Even in an industry where poor decision-making seems to run rampant, it wouldn't necessarily be expected that a manufacturer would discontinue one of its best products without good reason. Yet according to The Hill, "Days after General Motors announced it was temporarily suspending production of the Chevy Volt, the electric car was named European Car of the Year" by The Geneva Auto Show.
Of course the announcement of the suspension preceeded the announcement of the award. However, this award was only the latest in a parade of praise the Volt has received, including the North American Car of the Year in 2011. In addition, it has been widely lauded as an achievement in green technology, including by the bible, Motor Trend. Indeed a quick Google search of 'Chevy Volt awards' returns a veritable cornucopia of options.
As noted above, however, GM has put the line on hiatus. This is to work off a backlog of stock after the company fell short of the 10,000 sales number it set for the vehicle last year. Many analysts see the $40,000+ price point as the main deterrent to increased sales volume.
What went wrong here? It seems very simply that GM didn't do its homework on price point demand for its product. While the technology in the Volt is apparently top-notch, and while there is no end to the praise it has received, there are limited individuals who are willing to spend in the neighborhood of $40,000 to $50,000 for a new car in a tough economic environment. This is true even with government subsidies or if they will save some money on gas costs in the long-run. Of course there is the matter of exploding batteries as well, but let's stick to price points in today's post.
Maybe it was due to the hype around the product that GM overestimated the market's capacity to absorb it. After all, the number of Volts that have been sold isn't insignificant, it is just less than estimates, and subsequently production. Maybe the hype got to the planners' heads. Maybe planners concluded that price points wouldn't matter as much in the wake of high praise and green appeal. However it seems that, even in the green revolution, price points matter.
Fans of the Volt don't necessarily have anything to fear as many analysts have concluded that the current stoppage is not a signal that the line will be discontinued, just that production numbers will be reevaluated. Ironically, their conclusions are based on the very same thing that perhaps got GM into this mess; the overwhelming praise the vehicle has received. In other words, while hype led to overproduction, it could also lead to saving the line. After all, as noted in the very first line of this post, no one (not even auto industry execs) wants to let go of a potential winner too easily.
So, readers might ask, what is the lesson to be learned from this situation? Maybe there are two. The first, of course, is do not flout the laws of supply and demand. The other might be that you can't expect people to deviate wildly on price points just because a technology is new and exciting. Unless, of course, you are Apple...
3.30.2012
Supreme Court Split on Obamacare...Why are You Surprised?
Before it was clear that cases related to the Affordable Care Act would make their way to the Supreme Court, many commentators doubted that questions on individual mandates and extensions of the commerce clause would ever be settled by The Nine, at least not in the context of the healthcare bill. Even once it was clear that Obamacare would meet its ultimate fate at One First Street, many of those same commentators felt that it was almost inconceivable that the Court would overturn the legislation. My favorite example in support of this basic premise occured when Harvard professor Charles Fried, a former Reagan appointee no less, declared on Fox News Channel that he would eat his kangaroo hat if the law were struck down.
Of course now that the arguments have been heard, it is quite clear that there is a split among the justices, and that there is a very good chance that certain parts of the legislation will be scrapped. And, as the Obama administration has often reminded Americans, taking away a leg or two of the bill will likely make the whole table collapse. Therefore, even if only enough votes can be cobbled together to overturn, say, the individual mandate, (and in the absence of a severability clause) it would appear that the whole bill would be junked.
Not surprisingly, and like the initial vote on the legislation itself, the split noted above has occured tightly along party lines. Now, I should probably clarify that 'not surprisingly' to read 'not surprisingly to me.' While I am no constitutional law scholar (there are several law school professors who would vouch for that statement), it was always clear to me that, if Obamacare made it to the Supreme Court, that this very scenario would play out.
Why? Because it always does, particularly in the most high profile cases. That the Supreme Court is impartial in political cases is a conceit that has been developed by some without accounting for the lessons of history. There is a reason that perpetual swinger Justice Kennedy is often the most important man in the room, why opposition parties fight tooth and nail against opposite party presidential appointees to the bench, why political schemers are always listening for any clues tipping off when one of the older justices might hang up their robes. The justices are incredibly political, and this is often reflected in their opinions.
Now, this isn't to say that they are all playing outside the rules or that they somehow all become free and loose with the law once they receive their lifetime appointments. To the contrary, they were picked for the very reason that they do have opinions. Typically those opinions reflect those of the sitting president, and therefore, at least a rough plurality of society at the time. Indeed their ability to reflect some community standards in laws is an incredible benefit.
This isn't, of course, always a perfect system. The ends of judge's terms typically lag far behind the ends of the terms of the president who appoint them. And justices sometimes 'go rogue' and end up not being as reliable a vote as their appointers intended. However, these are often seen as benefits as well.
Additionally, some readers might consider judicial independence, strict construction and other catch-phrases in thinking that my logic doesn't hold water, that politics doesn't play into judicial decision-making. However, the proof is in the pudding.
Perfect or not, it is our system, and it must be understood and even accepted that political beliefs play heavily into its outcomes. The only surprise that came from the halls of the Supreme Court this week wasn't that its inhabitants were so divided on the healthcare law. It is that anyone was surprised about it.
Of course now that the arguments have been heard, it is quite clear that there is a split among the justices, and that there is a very good chance that certain parts of the legislation will be scrapped. And, as the Obama administration has often reminded Americans, taking away a leg or two of the bill will likely make the whole table collapse. Therefore, even if only enough votes can be cobbled together to overturn, say, the individual mandate, (and in the absence of a severability clause) it would appear that the whole bill would be junked.
Not surprisingly, and like the initial vote on the legislation itself, the split noted above has occured tightly along party lines. Now, I should probably clarify that 'not surprisingly' to read 'not surprisingly to me.' While I am no constitutional law scholar (there are several law school professors who would vouch for that statement), it was always clear to me that, if Obamacare made it to the Supreme Court, that this very scenario would play out.
Why? Because it always does, particularly in the most high profile cases. That the Supreme Court is impartial in political cases is a conceit that has been developed by some without accounting for the lessons of history. There is a reason that perpetual swinger Justice Kennedy is often the most important man in the room, why opposition parties fight tooth and nail against opposite party presidential appointees to the bench, why political schemers are always listening for any clues tipping off when one of the older justices might hang up their robes. The justices are incredibly political, and this is often reflected in their opinions.
Now, this isn't to say that they are all playing outside the rules or that they somehow all become free and loose with the law once they receive their lifetime appointments. To the contrary, they were picked for the very reason that they do have opinions. Typically those opinions reflect those of the sitting president, and therefore, at least a rough plurality of society at the time. Indeed their ability to reflect some community standards in laws is an incredible benefit.
This isn't, of course, always a perfect system. The ends of judge's terms typically lag far behind the ends of the terms of the president who appoint them. And justices sometimes 'go rogue' and end up not being as reliable a vote as their appointers intended. However, these are often seen as benefits as well.
Additionally, some readers might consider judicial independence, strict construction and other catch-phrases in thinking that my logic doesn't hold water, that politics doesn't play into judicial decision-making. However, the proof is in the pudding.
Perfect or not, it is our system, and it must be understood and even accepted that political beliefs play heavily into its outcomes. The only surprise that came from the halls of the Supreme Court this week wasn't that its inhabitants were so divided on the healthcare law. It is that anyone was surprised about it.
3.29.2012
PSA: Audio of Oral Arguments on The Affordable Care Act
For anyone interested in hearing the actual questions and answers, I have included links to each of the arguments before the Supreme Court on the Affordable Care Act below. They may also be found on the Supreme Court's website here. For more on the arguments as well as the fine legal points that most reports manage to skim over, I would highly recommend visiting SCOTUSblog here.
Monday, March 26th
Department of Health and Human Servs. v. Florida
Tuesday, March 27th
Department of Health and Human Servs. v. Florida
Wednesday, March 28th
National Federation of Independent Business v. Sebelius
Department of Health and Human Servs. v. Florida
Monday, March 26th
Department of Health and Human Servs. v. Florida
Tuesday, March 27th
Department of Health and Human Servs. v. Florida
Wednesday, March 28th
National Federation of Independent Business v. Sebelius
Department of Health and Human Servs. v. Florida
3.26.2012
Election Watch 2012: National Debt and Healthcare
By many measures President Obama is doing a pretty good job as leader of the free world. While he has had some hiccups, while some people will just never believe that he was born in the U.S., while some people just hate teleprompters or minorities or Democrats or Hawaiians or law professors, he has objectively had more successes than failures.
His handling of the economy, while admittedly criticized at times on this page, has nonetheless been aggressive and incisive. He has served as a competent Commander in Chief, both during mop-up duty for problems of the past and in new issues. The fact that his lack of foreign affairs experience pre-election is hardly ever mentioned anymore, even by his fiercest critics, is instructive. Some evidence, including the recently passed JOBS Act, suggests that he truly is interested in bringing parties together to make things happen. All of this, along with the blunderings of potential opponents during the Republican primaries, has seen his approval ratings on the rise.
However, come fall, Mr. Romney (presumably) has two dogs that will hunt; national debt and the health care legislation. The former is destined to be a huge issue for Obama as the national debt currently exceeds America's national GDP. This is due to the debt rising more since Obama's inauguration than it did during the entire Bush administration. That many of the bills coming due now were racked up under Bush will be lost on many people, particularly as Obama has done his best to add to the hole.
On the latter issue, Mr. Romney will have questions to answer himself as his plan is Massachusetts was the model for the national plan. However, as many questions as Romney faces, Obama will have many more to answer about a bill whose hallmark has been 'confusion.' Of course health care has made its way to the Supreme Court. However, even if the GOP appointees can cobble together enough votes to overturn parts of the bill, this is an issue that seems destined for a split vote, coalitions, pluralities and everything else that makes Con Law professors squeal with delight. In short, more confusion.
Even as Mr. Romney inches closer to an outright primary victory things are only just heating up in Election 2012. Mr. Obama can do all he wants to shift opinion between now and then. A rising Dow and declining unemployment numbers would help. However, there are two issues he is going to have to overcome at some point, and they make reelection far from certain.
His handling of the economy, while admittedly criticized at times on this page, has nonetheless been aggressive and incisive. He has served as a competent Commander in Chief, both during mop-up duty for problems of the past and in new issues. The fact that his lack of foreign affairs experience pre-election is hardly ever mentioned anymore, even by his fiercest critics, is instructive. Some evidence, including the recently passed JOBS Act, suggests that he truly is interested in bringing parties together to make things happen. All of this, along with the blunderings of potential opponents during the Republican primaries, has seen his approval ratings on the rise.
However, come fall, Mr. Romney (presumably) has two dogs that will hunt; national debt and the health care legislation. The former is destined to be a huge issue for Obama as the national debt currently exceeds America's national GDP. This is due to the debt rising more since Obama's inauguration than it did during the entire Bush administration. That many of the bills coming due now were racked up under Bush will be lost on many people, particularly as Obama has done his best to add to the hole.
On the latter issue, Mr. Romney will have questions to answer himself as his plan is Massachusetts was the model for the national plan. However, as many questions as Romney faces, Obama will have many more to answer about a bill whose hallmark has been 'confusion.' Of course health care has made its way to the Supreme Court. However, even if the GOP appointees can cobble together enough votes to overturn parts of the bill, this is an issue that seems destined for a split vote, coalitions, pluralities and everything else that makes Con Law professors squeal with delight. In short, more confusion.
Even as Mr. Romney inches closer to an outright primary victory things are only just heating up in Election 2012. Mr. Obama can do all he wants to shift opinion between now and then. A rising Dow and declining unemployment numbers would help. However, there are two issues he is going to have to overcome at some point, and they make reelection far from certain.
Internships, Dare I Say Revisited?
As promised (warned?) I am returning to a previous story yet again today. While it may be a bit lazy to keep going to the same trough, the unpaid intern issue at the Charlie Rose show I wrote about a little over a week ago has legs. While I wrote that I was in favor of unpaid internships for the opportunities they give many students who would not be able to gain work experience otherwise, some people are seeing another side of it. Indeed, like so many things these days, some folks have gone so far as to turn it into a class issue.
Their argument is that unpaid internships are really only for people who can afford them, that they are career advancement tools for the privileged. This view was also expressed in the comments section, if only rhetorically, by Mike Azmera, a friend of the site, contributer and all around deep thinker.
Though I value Mike's opinion in so many things, I just have to agree to disagree with him and many others who believe that unpaid internships create insidious problems and serve as a weapon in the class wars. While it is logically true that being able to afford an unpaid internship is a prerequisite for accepting one, it is worth considering what afford means.
It of course could mean a privileged individual, knowing that he or she will be supported by a trust fund, rich parents or an eccentric uncle, who therefore has no fears about going without for a summer during which she is not being paid. However it can also mean a working class individual with no such lifelines who is happy to get a government agency or stockbroker's name on his resume even without being paid. He might work nights at a bar, accept a work study program as part of his financial aid, or save up from other jobs to take the opportunity. It might be a struggle, but then, the payoff of getting a job based on that experience is made all the sweeter.
For anyone who doubts that this scenario can play out, that is actually my story. As I noted in the comments section of the Charlie Rose post, I took unpaid internships during both undergraduate and graduate studies and wouldn't have been able to get experience any other way at the time.
In economics terms, I traded my labor for a name on a resume and a recommendation from someone who mattered to future employers. In slightly more etheric terms, this working double duty and taking advantage of opportunities is described by some as the American Dream. Though I will sadly grant that this concept is becoming more and more remote to many folks in these tough times, I hope it is at least recognizable for most of our readers. Otherwise, America has a lot more trouble on its hands than unpaid internships.
Their argument is that unpaid internships are really only for people who can afford them, that they are career advancement tools for the privileged. This view was also expressed in the comments section, if only rhetorically, by Mike Azmera, a friend of the site, contributer and all around deep thinker.
Though I value Mike's opinion in so many things, I just have to agree to disagree with him and many others who believe that unpaid internships create insidious problems and serve as a weapon in the class wars. While it is logically true that being able to afford an unpaid internship is a prerequisite for accepting one, it is worth considering what afford means.
It of course could mean a privileged individual, knowing that he or she will be supported by a trust fund, rich parents or an eccentric uncle, who therefore has no fears about going without for a summer during which she is not being paid. However it can also mean a working class individual with no such lifelines who is happy to get a government agency or stockbroker's name on his resume even without being paid. He might work nights at a bar, accept a work study program as part of his financial aid, or save up from other jobs to take the opportunity. It might be a struggle, but then, the payoff of getting a job based on that experience is made all the sweeter.
For anyone who doubts that this scenario can play out, that is actually my story. As I noted in the comments section of the Charlie Rose post, I took unpaid internships during both undergraduate and graduate studies and wouldn't have been able to get experience any other way at the time.
In economics terms, I traded my labor for a name on a resume and a recommendation from someone who mattered to future employers. In slightly more etheric terms, this working double duty and taking advantage of opportunities is described by some as the American Dream. Though I will sadly grant that this concept is becoming more and more remote to many folks in these tough times, I hope it is at least recognizable for most of our readers. Otherwise, America has a lot more trouble on its hands than unpaid internships.
3.23.2012
Does Less Law Students = More Economists?
The world of law school is a world of scandal these days. Schools are over-promising and under-delivering. Alums are suing schools. Job placement offices have managed to justify their existence.
At the root of this all, of course, is the horrific legal job market. None of the above issues would be rearing their ugly heads if everyone was too busy working to file frivolous law suits or complain about admission office puffery. Late 2000's layoffs and the resulting job market crowding have only been exacerbated by individuals who continued to apply to law schools in the face of a growing mass of evidence that doing so was far from a sure bet. However, over the past year or so, it would appear that more people are getting the hint.
First, from the ABA Journal, law school applications for 2012 are down over 15%.
Second, from the WSJ Law Blog, the number of people taking the LSAT (admissions test for law school) is the lowest in about a decade.
Ceteris paribus, it would appear that over the past year, some individuals have utilized the available information on actual job rates and have factored it into their decision processes. What a novel approach. As students who are forgoing law school for other options are exhibiting the laws of supply and demand delightfully, perhaps a different kind of grad school might be in some of their futures. That would be a welcome development because, as readers know, if there is one thing the world needs more of than additional lawyers, it is new economists...
At the root of this all, of course, is the horrific legal job market. None of the above issues would be rearing their ugly heads if everyone was too busy working to file frivolous law suits or complain about admission office puffery. Late 2000's layoffs and the resulting job market crowding have only been exacerbated by individuals who continued to apply to law schools in the face of a growing mass of evidence that doing so was far from a sure bet. However, over the past year or so, it would appear that more people are getting the hint.
First, from the ABA Journal, law school applications for 2012 are down over 15%.
Second, from the WSJ Law Blog, the number of people taking the LSAT (admissions test for law school) is the lowest in about a decade.
Ceteris paribus, it would appear that over the past year, some individuals have utilized the available information on actual job rates and have factored it into their decision processes. What a novel approach. As students who are forgoing law school for other options are exhibiting the laws of supply and demand delightfully, perhaps a different kind of grad school might be in some of their futures. That would be a welcome development because, as readers know, if there is one thing the world needs more of than additional lawyers, it is new economists...
Bounty Hunting Revisited
First off, apologies to regular readers for all of the 'revisited' posts of late (there are more to come as well). I am not sure if this is a sign that I am starting to get ahead of the wave on stories or if I am just missing the most interesting angles. I suppose I will leave that up to readers to decide.
Today's re-visitation addresses a piece I recently wrote on the NFL Bounty-Gate scandal. For those who want the short version, the post addresses the fact that I am apparently the only person in America that feels that the whole thing just drips with hypocrisy, that it is incongruous to support football as it is played and also be appalled by bounty systems. Of course the Saints' actions were outside the rules of the game, and therefore some punishment was warranted. But I felt the level of horror with which many Americans apparently viewed the scandal showed a very strong lack of understanding of how the game is played at best and rank hypocrisy at worst.
Though not many commentators have come around to my admittedly off-the-beaten-path worldview on this subject, it has been interesting to see the shifting dialogue around the topic since the scandal originally broke. For one, many people felt that the punishment inflicted by commissioner Roger Goodell was overly harsh, underlining the idea that maybe what the Saints did wasn't so far outside the mainstream after all. Even more notably, writers at several high-profile media outlets have recently surmised that there is likely a direct correlation between this harsh punishment and current and future lawsuits which list the NFL as a defendant and which deal with culpability in player head injuries.
In this line of thinking, the NFL wants to be seen as the defender of player health. Despite the fact that the lawsuits stem from events in the past, the analysis would suggest that the NFL is either trying to make itself a more sympathetic defendant, almost like an unknowing fellow traveler in the 'free concussion' era, or mitigate potential damages from the suits by ex post action.
While this explanation for the harsh punishments levied on the Saints organization (with individual player penalties still to come) doesn't speak directly to my condemnation of the American public's condemnation of the scandal, it does suggest that there was, perhaps, something to the logic I used to get there. That was that the NFL had ulterior motives in playing up the player safety angle. While I might not get public opinion shifted all the way to my statement that Americans were being hypocritical about Bounty-Gate, the more information that comes out, the less inflammatory and aggressive such a position seems.
Today's re-visitation addresses a piece I recently wrote on the NFL Bounty-Gate scandal. For those who want the short version, the post addresses the fact that I am apparently the only person in America that feels that the whole thing just drips with hypocrisy, that it is incongruous to support football as it is played and also be appalled by bounty systems. Of course the Saints' actions were outside the rules of the game, and therefore some punishment was warranted. But I felt the level of horror with which many Americans apparently viewed the scandal showed a very strong lack of understanding of how the game is played at best and rank hypocrisy at worst.
Though not many commentators have come around to my admittedly off-the-beaten-path worldview on this subject, it has been interesting to see the shifting dialogue around the topic since the scandal originally broke. For one, many people felt that the punishment inflicted by commissioner Roger Goodell was overly harsh, underlining the idea that maybe what the Saints did wasn't so far outside the mainstream after all. Even more notably, writers at several high-profile media outlets have recently surmised that there is likely a direct correlation between this harsh punishment and current and future lawsuits which list the NFL as a defendant and which deal with culpability in player head injuries.
In this line of thinking, the NFL wants to be seen as the defender of player health. Despite the fact that the lawsuits stem from events in the past, the analysis would suggest that the NFL is either trying to make itself a more sympathetic defendant, almost like an unknowing fellow traveler in the 'free concussion' era, or mitigate potential damages from the suits by ex post action.
While this explanation for the harsh punishments levied on the Saints organization (with individual player penalties still to come) doesn't speak directly to my condemnation of the American public's condemnation of the scandal, it does suggest that there was, perhaps, something to the logic I used to get there. That was that the NFL had ulterior motives in playing up the player safety angle. While I might not get public opinion shifted all the way to my statement that Americans were being hypocritical about Bounty-Gate, the more information that comes out, the less inflammatory and aggressive such a position seems.
3.22.2012
Organ Donations Revisited
Last week we took some time to discuss what we believe are interesting consent issues, and possibly perverse incentive issues, in the area of organ donation/harvesting. If you are curious, you can view that post here. After reading that post, a few friends of the site shared some thoughts with me that I thought were worth a quick post of its own:
1. Someone with much more of a pulse on medicine and hospital procedures than I have assured me that an accidental harvesting has an infinitesimal chance of occurring. She also noted that, as far as the hospitals she is familiar with, standard procedures would eliminate any concerns about greedy doctors performing harvesting procedures for profit. Though I value this insight, I have to admit that the 'what-if' of the whole thing is still a bit problematic from a personal standpoint.
2. Another reader pointed out that I missed a great opportunity to discuss an even more interesting economic angle on this story. By law, donations in the US are currently only allowed in the absence of remuneration. Such rules are clearly in place at least in part to discourage the practice of people selling body parts, something I have heard rumor of in other nations. However, what of the individual who serves as a donor whose funeral costs can't be covered due to his family's destitution? What about personal choice issues? If I had concerns about unconscious consent in the first post, I supposed I would have to at least pay lip service to the idea that people should be able to choose what to do with their bodies while conscious, as grim as that may be.
3. Others merely read the piece and politely suggested that I lighten up a bit. I can assure everyone that this thought was no less appreciated than the others.
Tip of the cap to E.C., E.S., K.K. and H.J.
1. Someone with much more of a pulse on medicine and hospital procedures than I have assured me that an accidental harvesting has an infinitesimal chance of occurring. She also noted that, as far as the hospitals she is familiar with, standard procedures would eliminate any concerns about greedy doctors performing harvesting procedures for profit. Though I value this insight, I have to admit that the 'what-if' of the whole thing is still a bit problematic from a personal standpoint.
2. Another reader pointed out that I missed a great opportunity to discuss an even more interesting economic angle on this story. By law, donations in the US are currently only allowed in the absence of remuneration. Such rules are clearly in place at least in part to discourage the practice of people selling body parts, something I have heard rumor of in other nations. However, what of the individual who serves as a donor whose funeral costs can't be covered due to his family's destitution? What about personal choice issues? If I had concerns about unconscious consent in the first post, I supposed I would have to at least pay lip service to the idea that people should be able to choose what to do with their bodies while conscious, as grim as that may be.
3. Others merely read the piece and politely suggested that I lighten up a bit. I can assure everyone that this thought was no less appreciated than the others.
Tip of the cap to E.C., E.S., K.K. and H.J.
3.21.2012
Explaining the Brokered Convention Scenario
Despite Mitt Romney's recent primary victory in conservative hotspot Illinois, I have been hearing a lot about the possibility of a brokered convention come August when the Republicans join in Tampa Bay for a process that, in most election cycles, is a formality. From conservatives who are somehow not quite satisfied with the options on display to Democrats trying the 'what's that over there' trick to media members who apparently think that 'Romney wins Puerto Rico' isn't a sexy enough topic du jour for the week, 'brokered convention' is on the lips of everyone with a column, segment, or apparently, a blog. More often than not, this mention is followed by a knowing wink and a statement along the lines of 'if I knew how that worked, I would say something more about it now, but isn't the idea itself just so exciting?'
I am typically not a fan of the type of fly-by-the-seat-of-your pants reporting that has become almost epidemic in America. I am not sure when the line was crossed, but I do know that the media was soaked with water from the Rubicon by the time John from Mississippi's Twitter feed was being cited as a source on CNN. However, an even more-casual-than-usual form of journalism may be excused in this particular situation as the last brokered convention was in 1976. And we all know that in political years, that is far enough back that no one can be expected to remember how it works. Luckily, I have done some research. Looking to past brokered conventions, and adding some minor additions to account for the new media age, I believe a timeline of the brokered convention could potentially look something like the following:
August 27th
- The convention is called to order
- Speeches are given by the remaining candidates people care about
- A very surprised-looking Nancy Pelosi gives State of the Union-esque rebuttal speeches outside the convention center for reasons no one can quite understand
- Chris Christie, Sarah Palin and sit in the corner attempting to look really really nonchalant, hoping their names are called, but also really hoping they aren't
- Speeches are given by the people whose continued presence in the race got us into this mess, followed by additional rebuttals
- The blogosphere explodes with a story that Representative X sent a semi-nude Tweet to 'who he thought was Susan, his wife and the mother of his children' but was really 'Susie his 23 year old staffer'
I am typically not a fan of the type of fly-by-the-seat-of-your pants reporting that has become almost epidemic in America. I am not sure when the line was crossed, but I do know that the media was soaked with water from the Rubicon by the time John from Mississippi's Twitter feed was being cited as a source on CNN. However, an even more-casual-than-usual form of journalism may be excused in this particular situation as the last brokered convention was in 1976. And we all know that in political years, that is far enough back that no one can be expected to remember how it works. Luckily, I have done some research. Looking to past brokered conventions, and adding some minor additions to account for the new media age, I believe a timeline of the brokered convention could potentially look something like the following:
August 27th
- The convention is called to order
- Speeches are given by the remaining candidates people care about
- A very surprised-looking Nancy Pelosi gives State of the Union-esque rebuttal speeches outside the convention center for reasons no one can quite understand
- Chris Christie, Sarah Palin and sit in the corner attempting to look really really nonchalant, hoping their names are called, but also really hoping they aren't
- Speeches are given by the people whose continued presence in the race got us into this mess, followed by additional rebuttals
- The blogosphere explodes with a story that Representative X sent a semi-nude Tweet to 'who he thought was Susan, his wife and the mother of his children' but was really 'Susie his 23 year old staffer'
3.16.2012
Organ Donations and Freedom of Choice
According to The Wall St. Journal, organ transplantation is a $20 billion per year business. The article linked to above goes on to note that, "Average recipients are charged $750,000 for a transplant, and at an average 3.3 organs, that is more than $2 million per body. Neither donors nor their families can be paid for organs." In other words, these procedures are big business for the hospitals where they occur.
Which may lead some to wonder if there are any inherent conflicts in the donor process. Of course, when you tell your friendly local registry of motor vehicles that you will volunteer as a donor, that is a conscious decision (unless some states I am not aware of have an opt-out as opposed to an opt-in process). However, when the actual time comes for the donation to occur, what decisions are made then?
Readers might be surprised by this question as many individuals assume that organ donations only occur once the donor, and the freedom of choice along with them, has expired. However, it turns out that as organs begin to lose their efficacy shortly after their host has expired, it is actually better to harvest organs from individuals who have not yet fully died. In other words, individuals who are on life support. Most such individuals have had severe brain trauma, and would not be able to function without the support of various machines, but they nonetheless serve the purpose of keeping organs viable.
Which may lead some to wonder if there are any inherent conflicts in the donor process. Of course, when you tell your friendly local registry of motor vehicles that you will volunteer as a donor, that is a conscious decision (unless some states I am not aware of have an opt-out as opposed to an opt-in process). However, when the actual time comes for the donation to occur, what decisions are made then?
Readers might be surprised by this question as many individuals assume that organ donations only occur once the donor, and the freedom of choice along with them, has expired. However, it turns out that as organs begin to lose their efficacy shortly after their host has expired, it is actually better to harvest organs from individuals who have not yet fully died. In other words, individuals who are on life support. Most such individuals have had severe brain trauma, and would not be able to function without the support of various machines, but they nonetheless serve the purpose of keeping organs viable.
The Charlie Rose Case: The Collision of Laws and Common (Economic) Sense
A former intern for The Charlie Rose Show is suing the show for lost wages, alleging that classifying her as an intern rather than an employee was a violation of New York state law. According to the New York Daily News piece linked to above, the law in question prohibits classifying someone as an unpaid intern unless they are being "trained." The alternative would be that they are performing the type of work paid employees would do and should therefore receive remuneration for their efforts. The former intern, Lucy Bickerton, is claiming that, as the show couldn't go on without the efforts of at least 10 unpaid interns at any given time, such individuals are the equivalent of employees. If the court agrees, Ms. Bickerton will be owed at least minimum wages for the 25 hours per week she worked from June to August 2007.
While there is some analysis that could be done on the case (something I just can't avoid doing to a minor extent below), for our purposes it is much more interesting to take a look at the implications of the law itself. On one hand, some would argue that labor laws have helped our country become safer and more civilized. While they would be correct, it is also clear that this isn't the type of situation where such safeguards are required. Indeed, particularly in the case of internships, supply and demand dictates that many people, with an eye to the future, end up being more than satisfied with unpaid positions.
While there is some analysis that could be done on the case (something I just can't avoid doing to a minor extent below), for our purposes it is much more interesting to take a look at the implications of the law itself. On one hand, some would argue that labor laws have helped our country become safer and more civilized. While they would be correct, it is also clear that this isn't the type of situation where such safeguards are required. Indeed, particularly in the case of internships, supply and demand dictates that many people, with an eye to the future, end up being more than satisfied with unpaid positions.
3.15.2012
PBR, Revisited
One of our favorite posts of 2011 dealt with the inability of some ambitious entrepreneurs to amass capital for a buyout of their favorite brewer due to regulatory rules surrounding solicitations and offerings. While it is important to have a regulatory regime in place to protect investors from themselves, we noted in that post that it was also unfortunate that innovative strategies such as crowdsourcing couldn't be used for investment purposes. However, in an interesting twist, The Financial Times is reporting that The White House has thrown its support behind a bill which would allow the strategy going forward.
The White House-backed JOBS act, which recently passed the House by an overwhelming 390-23 margin, has a provision which, pertinent to our discussion, allows the solicitation of funds over the internet in a strategy the bill labels 'crowdfunding.' It also ends an SEC ban on small company advertisements to solicit capital, increases the offering threshold from $5 million to $50 million before SEC registration is required and raises the shareholder registration requirement from 500 to 1,000 shareholders.
While this can be viewed as a positive from the perspective of would-be crowdsourcers (or crowdfunders in the legislation), the SEC and labor have come out against the changes, and the Senate has yet to vote on a bill with some very different language. However, as noted, The White House is in favor of the House version, as, despite Republican ownership of the bill, it is viewed as a positive for economic growth. Whether or not crowdsourcing will soon become a possibility is unclear, but it is good to see efforts being made at innovation. We will try to keep our readers posted on any updates.
The White House-backed JOBS act, which recently passed the House by an overwhelming 390-23 margin, has a provision which, pertinent to our discussion, allows the solicitation of funds over the internet in a strategy the bill labels 'crowdfunding.' It also ends an SEC ban on small company advertisements to solicit capital, increases the offering threshold from $5 million to $50 million before SEC registration is required and raises the shareholder registration requirement from 500 to 1,000 shareholders.
While this can be viewed as a positive from the perspective of would-be crowdsourcers (or crowdfunders in the legislation), the SEC and labor have come out against the changes, and the Senate has yet to vote on a bill with some very different language. However, as noted, The White House is in favor of the House version, as, despite Republican ownership of the bill, it is viewed as a positive for economic growth. Whether or not crowdsourcing will soon become a possibility is unclear, but it is good to see efforts being made at innovation. We will try to keep our readers posted on any updates.
3.12.2012
Resources for Readers: The State of Renewable Energy Project Financing in the US
I have recently noted that many visitors to the site arrive via a piece I wrote on Ponzi schemes. Another, slightly less puzzling, major topic visitors seem to turn to the site for is solar power project development. Articles on the yet-to-be utilized solar REIT structure as well as a companion piece on such a structure's potential viability in the German market have gained particular attention. Knowing that the appetite of readers for information on solar development is so high, it brings me particular pleasure to provide today's Resource for Readers. Today's resource, Renewable Energy Project Finance in the U.S.: 2010-2013 Overview and Future Outlook, arrives courtesy of law firm Mintz Levin in collaboration with GTM Research. The two parties teamed up to produce an excellent piece on the state of project financing in the US that should be a must-read for anyone who found the S-REIT paper of interest.
3.10.2012
Maybe that Nobel was a Bit Premature...
Attorney General Eric Holder was in the news recently after discussing the government's use of lethal force against U.S. citizens abroad. According to the Washington Post article linked to above, the Obama Administration's criteria in making the decision to take American lives abroad extrajudicially is based on an 'imminent threat' analysis. The factors that play into this analysis include the 'relevant window of opportunity to act, the possible harm that missing the window would cause to civilians and the likelihood of heading off future disastrous attacks against the United States.' The Post also reported that, 'there are no known U.S. citizens on target lists maintained by the CIA or the military’s Joint Special Operations Command' for what that's worth.
It is undoubtedly very bad people who are targeted by this practice, and there are valid points both for and against it. However, even without passing judgment on the practice itself, this writer can at least make the observation that a certain group of over-enthusiastic Scandanavians who awarded a very new President Obama the Nobel Peace Prize would probably appreciate a mulligan right about now. It is probably also true that many of the people who wanted 'anyone but a Republican' in the last election are less than enthused about repeated extensions of, and additions to, the types of practices Mr. Bush put into place by the Obama administration.
Of course, whether this plays at all into results this November is tougher to predict. My guess is that it won't. After all, Republicans (except perhaps Ron Paul) would be unlikely to knock practices which could be painted as making the US more secure. This is especially true when most of the people against the practice are likely liberal and/or European. Most GOP voters would be just fine with killing enemies of the state, no matter where they are. Therefore, it would be up to traditional liberals to speak out against the practice, and my guess is they would still rather have Obama than Rick Santorum or Mitt Romney, the current frontrunners.
One thing is for sure however; now that these practices are in place, and have been used by both parties, they are going nowhere fast.
It is undoubtedly very bad people who are targeted by this practice, and there are valid points both for and against it. However, even without passing judgment on the practice itself, this writer can at least make the observation that a certain group of over-enthusiastic Scandanavians who awarded a very new President Obama the Nobel Peace Prize would probably appreciate a mulligan right about now. It is probably also true that many of the people who wanted 'anyone but a Republican' in the last election are less than enthused about repeated extensions of, and additions to, the types of practices Mr. Bush put into place by the Obama administration.
Of course, whether this plays at all into results this November is tougher to predict. My guess is that it won't. After all, Republicans (except perhaps Ron Paul) would be unlikely to knock practices which could be painted as making the US more secure. This is especially true when most of the people against the practice are likely liberal and/or European. Most GOP voters would be just fine with killing enemies of the state, no matter where they are. Therefore, it would be up to traditional liberals to speak out against the practice, and my guess is they would still rather have Obama than Rick Santorum or Mitt Romney, the current frontrunners.
One thing is for sure however; now that these practices are in place, and have been used by both parties, they are going nowhere fast.
Celebrating the Ponzi Scheme?
Ponzi schemes have certainly held a prominent position in the news cycle over the past week. That said, perhaps it shouldn't be surprising that one of the most heavily visited posts on the site over that same time period centered on such scams. What is a bit more puzzling to me is the fact that 'Should Ponzi Schemes Be Legal' is the most heavily visited post we have ever written.
I am really at a loss to explain why this might be. While the post is over a year old at this point, giving it plenty of time to garner hits, I have been posting here since late 2009. Many other posts have been in the public domain for much longer. In addition, I have posted on topics here, including the solar REIT concept, that are difficult to find elsewhere. It would be natural for people to come here to find information on such concepts were they so inclined. In contrast, there are many places where interested parties could find information on Ponzi schemes, including much more informative sites than Blawgconomics.
I have to conclude then that it is the topic itself, the question of whether or not these schemes should be legal, that has garnered attention. I am not sure what inferences to draw from this conclusion. If it is indeed correct, it would seem to be true that there is some kind of grass roots support for legalizing Ponzi schemes in some way. This support would be truly underground, as the legalization of Ponzi schemes is not something that is discussed in any newspapers or financial press that I have encountered.
Perhaps, then, it is the rising segment of the population which identifies with libertarianism which would exhibit support for legalization. Ironic in some ways, as the legalization of Ponzi schemes would almost certainly involve heavy regulation under either securities laws, pension laws, insurance rules or a combination of the three. However, there would still be an element of choice involved, and maybe this is what appeals to the libertarian in some people.
On the other hand maybe that is completely wrong. Maybe it is merely the criminal element of the nation who have stumbled upon a piece inspired by a classmate's description of what a Ponzi scheme is. I can't think so however, unless they are concerned that legalization could cut into their profits and are therefore reading up on the latest and greatest on the political front. I don't personally buy that, but I suppose stranger things have happened.
I guess I will have to admit that I am stumped and leave it at that. Perhaps the popularity of the Ponzi post will remain as much a mystery as how people think they can get away with perpetrating these schemes in this day and age...
I am really at a loss to explain why this might be. While the post is over a year old at this point, giving it plenty of time to garner hits, I have been posting here since late 2009. Many other posts have been in the public domain for much longer. In addition, I have posted on topics here, including the solar REIT concept, that are difficult to find elsewhere. It would be natural for people to come here to find information on such concepts were they so inclined. In contrast, there are many places where interested parties could find information on Ponzi schemes, including much more informative sites than Blawgconomics.
I have to conclude then that it is the topic itself, the question of whether or not these schemes should be legal, that has garnered attention. I am not sure what inferences to draw from this conclusion. If it is indeed correct, it would seem to be true that there is some kind of grass roots support for legalizing Ponzi schemes in some way. This support would be truly underground, as the legalization of Ponzi schemes is not something that is discussed in any newspapers or financial press that I have encountered.
Perhaps, then, it is the rising segment of the population which identifies with libertarianism which would exhibit support for legalization. Ironic in some ways, as the legalization of Ponzi schemes would almost certainly involve heavy regulation under either securities laws, pension laws, insurance rules or a combination of the three. However, there would still be an element of choice involved, and maybe this is what appeals to the libertarian in some people.
On the other hand maybe that is completely wrong. Maybe it is merely the criminal element of the nation who have stumbled upon a piece inspired by a classmate's description of what a Ponzi scheme is. I can't think so however, unless they are concerned that legalization could cut into their profits and are therefore reading up on the latest and greatest on the political front. I don't personally buy that, but I suppose stranger things have happened.
I guess I will have to admit that I am stumped and leave it at that. Perhaps the popularity of the Ponzi post will remain as much a mystery as how people think they can get away with perpetrating these schemes in this day and age...
3.09.2012
Op-ed: The Problem With Being Anti-Headhunting
It was recently written in The New York Post that members of the New Orleans Saints organization should face criminal prosecution for Headhunt-Gate. Under organized crime laws no less. Meanwhile, at Grantland, Charles Pierce waxed poetic about some sort of apparent social contract Americans have with the sport of football whereby we accept some consequential violence to watch a game that is, in Pierce's mind at least, about something other than violence. These were just two of dozens of perspectives in support of what appears to be nearly universal condemnation of the Saints' practice of paying bonuses for injuring opposing players. Particularly in a world where we understand the long-term consequences of certain injuries, particularly those to the head, better than ever, espousing such an anti-headhunting stance is hardly objectionable.
However, not one analysis of the situation I have read has addressed the flip-side of the coin; the culpability, and hypocrisy, of the American public. A public that thirsts for big hits, hyper-aggressive defenders, bruising running backs, and of course, the victories that come with them. Americans spend billions of dollars a year on the NFL, and while some of that is for the joy that comes from a perfectly executed go-route off of an audible, an athletic interception or a dazzling run, it is also true that not one of those outcomes are possible without some truly brutal contact somewhere else on the field. It is also true that, on any given play, even when everything is done by the book, someone can be injured in a way that ends their game, season or even career.
This is not to say that I necessarily think that bounties are okay, or that the Saints shouldn't be punished for breaking an established rule. There are also folks out there that decry the violence of the sport whether within or outside the rules of the game. I applaud their consistency. However I am having trouble accepting the cries of disgust about the practice from the same people who delight in a lights-out Ray Lewis hit on whatever running back is foolish enough to turn upfield, or who gleefully watch an NFL Films segment showing linemen pumping each other up 'for war' between series. Or those who quote the maxim that the game is won in the trenches, where 300+ pound behemoths seek to do nothing but inflict pain, ad nauseum. Or in fact, just about everyone who watches and enjoy the game itself. For, at its very core, the system rewards those who have the ability to injure others very richly, while others who can't make the 'big play' become insurance salesmen. What is the difference between a contract bonus you receive for going to the Pro-Bowl on the back of featuring weekly in an ESPN 'Jacked Up' segment and getting a little cash on the side from your teammates for a lights-out hit? Not much from my perspective. And I am honestly taken aback that so many seem to disagree.
Let me make it clear if I haven't already; I am not currently speaking out for or against the bounty system. I am merely against the rank hypocrisy of those who would have it both ways. And I am not merely ranting; there are real economic implications marching hand-in-hand with this topic. I noted in our recent Snippets column that some folks have started to consider what life without an NFL could be like. In one particular example, economists Tyler Cowen and Kevin Grier (on the same Grantland site noted above) looked at the trickle-up impact concussions could have on the league in the future. In essence, if Pop Warner programs, high schools and colleges begin to abandon the game due to the deleterious impact of concussions, that would certainly have an impact on the final product of the NFL. It might take a while, but then again, it wasn't so long that a heavyweight title fight meant something. It could well be that the concussion/injury issue could potentially severely impact a multi-billion dollar industry. That said, it is clear that there are questions which need to be asked and answered about the future of the game.
Of course, instead of waiting for spontaneous change, the NFL could make changes from the top. It seems to be doing so to some extent, and player safety, particularly that of quarterbacks, seems to be taking a prominent position in the plans of the Commissioner's Office. But at some point, it is likely that people will stop paying full price for a watered-down product. In other words, no one is going to pay to watch flag football, no matter how elegant it might be. Since owners won't stand for lower profits, it is a fine line indeed that the leaders of the NFL are walking. Either change from the top down and lose fans and revenue, or let change happen from the grass roots as mentioned above and, well, lose fans and revenue.
Or, of course, there is option three, seemingly the preferred option of the NFL, which seems to be 'pay lip service to change, fine the Saints to quell public fury and let the profits keep rolling in.' Deep in their hearts, most Americans would probably be just fine with this latter option, but of course this is completely at odds with the general outrage being expressed at Headhunt-Gate.
It could very well be wrong, legally, morally, however you want to judge it, to put an injury bounty system in place. It rewards hurting others, and this is a defensible argument. But if that is true, it almost has to be true that football itself, where brutality and the resulting bodily injuries and concussions are commonplace due to the very nature of the sport, has to be changed as well. Yes, there are more rules in place than ever to protect players, particularly quarterbacks. However, football is still a brutal, brutal sport, even when it is played at its cleanest. If one is of the opinion that bounties are wrong because they reward hurting others, then it can't be that they would accept the NFL continuing as currently constituted. However, very few people are calling for an end to the league. And as that is the case, it could well be that the bounty controversy shined even more light on hypocrisy than it did on a particular instance of rule-breaking.
However, not one analysis of the situation I have read has addressed the flip-side of the coin; the culpability, and hypocrisy, of the American public. A public that thirsts for big hits, hyper-aggressive defenders, bruising running backs, and of course, the victories that come with them. Americans spend billions of dollars a year on the NFL, and while some of that is for the joy that comes from a perfectly executed go-route off of an audible, an athletic interception or a dazzling run, it is also true that not one of those outcomes are possible without some truly brutal contact somewhere else on the field. It is also true that, on any given play, even when everything is done by the book, someone can be injured in a way that ends their game, season or even career.
This is not to say that I necessarily think that bounties are okay, or that the Saints shouldn't be punished for breaking an established rule. There are also folks out there that decry the violence of the sport whether within or outside the rules of the game. I applaud their consistency. However I am having trouble accepting the cries of disgust about the practice from the same people who delight in a lights-out Ray Lewis hit on whatever running back is foolish enough to turn upfield, or who gleefully watch an NFL Films segment showing linemen pumping each other up 'for war' between series. Or those who quote the maxim that the game is won in the trenches, where 300+ pound behemoths seek to do nothing but inflict pain, ad nauseum. Or in fact, just about everyone who watches and enjoy the game itself. For, at its very core, the system rewards those who have the ability to injure others very richly, while others who can't make the 'big play' become insurance salesmen. What is the difference between a contract bonus you receive for going to the Pro-Bowl on the back of featuring weekly in an ESPN 'Jacked Up' segment and getting a little cash on the side from your teammates for a lights-out hit? Not much from my perspective. And I am honestly taken aback that so many seem to disagree.
Let me make it clear if I haven't already; I am not currently speaking out for or against the bounty system. I am merely against the rank hypocrisy of those who would have it both ways. And I am not merely ranting; there are real economic implications marching hand-in-hand with this topic. I noted in our recent Snippets column that some folks have started to consider what life without an NFL could be like. In one particular example, economists Tyler Cowen and Kevin Grier (on the same Grantland site noted above) looked at the trickle-up impact concussions could have on the league in the future. In essence, if Pop Warner programs, high schools and colleges begin to abandon the game due to the deleterious impact of concussions, that would certainly have an impact on the final product of the NFL. It might take a while, but then again, it wasn't so long that a heavyweight title fight meant something. It could well be that the concussion/injury issue could potentially severely impact a multi-billion dollar industry. That said, it is clear that there are questions which need to be asked and answered about the future of the game.
Of course, instead of waiting for spontaneous change, the NFL could make changes from the top. It seems to be doing so to some extent, and player safety, particularly that of quarterbacks, seems to be taking a prominent position in the plans of the Commissioner's Office. But at some point, it is likely that people will stop paying full price for a watered-down product. In other words, no one is going to pay to watch flag football, no matter how elegant it might be. Since owners won't stand for lower profits, it is a fine line indeed that the leaders of the NFL are walking. Either change from the top down and lose fans and revenue, or let change happen from the grass roots as mentioned above and, well, lose fans and revenue.
Or, of course, there is option three, seemingly the preferred option of the NFL, which seems to be 'pay lip service to change, fine the Saints to quell public fury and let the profits keep rolling in.' Deep in their hearts, most Americans would probably be just fine with this latter option, but of course this is completely at odds with the general outrage being expressed at Headhunt-Gate.
It could very well be wrong, legally, morally, however you want to judge it, to put an injury bounty system in place. It rewards hurting others, and this is a defensible argument. But if that is true, it almost has to be true that football itself, where brutality and the resulting bodily injuries and concussions are commonplace due to the very nature of the sport, has to be changed as well. Yes, there are more rules in place than ever to protect players, particularly quarterbacks. However, football is still a brutal, brutal sport, even when it is played at its cleanest. If one is of the opinion that bounties are wrong because they reward hurting others, then it can't be that they would accept the NFL continuing as currently constituted. However, very few people are calling for an end to the league. And as that is the case, it could well be that the bounty controversy shined even more light on hypocrisy than it did on a particular instance of rule-breaking.
3.08.2012
G-8 Switch Invokes an Earlier Era
While it was certainly not the motivation for the switch, it strikes me that moving the G-8 conference to the underutilized Camp David from Chicago hearkens back to an older way of doing politics that many Americans might not be used to. On the surface, it might surprise some that it is not the Chicago-machine style of politics I am referring to. Indeed, Rahm Emanuel's reaction after he was informed that the meeting of economic superpowers was being moved serves as strong evidence that Windy City business as usual cannot be counted on (at least always; the NATO summit is still scheduled for Chicago later this year) from the Obama Administration. No, Obama is invoking another style of politics that many of his detractors nonetheless decry in equal measure; classic European diplomacy.
Though the style hasn't perhaps been on evidence as often as opponents were worried about when Obama first started discussing new ways of reaching out to friends and foes alike, European diplomacy will get its chance in the spotlight during the G-8. The presidential country estate will be perfect, with numerous nooks and crannies, for having the sort of quiet, private conversations which have gotten business done in the Old World for centuries. Unlike Chicago proper, with its inevitable hordes of anti-establishmentarians, ranks swelling with the nouveau Occupy class, Camp David will be on lock-down for the duration of the event. This should provide a wonderful backdrop for the exertion of soft power in a way that Chicago just couldn't. Some of the few remaining neo-cons in the country might not love the style (in a strange show of unity with Occupiers...). However, with the state of the global economy, there would seem to be no better time than the present to try something old.
Though the style hasn't perhaps been on evidence as often as opponents were worried about when Obama first started discussing new ways of reaching out to friends and foes alike, European diplomacy will get its chance in the spotlight during the G-8. The presidential country estate will be perfect, with numerous nooks and crannies, for having the sort of quiet, private conversations which have gotten business done in the Old World for centuries. Unlike Chicago proper, with its inevitable hordes of anti-establishmentarians, ranks swelling with the nouveau Occupy class, Camp David will be on lock-down for the duration of the event. This should provide a wonderful backdrop for the exertion of soft power in a way that Chicago just couldn't. Some of the few remaining neo-cons in the country might not love the style (in a strange show of unity with Occupiers...). However, with the state of the global economy, there would seem to be no better time than the present to try something old.
'The Greatest Gun Salesman in America' and the Law of Unintended Consequences
Oh law of unintended consequences! How often you rear your ironic head!
In 2008, Candidate Obama, a Democrat (strike one and two in the minds of many gun owners) spoke out against assault weapons (swing and a miss!). By doing so, he set into motion a process which has made it increasingly difficult for him to do anything about the very weapons he thinks should be eliminated. However his actions have, happily for amateur economists like you and I, provided a great example of the law of unintended consequences.
How is this? In the run up to, and in the immediate aftermath of, Obama's election, gun sales in America rose dramatically as gun owners fearful of potential restrictions under a combination of Democrat-controlled legislative and executive branches stocked up on arms. In practice the Obama administration has not focused much on increasing gun control since. However a divided slate of Republican hopefuls with no clear front-runner (apologies to Mitt, but things are still a bit tight for him) and rising approval ratings for the incumbent have combined to put gun owners back on red alert. Presumably their analysis is that, despite not doing so thus far, an Obama victory in 2012 would allow him to run roughshod over the Second Amendment.
However, gun owners should be able to rest easy as the Second Amendment, heavy arms and all, appears to be safe for now. Why? Look no further than the old adage about politics and bedfellows; it actually behooves gun owners to have Obama poll well. As noted, as the odds that Obama will win re-election rise, gun sales rise in lockstep. And the more sales increase, the more gun manufacturers profit. They more they profit, the more money can be spent on gun-rights lobbyists, and indeed, even potentially President Obama's re-election.
This, of course, tidies up the introduction to this piece...Candidate Obama speaking out against assault weapons all the way back in 2008 has actually made it more difficult for him to do anything about them now, or in the future. In economic terms, his political stance created a classic example of unintended consequences, albeit in a roundabout fashion.
Some amateur economists out there might have also spotted a perverse incentive effect for Obama supporters with strong gun control leanings, as voting for their candidate could actually work against their interests. This would be particularly galling for many if the 'look the other way' policy were a direct back-scratching response to manufacturers' help this fall, but we can leave that post for another day...
In the end, what lesson can be learned from this domino effect-type analysis? Well, any economist-cum-gun owners out there might consider the idea of free-riding on the public good being created by those who have been in panic-buy mode. In other words, if you already have the gun you want, it will probably be protected via the fear buy/profit/lobby process noted above, and you don't have to do anything extra to protect your rights. Then again, some people might just be buying because they like new toys. In which case, spend away! After all, and if nothing else, those on both sides of the gun rights debate should at least be able to agree that our GDP could use the bump...
In 2008, Candidate Obama, a Democrat (strike one and two in the minds of many gun owners) spoke out against assault weapons (swing and a miss!). By doing so, he set into motion a process which has made it increasingly difficult for him to do anything about the very weapons he thinks should be eliminated. However his actions have, happily for amateur economists like you and I, provided a great example of the law of unintended consequences.
How is this? In the run up to, and in the immediate aftermath of, Obama's election, gun sales in America rose dramatically as gun owners fearful of potential restrictions under a combination of Democrat-controlled legislative and executive branches stocked up on arms. In practice the Obama administration has not focused much on increasing gun control since. However a divided slate of Republican hopefuls with no clear front-runner (apologies to Mitt, but things are still a bit tight for him) and rising approval ratings for the incumbent have combined to put gun owners back on red alert. Presumably their analysis is that, despite not doing so thus far, an Obama victory in 2012 would allow him to run roughshod over the Second Amendment.
However, gun owners should be able to rest easy as the Second Amendment, heavy arms and all, appears to be safe for now. Why? Look no further than the old adage about politics and bedfellows; it actually behooves gun owners to have Obama poll well. As noted, as the odds that Obama will win re-election rise, gun sales rise in lockstep. And the more sales increase, the more gun manufacturers profit. They more they profit, the more money can be spent on gun-rights lobbyists, and indeed, even potentially President Obama's re-election.
This, of course, tidies up the introduction to this piece...Candidate Obama speaking out against assault weapons all the way back in 2008 has actually made it more difficult for him to do anything about them now, or in the future. In economic terms, his political stance created a classic example of unintended consequences, albeit in a roundabout fashion.
Some amateur economists out there might have also spotted a perverse incentive effect for Obama supporters with strong gun control leanings, as voting for their candidate could actually work against their interests. This would be particularly galling for many if the 'look the other way' policy were a direct back-scratching response to manufacturers' help this fall, but we can leave that post for another day...
In the end, what lesson can be learned from this domino effect-type analysis? Well, any economist-cum-gun owners out there might consider the idea of free-riding on the public good being created by those who have been in panic-buy mode. In other words, if you already have the gun you want, it will probably be protected via the fear buy/profit/lobby process noted above, and you don't have to do anything extra to protect your rights. Then again, some people might just be buying because they like new toys. In which case, spend away! After all, and if nothing else, those on both sides of the gun rights debate should at least be able to agree that our GDP could use the bump...
3.06.2012
Worst Campaign Ever? Not for One Candidate...
For anyone who hasn't turned on a TV, opened a newspaper or flipped open a laptop today until reading this, it's Super Tuesday. For the past week in ten states across America, millions and millions of dollars have been spent by the candidates as well as their 'unaffiliated' Super PACs to try and convince voters that they are the one of the four remaining hopefuls who is the man for the job. There would seem to be no better time than the present to discuss the current Election 2012 state of affairs.
In a word, the Republican primary can be described as 'devastating,' at least for the GOP. The negative campaigning has been effective in some ways, but it has also left the Republican party sharply divided. Rather than crowning a nominee, the process has left the candidates battered and bruised. In fact, according to Barbara Bush, an individual with a unique perspective to offer such an opinion, it has been the worst campaign of her lifetime.
However, there is one person who this campaign season has not been devastating for; the incumbent. So far, President Obama's strategy has seemed to be simply 'stay above the fray.' More recently, he has begun to strategically manage his speaking schedule to upstage his squabbling counterparts. However, even this is much more innocuous than what the Republican candidates are doing to themselves. Of course no one with a pulse on politics would expect the nice-guy routine to continue once a clear opponent is selected. However, until then, and despite being far behind on actual nuts and bolts campaigning, Obama appears to be the only clear winner this primary season.
In a word, the Republican primary can be described as 'devastating,' at least for the GOP. The negative campaigning has been effective in some ways, but it has also left the Republican party sharply divided. Rather than crowning a nominee, the process has left the candidates battered and bruised. In fact, according to Barbara Bush, an individual with a unique perspective to offer such an opinion, it has been the worst campaign of her lifetime.
However, there is one person who this campaign season has not been devastating for; the incumbent. So far, President Obama's strategy has seemed to be simply 'stay above the fray.' More recently, he has begun to strategically manage his speaking schedule to upstage his squabbling counterparts. However, even this is much more innocuous than what the Republican candidates are doing to themselves. Of course no one with a pulse on politics would expect the nice-guy routine to continue once a clear opponent is selected. However, until then, and despite being far behind on actual nuts and bolts campaigning, Obama appears to be the only clear winner this primary season.
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