Proposition 1. Any time you have congestion, it almost certain that market pricing is absent.

Proposition 2. Market pricing will almost always reduce or eliminate congestion.

From today’s NY Times:

Congestion pricing — the concept of charging higher fees to consumers for a good or a service at times of heavy use — is well established in businesses like hotels, long-distance phone service and air travel. And while London and Stockholm have successfully enacted plans that levy fees on drivers who want to enter traffic-clogged city streets, the United States has been slow to apply the concept on the roads (see graph above for an example of congestion pricing in California).

By making people take into account the true cost of driving — beyond gasoline, insurance and lease payments — congestion pricing in theory encourages people to car-pool, or to drive at different times of the day, or to take the train or bus.

Check out this clip on YouTube of computer animated music “Pipedream,” from the first Animusic DVD.

Kenya has gone share crazy. The incredible performance of the Nairobi Stock Exchange (NSE) – which is next to the public auditorium and provides the live share-price feed – is the talk of the country. From 2002 to 2007, the main NSE index rose 787% in dollar terms (see graph above), according to Standard & Poor’s, the investment research firm, making it one of the world’s best-performing markets.

There is now an “investable” index of economic freedom – First Trust announced the creation of the Index of Economic Freedom Portfolio.

The portfolio (IEFP) is made up of country funds or large foreign stocks from the top 20 countries labeled “free” by the annual Heritage/Wall Street Journal Index of Economic Freedom.

Read more about it here.

Thanks to Club for Growth for the tip.

With breakneck growth, an outsourcing industry that leads the world and hundreds of millions of consumers demanding more class and comfort, India has an economy many countries would envy.

But now, after three years of near double-digit growth, signs of a potentially dangerous inflationary spiral are beginning to emerge. Prime Minister Manmohan Singh and his closest economic advisors gathered just last weekend over fears that India’s extraordinary economic expansion was starting to overheat, an issue they labeled as a “key short-term priority.”

From India Finds Its Economy on the Verge of Overheating in today’s NYTimes.

Fund managers love the ETF (exchange-traded funds). But what’s in it for the investor? Vanguard founder John Bogle expresses his skepticism of ETFs in today’s WSJ:

So long as the truism that “the more financial intermediaries take, the less their clients make” remains in effect, serious and intelligent investors ought to beware of moving their investments out of classic index funds focused on low costs, broad diversification and long-term, buy-and-hold strategies into index funds nouveau (ETFs), with their overlay of costs, limited diversification and short-term trading strategies. Industry participants, too, should be concerned. For in the long run, any business that puts the interest of service to self before service to clients will ultimately pay for this contradiction.

Public policy is all about trade-offs. Economists understand this better than politicians because voters want to have their cake and eat it too, and politicians think whatever is popular must also be true.

In the history of trade-offs, never has there been a better one than trading a tiny amount of global warming for a massive amount of global prosperity. Earth got about 0.7 degrees Celsius warmer in the 20th century while it increased its GDP by 1,800%, by one estimate. How much of that 0.7 degrees can be laid at the feet of that 1,800% is unknowable, but let’s stipulate that all of the warming was the result of our prosperity and that this warming is in fact indisputably bad (which is hardly obvious). That’s still an amazing bargain. Life expectancies in the United States increased from about 47 years to about 77 years. Literacy, medicine, leisure and even, in many respects, the environment have improved mightily over the course of the 20th century, at least in the prosperous West.

Given the option of getting another 1,800% richer in exchange for another 0.7 degrees warmer, I’d take the heat in a heartbeat.

From Global Cooling Costs Too Much by Jonah Goldberg.

As Thomas Sowell said, “The first lesson of economics is that we live in a world of scarcity and there are trade-offs. The first lesson of politics is to ignore the first lesson of economics.”

“Yale now is alone among American colleges and universities in failing to provide, at the initial appointment, resources for a potential tenured appointment, should the faculty member eventually qualify.

Current nontenured faculty members at Yale must wait for a colleague to retire, to leave, or to die — or hope that good fortune allows for an additional tenured position to open up in their department. Even then, they may have to compete with more-seasoned scholars in an open search that gives them little to no advantage.”

From The Chronicle for Higher Education article “Yale Plans Overhaul of Tenure Process.”