Why I Am Not in Business

November 10, 2008
Posted by Jay Livingston

Dave was looking for shoelaces when I ran into him on the street yesterday. He can certainly afford them. After a successful career as a bond trader, Dave formed his own small investment company, and even in these hard times in the financial industry, with jobs, companies, and banks disappearing, he hasn’t had to lay anybody off.

He’d been walking for fifteen blocks and still hadn’t found shoelaces for his sneakers. Now he was on his way to Tip Top Shoes on West 72nd St., which would surely have them. I would have been annoyed; I might even have been curious as to why shoelaces had become so hard to find. That’s why I’m in academics and not business.

“I figure in this economic climate, people will be buying shoelaces,” Dave said. “They won’t be buying new shoes. It’ll be shoelaces. And Shoe-GOO, remember that?” I nodded, and he went on, “I should be looking for shoelace companies to invest in.”

It sounded like he was kidding. Maybe not. But that thought wouldn’t even have crossed my mind.

A Sign of Change

November 7, 2008
Posted by Jay Livingston

It’s not that I don’t get sentimental and emotional and teary sometimes about political events (like recent ones). I do. It’s just that I don’t care for emotionality as a political tool. I especially dislike the use of little kids in politics – by candidates or supporters. I cringe when I see kids marching carrying signs their parents have persuaded or forced them to carry – even when I agree with what the signs say.

But this is different.


It’s by Ezra Klein at The American Prospect, and you must absolutely go here and see the full photo-story.

It’s spontaneous and not exploitative. And it’s something you would never have seen at a McCain or Palin celebration.

Take a Tip from Me

November 7, 2008
Posted by Jay Livingston

There’s a new blogger on the block - Brooke Harrington at Economic Sociology. Most recently, she wonders why tip jars don’t get stolen more often. The tip jar is an easy target, often unwatched. Brooke sees the survival of tip jars as evidence of trust.

Yes, but there are also laws against stealing, even when you can probably get away with it.

Economists are puzzled by seemingly irrational behavior, especially when it doesn’t violate the law – like standing in line to vote when it’s almost certain that your vote won’t affect the outcome of the election. Even worse is irrationality that’s explicitly economic. When a person or organization fails to maximize its gain, say charging less than what the market would bear, economists refer to it as “leaving money on the table.”

That’s also a pretty accurate description of tipping, which is another puzzle to economists. But here’s a puzzle for lawyers or ethicists: If you sit down at a restaurant table that still hasn’t been cleared and you pocket the tip someone left, that’s stealing. But what about this: you take half the money, and when you finish your meal, you add it to the tip you leave. The server comes out no worse, but the previous diner looks like a piker, and you look like a very generous tipper.

My father claimed that this hypothetical was a question on an exam when he was a law student.

Two Years Ago - Illinois, DC, Hawaii

November 4, 2008
Posted by Jay Livingston

The news kept reminding me that this campaign had been going on for two years. True, and things can change a lot in two years. Here's a map, apparently legit, from SurveyUSA.

Exactly two years ago, SurveyUSA completed interviews with 600 voters in every state (30,000 total interviews), asking them how they would vote in a 2008 Presidential Election between John McCain and Barack Obama.

Hat tip to Wesleying, where I first saw this.