When to Rob a Bank: ...And 131 More Warped Suggestions and Well-Intended Rants

by Steven D. Levitt

if you really want to impose pain on the U.S., the act has to be something that prompts the government to pass a bundle of very costly laws that stay in place long after they have served their purpose (assuming they had a purpose in the first place).

I have heard is one that my father thought up after the D.C. snipers created havoc in 2002. The basic idea is to arm twenty terrorists with rifles and cars, and arrange to have them begin shooting randomly at pre-set times all across the country. Big cities, little cities, suburbs, etc. Have them move around a lot. No one will know when and where the next attack will be. The chaos would be unbelievable, especially considering how few resources it would require of the terrorists.

if terrorists want to engage in low-grade, low-tech terror, we are powerless to stop it.

The actual cost of this low-grade terrorism in terms of human lives is relatively small, compared to other causes of death like motor-vehicle crashes, heart attacks, homicide, and suicide. It is the fear that imposes the real cost.

Another option is one the British have used: putting cameras everywhere. This is very anti-American, so it probably would never fly here. I also am not sure it is a good investment.

IRS knows who owes the money and knows where to find it, but because it is understaffed cannot afford to collect it. So it has to hire someone else to do it, at a stiff price.

emphasizing that the “tax gap” (the difference between taxes owed and money collected) is about the size of the federal deficit:

For now, we’ll have to settle for the IRS turning over the job to collection agencies who will collect some money but not nearly as much as is owed. Which means a lot of money—a lot of tax money, that is, collected from the people who don’t cheat—continuing to go down the drain.

Think of all the service people who habitually get tips: hotel bellmen, taxi drivers, waiters and waitresses, the guys who handle curbside baggage at airports, sometimes even the baristas at Starbucks. But not flight attendants. Why not?

it’s very odd to me that so many service people who perform similar functions get tipped and that flight attendants don’t. Especially when they often work so hard for so many people, running back and forth with drinks, pillows, headphones,

they erve food as waitress and more but no one care!

Update: I tried, and failed. “A flight attendant is not a waitress,” I was told—so forcefully that I felt terrible for even trying to put money in the woman’s hands.

Anyone who has ever heard me talk about Obamacare knows I am no fan of it, and I never have been.

when you don’t charge people for things (including health care), they will consume too much of it.

I guarantee you that if Americans had to pay out of their own pockets the crazy prices that hospitals charge for services, a much smaller share of U.S. GDP would go to health care. And, of course, the same would be true in the U.K. Smith ends his critique by writing: But I don’t think Levitt has a model. What he has is a simple message (“all markets are the same”), and a strong prior belief in that message.

On January 1 of each year, the British government would mail a check for £1,000 to every British resident. They can do whatever they want with that money, but if they are being prudent, they might want to set it aside to cover out-of-pocket health care costs. In my system, individuals are now required to pay out of pocket for 100 percent of their health care costs up to £2,000, and 50 percent of the costs between £2,000 and £8,000. The government pays for all expenses over £8,000 in a year.

The way economists see it, the chances of an individual’s vote influencing an election outcome is vanishingly small, so unless it is fun to vote, it doesn’t make much sense to do so.

One big problem with politics is that politicians’ incentives are generally not aligned well with the incentives of the electorate.

economists think of prices as the logic that organizes our world.

Frustrated by the failure of the $25 million bounty on Osama bin Laden to lead to his capture, the Senate has voted 87–1 to raise the bounty to $50 million. (The lone dissenter was Jim Bunning, a Republican from Kentucky.)

As reported by ABC News, “the raid that killed the al Qaeda leader in Pakistan on May 2 [2011] was the result of electronic intelligence, not human informants

is that it costs the U.S. Government a lot more than one cent to make a penny.

Why does the U.S. still use pennies? One big reason: lobbyists.

Mark Weller is the voice of “Americans for Common Cents,” a pro-penny group that claims that rounding up will cost Americans $600 million a year . . . He says without the penny, charities, too, would suffer, on the theory that people are less likely to donate as many nickels.

Weller freely admits, he’s got a financial interest in the high cost of penny pinching: Weller is a lobbyist for Jarden Zinc, the Tennessee company that sells those little blank discs for the mint to turn into Lincoln pennies.

While I stand by my belief that the penny is lousy as currency, someone has finally come up with a use for pennies that has made me reconsider my extinction argument: make a floor out of them! The penny floor can be found at the Standard Grill at the new Standard Hotel in New York, the one straddling the High Line. The Standard tells us that it used 250 pennies per square foot, or 480,000 pennies in all.

The $720 billion figure is also about the same magnitude as the amount of money the U.S. government spent on the war in Iraq for the first few years.

home prices did not fall at all last year, but one day you took $18,000 out of the bank to pay cash for a new car, and someone then stole your wallet with the $18,000 in it. At the end of the day, your wealth would be the same (down $18,000, either from depreciation of the value of your home or because the money was stolen), but one loss is psychologically far worse than the other.

There are many possible reasons for why it doesn’t hurt so much to lose money on an asset like a house. First, it isn’t very tangible, since no one really knows what their house is worth anyway. Second, it hurts less whenever everyone else is also losing on their houses. (I once heard a very rich person say that he didn’t care about his absolute wealth, only what his ranking was on the Forbes list of richest people.) Third, you can’t really blame yourself for house prices falling, but you could second-guess your decision to carry around $18,000 in cash. Fourth, the fact that a thief has your money might make it worse than the money just evaporating into space, like it does when house prices fall. There are probably other reasons as well.

More generally, the economist Richard Thaler coined the phrase mental accounts to describe the way in which people seem to treat different assets as non-fungible, even though in principle it seems like they should be. Although my economist friends make fun of me for it, I definitely use mental accounts myself. For me, a dollar made playing poker means much more than a dollar ear...

The Laffer curve is a unicorn-y concept that seeks to explain the rate of taxation at which revenues will fall because earners either move away or decide to earn less (or cheat more, I guess).

So I wrote to Will Masters, a food economist

how many surgeons have to retake their medical boards every nine months in order to be qualified? Airline pilots do.

How many surgeons have to take a physical exam every six months by the AMA in order to work? None! Airline pilots do. Fail your medical exam and you’re done! How many surgeons (or any other critical professional, including politicians) are subject to random drug and alcohol testing? None.

I have felt the price of gasoline in the United States was way too low. Pretty much all economists believe this,

The reason we need high gas taxes is that there are all sorts of costs associated with my driving that I don’t pay—someone else pays them. This is what economists call a “negative externality.”

Because I don’t pay the full costs of my driving, I drive too much. Ideally, the government could correct this problem through a gas tax that aligns my own private incentive to drive with the social costs of driving. Three possible externalities associated with driving are the following: a. My driving increases congestion for other drivers. b. I might crash into other cars or pedestrians. c. My driving contributes to global warming.

The Texas Transportation Institute estimates that in 2000 the 75 largest metropolitan areas experienced 3.6 billion vehicle-hours of delay, resulting in 5.7 billion US gallons (21.6 billion liters) in wasted fuel and $67.5 billion in lost productivity, or about 0.7% of the nation’s GDP

each extra driver raises the insurance costs of other drivers

Your response to our motto contest was quite strong, with more than 1,200 replies to date.

An interesting paper by the economists Shin-Yi Chou, Michael Grossman, and Henry Saffer sorts through many factors (including per capita number of restaurants, portion sizes and prices, etc.) and concludes—not surprisingly—that the spike in obesity mostly has to do with the widespread availability of very cheap, very tasty food. They also find that a widespread decline in cigarette smoking has helped drive the obesity rate. This seems sensible, as nicotine is both a stimulant (which helps burn calories) and an appetite suppressant.

Caesars is one of the few big businesses run by an economist, Gary Loveman, who has brought good economic thinking to many other aspects of the company’s operations.

When there is consumer demand for a good or service, it is extremely difficult to fight the problem through government punishments of suppliers. Illegal drugs are a good example. Americans want cocaine. Over the last forty years of the “War on Drugs,”

Especially when the demand for a good is inelastic, squashing supply is ineffective. Making life difficult for incumbent suppliers entices new entrants who are eager to meet existing demand.

New York police commissioner Bill Bratton’s “broken windows” policing philosophy.

He’s got a new working paper with Michael Margolis and Daniel Osgood that makes the surprising claim that the Endangered Species Act—which is designed to help endangered species—may actually harm them.

Based on this theory, List et al. analyze the data for the cactus ferruginous pygmy owl near Tucson, Arizona. Indeed, they find that land development speeds up substantially

This result, combined with the economist Sam Peltzman’s observation that only 39 of the 1,300 species put on the endangered species list have ever been removed,

One of the hottest topics among businesspeople is how to increase profits by being environmentally friendly. There are many ways to achieve this. At hotels, for instance, by not automatically washing towels during a guest’s stay, the hotel saves both money and the environment.

Another potential benefit of “going green” is that it makes environmentally minded employees happy,

To qualify, customers must show the receptionist either a bicycle padlock key or proof they used public transit