Archive for January, 2009

John Roberts’s Big Day

Tuesday, January 20th, 2009

Today is a big day for America and the world and for Barack Obama too. It seems like humanity collectively decided to throw a party on Jan 20. I still kind of can’t believe we’ll be looking at a President Obama in less than an hour.

To me the “it’s a historic day / moment / time” message not nearly as weighty as the “President Obama will likely ban torture, unrestrict funding for stem cell research, and repeal the global gag rule within a few days of taking office” one. Just giving the White House a change of face from the Bush Presidency is kind of a big deal, and the smart money is on some epic changes to the way government functions. And I don’t know how we can overstate the importance of not torturing people.

For some reason, the part of the inauguration I am most looking forward to is seeing Chief Justice John Roberts. It’s a big day for the Chief Justice: this will be his first swearing-in of a President, which not many people get to do. With everyone so hyped up about President-elect Obama, we forget about other awesome people a bit too easily. Not least of all John Roberts is an intellectual beast — and a good looking guy, in my opinion — and from what I hear he is firmly on our side in the battle for awesomeness.

Probably my favorite executive power is the appointment of justices to the Supreme Court. That gives me the most hope from the soon-to-be Obama Administration, because the liberal wing of the Court is going to need some reinforcement in the coming years. As ridiculously fabulous as Justice Stevens is, he’s not going to be around forever. The conservatives are significantly younger than the liberals. Balance must be restored.

Here’s looking at a frigging awesome time for the foreseeable future.

The opportunity cost problem

Thursday, January 15th, 2009

Opportunity cost is what you give up to get something. This is explicit in some cases. Say you buy a bag of oranges at the grocery store: the opportunity cost is what you pay for them. You can’t use that money to buy something else now.

I think the biggest opportunity cost is time. Or at least, when I try to think of examples to illustrate opportunity cost, they all have to do with how you spend your time. When you spend your time doing any one thing, you are implicitly choosing not to do anything else. When you hang out with a friend you can’t be doing homework or cleaning your room  (or maybe you can, but with a loss in efficiency). When you choose to sleep, you can’t be reading or eating or partying.

Opportunity costs loom large even if we restrict our domain to tasks that need to be accomplished. When I choose to work on my econometrics homework, it means I can’t be working on my chemistry homework. If I’m reading an ecological economics paper, I can’t be reviewing the behavioral economics literature.

I think this is a large source of procrastination. Obviously it is easy to procrastinate if you choose to party instead of doing homework. But I have found it easy to procrastinate even when  I set aside a block of time for homework only. I think this is because, when something is not due the next day, I cannot choose which assignment deserves all of my attention. The other assignments nag at my psyche leading to inattentiveness and inefficiency.

Solving the opportunity cost problem is a necessary condition for increased productivity.

Breakups and necessary externalities

Sunday, January 4th, 2009

Relationships are funny things. When you bring a new person into the fold, you are not the only one affected. Getting to know someone means introducing them to your life, including all those people you already know. Your friends and family get to know this person you’re with, and they develop relationships too.

Most relationships end. In deciding whether or not you should end the relationship you’re in, should you consider the effect of breakup on your friends and family? Surely this decision affects you, but it affects them too. A selfish agent in a relationship would make the breakup decision without paying heed to such effects on other persons.

Here we have a situation ripe for externality — that is, if the full costs of breakup are not borne solely by the agent doing the breaking. Then again, no one ever claimed actors in a relationship are rational. So maybe, when you’re considering whether to break up with your significant other, you think about how your friends or family might feel. By asking “how would this affect others”, you can move closer to the socially optimal decision.

Now, I am not one who normally argues against the social optimum. In cases like these, though, I think a little externality is best. In matters of relationships, you should only consider yourself — and optionally the other person.

Spillover effects happen. A relationship is too important to worry about market failure.

Creative Commons Attribution 3.0 Unported
This work is licensed under a Creative Commons Attribution 3.0 Unported.