Blawgconomics has been unabashedly critical of government stimulus plans. In particular we have written about the seeming inefficiency of the American Recovery and Reinvestment Act as it appears that the certain costs were not worth the debatable benefits. Despite the lack of academic rigour inherent in our calculations, it is becoming clearer that that they were not so far off base. Dartmouth's Bruce Sacerdote and James Feyrer have produced a paper which examines the relationship between ARRA and employment including the impact of types of spending, 'Did Stimulus Stimulate? Real Time Estimates of the Effects of the American Readjustment and Recovery Act.'* Though the pair went beyond pure per job cost data to explore multiplier effects, determining per job costs was clearly an important part of their analysis. From the abstract:
'We use state and county level variation to examine the impact of the American Recovery and Reinvestment Act on employment. A cross state analysis suggests that one additional job was created by each $170,000 in stimulus spending. Time series analysis at the state level suggests a smaller response with a per job cost of about $400,000. These results imply Keynesian multipliers between 0.5 and 1.0, somewhat lower than those assumed by the administration. However, the overall results mask considerable variation for different types of spending. Grants to states for education do not appear to have created any additional jobs. Support programs for low income households and infrastructure spending are found to be highly expansionary. Estimates excluding education spending suggest fiscal policy multipliers of about 2.0 with per job cost of under $100,000.'
What to make of this? Well, it would appear that ARRA cost taxpayers somewhere between $170,000 and $400,000 per job**. This is on the high side for per job costs, even if a little lower than our estimates. Notably, if education spending is excluded, per job costs were around $100,000. Though this is getting a little closer to a palatable number, it still seems to be on the high side given that many of the jobs created by the stimulus plan were temporary and most likely didn't pay as much as they cost. In other words, the stimulus package might have been marginally more effective than we estimated, and was relatively more effective in certain sectors than others, but it was inefficient nonetheless.
6.26.2011
Crowdsourcing, PBR and Chasing the American Dream
Ownership, whether of a car, a home or a business, is thought by many to be one of the key ingredients in that tough-to-define and oft-evolving concept known as The American Dream. However, earlier this month an innovative plan utilizing social media that would have given Americans a chance to own their own little piece of a well-known national brand was nixed by the Securities Exchange Commission (SEC). Why? The SEC determined that a social network-driven initiative to buy brewer Pabst failed to meet the statutory standards for a public offering. According to The Wall St. Journal's legal blog:
"Two advertising executives on (June 8) reached a settlement with securities regulators over a Web site that purported to raise $300 million via ”crowdsourcing” on Facebook and Twitter to buy Pabst Brewing Co., the maker of Pabst Blue Ribbon, Lone Star, Colt 45 and other beers.
The Securities and Exchange Commission said Michael Migliozzi II and Brian William Flatow agreed to a cease-and-desist order after they allegedly failed to register their offering before seeking to sell shares to the public. They did so without admitting or denying wrongdoing."
For those unfamiliar with the details of the Pabst sale, crowdsourcing or the role of the SEC, allow us to elaborate. Migliozzi and Flatow noted that the brewer, Pabst, had been put on sale by the private charitable trust which currently owns it. The two ad execs saw an opportunity to buy a well-known brand (or conduct a social media experiment, or both depending on who is describing the facts) and created a website which advertised their intent to buy PBR. They also used social media, including Twitter and Facebook, to attract co-travelers, who they called 'pledgees' and 'investors' to their potential venture.
What would pledgors receive for their efforts? According to the website (which has been restricted for obvious reasons, but whose main contents can be found in SEC documents), in the event that the threshold amount was reached, each investor would receive a 'crowdsourced certificate of ownership' and beer of an equal value to the amount invested. At least at that point, it would appear that a pledge of, say, $20 would get a potential investor a certificate and a few six-packs, but not necessarily an ownership stake in the brewer, in the event of a successful purchase.
"Two advertising executives on (June 8) reached a settlement with securities regulators over a Web site that purported to raise $300 million via ”crowdsourcing” on Facebook and Twitter to buy Pabst Brewing Co., the maker of Pabst Blue Ribbon, Lone Star, Colt 45 and other beers.
The Securities and Exchange Commission said Michael Migliozzi II and Brian William Flatow agreed to a cease-and-desist order after they allegedly failed to register their offering before seeking to sell shares to the public. They did so without admitting or denying wrongdoing."
For those unfamiliar with the details of the Pabst sale, crowdsourcing or the role of the SEC, allow us to elaborate. Migliozzi and Flatow noted that the brewer, Pabst, had been put on sale by the private charitable trust which currently owns it. The two ad execs saw an opportunity to buy a well-known brand (or conduct a social media experiment, or both depending on who is describing the facts) and created a website which advertised their intent to buy PBR. They also used social media, including Twitter and Facebook, to attract co-travelers, who they called 'pledgees' and 'investors' to their potential venture.
Speaks for itself...
The site, 'Thebuyabeercompany.com,' explained the execs' plan to potential pledgors; the first stage would be the gathering of pledges. After a sum of $300 million was pledged, the next step would be collecting and making a bid for the brewer.What would pledgors receive for their efforts? According to the website (which has been restricted for obvious reasons, but whose main contents can be found in SEC documents), in the event that the threshold amount was reached, each investor would receive a 'crowdsourced certificate of ownership' and beer of an equal value to the amount invested. At least at that point, it would appear that a pledge of, say, $20 would get a potential investor a certificate and a few six-packs, but not necessarily an ownership stake in the brewer, in the event of a successful purchase.
6.23.2011
America by the Numbers
As campaigns for the 2012 presidential race kick into high gear, managers and their lackeyes are undoubtedly spending nearly as many hours as there are in the day to get statistical information on the voting public. And the non-voting public. And even the potential voting public. Who are they? What are their educational backgrounds? What racial demographics do they fall into? What are their issues?
Those are the types of questions that keep campaign managers up at night. They spend extraordinary amounts of money and manpower to get approximate answers. For the rest of us, recent data from The Pew Research Center will have to suffice. Not that it is much of a step down from what the political posturers can get their hands on; Pew's Beyond Red v. Blue: The Political Typology is a tremendous report full of enough interesting data and analysis to keep even casual political junkies busy for hours. For more, readers can visit the report here.
Those are the types of questions that keep campaign managers up at night. They spend extraordinary amounts of money and manpower to get approximate answers. For the rest of us, recent data from The Pew Research Center will have to suffice. Not that it is much of a step down from what the political posturers can get their hands on; Pew's Beyond Red v. Blue: The Political Typology is a tremendous report full of enough interesting data and analysis to keep even casual political junkies busy for hours. For more, readers can visit the report here.
The Cost of War
It is almost impossible to determine the true cost of a war. While in a democracy, it is often possible to quantify dollars spent on wars based on the (relative) tranparency of spending legislation as well as defense department and national government budgets, there are many costs that are impossible to measure.
In addition to the loss of life and the costs of injuries sustained by combatants, there are national reputational issues and long-term strategic impacts resulting from any military action. In addition, at least according to Gregg Easterbrook, unemployment is another (at least what we would say is a difficult to measure) cost of war. In particular, he discusses the idea that the current wars being fought by the United States, and their monetary costs, have created such a drag on the economy that job growth has been impacted.
As is often the case with Mr. Easterbrook's thought-provoking pieces for Reuters, reaction to the article is mixed. Supporters of and detractors from this theory alike as well as those who try to arrive at conclusions about stimulus packages based on extended logic all acquit themselves well in the comments section. Those interested in checking out the article can find it here.
In addition to the loss of life and the costs of injuries sustained by combatants, there are national reputational issues and long-term strategic impacts resulting from any military action. In addition, at least according to Gregg Easterbrook, unemployment is another (at least what we would say is a difficult to measure) cost of war. In particular, he discusses the idea that the current wars being fought by the United States, and their monetary costs, have created such a drag on the economy that job growth has been impacted.
As is often the case with Mr. Easterbrook's thought-provoking pieces for Reuters, reaction to the article is mixed. Supporters of and detractors from this theory alike as well as those who try to arrive at conclusions about stimulus packages based on extended logic all acquit themselves well in the comments section. Those interested in checking out the article can find it here.
A Not Quite Inside Look at the 'Hacktivist' World
Are 'hacktivists' criminals or are they the current generation's peaceful protestors? Hacktivists can loosely be defined as individuals and collaboratives who use the tools of hackers, including data breaches and denial of service attacks, to make what they believe are statements. These 'statements,' whether written in ink or irony, have included everything from vocal support for Julian Assange to electronic evidence that even the CIA isn't immune from cyber mischief. So, once again, the question...are those who make such statements criminals or merely the political operatives and opinion-shapers of an increasingly wired Earth?
In a post-9/11 world of shifting legal standards, in a world where the internet is increasingly being used as a political tool, where virtual news sites such as Wikileaks can place actual lives on the line, where governments are increasingly regulating the web, where more and more of the very confidential information we all use to run our lives is found in cyberspace, the answers to such questions are not always clear. It is not even always clear who the 'good' guys and the 'bad guys' are.
Complicating the analysis further, it is not always clear who is in charge of information, what legal regimes govern web conflicts or who has jurisdiction over individuals in a sovereign nations who commit their purported crimes thousands of miles away. Muddying the waters even further, as hacktivists who consider themselves to be akin to peaceful sit-in protestors have transitioned from making political statements to reaching increasingly more nefarious ends, the answers to questions about their legitimacy have become not only gray, but fuzzy, confusticated and hidden to boot.
Little is known about the members of the hacktivist groups, either by the media, or even sometimes even their co-hackers as individuals strive to shroud themselves in mystery. However, as more actions by such groups begin to occur in the open and as more people become involved, some outlines are being developed. For more on the best-known of the hacktivist groups, appropriately named 'Anonymous,' view the Wall St. Journal clip below.
In a post-9/11 world of shifting legal standards, in a world where the internet is increasingly being used as a political tool, where virtual news sites such as Wikileaks can place actual lives on the line, where governments are increasingly regulating the web, where more and more of the very confidential information we all use to run our lives is found in cyberspace, the answers to such questions are not always clear. It is not even always clear who the 'good' guys and the 'bad guys' are.
Complicating the analysis further, it is not always clear who is in charge of information, what legal regimes govern web conflicts or who has jurisdiction over individuals in a sovereign nations who commit their purported crimes thousands of miles away. Muddying the waters even further, as hacktivists who consider themselves to be akin to peaceful sit-in protestors have transitioned from making political statements to reaching increasingly more nefarious ends, the answers to questions about their legitimacy have become not only gray, but fuzzy, confusticated and hidden to boot.
Little is known about the members of the hacktivist groups, either by the media, or even sometimes even their co-hackers as individuals strive to shroud themselves in mystery. However, as more actions by such groups begin to occur in the open and as more people become involved, some outlines are being developed. For more on the best-known of the hacktivist groups, appropriately named 'Anonymous,' view the Wall St. Journal clip below.
6.17.2011
2011: The Rise of the E-conomist
Economists are often perceived to be stodgy types, the sort of dismal fellows who prophesize doom and gloom with regularity. What else could be expected about those who spend their careers focusing on various methods and means to discuss scarcity? However, the internet has provided an outlet for those who are attempting to break from the mould. Sites like Freakonomics and Economists do it with Models as well as the various blogs being written by some of the bigger names in economics have represented an attempt to reach out to common people using common language to explain what are often complicated topics. Does this signal the trend of a new kind of economist? In keeping with the spirit of the post (as well as our ongoing desire to be the first to coin some word of consequence in the 'new economy' world) let's call them e-conomists.
I think that there is a pretty compelling argument that economics is becoming more generally accessible due to the reach and breadth of internet resources. I also believe that some of today's top economists are doing a much better job than their predecessors of using regular language to explain economic principles. However, these factors alone are not the only, or even the best, evidence that e-conomics is becoming a developed area of the discipline; oftentimes they are simply examples of a new medium and slightly easier-to-understand language being used to explain the same old concepts
Rather, to the extent that a new breed of scholars, so-called e-conomists, are arriving on the scene, I would point to other two specific phenomena as support. First is the current trend by which serious economists are using not only common language to describe subjects of analysis, but are using this plain speak to analyze interesting things. Secondly, I would say that the idea that we are heading toward an e-conomist world is supported by the phenomenon we have recently noted where economists are using web resources to actually do their research.
I think that there is a pretty compelling argument that economics is becoming more generally accessible due to the reach and breadth of internet resources. I also believe that some of today's top economists are doing a much better job than their predecessors of using regular language to explain economic principles. However, these factors alone are not the only, or even the best, evidence that e-conomics is becoming a developed area of the discipline; oftentimes they are simply examples of a new medium and slightly easier-to-understand language being used to explain the same old concepts
Rather, to the extent that a new breed of scholars, so-called e-conomists, are arriving on the scene, I would point to other two specific phenomena as support. First is the current trend by which serious economists are using not only common language to describe subjects of analysis, but are using this plain speak to analyze interesting things. Secondly, I would say that the idea that we are heading toward an e-conomist world is supported by the phenomenon we have recently noted where economists are using web resources to actually do their research.
Civil War Economics
As it is the 150th anniversary of the American Civil War this year, many publications have been exploring the economic side of the nation's bloodiest conflict. At Freakonomics Professor Peter Coclanis of the University of North Carolina was available to answer reader questions in response to a statement of his which was posted on the same site about a week earlier. Meanwhile, The Economist handled the historical backdrop of the conflict, its long-lasting economic effects and its legacy with aplomb in a longer piece typical of that paper's outstanding work.
Though several generations have come and gone since the terminal end of the conflict, it seems Americans remain deeply divided over the contributing factors and impacts of the war, as can be noted in a series of rather heated comments in response to Professor Coclanis' piece. Perhaps unsurprisingly in light of this they remain equally conflicted over how to recognize this seminal moment in American history; evidence of this can be seen at a recent Harris poll here.
Though several generations have come and gone since the terminal end of the conflict, it seems Americans remain deeply divided over the contributing factors and impacts of the war, as can be noted in a series of rather heated comments in response to Professor Coclanis' piece. Perhaps unsurprisingly in light of this they remain equally conflicted over how to recognize this seminal moment in American history; evidence of this can be seen at a recent Harris poll here.
Stanley Cup Supply and Demand Stories
Now two days removed from a deciding game 7 to determine this year's NHL champion, my fellow native Bostonians are still in a state of bliss over the Bruins winning Lord Stanley's Cup. Described by some as the toughest trophy in American (or Canadian) sports to win, the Cup is already making the rounds at local watering holes around the Commonwealth, cherished by its winners and their fans alike. More pertinent to this website are two interesting supply and demand stories stemming from the Bruins' best of seven series with the Vancouver Canucks as well as its aftermath.
First off it seems, as is the case with many major finals in the sporting world, that tight supply and high demand for the game seven in Vancouver drove prices to astronomical heights. Blawgconomics favorite Darren Rovell noted in a piece from Wednesday that prices rose to around $3,000 on the day of the game on StubHub; local Boston radio stations suggested that some deals were being made at over $10,000. The Vancouver Sun noted at least one ticket was posted on an auction site SeatGeek for nearly $20,000, though it is unclear if it actually sold or if someone was throwing in a line to see if they could get a bite. Even if the latter is true, it does indicate that at least one potential participant valued the experience of going to the game marginally over $19,801 in cold hard cash.
Rovell noted in his SportsBiz post that supply was constrained more than prices might have been were the game in Boston as the secondary market for tickets is far less robust in Canada than in the States at this time. In a slightly more anecdotal case, it appears that there aren't enough official 2011 Stanley Cup Champion hats on the shelves in Boston. From my father (a rabid Bruin fan on the search for his customary post-championship purchase), "The local shops are all out of hats. One of the clerks told me it might be up to two weeks before Reebok (the official producer) has enough made and shipped for me to get one."
First off it seems, as is the case with many major finals in the sporting world, that tight supply and high demand for the game seven in Vancouver drove prices to astronomical heights. Blawgconomics favorite Darren Rovell noted in a piece from Wednesday that prices rose to around $3,000 on the day of the game on StubHub; local Boston radio stations suggested that some deals were being made at over $10,000. The Vancouver Sun noted at least one ticket was posted on an auction site SeatGeek for nearly $20,000, though it is unclear if it actually sold or if someone was throwing in a line to see if they could get a bite. Even if the latter is true, it does indicate that at least one potential participant valued the experience of going to the game marginally over $19,801 in cold hard cash.
Rovell noted in his SportsBiz post that supply was constrained more than prices might have been were the game in Boston as the secondary market for tickets is far less robust in Canada than in the States at this time. In a slightly more anecdotal case, it appears that there aren't enough official 2011 Stanley Cup Champion hats on the shelves in Boston. From my father (a rabid Bruin fan on the search for his customary post-championship purchase), "The local shops are all out of hats. One of the clerks told me it might be up to two weeks before Reebok (the official producer) has enough made and shipped for me to get one."
Betting on The Law
With black box algorithms, the overwhelming number of hedge funds (with an even greater number of analysts and managers), and the myriad ways to make swap bets is it possible that there is an alternative investment strategy which hasn't been tapped into yet? Is there yet some fertile ground where a new approach could take hold, allowing its sowers to reap glorious profits? At least one well-known lawyer thinks so.
Ted Frank, a class action specialist and fellow blogger believes that investors have been very slow to catch on to a very easily accessible and very public source of information which could greatly impact share values. From his blog Pointoflaw:
"Over the years I've been surprised when the stock market strongly reacted to judicial decisions that seemed like obvious outcomes. This surprises me: I don't have inside information; institutional investors have the ability to process the same public information that I do; the efficient market hypothesis predicts that this public information should already be reflected in the stock price; thus, if I can predict a ruling, the market can, too, and shouldn't treat it as a surprise when, say, the Illinois Supreme Court reverses a multi-billion-dollar judgment against Philip Morris, which bounced over 5% that week in December 2005. But apparently, the trial lawyer strategy to artificially depress stock prices to pressure defendants into settlements has an effect of creating market inefficiencies.
Ted Frank, a class action specialist and fellow blogger believes that investors have been very slow to catch on to a very easily accessible and very public source of information which could greatly impact share values. From his blog Pointoflaw:
"Over the years I've been surprised when the stock market strongly reacted to judicial decisions that seemed like obvious outcomes. This surprises me: I don't have inside information; institutional investors have the ability to process the same public information that I do; the efficient market hypothesis predicts that this public information should already be reflected in the stock price; thus, if I can predict a ruling, the market can, too, and shouldn't treat it as a surprise when, say, the Illinois Supreme Court reverses a multi-billion-dollar judgment against Philip Morris, which bounced over 5% that week in December 2005. But apparently, the trial lawyer strategy to artificially depress stock prices to pressure defendants into settlements has an effect of creating market inefficiencies.
6.15.2011
Exploring the Zeitgeist Through Language Usage
I recently came across an interesting feature on the site of one of the more popular free online dictionaries, Merriam-Webster Online. The feature in question is a set of three lists, each noting the most popular searches on the site over time periods including the past 24 hours, the past week and the past four months.
Though some words are necessarily searched with greater frequency than others, it is probably also true that the search of some words is a function of how often they are being used in the media. Which led me to consider how well the search of certain words can capture the mood of the moment; in other words, can a story be told, and there is no pun intended here, through the words that are in high usage at any given time.
I think, to some extent, that the answer could be yes. Of course it would be very difficult to extrapolate a story using a list of words. However with both in hand, it is not nearly as difficult to determine how stories are being defined by commentators. For example, it is not too difficult to think about how the following words relate to a current story about a certain member (again, no pun intended) from New York: weiner (I promise this is on there, and yes, one last time, no pun intended), cynical, didactic, integrity, hypocrite, pretentious, ubiquitous, conundrum, debauchery and lewd all show on the trending list from the past week.
Though some words are necessarily searched with greater frequency than others, it is probably also true that the search of some words is a function of how often they are being used in the media. Which led me to consider how well the search of certain words can capture the mood of the moment; in other words, can a story be told, and there is no pun intended here, through the words that are in high usage at any given time.
I think, to some extent, that the answer could be yes. Of course it would be very difficult to extrapolate a story using a list of words. However with both in hand, it is not nearly as difficult to determine how stories are being defined by commentators. For example, it is not too difficult to think about how the following words relate to a current story about a certain member (again, no pun intended) from New York: weiner (I promise this is on there, and yes, one last time, no pun intended), cynical, didactic, integrity, hypocrite, pretentious, ubiquitous, conundrum, debauchery and lewd all show on the trending list from the past week.
6.13.2011
Nowcasting and the Public Interest
We recently wrote about the ways tools on Google such as Trends and Correlate can be used by just about anyone with a computer and an internet connection to better understand the world around them. We can safely say that Blawgconomics was not the first to find these tools interesting as there has been quite a bit of research and press, necessarily over the past few years, on how search data can be used to forecast or 'nowcast' any number of interesting things.
One of the latest examples of research in this vein (and a strong indicator that it isn't only amateur economists who are finding a use for internet data) is a report just recently released by the Bank of England entitled 'Using internet search data as economic indicators.' From the conclusion:
This article has considered the potential usefulness of internet search data as economic indicators. There remain some limitations of these data: there is only a short backrun, there is no information on the actual volume of searches, and as the index is based on a subsample the backrun of data can change. However, even in their current form, initial results suggest these data can be useful. In line with studies for other countries, internet search data can help predict changes in unemployment in the United Kingdom. These appear to be as useful as existing indicators. For house prices, the results are somewhat stronger: search term variables can outperform some existing indicators over the period since 2004. There is also evidence that these data may be used to provide additional insight on a wider range of issues which traditional business surveys might not cover. (emph. added)
One of the latest examples of research in this vein (and a strong indicator that it isn't only amateur economists who are finding a use for internet data) is a report just recently released by the Bank of England entitled 'Using internet search data as economic indicators.' From the conclusion:
This article has considered the potential usefulness of internet search data as economic indicators. There remain some limitations of these data: there is only a short backrun, there is no information on the actual volume of searches, and as the index is based on a subsample the backrun of data can change. However, even in their current form, initial results suggest these data can be useful. In line with studies for other countries, internet search data can help predict changes in unemployment in the United Kingdom. These appear to be as useful as existing indicators. For house prices, the results are somewhat stronger: search term variables can outperform some existing indicators over the period since 2004. There is also evidence that these data may be used to provide additional insight on a wider range of issues which traditional business surveys might not cover. (emph. added)
Utah Declares Its Currency To Be Gold, Silver: Can They Do That?
By contributor Jeremiah Newhall
This recent BlawgConomics post linked to an AP article (no longer available) about a bill passed in Utah declaring gold and silver coins to be “currency.” That post left yours truly wondering if Utah had considered the United States Constitution and its exclusive grant of power to the Congress over currency. Which means it’s time for the inaugural edition of an irregularly recurring feature on BlawgConomics: “Can They Do That?”
Let’s begin with the bare assertion that Utah “legalize[d] the use of gold and silver coins as currency.” Does this mean gold and silver pirate doubloons from the bottom of the ocean? Coin collectibles? Are these now the official currency of the state of Utah? Can they do that?
No, Utah cannot declare all gold and silver coins to be currency. In fact, it can’t declare anything to be currency. Let’s have a look at Article I, Section 8, clause 5, which give Congress the power “[t]o coin Money, regulate the Value thereof, and of foreign Coin[.]” States cannot declare coins to be legal tender, only Congress can do that.
This recent BlawgConomics post linked to an AP article (no longer available) about a bill passed in Utah declaring gold and silver coins to be “currency.” That post left yours truly wondering if Utah had considered the United States Constitution and its exclusive grant of power to the Congress over currency. Which means it’s time for the inaugural edition of an irregularly recurring feature on BlawgConomics: “Can They Do That?”
These still work in Utah...how about pirate gold?
Most of the media did a poor job covering the issue, with articles that got most of the facts right yet still managed to get the law wrong. But by taking a look at the actual legislation and the Constitution we can easily sort fact from popular fiction.Let’s begin with the bare assertion that Utah “legalize[d] the use of gold and silver coins as currency.” Does this mean gold and silver pirate doubloons from the bottom of the ocean? Coin collectibles? Are these now the official currency of the state of Utah? Can they do that?
No, Utah cannot declare all gold and silver coins to be currency. In fact, it can’t declare anything to be currency. Let’s have a look at Article I, Section 8, clause 5, which give Congress the power “[t]o coin Money, regulate the Value thereof, and of foreign Coin[.]” States cannot declare coins to be legal tender, only Congress can do that.
6.10.2011
Presidential Predictions via The Wisdom of Crowds
There are markets for almost everything these days...even political races. If you subscribe to theories regarding the wisdom of crowds , such 'prediction' markets can provide an endless source of interesting information, or at least fodder for conversation, leading up to Decision 2012. For more on prediction markets, visit Intrade's website here. Those less interested in talking theory and more interested in placing a bet on their favorite aspirant (or perhaps incumbent) to the White House can go straight to the fun stuff here.
On a related side note, we have no affiliation with Intrade and have not used its services. Therefore we can't vouch for the platform. However, we did just spend 20 minutes taking a look at what the investing public thinks of everything from Anthony Weiner's chances of resigning to the odds that the Higgs Boson particle will be discovered by the end of the year. So as far as warnings and disclaimers, we can provide readers with the following; it may or may not provide you with an early retirement package, but there is most certainly a large potential for time spending (wasting?) on the site.
On a related side note, we have no affiliation with Intrade and have not used its services. Therefore we can't vouch for the platform. However, we did just spend 20 minutes taking a look at what the investing public thinks of everything from Anthony Weiner's chances of resigning to the odds that the Higgs Boson particle will be discovered by the end of the year. So as far as warnings and disclaimers, we can provide readers with the following; it may or may not provide you with an early retirement package, but there is most certainly a large potential for time spending (wasting?) on the site.
Are We In the Midst of Tech-Bubble 2.0?
Recalling the heady days of the tech bubble, it seemed that anyone with a half-baked idea and a clever name could raise enough capital to fund the takeover of a small country, never mind the operations of a company with no tangible (and in many cases, not even in tangible) output. For example, according to Ljungqvist and Wilhelm in their paper 'IPO Pricing in the Dot-com Bubble',
In 1996, first-day returns on initial public offerings (IPOs) averaged about 17 percent (median: 10 percent). In 1999, first-day returns averaged 73 percent (median: 40 percent) before tapering off to 58 percent (median: 30 percent) in 2000. internet IPOs averaged a stunning 89 percent (median: 57 percent) during 1999 and 2000. These average returns dwarf those from earlier periods and are the most widely recognized feature of what is now commonly referred to as the 'dot-com bubble.'
LinkedIn recently went public for over $4 billion (and subsequently doubled). Twitter is being valued in secondary markets at about double that price. Not to be outdone, and as we have noted in a previous post, Facebook is being valued somewhere in the neighborhood of $70 billion. Not bad for a website that is essentially a virtual gossip session with photos. The question that is begging to be asked is, are we in the midst of a second technology bubble? The arguments in the negative range from the idea that investors would not allow such a thing to happen again (weak) to the exponential growth of internet users in China (only slightly better) to the idea that the current mini-boom has, thus far, only included best of breed companies with revenue (getting closer).
In 1996, first-day returns on initial public offerings (IPOs) averaged about 17 percent (median: 10 percent). In 1999, first-day returns averaged 73 percent (median: 40 percent) before tapering off to 58 percent (median: 30 percent) in 2000. internet IPOs averaged a stunning 89 percent (median: 57 percent) during 1999 and 2000. These average returns dwarf those from earlier periods and are the most widely recognized feature of what is now commonly referred to as the 'dot-com bubble.'
LinkedIn recently went public for over $4 billion (and subsequently doubled). Twitter is being valued in secondary markets at about double that price. Not to be outdone, and as we have noted in a previous post, Facebook is being valued somewhere in the neighborhood of $70 billion. Not bad for a website that is essentially a virtual gossip session with photos. The question that is begging to be asked is, are we in the midst of a second technology bubble? The arguments in the negative range from the idea that investors would not allow such a thing to happen again (weak) to the exponential growth of internet users in China (only slightly better) to the idea that the current mini-boom has, thus far, only included best of breed companies with revenue (getting closer).
Do Cell Phones Cause Cancer?
In news that is about a week old a group of scientists working with the World Health Organization has placed cell phones into the 'possibly carcinogenic' category. So should our readers stop checking the site from their mobiles? Maybe not yet. Other items in the 'possibly carcinogenic' category include pickles and coffee. While there is some evidence that cell phone use may present a threat, their near ubiquity in many parts of the world mean that this gray-shaded report is highly unlikely to impact usage or sales. However, the report is not entirely useless; if the waffling category the products were placed in leads to more research providing a definitive answer either way, it will prove to be a useful tool for regulators and manufacturers alike. Here's hoping...
6.03.2011
Understanding Net Neutrality
There are many issues in the political sphere which create confusion among voters as well as, in too many cases, the politicians who represent them. One of the foremost among these seems to be net neutrality. It is not difficult to see why. Most folks don't understand how the internet works; their technical expertise probably extends to sticking a pen in the back of a modem when things aren't working then putting the same tool to task writing checks to Comcast.
We are not ashamed to admit that we are among the ignorant; net neutrality is a tough concept for Blawgconomics as well. For us, in addition to lacking technical expertise as described above is the added layer that much of the information available on the topic is so clearly agenda-driven that neutral discussion of neutrality is almost impossible to uncover. However, despite the rampant politicization of the topic, we have found one resource which rises above many of the others in a relatively even and thoroughly easy to understand way. This entertaining video can be viewed below and also found here.
We are not ashamed to admit that we are among the ignorant; net neutrality is a tough concept for Blawgconomics as well. For us, in addition to lacking technical expertise as described above is the added layer that much of the information available on the topic is so clearly agenda-driven that neutral discussion of neutrality is almost impossible to uncover. However, despite the rampant politicization of the topic, we have found one resource which rises above many of the others in a relatively even and thoroughly easy to understand way. This entertaining video can be viewed below and also found here.
PSA: The History of the Internet
Most readers will know that the internet has been a transformative force in human society over the past decade or two. In one close-to-home example there is probably no chance that we could share our thoughts with readers in posts just like this without it. No other medium could provide the forum for an everyday common writer such as myself to share thoughts with such a disparate audience with such ease or with so little expense.
However, despite common acceptance of the power of the internet, fewer users understand just how it came into existence or how it works. We hate to spoil a surprise as much as the next person, but Al Gore had nothing to do with it. For a brief read on the real history of the internet, visit the Internet Society's website here.
However, despite common acceptance of the power of the internet, fewer users understand just how it came into existence or how it works. We hate to spoil a surprise as much as the next person, but Al Gore had nothing to do with it. For a brief read on the real history of the internet, visit the Internet Society's website here.
Is Safety Still a Valid Reason for SUV Ownership?
It wasn't so long ago that super-sized SUVs seemed to reign supreme over the hard top surfaces of the United States. From its highways to its malls to its youth sport facility parking lots, names like Expedition and Suburban seemed to surpass more, well, European sounding names in both size and number. One almost couldn't imagine a trip to the local shop without spending at least one leg of the trip staring at the back of an eight foot tall wall of plastic and glass.
Of course some owners use SUVs for their off-road abilities or their carrying capacity. Others undoubtedly contributed to this abundance of gas guzzlers for purely aesthetic reasons. However there were some who rightly justified the initial, ongoing, and perhaps environmental costs of ownership by their belief that their vehicles ensured the safety of themselves and their loved ones.
The simple science of automobiles as recently as a decade ago was generally that the more space, and therefore gas, your vehicle used, the safer its passengers were. While seemingly exponentially rising gas prices have, to some extent, curtailed the use of the SUV as the mode of choice among many in the suburbs, recent observations of local grocery and consumer goods store parking lots suggest that more than area farmers are still utilizing oversized vehicles as every day drivers.
Can this still be justified on pure safety grounds? Or have the holdouts lost their footing when it comes to justifying SUV ownership on anything but aesthetic grounds? Recent studies by the Insurance Institute for Highway Safety suggest that the latter may be true. Indeed it is now the case that you can own a vehicle which gains over 40 miles to the gallon while nonetheless holding a top safety rating. And while it is still true that most Hyundai Elantra and Nissan Juke owners will avoid taking their vehicles off-road, it is also true that most past and current SUV owners couldn't tell a winch from a common kitchen blender, suggesting that such functionality won't necessarily be missed in the trade for superior gas mileage...
Of course some owners use SUVs for their off-road abilities or their carrying capacity. Others undoubtedly contributed to this abundance of gas guzzlers for purely aesthetic reasons. However there were some who rightly justified the initial, ongoing, and perhaps environmental costs of ownership by their belief that their vehicles ensured the safety of themselves and their loved ones.
The simple science of automobiles as recently as a decade ago was generally that the more space, and therefore gas, your vehicle used, the safer its passengers were. While seemingly exponentially rising gas prices have, to some extent, curtailed the use of the SUV as the mode of choice among many in the suburbs, recent observations of local grocery and consumer goods store parking lots suggest that more than area farmers are still utilizing oversized vehicles as every day drivers.
Can this still be justified on pure safety grounds? Or have the holdouts lost their footing when it comes to justifying SUV ownership on anything but aesthetic grounds? Recent studies by the Insurance Institute for Highway Safety suggest that the latter may be true. Indeed it is now the case that you can own a vehicle which gains over 40 miles to the gallon while nonetheless holding a top safety rating. And while it is still true that most Hyundai Elantra and Nissan Juke owners will avoid taking their vehicles off-road, it is also true that most past and current SUV owners couldn't tell a winch from a common kitchen blender, suggesting that such functionality won't necessarily be missed in the trade for superior gas mileage...
6.01.2011
Value Networks and the Renewable Energy Industry: Part 4 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 4, the final in a series. Parts 1 through 3 can be found at the following links; Part 1, Part 2, and Part 3.)
Emissions Tracking and Trading Schemes
Another element of the value network of renewable energy firms relies on the trading, tracking, and penalties associated with emitting carbon into the atmosphere. The thought is that due to the heavy pollution associated with the generation of coal and oil based energies, an emissions trading scheme would inhibit the use of fossil fuels and make it financially more viable to invest in renewable energies.
For example, there is legislation filed in the United States Senate called the Clean Energy Jobs and American Power Act – much more commonly known as “cap and trade” - that caps carbon emissions and sets up a pricing scheme for carbon and carbon credits which can be actively traded between corporations on an exchange, similar to a stock exchange. [1] The credits themselves and the trading would be taxed, which provides a source of revenue to the government and it is expected that these regulations will drastically reduce carbon emissions.
When assessing the usefulness of this sort of public policy plan for the renewable energy sector, conventional wisdom would tell us that this is a useful incentive to drive the adoption of renewable energy over fossil fuels. Unfortunately, it is also expected to drive up costs for consumers of fossil fuel based energies or the goods and services of corporations who take advantage of goods and services made from anywhere between $175 - $1,870 per year by 2020. [2] This again would reinforce some of the weaknesses of incentives mentioned in the previous section.
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