Economics

John McCain admits economics are not his passion, and that's fine. His past instincts were mostly good. He voted against tax cuts not paid for by savings elsewhere. He fought earmarks, earning the wrath of big-spenders in his own Republican Party. As president, he could hire some economic brain to do the big thinking about money. But he really shouldn't wait for that. Unfortunately, it seems no one in his camp has been doing much big thinking on the subject. He tried to make a speech on economic policy in Pittsburgh a couple of weeks ago, but it sorely needed a captain.

Here's something to chew on during these summer nights bereft of baseball. Contrary to what you might think, major-league ballplayers - those pitcher- plutocrats and millionaire middle infielders who walked off the job last week- are not overpaid. On the whole, they get less than they're worth. In some cases, a lot less. Even at an average of $1.2 million a year. This is not a strike-induced hallucination. Nor is it players' union propaganda. It's the opinion of reputable economists, with no ax to grind, who have studied baseball's payrolls and profits and calculated how much players add to the bottom line.

A couple is negotiating over vacation plans. He wants Alaska. She wants Europe. He appeals to her sense of adventure, then to her love of the outdoors. But finally, he gives in, knowing from their years of marriage that no strategy will change the mind of his determined spouse. Some would call it common sense, but economists would say the couple's behavior is best explained by a mathematical equation that can be applied equally to the behavior of nations, multinational corporations, grocers and even poker players: They call it the Nash equilibrium.

A new municipality, complete with a mayor, judge, police chief, and several commercial enterprises, sprang into existence here this week. The entity, Exchange City, is only about 150 feet long and 45 feet wide and occupies the first floor of the Crozer Building, at Fifth Street and the Avenue of the States. It was not the creation of the Pennsylvania state legislature; it is the brainchild of Junior Achievement of Delaware Valley Inc., a Philadelphia-based nonprofit that helps educate young people about the role of economics in society.

Negotiating a contract this spring is like hitting with an 0-2 count. Forget about seeing anything great. The Phillies concluded most of their post-strike financial business before regular players had been back even a week, quickly signing the third baseman they wanted for a reasonable price, expediting their two arbitration cases, and adding a few inexpensive free agents. All of which proves that while the Phils might not yet have a backup shortstop, they've got a clubhouse filled with economic realists: Charlie Hayes knew that if he wanted to sign with a team of his choosing, he would have to make some concessions.

The Montgomery County trash police were waiting when the dump truck arrived recently at a landfill near Scranton. The police told the driver to deposit his load on the ground, and they began rooting through the smelly debris, piece by piece. Their quest? Evidence that the trash had been illegally spirited out of their county. The results: Inconclusive. But they'd be back. Again and again. In August, Delaware County officials sued two local companies, alleging that they had cheated the county out of nearly $1.2 million in revenues by having the nerve to take their trash elsewhere.

When Joseph F. Flubacher entered La Salle College in 1931, the Depression was grinding the country down. La Salle was all-male, all-commuter, practically all-white, and tuition was $400 a year. By the time Flubacher ceased his weekly visits to the campus about a year ago, America was enjoying a record bull market. La Salle had become a university, the student body included more women than men, residents outnumbered commuters in the freshman class, minorities accounted for a fifth of the student body, and annual tuition stood at nearly $15,000.

An American whose life work has been devoted to showing how economic logic governs everyday personal decisions, from marriage to divorce, yesterday won the Nobel Prize in economics. Gary S. Becker, 61, a professor of sociology and economics at the University of Chicago, won the $1.2 million prize for extending "the sphere of economic analysis to new areas of human behavior and relations," the Swedish Academy of Sciences said. Becker figured out that people usually consider the economic consequences when making a wide variety of such everyday decisions as whether to get married or divorced, whether to have a baby, or how much money to leave their children.

What if President Bush had his way and persuaded Congress to pass a cut in the capital-gains tax? What if, instead, Sen. Patrick Moynihan (D., N.Y.) had his way and managed to get a cut in the Social Security tax? What if both taxes were cut and, at the same time, the tax rate on incomes above $200,000 a year were raised from 28 to 38 percent? What if, to raise revenues, Congress enacted a $5-a-barrel fee on imported oil? A 50-cents-a-gallon tax on gasoline? A 1 percent national sales tax?

Robert J. Aumann and Thomas C. Schelling won the Nobel Prize in economics yesterday for establishing game theory as the dominant approach to understanding conflict and cooperation between countries, individuals and businesses. Game theory is a branch of mathematics that uses models to study strategies that can be applied to price wars, labor negotiations, arms races and warfare. Aumann, 75, an Israeli American, and Schelling, 84, an American, were honored for their contribution to understanding why "some groups of individuals, organizations and countries succeed in promoting cooperation while others suffer from conflict," said the Royal Swedish Academy of Sciences, which selects the winner.