John Foster Kane? HA HA HA!

The CBS news just had a story about snow globes and they referred to Orson Welles' character in the movie "Citizen Kane" as John Foster Kane. The caption even read John Foster Kane. I thought everyone knew it was Charles Foster Kane. What a joke that the supposed intelligentsia of the media does not know the right name. This movie is a very important part of American culture.

Semester Ends

Since we are in finals week and then will be on break, I might not blog very much over the next month.

If Prices Are Not Used, Other Allocation Methods Emerge: Police Officers Get PS3's First

An entry from a couple of weeks ago showed how we could end the violence and chaos surrounding the Play Station 3. There didn't seem to be enough to go around at the price the stores had set. I suggested raising the price to end the problems. Now we find out that cops have been getting preferential treatment in buying this rare commodity. This is further proof that if market prices are not allowed to determine allocation, some other way will be found, one which we may not like. Here is the opening of the AP story.

"PROVIDENCE, R.I. --Two police officers are under investigation for allegedly using their influence to skip a long line of shoppers waiting to buy the PlayStation 3 video game system the day it went on sale, authorities said."

You can read more here or here.

Want to Get Rich? Improve Your Health

One thing individuals can do for themselves is to stay healthy.

"A new study published in the British Medical Journal finds the healthier you are, the richer you will be. Researchers examined the link between health and wealth in rich countries and found that healthier people are more productive at work, earn more and spend more days in the work force because they don't take as much sick leave."

You can read this study at Lean Times

Another Way the Internet Increases Efficiency

It makes shopping more efficient. From an article in the Nov. 29 issue of The Wall Street called The Internet Allows Consumers to Trim Wasteful Purchases. It was by By WILLIAM M. BULKELEY. My San Antonio College students might be able to read this through our library's website.

Here is an exerpt:

"Photo companies made customers pay for 24 shots in a roll of film to get a handful of good pictures. Music publishers made customers buy full CDs to get a single hit song. Encyclopedia publishers made parents spend thousands of dollars on multiple volumes when all they wanted was to help their kid do one homework paper. The business models required customers to pay for detritus to get the good stuff."

So now we take digital pictures and can save only the ones we want. We don't pay for ones we don't want. We can download songs and only pay for the ones we want.

Symbols and the Minimum Wage

There is talk coming out of Washington about rasing the minimum wage. I am one of those economists who thinks this is a bad idea. The law of demand says that as the price of something goes up, its quantity demanded goes down. So fewer low-skilled workers will be hired.

"... research shows that in the long run the adverse effects of a higher minimum wage are quite substantial." (page 84, The Economics of Public Issues, 13e, by Roger LeRoy Miller, Daniel K. Benjamin, and Douglass C. North).

"In a new report, economists David Neumark of the University of California at Irvine and William Wascher of the Federal Reserve Board say a review of more than 90 studies in more than 15 countries since the early 1990s shows nearly two-thirds of the studies find a "consistent" though not always statistically significant negative impact on employment. Fewer than 10 found a consistently positive impact. While there's "no consensus," they say, "the weight of empirical evidence" supports the traditional view." (The Wall Street Journal, p. A4, Nov. 3, 2006)

From Greg Mankiw's blog:

"Economists Richard Burkhauser (Cornell University) and Joseph Sabia (University of Georgia) report:

a beneficiary from a proposed federal minimum wage hike to $7.25 an hour is far more likely to be in a family earning more than three times the poverty line than in a poor family. In total, only 12.7 percent of the benefits from a federal minimum wage increase to $7.25 an hour would go to poor families. In contrast, 63 percent of benefits would go to families earning more than twice the poverty line and 42 percent would go to families earning more than three times the poverty line."

Gary Becker and Richard Posner at their blog discussed how the minimum wage is a symbol and not a substantive way to fight poverty. But this brings me to my point: that symbols are very important in politics. Symbols express emotions and that is often what wins over voters. It makes it look like the government cares about the poor. I have written about the role of symbols at

The Inter