The Frying Pan Fable: On Asking the Wrong Questions

Frying pans are really great for cooking things, after all, that is what they are designed for. From scrambled eggs to sautéed vegetables, there are numerous types of foods that can be prepared in a frying pan. However, besides this obvious use, a frying pan can be utilized for a variety of other tasks. If someone breaks into your house, a frying pan can be used as a self-defense tool. If you are concerned about small objects falling on your head, a frying pan could be used as a helmet.

Despite these alternative uses, frying pans are generally just used for cooking. Why is that? What prevents people from seeing frying pans as multipurpose tools and using frying pans for all sorts of tasks? Well, besides the fact that frying pans are not all that good at accomplishing these other tasks, people use frying pans for cooking because they were designed for that task. I could try to use my lawn mower as a fan or my shoes as soup bowls, but these items were not designed for those jobs and would do a poor job.

Economist Gene Callahan illustrates this idea that different tools have different roles and different levels of effectiveness, “Simply because a sledgehammer does a good job breaking up stones does not mean that it’s the right tool for slicing tomatoes” (“Economics For Real People” page 35)

The majority of fabricated items in this world were created with particular purposes in mind. That’s not to say there is no place for experimenting with alternative uses or making do with limited resources. However, I think I’m correct in saying that, generally, things work best when they are put to use according to their design. If I am holding a vacuum cleaner and wondering how to use it, I should ask for what it was designed for. On a bigger scale, if I am wondering how I should live, I should attempt to find out what I was created for.

This leads into the main purpose of this blog post, which is about how to evaluate government. I spent to preceding paragraphs making the point that things in life should (generally) be utilized according to their design. Why do we not apply this same framework to government? Why do we not spend more time considering the proper role of government? From handling education to regulating the food industry clearly government is capable of many things. But, like using the frying pan for self-defense, some of these tasks might be outside of the realm of its design. To evaluate government in terms of capability, or even its propensity to act according to my personal values is to ask the wrong questions. Rather, we should step back and attempt to determine the proper role and purpose of government. From there we can evaluate aspects of government action, such as effectiveness, from a more stable foundation.

When thinking about government involvement in healthcare, for example, I could start by thinking about the effectiveness of government regulated healthcare. Additionally, I might consider my personal feelings on the matter. However, if I don’t start by considering whether or not regulation of healthcare is within the realm of government’s role, I will have missed the fundamental issue.

I would challenge everybody reading this post to think hard about government’s role. Think through why government exists and what purposes it achieves. From there try to determine if the policies that you support agree with this foundational framework. Hopefully, this exercise will enable you to have a more consistent and thoughtful view of government.

//

As usual, I’d love to hear your thoughts on this topic. Feel free to leave a comment or shoot me an email. Thanks for reading!

Advertisements

Blog Update and Upcoming Schedule

Hey everybody,

I’m sorry that it’s been so long since I last posted on here. My blogging style is probably different from normal in that I prefer to write a bunch of posts and then publish one per week versus writing and publishing one per week. So it takes me a little while to create a new batch of posts to start publishing. That being said, I have a number of posts in the works right now that I will try to start publishing soon.

I’ll warn you that, in terms of the content of this blog, my upcoming posts will likely be pretty political in nature. I’ve been reading and thinking a lot about politics, particularly the role of government, so that is where I’m going to be focusing my writing in the upcoming weeks. My tentative schedule is as follows:

  • 1-2 very broad posts about the role of government
  • 4-6 posts that consider some books that have influenced my thoughts over the years and how my views have progressed
  • 3-5 posts that look at particular policies or issues within our current government system
  • …and I’m not entirely sure what I’m going to write after this, although I do have some *undeveloped* ideas

I’m going to try to get back into my one post per week schedule (on Mondays), so hopefully, this post will provide some accountability for me to stay on schedule.

If that sounds interesting to you – great! If that sounds terribly uninteresting to you –  feel free to leave a comment or send me an email with some ideas for other things that I should write about.

Thanks so much for visiting this blog!

Buying Local, Trade, and Protectionism

I always buy locally-made products…unless I can find non-locally-made products of the same quality for a lower price.

“Buying local” is one of the current trends in our culture. Various companies and brands craft entire marketing campaigns around the fact that their products are produced locally, made out of local materials, and/or created with local labor. Now, why would the fact that a company is selling “local” products be persuasive and enticing to consumers?

One potential explanation would be that local consumers buy into a variation of “protectionism” on a smaller, local scale.* This explanation would argue that local consumers want to support their community and facilitate economic wellbeing within the local business environment by shopping primarily or exclusively at local dealers. This might be more of an emotional situation where consumers not only buy a product, but also purchase a good feeling of sorts.**

One of the problems with this line of thinking is the same problem that large-scale protectionism faces. When considering the economic well-being of a certain area, one must look at both the producer and consumer side of things. Buying local products at a higher price (and from my experience these locally made and marketed products tend to be more pricey) may benefit certain local producers but it also hurts local consumers (including you). If a whole bunch of consumers buys overpriced, locally-made coffee, the local coffee shop benefits at the expense of the five consumers.*** Therefore, it is difficult to argue that the local community is better off on net.

And why should local producers be my primary concern? Not to say that I should intend to hurt my community, but this sort of thinking can have the effect of hurting many foreign (or non-local) producers. Think of producers many states away who are efficiently producing cheaper, equal quality goods. Why should I turn away their products, which are of equal quality and a lower price?

Competition and trade forces producers to innovate and cater to consumers. Therefore, consumers should want as much trade as possible and as many product options as possible. This forces producers to use their time and resources in the most effective way possible. If local producers know that I will buy their goods because I am emotionally motivated to support them, then those producers will not be worried about their non-local competition and will be less likely to innovate, produce quality goods, and charge low prices. While this is a much smaller scale example, the “buy local” marketing scheme is similar to an import tariff in that it attempts to limit local consumption of non-local goods.

Now some might say that it saves resources to buy local. And this may or may not be the case. Dr. Arnold Kling in his recent book Specialization and Trade: A Re-Introduction to Economics argues that buying local can actually waste resources:

“Many people believe intuitively that it saves resources to “buy local.” Surely, we think, cheese or vegetables from a local farm must save on the energy required for transportation. However, if the grocery store sells cheaper products that comes from hundreds of miles away, some factor must offset the higher transportation costs. Chances are, the land elsewhere is more suited to growing crops, so that fewer acres are being used to produce a given amount of output. The local land might be better used for housing or as wilderness.
Water or other resources may be used more heavily locally than on distant farms. Whenever produce from distant farms is cheaper than locally grown produce, the price system is telling us that “buying local” wastes resources.”

So next time you are tempted to buy a product merely because it is locally-made, consider the bigger picture. Look into non-local options and try to use your purchasing power to support producers who make the highest quality product in the most efficient way possible. Don’t discriminate against high quality, cost-effective producers just because they live far away from you.

//

If this post resonates with you or irritated you, leave a comment below and tell me what you think of it. You can always send me an email as well; I’d love to hear your thoughts. Thanks for reading!

//

*Ironically, one of the most startling side effects of protectionism is that a significant portion of local producers is actually harmed by this type of behavior. Every dollar spent subsidizing the inefficiencies of one producer is a dollar that could have been spent supporting the innovative and efficient ones.

**The price that consumers pay for “local” goods could potentially involve a base price, which would be identical to the price of the product elsewhere, plus a premium to support the local market. This premium portion of the price would then be similar to a charitable contribution in the sense that the only benefit the consumer receives for this added cost is a good feeling for having “supported” the local community.

***How do producers benefit at the expense of consumers? After all, this is voluntary trade, which should be mutually beneficial. The key here is that consumers do benefit, but they could benefit even more by buying a less expensive product of equal quality elsewhere. Thus, this transaction is at least somewhat inefficient, because consumers bear an extra cost without a corresponding benefit.

The Parking Garage Dilemma

I’ve been studying a lot of economics lately and have been intrigued by a field known as “Behavioral Economics.” While I am far from an expert in this field, from my understanding this area of study seeks to explain why individuals make many of the decisions that they do, based on economic theory. This field is rooted in the concept of “rationality” which assumes that individuals weigh costs and benefits when making decisions.

Being a student of economics, and this area in particular, has lead me to try to apply what I’ve learned to some areas of my everyday life. (It is really interesting, as you get into this area of study, to look at and analyze the different decisions that you make on a daily basis. Oftentimes, you will begin to notice that you subconsciously weigh the costs and benefits of decisions without even explicitly thinking about it.)

One such area that I have been wrestling with is the concept of where one should park in a parking garage. I’ve been working in downtown Louisville for the past two years and utilize a parking garage on a weekly basis. Honestly, as I drove into work, I didn’t put too much thought into where to park. I generally would pick the first open spot I could find, so as to limit the amount of time I would spend driving out of the parking garage.

If everybody behaved this way, this topic would be quite uninteresting. After a couple months of parking in this manner, however, I started to notice that cars would drive past me and other open parking spots and head further up the garage in search of other open spots. To be honest, I could not make sense of this decision. Why would somebody pass up perfectly good spots on, say the fourth floor, in order to obtain open spots on the sixth floor? It made no rational sense to me.

Although I didn’t put too much effort into solving this puzzle, it did stick with me and annoy me on occasion. Finally, I obtained some clarity on a day when most of the lower level spots were filled. I drove up to the fifth level and noticed that all of the spots near the elevator were filled. I kept driving past many open spots until I got to the sixth level and also noticed that all of the spots near the elevator were filled. Suddenly, it occurred to me – these people were not trying to minimize the amount of time spent leaving the parking garage, but were trying to minimize the amount of time spent walking to and from the elevator! While I was willing to sacrifice a short walk to the elevator (cost) in exchange for a short drive out of the parking garage (benefit), these other people behaved the opposite way.

(Since writing this initial post in December, I’ve been able to take an “Urban Economics” class, which deals with city structure, transportation, and many other issues, and has given me a few tools to more eloquently explain this situation. Here is a more bit of a more technical explanation of the situation:)

When thinking about the “costs” of travel, economists consider both explicit monetary costs, as well as time costs. These time costs can be further broken down into “access time” costs and “in-vehicle time” costs. Access time cost is merely the disutility that an individual undergoes in order to enter a vehicle (i.e. waiting for a subway, walking to a bus stop, etc.), while in-vehicle cost is the disutility that an individual undergoes during an actual trip (i.e. sitting in traffic, sitting in a crowded bus, etc.).

Generally, to decrease access time, in-vehicle time would have to be increased. For example for a light rail system to decrease access time, the operators would have to add stops to the system. These more frequent stops would, however, increase in-vehicle time for those who were already on the light rail.

Empirical research shows that people actually dislike access time more than in-vehicle time. So, most individuals would rather get on a vehicle quickly, even if the trips itself were to take longer.

This actually lines up consistently with my observations in the parking garage. While I tried to minimize my in-vehicle time by parking in the first spot I saw, these people who kept driving to upper levels were trying to minimize their access time by parking close to the elevators. Apparently, my “ground-breaking” observations can be very easily explained by existing economic theory. Nevertheless, I thought these ideas were worth sharing.

To wrap this up, economics is a fascinating topic and can be used to explain many seemingly confusing aspects of human behavior. I hope this post was interesting and/or beneficial to you.

//

If this post piqued your interest or if you believe that this is really too petty of a subject to be discussed, please leave a comment or send me an email. Thanks for reading!

Tom Brady Was Innocent…But That’s Not the Real Issue

(Note: Although I’m literally years late in commenting on Deflategate, I figured better late than never. Also, we’re coming up on the two year anniversary of Deflategate, so in some ways, it’s seems like an appropriate time to talk about these issues.)

I’ll admit that I am far from unbiased when it comes to anything related to the New England Patriots. I grew up a huge Patriots fan and still vehemently follow and support them. So maybe I am not the best person to speak on the issue – I’m definitely not the most objective. However, I contend that Deflategate and the Patriots in general are very polarizing issues, so you’re unlikely to get commentary that is completely unbiased. And unlike many of the journalists that covered this topic, I am clearly stating my bias from the beginning, instead of trying to appear objective and neutral.

This is not intended to be an extensive report on this topic. If you want to read ALL of the facts of the matter and become an expert on this topic, I would point you “The Wells Report in Context,” which is a site created by the Patriots to respond to many of these *false* attacks. My intent, through this post, is to outline some of the main issues and point you all to various other resources so that you at least have to opportunity to become more educated on the topic. So, first things first:

  1. The NFL never cared about PSI levels and still doesn’t care. Let’s get this straight, if the NFL REALLY cared about PSI levels, they wouldn’t give an arbitrary range of PSI levels for teams to use. If cheating in this area was such a big concern, they wouldn’t blatantly disregard comments made by other NFL teams/players about football alteration. If PSI levels in footballs was a legitimate issue, the NFL would’ve actually recorded and kept data on PSI levels in 2015 in order to at least appear like they care about this issue. So let’s not pretend this has been an big issue over the years. The NFL gave this range of PSI, because they wanted quarterbacks to prepare footballs in a way that they liked in order to make the game more high scoring and entertaining. Nobody knew or even cared about PSI until Deflategate came up.
  2. The initial reports on PSI levels were completely erroneous. This is a well known fact, but is somehow completely ignored by many individuals when discussing Deflategate. The first tweet on this issue stated that 11 out of 12 Patriots footballs were under inflated by significant amounts. This tweet set the tone for the initial coverage and the responses to these allegations. Given the severity of these accusations, the Patriots were forced to figure out some way to respond to these charges, which were shown to be almost completely false six months later. But letting false ideas be considered and believed for six months can have serious effects, even when those same ideas are shown to be wrong in the future. These false reports did a lot to sway public opinion in the immediate future.
  3. Tom Brady behaved suspiciously, but that does not prove his guilt. I will admit that there are some things about this whole procedure that confuse me. The fact that Brady destroyed his phone around the time of the investigation is bizarre and admittedly seems suspicious. I’m not a celebrity and I don’t know how they handle their communication, but I wouldn’t say Brady’s reasoning for destroying his phone was terrible. That being said, the fact is we don’t have his phone, we never saw what was on it, and we can only speculate what he might have been trying to hide. This behavior is odd, suspicious, but far from conclusive. It would have been nice if people could have withheld judgment until more evidence came out.
  4. The entire NFL investigation process was a scam. Honestly, if the NFL hopes to maintain any appearance of credibility going forward they need to figure out how to investigate issues in an independent manner. It’s no secret that Ted Wells was not independent when he investigated this issue and that the NFL edited his report before it was published. Having Roger Goodell try to act as arbitrator after bringing these accusations against Brady and the Patriots is quite laughable for those who care at all about due process or fairness. There is definitely a legitimate and widespread concern that Goodell has far too much power and if the NFL wants to remain credible, they need to change these types of processes going forward. And this is hardly an isolated mistake on Goodell’s resumé. He has a history of totally mishandling issues likes these.

At the end of the day, Deflategate was not about Brady’s guilt or innocence, although I would argue that no conclusive evidence was shown to prove his guilt. The primary issues in the Deflategate saga were: poor journalism swaying public opinion, extreme public biases against the New England Patriots, and a terrible, unfair investigation process. This was a blatant smear job! Although I’m sure irreversible damage was done to Brady’s image and public opinion of the Patriots, Goodell actually succeeded in making himself less likable than he already was.

If you hate Tom Brady and think he was guilty, here’s a link to help you come to terms with your feelings. I know these beliefs are often deeply rooted and if you’re a fan of the Jets, Ravens, Bills, Colts, Dolphins or various other teams, there is likely no way that I can change your mind. And I’m okay with that. Hopefully this post has broadened your knowledge on these issues and created or reinforced a distaste for Roger Goodell’s managerial behavior.

If you’re a Patriots’ fan I hope this post provided you with some level of comfort and vindication. At the end of the day our team’s best response to outside hate and jealousy is to keep doing what they’ve been doing for 15 years – winning. Here’s to getting that fifth ring!

//

Regardless of your stance on this divisive issue, I would love for you to comment on this post or send me an email (unless you’re a Jets’ fan… just kidding). Thanks for reading!

 

Lessons From A Year of Marriage

Guys, as of today I’ve been married for a year so I am basically now an expert on all things related to marriage. Hopefully you detected the sarcasm in that initial sentenced and deduced that I was very much kidding. I know that, despite all I’ve learned, there are still a multitude of lessons ahead of me. That being said, here is a non-comprehensive list of some of the things that I have learned this past year:

  1. Marriage is hard, but very much worth it. Prior to getting married I heard a number of people say things like “Marriage is the hardest thing you’ll ever do” or other phrases along those lines. And it’s true, real relationships rarely work out as effortlessly as the ones in movies. But don’t let this dissuade you from pursuing marriage. The valuable things in life require effort, so (to some degree) the fact that a good marriage takes work could be a signal that it is something worth working for. And all that being said, I think overemphasizing the difficulty of marriage can work to overshadow the benefits of marriage. I am so thankful to the Lord for putting me and my wife Maddie together. I regularly wonder how I was able to survive without her, but more on that to come later.
  2. I’m quite a bit more selfish than I realized. Life is full of situations and relationships that accentuate areas of sin in one’s life. I’ve heard having children behaves in this way and can now tell you from experience that being married definitely does. I’ve always been aware of the fact that as a sinner, I am naturally selfish. But this awareness was often in a theoretical sense rather than a tangible awareness of specific selfish thoughts and actions. Having a person who lives with you, serves you, and is committed to being with you for the rest of life can create a situation where its easy to see the other person as a means to fulfilling your own desires. By God’s grace I’ve noticed these tendencies in my life and am desperately trying to fight against them.
  3. My wife is even more amazing than I could have imagined. I knew my wife was pretty special prior to marriage. After all, it would take a very special person to stick with me. And seeing the way that she has selflessly loved me this past year has been truly incredible. My wife has thrived this past year and is such an encouragement to me in all areas of life. I could go on and on about all the amazing food she makes, how hard she works at her job and school, how fun she is to spend time with, how beautiful she is, but that would literally take an entire post of itself.
  4. God is faithful and kind to bless imperfect relationships. It was a bit daunting getting married so young, while also both being full-time students. There were a lot of things that could have gone terribly wrong this past year, but the Lord has been so kind to not only prevent bad things from happening but to also bless us with many good gifts. From an amazing church to a supportive family to good jobs to a beautiful house, the Lord has given us far more than we deserve. And more than anything, we rejoice that He offered us salvation while did not deserve it (1 Peter 3:18) and promises to continue sanctifying us (Philippians 1:6).

These are just some of the things I’ve learned this past year. I’m sure there are others, but I honestly can’t think of them right now. My marriage has been an incredible blessing and I look forward to see how God will continue to teach me and sanctify me through it.

//

If you have thoughts, questions, or comments on this post, please leave a comment or send me an email. A lot of you have been married longer than I and have far more wisdom to share than I do. Thanks for reading!

The Economic/Behavioral Effects of Bridge Tolls

Those of you who live in Louisville are likely very aware of the upcoming tolls on a few of our local bridges. Given the high amount of use that these bridges face in the Kentuckiana area, it will be interesting to see how traffic behavior changes with the introduction of these tolls. What exactly might be some of the changes instigated by these new tolls?

In essence these tolls will behave as a tax on the use of three of the five Ohio River bridges, raising the cost of travel via these bridges. (As a sidenote, a toll seems to be a more equitable way to pay for the costs of the bridge than increasing everybody’s state/local taxes, regardless of their use of the bridge.) All else equal, economists generally believe that an increase in price leads to a decrease in quantity demanded. Thus, it would make sense that traffic on these tolled bridges would decrease, as people try to effectively plan and limit their trips across the river.

Now the exact size of this decrease is a little bit harder to predict. One factor that effects the size of a decrease in quantity demanded, relative to an increase in price is the availability of close substitutes. The bridges not being tolled would seem like legitimate substitutes, meaning it would seem reasonable to expect traffic on non-tolled bridges to increase.

However, it will be interesting to see whether drivers traveling from (for example) downtown Louisville to Clarksville or Charlestown view the Sherman Minton Bridge as a legitimate substitute or if cost of the extra travel time would outweigh the benefit of avoiding the toll. If time is money, as the saying goes, than it seems reasonable to expect some people (especially high earners) to choose to pay the tolls and save time. People making less money, whose time is presumably less valuable (from a strict wage perspective) would likely be willing to endure longer travels for the sake of saving some money.

All that said, this is merely theory and there are most likely other factors that will effect commuting behavior beyond what I highlighted here. Hopefully, this post was helpful and thought provoking. It will be interesting to see how this change effects the city of Louisville and the surrounding area.

//

If you agree or disagree with the thoughts posted here or have additional thoughts on this issue, please feel free to post a comment or send me an email. I’d love to hear what you have to say. Thanks for reading!