Category Archives: Econ & Money

Economic Impact of LeBron James on Miami

Posted on June 15, 2017 by Michael Froomkin

Abstract:

We study the local economic spillovers generated by LeBron James’ presence on a team in the National Basketball Association. Mr. James, the first overall pick of the 2003 NBA draft, spent the first seven seasons of his career at the Cleveland Cavaliers, and then moved to the Miami Heat in 2010, only to return to Cleveland in 2014. Long considered one of the NBA’s superstars, he has received the league’s MVP award four times, won three NBA championships, and been a part of two victorious US teams at the Olympics. We trace the impact a star of Mr. James’ caliber can have on economic activity by analyzing the impact his departures and arrivals had on business activity close to the Cleveland Cavaliers and Miami Heat stadiums. We find that Mr. James has a statistically and economically significant positive effect on both the number of restaurants and other eating and drinking establishments near the stadium where he is based, and on aggregate employment at those establishments. Specifically, his presence increases the number of such establishments within one mile of the stadium by about 13%, and employment by about 23.5%. These effects are very local, in that they decay rapidly as one moves farther from the stadium.

— Taking My Talents to South Beach (And Back) by Daniel Shoag, Harvard Kennedy School & Stan Veuger, American Enterprise Institute (AEI).

Posted in Basketball, Econ & Money, Miami | Comments Off on Economic Impact of LeBron James on Miami

A Modest Proposal for an Afghan Exit Strategy

Posted on May 25, 2017 by Michael Froomkin

The papers say the US is spending $3.1 billion per month on the war in Afghanistan. And I’m sure that doesn’t count the long-term care costs for wounded soldiers after they get home.

At $37.2 billion per year our spending is about half the Afghani GDP at purchasing power parity – or, if you prefer, about double their GDP at the official exchange rate. The population of Afghanistan is about 33.3 million persons. So we are spending about $100 per Afghani per month; call it $1200 per Afghani per year.

The average income in Afghanistan has been estimated at US$ 1,883 I suspect this is a PPP number, and quite inflated. The Asia Foundation did a study which found that The average monthly income in households where women contribute to family earnings was 10,197 Afs (approximately USD $158). By comparison, in households where women do not contribute, the average monthly income was 10,851 Afs (approximately USD $168). (Study at p. 63.) Whatever the truth may be, I’m betting the US spends more in Afghanistan than the entire earnings of at least 98% of the population.

Are we getting our money’s worth? How, if our goal were to influence Afghanistan might we put that money to work in income support (bribes if you will), building things (nation-building if you will) and creating institutions designed to keep things modern and running after the subventions stop (imperialism if you must)? We could probably do worse than just give $500 per year to every Afghan woman for starters, and wait for the animal spirits of capitalism to explode.

Previously: A Modest Dinner-Party-Based Proposal For An Iraqi Exit Strategy (Sept 27, 2003) ($3000/year per Iraqi)

Posted in Econ & Money, Politics: International | 1 Comment

Nomenclature Matters

Posted on November 6, 2016 by Michael Froomkin

What you call it can determine how it is regulated. Businesses are lobbying hard to be allowed to repatriate “$2 trillion in untaxed profits outside the United States”. Seems to me they practically have won the war by labeling this money “stranded cash” when in fact it should be called “sheltered cash”.

Thus we get stuff like this:

But this much is clear: There is a growing political consensus that the time has come for change in the tax rules to encourage repatriation of the vast troves of corporate earnings held outside the country. Companies, ordinary American taxpayers and thousands of investors have substantial and sometimes conflicting stakes in the outcome.

“Everyone agrees that something is going to be done about this,” said Edward D. Kleinbard, the former chief of staff of the congressional Joint Committee on Taxation, and now a law professor at the University of Southern California. “The question, of course, is exactly what.”

Well, I don’t agree. Let’s just close the loophole going forward as a first step, so as not to make foreign investment more profitable than domestic. Then maybe we can talk about wealth taxes?

Meanwhile, please can we call this $2 trillion what it is: tax-sheltered cash stored in offshore bank accounts.

Posted in Econ & Money, Law: Tax | Comments Off on Nomenclature Matters

Stocks Love Democrats

Posted on September 19, 2016 by Michael Froomkin

stocksSource

Posted in 2016 Election, Econ & Money | Comments Off on Stocks Love Democrats

My New Paper May Make Some of My Friends Angry

Posted on May 25, 2016 by Michael Froomkin

Building Privacy into the Infrastructure: Towards a New Identity Management Architecture comes to what I fear some of my friends in the privacy community will find to be an unacceptable conclusion.

I’ll be presenting it at the Privacy Law Scholars Conference in Washington next week. Hopefully, since many attendees are in fact friends, they won’t bring brickbats.

Posted in Cryptography, Econ & Money, Law: Internet Law, Law: Privacy, Surveillance, Talks & Conferences | Comments Off on My New Paper May Make Some of My Friends Angry

Soon We’re All (Economic) Robots

Posted on September 2, 2015 by Michael Froomkin

Uber 2.0: Human Self-Driving Cars on Stratechery by Ben Thompson is the most interesting thing I’ve read about Uber in some time. Maybe ever.

Posted in So-called Sharing Economy | Comments Off on Soon We’re All (Economic) Robots