The Liberal Order

Now's A Good Time to Buy a Toyota

As I said previously, now is a good time to buy a Toyota.

People overreact to small risks, especially when it's in the news and has become politicized.

The Ranking of Cities Based on the Integrity of Auto Repair Shops

Raleigh ranks 45th out of 50. In other words, you better be alert when getting your car worked on in Raleigh.

Canadians and the Olympics

ESPN's Rick Reilly slams the Canadians at the start of the Olympic games, and then slams them again with an apology.

One commenter questions Reilly about his perceptions of Canada with:

"Are you sure you weren't in Michigan?"

I agree; it's the people looking southward across Lakes Erie and Superior, and westward across Lakes Huron and St. Clair who should be ridiculing what they observe. I lived in Michigan - I know! Nice people, but what an inept political system that's left little but misery in its wake.

Overhyping Your Product

Two economists allege that ski resorts hype the amount of fresh snow on their slopes in order to attract more skiers. Apparently, but not surprisingly, weekends are best.

Economists Jonathan Zinman and Eric Zitzewitz, skiers who took offense to a fluffed-up claim, studied snow reports from 2004 to 2008 and compared them to area government weather stations. They found that ski resorts across the U.S. and Canada reported more fresh snow — 23 percent more, on average — on skier-coveted weekends than during the week. Resorts with more business to gain were the ones most likely to boast of deeper snowfalls, their study said.

Ski slope owners respond:

The resorts question the findings. For one thing, they say, the government's weather stations aren't necessarily in the same snowy spots as the slopes. And they say overreporting snow does them no good if disgruntled skiers and riders find less snow than expected.

"It doesn't serve you to overreport snow," said JJ Toland, spokesman for Sugarbush Resort. "If you do overreport and make a false promise, people show up and they just become angry that you lied to them and they won't come back."

A New Monetary Aggregate

An interesting arbitrage opportunity has some buying coins from the U.S. Mint at face value and with free shipping and then immediately depositing the coins into their bank accounts in order to pay off their credit card balances. The purchases, made using airline credit cards, provide purchasers frequent-flier miles at no cost. Well, other than a trip to the bank.

What's interesting is the following:

Now, airlines have turned miles into more than a competitive device; they have become a currency that airlines can sell, usually at less than a penny a mile, to other merchants to generate revenue. More miles are put into circulation by companies -- including credit-card issuers, hotels, mortgage servicers, and florists -- than are given to travelers for flights.

The mile is such a cherished commodity that airlines have even bolstered their balance sheets by preselling billions of miles. Citigroup Inc., which gives away American AAdvantage miles to credit-card customers, agreed to lend American $1 billion in September. The loan is to be repaid between 2012 and 2016 -- not in cash but in miles.

Now that frequent-flier miles have become a tradeable currency, are they now a new monetary aggregate?

Teaching Basic Economics During a Trip to Denver

It's always fun traveling with the family. New locations offer new insights into everyday economics. Sometimes the kids get annoyed from having to learn, but as I say, learning never stops.

The first learning example came about from observing the large number of panhandlers begging in the streets of Denver. This was an opportune time do discuss incentives and why giving money to panhandlers simply increases the number of people who take up panhandling as a source of income. 

The second was a bus service that ran up and down the 16th Street Pedestrian Mall. On the front of the bus was "Free MallRide." First, we know that this service isn't free; even the kids knew that. But more importantly, they learned the incentives of politicians: It isn't as appealing to provide at public expense a service that advertises itself as "Taxpayer Subsidized MallRide" than it is to have "Free MallRide." We want it all and we want it "free." Politicians are certainly willing to oblige with the charade.

Lastly, the Sheraton Hotel in Denver advertised its $70 million renovation project as "Our gift to the city of Denver." Another teaching example for self-interest. Is serving the interests of Denver the motive behind the renovation project or is it in the interest of Sheraton to spruce up its hotel? Does it matter? Not at all.

[An individual is] led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.