Steve Verdon partially answers why Citibank is getting bailed out:

Simple: the executives and large stake shareholders in Citigroup have the personal phone numbers of most politicians in their roll-a-dex. They are probably on a first name basis with Senator Harry Reid, Speaker of the House Nancy Pelosi, Secretary Henry Paulson, and Senator Mitch McConnell.

Voters on the other hand do not have these numbers. Voters are a large and diverse group. Voters are hard to organize and can be a fractious group at best. So when it comes to supporting large scale donors, possible future employers, over screwing the voter it is a no-brainer. Any attempt to look for additional logic/reasons in this is futile. We have here an extremely blatant case of rent-seeking.

There is certainly a diffuse-versus-concentrated interests issue at stake here, as well as an issue of asymmetrical expertise, an issue of the incestuous relationships between the financial sector and beltway insiders, and a healthy dollop of “Do Somethingism”—politicians, aka single-minded seekers of reelection and/or higher office, must be seen to be Taking Action to Avert Crisis even if said Action does not ultimately Avert said Crisis. In part, Citibank isn’t too big to fail; it’s too politically connected for its patrons to allow it to fail.

More on the broader economic nonsense afoot, including cautionary notes on using Depression-era policies to “fix” what’s going on now, from Megan McArdle.

A commenter at Kids Prefer Cheese demonstrates the application of heuristics to Internet dialogue:

You know how people use cognitive short-cuts to make sense of the world? For example, I could go read Ransom’s entire blog, probably do a bunch of background reading on Austrian business cycles, and then figure out whether he’s right about Cowen. Or I could use a simplifying heuristic which goes like this: people who post in all caps in blog comments are usually wingnuts. Sorry, Ransom, maybe you’re right, but in my book you’ve already lost on style points.

The Economist says Larry Bartels’ recent effort to claim Democrats are better for the economy than Republicans is “a political case masquerading as economic analysis.”

Update: Meanwhile, “Michael Walzer would be happier with foreign policy if Obama were president, which is fine, but the article is not as objective as he wants to make it out to be.” Fellow political scientists: there’s only 13 shopping days left to prostitute your reputation forever in the service of a guy who’s going to be elected anyway!

So does this news mean I can kiss two of my credit card bills goodbye? (Sadly, no.) WaMu, we hardly knew ye.

Jim Henley reacts about the same way I did to becoming a proud stockholder of A-I-G.

Megan McArdle on the profound ignorance of 100 University of Chicago faculty members:

I haven’t heard such transparently wishful claptrap since my fifteen-year-old boyfriend tried to convince me that sex provided unparalleled aerobic exercise.

Then again, profound ignorance is hardly a new problem for the institution.

Wired blogger Alexis Madrigal posts a map of gasoline prices nationwide and comments:

Note how similar gas prices are within individual states and how much they vary between states. Using just gas price data, you could practically draw the state lines, if they weren’t already inked in for you. Look at that Illinois-Missouri border!

This county-by-county highlights the importance of energy policy at the state level in driving prices, at least at the relatively small variations in price they are mapping here.

I know this is an amazing concept, but individual states set this thing called the “gasoline tax” at different levels. (A few states, including Missouri, also mandate a 10% ethanol blend to subsidize already overpaid and oversubsidized farmers kill most drivers’ gas mileage, thus actually increasing the quantity demanded of gasoline reduce our dependence on foreign oil.) Gasoline is essentially an easily-transportable commodity, and while there are some regional variations in formulation the marginal cost of those variations is rather low.

On a related note, acting Federal Highway Administration, er, administrator Jim Ray says it is time to decouple highway financing from the various motor fuels taxes levied by states and the federal government. Good luck with that.

Via Sully, who links without comment.

Nick Troester extolls the virtues of renter’s insurance in light of his recent run-in with Durham’s criminal element. I’ve always maintained renter’s insurance myself (excluding the six years I co-owned a house, when I had home insurance coverage), along with a supplemental policy for my laptop and additional liability insurance, and while it hasn’t paid off more than I’ve put in it over the years it has saved my butt a few times, most notably with my policy’s refrigerator/freezer power-loss coverage which I’ve had to use a couple of times.

My car insurance, on the other hand, has done relatively little for me over the years; I don’t think I’ve ever collected on a claim.

The Court of Appeals for the D.C. Circuit has upheld a lower court ruling that the Department of the Treasury is required to make U.S. paper currency accessible to the blind; although the most recent changes to the higher-denomination bills have made various denominations of currency more distinguishable by people with limited vision, all the bills remain the same size and have no tactile features that distinguish the bank note denominations.

I’ll agree with the basic proposition that making major changes to the bills yet again would probably be a bit of a pain, but surely the Bureau of Engraving and Printing could punch some little holes or make some raised dots on the existing bill designs without compromising their usability in existing vending machines.

As noted previously on these shores, Barack Obama has—contrary to his reputation as the “most liberal senator” ginned up by the National Journal—generally made proposals that make economic sense. His opposition to the hare-brained “gas tax holiday” scheme is another point in his—or at least his economic advisors’—favor.

That said, I will quibble with Dan Drezner’s half-suggestion that Obama run with the “it’ll only save you $30” talking point. My general feeling is that when politicians have belittled dollar figures in the past—most notably when the first $300 tax rebate was being proposed way-back-when (2002?)—voters outside the beltway bubble generally seem to think that they have better ideas about how to spend the money than folks in Washington do, especially when they're not making a six-figure government salary. That said, I think the talking point works better when it’s a relatively non-transparent tax like the 18.4¢/gal federal gasoline excise tax that generally isn’t broken out on receipts rather than a check that shows up in the mail.

Ezra Klein reinvents government accounting today:

McCain’s tax cuts—which include the extension of the Bush tax cut and the repeal of the Alternative Minimum Tax, neither of which are included on CAP‘s cool McCain thermometer—dwarf the spending plans of the Democrats before you even look into his programs (or his war agenda). But that’s rarely mentioned, because the media doesn’t really view tax cuts as spending in the way they view new social programs as spending. [emphasis added]

I’ll hazard a guess that outside Klein’s brain, nobody views tax cuts in general as government spending. I suppose a refundable tax credit, like the earned income tax credit, would be a form of government spending—but that’s not a “tax cut” in the same sense that reducing one’s tax liability (say, by repealing the AMT) is a tax cut.

I propose a very simple criterion for government spending: if the government cuts you a check for more money than you paid in tax withholding and estimated tax contributions, that excess is government spending. The rest… well, that’s taxes.

Josh Patashnik of The New Republic discovers that Republicans and Democrats have divergent beliefs about the state of the national economy (þ: JustOneMinute). Clearly he doesn’t have a subscription to the American Journal of Political Science, where my dissertation chair and two co-authors showed this to be the case seven years ago based on 1990s data, well before George W. Bush set up camp in the Oval Office (see also Duch and Palmer 2001, which demonstrates the same effect among Hungarian voters).

The moral of the story: those who do not read the political science literature are condemned to reinvent it.

My seemingly-biweekly contribution to OTB this time is about the simultaneous popularity of doing something about climate change and unpopularity of using carbon taxes to do it.

Paul Gronke and Free Exchange both address how the use of a majority-runoff system in French presidential elections has produced in 2007 a runoff without the presumptive Condorcet winner on the ballot; neither is inaccessible enough to bring the good Marquis in by name, but Free Exchange mentions Ken Arrow and Paul Gronke discusses Gary Cox, which are certainly good starts in that direction.

Via Democracy in America, I present to you Jim Cramer:

Arnold Kling takes apart the book The Logic of Political Survival by Bruce Bueno de Mesquita et al. A taste of the critique:

In my opinion, the authors of The Logic of Political Survival should not be criticized for mishandling data.

They should be arrested. Imprisoned. Only released back into the community with warnings to neighbors to protect your children. ...

[I]t is only interesting to tests constraints on the data that are imposed by theory. In this case, the constraints are being imposed by simple incompetence.

The Logic of Political Survival is a stimulating and provocative book. I was impressed by the authors’ use of historical examples, particularly the use of King Leopold’s different approaches to governing Belgium and the Congo as a “natural experiment” demonstrating that institutional characteristics matter more than the leader’s personality. However, in my view, the attempts to introduce formal game theory and econometrics did more harm than good. Rather than bridge the gulf between political scientists and economists, they widened it—as far as I am concerned—by their shameful and unseemly conduct with the data.

þ: Dirk, via email, who by virtue of his educational background represents the winning side in this argument.

The Free Exchange blog at The Economist considers the conditions under which unions might increase productivity. Given the conditions identified, this is not the article you want to take to your dean to defend your efforts to start a faculty union (or, even worse, a grad student union).

Newmark’s Door links federal income tax liability data by county and congressional district. A map would be nice too… perhaps I can dig out the code I used for the census maps I made in R a few years back and use that.

If there is a recurring fall “theme” here at Signifying Nothing, it’s my belief that the political science job market is fundamentally broken; the only candidates who are well-served by the market appear to be the 3–4 “star” ABDs every year and established scholars (the latter of whom don’t actually participate in the same job market), and the only employers who are well-served are those who ultimately get their pick of the litter from those categories. For everyone else, there’s the obscenely stupid APSA meat market that (except for the earliest-deadline institutions) really doesn’t work except as an impetus for a run on the hotel bar by candidates and search committee members alike.

Unlike political scientists, the economists have actually thought about these problems, and continue to refine their processes. A case in point: Stephen Karlson reports on the new ‘signaling’ mechanism that allows candidates to credibly indicate up to two positions that they are particularly interested in, getting around the problems of both private (every application including the boilerplate “I really want to teach at [Institution mail-merge name here]”) and public signals (the candidate declaring on his/her website what job he/she really wants, which probably doesn’t help the candidate with other job applications)* in cover letters and recommendations. Greg Mankiw and the AEA website explain the details.

Obviously getting political scientists to adopt a similar process would be like herding cats—but there is a strong case to be made that the lower-tier R1s and other schools would be best served by banding together and either getting the APSA to sponsor an AEA-like hiring event, or organizing their own event, in the November-January time frame where more serious interviews could take place than at the APSA meat market and departments would have a clearer idea of their needs and realistic prospects for attracting the top candidates.

Even absent a hiring conference, though, APSA could provide a similar credible signaling system for candidates in eJobs—if it were so inclined. Doing so, while a baby step towards a more useful market, would probably at least help a few candidates get on the shortlists they want to be on as opposed to the ones that departments think the candidates want to be on.

* As for me, I’ve made no real secret of my preferences, but if an R1 wants to pay my salary for a few years on the tenure track while I try to find a good liberal arts college that will take me I’m certainly not going to complain.

Tyler Cowen is the latest to observe that extended warranties are a profit center for electronics retailers. The only products I buy extended warranties on these days are laptop computers—I can fix a desktop fairly readily (and usually quite cheaply, thanks to Newegg), but if anything other than a hard drive or memory bites the dust on a laptop you’re basically screwed.

Laptops tend toward the unreliable side; with heavy use and normal levels of abuse, I’m lucky to get through 12 months without some sort of failure. I’m also a complete klutz… I’ve fried two laptops with liquids over the past four years, making an accidental repair plan pretty much a necessity.

The extended warranty isn’t a complete panacea; I’ve had repaired laptops come back with the wrong power connector and the wrong motherboard (I recently sent off my Compaq V4000T for repair with an ATI Radeon X700 graphics chip, and it came back with an Intel i915GM, a decidedly inferior part). But it beats shelling out $1000+ every 18 months.

James Joyner has an interesting critique of a whiny piece from the New York Times Magazine on Wal-Mart’s entry into the organic foods market.

My general sense of the whole “organic foods” craze is that, like the $3 cup of coffee at Starbucks (or, better, the local “fair trade” coffee place), it is another way for the upper-middle class to avoid shopping with the riff-raff while proclaiming their moral superiority over those who can’t waste money on such accoutrements—in other words, the traditional conspicuous consumption of the well-to-do spackled with a thin layer of altruism.

The boss has posted a link to his latest EconLib column on opportunity costs and why people don’t seem to understand them.

Maybe a future column will explain why I find it harder to spend a gift certificate than my own money.

I’ve already asserted that George Mason University’s basketball team shouldn’t be held up as some sort of exemplar of the triumph of classical liberalism. Another data point in this critique arrives from Indianapolis Star writer Mark Alesia, whose paper surveyed all of the public colleges and universities in NCAA Division I and found that the average public institution subsidizes its Division I athletic program to the tune of $5 million per year.

Those plucky underdog classical liberals at George Mason’s athletic department reached the Final Four on $1.1 million of “direct institutional support” and an additional $7.57 million in mandatory student fees, much of which were picked up indirectly by the taxpayer through grants or loan subsidies. Good old George would be proud. (þ: UD)

Prof. Karlson notes that the budgetary situation at NIU is such that “enrollment impacted” departments (that’s jargon for “all our classes are full”) cannot secure additional faculty, but nonetheless the university has found the money to do a bit of landscaping.

At Duke, meanwhile, the administration has found $240 million (yes, that’s one quarter of a billion dollars, give or take, and that’s just Phase I) to make Central really tie the whole university together, but can’t scrape together the cash for sabbatical replacements in numerous departments. As I commented to the bossman, I suppose money really isn’t fungible after all.

This week’s Economist has a bit of fun with the escalating stakes in the razor blade wars. (þ: Division of Labour)