100 Economics Question of the Day: An Intermittent Blog: April 2006

Tuesday, April 25, 2006

Menendez proposes a credit "bill of rights"

I'm not certain a pulse is required

Declaring that anyone with a pulse and a Social Security number can get a credit card, Sen. Robert Menendez, D-Hoboken, unveiled legislation Monday that would strengthen consumer protections against zealous marketing practices and abuses by credit card companies.

How zealous?
Menendez, a member of the Senate Banking Committee, said credit card companies have increased their solicitations to consumers 500 percent since 1990, to more than 5 billion in 2004. A member of Menendez's own staff got a solicitation for his 2-year-old child last year, the senator said.

Only one? I've gotten four or five for Valerie so far this year.

The issue:
"More and more Americans are using credit card debt to manage daily living expenses such as basic living costs, medical bills and house or automotive repairs," Menendez said in prepared remarks released by his Senate office.

And the opposition:
Feddis said banks are already required under federal law to assess credit risks before issuing borrowing limits.

But if they were doing so, would they have needed last year's bankruptcy bill?
Menendez's proposal would keep credit cards from some borrowers who would use credit only in emergency situations or to build their credit history, she said.

How would this be so? In the former case, the person is clearly credit-worthy, and in the latter (where, presumably, one pays off the balance on time each month), the same would be true.

The question one has to ask is whether the business model for credit card issuers conforms to that of the "required...assess[ment of] credit risks." No reasonable analysis of Feddis's statements would lead one to believe it does.

(links and updates to follow)

Wednesday, April 19, 2006

Equivalent to Raider merchandise?

Is this an efficient market?

Or is it just sickening? (See UPDATE below)
"Historically, lacrosse has been one of our three or four best-selling sports," said Tom Craig, general manager of retail stores at the Durham, N.C., school. "But over the last month, sales have increased to three or four times our normal rate."

But there is a silver lining from some:
"The reasons we stopped selling the gear are very straightforward," said Jeff Hennion, senior vice president and chief marketing officer of the company, which has more than 200 stores nationwide. "It is highly controversial in the Raleigh-Durham area. Having that type of product out in front of our customers seemed to be a lightning rod. And secondly, we had customers who saw it out in the store and complained about it."

Nice to see Michael Savage's listeners still have some spare cash.
When the story first hit the news more than a month ago, the average price of a Duke lacrosse item on the online auction site eBay was $7.74. The average price now is $17.04. The pace of transactions has increased, too. In early March, only a handful of Duke lacrosse items changed hands in a week. This past week, 79 items sold.

UPDATE: ESPN.com's Dan Shanoff weighs in with the same reaction:
The demand for Duke lacrosse merchandise is hot. Actually, it's a little sickening....

I have to believe that you won't get a warm reception from people if you're trying to suggest you're cool or an ironic hipster by wearing the shirt.

I wish I thought he was correct.

Wednesday, April 12, 2006

This is what economists mean when they say "win-win" situation?

At least he called him "an economist" (p. 133)

There is nothing I can possibly add to Tim Lambert's destruction of John Lott, who insists we use his data even though the dog (or something) ate his homework.

But I hasten to note that Freakonomics called Lott "an economist," while Levitt Paul Krugman was a "New York Times columnist and devout critic of George W. Bush (p. 91)." Maybe Levitt can blame it all on his co-author?

(Updated with page references and the full Krugman description)

Friday, April 07, 2006

Is this an economics question?

What was the effect on children's asthma rates when it became socially acceptable for women to smoke out of doors?

Does your answer change if the question becomes:

How much of the decline in children's asthma rates is attributable to women not doing all of their smoking at home?

Sunday, April 02, 2006

Will they make more on Application Fees than this will cost?

In Which I Say Nice Things about Lawrence Summers

Harvard has instituted, as part of Summers's greatest achievement, a new tuition structure. (The story was posted 31 March, so I will for now assume it is not an April Fool's Day joke.)
Harvard had previously waived tuition for its students from families earning less than $40,000.

Don't get me wrong; this structure still doesn't mean that Harvard becomes affordable for all
Harvard...set its annual tuition, room, board and mandatory fees at $43,655 last week.

but it becomes a lot easier to justify applying there if you are in the position of, say, Mark Thoma. Or the author of this blog way back when.

Quoting Thoma:
I know how hard it was for people in my town to get out of there and go to college anywhere, and I know how easy it would have been to slip through the cracks, how close I came to doing just that, so I hope you will bear with me when I push on educational issues. It made a huge difference in my life and I'd hate to see others miss out on their window of opportunity.

It's easy to overlook how little space there may be in that "window of opportunity." It's not that some people wouldn't succeed any way; the host of this show was a waitlisted student; had his alma mater gone co-ed five years earlier--he probably still would have come out of Oberlin or Case Western or Washington University of St. Louis. But it might not have been so easy for him to do so.

"Trickle down" depends on opportunity, which is why the crony capitalism of Bushalliburton's "no-bid," "not required to perform" contracts is opportunity lost.

More later.