Joe Waljasper always has a great way with words. This time he's describing Mizzou's terribly sloppy game against OU where the Tigers lost 26-10:
After being asked about a crucial roughing-the-kicker penalty - the
umpteenth question about one knuckleheaded play or another that had
hurt his team - Missouri Coach Gary Pinkel had lost the ability to
judge which blunder was the most damaging.
"You could look at that and say that was critical, and obviously it was
critical, but I could go back and pick out 25 other plays," he said.
Unfortunately for the Tigers, he wasn’t exaggerating. There wasn’t
really one turning point in yesterday’s 26-10 loss to Oklahoma, just
like there is no turning point in a flushing toilet - just a downward
A 10-member volunteer Design Advisory Group appointed by the Hennepin
County commissioners held a public hearing this week to review the
issues and invite feedback. By Nov. 9, the group is to report back to
the commissioners on ways to activate the area around the stadium.
...But the park's sunken site means fans will reach it by elevated
walkways -- a broad pedestrian bridge extending from the Target Center,
skyways from the nearby parking ramps and platforms from the Hiawatha
light-rail and Northstar commuter trains.
"We have several large
gulfs that need to be bridged," said Chuck Ballentine, deputy
coordinator for the Hennepin County ballpark project.
How these connections work is one of many questions about how the 42,000-seat ballpark will fit into the city.
...rather than letting the neighborhood grow around the ballpark. Past experience tells us that ballparks do not, by themselves, lead to much "spontaneuous" economic vitality around them. There are notable exceptions (Wrigley Field, anyone?), but they are the outliers. Why should folks believe that public officials are any better at designing "ballpark villages" that will attract people than they were at building ballparks?
Costs, simply put, are the sacrifices people make to do something. According to economists, the sacrifices that matter when making a rational decision to do something are those that otherwise would not have been made (the marginal costs). Sometimes these are measurable costs (like a ticket to a movie). Sometimes these costs aren't measurable (like the value you place on watching a television show that you forgo watching to go see a movie) to a third party observer. Not only that, but third parties can't verify such sacrifices. How do I know if you aren't BS'ing me?
But to an economist, it doesn't matter if a sacrifice is measurable by a third party. What matters is how the decision maker internally feels about these sacrifices - the decision-maker's internal value of the thing forgone.
Accountants, on the other hand, prepare documents that describe the financial health of firms for the benefit of owners and for tax reasons. Costs also represent some sort of sacrifice when viewed by accountants, but accounting costs are costs that must be measurable and they must be verifiable. The documents that accountants create must satisfy the generally-accepted accounting principles and tax law.
For example, suppose Jared owns a business and has a son, Alex. Suppose that on one day, Jared chooses to work rather than to spend time with his son. Suppose that Jared internally values that time with his son at $25. To the economist, that sacrifice is an important part of the overall decision to work. But if Jared tried to deduct that $25 as a business expense, he'd be in trouble with the IRS faster than you could say "snail snot." Do you have a receipt for that, Jared?
Because accountants and economists treat some sacrifices differently, they can have differing opinions on the overall health of a business. Here is a link to an article from 2005 on Major League Baseball team profitability statement as compiled by Forbes magazine, a statement that baseball commissioner Bud Selig took issue with. It includes a famous quote by Paul Beeston, formerly an executive with the Toronto Blue Jays, that underscores the difference between how economists think of costs and the costs that accountants typically put in their documents.
Ozanian quoted former MLB president and chief operating officer Paul
Beeston when he was an executive with the Toronto Blue Jays: "I can
turn a $4 million profit into a $2 million loss and I can get every
national accounting firm to agree with me."
The tax laws and the generally-accpeted principles exist for a reason, but they can cloud the real issues behind why people do things.
Today's M.B.A. students are not as ethically challenged as recent
reports make them out to be, according to the findings of a study being
released today at a global conference of business educators and
leaders. In fact, 81 percent of those responding to a recent survey
believe businesses should work to improve society, and 78 percent of
them want "corporate social responsibility" integrated throughout their
The survey results will be presented during a three-day
conference, "Business as an Agent of World Benefit," at Case Western
Reserve University, in Cleveland. The conference, which began on
Monday, has drawn 440 management educators and business leaders, as
well as about 1,000 online participants.
While the proportion of tenure-track faculty job offers Harvard
University made to women continued to increase in the 2005-6 academic
year, the percentage of offers accepted by women dropped drastically.
The article does not offer a reason why this is so.
Update: Coyote Blog makes some very good points about the "business ethics" article.
Dave Berri reviews the new book The Blind Side by Michael Lewis of Moneyball fame:
Lewis focuses on a position often overlooked by
football fans, the left offensive tackle. The job of the left offensive
tackle is to protect the right-handed quarterback’s blind side. The
importance of this job is highlighted by the pay these players receive.
As Lewis notes: “By the 2004 NFL season, the average NFL left tackle
salary was $5.5 million a year, and the left tackle had become the
second highest paid position on the field.”
I teach Principles of Microeconomics at a public university in Minnesota. I follow the basic outline: students study why people trade rather than doing everything themselves. They study how prices and amounts exchanged are determined by the collective actions of people in a competitive market, not by anyone person. Students study the overall nature of consumer demand and firm supply and they study how firm officials make decisions when facing differing levels of competition in their industry.
Overall, an underlying theme of my Principles of
Microeconomics courses is that markets generally work well in coordinating
economic activity – in directing resources to their most-valued use. In recent semesters, I began having students
read a short essay written by Leonard Read in the 1940’s called “I, Pencil”. Mr. Read, writing from the point
of view of an ordinary wooden pencil, discusses the intricate web of
coordination activities that takes place to produce an ordinary pencil. He makes the point that economic activity
is so complex that, as a practical matter, government activities meant to
promote better coordination in a market often lead to less coordination and worse
In having students read this
short essay, I try to help them appreciate that most people have no idea how to
make the things they consume, yet they are able to acquire many valuable
things in the marketplace, such as lunch or a gallon of milk, with modest effort. More to the point, they can acquire these things with less effort than if they tried to make them themselves.
Private markets are ways of coordinating the
numerous activities that must be coordinated, ensuring jobs are completed,
while not requiring final consumers to actually know how to produce the goods
and services they use. People do not need to
have to worry about learning how to produce things like the wooden shaft of a
pencil, the metal that holds the eraser in place, the graphite with which they
write, or the rubber that goes into the eraser. There is no mastermind that directs these activities.
Instead, there is decentralized coordination
of the activities, coordination that takes place in small increments, in which
people complete tasks that they are most familiar with, leaving the
unfamiliar to others. The result, more often than not, is a
well-ordered economy, higher standards of living, and wealth.
Who writes it: Started by Raymond "Skip" Sauer, an
economics professor at Clemson University, it's now home to 10 econ
profs who really like sports.
The skinny: In this Freakonomics-mad
world, there's no subject better suited to ivory-towered analysis than
the statistics-rich field of sports. What, say, is Barry Bonds's
marginal revenue product? But unlike too many Bill James disciples,
these profs don't bog their blog down with data.
That's a great plug for Skip and crew (including yours truly). The Sports Law Blog also made the top 3:
Who writes it: Four sports-law professors, plus guest contributors
The skinny: With apologies to Warren Zevon, the
common threads through all sport today are lawyers and money (less so
guns). While focusing on the legalities--such as the implications of a
wrongful-dismissal suit brought by a blind ref--this blog intelligently
explains the financial impact of off-the-field goings-on.