Monthly Archive for December, 2013

Walter Oi, 1929 – 2013

A long time ago, when I had just started teaching at the University of Rochester, a blind man marched into my office, adopted a commanding stance, and announced in a booming voice that “it takes 150 condoms to prevent one birth in India”. Then he turned on his heels and marched out, leaving me to wonder what he had divided into what to get that number.

That’s what it was like working with Walter Oi, who died peacefully in his sleep on Christmas Eve after a long illness. Walter loved odd facts, and he loved to share them. It was Walter who told me that when all frozen pies had 12 inch diameters, apple was the most popular flavor — but when 7 inch pies came on the market, apple immediately fell to something like fifth place. His explanation: When you’re buying a 12 inch pie, the whole family has to agree on a flavor, and apple wins because it’s everyone’s second choice. With 7 inch pies, family members each get their pick, and almost nobody chooses apple.

Walter loved facts so much that he sometimes invented new ones, because the world could always use more. One day he walked into the department coffee room and announced that “A one hundred pound man and a three hundred pound man have exactly the same quantity of blood.” When this was met with considerable skepticism, Walter responded as he always responded to skepticism — by repeating himself more forcefully: “A one hundred pound man and a three hundred pound man have EXACTLY the same quantity of blood”.

In those pre-Internet days, some of us owned a device called an “encyclopedia”, which was sort of like a hardcopy printout of Wikipedia, but with fewer Simpsons references. A couple of my more enterprising colleagues went home and checked their encyclopedias that night, and came back the next morning to report that according to authoritative sources, a man’s blood volume is roughly proportional to his body weight. Walter’s response: “Nope. A one hundred pound man and a three hundred pound man have EXACTLY the same quantity of blood.”

If you watched carefully and didn’t blink, you might have caught him suppressing a smile.

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Thursday Solution

Tuesday Puzzle

Here I have a well shuffled deck of 52 cards, half of them red and half of them black. I plan to slowly turn the cards face up, one at a time. You can raise your hand at any point — either just before I turn over the first card, or the second, or the third, et cetera. When you raise your hand, you win a prize if the next card I turn over is red.

What’s your strategy?

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MegaOdds

In case you’re thinking of running out for a MegaMillions lottery ticket in the few hours left before tonight’s drawing: If you drive one mile to buy your ticket, your chance of being involved in a fatal accident on the way is about 8 times as great as your chance of winning the jackpot.

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Vocabulary Lesson

So…Democrats want to increase federal spending. Republicans supposedly want to decrease federal spending. The “compromise” is to increase federal spending by $45 billion.

I do not think the word “compromise” means what these people seem to think it means.

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Blast from the Past

With minimum wages in the news, one of my old posts on the subject has been getting a lot of hits lately. Unfortunately that post is quite long and the key points come near the end — past the point where I suspect a lot of people might stop reading. So here I’m excerpting what I consider the main ideas:

1. If we’re going to transfer income to low-wage workers, it’s both fundamentally unfair and politically unwise to put the entire burden of that transfer on a relatively small segment of the population (namely the owners and customers of businesses that employ a lot of low-wage workers). The right thing, given that we’re going to make this transfer, is to fund it as broadly as possible — say through an increase in the Earned Income Tax Credit, which comes out of general tax revenues.

2. I used the phrase “fundamentally unfair and politically unwise”. I’ll expand on both points, starting with fairness. When we collectively want a whole lot of 18-year olds to form an army, do we put the entire burden of that desire on people who happen to be 18 years old, by conscripting them at zero wage? Or do we think it’s fairer for those of us who enjoy the protections of that army to bear the cost through the tax system? When we collectively want to convert farmland to parkland, do we put the entire burden of that desire on people who happen to own farms, by taking their land without compensation? Or do we think it’s fairer for potential park-goers to pay for that land through the tax system? When we collectively want to raise the wages of unskilled workers, should we put the entire burden of that desire on those who happen to employ unskilled workers? Or is it fairer for those who have collectively made this decision to share the burden?

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Minimum Insight

Paul Krugman argues that:

  1. Hiking the minimum wage has little or no adverse effect on employment
  2. and therefore

  3. A minimum-wage increase would help low-paid workers, with few adverse side effects

.

In other words, Krugman, not for the first time, is peddling the sort of claptrap that few of us would accept from a college freshman.

The first point — that hiking the minimum wage has little effect on employment — is an empirical one. Not all smart observers agree with Krugman’s reading of the data, but many do — so for the sake of argument, let’s assume he’s right about that.

The question now is: How the hell do you get from point 1 to point 2? Answer: Only by forgetting the most basic principle of economics, which is that things have to add up. If the minimum wage has no effect on employment, then it’s basically a pure transfer of resources. Which means that the costs and the benefits are equal. The only way there can be “few adverse side effects” —- i.e. few costs — is if there are few benefits. Our job as economists is to make sure people understand such things.

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