Photo, above: Gary Stanley Becker (December 2, 1930 – May 3, 2014) received the 1992 Nobel Prize in economic sciences. Becker is credited with pioneering the approach to economics as a study of human behavior.  

JOHN BATCHELOR SHOW

Co-hosts: Larry Kudlow, The Kudlow Report, CNBC; and Cumulus Media radio. Mary Kissel, Wall Street Journal editorial board.

Hour One

Tuesday   6 May   2014 / Hour 1, Block A: Michael Boskin, Hoover; Ed Lazear, Hoover; Russ Roberts, Hoover, in re: In memoriam, Gary Becker.  Gary Becker was a great man, did fabulous work in micro economics, incl crime, education, and why employers want to hire the most competent employees. Also slash corp tax and remove overregulation He was an optimist, didn't buy into this secular stagnation notion.  We all regret his passing.  Once I got a note, "While you were out" – "Gary Becker called" while I was in grad school, felt terror. He always asked difficult questions, strolling back and forth looking at the ceiling; then he'd bark out a student's last name and issue the question. We respected him greatly, wanted is respect. Once a student suggest that Mr Becker didn’t understand the work of Ronald Coase, a Nobelist.  He taught us that economics was a tool for understanding how the world works.  He was also perhaps the greatest social scientist of the Twentieth Century: his work spanned so many fields.  . . .  Discrimination was considered irrational, embedded; Gary modeled it to see what the implications are. He though it through and eventually won his critics over.  He believed that even though markets are imperfect, they're best at guiding behavior and policy. 

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Washington Post - Gary Becker, the Nobel laureate and University of Chicago economist who died this weekend, was offered many honorifics: “the greatest living economist,” a “path-breaking scholar,” “the greatest social scientist who has lived and worked in the last half century.” (That last superlative came from his mentor, Milton Friedman.)

But perhaps more than anything else, Becker was the father of economics imperialism. And I mean that as a compliment. [more]

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Tuesday   6 May   2014 / Hour 1, Block B: Michael Boskin, Hoover; Ed Lazear, Hoover; Russ Roberts, Hoover, in re: One way to talk about this is to talk about the   … Gary did an immense amount of work on how incentives affect people's decisions.  . . .  Also could see puzzles that brought back a great tradition in economics: seeing different stages of history.  Gary Becker could have won multiple prizes.   . . .  Gary spawned a whole set of studies. Virtually all economists are students of Gary.  Not only was he courageous sin breakthroughs, but his work has endured so well.  Unemployment insurance and other programs: poverty trap with generous benefits and eligibility.  Hope to get the labor mkt to a healthier point.  The unemployment rate went to 6.3% [formally; from 10%].  Employment rate – number of working people relative to number that could be working – hasn’t gone up.   We should be much further along – we’ve regained most of the jobs lost in recession, but we also have 10 million more people.  Casey Mulligan singlehandedly changed CBO estimate on Obamacare. If you move your salary from $25K a year to $40K, then . . .

Tuesday   6 May   2014 / Hour 1, Block C: Michael Boskin, Hoover; Ed Lazear, Hoover; Russ Roberts, Hoover, in re: .Casey Mulligan singlehandedly changed CBO estimate on Obamacare. because it became clear: If you move your salary from $25K a year to $40K, then you lose your healthcare subsidy – a benefit cliff; the CBO looked again and agreed.   People in fact don’t want to hear this.  Disability, unemployment insurance, and the like: the programs themselves are so uncertain that employers are chary of hiring.  Dodd-Frank isn’t even finished; neither is Obamacare.  Tough to make decisions when you can’t find out the rules of the game. Rationality in markets even if people are irrational.  He wrote a seminal paper early in his career.  He thought of a child as a "consumer durable" -  What’s the price? 1. What you have to buy; 2. The time it takes to raise the child [opportunity cost].  One aspect of looking at value and time and opportunity cost: with a progressive income tax, the marginal tax on the first dollar of the second earner in a family is taxed same as the last dollar of the first earner.  Thus women earners have greater responsiveness. Gary Becker was very focused on time.  Understood that money isn't the only thing that matters.  He was both an optimist and a realist: free people making decisions do the most good.  New York used to have the highest crime rate in the country; Gary: Criminals are rational; raise the costs of crime (better policing, stiffer sentences), crime will go down.  Giuliani applied computers, did careful analyses, massively reduced crime and spawned a 25-year economic surge.  Gary Becker researched human capital – now standard vernacular, but Gary pushed it further than anyone, Educational establishment hated the phrase, finding it demeaning; then they realized, "This makes us more important" and Gary won them over.  Microeconomics might be the way to explain political theory. 

Tuesday   6 May   2014 / Hour 1, Block D: Michael Boskin, Hoover; Ed Lazear, Hoover; Russ Roberts, Hoover, in re: Gary Becker held that we all deserve what we get.  LK: education as an investment choice. MB: . . .  economic policies at the fore of discussion in 2014 and 2016 elections.  He was sympathetic to Jim Buchanan of Chicago: Public Choice Theory; vide: Gary Becker' s Incentive Theory.  WSJ today: "Elite Colleges Don’t Buy  Happiness." However, educated persons do better in our society than less-educated.  Differences are enormous.  College-educated unemployment is <3%.  More than 70% of US capital is human capital. Compare benefits and costs of education.  Russ: Gary was honored at Chicago, said his biggest influences were Adam Smith and Marshall.  Michael Boskin: Think deeply about something and follow it; he was a huge influence on me. I once saw him ferocious: on the tennis court.  EL:  Gary believed that markets are so strong they can overcome even misguided governmental policies.  LK: If we’re smart enough to apply Gary Becker's principles, we'll do well; if not, we'll be in trouble. 

Hour Two

Tuesday   6 May   2014 / Hour 2, Block A: Stephen F. Cohen, NYU & Princeton prof Emeritus ;  author: Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War, & The Victims Return: Survivors of the Gulag after Stalin;  (1 of 4) in re:

Tuesday   6 May   2014 / Hour 2, Block B: Stephen F. Cohen, NYU & Princeton prof Emeritus ;  author: Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War, & The Victims Return: Survivors of the Gulag after Stalin; (2 of 4)  in re: "Cold War Against Russia without Debate," The Nation.  If we think the unthinkable and imagine this leading to war, that could become nuclear war with Russia.  I don’t have people inside Ukraine informing me;  US media give us no  idea of what’s happening in Western Ukraine.  Is there an American reporter there?  Rumors – reports – that Right Sector is armed and taking over more and more local govt bldgs.  Russians and others in the middle of this are horrified by the people who were shot.  The US govt should have made a compassionate statement the day the shootings occurred. Why didn’t my govt show as much compassion as many other countries did?  London Telegraph: "They kill our children, mothers with unborn children."  Russians eager to go fight; border is porous.  People in Eastern Ukraine blame not Moscow but Kiev. 

Tuesday   6 May   2014 / Hour 2, Block C: Stephen F. Cohen, NYU & Princeton prof Emeritus ;  author: Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War, & The Victims Return: Survivors of the Gulag after Stalin; (2 of 4)  in re:  . . . Lots of people will vote yes in the May 11 referendum -  Kyiv calls the Western Ukrainians "secessionist" – maybe 20% of the population What do they really want? Some form of home rule, calling it "federalization."  The May 11 referendum has no meaning outside of Donetsk; May 25 is the presidential election, and important. Kievan army trying to recover lost land; how can you have an election in the circumstances?  EU originally brokered an election in December. . . .  If you have an election, elect a president (the last one had to flee), then another of a rump country – thus two  illegitimate presidents. Need:  1. a referendum on a constitution; 2.  new parliamentary elections (this morning in the Rada, it expelled 30 deputies who opposed secret votes); 3. ____.

This is not the way to legitimacy. Ukraine is a surrogate for two nuclear states? Roll that back -  the Kiev govt has no resources other than EU and US. Russia doesn’t recognize its legitimacy; Europe is divided on the issue. Michael McFaul said: This is not about months; it's a decades-long struggle between Moscow ("an autocracy") and the US ("a democracy").

Tuesday   6 May   2014 / Hour 2, Block D: Stephen F. Cohen, NYU & Princeton prof Emeritus ;  author: Soviet Fates and Lost Alternatives: From Stalinism to the New Cold War, & The Victims Return: Survivors of the Gulag after Stalin; (4 of 4) in re:  . . .  Putin needed a convenient scapegoat; Michael McFaul was a convenient person to take attention away from his own failings.  Charitably: Michael hasn’t understood the history that brought us here and the history that we're in now.  Putin has a vision; when he came to power, he thought Russia  and the US would be partners.

Hour Three

Tuesday   6 May   2014 / Hour 3, Block A:   Terry Anderson, PERC and Hoover John and Jean De Nault Senior Fellow; Hoover Defining Ideas, in re: Risky Hydraulic Fracturing?

The Grand Canyon of Property Rights  In Indian Country, tribal abuse and unenforceable contracts are stifling investment and economic growth (1 of 2) Hydrofracking came to Lynchburg, VA, with a train wreck.  Now fracking is all over North Dakota and around the country. The big question: how will  the oil be shipped? .

Tuesday   6 May   2014 / Hour 3, Block B: Terry Anderson, PERC and Hoover John and Jean De Nault Senior Fellow; Hoover Defining Ideas, in re: Risky Hydraulic Fracturing?

The Grand Canyon of Property Rights  In Indian Country, tribal abuse and unenforceable contracts are stifling investment and economic growth (2 of 2)  One-third of Montana is owned by the federal govt.  Similar in Colorado, Nevada, New Mexico.  . . .  Many many agencies: Forest Svc and BLM, also Defense, EPA, some state regs; Clean Water Act.  Add American Indian lands – an incredibly rich resource for very poor people  - the BIA.  Behind h scenes are interest groups opposing our use of oil, incl renewable-energy people and the Middle East suppliers (Saudis, et  al.), who work together to lobby.

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Risky Hydraulic Fracturing? by Terry Anderson (John and Jean De Nault Senior Fellow) and Carson Bruno (Research Fellow) - According to scientific research, the environmental costs are real but rare.

Editor’s Note: This is the first in a two-part series on the risks associated with hydraulic fracturing and how policymakers can respond to them.

The nation is experiencing a natural gas and oil boom due in no small part to hydraulic fracturing. In many states, hydraulic fracturing has been the driver behind economic growth. But the process is among the environmentalist movement’s top targets. However, the scientific research on the water-related concerns associated with fracturing suggests environmentalists’ concerns are overblown: although the risks are real, their occurrences are rare. Although developed in the 1940s, only recently has hydraulic fracturing become widely used as a result of advances in the process. It is important to note that drilling a hydraulically fractured well is basically identical to drilling a conventional well. The main difference stems from the horizontal drilling component coupled with the fracturing process.

After drilling the vertical well and encasing the pipe in cement, approximately 500 feet above the intended lateral zone, a special drill bit is inserted into the well that drills at a sloping angle eventually leveling out at a depth as much as a mile under the surface to drill horizontally. Cement is pumped between the piping and the shale formation to seal the well.

The targeted lateral zone is prepped for the hydraulic fracturing process using an electrified perforation gun to perforate the pipe, cement casing, and shale formation. Because the perforations are not large enough to allow hydrocarbons to flow, a special fluid made of approximately 99 percent water and sand and 1 percent additives is pumped into the well to widen and hold open the cracks in the shale formation.  The injection part of the hydraulic fracturing process is what has triggered . . . [more]

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Tuesday   6 May   2014 / Hour 3, Block C:   Victor Davis Hanson, Hoover & National Review Online, in re: Foreign Policy: From Bad to None – Pres Obama thought that if he could assure voters that he wasn't George Bush, he'd won the residency and save the world. It hasn’t quite worked out that way. Iraq, Afghanistan, Ukraine, China – he thought his charismatic, teleprompter eloquence would carry the day; he's disappointed and has assumed a sort of fetal position in foreign policy. If someone said, "You’re a steward of a seventy-year foreign policy (Harry Truman's change of mind, first thinking that the world could be transformed into a sort of New England; then he said, "That SOB [Stalin] lied to me," so crafted a new world policy) and have responsibilities,"  - he doesn’t seem to appreciate his position.   "Fetal foreign policy" is reminiscent of a small child, which is how he appears (including to the New Yorker).   . . .  They didn't storm our mission in Benghazi to avenge Palestinians.  . . . China announces that it'll sell arms to Iran. This is Mrs Clinton's policy coming to fruition. 

Paul Krugman doesn't much advertise that he was a Reagan advisor and worked for Enron; now he's taken a teaching post at the City College of New York for a part-time salary that would cover 75 part-timers, i.e., $325,000 per year. He's a successful capitalist, also an elitist.  [Gauche caviar, as the French say.]  Not populist or liberal; the life the elite leads is contrary to her rhetoric. Elizabeth Warren has $14 million – good for her, but don't lecture those of us in the 99%.   Must be psychologically redemptive - "I'll profess an abstract utopian view." These are the Cardinals.  (1 of 2)

Tuesday   6 May   2014 / Hour 3, Block D: Victor Davis Hanson, Hoover & National Review Online, in re:  Elites' Sacrificial Victims (2 of 2)

Hour Four

Tuesday   6 May   2014 / Hour 4, Block A: Paul Gregory, Hoover, in re:  Ukraine close to war, says Germany. Daily Caller (DC): Tunneling Wealth to Vladimir Putin.    Forbes.com: Putin's Promises to Eastern Ukraine Could Bankrupt Russia.  Real Clear Politics: Is Putin's New Type of War in Ukraine Failing?   Forbes.com: Putin Propagandists Caught Red-Handed Again: Pro-Russian Self-Defense Forces Capture Snipers' Diapers Slovansk is Moscow's command and control center; Putin tourists; a sage play: a little activity orchestrated by a capable Kremlin.   Putin, in his talkathon three weeks ago, advised his supporters to use Ukrainians as human shields.  Kyiv says, "We don’t want to kill our own people" – so how to deal with a situation where one side has morals and the other doesn’t? A real count was carried out by Putin's Council on Human Rights and Development of Civil Society, shown on Putin's own website: they’re responsible for he biz of Crimean annexation; issued a report offering elections results: Putin claimed turnout was 80%; it was actually 40% according to his report.  Crimean Tatar and Ukrainian –speakers didn't participate. MO: hold a bogus vote; have few people participate, then have most of the voters be leaning toward one's own side. Then proclaim an 80% turnout.  Referendum for the People's Republic of Donetsk, 11May: will have a few lines of voters, a few babushkas saying, "Can't wait to be Russian" – and Moscow will persuade the world that it was a legit election.  The world so far is going along with this bogus script.  Note that the propaganda is not for the West but for Russians – and it’s working.    (1 of 2)

Tuesday   6 May   2014 / Hour 4, Block B: Paul Gregory, Hoover, in re: Ukraine close to war, says Germany. Daily Caller (DC): Tunneling Wealth to Vladimir Putin.    Forbes.com: Putin's Promises to Eastern Ukraine Could Bankrupt Russia.  Real Clear Politics: Is Putin's New Type of War in Ukraine Failing?   Forbes.com: Putin Propagandists Caught Red-Handed Again: Pro-Russian Self-Defense Forces Capture Snipers' Diapers Germans and Russians: do Germans accept that the tsar is masterful and we should accommodate?  Putin's first major audience is Russia, second is Germany.  Chancellor Schroeder is on the board of Gazprom.  Siemens, BASF – all go to Merkel to say, "Let's look at the long run; we need to be partners with Russia."  Thorough enmeshment.  There's a deep stream of pacifism in Germany - in the Green Party, in SPD; Merkel is now in a Grand Coalition with the SPD and is rather caught. Don’t underestimate the power of the Greens – they've raised electricity prices, which challenges Germany's competitiveness and renders the country more dependent on Russian gas. Concerning Putin:  I’d go after his money, as he's very sensitive (via a Swiss trading company).  It must be tempting to send in black ops, to both Kyiv and Moscow. Need to break Europe's dependency on Russian energy – US could do a lot on that.  And as for the [weak] "sectoral sanctions," we could be quite effective. 

Twitter: list of provocative actions Russia has taken; it gets snagged at "deeply concerned,  deeply concerned.' What can we do? Our credit is so low it doesn’t matter what he US says.  Putin does not speak with forked tongue; he's direct.  He's not a patriot: he's interested in his wealth and power.   (2 of 2)

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Paul Roderick Gregory, Forbes Contributor

Putin's 'Human Rights Council' Accidentally Posts Real Crimean Election Results  As you may recall, the official Crimean election results, as reported widely in the Western press, showed a 97 percent vote in favor of annexation with a turnout of 83 percent. No international observers were allowed. The pro-Russia election pressure would have raised the already weak vote in favor of annexation, of course.  Yesterday, however, according to a major Ukrainian news site, TSN.ua, the website of the President of Russia’s Council on Civil Society and Human Rights (shortened to President’s Human Rights Council) posted a report that was quickly taken down as if it were toxic radioactive waste. According to this purported report about the March referendum to annex Crimea, the turnout of Crimean voters was only 30 percent. And of these, only half voted for the referendum–meaning only 15 percent of Crimean citizens voted for annexation.

The TSN report does not link to a copy of the cited report. However, there is a report of the Human Rights Council, entitled “Problems of Crimean Residents,” still up on the president-sovet.ru website, which discusses the Council’s estimates of the results of the March 16 referendum. Quoting from that report: “In Crimea, according to various indicators, 50-60% voted for unification with Russia with a voter turnout (yavka) of 30-50%.” This leads to a range of between 15 percent (50% x 30%) and 30 percent (60% x 50%) voting for annexation. The turnout in the Crimean district of Sevastopol, according to the Council, was higher: 50-80%.

The original version, in Russian, and a version clumsily translated by Google, are below [see URL]:  референдум   [http://www.forbes.com/sites/paulroderickgregory/2014/05/01/putins-promis... ]

To make sure no one misses this:

Official Kremlin results: 97 percent of polled voters for annexation, turnout 83 percent, and 82 percent of total Crimean population voting in favor.

President’s Human Rights Council mid-point estimate: 55 percent of polled voters for annexation, turnout 40 percent, 22.5 percent of total Crimean population voting in favor.

A member of the Human Rights Council, Svetlana Gannushkina, talked about election fraud on Kanal 24 (as replayed on Ukrainian television), declaring that the Crimean vote “discredited Russia more than could be dreamed up by a foreign agent.”  We can debate the extent of fraud in the March 16 referendum, but only the Council’s highest estimate just yields the fifty percent turnout ratio normally required for major referendums. What counts is that the Putin regime solemnly announced to the world that 82 percent of the Crimean people voted to join Mother Russia, and many in the West swallowed this whopper. At best, according to Putin’s own council, only 30 percent did.

Putin plans to repeat the Crimean election farce in the May 11 referendum on the status of the so-called People’s Republic of Donetsk. He will use the same tricks to produce an overwhelming vote for “independence” and a high turnout. The few international election monitors will object, but Putin counts on repetition of his Big Lie to convince his own people and sympathetic politicians and press in the West that the people of east Ukraine actually want to separate from Ukraine.

Will the West let Putin get away with it again?

UPDATE: This article has been updated to include a screenshot of a report from the Russian Human Rights Council, and revised to reflect the turnout and voting ranges reflected in that report. The original version of this article discussed only the 15 percent figure cited in Ukrainian media.

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Tuesday   6 May   2014 / Hour 4, Block C:Robert Zimmerman, behindtheblack.com, in re: space, rockets. Anti-Russian sanctions affect US corporation. Iridium went bust, sold for ten cents on the dollar, reborn as sat phones in Antarctica and the like.  

Tuesday   6 May   2014 / Hour 4, Block D:   Mary Kissel, Wall Street Journal editorial board, in re: banks, regulation, ethics. 

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Music

Hour 1:  Robin Hood. Battle LA.

Hour 2:  Red Army Choir. 

Hour 3:  Alias. 

Hour 4:  Battle LA. Pacific Rim.

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