Old Dogs, Same Tricks

We are far from being card-carrying members of the anti-Wall Street crowd here at Blawgconomics. Indeed we admittedly tend to be more on the pro-bank end of the spectrum when it comes to regulatory matters and feel that firms should be allowed to take on risks without government interference if they so wish. However, we also feel that they should be responsible for those risks, one of the main reasons we were against bank (particularly investment bank) bailouts. We get all of the arguments about 'too big to fail' and systemic shocks, however by allowing a taxpayer-funded safety net rather than survival of the fittest to be the guiding principle of the banking regulation, the powers-that-be almost provoked banks into continuing to take on excessive risks.

Now, no less an authority than Carl Icahn is suggesting that such provocation has already led to a reemergence of the same types of behaviors that contributed to the recent problems on The Street. Like Blawgconomics, Mr. Icahn can not honestly be considered to be anti-bank by any means. Speaking with CNBC at an investment conference in New York, the billionaire investor said plainly enough, 'I think we're going back to the same crap.' He added, '(There’s) just, way too much leverage, way too much risk taking with other peoples money.'

While it is impossible to say exactly what the world would look like today had the Fed not taken aggressive action to steady bank balance sheets over the past few years, it is not difficult to link the actions that have been taken with the return of risky behavior by bankers. The lesson during bailouts was, if you can prove that you are a critical part of the system, that you are 'too big to fail', then the American taxpayer will bail you out. True, very little regulation has been put into place since then; however if banks with too much risk had been allowed to implode at the time, more lessons would have been learned making increased regulation less necessary.

As it is, and in the words of Mr. Icahn, 'I do think though that there could be another major problem. Now will it happen next week? Next year? I don’t know. And that, certainly nobody knows. But I don’t think that the system is working properly.' We don't know if Mr. Icahn agrees with our supposition that bailouts were inherently dangerous for the long-term health of the banking system, and we certainly don't want to put words in his mouth. However, it does seem like he is buying into the idea that problems are back, and that aggressive risk taking is the main reason. In other words, the same old dogs are up to their same old tricks.

Was Stimulus Worth the Cost?

The Congressional Budget Office, about as non-partisan an entity as exists within the bulging beltway of our nation's capital, has released a report on the American government's efforts to stem the tide of unemployment which swept the country after the housing bubble burst. According to the CBO, The American Recovery and Reinvestment Act (ARRA) lowered unemployment and raised GDP. Balancing out these undeniably good points is the cost; an estimated $830 billion over a ten year span.

While at the time of its passage President Obama and his friends in Congress suggested that the legislation would save or create about 3.5 million jobs, the CBO puts that figure within a range of 1.2 to 3.3 million. Doing a little back of the napkin math, this means that each job cost the American taxpayer somewhere between $250,000 and $690,000. Economists with the Fed, government officials with the Labor Department or someone at the Bureau of Labor Statistics might have some insights that we do not, some tools that could explain why such eye-popping costs are indicative of good policy, but it is hard for us to see that such numbers make sense.

Even if 3.5 million jobs had been saved as the now-obviously rosy projections suggested, the cost would still have been about $237,000 per job. Therefore, let us give decisionmakers the benefit of the doubt and use that number as an optimistic baseline. We don't have data to back this up, but we are thinking that most of the jobs 'saved or produced' don't pay as much as they cost. And, if they do, are those the people who need helping?

If those numbers don't seem particularly alarming, maybe a little thought excercise could help put them into perspective. What if the government had simply decided to instead write checks for $237,000 each to 3.5 million lucky unemployed Americans back in 2009? This would have arguably produced better results for the economy, as well as rather more interesting headlines. However, it is unlikely that taxpayers would have appreciated their contributions to the government coffers being utilized in such a way. If that is true, then why are people so accepting of ARRA?

As is usually the case, there are, of course, other factors which should be considered. For example, roads were repaired and bridges were built with the labor provided by the funds. Maybe the hole the country seems to still be stuck in would have lasted even longer without ARRA. Maybe the psychological boost of knowing that the government was at least trying something during one of the nation's darkest economic hours outweighed the admittedly simple math above. However, simple as our calculations may be, on the numbers alone, the logic would tell us that stimulus was not worth it.

Fun with Google

Some people (notably certain early-stage investors) love the company whose motto reads 'don't be evil'; others claim that it is getting closer and closer to violating its own credo with every passing day. However, even those who would disparage what has become one of the most highly capitalized companies on the planet for everything from data mining to anti-competitive behavior to collaborating with governments should be able to agree; Google produces some amazing tools. One of the latest from the same guys who gave us the ability to view our own homes from inside them and the tools to search for literally anything under the sun in less time than the blink you are forced into by looking at it is Google Trends.

This tool allows users to study internet trend data on the topics of their own choice as well as see what the greater American searching public's topics du jour are. With the benefit of its search tools, Google is also able to plug-in stories related to the topic, regional data and the ability to study time periods, taking the tool one step beyond something like trending Twitter topics. Due to its size and scope, the company can pull such data together in a really unprecedented way. To reverse engineer this same type of data the company offers the Correlate tool, which is equally as interesting and allowed the company to identify flu trends across the country. Freakonomics has more on both here.

Some readers may be thinking that these are merely the latest tools which will allow governments to exert greater levels of control over their populations in the future. I truly hope not. However, if at some point in time the human tendency to be curious does indeed collectively work against its currently free populations, the thinking here is that we should at least have fun using the tools of our future subjugation in the meantime. Just make sure you aren't being evil while you do so...

Value Networks and the Renewable Energy Industry: Part 3 in a Series

By Patrick DeCourcy

(Ed. Note: This post is an excerpt from a recent paper entitled 'Value Networks and the Renewable Energy Industry: Mapping a Pathway Towards Enhanced Technology Diffusion' which explores some of the challenges facing the renewable energy industry as it moves to become a greater part of the US energy infrastructure. This is Part 3 in a series, Part 1 can be found here, Part 2 can be found here.)

Mandates and Incentives

Public policy mandates and incentives seem like a great way to introduce a new technology to more people. New technologies are usually more expensive than their predecessors and the theory is that it sometimes takes an incentive for people to change their preferences for something less familiar. There are several public policy mandates and incentives surrounding renewable energies including tax breaks after purchases of targeted renewable technologies, subsidies for companies who are developing renewable energy technologies, public funds going to support "green jobs", and many others. [1]

Public policy mandates and incentives have parallels to the fossil fuel industry as this industry has been a long time beneficiary of government subsidies and incentives - most recently, to the tune of around $700 billion per year. [2] Even prior to the current day subsidies, there is evidence that the entire industry has been aided throughout its history through the use of targeted subsidies and incentives for energy exploration in specific geographical regions.  Again, the conventional wisdom would be that it makes sense for renewable energy entrant firms to try and lobby for the removal or shifting of all of these subsidies toward their form of energy and then incorporate this source of potential value as a permanent part of their value network. 

However, there is a major strategic issue with this, and it was articulated by Clayton Christiansen in The Innovator’s Dilemma 

“When would-be disruptors enter into existing value networks, they must adapt their business models to conform to the value network and therefore fail that disruption because they become co-opted." [3] My interpretation of this is that a value network should be uniquely built around the mechanics of advancing and diffusing the disruptive technology throughout the rapid advancement phase of the technology development cycle. It is clear that fossil fuel companies have already incorporated subsidies into their value network - and it is more likely that they are reliant on them to such a degree that they spend vast sums of money on lobbyists and political activities to keep them legally entrenched within public policy decision making circles. The website dirtyenergymoney.com [4] provides some transparency into the amount of fossil fuel sponsored lobbying and it is at a staggering level on both ideological sides of the political spectrum (Democrats and Republicans both benefit). 

PSA: Comparing Pay Across the US

The Bureau of Labor Statistics has released its latest study on average pay comparisons across the US. From the press release:

(The comparison is a) calculation of pay—wages, salaries, commissions, and production bonuses—for a given metropolitan area relative to the nation as a whole.  The calculation controls for differences among areas in occupational composition, establishment and occupational characteristics, and the fact that data are collected for areas at different times during the year. Simple pay comparisons calculating the ratio of the average pay for an area to the entire United States in percentage terms would not control for interarea differences in occupational composition and other factors, which may impact pay relatives.

Though there are exceptions, folks on the coasts seem to be doing relatively better than their heartland counterparts. Let's just say that if any of our readers are in job search mode, they could do a lot worse than to start with the San Francisco Bay Area and New York Metro versions of Craigslist. Whether there are jobs available in those high-paying areas is another matter, but perhaps we can leave that for another day. The BLS press release can be found here while analysis and an interactive map provided by the Wall St. Journal can be found here.

Value Networks and the Renewable Energy Industry: Part 2 in a Series

By Patrick DeCourcy

(Ed. Note: This post is an excerpt from a recent paper entitled 'Value Networks and the Renewable Energy Industry: Mapping a Pathway Towards Enhanced Technology Diffusion' which explores some of the challenges facing the renewable energy industry as it moves to become a greater part of the US energy infrastructure. This is Part 2 in a series, Part 1 can be found here.)

Value Networks 

Conceptually, value networks have been defined by Clayton Christensen in two specific ways: [1]

“The context within which a firm identified and responds to customers’ needs, solves problems, procures input, reacts to competitors, and strives for profit”

“The collection of upstream suppliers, downstream channels to market, and ancillary providers that support a common business model within an industry"

Both of these definitions are crucial to the development of a technology and also show that the composition of a value network will greatly influence the diffusion and dvelopment of a new technology. A well crafted value network has been shown to allow for disruptive technological change to be introduced by entrant firms rather than established firms - who have typically remained addicted to the fueling of their sustaining innovations because of their value networks.

This parallels the situation that entrant renewable energy firms face versus the fossil fuel energy giants who have been enriched by the widespread use of carbon based energy sources.  A unique value network will not stop the older giants from using their significant financial advantage to acquire some entrant firms [2], but researchers like Christiansen would predict that they will ultimately fail at their attempts to commercialize a disruptive renewable energy technology due to not being able to pivot their organizational structures to support a different value network. 

PSA: Supreme Court Upholds AZ Immigration Law

Today, the Supreme Court upheld an Arizona law that allows authorities to sanction businesses that hire illegal immigrants in a 5-3 decision. In just the latest of a recent string of laws and practices in the border state that have faced national scrutiny, the High Court found that 'federal immigration law does not preempt Arizona from suspending or revoking the licenses of businesses that violate state immigration law.' The entire opinion, written by Chief Justice Roberts, can be found here.

The New Gold Standard?

Utah recently became the first state in the union to legalize the use of gold and silver coins as currency. The same law also helpfully exempts the sale of such coins from taxability, meaning that consumers will not have to fear paying for capital gains if the gold they hold for transactions appreciates. Though the law does not require merchants to accept the coins, at least one entrepreneur is looking to cash in on the law with a debit-card-linked depository. Such a debit card system is critically important at the point of sale; it would be difficult to imagine the clerk at a CVS weighing out and making change off of gold coins in the absence of such an innovation.

Perhaps sensing that the public is yearning for the good old days when the dollar was the dollar (and was also back by something other than a promise), at least ten other state legislatures are looking at schemes similar to the one Utah put into place. However, even proponents of the plan, including its author Rep. Brad Galvez, recognize that the dollar isn't returning to the old standard any time soon after the system was abandoned in the early seventies. The AP has more on the plan as well as a brief history of the gold standard in the US here.

Value Networks and the Renewable Energy Industry: Part 1 in a Series

By Patrick DeCourcy

(Ed. Note: This post is an excerpt from a recent paper entitled 'Value Networks and the Renewable Energy Industry: Mapping a Pathway Towards Enhanced Technology Diffusion' which explores some of the challenges facing the renewable energy industry as it moves to become a greater part of the US energy infrastructure. This is Part 1 in a series we will be posting over the next few days.)

Introduction

In 2008 President Obama made a bold declaration regarding the future of renewable energy:

“We’ll create 5 million new, high-wage jobs by investing in the renewable sources of energy that will eliminate the oil we currently import from the Middle East in 10 years…”  [1]

This promise is quite ambitious given the current diffusion of renewable energy in the United States.  Fossil fuel generated energy represented over 85% of the total energy consumption in the United States in 2007, with renewable energy sources representing a mere 6%. [2]  However, all is not bleak for renewable energy, both entrant and established firms in this sector have begun to craft a powerful value network which aims to disrupt the current dominance of fossil fuel based energy companies.  For President Obama’s promise to have any hope of succeeding, this value network needs to provide the means for the technology to diffuse further beyond the innovators and early adopters phase and into the early majority (terminology from Rogers Model of Technology Diffusion) [3].

This paper will analyze the value network of renewable energy firms and identify the weaknesses of the current value network relying on lessons from Clayton Christiansen in The Innovator’s Dilemma and other sources with a focus on removing obstacles to the further diffusion of renewable technologies.

Technology Development Lessons

There is ample evidence that there is a developing discontinuity between fossil fuel based energy and renewable energy.  Discontinuities develop in technology when there is a newer technology with a new vision and way of thinking about serving the same market demands of an older technology which has been sustained for some time and is now diminishing in its returns. 

Looking at technology S-curves can add further detail to these discontinuities and can indicate the competitive forces which have caused the discontinuity.  When renewable energy technologies are compared to carbon based sources of energy, there is a clear diminishing return of the current widespread fossil fuel based energy which can be juxtaposed against the rapid development phase present in renewable energy technologies.

The Show Must Go On

The much-anticipated follow-up to the smash hit The Hangover will debut, as scheduled, tomorrow night. There had been some trepidation among comedy aficionados that the opposite might be true after Mike Tyson's face tattoo artist, S. Victor Whitmill, attempted to shut down the film because of its unauthorized use of his artwork. However a judge ruled earlier this week that an injunction wouldn't be appropriate because of the harm it could cause for independent movie theaters. This, of course, still leaves the door open for money damages or, more likely, a settlement.

Beside the benefit this provides to fans of college humor everywhere, this was also clearly a case where the economics of a situation played into and impacted the legal analysis; if it weren't for the potential for third parties to lose money in the event of an injunction, the legal analysis suggests that it would have been an appropriate remedy. As it is, all parties will likely benefit. Warner Brothers gets free promotion (less fairly negligible legal costs) and a scheduled release. Whitmill gets free promotion (again, less legal costs) and, in all likelihood, a nice settlement. This is just a guess, but tomorrow probably isn't going to be a bad day at the theater or the tattoo parlor...

Legitimizing the World's Oldest Profession...

In times of economic turmoil, when states run budget deficits and when programs are being cut back and shut down, legislators often scour the statutes of their jurisdictions in an attempt to find someone, somewhere who isn't being taxed. Therefore, particularly in times like these, it would be rare to find a situation where an industry or profession wasn't being taxed in any way.

It would, of course, be even rarer to find an industry whose cries to be taxed went consistently unanswered. However, that is exactly what is happening in Nevada as the brothel industry's attempts to gain some legitimacy through their contributions to the state's coffers have once again proven unsuccessful. Particulars on the latest attempt as well as a bit of the history of brothel taxation in Nevada can be found in the Las Vegas Sun can be found here.

Is Reverse Racism the New Racism?

A sensitive topic that is nonetheless an important one, the history of racism in America is something that cannot be ignored by serious students of law or economics. In recognition of the harms of the past, a number of laws have been passed and programs put into place with varying degrees of effectiveness and popularity to combat historical biases against particular racial classes. Among them, affirmative action is probably foremost in the public consciousness due to the controversies it has spawned and legal challenges it has faced. However, have programs such as affirmative action gone too far? Have the scales shifted to the extent that what pundits are calling 'anti-white bias' is as big a problem for society as more traditional forms of racism?

This is one of the many questions that are being asked following the release of a study by Professors Michael Norton and Samuel Sommers of Harvard and Tufts, respectively. From the abstract:

Although some have heralded recent political and cultural developments as signaling the arrival of a postracial era in America, several legal and social controversies regarding‘‘reverse racism’’ highlight Whites’ increasing concern about anti-White bias. We show that this emerging belief reflects Whites’ view of racism as a zero-sum game, such that decreases in perceived bias against Blacks over the past six decades are associated with increases in perceived bias against Whites—a relationship not observed in Blacks’ perceptions. Moreover, these changes in Whites’ conceptions of racism are extreme enough that Whites have now come to view anti-White bias as a bigger societal problem than anti-Black bias.

For those who think that the white individuals in the study are potentially merely reacting to perceived slights againt them, that anti-white bias is simply not as big a problem as other forms of racism, point taken. However, the analysis can't end there as the Supreme Court has already weighed in on the topic in at least one instance, Ricci v. DeStefano. There, it was held that white firefighters were denied job opportunities based on their race when no promotions were given because no blacks passed the promotions exam (there is no prize for guessing which side of the 5-4 opinion each justice came in on...). Therefore, in at least one case, in the opinion of the only group of individuals whose opinions matter, a program intended to combat bias created a new one. The New York Times' 'Room for Debate' page continues the discussion here.

NYC Bag Ban and the Shifting Rationale for Trademark Law

By contributor Jeremiah Newhall

The recent BlawgConomics post on NYC’s proposed bag ban prompted me to wonder: what, or whose, interest is the ban protecting?  Trademark law should prevent unfair competition and consumer confusion, but this law punishes consumers, not competitors.  What’s going on here?

The ban is aimed at the putative world capital of designer knock-offs, the Canal Street area.  The previous post focused upon the efficiency (or, as Josh concluded, lack thereof) of enacting and enforcing such a measure, but I’m drawn to other questions.  The proposal represents a seismic shift in the way we think about trademark law.

New York City's biggest law enforcement problem?

As a preliminary matter, I’d like to dispense with two basic points: first, the bags in question are protected by trademark, not copyright.  For reasons best explained elsewhere, designer bags are not, in most cases, copyrightable.  As a result, designers from Donna Karan to Calvin Klein have relied instead upon trademark protection to prevent others from creating copy-cat designs.

Second, NYC has the power to enact such a law.  The general police power of the states is plenary, and extends to the limits of the Constitution.  So long as the state provides at least a rational basis for its laws, it may punish citizens for owning knock-off bags, or dynamite, or even celery.  Nor is NYC’s bag ban preempted by any federal legislation.  Congress could preempt such a ban, by regulating ownership of false trademarks under its commerce clause power, but it has chosen not to do so.

Moving past those preliminary points, whether or not NYC should enact its bag ban raises fascinating questions about why we have trademark law at all.  From a legal perspective, trademark law has traditionally been a consumer-protection measure. But from an economic perspective, trademark law creates an asset on the value sheet. With these notions in mind, it is possible to view the NYC bag ban as an overdue legal response to the economic reality of trademark ownership.

Markets for Everything?

We all know the old cliche that everything has a price. Is this true? If it is, does it infer that there is a market for everything? We often take the side of the free market here at Blawgconomics, and have many times advocated for market solutions where they don't currently exist. But even we find two examples from the blogosphere this morning to be, if not extreme, then probably at the margins.

First up is more of a thought than a well-developed post over at Freakonomics on the market for human organs. Despite its (lack of) length an interesting point is made. Then from Greg Mankiw's Blog  we get something a little more substantial; a portion of an advertisement from the group providing what can only be described as 'Rapture insurance for pets targeted at those who believed the radio guy was right that the world was ending over the weekend.' In sum, if the following quote hits close to home, it is probably tailor-made for you:

'You've committed your life to Jesus. You know you're saved. But when the Rapture comes what's to become of your loving pets who are left behind? Eternal Earth-Bound Pets takes that burden off your mind.'

Clarification on Israel

After making some comments on Israel last week that, rightfully or wrongly, stirred up large portions of the media and those who consider themselves to be friends of Israel, President Obama clarified his thoughts, or restated them more artfully, or completely backtracked (depending on who is giving the analysis) in a speech before AIPAC over the weekend. His exact position on the Israeli-Palestinian question is important not only in general terms and in light of the confusion over what was reported from his meetings with Israeli PM Benjamin Netanyahu last week, but also ahead of his week-long European adventure starting today. There, he is reportedly going to attempt to gain support for yet another push into a Holy Land peace process. The entire transcript of the president's speech can be found here; selected snippets follow.

Q&A on DSK or: How Just is Justice?

Sometimes current media items that would presumably fit nicely under our claimed umbrella of legal/economic topics are nonetheless difficult for us to write about. Sometimes, particularly with regards to a very recent and hot story, 'the facts' are complicated; sometimes they are contradictory; sometimes there are just too many threads to a particular story and a wealth of information can lead somewhat ironically to an A-grade case of writer's block. Sometimes in situations like this, before all the facts on the ground are clear, it helps to simply grab hold of one of the compelling and unanswered questions surrounding the story and work with that.

The Dominique Strauss-Kahn affair provides a good example of this. For one, the situation has stimulated a seemingly never ending parade of interesting questions; some about the man, some about the situation(s) he got himself into, some about the institution he had, until his recent resignation, run. These questions fall across the entire spectrum, including the absurd. For example, 'Wait, someone named Dominique with a hyphenated surname is a man?' has shown up with alarming frequency, only sometimes tongue in cheek.

They obviously range to the far more serious as well. For example, if the allegations are true, everyone should be wondering if the potential victim is okay. Others include 'Why does Europe have such a strangle-hold on leadership of the IMF?' 'He has had similar allegations levelled against him in France?' 'What will happen to the hierarchy and respectability of the IMF during a time in its history when both are important?' and 'How did a former Communist Party member get elected as head of the IMF?**'

Should Law Firms be able to Go Public?

There are currently no publicly-held law firms in the U.S. It isn't that there isn't a market, it is that the legal profession, one of the most heavily self-regulatory in existence, has decided that answering to non-lawyers and shareholders could create conflicts for lawyers. This should be a familiar line of reasoning to lawyers; most every state bar has adopted language into its regulations limiting this type of practice.

Similar rules prevent lawyers from combining with accountants, social justice advocates, financial advisors and others who could help to create some interesting synergies within individual offices. For example, it is likely that clients could benefit from their accountant and attorney being located in the same office, or from the community group helping them with their asylum case also representing them in legal proceedings.

However, despite the potential for benefits to be created by outside ownership and business combinations, it is also true that such situations could create conflicts for the parties involved. And, with the frequency that lawyers find themselves in conflict now, it is probably well that the legal profession works hard to nip potential conflicts in the bud at a stage before they even have a chance to manifest.

The Subsidization of the Energy Industry

Those interested in how the government subsidizes various factions of the energy sector in the US could do a lot worse than reading Gary Becker's concise piece on the topic on The Becker-Posner Blog. Mr. Becker describes how various sources, including domestic oil, are subsidized, what some alternatives to the status quo might be, and how changing subsidies in the future could benefit the energy infrastructure of the US, all with a nod to environmental concerns. The article, Subsidies to Oil and Other Energy Sources, can be found here.

Indexing Equality and Consumer Confidence Around the World

We are always on the look out for interesting resources with the goal of sharing them with readers. This particularly includes resources with hard data which can be used by those interested in analyzing topics free from the shackles of politicization. Though we are occasionally able to post something of interest, making this goal difficult is the fact that most such resources are available only to subscribers or for a fee.

In case it is not clear where we are headed, we recently found a very interesting and free resource from MasterCard Global indexing data on women's equality and opportunities in different regions (mainly of the developing variety) around the world. There are additionally indices covering consumer confidence and behaviors. Though most of the information is plainly in index form, there is not a lot of fluff, the descriptions and methodologies are clear and the lessons are plain enough. Those interested in MasterCard's Worldwide Indices can visit the homepage of the resource here.

Exploring the Limits of Culinary (and Scientific and Legal and Economic) Curiosity

Would you eat meat that was created in a test-tube? Americans already eat meat that is hyper-processed and chemically enhanced. Many around the world likewise eat vegetables which have been heavily genetically modified. Is laboratory-produced meat a step too far however? That is the central question of many interesting ones being posed by Michael Specter in this week's edition of The New Yorker in an article entitled 'Test-Tube Burgers' Although the entire article is only available to subscribers, the following bits from the abstract should provide enough fodder for the discussion below:

"'Why can’t we grow meat outside of the body? Make it in a laboratory, as we make so many other things.' In-vitro meat can be made by placing a few cells in a nutrient mixture that helps them proliferate. As the cells begin to grow together, forming muscle tissue, they are attached to a biodegradable scaffold. There the tissue can be stretched and molded into food, which could, in theory, be sold, cooked, and consumed like any processed meat...A new discipline, propelled by an unlikely combination of stem-cell biologists, tissue engineers, animal-rights activists, and environmentalists, has emerged in both Europe and the U.S.

Lab-grown meat raises powerful questions about what most people see as the boundaries of nature and the basic definitions of life. Yet our patterns of meat consumption have become increasingly dangerous for both individuals and the planet. The global livestock industry is responsible for nearly twenty per cent of humanity’s greenhouse-gas emissions. Cattle consume nearly ten per cent of the world’s freshwater resources, and eighty per cent of all farmland is devoted to the production of meat. The consequences of eating meat, and our increasing reliance on factory farms, are almost as disturbing for human health."

So, mass consumption of meat has health consequences for both humanity and the earth. Per capita consumption is only expected to increase as the middle classes of today's developing countries rise and become the next generation's consumption kings. Clearly, if less space and resources were devoted to growing meat, it would benefit everyone. This particular solution remains some way off however. While the question of fake meat is a nascent and very experimental one, there are nonetheless interesting law and economics questions that can be asked, and which will need to be answered, before any readers out there see 'test-tube burgers', sausages or even hot dogs.

Why Does the BCS Exist?

Why does college football's Bowl Championship Series exist? Inquiring minds, including those in the Justice Department, would apparently like to know. Following is a letter sent to Mark Emmert, the President of the NCAA, by Christine Varney, head of antitrust with the Justice Department, on May 3 of this year:

Mark A. Emmert, Ph.D.
President
National Collegiate Athletic Association
P.O. Box 6222
Indianapolis, IN 46206

Dear Dr. Emmert:

Serious questions continue to arise suggesting that the current Bowl Championship Series (BCS) system may not be conducted consistent with the competition principles expressed in the federal antitrust laws. The Attorney General of Utah has announced an intention to file an antitrust lawsuit against the BCS.

In addition, we recently received a request to open an investigation of the BCS from a group of twenty-one professors, a copy of which is attached. Other prominent individuals also have publicly encouraged the Antitrust Division to take action against the BCS, arguing that it violates the antitrust laws.

Supreme Court Chess Games in Focus as Election 2012 Approaches

It is no secret that some Supreme Court justices tend to be more liberal while others tend to be more conservative. This isn't always obvious or indeed that important; many cases of the more mundane variety see The Nine agreeing on the result. On the contrary, while less common, the types of cases which catch the public's eye often have the type of political undertones that can lead to idealogical splits. It is in these big cases that the political mix of judges on the Court makes the biggest difference; the hesitation of the SCOTUS to change precedential rulings except in extreme circumstances can lead to the implications of a Court's decision echoing through the legal system for years or even decades.

Halls of justice or home of political intrigue?

With this backdrop, the otherwise lifetime tenures of Supreme Court justices can become politicized, particularly once they are well past what other Americans would deem to be a comfortable retirement age. This is because, as many readers will know, sitting presidents have the ability to nominate justices to replace those who have stepped down. Currently, with Justices Ginsberg and Breyer in their seventies and a President who, despite a recent boost, has proven to be far from a reelection certainty, some liberal commentators are calling for these two justices to 'take one for the team' by moving their respective retirement dates ahead. This would give the President two more appointments before the already cloudy political waters become even murkier in 2012. For more on this, visit The Wall St. Journal's legal blog here.

The Inefficiencies of Upholding the Law...

From a post by Ashby Jones at The Wall St. Journal law blog a few days back:

'Well, we can’t say it’s the sole attraction offered by New York City, but we certainly know some people who’ve traveled here just to pick up the knockoff Gucci and Kate Spade bags sold in various parts of downtown Manhattan.

Such an activity could soon come with a bit more risk than it used to be, that is, if NY city council member Margaret Chin has her way.

According to stories at the AP, WNYC, Epoch Times, Chin is set to introduce legislation on Thursday that would criminalize the purchase of fake and trademarked items. Buying such items would attach a class A misdemeanor that could include either jail time or a $1000 ticket.'

This is a piece of legislation that just screams for a bit of economic analysis. While most people would agree that enforcing laws, including trademark laws, is a good thing, there are times when laws do not do what they are intended to do, or perhaps have unintended consequences. In other words, putting aside any notions of legal justice or fairness, economists might say that some laws are 'bad' based on economic analysis. While many people believe that in a conflict between economics and fairness the latter should clearly come out on top, let's run this one through the wringer and see what we can come up with.

Taking Advantage of a 'Halo Effect' Moment

It is likely that anyone with the technology needed to visit this site is already aware of the biggest news of the day, week, month and possibly year. It is also probably true that others are far better equipped than we are to analyze and discuss the impact of Osama bin Laden's death from a purely emotional perspective; we will leave the penning of more poignant words to them. However, we thought it might be useful to post President Obama's speech for those who may have already been in bed before the president hit the airwaves last night.