Saturday, April 10, 2004

USDA won't budge on meat testing case 

From today's New YorkTimes:
The Department of Agriculture refused yesterday to allow a Kansas beef producer to test all of its cattle for mad cow disease, saying such sweeping tests were not scientifically warranted.

The producer, Creekstone Farms Premium Beef, wanted to use recently approved rapid tests so it could resume selling its fat-marbled black Angus beef to Japan, which banned American beef after a cow slaughtered in Washington State last December tested positive for mad cow. The company has complained that the ban is costing it $40,000 a day and forced it to lay off 50 employees.

The department's under secretary for marketing and regulation, Bill Hawks, said in a statement yesterday that the rapid tests, which are used in Japan and Europe, were licensed for surveillance of animal health, while Creekstone's use would have "implied a consumer safety aspect that is not scientifically warranted."

Lobbying groups for cattle ranchers and slaughterhouses applauded the decision, but consumer advocates denounced it, saying the department was preventing Creekstone from taking extra steps to prove its product was safe.

Under the Virus Serum Toxin Act of 1913, the department decides where cattle can be tested and for what.

....Gary Weber of the cattlemen's association called 100 percent testing misleading to consumers because it would create a false impression that untested beef was not safe. He compared it to demanding that all cars be crash tested to prove they are safe.

Asked if American beef producers were content to give up the $1.5 billion Japanese market, Mr. Weber said: "We're not going to give in to their demands. If that means in the short-to-medium term that we don't have that market, that's the price we'll pay. But in the long run, it means there's testing that's science based and that creates a level playing field."

Asked if beef producers did not want to be pressured to imitate Creekstone and pay for more tests, Mr. Weber said it was "absolutely not about the money."
Two observations. First, Mr. Weber's statement that it's "not about the money" is an absolute howler. Second, perhaps the Japanese government has an unreasonable standard (a problem not foreign to this country). But to prohibit Creekstone from satisfying the Japanese standard seems actionable, even if a lower cost testing regimen were effective and feasible.

We noted this issue several weeks ago.

Friday, April 09, 2004

Students Sue for Right to Drink Cheaply 

That's the title of a story ($) in today's Chronicle of Higher Education. Students at the University of Wisconsin are suing because bars in Madison have agreed to eliminate "drink specials on Friday nights and Saturday nights." The Badger Herald has a publicly accessible story from March 25 on the suit:
The ban began after the University of Wisconsin's Policy, Alternatives, Community and Education, or PACE Project, recommended the creation of an ordinance to ban drink specials in downtown bars.

Instead of making the ban public policy, a group of bar owners decided to voluntarily ban weekend drink specials. These bar owners are now being sued for their actions.

The lawsuit states four main objectives: to break up the Madison Bar cartel, to return price competition to the business of selling alcoholic beverages in downtown Madison, to uncover the full duration, scope, nature of operation and economic impact of the cartel and to recover and return to the victims of the cartel, primarily UW students, the full measure of damages to which they are lawfully entitled.
This is interesting. Under the State Action Doctrine, a bar cartel of this sort would pass legal muster, like California agricultural cooperatives, which were an early test of the concept. If the state sanctions a cartel, its ok. But without state sanction, an agreement to limit price competition, even if it has some positive public purpose, is generally unlawful under the Sherman Act.

The MIT case re-tested that argument. MIT and Ivy League schools shared information on scholarship offers, and directly limited competition among themselves for students. MIT argued that the policy allowed them to stretch a limited amount of financial support across a greater number of needy students. The program was alleged to be socially beneficial, but the court did not accept the argument. The Madison bar program falls into the same trap. But if a law were passed having the same effect, there is no antitrust issue. This is an interesting conundrum. The bars are likely to lose the case, but would that lead to legislation? That the bars would benefit from pure cartelizing legislation is obvious, but they're unlikely to be sanguine about giving the government a large role in their business.

The Pink Panther at Augusta 

I spent yesterday walking the course at the Masters, following my former student Jonathan Byrd (economics, not golf!), who had a bad day (+7). Those memories will fade - that was Jonathan's 3rd round of golf after returning from hip surgery. They say you can't "find your game at Augusta, you'd better come there with it." Add the rounds of Byrd, Mike Weir (+7) and Tiger Woods (+3) to the pile of evidence.

But what created a buzz throughout the course was Jonathan's playing partner, Ian Poulter, who was decked out in pink. Poulter, from England, wore pink pants. And a pink visor. And Adidas golf shoes with pink stripes! Poulter had previously shown up for the TPC, the "5th major," with his spiked hair died red. It turns out the colors were a tribute to Arsenal Football Club (dude's ok!).

What to make of the pink outfit? I figured he was taking a page from Jesper Parnevik's book: wear garish clothes, get some publicity, and sign a marketing deal. Wearing pink is a guaranteed attention-getter. But how would this go down with the traditionalists that run Augusta? The English papers were full of rumors this week that Hootie Johnson had served notice to Poulter that he tone it down. On the record, Poulter pays homage to the tournament, and says that "It's all got a bit out of hand. I haven't had a letter from him. And Hootie Johnson hasn't said anything to me. As far as I know he hasn't got any problem with me in any shape or form."

But the boys were having fun with it. From the Telegraph:
On Wednesday night, Charles Howell, one of the tour's practical jokers, had used his southern drawl to impersonate a member of Augusta's championship committee. Having dialed Poulter, he told the Englishman that word had reached the committee that he was not planning to be as soberly clad as they would wish.

Poulter, who was completely taken in, had a question for the official. "What about Doug Sanders?" he asked, in a reference to the garish dress of the runner-up in the 1970 Open.

"We weren't happy about that, either," returned Howell. So the conversation continued until Howell decided enough was enough on the eve of the player's first Masters.
After watching him for eighteen holes, I can confidently tell you that the young man's got game. He was hitting the crispest and most accurate irons in his threesome. Save the one that flew over my head and landed in the gallery forty yards right of the 11th green. (He was a great sport about that, by the way). Poulter has a chance to make some noise in the big tournaments. If you are intrigued, this Guardian story on Poulter is the most informative I've found. He's quite a character.

Wednesday, April 07, 2004

On Olympic subsidies 

Ron Rapoport looks ahead to an accounting of how much Olympic construction will cost the Greeks. It may or may not be a good investment, but this observation should make one cautious:
The 1976 Montreal Olympics are remembered for three things: Nadia Comaneci's three gold medals, an Olympic Stadium that was a white elephant before the closing ceremonies were over and a huge debt that only recently has been paid off.
Ouch. That's a long time to pay off a white elephant.

The strange politics of superstores 

Walmart wants to sell groceries in California, like they do in many parts of the country. When they announced plans to build a superstore in Inglewood California, the city passed "an emergency ordinance ... that barred construction of retail stores larger than 155,000 square feet that sell more than 20,000 nontaxable items, such as food and drugs." The site, located between Hollywood Park Racetrack and the Great Western Forum, is described in this LA Times story as "a crumbling asphalt parking lot." Voters yesterday rejected a referendum that would have allowed Walmart to circumvent the ordinance and start building.

Meanwhile, in Fort Worth, Texas, local politicians are pitching a $40 million dollar subsidy to lure a Cabelas Sporting Goods Superstore to their city. This brings to mind the Mississippi subsidies for a Bass Pro Superstore/baseball stadium project discussed a few posts below. There is a precedent here, and it does not bode well for taxpayers.

Regardless, it's a mysterious process that bans one flavor of superstore, and grants another millions in subsidies. What a country!

Hal, Hootie, & the Masters 

Here is a compelling column at SI.com on the 2003 media firestorm created by Martha Burk, Hootie Johnson, and Hal Raines over Augusta National's all-male membership. The column is an excerpt from Alan Shipnuck's The Battle for Augusta National, an appropriate title.

Here' the plot, as I see it. Burk, described by one of the battle's protagonists as an "attack activist," found an issue to exploit. Her effort was successful - everyone now knows of Martha Burk, women's activist. Few did before the controversy.

Hootie Johnson sensed Augusta was being used in this way. He refused to "be bullied" when Burk took the issue public, which was surely her intention all along. Hal Raines, editor of the New York Times, saw an opportunity to raise the national profile of the paper with the issue. Shipnuck's account makes this crystal clear. Raines began to "flood the zone" (his term) with story after story on the issue. Many of them simply didn't make sense. The Times was on a mission, and its objective was a social one, not journalism per se.

Ultimately, the Times' coverage of the Augusta flap revealed more than anything to date that an ideological agenda was inherent in Raines' editorship. Shipnuck's story highlights the role of internet commentary by Kaus, Reynolds, Shafer, and Sullivan in making this case, while the mainstream media was initially silent. With this well established, the Raines regime was toppled when the Blair affair, a case of serious mistakes in judgement with a similar activist undercurrent, was exposed. The Masters flap was the opening act in the downfall of Hall Raines.

The one issue that has always puzzled me in this saga is the basis for Johnson's scathing public letter to Burk at the outset of the controversy. It was more than a defense of Augusta National; its scathing and intemperate tone fanned the flames of the issue. It was clear that it would incite further criticism of the golf club. In an odd way however, this had a salutary effect in the end, as Raines fell into a trap, and the Times was rescued from an ideological takeover. But that remote outcome could not have been Johnson's intent, so the reason for issuing that letter remains a puzzle. Perhaps Shipnuck's book offers an explanation.

Footnote 1: Read Shipnuck's piece when you have a few moments. Its a long, and rich in information. A single excerpt here would not do it justice. Note also - based on his prior work, I'm pretty sure that Shipnuck is not a reflexive defender of Hootie or Augusta.

Footnote 2: Eric McErlain is a Hootie defender, on the basis of principle. Read his post, "Who Is Hootie Johnson," to learn important facts about the man that Raines would never print. I've linked this before, but it's a hall of famer, and deserves a reprint.

Tuesday, April 06, 2004

NOPEC 

That's the tile of a bipartisan bill (natch) aimed at OPEC. Introduced last week by Senator Mike DeWine (R-Ohio) and Herb Kohl (D-Wisconsin), the legislation "would permit the U.S. Department of Justice and the Federal Trade Commission to bring antitrust actions against foreign states." Ahem. Perhaps the boys should first nullify the Webb-Pomerene Act (1917), which allows US firms to participate in export cartels. Then they can step up and claim the moral high ground.

A hearing on the cause of high gas prices is set for Wednesday. Set to testify are Justine Hastings, assistant professor of economics at Yale, and William Kovacic, general counsel at the FTC. Might make for interesting viewing - in between the senators' sound bites - on CSPAN.


Height and the economic historians 

Newmark's Door points to an article in the New Yorker which discusses work by economic historians on variations in human height. Initiated by Nobel Laureate Robert Fogel, the path of this work was not pre-conceived, but rather guided by the formation of intellectual puzzles and subsequent data analysis. The findings are stunning, and important.

From studying height differences between African-American slaves and their African contemporaries, Americans and Europeans, oriental peoples over time, and so on, emerges an intriguing and engrossing tale. We now know that the average height of a population is a long run indicator of a society's health, a summary index of nutrition and disease. Urbanization in the middle ages decreased height, due to the effects of concentrating disease. The migration from Europe to America increased height dramatically, one of Fogel's early findings. But this trend has been dramatically reversed in the last half century, as the height of American's has reached a plateau while other societies have shot past. The stereotypical image of a small oriental male does not fit that of professional athletes such as Yao Ming, Ichiro, or Chung Ho Park. These fellows are the leading edge of a dramatic increase in height of oriental populations as their economies develop, and nutrition and health improve.

These findings are of immense interest and importance for public policy. For example, should pre and post-natal care be entirely free to everyone in a society? They are so in the Netherlands. This is a critical stage of development, with long term implications for the future health of children. As the New Yorker article notes, the Dutch have grown from "among the smallest people in Europe to the largest in the world" over the last century. Maybe this is a coincidence. Or do the Dutch have the model policy for "no child left behind?"

The economist's manifesto on stadium subsidies 

Brad Humphreys, an economist and baseball fan like myself, testified at the DC Committee in Finance and Revenue last summer on the case for funding a baseball stadium in DC. Brad has studied the issue extensively and knows what he's talking about. I recommend reading it all, but here is the bottom line. The figures and location are obviously specific to DC, but the case is general and eloquently made by Brad. One might as well call it the "economist's manifesto on stadium subsidies."
I am not against baseball. I am not opposed to public subsidies for baseball stadiums. I am opposed to public financing for sports facilities on the grounds that they will be engines of economic growth, generating thousands of new jobs and raising the income of taxpayers. The evidence from the academic literature on the economic impact of stadiums overwhelmingly suggests that there will be no net economic benefits from a new stadium. So let this be your guiding question: Is it worth $338 million in tax money spent on a new baseball stadium to incrementally improve the quality of life of the taxpayers, civic pride, and the national image of the District?
And the way to evaluate that question is to compare the benefits of $338 million in stadium spending with $338 million in alternative public investments, including tax relief.

Monday, April 05, 2004

Point spreads and the mythical "balanced book" 

Papers on point spreads commonly claim that bookmakers set the spread in order to "balance the book," and adjust it in order to take equal amounts of money on either side of the proposition. This is a myth. In reality, bookmakers often have a serious imbalance on either side of a game. Duke-UConn was such a game. Duhon's "meaningless" three-pointer at the buzzer rescued millions of bookmaker dollars from the Blue Devils' collapse. Here's an interesting case, from an intriguing story at ESPN:
The Duhon shot caused a $630,000 positive swing for BetCBSports.com, an online sportsbook based in Costa Rica. The sportsbook took more than 10,000 bets on the Duke-Connecticut matchup, with more than 8,000 bettors placing an average wager of $50 on UCONN to cover a 2- to 2 1/2-point spread. If Duhon didn't hit the shot and Connecticut prevailed 79-75, BetCBSports.com, which has no affiliation to the network broadcast partner, would have lost $290,000 instead of making $340,000, according to Dan Johnson, senior oddsmaker for the betting site.

When Duhon made the shot, there was an overwhelming feeling of euphoria here," said Johnson, who was in the company's headquarters surrounded by televisions. "We all jumped up in unison and that doesn't normally happen in this business.
A couple of points. If the line is right, and the outcome of the bet is 50-50, BetCBSports.com's expected profit is $25,000 on this game. Assuming the line is correct, random plays like Duhon's shot typically settle matters, which, given the vigorish, is where the bookmakers get their edge. Bookies make their living off of garbage time. Second, although they seem suspiciously rounded, the numbers reported in the story add up. Assuming the standard 11-10 rule, they point to betting volume that was four times higher on UConn than Duke. Not balanced, not at all.

Bookies take big risks, but note: even if the public is cuckoo for UConn, the wise guys are not. If the book had raised the line to, say 3.5 to 4.5 points, smart money would have flooded in on Duke. The bookmakers would have set themselves up for fleecing, which is not their business model.

Line-setting is tricky, and there is alot of money riding on whether the line is correct. Mike Roxborough, who set the initial spread in Vegas for many years, kept a nylon rope in a plastic bag nailed to his office wall. Below it was a sign "For a Middle on Super Bowl." Books can lose to both sides (a middle) when the line moves significantly. Another reason, assuming no change in fundamentals, to sit tight and accept the risk from one-sided action in situations like the Duke-UConn game.

Stadium deals - AA edition 

The Braves AA team has played for 20 years in Greenville, SC. They played in Municipal Stadium under the following terms: no rent, with all revenue from tickets, concessions, parking, and souvenirs going to the Braves. Not bad, but the stadium is old, and attendance was on the wane. So it was time to "listen to competing proposals," as Bud Selig, in reference to the Expos, said on ESPN2 last night. That is, run an auction among political entities to see who'll provide the best bag of goodies.

Greenville came up with an $18 million proposal, based on the following principles: the stadium "must promote economic growth downtown," "not use residential property taxes," and "not jeopardize the city's bond rating," while allowing "the Braves to keep enough revenue to operate a team in Greenville."

Sensible enough. But a competing proposal, to use Selig's term, was sufficient for the Braves to divorce themselves from Greenville. The G-Braves will become the Mississippi Braves next season and play their games in Pearl, just east of Jackson. The $25 million stadium in Pearl is part of a $55 million complex planned by Bloomfield Properties. The twin pillars of the project are the stadium and a 125,000 square foot Bass Pro Shops. The state is providing $7.5 million in tax rebates for the stadium. Also reported are $8.2 million in incentives for the overall project, and the usual infrastructure work.

The stadium is reported to be "privately financed," although this raises the question of how the returns to private financing will be realized. Regardless, it is clear that state-level subsidies are central to the Pearl project. In a political competition between the city of Greenville and the state of Mississippi to subsidize stadium construction, the winner is obvious. Citizens of Greenville may rue the loss of the Braves, but the price of keeping them appears to have been too high.

Nearby Jackson had its own AA team until 1999, when it moved to new digs - apparently very nice ones at that - in Round Rock, Texas. Now its Greenville's turn to feel the sadness, though its a safe bet the city will find a team before long. There are plenty of teams around, including an independent league team in Jackson who will soon be looking for a new home. The game of musical chairs continues. Who's the winner, Bud?

Sunday, April 04, 2004

Cuban on taking a charge 

Worth thinking about, at least.
Off the ball defender charges should be eliminated. It should ALWAYS be a block. It would mean we could get rid of the half circle under the basket since that only applies to off the ball, 2ndary defenders, and we would speed up the game and add highlight plays to every game and reduce the number of injuries suffered by our best players every year.

One thing to clarify on for those who aren’t familiar with NBA rules. This would in no way apply to charges taken when you are actively guarding your man. So if Nash is guarding Marbury, and Marbury lowers a shoulder and knocks over Nash, or vice versa, it would still be a charge.
Update: Dan Lewis has more on the issue of rules. He makes the point that fouling "should offer no strategic benefit." This is a problem in many sports -- soccer and football have similar issues, and designing proper rules to address the problem is difficult. If Cuban is right, and his proposal was summarily dismissed by the old guard, that's unfortunate, to put it mildly. His proposal deserves consideration.

Weekend update 

Adu watch: The watch is over. Freddy entered in the 61st minute and showed some skill, but never got off a shot. Looks like his coach plans to bring him along slowly, which is surely the right thing to do. He'll score soon enough, but I'll wait for the highlights.

Pollard's Vision: The one-eyed colt named after Seabiscuit's jockey turned in a sharp performance, winning the Illinois Derby by 2 3/4 lengths. He didn't beat much though, and had things his own way the entire race. The Kentucky Derby will be a much tougher proposition, but he's earned his place in it. He'll be a big talking point in the media run-up to the race. Meanwhile, at Santa Anita, the Derby picture got even murkier. Favorites Wimbledon and St. Averil each turned in a stinker, while 30-1 shot Castledale edged newcomer Rock Hard Ten in a thrilling stretch duel. Imperialsm, another horse with limited vision in one eye, was also in the thick of it when Rock Hard Ten drifted into his path, for which he was disqualified and placed 3rd. All three appear bound for Kentucky.

Replays of the Illinois Derby & Santa Anita Derby can be seen in Real Player here. Next up are the Blue Grass, and the Arkansas Derby, where the focus will be on Smarty Jones' final furlong. If he finishes fast and wins, he'll be the Derby favorite, but as with Pollard's Vision, there are questions about stamina and his ability to get a mile and a quarter.

Update: There's also the Wood Memorial next Saturday, where the highly regarded Eddington has a chance to redeem himself.

Friday, April 02, 2004

The jobs puzzle 

Much has been written about the jobs puzzle - the slower than usual recovery of employment as the economy has pushed out of the recession. In today's New York Times, Eduardo Porter's piece is titled "Estimates of Job Creation Versus the Facts." Mr. Porter states that economists will be watching today's jobs report to see if "the numbers that they were forecasting are as embarrassingly off target as they have been in recent months."

All indicators point to a strong economy and strong employment growth, but employment estimates from the BLS, the "facts" that Mr. Porter takes as given, have stubbornly refused to fall in line with past experience.
Ever hopeful, many economists are still expecting a burst of employment. The consensus forecast this week puts employment growth at 120,000 jobs in March. Goldman Sachs is betting on 160,000. And High Frequency Economics is forecasting 200,000, saying good weather and the end of a supermarket strike in California should give the jobs data a big boost.

Some "whisper numbers," which economists do not write down but which make their way into trading rooms along Wall Street, are even higher.
Here is an interesting conjecture, that if true, might solve the riddle. Brian Wesbury and Bill Mulvihill, economists at a Chicago Investment Bank, argue that the current BLS benchmark for employment is probably too low. Unlike other agencies, the BLS is slow to revise its benchmarks in light of contrary evidence. The BEA, for example, recently revised its January estimate for wage and salary income of private workers upward by 0.7%. The disconnect between income estimates and employment estimates is what has economists confused.

Wesbury and Mulvihill state that the BLS won't revisit its benchmark until February of 2005, and that employment figures may be off by as much as 100,000 per month. If this argument has force, employment will remain surprisingly low until next winter when the BLS restates the employment "facts." Can it be that simple?

Adu watch 

I wasn't aware of this fact on the switching of draft picks:
As a single-entity operation, M.L.S. had the luxury of engineering the swapping of the rights to Adu from Dallas, which held the first selection in its draft, to D.C. United, which is based close to Adu's home in Potomac, Md. ....

Ultimately, it was Adu's mother, Emelia, who insisted that her young son live at home, intimating that if the league did not agree, the family might accept a more lucrative deal from a European club.
Most of the rest of this story is well known, but check it out if earlier stories slipped under your radar. Freddy Adu, the 14 year old soccer phenom, plays in his MLS debut tomorrow (ABC TV, 4:30 ET).

The University of Colorado and the State 

The Chronicle has an interesting story about The University of Colorado System's President, Elizabeth Hoffman. The story focuses on her handling of the sex scandal associated with the Buffalo football program, of course. In an odd twist of fate, responsibility for athletics had been removed from the President's office prior to her arrival in 2000. The move is traced to the stormy relations between her predecessor Judith Albino and the Board of Regents. But the public scandal has thrown responsiblity for managing the issue back into the President's court, where it surely belongs. But what I found most interesting was this passage:
During the past couple of years Ms. Hoffman has been pushing for even more autonomy. She wants the state's General Assembly to grant the university "enterprise status," which would make it a semiprivate institution with more independence over financial matters such as raising money and setting tuition rates.

Even in the midst of the athletics scandal, she has continued to lobby for passage of a measure that would create a voucher system for students at the state's public and private colleges, bringing out pages of charts and graphs on the university's budget over lunches and dinners with state legislators. If the bill passes this spring, Ms. Hoffman says, the university's "enterprise status" is a done deal.

The new status is essential for the university's financial future, she says. The university system now receives only about 10 percent of its funding from the state. After three years of significant cuts in money from the state, she says, the university needs more autonomy to manage its finances in order to maintain quality.
This issue is not unique to Colorado. The University of Virginia is a well known example where state funding has become a small percentage of operating expenditure. Clemson has the same problem. The issue is not just "managing finances," but having the freedom to make autonomous decisions on numerous margins which affect the university. Given the dry well in public funding, schools want to be released from regulatory constraints on what they do. Increasingly, good state universities are obtaining a more private character. Schools that do not move in this direction will surely suffer in the national competition for quality students and faculty.

The Chronicle piece is very interesting in all its dimensions, and is worth reading. By the way, President Hoffman was well known among economists before entering the realm of university administration. Good luck to her as she navagates these treacherous waters.

Thursday, April 01, 2004

'Tis the season 

From Baseball Musings: Steinbrenner Repents
In what some people call the most unlikely turn of events since Bobby Ewing's return to Dallas, George Steinbrenner apologized today for running the Yankees as an evil empire. As a way of doing penance, Steinbrenner has traded rosters with the Tampa Bay Devil Rays.

"I didn't know what else I could do," Steinbrenner explained. "We've been on a ten year roll, and Tampa's never won more than 63 games. Besides, I thought I owed Lou one after firing him two or three times. And with all the time I spend in Tampa, I'll still get to see a championship team. Besides, maybe now the fans will get off my back for letting Tino go."

....

Derek Jeter looks forward to playing in the relative obscurity of Tampa Bay.

"It's cool. I'm tired of staying out late and partying at night clubs anyway. I can use the extra time to work on my defense."
Go on over to Baseball Musings. There's plenty more.

Update: Doug Pappas has been at it as well, and pays his respects to Bud Selig here.

An informative piece of trivia from the 1915 Rose Bowl 

I'm reading John M. Carroll's biography of Fritz Pollard, a black football player whose career was cut short when the NFL instituted a policy of segregation in 1933. Pollard, a collegiate hall of famer for Brown, probably belongs in the NFL hall of fame as well.

The book is packed full of interesting facts. Here is one observation from preparations for the 1915 Rose Bowl.
During its stay in the Los Angeles area, Washington State held its practice sessions on the movie set of the film Tom Brown of Harvard. The players worked as extras in the low-budget film with a football theme, and Coach Dietz had a principal role. Dick Hanley, a star halfback of the 1915 team, recalled that "for two weeks before the game we were busy all day filming the football scenes. We thus combined our movie work with training for the game." He added that the players made about $100 apiece for their movie work and "bet it all on ourselves to beat Brown." ... Most sportswriters, in deference to the alleged superiority of Eastern football, made Brown a heavy favorite in the contest.
That's not a bad chunk of change in 2004 dollars, and participation in the film would certainly violate NCAA rules today. And the gambling -- what a scandal that would be!

My point? Remember your history the next time someone alleges that the modern game has lost touch with the ethics of "the good old days." I'll have more on Carroll's book when I finish reading it.

Champs or cheats? 

Rumors of a drug scandal from 50 years ago are coming back to haunt the Germans, according to the Daily Telegraph (registration).
Half a century after Germany's 1954 World Cup victory, widely considered to mark the moment the country regained international respectability, Germans are transfixed by a row over allegations that the players may have been doped.

The German football team, who emerged as the "Heroes of Bern" after a 3-2 victory over Hungary in the Swiss capital, may have been injected with performance-enhancing substances before the match, according to a new book and two television documentaries by publicly funded broadcasters.

Former doctors claim that they injected the men with Vitamin C, but the documentaries suggest that subsequent health problems raise further questions.

The victory was an unlikely one. Hungary were regarded as the finest side in the world and in an earlier game in the tournament beat the Germans 8-3. The events were dramatized last year in the film The Miracle of Bern which has broken box office records in Germany and on his own admission, reduced Chancellor Gerhard Schröder to tears.

To football enthusiasts the very fact that the topic has been brought up at all has come as a crushing blow. Bild, the mass tabloid, yesterday referred to the claims as "the most horrendous accusation in the history of football".
This is an odd story. Sustained excellence, which even my English friends will admit has been produced by the German team for decades, is unlikely to stem from a one-off set of injections. Nevertheless, the claim that the syringes were filled with Vitamin C sounds dubious from this vantage point.

Direct democracy and college athletics 

California's budget problems are forcing colleges to cut funding across the board, sports included. Accompanying these cuts, according to this story in the LA Times, are referendums to support programs with student activity fees.
Priorities were put to a vote earlier this month at San Francisco State, and sports lost. Students narrowly rejected taxing themselves $33 a semester to pay for half of the $2.6-million athletic budget, putting the school's 16 remaining intercollegiate teams in jeopardy. Swimming has already been axed.

"It's saying that healthy growth through sports is not a priority and that college athletics is not important," said student body President Natalie Batista, a former softball star.
$66 bucks a year doesn't seem like much, but I have no idea what San Francisco State athletics does for its students. The story does not make clear whether the remainder of the budget is generated from athletic revenues or school subsidies. Students at San Diego State, where athletics are more prominent, vote next month on a $95 per semester fee. Having local hero Tony Gwinn (former Padre, and Aztec basketball and baseball star) for your baseball coach might help get out the "pro" vote, but $190 per year is real money.

In general, I give the edge to athletics over the English Department when it comes to students voting on funding programs. It is interesting to ponder what it means that university administrators are cutting sports programs and throwing back the option to a student vote, but I haven't sorted it out yet.

Wednesday, March 31, 2004

Changing the walk rule 

JC at Sabernomics considers the implications of adopting Bill James' suggestion to change the walk rule. JC is surely correct that productivity differences between hitters will increase. He might also be right in that long term adjustments will not be fan-friendly. I still support experimenting with the rule change in spring training. Perhaps an independent minor league will consider adopting it.

More on the Jets' stadium deal 

Bill Sjostrom has an interesting observation on the queue for Jets tickets, and some useful links on the stadium subsidy issue.

NCAA to ban media guides 

According to a story in the Chicago Tribune (registration), the ACC and Big 10 are pushing a proposal to ban media guides, at least in the printed form. The reason? Competition in recruiting has transformed the media guide from information source into a costly vessel of glorification.
When Bob Brooks started covering Big Ten football in the 1940s, media guides did not exist.

"You'd be given a roster," Brooks recalled. "And maybe a background of the head coach."

As the years went by, an entirely different problem emerged. Football media guides grew like sewer rats, some swelling to 500-plus pages as schools beefed up their books to impress recruits.

"From the press standpoint, those things are terrible," said Brooks, who talks Iowa football on KMRY-AM in Cedar Rapids. "What I did for years was go through them and rip out all the fluff."

......Most NFL guides weigh a fraction of what college guides do. Although they're often more than 300 pages, they can be half the size of the 8½-by-11-inch college guides and typically contain thin paper, rather than the shiny and glossy pages.

"Why they have not done something about this in the past is unbelievable," Brooks said. "Michigan wanted to have the biggest guide. Then Michigan State did. Now we're up to the Webster Fully Unabridged Dictionary."
The modern media guide is a form of rent dissipation, that stems from the rule which prohibits schools from paying players. Schools thus compete on non-monetary margins - lush locker rooms and player lounges, recruiting parties (we've seen recently where that has led), tutoring services, athletic dorms - to get an edge on recruits. Rules are then subsequently passed in a futile attempt to reduce these costs. The recruiting rule book has gotten so big and complicated that athletic departments need a lawyer on staff to interpret it!

The current record holder for the media guide is Notre Dame, checking in at 788 pages. No surprise there. Notre Dame has plenty of rent to dissipate.

Tuesday, March 30, 2004

The Economist on statistical analysis and sport 

The Economist magazine has a story on statistical analysis in sports. Most of the article will be familiar to people who have been following this trend. The story pays appropriate respect to our intellectual godfather, Bill James, and mentions the contributions of economists David (4th down) Romer and Steve (down the middle) Levitt.

I'm an advocate of the proposition that economics sheds light on sport, and that sports shed light on economics. It's a two way street, and the article shares that view:
Shrewd observers seek understanding not through received wisdom but from the statistics that accrue over weeks and seasons. Analysing those statistics allows one better to determine which players are better than others or what the best strategy might be against a certain team. ....

And the cross-pollination between sport and social science works both ways. In September 2002, a group of economists at the University of Chicago wrote a paper in the American Economic Review arguing that in taking penalty kicks in football, strikers would do better to aim at the centre of the goal, as goalkeepers invariably dive one way or the other in a desperate blocking attempt. Steven Levitt and his colleagues had an added motivation for their subject: game theory, their discipline, often lacks real-world examples, and in sport they saw a rich set of unbiased, real-world data with which they could validate their theoretical constructions. They saw, in other words, the opposite of what those grizzled scouts and coaches see: a field of data rather than a field of dreams.
Thanks to Mark at Rational Explications for the tip.

I'm a starter! 

"Batting seventh, second baseman, The Sports Economist," .... at Only Baseball Matters. I guess I'm the counterexample to the title of that fine blog on the SF Giants. Time to step up to the plate and knock in some runs!

Some facts on regulation, refining, & gasoline prices 

No new refinery has been built in the U.S. since 1976. Although expansion of existing refineries increased capacity through 2002, capacity is unchanged since. Demand for gasoline continues to rise, but regulatory mandates have forced investments in "clean fuel expenditure" and inhibit investment in new capacity, according to this story in the Houston Chronicle. "The U.S. refining industry could spend as much as $20 billion on meeting all types of regulations this decade, predicts Bob Slaughter, president of the National Petrochemical and Refiners Association. Depending upon size, this could be enough to build a half dozen refineries."

Given the shortfall in refining capacity, the U.S. has resorted in recent years to increased imports of refined gasoline. But this source is also being checked by regulation.
The United States needs 1 million barrels per day of gasoline imports during the summer just to keep the cars and trucks rolling .... Over the course of a year, imports amount to about 10 percent.

But even that source of supply has its environmental problems. Regulations that went into effect on Jan. 1 are keeping the equivalent of 150,000 barrels per day out of the country. Gasoline imports for the year to date are down about 6 percent, the equivalent of about 50,000 barrels per day.

Much of the 150,000 barrels has been coming from suppliers such as Russia, Turkey and South America, where refineries aren't set up to produce the lower-sulfur fuel that is now required.
My sense is that conditions in the gasoline market will get much worse before they'll get better. And the culprit is environmental regulation. Consumer anger at gasoline prices is usually focused on "greedy oil companies." How will consumers respond when they realize that environmental regulations are responsible for high prices?

To be sure, there are many factors at work in the gasoline market. Crude prices are up. Energy demand in China is growing inexorably. OPEC production decisions are paramount. But if more severe environmental regulations in the U.S. play an important role, U.S. gasoline prices should have risen relative to prices in the rest of the world. That's testable, and my hunch is its correct. The Knowledge Problem has a series of posts for those interested in more information on this topic.

Monday, March 29, 2004

The NIT's antitrust suit vs. the NCAA 

The NIT has charged that the NCAA violated antitrust law when it threatened to sanction teams who declined an invitation to the NCAA tournament in favor of the NIT. Jeffrey Kessler, an attorney representing the NIT, states his case in the NY Times.
In 1950, for example, City College of New York played in and won both tournaments.

In 1962, Loyola, Mississippi State, Dayton, the University of Houston and St. John's all chose to participate in the N.I.T. rather than accept invitations to the N.C.A.A. tournament. In 1970, Marquette, one of the best teams in the nation that year, chose to go to the N.I.T. over the N.C.A.A. tournament, which provoked an outcry by the powers that ran the N.C.A.A. tournament. .....

[I]n the early 1980's, [the NCAA] took decisive action.

The N.C.A.A. changed its rules so that all schools invited to its tournament would be required to boycott the N.I.T. under the pain of N.C.A.A. penalties, and combined that rule with a major expansion of the N.C.A.A. tournament field to 64 teams from 32. The result is that each year the N.I.T., or any other tournament that may try to enter the market, is prevented from competing for any of the best teams in the country, and the N.C.A.A.'s monopoly power and profits are assured.
The NIT may have a very good case. I do not object to the NCAA's effective monopoly in the tournament in any way shape or form, but a boycott requirement violates antitrust law. A simple requirement that a school commit to the NCAA tournament if an invitation were accepted would have been sufficient, and lawful. The NCAA, by the way, is a serial violator of the Sherman Antitrust Act, so this is nothing new. But the NIT is woefully slow in suing over something that occurred twenty years ago.

Pivotal Moment 

Xavier gave Duke a strong challenge yesterday, matching Duke's intensity but not quite their athleticism. The game's pivotal moment was Anthony Myles' little push on Sheldon Williams, fouling out Xavier's best player with twelve minutes remaining. George Vecsey suggests the Gremlins were at work again:
Anthony Myles looked to see his replacement scampering up to the scorer's table, but Coach Thad Matta had summoned the sub a moment too late to get him into the game...... Just don't foul.

Six ticks of the clock later, the great deus ex machina of sport struck again. The same practical joker who allowed Christian Laettner to catch an unobstructed pass and turn and shoot against Kentucky a decade ago was back. The same prankster who used to favor Notre Dame and the Boston Celtics back in the old days was pulling the strings once again.

The same mischief-maker who flicked Derek Jeter's fly ball into a home run, the same sadist who made some poor boob in Wrigley Field stick out his hands and deflect a foul fly, was in midseason form.

Before Myles could get out of the game for a rest, he made contact with Duke's Shelden Williams under the Blue Devils' basket. This was not some blatant collision that made the Georgia Dome shake, but rather two large and determined athletes grappling for the same little corner of this crazy universe.

One tweet of the whistle and Myles was out of the game for good, with 16 points and 10 rebounds, with 12 momentous minutes and 27 significant seconds left in the game.

Sunday, March 28, 2004

Okla State-St. Joe's 

Nice article on a great game, by John Feisntein, dean of college basketball writers.

Friday, March 26, 2004

On Adu, and youth 

Freddy Adu, the 14 year old soccer phenom, will make his MLS debut for DC United on April 3rd. The match will be televised on ABC at 4pm ET. Adu finished school last Friday and traveled to Charleston, SC to play his first game with United in the Carolina Challenge Cup. He scored within 11 minutes. This could be fun to watch, and United's TV schedule indicates that he'll be on a lot. Adu is the highest paid player in MLS history, and is surely worth every penny of his salary.

Ring a bell? This brings to mind Michael McCann's research which I recently referenced. McCann's analysis shows that, contrary to popular opinion, high school players drafted by the NBA are quite successful. Nbadraft.net has an interview with McCann. When asked why he wrote the article, McCann said:
I initially came up with the idea right before the 2001 NBA Draft. At the time, I had read a number of newspaper stories criticizing the ability of high school players like Kwame Brown, Tyson Chandler, and Eddy Curry to participate in the Draft, and how their participation was somehow harmful to both them individually and to the NBA. These stories would often say something to the effect of, "for every Kobe Bryant, there are two or three Korleone Youngs" and how history showed that high school players tended to fail in the NBA. I was honestly struck by the fact that no one seemed willing or interested to challenge this assertion, and I was curious to see if it was indeed correct. After conducting preliminary research, I soon realized that this assertion was woefully wrong, and, in all likelihood, had only become accepted as fact because it was repeated and repeated until it became recognized as such.

Question: Critics of your theory claim that a player like Korleone Young is a prime example of why a ban on high school players makes sense. How do you respond?

Michael McCann: You're right - many people regard Korleone Young as a "failure" because he was a second round pick in 1998 and only played one season in the NBA. Well, first off, bear in mind that at age 19, he earned $289,750 to play in the NBA. Had he never earned another dollar playing basketball, he could have returned to college at age 20 with plenty of money in the bank - and certainly more money than any 20 year old that I knew in college.

Instead, however, Young has continued to play basketball professionally over the past five years, earning between $50,000 and $100,000 per year to live abroad and play two or three basketball games a week for eight months of the year.
Not bad for "a failure." Let them play!

A stadium whopper 

The Jets want to move back to New York, and have their eyes on a site that connects to the Javitz Center, on the banks of the Hudson in Midtown Manhattan. Interesting location. The Jets are offering to pay $800 million towards a $1.4 billion cost. The figures come from this story, which does not make clear just what property rights the Jets obtain for their millions. The stadium proposal includes $600 million in public funding which, if solely for the purpose of the stadium, would set a record of its own.

Suppose there is no land ownership transferred (this appears to be the case), merely a lease tied to the stadium, and nothing more. If so, this implies that the Jets' $800 million expenditure is a measure of an NFL team's willingness to pay for a stadium. Public subsidies for stadiums elsewhere - where teams have spent a tiny fraction of this amount - thus appear to be wealth transfers to franchise owners. This simple notion echoes a point made at length in a recent paper by economists Marc Poitras and Larry Hadley of the University of Dayton.

How do owners get away with this? I call this the "franchise monopoly game." Monopoly leagues create artificial scarcity in the number of teams that can participate in the league. They control entry and to a great extent, location. The initial wave of public funding for sports stadiums began in the 1950s, when MLB spread teams from multiple team towns like Boston, Philadelphia, New York, and St. Louis, to new cities. Does your town want a team? Build us a stadium. If not, we'll go elsewhere. Since then, threats to relocate have been credible, and subsidies have increased dramatically. Some slides from a lecture I give on this topic are here. Russell Roberts links the political pitch on the economic impact of stadiums to Bastiat's broken window fallacy. Andrew Zimbalist, who wrote one of the seminal studies on this topic, comments on the Jets' proposal in this story. He's as puzzled as I am about the terms of the Jets' deal. This one bears watching.

Thursday, March 25, 2004

More from Bill James 

AEI's The American Enterprise has an interview with Bill James. Of course you'll just go there and read it, regardless of what I say. Here's a snip though:
TAE: You've advocated a number of changes to speed up games, such as thickening the barrels of today's whippet-thin bats, limiting time outs, limiting pitchers, etc. A couple of years ago, some suggested limiting the number of intentional walks. You might call this the Barry Bonds Rule.

JAMES: I think intentional walks should be limited, but among the things that slow down baseball games intentional walks don't rank in the top 50.

I suggest a batter should be able to decline a walk. Not only an intentional walk, but any walk. The batter's team should able to say, "No thanks, I don't want that walk." And if you walk him again, he goes to second base and anybody already on moves up two bases. The reason that should be the rule is because the walk was created to force the pitcher to throw hittable pitches to the batter. That is the walk's natural function. To allow the walk to become something the defense can use to its advantage with no response from the offense is illogical and counterproductive.

TAE: Don't TV time outs, which break the rhythm of the game, make baseball unendurable for many viewers?

JAMES: I think prolonged TV time outs are a serious mistake, because they do make the game less enjoyable. That depresses both live attendance and viewership. And it also tends to create an artificial surplus of advertising time on baseball games, which drives down the price of advertising minutes.

TAE: In his recent State of the Union speech, President Bush called for a ban on steroids in baseball.

JAMES: I was glad to see it. I think it is a serious issue. It's serious because what professional athletes do now, college athletes will be doing in five years, and high school athletes will be doing in ten years or sooner than that, and there are serious negative health consequences. We can't permit baseball to be a wedge which opens that door. So I was glad to see him pay some attention to it.
Hat tip to Tom in Houston.

Quote of the day 

From Keith Olberman's Constitutional Amendment Prohibiting Corporate Welfare: any official of any government "who pays, suggests his government should pay, or promises a sports franchise, or ... money towards building a stadium or refurbishing an existing one, that official will be sentenced to a life of hard labor in a federal penitentiary."

From Mike Lupica's Mad as Hell, 1996, via Raymond J. Keating, "Sports Pork," Cato Institute Policy Analysis No. 339.

Teacher quality 

Virginia Postrel surveys research on teacher quality. The bottom line is that teachers' unions have compressed wages, and hence those with the most potential find jobs in other sectors.

This is consistent with what is currently happening in South Carolina. A program to introduce sizeable tax credits for any child in any school - public or private - is being attacked by the SC Education Association (the union). The program would allow any child to remain in pubic school at no extra cost, or to use the credit to subsidize tuition elsewhere. This program would not decrease demand for teachers.* Rather, it would make earnings more sensitive to teacher quality. That's what competition does naturally, and unions and state monopolies suppress. Can't have that now, can we kids?

*Indeed, the union's advertisements imply that spending on education would increase as a result of the program..

Point and scoot -- NCAA tourney edition 

Nice story about Mo Finley, the giant-killer from UAB. Finley dreamt of playing for an SEC school, but got no offers out of high school, despite averaging 25 points a game. So when his chance came, he took down Kentucky with the shot of his life. Apparently, he was prepared for it. Good on ya, Mo.