A CBS affiliate in Connecticut reported yesterday that Joe Lieberman, Senator and Chairman of the Committee on Homeland Security and Governmental Affairs, has asked Google to ban terrorist's writings on its Blogger platform. For those who are not necessarily blog-savvy, that is the platform you are reading this post on. It's ease of use and simplicity has brought blogging to the computer illiterate masses, including home chefs, armchair philosophers, amateur economists, and, well, homegrown terrorists. According to Lieberman, doing so would put Google's Blogger policies more in-line with those of other its other platforms, such as YouTube, on which it has banned terror-related content.
There are at least two major concerns that many have with Lieberman's approach. The first is obviously the potential impingement on First Amendment rights. While these rights are of course not without limitations, they are nonetheless some of the most carefully protected freedoms in America. Potential violations of freedom of speech, religious freedom, freedom of the press, freedom to protest, all of which fall under the protective umbrella of the First Amendment, are implicated in Lieberman's approach
There is another concern that is less obvious, but also important; banning terrorist's blogs would create the unintended consequence of taking away a proven tool in locating notoriously difficult to find homegrown terrorists (Lieberman's letter ironically notes that a recent terror suspect was tracked down in part due to his blog).
Americans strongly backed the War on Terror in the wake of 9/11. Support has been eroded by the PATRIOT Act, the TSA and other intrusive government initiatives. Governmental mandates to private actors to ban words are not only unconstitutional, but as a practical matter they erode both the tools to fight terrorism and public support for important and valid anti-terror initiatives. This is a bad combination in a world where terrorism is still a clear and present danger.
11.30.2011
The War on Drugs, In the Style of Satire
One of the great pleasures of running BlawgConomics is the ability it affords me to showcase thought-provoking and interesting content by some colleagues and friends of various political and ideological persuasions. I often find myself wishing that there were more fora for thought and discussion on the internet and elsewhere that provided similar opportunities; media where discussion on topics of the day didn't degenerate instantaneously into name-calling and partisan sniping. Until then, there is BlawgConomics.
Today we are carrying on our proud tradition of featuring the best and the brightest by introducing our readers to Mr. Robert Morris, a recent law school graduate who also goes under the tag of MoFreedomFoundation. Mr. Morris' MoFreedomFoundation avatar is an attempt to explore the facts behind The War on Drugs.
Students of both legal and economic theory will be familiar with various arguments for and against The War on Drugs. Though generalities are tough to make on a topic which is so socially, ideologically, and politically charged, it can nonetheless be argued that economists (and proponents of a law and economics approach) are more likely to be against The War on Drugs than those coming from a straight legal tradition. The former camp looks at the numbers behind what has, in their view, been a disastrous effort while the latter is more likely to cite notions of retribution and deterrence in support of drug regulation.
Today we are carrying on our proud tradition of featuring the best and the brightest by introducing our readers to Mr. Robert Morris, a recent law school graduate who also goes under the tag of MoFreedomFoundation. Mr. Morris' MoFreedomFoundation avatar is an attempt to explore the facts behind The War on Drugs.
Students of both legal and economic theory will be familiar with various arguments for and against The War on Drugs. Though generalities are tough to make on a topic which is so socially, ideologically, and politically charged, it can nonetheless be argued that economists (and proponents of a law and economics approach) are more likely to be against The War on Drugs than those coming from a straight legal tradition. The former camp looks at the numbers behind what has, in their view, been a disastrous effort while the latter is more likely to cite notions of retribution and deterrence in support of drug regulation.
11.28.2011
Economic Ignorance Knows No Idealogical Bounds
The other day Ilya Solmin at The Volokh Conspiracy had an interesting article discussing a recent set of studies on political affiliation and economic savvy. In short the authors of the studies, Zeljka Buturovic and Dan Klein, looked at how people who identified with the major US political parties scored on basic economic tests. I can save you the trouble of reading through the article; it doesn't matter if one is a Republican or a Democrat, both groups are biased and economically illiterate. Although, considering the recent track records of those who would undoubtedly do substantially better on such tests, perhaps economic illiteracy isn't the worst thing in the world...
Can F1 Make it in North America?
In this post we turn to the world of auto-racing, continuing a recent series of sports-related pieces. Among these included an article on the decline of boxing, Mike Azmera's excellent debut discussing the economics behind the NBA lockout and another article discussing fan indifference with respect to that very same labor dispute. Though this is a lot of sports in a little time, it is hardly a stretch for our site; it is often the case (as both sides in the NBA dispute made quite clear) that professional sports are at least as much about economics as they are about actual games.
Uncommonly for a blog based in the US, our auto-racing discussion will focus on Formula 1. This is no throwaway statement; NASCAR is the self-proclaimed 'fastest growing sport in America' and to the extent that print and tv space are spent on auto-racing in the US, they are spent on NASCAR. It has made its way onto ESPN telecasts and the stars of the sport are as bankable as any of the big names from the MLB or NFL.
However, despite this clear ability of motor sports to capture the hearts and wallets of Americans, there is a decided lack of interest in Formula 1. Therefore we would like to take a look at the slightly incongruous question of whether or not this global mega-brand can succeed in one of the World's biggest markets.
Uncommonly for a blog based in the US, our auto-racing discussion will focus on Formula 1. This is no throwaway statement; NASCAR is the self-proclaimed 'fastest growing sport in America' and to the extent that print and tv space are spent on auto-racing in the US, they are spent on NASCAR. It has made its way onto ESPN telecasts and the stars of the sport are as bankable as any of the big names from the MLB or NFL.
However, despite this clear ability of motor sports to capture the hearts and wallets of Americans, there is a decided lack of interest in Formula 1. Therefore we would like to take a look at the slightly incongruous question of whether or not this global mega-brand can succeed in one of the World's biggest markets.
The Public Welfare Investment Authority and Solar Development
With all of the recent discussion about the Solyndra fiasco, many of our naturally curious readers have undoubtedly spent some time considering exactly how the government is involved in the developing solar industry. Among the more attention-grabbing ways it is involved would of course be the now infamous loan guarantee system. There are also various tax credit and grant schemes at the federal level as well as locally. However, there are other means by which the federal government has encouraged investment in the solar industry which carry less direct risk.
One of the tools in this multi-pronged approach is the use of regulatory schemes to encourage private investment in solar projects. In other words, in addition to the enticements of tax breaks, the government can also stimulate behaviors by creating loopholes in rules and allowing certain activities which would otherwise be forbidden. One notable example of this approach is provided by the Office of the Comptroller of the Currency (OCC)'s public welfare investment authority.
First a little backdrop. Under the National Banking Act, banks are restricted from making certain types of investments. Typically this would foreclose large investments in developing industries which could be seen as speculative. Solar projects would certainly fall into this category at this time. However, one clause of the Act allows for higher thresholds for investments which encourage the public welfare. Specifically, banks are allowed to:
"...make investments directly or indirectly, each of which is designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families (such as by providing housing, services or jobs)."
One of the tools in this multi-pronged approach is the use of regulatory schemes to encourage private investment in solar projects. In other words, in addition to the enticements of tax breaks, the government can also stimulate behaviors by creating loopholes in rules and allowing certain activities which would otherwise be forbidden. One notable example of this approach is provided by the Office of the Comptroller of the Currency (OCC)'s public welfare investment authority.
First a little backdrop. Under the National Banking Act, banks are restricted from making certain types of investments. Typically this would foreclose large investments in developing industries which could be seen as speculative. Solar projects would certainly fall into this category at this time. However, one clause of the Act allows for higher thresholds for investments which encourage the public welfare. Specifically, banks are allowed to:
"...make investments directly or indirectly, each of which is designed primarily to promote the public welfare, including the welfare of low- and moderate-income communities or families (such as by providing housing, services or jobs)."
11.12.2011
The NBA: Where Fan Indifference Happens
The other day, we posted an article which described some of the business aspects behind the current NBA work stoppage. However, one thing that wasn't discussed in Mike Azmera's otherwise excellent piece on the NBA lockout was the potential fallout which would occur if games are not played very soon. I think that one of the reasons that Mike did not contemplate such a scenario is that he hopes that games will start soon.
And they will start at some point. At some point, players will miss checks (and maybe even the competition), owners will play ball, and a deal will be done.
However, the lockout has damaged public opinion of both sides. Even if games are played this season (an uncertain proposition), there has already been significant time off and momentum has been lost from a strong playoffs this past spring. The question has to be asked: when the NBA comes back, whether this season or the next, will anyone be watching?
Over a year and a half ago, we posted what now seems to be a rather prescient piece on one reason why the NBA should avoid a lockout. Among other things we wrote:
And they will start at some point. At some point, players will miss checks (and maybe even the competition), owners will play ball, and a deal will be done.
However, the lockout has damaged public opinion of both sides. Even if games are played this season (an uncertain proposition), there has already been significant time off and momentum has been lost from a strong playoffs this past spring. The question has to be asked: when the NBA comes back, whether this season or the next, will anyone be watching?
Over a year and a half ago, we posted what now seems to be a rather prescient piece on one reason why the NBA should avoid a lockout. Among other things we wrote:
11.10.2011
The NBA: Where an Overpaid Middle Class Happens
By Michael Azmera
I would like to quickly thank my friend Josh for letting me talk to you about one of my favorite things, basketball, and about one of my least favorite things, the current NBA lockout.
The last time that we saw an NBA game, we watched Dirk Nowitzki join the ranks of the great players who have won an NBA championship. He joined Jordan, Kobe, Magic, Bird, Duncan, Garnett, Olajuwon, Moses Malone, Isiah Thomas, and Shaq, all players who are either in the Basketball Hall of Fame or well on their way there. All of these players were—and some still are—among the very best players in the NBA during their careers.
Excluding the 2004 Detroit Pistons as the lone exception, every NBA champion since the 1980 Lakers had at least one of these players on its roster. All of them have been able to boast at least one of the 10 best players in that season’s NBA. The rule is pretty simple: Teams with elite players can contend for NBA championships. Teams without these players just fill out the rest of the league. Micky Arison, owner of the Miami Heat, looked back on 31 years of recent NBA history, noted this rule, and built a team around a pair of superstars. The Heat narrowly lost in the 2011 NBA Finals, essentially proving this rule along their way.
However they did not win it in the end; the Dallas Mavericks did. And in comparing the champion Mavericks with the runner-up Heat, the difference is obvious. The Mavericks surrounded their superstar with a good team of complimentary players; the Heat splurged on superstars and filled out their roster with an affordable group of supporting players.
Now give me a moment to explain why this is relevant to the current labor dispute. As fans, we like to think of winning championships as the ultimate goal of team owners. But owners also want to turn a profit. As such, they need to generate enough team revenue to exceed team expenses. NBA teams generate revenue, among other things, through ticket sales, through TV contracts, and through merchandise sales. Put simply, NBA teams generate revenue when people watch games. So one goal is to win the games; another is to get people to watch the games.
I would like to quickly thank my friend Josh for letting me talk to you about one of my favorite things, basketball, and about one of my least favorite things, the current NBA lockout.
The last time that we saw an NBA game, we watched Dirk Nowitzki join the ranks of the great players who have won an NBA championship. He joined Jordan, Kobe, Magic, Bird, Duncan, Garnett, Olajuwon, Moses Malone, Isiah Thomas, and Shaq, all players who are either in the Basketball Hall of Fame or well on their way there. All of these players were—and some still are—among the very best players in the NBA during their careers.
Excluding the 2004 Detroit Pistons as the lone exception, every NBA champion since the 1980 Lakers had at least one of these players on its roster. All of them have been able to boast at least one of the 10 best players in that season’s NBA. The rule is pretty simple: Teams with elite players can contend for NBA championships. Teams without these players just fill out the rest of the league. Micky Arison, owner of the Miami Heat, looked back on 31 years of recent NBA history, noted this rule, and built a team around a pair of superstars. The Heat narrowly lost in the 2011 NBA Finals, essentially proving this rule along their way.
However they did not win it in the end; the Dallas Mavericks did. And in comparing the champion Mavericks with the runner-up Heat, the difference is obvious. The Mavericks surrounded their superstar with a good team of complimentary players; the Heat splurged on superstars and filled out their roster with an affordable group of supporting players.
Now give me a moment to explain why this is relevant to the current labor dispute. As fans, we like to think of winning championships as the ultimate goal of team owners. But owners also want to turn a profit. As such, they need to generate enough team revenue to exceed team expenses. NBA teams generate revenue, among other things, through ticket sales, through TV contracts, and through merchandise sales. Put simply, NBA teams generate revenue when people watch games. So one goal is to win the games; another is to get people to watch the games.
11.08.2011
Time's 25 Best Financial Blogs
Readers can click here for a list of what Time magazine has determined are the top 25 financial blogs. Eagle-eyed readers will note, in what must be a first for the site, that this is the second reference we have made to Time in one day.
Some might wonder why we keep posting other news site's 'best' lists when we aren't included on any of them. First off, it makes for an easy post. Secondly, it is well-established to be good SEO practice. But most of all, we are still holding out hope for inclusion on the ABA Blawg 100. We figure that if the posting of such lists is de rigueur for the site, it won't seem louche if we make the list and immediately re-post it.
After all, whether one is making decisions based on a specific law or regulation, making investments in the financial markets or simply sitting down for a read of their favorite blog, it is often beneficial to have to have proper expectations for what one might find.
Some might wonder why we keep posting other news site's 'best' lists when we aren't included on any of them. First off, it makes for an easy post. Secondly, it is well-established to be good SEO practice. But most of all, we are still holding out hope for inclusion on the ABA Blawg 100. We figure that if the posting of such lists is de rigueur for the site, it won't seem louche if we make the list and immediately re-post it.
After all, whether one is making decisions based on a specific law or regulation, making investments in the financial markets or simply sitting down for a read of their favorite blog, it is often beneficial to have to have proper expectations for what one might find.
Smokin' Joe and Boxing's Decline
Smokin' Joe Frazier's death at a relatively young age drew an outpouring of emotion from those who covered him from the press box and faced him in the ring (even Ali, which undoubtedly brings a wry smile to the face of anyone familiar with their history). Family members, friends and fans alike have all expressed sincere sadness at his passing. And while many of the emotions expressed regarding the passing of this American sporting icon were undoubtedly brought on by a real affection for the man himself, there must have also been a sense among many that his death was another nail in the coffin for the sport he shed blood, sweat and tears for.
While we don't typically write about individuals on this site (with Steve Jobs being a notable and recent exception) the decline in boxing which is emblemized by the declining health and increasingly frequent passings of the greatest stars of the sport's not-so-distant past is also an economic story. Of course there are some fighters who still garner media and fan attention, and thus create wealth. Global stars like Manny Pacquiao are big pay-per-view draws and Vegas still buzzes like the old days when the latest lamb is led to the ring with him. However there aren't many Mannys left in the sport and very few names in the boxing world generate enough interest to merit high ticket prices. Only 'true' boxing fans tune in to most bouts.
While this state of affairs has been enough to keep the sport on life support for some time, the numbers of 'real' fans are dwindling, and there is hardly such thing as a casual fan in the sport anymore. Most Americans probably couldn't name the heavyweight champ (not even one of them) at any given time. Likely even fewer have watched a fight any time in the past year. Some might say that this is a sign of the times, that such violence doesn't have a place in America any more. The rise of mixed martial arts of course renders such sentiments invalid.
It is probably rather a grab bag of issues which has led to boxing's decline. A lack of star power, an unwieldy number of governing bodies, corruption, high prices for tickets and televised events, a lack of accessibility, the rise since boxing's hey day of other sports such as football; all these factors and more have likely contributed to the decline of the sport.
However, this wasn't always the case. To have a decline, something must have an apex, and boxing's apex was as high as the Rockies. While the sport's decline has been precipitous, within the lifetimes of most of our readers Mike Tyson appeared in Pepsi commercials. And within the lifetime of some of the older readers of the blog, it was arguably the biggest sport in the country. Big title matches used to be bigger than the Super Bowl. Stars of the sport were social ambassadors. Champs graced the covers of magazines like Time and the front pages of the biggest newspapers in the land.
All of which leads to the punchline. Though of course the business and the essence of boxing are both different from many of the other popular sports in the US right now, it is also true that those involved with the sport over the past 25 or so years have presided over its downfall, taking it from a top sport and a very lucrative business to an almost unsalvageable mess. It might behoove those involved in a certain labor dispute to remember just how big boxing used to be, and just how fast the sport has fallen as they plot out the path of their sport. Otherwise, there is a great risk that someday people will wake up and just not care.
While we don't typically write about individuals on this site (with Steve Jobs being a notable and recent exception) the decline in boxing which is emblemized by the declining health and increasingly frequent passings of the greatest stars of the sport's not-so-distant past is also an economic story. Of course there are some fighters who still garner media and fan attention, and thus create wealth. Global stars like Manny Pacquiao are big pay-per-view draws and Vegas still buzzes like the old days when the latest lamb is led to the ring with him. However there aren't many Mannys left in the sport and very few names in the boxing world generate enough interest to merit high ticket prices. Only 'true' boxing fans tune in to most bouts.
While this state of affairs has been enough to keep the sport on life support for some time, the numbers of 'real' fans are dwindling, and there is hardly such thing as a casual fan in the sport anymore. Most Americans probably couldn't name the heavyweight champ (not even one of them) at any given time. Likely even fewer have watched a fight any time in the past year. Some might say that this is a sign of the times, that such violence doesn't have a place in America any more. The rise of mixed martial arts of course renders such sentiments invalid.
It is probably rather a grab bag of issues which has led to boxing's decline. A lack of star power, an unwieldy number of governing bodies, corruption, high prices for tickets and televised events, a lack of accessibility, the rise since boxing's hey day of other sports such as football; all these factors and more have likely contributed to the decline of the sport.
However, this wasn't always the case. To have a decline, something must have an apex, and boxing's apex was as high as the Rockies. While the sport's decline has been precipitous, within the lifetimes of most of our readers Mike Tyson appeared in Pepsi commercials. And within the lifetime of some of the older readers of the blog, it was arguably the biggest sport in the country. Big title matches used to be bigger than the Super Bowl. Stars of the sport were social ambassadors. Champs graced the covers of magazines like Time and the front pages of the biggest newspapers in the land.
All of which leads to the punchline. Though of course the business and the essence of boxing are both different from many of the other popular sports in the US right now, it is also true that those involved with the sport over the past 25 or so years have presided over its downfall, taking it from a top sport and a very lucrative business to an almost unsalvageable mess. It might behoove those involved in a certain labor dispute to remember just how big boxing used to be, and just how fast the sport has fallen as they plot out the path of their sport. Otherwise, there is a great risk that someday people will wake up and just not care.
Easterbrook on Groupon
We just loved the following comment from Gregg Easterbrook's Tuesday Morning Quarterback column today (I hope Mr. Easterbrook doesn't mind the reprint):
Groupon Issues Coupons for Its Own IPO: Groupon just had a successful IPO, raising $805 million. Eleven months ago, the same company turned down a $6 billion purchase by Google. Had Groupon accepted the Google proposal, its early investors and founding management would have $6 billion; instead, following the IPO they are holding a much smaller sum. True, they also still hold equity, and could wind up ahead in the long run. Or they may end up way behind: Your columnist noted 11 months ago that Groupon someday may wish it had accepted the Google offer. At any rate, rather than getting $6 billion in 2011, Groupon insiders got $805 million. Groupon issued discount coupons for itself, offering 87 percent off!
Mr. Easterbrook is correct to point out that there is a chance that those involved will more than make up for not accepting Google's billions at some point. However considering typical early investor expectations for exit, the time value of money, and signals to the contrary being provided by the supply/demand for shares, it seems about as likely as law school hire rates being uninflated.
Groupon Issues Coupons for Its Own IPO: Groupon just had a successful IPO, raising $805 million. Eleven months ago, the same company turned down a $6 billion purchase by Google. Had Groupon accepted the Google proposal, its early investors and founding management would have $6 billion; instead, following the IPO they are holding a much smaller sum. True, they also still hold equity, and could wind up ahead in the long run. Or they may end up way behind: Your columnist noted 11 months ago that Groupon someday may wish it had accepted the Google offer. At any rate, rather than getting $6 billion in 2011, Groupon insiders got $805 million. Groupon issued discount coupons for itself, offering 87 percent off!
Mr. Easterbrook is correct to point out that there is a chance that those involved will more than make up for not accepting Google's billions at some point. However considering typical early investor expectations for exit, the time value of money, and signals to the contrary being provided by the supply/demand for shares, it seems about as likely as law school hire rates being uninflated.
11.06.2011
Americans Voting with Their Feet
It is yet to be seen whether the 'bank transfer day' which took place yesterday and was supported by the Occupy Movement will have any noticeable impact on the bottom line at big banks. The idea behind the day was that transferring funds en masse from the largest financial institutions to local banks and credit unions would serve as a protest to fees. The idea has also obtained a punitive air about it, with some advocates suggesting that it could hurt the people who were responsible for the financial crisis.
In reality, it is of course more likely to be front-line workers, themselves struggling to get by, rather than the masters of the universe who will be harmed if profits decline at the nation's largest financial institutions. However, it would only be right to commend the protestors for doing/advocating for something that is potentially of substance after all of the criticism with regards to their lack of direction we have noted in the past.
However, even if the bank transfer day 'works', it isn't clear that it should necessarily be a notch in the Occupy Movement's belt. Indeed, it was the alliterative Kristen Christian, a small-business owner in Los Angeles who had the idea originally. Occupy only picked up on the Facebook-driven concept once it was fully formed.
Additionally, according to the Financial Times, many Americans have already had their own personal bank transfer days; the paper reported this weekend that over 650,000 Americans have joined credit unions in the past month, compared with about 600,000 in the entire previous year. This influx of members has led to an estimated $4.5 billion dollars shifting hands from big banks to local institutions. Even in a world of $700 billion dollar bailouts, that is nothing to sneer at and is perhaps the main reason behind some banks scrapping previously announced fee increases.
If the current trend which has seen money flowing from the national banks to local institutions continues, Occupy will no doubt claim a victory. Whether or not it is rightly claimed will remain to be seen. Until then, however, we would like to think that this trend is emblematic of something simpler and more 'by the book' than a social networking or protest movement, that it is just a good old fashioned case of Americans voting with their feet. It is somehow comforting to know that good old micro-econ still matters in these topsy-turvy times of ours...
In reality, it is of course more likely to be front-line workers, themselves struggling to get by, rather than the masters of the universe who will be harmed if profits decline at the nation's largest financial institutions. However, it would only be right to commend the protestors for doing/advocating for something that is potentially of substance after all of the criticism with regards to their lack of direction we have noted in the past.
However, even if the bank transfer day 'works', it isn't clear that it should necessarily be a notch in the Occupy Movement's belt. Indeed, it was the alliterative Kristen Christian, a small-business owner in Los Angeles who had the idea originally. Occupy only picked up on the Facebook-driven concept once it was fully formed.
Additionally, according to the Financial Times, many Americans have already had their own personal bank transfer days; the paper reported this weekend that over 650,000 Americans have joined credit unions in the past month, compared with about 600,000 in the entire previous year. This influx of members has led to an estimated $4.5 billion dollars shifting hands from big banks to local institutions. Even in a world of $700 billion dollar bailouts, that is nothing to sneer at and is perhaps the main reason behind some banks scrapping previously announced fee increases.
If the current trend which has seen money flowing from the national banks to local institutions continues, Occupy will no doubt claim a victory. Whether or not it is rightly claimed will remain to be seen. Until then, however, we would like to think that this trend is emblematic of something simpler and more 'by the book' than a social networking or protest movement, that it is just a good old fashioned case of Americans voting with their feet. It is somehow comforting to know that good old micro-econ still matters in these topsy-turvy times of ours...
11.05.2011
Remember remember...
...the fifth of November
Gunpowder, treason and plot
I see no reason why gunpowder, treason
Should ever be forgot
- Traditional English Nursery Rhyme
Though Blawgconomics did not suppose that the Guy Fawkes mask would ever attain more popularity in the United States than it did after the release of the movie 'V' for Vendetta, the rise of hacktivists Anonymous and the adoption of the symbol by some in the Occupy movement have proven us wrong. For anyone who is unfamiliar with why, exactly, the mask has become so popular, there is no more appropriate day than today for an explanation. From the website http://www.rhymes.org.uk/:
Words of "Remember Remember" refer to Guy Fawkes with origins in 17th century English history. On the 5th November 1605 Guy Fawkes was caught in the cellars of the Houses of Parliament with several dozen barrels of gunpowder. Guy Fawkes was subsequently tried as a traitor with his co-conspirators for plotting against the government. He was tried by Judge Popham who came to London specifically for the trial from his country manor Littlecote House in Hungerford, Gloucestershire. Fawkes was sentenced to death and the form of the execution was one of the most horrendous ever practised (hung ,drawn and quartered) which reflected the serious nature of the crime of treason.
The 'V' stands for victory, right?
It is clear that the protestors have adopted the Fawkes persona as a means to represent their anti-government leanings; nothing subtle there. However it is unclear if they are at all aware of the outcome of Fawkes' actions. For one, he failed in his mission. For another, as a result of his failed actions he endured one of the most 'horrendous ever' executions. Somehow I find it difficult to believe a mic check of the 99% would lead to either outcome being approved if put to a vote...
This Sums it Up...
It will be no surprise to frequent readers that I am a fan of both Paul Krugman and Greg Mankiw. We link to both of their blogs and have referenced the work of both in posts and on the Twitter feed. Both are incredibly intelligent and both typically provide interesting contributions to the hot debates of the day. However, despite appreciating the logic and style of both, I often find myself agreeing with the latter more often than the former.
The cult of the 99% which has arisen out of the Occupy Movement has led to a virtual debate between the two which summarizes very well why I more often than not end up in Camp Mankiw. Mr. Krugman's analysis, suggesting, if I may be blunt, that education no longer matters in our society of 'oligarchs,' can be found here and here. Meanwhile, Mr. Mankiw's admittedly slightly aspirational (though factually-based) assertion that education, while no guarantee, is still one factor in ultimate success can be found here.
Call me a sucker for the system, but it must be true that education is still a factor in career success. On one hand, it is true that education does not immediately guarantee higher wages (Krugman). However, it is also true that many individuals would not even be able to get off the ground floor in our current society without a degree or two (Mankiw). Though the cost of education has soared in recent years, and though I do believe that more individuals in our society should be encouraged into trade schools and other more suitable alternatives to the typical undergraduate path, gaining an education is still a valuable proposition for the average American worker in a service economy.
Alternately, it could be that the lump of student debt I have accumulated leads me to hope Mankiw is right in a case of self-serving blindness. I suppose I will have to get back to you in about 20 years for confirmation.
The cult of the 99% which has arisen out of the Occupy Movement has led to a virtual debate between the two which summarizes very well why I more often than not end up in Camp Mankiw. Mr. Krugman's analysis, suggesting, if I may be blunt, that education no longer matters in our society of 'oligarchs,' can be found here and here. Meanwhile, Mr. Mankiw's admittedly slightly aspirational (though factually-based) assertion that education, while no guarantee, is still one factor in ultimate success can be found here.
Call me a sucker for the system, but it must be true that education is still a factor in career success. On one hand, it is true that education does not immediately guarantee higher wages (Krugman). However, it is also true that many individuals would not even be able to get off the ground floor in our current society without a degree or two (Mankiw). Though the cost of education has soared in recent years, and though I do believe that more individuals in our society should be encouraged into trade schools and other more suitable alternatives to the typical undergraduate path, gaining an education is still a valuable proposition for the average American worker in a service economy.
Alternately, it could be that the lump of student debt I have accumulated leads me to hope Mankiw is right in a case of self-serving blindness. I suppose I will have to get back to you in about 20 years for confirmation.
Who is Responsible for Europe's Financial Crisis?
Is Greece responsible for the current European financial crisis? Is it continuing fallout from the American housing bubble which has brought Europe to the edge? Perhaps the failed Lehman Brothers is the culprit?
George Soros seems to think that the answer to the query in the title is not any of the usual suspects, but rather Angela Merkel. That is the same Angela Merkel who currently serves as the leader of what by most accounts is actually the most fiscally responsible nation in Europe. For anyone who is curious about Mr. Soros' logic, video is available below:
George Soros seems to think that the answer to the query in the title is not any of the usual suspects, but rather Angela Merkel. That is the same Angela Merkel who currently serves as the leader of what by most accounts is actually the most fiscally responsible nation in Europe. For anyone who is curious about Mr. Soros' logic, video is available below:
Resources for Readers: The Oyez Project
BlawgConomics has often noted its keen interest in free resources for students, professionals and average citizens in a world of expensive websites and subscription services. As we think it can only benefit our readers to know about and have access to such resources, we try to use the platform afforded by the site to help spread the word whenever we come across anything of note. In this post, we would like to highlight Chicago-Kent's aptly named Oyez Project, a multi-year systematic program dedicated to providing an accessible resource for everything SCOTUS. From the Project's 'About' tab:
The Oyez Project at Chicago-Kent is a multimedia archive devoted to the Supreme Court of the United States and its work. It aims to be a complete and authoritative source for all audio recorded in the Court since the installation of a recording system in October 1955. The Project also provides authoritative information on all justices and offers a virtual reality Tour of portions of the Supreme Court building, including the chambers of some of the justices.
The Oyez Project now offers access to more than 7,000 hours of Supreme Court audio. The aim of this latest effort is to create a public, searchable archive of all public sessions recorded in the Court since 1955. With this version of Oyez, our audio collection covers all audio from the 1968 Term through the current 2010 Term. Before 1968, the audio collection is selective.
We report voting details in every case back to 1953, thanks to data compiled by Harold Spaeth, the creator of several NSF-funded databases currently hosted Center for Empirical Research in the Law (CERL) at Washington University School of Law. We display votes using headshots of the justices. Active images signal voting with the majority, opaque images signal voting with the minority, and missing images signal no participation. The author of a majority opinion will be framed in purple, and the author of a judgment of the Court will be framed in green. More details about a justice's vote can be displayed by moving the mouse over his or her picture. For example, this is how the votes appear in Hamdan v. Rumsfeld:
You can sort the votes by voting coalitions, by seniority, or by ideology. Seniority arrays the justices left to right, with the Chief Justice in the left-hand position followed in order of service by the other justices. Ideology arrays the justices left to right from most liberal to most conservative.
This is a truly powerful tool as well as a valuable resource for anyone interested in how the US justice system functions. For anyone interested in specific resources, audio is available here and information on particular courts can be found here. Meanwhile the Project's main page can be accessed here. We have also included a link to the Oyez Project in our Other Resources section where readers can find the best in global news as well free legal and economic tools.
The Oyez Project at Chicago-Kent is a multimedia archive devoted to the Supreme Court of the United States and its work. It aims to be a complete and authoritative source for all audio recorded in the Court since the installation of a recording system in October 1955. The Project also provides authoritative information on all justices and offers a virtual reality Tour of portions of the Supreme Court building, including the chambers of some of the justices.
The Oyez Project now offers access to more than 7,000 hours of Supreme Court audio. The aim of this latest effort is to create a public, searchable archive of all public sessions recorded in the Court since 1955. With this version of Oyez, our audio collection covers all audio from the 1968 Term through the current 2010 Term. Before 1968, the audio collection is selective.
We report voting details in every case back to 1953, thanks to data compiled by Harold Spaeth, the creator of several NSF-funded databases currently hosted Center for Empirical Research in the Law (CERL) at Washington University School of Law. We display votes using headshots of the justices. Active images signal voting with the majority, opaque images signal voting with the minority, and missing images signal no participation. The author of a majority opinion will be framed in purple, and the author of a judgment of the Court will be framed in green. More details about a justice's vote can be displayed by moving the mouse over his or her picture. For example, this is how the votes appear in Hamdan v. Rumsfeld:
You can sort the votes by voting coalitions, by seniority, or by ideology. Seniority arrays the justices left to right, with the Chief Justice in the left-hand position followed in order of service by the other justices. Ideology arrays the justices left to right from most liberal to most conservative.
This is a truly powerful tool as well as a valuable resource for anyone interested in how the US justice system functions. For anyone interested in specific resources, audio is available here and information on particular courts can be found here. Meanwhile the Project's main page can be accessed here. We have also included a link to the Oyez Project in our Other Resources section where readers can find the best in global news as well free legal and economic tools.
Freedom v. Security, Tech-Style
Since 9/11, America has been embroiled in a debate about whether privacy and other related freedoms should be sacrificed at the expense of national security. From the PATRIOT Act to the sometimes heavy-handed approach of the TSA, reasonable voices have differed on just what the correct balance between these important interests is. That the relative worths of security and privacy are weighed in a constant struggle is unquestionable, only whether or not one feels that the scales are tipped in an appropriate direction on any particular topic is still up for debate.
Nowhere is this dichotomy more evident or contemporary than in the technology world. Though it was coincidental that e-banking, e-commerce and e-communication came into their own around the same time as the tragedies of 9/11, the freedom/safety debate has been inextricably linked to the tech world ever since. Some recent stories have ensured that this ongoing issue has remained firmly in the public consciousness:
The Department of Homeland Security has declared its intent to more closely monitor social networking sites for signs of civil unrest in the wake of the events in the Middle East earlier this year. According to Department Undersecretary Caryn Wagner "We're still trying to figure out how you use things like Twitter as a source. How do you establish trends and how do you then capture that in an intelligence product?"
While not necessarily related to the internet, a story out of Florida merits inclusion here due to its strong link to the privacy/public security debate in the technological context. In a case that has made its way to the Supreme Court, Florida police have made a habit of installing GPS transmitters without first obtaining warrants. While this has assisted in crime fighting efforts, detractors have noted a 'Minority Report' feeling surrounding some actions. According to Pembroke Pines Police Captain Sean Hemingway, "GPS is one of the technologies that are helping to move us forward. You can use it to take someone down in an area they don't belong, like say a gated community. Or you can watch where they go and build a case for loitering and prowling, to prevent a burglary."
Nowhere is this dichotomy more evident or contemporary than in the technology world. Though it was coincidental that e-banking, e-commerce and e-communication came into their own around the same time as the tragedies of 9/11, the freedom/safety debate has been inextricably linked to the tech world ever since. Some recent stories have ensured that this ongoing issue has remained firmly in the public consciousness:
The Department of Homeland Security has declared its intent to more closely monitor social networking sites for signs of civil unrest in the wake of the events in the Middle East earlier this year. According to Department Undersecretary Caryn Wagner "We're still trying to figure out how you use things like Twitter as a source. How do you establish trends and how do you then capture that in an intelligence product?"
While not necessarily related to the internet, a story out of Florida merits inclusion here due to its strong link to the privacy/public security debate in the technological context. In a case that has made its way to the Supreme Court, Florida police have made a habit of installing GPS transmitters without first obtaining warrants. While this has assisted in crime fighting efforts, detractors have noted a 'Minority Report' feeling surrounding some actions. According to Pembroke Pines Police Captain Sean Hemingway, "GPS is one of the technologies that are helping to move us forward. You can use it to take someone down in an area they don't belong, like say a gated community. Or you can watch where they go and build a case for loitering and prowling, to prevent a burglary."
Music as a Metaphor for Social Welfare Systems (Reprint)
On occasion, we reprint a story from the past when/if we believe circumstances dictate that it would be of interest to readers a second time around. After the music/e-conomy story earlier today, we though we had just such a situation on our hands. Following is a reprint of a story from late last year explaining the economics of music industries in places that aren't the US and the UK, where government subsidies, rather than music executives, are the main driving force behind nascent musical groups' development. Apologies to those who may have seen this one the first time it was posted. All I can say is that it is good to be both editor-in-chief and chief contributor...
While it is true that American tax dollars are spent on music programs in schools, and there might be performing arts centers or city orchestras which receive a slight funding boost from their respective local coffers, the federal government does not typically set aside funds for 20-somethings to globetrot in an attempt to increase fandom, and as a result, album sales and downloads.
Indeed there would likely be enough public uproar to establish a congressional sub-committee if it were someday discovered that Jack and Meg White, for example, were able to leave Detroit behind for international stardom on the back of government subsidies (that such a hearing would almost inevitably cost the taxpayer more than the initial handout is another topic for another day). Most politicians spend most of their time attempting to get re-elected, and while doing so would rather discuss local pork barrel projects with voters than explain why tax dollars were spent on kids with tattoos in tight jeans. So, of course, they build bridges instead.
While it is true that American tax dollars are spent on music programs in schools, and there might be performing arts centers or city orchestras which receive a slight funding boost from their respective local coffers, the federal government does not typically set aside funds for 20-somethings to globetrot in an attempt to increase fandom, and as a result, album sales and downloads.
Indeed there would likely be enough public uproar to establish a congressional sub-committee if it were someday discovered that Jack and Meg White, for example, were able to leave Detroit behind for international stardom on the back of government subsidies (that such a hearing would almost inevitably cost the taxpayer more than the initial handout is another topic for another day). Most politicians spend most of their time attempting to get re-elected, and while doing so would rather discuss local pork barrel projects with voters than explain why tax dollars were spent on kids with tattoos in tight jeans. So, of course, they build bridges instead.
The E-Conomy and the Music Industry
Our readers would be wise to ignore the faux prophetic warnings of music executives bemoaning the pending death knell of their domain. While consumers no longer have to haul around a 10 pound CD wallet to listen to more than one album on a foray outside their homes, and while it has undoubtedly been a few years since any of our readers stepped foot inside a Tower Records, music is still very, very big business. It is simply that the nature of the business has changed. And transitioning from the Walkman to the iPod is not the only example of this. From streaming radio stations to satellite radio to YouTube, the way music is consumed, paid for and creates wealth is not so much in a state of evolution as it is embroiled in a foaming sea of change.
Rolling Stone contributor Steve Knopper has helpfully explained exactly how in a recent article The New Economics of the Music Industry. In the article, through words and graphics, Knopper explains how what music consumers pay for everything from downloads to streaming content is shared between executives, artists, songwriters and hosts. The observant will note at least one in-article correction explaining that various models exist as well as some differing opinions on actual payment schemes in the comments section. However, the broader point is that the recording industry is doing just fine, and your favorite artist is not at all likely to be facing penury any time soon, at least not any more than s/he would have been under the old system...
Though changing economics might not result in big artists losing revenue, one legend in the industry believes that the new model is leading to poorer development of new artists. Pete Townshend, perhaps taking advantage of the metaphorization opportunity afforded by both Halloween week and the buzz around the latest installation of the Twilight saga, went so far as to liken Apple to a 'digital vampire' earlier this week. At the BBC-hosted lecture he was speaking at, Townshend argued that, of the traditional functions of the record executive: editorial guidance, financial support, creative nurturing, manufacturing, publishing, marketing, distribution and payment of royalties, the iTunes system really only provides the latter two.
Rolling Stone contributor Steve Knopper has helpfully explained exactly how in a recent article The New Economics of the Music Industry. In the article, through words and graphics, Knopper explains how what music consumers pay for everything from downloads to streaming content is shared between executives, artists, songwriters and hosts. The observant will note at least one in-article correction explaining that various models exist as well as some differing opinions on actual payment schemes in the comments section. However, the broader point is that the recording industry is doing just fine, and your favorite artist is not at all likely to be facing penury any time soon, at least not any more than s/he would have been under the old system...
Though changing economics might not result in big artists losing revenue, one legend in the industry believes that the new model is leading to poorer development of new artists. Pete Townshend, perhaps taking advantage of the metaphorization opportunity afforded by both Halloween week and the buzz around the latest installation of the Twilight saga, went so far as to liken Apple to a 'digital vampire' earlier this week. At the BBC-hosted lecture he was speaking at, Townshend argued that, of the traditional functions of the record executive: editorial guidance, financial support, creative nurturing, manufacturing, publishing, marketing, distribution and payment of royalties, the iTunes system really only provides the latter two.
11.01.2011
Variable Healthcare Premiums: Why Law and Econ Can't Tell the Whole Story
Smokers and obese people use more healthcare resources over their lifetimes than people who aren't overweight or smoke. This indisputable fact has put a spotlight in recent years on the strain that those who live what can be blanket-labelled unhealthy lifestyles are putting on company-sponsored health plans. This has become ever more true in an environment with mandated coverage and ever-rising costs. As a result, many companies have recently made the decision to charge smokers and overweight employees higher premiums for insurance coverage. While this is potentially more fair to 'healthy' employees who would otherwise have to bear a disproportionate burden, it has also created far more questions than answers with respect to privacy and personal choice.
For example, should companies have the right to inquire whether employees are smokers? After all, despite it being a freedom which has been massively curtailed over the past decade, smoking is still legal. While it would be possible to avoid judgment calls by using physician-approved weight tables, should a company have the right to ask an employee their weight? What if the employee's weight gain (or inability to lose weight) is not self-induced but physiological? What about overweight smokers who nonetheless live well into old age and never place an added burden on the healthcare system? Why should they have to pay extra? After all, the very idea of insurance presupposes the averaging of lifespans and lifelong costs among a broad pool of people. Perhaps the choices of individuals in that pool shouldn't matter.
With such fundamental privacy issues involved and the overwhelming amount of healthcare legislation existing in the US, some among this post's readers will be wondering what the law is on variable pricing. According to the Reuters piece linked to above,
For example, should companies have the right to inquire whether employees are smokers? After all, despite it being a freedom which has been massively curtailed over the past decade, smoking is still legal. While it would be possible to avoid judgment calls by using physician-approved weight tables, should a company have the right to ask an employee their weight? What if the employee's weight gain (or inability to lose weight) is not self-induced but physiological? What about overweight smokers who nonetheless live well into old age and never place an added burden on the healthcare system? Why should they have to pay extra? After all, the very idea of insurance presupposes the averaging of lifespans and lifelong costs among a broad pool of people. Perhaps the choices of individuals in that pool shouldn't matter.
With such fundamental privacy issues involved and the overwhelming amount of healthcare legislation existing in the US, some among this post's readers will be wondering what the law is on variable pricing. According to the Reuters piece linked to above,
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