Marshalsea de nos jours

Debtor’s prisons are supposed to be illegal in the United States but today poor people who fail to pay even small criminal justice fees are routinely being imprisoned. The problem has gotten worse recently because strapped states have dramatically increased the number of criminal justice fees. In Pennsylvania, for example, the criminal court charges for police transport, sheriff costs, state court costs, postage, and “judgment.” Many of these charges are not for any direct costs imposed by the criminal but have been added as revenue enhancers.

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Most outrageously, in some states public defender, pre-trial jail and other court fees can be assessed on individuals even when they are not convicted of any crime. 

Alex Tabarrok on MR

chess à trois

There is a rule sheet (next page), but you can start playing without it and refer to it as needed.  Basically, three sets of pieces (the same sets as in conventional Chess) border each other on the outer two ranks of the round board.  Since the "rows" are now concentric circles, a Rook may rotate around the entire board - [!!!!! -- the perfect Xmas upgrade] or move straight across the board passing through the center.  There is no space to occupy in the center, you simply pass through it.  By the nature of the board, diagonal moves "bend" toward and may rotate through the center.  The "trajectory" lines on the board are only visual aids to help you see and plan possible diagonal moves.  Diagonal moves such as a Bishop, may rotate through the center but cannot rotate through (or bounce off) the outer rank in one move.  There are "Moats" between each team on the outer rank.  They are necessary to keep Rooks from capturing each other on the first move. These Moats may become bridged if the outer rank between two teams becomes vacant.  Also, there are Creeks that run two ranks toward the center off each Moat.  The Creeks only purpose is that a Pawn cannot diagonally capture across the Creek (it must first be past the Creek).

Hat Tip MR. Ordering and more information here.

Tabarrok on Arrow

Arrow showed that when a group chooses, there are no underlying preferences to uncover--not even in theory. In one sense, the theorem is trivial. We know or should always have known that a group doesn't have preferences anymore than a group smiles. What Arrow showed, however, is that without invoking special cases we can't even rationalize group choices as if leviathan had preferences. Put differently, the only leviathan that rationalizes group choice has the preferences of a madman.

the whole glorious thing here

boids

Alex Tabarrok on bird death.

How Stuff Works on statistics of bird death. (Wind turbines 10,000-40,000; power lines 130-174 million...)

Altamont Pass is different for two main reasons: turbine location and turbine design.

There are more than 4,000 wind turbines at the Altamont Pass energy farm in California. It's one of the first wind farms in the United States, and its 20-year-old turbines are accordingly out-of-date. Their design has long since been abandoned: Latticework blades with small surface area are far from efficient for energy generation, and far from safe for birds. The lattice structure actually attracts large birds, because the frame makes for an excellent perch. Large birds like raptors are drawn to the blades, and collision rates are high as a result.

The other design issue is the blades' low surface area, because less surface area means the blades have to spin faster to turn the electricity-generating turbines. The faster the blades spin, the more dangerous they are to birds flying near them. It's unlikely that a bird that finds itself in the vicinity of the blades could ever make it through when they're spinning so fast.

As if this weren't enough to make old wind farms a bird nightmare, the Altamont Pass power plant was built smack dab in the middle of a major migratory route for large birds. The area also houses the world's largest single population of golden eagles [source: USA Today]. With thousands of dated wind turbines sprawling across a super-high-population bird area, it's inevitable that birds and turbines will meet. A current estimate puts the number of birds killed by turbines at Altamont Pass to be about 4,700 each year, several hundred of which are raptors [source: USA Today].

The Altamont Pass wind farm kills far more birds than any other farm in the United States. The total at that single wind farm with 4,000 turbines is 4,700 fatalities; the total for all wind farms in the United States, with more than 25,000 turbines in operation at any given time, is 10,000 to 40,000 per year [source: Reuters

Last Call

Cowen on Last Call:

Okrent can't claim to have discovered Prohibition; Michael Lerner's recent Dry Manhattan is another good entry in a well-tilled field. What elevates Last Call is, among other things, a clear explanation of the unique confluence of events that caused it. The introduction of the income tax made Prohibition fiscally feasible. Women's suffrage made it politically feasible. World War I created a surfeit of patriotism, a willingness to sacrifice, and an embrace of the expansion of federal power. By 1920 everything was in place for a bold new government intrusion into everyday life.

Tabarrok:

Here is Okrent on Prohibition and the income tax:

By 1875 fully one-third of federal revenues came from the beer keg and the whiskey bottle, a proportion that would increase in the years ahead and that would come to be described by a temperance leader in 1913, not inaccurately, as "a bribe on the public conscience."

...it would be hard enough to fund the cost of government without the tariff and impossible without a liquor tax. Given that you wouldn't collect much revenue from a liquor tax in a nation where there was no liquor, this might have seemed like an insurmountable problem for the Prohibition movement. Unless, that is, you could weld the drive for Prohibition to the campaign for another reform, the creation of a tax on incomes.

moral hazard revisited

Alex Tabarrok draws attention to a paper by Richard Squire in the Harvard Law Review:

If liability on a firm’s contingent debt is especially likely to be triggered when the firm is insolvent, the contract that creates the debt transfers wealth from the firm’s creditors to its shareholders. A firm therefore has incentive to engage in correlation-seeking — that is, to incur contingent debts that correlate, or that through asset purchases can be made to correlate, with the firm’s insolvency risk. The consequence is an overuse of contingent debt that destroys social wealth through overinvestment, higher borrowing costs, financial distress, and potential systemic risk. Correlation-seeking is especially pernicious because, unlike other forms of shareholder opportunism such as asset substitution, it can reduce risk to shareholders even as it increases shareholder returns.

AT: It's long been known that a firm close to bankruptcy has an incentive to gamble because if the gamble pays off the shareholders prosper and if the gamble fails then the shareholders are no worse off (since the firm was already close to bankruptcy). But gambles like this add to shareholder value primarily by transferring wealth from the creditors who bear the downside risk without any hope of upside gain.

Squire shows how this idea is magnified when we add contingent debt and correlated asset returns. A contingent debt is one that must be paid only in certain states. If the shareholders take on contingent debt and at the same time buy assets with low or negative payoffs in the same set of states then the shareholders can focus the downside risk into the states in which they are bankrupt anyway - thus focusing the downside risk onto unsecured creditors. (the rest here)

[a commenter adds: As firms get closer to insolvency, managers and directors become exponentially more sensitive to risk of personal liability and thus much more conservative. Further, creditors' monitoring increases exponentially as said risk rises (gambles always need a counterparty and they disappear in insolvency situations). The gambles by large firms occur more during times of complacency. -- MR, as so often, indispensable for supposedly unfun things]

new game new game new game

Alex Tabarrok at Marginal Revolution has a post on the role of computers in improving educational achievement in the young.

Ofer Malamud and Cristian Pop-Eleches look at the effects of a program that gave poor households a voucher to purchase a computer. ... Households with incomes directly below a cutoff level were given a voucher while households with incomes directly above the cutoff were not. Thus, households which were very similar were treated differently and this lets the authors use a regression discontinuity design that makes their results credible as representing a causal effect. The results of a regression discontinuity design are also very easy to explain with figures.

The income cutoff is shown by the red line. Beginning at the top left we see that households with incomes just below the cutoff were much more likely to have a computer than households with incomes just above the cutoff - thus the voucher program has a big effect on computer ownership. The top right figure shows similarly that the voucher program increased computer usage since computers were used much more often in households with incomes just below the cutoff than in the non-eligible for voucher households with incomes just above the cutoff.

We hate spoilers. The rest here.

(Originally from David Youngberg at See the invisible hand, which looks terrifyingly addictive in its own right.)