James Altucher on College

Glenn Beck sits with James Altucher to talk college.

We've discussed whether college is worth it for most people.  I always want to pull out my "Hillsdale exemption" card at these discussions, but we should be honest that the vast majority of colleges offer very little quality education for loads of debt.

I like that James argues against college not just for the upfront cost, but for the opportunity cost as well.  What could you have done in four years?  A lot of great things that won't put you in debt.

I still think that college is for some people, but all generalizations are general.  And at this point, we should be comfortable saying that a lot of people are in college who shouldn't be there.  I am glad that people like James and Glenn have the courage to bring this up.

Bad food = more eating?

One of the most counter-intuitive lessons I remember from economics classes is how forcing people to smoke light cigarettes may actually increase smoking.

What happens is when you change the constraints on someone without changing their preferences, you are going to lead to a different outcome, and it will likely be something different than you intended.

The same goes for food.  This article makes some good points about French vs. North American attitudes about food.  I tend to ignore Francophilia, but the author has a point.  The French aren't afraid of butter!  No fat-free yogurts for them.  But since they are getting wholesome food, they do not overindulge.  You could make the argument that the French have all kinds of food regulations, but to my knowledge they are not for dietary reasons but instead for cultural of economic.  I am talking regulation intended to make people healthier.

Policies to change peoples' eating habits often does not meet its intended goal.

Is Michelle Obama listening?

Shlaes on the Graphic Novel

We covered this yesterday, but Amity Shlaes is all over promoting her illustrated edition of The Forgotten Man.  What makes this promotion unusual is that she is not only marketing her book but defending its medium as a whole.

Shaes argues that conservatives are failing to capitalize on the popular graphic novel genre.  These books are especially popular with young people and are increasingly acceptable literary sources at schools.  Shlaes believes that conservatives have turned up their noses too quickly at this trend.

Are conservatives really being too hard on graphic novels?   Yes and no.  Illustrated editions of the classics are nothing new and are great introductions to the real thing.  I can remember illustrated versions of various classics as a child.  The Inferno, The Hobbit, and Alice in Wonderland had all been rendered with beautiful drawings by artists of all eras and styles.

The difference between these illustrated editions and the graphic novel is that in illustrated editions, the text was still the crux of the work.  Illustrated versions meant exactly that – it was the same piece of literature, but with pictures.  This is very helpful for children, who may need help comprehending the difficult prose of Shakespeare or Dante.   The goal was never to supersede the book itself.

 Graphic novels, on the other hand, take the basic plot of a book, but reduce it to comic-strip format.  This is a sweeping generalization, but from what I have seen, the graphic novel does not match a regular piece of prose in its depth and vocabulary.  An easy comparison: a movie is hardly ever as detailed or thought-provoking as the book from which is was based.

While I commend Shlaes for her new book, I’m not sure her rallying cry for the graphic novel is necessary.  Shifting the political discourse to what will always be a reduction of the original is not how to change minds.

Internet pennies

I enjoy listening to NPR's Planet Money.  They make economic theory manageable to the average listener, through stories on everything from violins to professional sports.

I'm frequently disappointed, however, in the incomplete economic thought that goes into the show.  The reporters tend to miss some pretty simple connections from their story to economic principles.  It makes the story feel more like a human interest piece rather than applied economics

The recent show on the value of a penny is a great example.  This would have made a great exhibit of how the internet has lowered transaction costs.

The reporters went all over Manhattan to see if they could buy anything for a penny.  The closest they found was at a dressmaker. The shopkeeper told them that a single sequin would cost about one penny, but she would not bother selling it too them.  She said it wouldn't be worth the time to transact the deal.  This is, quite literally, a transaction cost.  Other shopkeepers said that in similar instances, it was actually more cost-effective to give away penny merchandise than to actually sell it.  The transaction costs outweighed the sale.

Flash forward in the show to the internet startup looking to disburse micro-donations to various content providers, and the problem of transaction costs disappears.  The internet has unlocked value potential to the smallest fraction of a dollar by bringing transaction costs basically to zero.  So the internet equivalent of a sequin -- let's say a video or blog post -- can be traded for a penny, with economic benefit.  With the millions of customers surfing the web, this could be a real moneymaker for many online content providers.

Unfortunately, Planet Money failed to develop this idea, and the value of a penny in the online world vs. brick-and-mortar remained more an oddity than an explainable phenomenon. The application of transaction cost theory would have made for such a more stimulating show.

May 29, 1453

Today the Roman Empire fell.

I am happy to see the fall of Constantinople got some modest coverage in the conservative blogosphere.  People are starting to see the Byzantine Empire as not some esoteric force from long ago but the very continuation of the same Roman Empire from which we derive much of our civilization.

Forgotten Man -- Graphic Novel

What better way to give a portrait of the "Forgotten Man" of the Great Depression than by literally drawing him in a graphic novel?

Amity Shlaes recently came out with this sequel to her classic The Forgotten Man.  I heard her on Peter Schiff this morning.  I'm looking forward to reading a comic book!

Student Health Plans going to Medicaid?

Kaiser Health News is reporting that schools are beginning to experiment rolling their student health plans into Medicaid.

Funny how this same class of "young invincibles" that are necessary for the ACA to work are being given every possible incentive not to buy their own health insurance.  First, it was the extension of staying on parents' health plans.  Now, colleges are signing students up for Medicaid.

It would also be interesting to see how HHS accounts for these "new" health plans.  Even individuals that previously were on plans but then lost coverage due to the ACA are counted as "new" when they get an exchange-approved or Medicaid plan.