The podcast we’re putting out next week is called “Legacy of a Jerk.” It’s about how people’s reputations change, for better or worse, after their death. We talk at some length about Ty Cobb, widely considered to be one of the greatest baseball players who ever lived — and one of the nastiest humans. Suffice it to say that his reputation gets a second look in our episode.
With that idea in mind, I read with great interest Robert F. Turner‘s essay in the Wall Street Journal today about Thomas Jefferson having supposedly fathering a child with his slave Sally Hemings. Turner, a law professor at the University of Virginia, edited The Jefferson-Hemings Controversy: Report of the Scholars Commission
I recently had occasion to e-chat with Rocky Kolb, a well-regarded astronomer and astrophysicist at the University of Chicago. Talk turned, of course, to the recent likely discovery of the Higgs boson — but, as Kolb talk about that, he raised an even broader and more interesting point about scientific discovery.
He was good enough to write up his thoughts in a guest blog post that I am pleased to present below:
Faster Than Light
By Rocky Kolb
After the news coverage of the past week, everyone now understands what a Higgs particle is, and why physicists were so excited about the July 4th announcement of its probable discovery at CERN, a huge European physics accelerator laboratory. (The disclaimer “probable” is because it could turn out that the new particle seen at CERN is not the Higgs after all, but an imposter particle with properties like the Higgs.)
For a few days it was common to see, hear, or read my colleagues struggling to explain why the discovery of a Higgs particle is a triumph for science. But after a week of physics in the news, the media has moved on to cover the Tom Cruise–Katie Holmes divorce and shark sightings near beaches. Perhaps all the public will be left with is a memory that there was a triumph for science. Science works: theories are tested and confirmed by experiment.
I think that the CERN Higgs discovery was, indeed, a triumph for science. However, the Higgs was not the only dramatic announcement at CERN in the past year. But the other dramatic result is something many physicists would rather forget.
A Bloomberg article by Michael J. Moore shows that finance and investment employees frequently commit the cardinal sin of failing to diversify their personal holdings by holding too much of their own company’s stock:
Current and former Morgan Stanley employees, who receive company shares to match their 401(k) contributions, held 24 percent of retirement assets in the firm’s stock before last year’s decline, the highest percentage of any of the banks. They lost $570 million in 2011 as the shares plunged 44 percent.
Bank of America Corp. (BAC) employees lost the most, $1.37 billion, as the lender’s stock dropped 58 percent last year. Workers at JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C), both based in New York, also lost hundreds of millions of dollars.
JPMorgan employees, some of whom received stock in the company until last year to match retirement contributions, devoted 18 percent of their funds to the lender’s shares at the end of 2010. Bank of America employees put 13 percent of their assets in the bank’s stock, while the figures for Citigroup and New York-based Goldman Sachs Group Inc. (GS) were 8 percent and 2 percent, respectively.
If we want our kids to thrive in school, maybe we should just pay them.
A response via Twitter concerning our recent post about Cambodian villagers who reportedly converted to Christianity to save money:
@DavidFCox: I had an Indian friend that changed religion 4 times to get best education
I was recently humbled and thrilled to return to my undergraduate alma mater, Appalachian State University, to receive its Distinguished Alumni Award. Here’s the introductory video the school made:
Levitt and Dubner answer your FREAK-quently Asked Questions about junk food, insurance, and how to make an economist happy.
A reader and podcast listener named Paul Tucker writes to say:
While listening to the “Herd Mentality” podcast piece about the Petrified Forest National Park, I thought you missed a very pertinent display at the park. At the south entrance to the National Park the visitor center has the Rainbow Forest Museum. In the museum there is a room dedicated completely to the theft of petrified wood. It is called the Guilt Room. The room is filled with pieces of petrified wood and the packages they arrived in and their accompanying letters of remorse and contrition by people who are trying to assuage their guilt by returning the offensive fossils.
As @VikingPlastics (a “global supplier of engineered sealing solutions” in Corry, Pa.) correctly notes, @freakonomics has a lot of followers but we do not follow anyone. In fact, we made a podcast about this. We briefly followed Marketplace‘s Kai Ryssdal, but have returned to our anti-social ways.
So Viking has made us a cash offer to follow it:
We ran a blog post a while back about how alumni should think about giving money to their alma maters. A recent NBER paper (abstract; PDF) by Jonathan Meer and Harvey S. Rosen looks at the “donative behaviour” of alumni who received financial aid. It has some really interesting conclusions:
The empirical work is based upon micro data on alumni giving at an anonymous research university. We focus on three types of financial aid, scholarships, loans, and campus jobs. …
Our main findings are: 1) Individuals who took out student loans are less likely to make a gift, other things being the same. We conjecture that this phenomenon is caused by an “annoyance effect” —
alumni resent the fact that they are burdened with loans. 2) Scholarship aid reduces the size of a gift, but has little effect on the probability of donating. The negative effect of receiving a scholarship on donations decreases in absolute value with the size of the scholarship. We do not find any evidence that scholarship recipients give less because they have relatively low incomes post graduation. 3) Aid in the form of campus jobs does not have a strong effect on donative behavior.
Apple has just released an app called Podcasts which, yes, helps you download and manage podcast from the iTunes store.
Coverage of the app can be found here, here, here, and here.
I haven’t used the app yet so I cannot comment on it — some of the iTunes reviews indicate some fixes are needed — but I have to say that I do like Apple’s taste in the podcasts it has chosen for its promo materials:
I love the New York Times (and not just because I used to work there) but goodness gracious, this kind of thing really hurts its credibility.
An article about News Corp.’s decision to split off its publishing business (including the Wall Street Journal) from its entertainment business contains the following sentence:
Both companies would maintain their controversial dual-class share stock structure, which enables the Murdoch family to control nearly 40 percent of the voting power.
Well, guess what other family-run news organization maintains a dual-class share stock structure? Yes, the New York Times — as well as the Washington Post and others, as Rupert Murdoch pointed out in announcing News Corp.’s move. This fact, however, isn’t mentioned in the Times article. But here’s the reality: given the turmoil in the newspaper business in general and at the Times in particular, it’d be easy to argue that if anyone’s dual-class ownership is “controversial,” it is the Times‘s more than the Journal‘s.
The Times article also omits that the new publishing unit will include News Corp.’s education unit and HarperCollins, one of the world’s largest book publishers. (Our books are published by William Morrow, a division of HC.) The Journal‘s coverage of the story is superior.
Once a week, the British Prime Minister goes before the House of Commons for a lightning round of hard questions. Should the U.S. give it a try?
We recently solicited your food questions for economist Tyler Cowen, whose latest book is An Economist Gets Lunch: New Rules for Everyday Foodies
Below are the answers to some of your questions. Cowen talks about food subsidies, the Malthusian trap, “ethnic” food, the the meal he’d like to share with Murray Rothbard and Ludwig von Mises. Thanks to all for participating.
Q. Any advice on choosing the best food when eating at a college cafeteria? – Philip Mulder
A. That is a good time to start your diet. Otherwise, look for items which can sit and stew for a long time. Indian food works okay in such contexts, as do stews, as the name would suggest. Stay away from anything requiring flash frying or immediate, short-term contact with heat. The vegetables won’t be great, but often they are not great (in the U.S.) anyway, so now is the time to fill up on them! The opportunity cost of eating the bad-tasting but nutritious food is especially low in these circumstances.
Whenever you look at a political system and find it wanting, one tempting thought is this: Maybe we have subpar politicians because the job simply isn’t attracting the right people. And, therefore, if we were to significantly raise politicians’ salaries, we would attract a better class of politician.
This is an unpopular argument for various reasons, in part because it would be the politicians themselves who have to lobby for higher salaries, and that isn’t politically feasible (especially in a poor economy). Can you imagine the headlines?
But the idea remains attractive, doesn’t it? The idea is that, by raising the salaries of elected and other government officials, you would a) signal the true importance of the job; b) attract a kind of competent person who might otherwise enter a more remunerative field; c) allow politicians to focus more on the task at hand rather than worry about their income; and d) make politicians less susceptible to the influence of moneyed interests.
How using peer pressure — and good, old-fashioned shame — can push people to do the right thing.
A British reader named Dominic Ellison sends the following photo and note:
I saw the attached notice in the window of a neighbor’s car that had been pranged and lost its bumper.
I felt that it was an interesting test in game theory and was reminded of what I think is called the Prisoner’s Dilemma, as the reader must certainly ask a number of questions:
Does the owner really have CCTV evidence? If so, why does the poster not allude to make, model or registration?
Would the consequences be genuinely worse if not come forward? For example, was it a drink driver not wishing to be identified at the time?
Interesting if perhaps not so surprising: in a new working paper called “The Cost of Friendship,” Paul Gompers, Vladimir Mukharlyamov, and Yuhai Xuan argue that even in as performance-based an industry as venture capital, people tend to collaborate with people who have similar backgrounds, often to their detriment:
This paper explores two broad questions on collaboration between individuals. First, we investigate what personal characteristics affect people’s desire to work together. Second, given the influence of these personal characteristics, we analyze whether this attraction enhances or detracts from performance. Addressing these problems in the venture capital syndication setting, we show that venture capitalists exhibit strong detrimental homophily in their co-investment decisions. We find that individual venture capitalists choose to collaborate with other venture capitalists for both ability-based characteristics (e.g., whether both individuals in a dyad obtained a degree from a top university) and affinity-based characteristics (e.g., whether individuals in a pair share the same ethnic background, attended the same school, or worked for the same employer previously).
I am told it is true but haven’t yet seen evidence.
Am in London for work and, as always, delight in reading the newspapers here. From today’s Telegraph, my favorite article:
Accident and emergency departments have seen a 15 per cent rise in sports injuries as an unfortunate side effect of Olympic fever, figures show. Young men and boys are the most likely to be treated and peak times are Saturday afternoons and lunchtime Sundays. The figures indicate more people may be taking up sport in the run up to the Euro 2012 football tournament and the London Olympics. However more are ending up needing emergency treatment after knocks, cuts, sprains and strains, broken bones and head injuries, officials NHS figures show.
Paying workers as little as possible seems smart — unless you can make more money by paying them more.
I admire both of these books, and their authors, and even their covers.
Our latest full-length podcasts are “You Eat What You Are,” Parts 1 and 2. They were inspired in part by Tyler Cowen‘s latest book An Economist Gets Lunch: New Rules for Everyday Foodies
Freakonomics Radio has been nominated as one of the top “edutainment” podcasts on iTunes, and the biggest vote-getter will be featured on iTunes in July. You can vote here. I will warn you, the competition is very stiff — we’re up against Radiolab (which would probably get my vote, to be honest), the TED Talks podcast, and some other formidables.
I realize it is the height of hypocrisy for us, the guys who say that voting is overvalued, to ask for your vote. But if you don’t mind voting for hypocrites, go ahead and tick the box.
To feed 7 billion people while protecting the environment, it would seem that going local is a no-brainer — until you start looking at the numbers.
I am not an avid runner but I do it pretty regularly because it is good, cheap, easy exercise. I often run in Central Park. The other day on my run there, it was hotter than usual and I ran further than usual, maybe 5 miles. So I really, really wanted to buy an iced coffee when this ordeal was over. I usually tuck a $5 or $10 bill into my running shorts but I’d forgotten. Oh well.
But then, just a few hundred yards from the end of my run I saw on the ground directly in front of me a suspicious little lump of green paper. I stopped. It was money. Three single dollar bills, crisply folded. Just enough for an iced coffee. I was grateful to whoever dropped it and I hoped it didn’t represent their last three dollars.
The New York Times Magazine‘s “Innovations” issue is a good read. Of the 32 innovations listed, the most interesting to me were Nos. 14, 15, and 16. The appeal of the middle, anyone? Or maybe I’m just a fan of Catherine Rampell, who wrote two of those three.
Here they are:
The Shutup Gun When you aim the SpeechJammer at someone, it records that person’s voice and plays it back to him with a delay of a few hundred milliseconds. This seems to gum up the brain’s cognitive processes — a phenomenon known as delayed auditory feedback — and can painlessly render the person unable to speak.
Kazutaka Kurihara, one of the SpeechJammer’s creators, sees it as a tool to prevent loudmouths from overtaking meetings and public forums, and he’d like to miniaturize his invention so that it can be built into cellphones. “It’s different from conventional weapons such as samurai swords,” Kurihara says. “We hope it will build a more peaceful world.” — Catherine Rampell
Last week, we solicited your questions for journalist Edward Humes, who seems to love trash as much as we do. His new book is Garbology: Our Dirty Love Affair with Trash.
Below are his answers to some of your questions. He writes about New York City’s cleanup, the facts about burning trash and recycling, how incentives work (or fail) when it comes to trash, and, of course, the Great Pacific Garbage Patch.
Thanks to Humes for answering so many questions, and to all of you for your good questions (and candor).
Al Roth, whom we’ve blogged about in the past, is known (to me, at least) as the King of Repugnance.
Not that Roth is himself in any way repugnant (quite the opposite), but he is masterful at thinking about the kind of transactions that we find morally or ethically or otherwise disturbing and how the trends of repugnance shift over time.
For a forthcoming book anthology called In 100 Years (inspired, Roth tells us, by a 1930 essay by Keynes called “Economic Possibilities of Our Grandchildren"), Roth has written an essay (PDF here) about the future of repugnance:
I have a friend named Barry Singer
He has now combined all these passions to write a book called Churchill Style: The Art of Being Winston Churchill
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