Fri, 30 Oct 2009

Do It Their Way

Tom Slee has written a book entitled No One Makes You Shop at Wal-Mart. The introduction of the book ends with "why we need to rely on collective action rather than individual choice to take us to where we want to be".

Poor Tom! He fantasizes that once the tools of coercive collective action are created, intellectual such as himself will be in charge of directing the action. And yet, when you point him at collective action gone wrong (e.g. Jim Crow laws, or the War in *, or the War on Drugs), he'll just tell you that the wrong people (e.g. George Bush) are in charge.

No, it's far more likely that when powerful tools are created, powerful people (politically and/or economically powerful -- which you surely must acknowledge doesn't include intellectuals) control them. That's why I oppose the creation and ongoing maintenance of these tools. Not because you can't do good things with them -- you can -- but it's more likely that bad things will be done with them.

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Thu, 29 Oct 2009

Tax on Hiring

The US Sentate is currently considering a bill designed to pay people to be unemployed, and to penalize any private parties that still employs people.

Well, that's not exactly how the bill is written, but that's how any economist will read it. They're planning to extend unemployment benefits, which would otherwise run out. This has the effect of paying people to have the job of being unemployed. When you buy more of something, anybody who has a supply of it will step up to the plate. So rather than take a job, any body just to get income flowing again, the US Senate is encouraging people to stay unemployed.

The other thing they're doing which "helps" the recovery is to raise the unemployment insurance payments that employers have to pay when they employ someone. This is a tax on employment, and makes it more expensive to keep someone employed. Anybody whose employment is on the edge will get kicked over and kicked off.

When you tax something, you get less of it. When you subsidize something, you get more of it. Thus it has always been, and thus always have politicians ignored that face. It's the economist's burden to always have to tell them that their grand plans are doomed to failure.

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Mon, 19 Oct 2009

Jobs Created

I just cringe whenever I hear Obama or his minions talking about how they created or saved N jobs. As an economist, I'm trained to look for the other side of the coin. Yin and Yang. The coin cannot not have another side if it is to be a coin. So when the government takes money from taxpayers, or prints up new money, or borrows money from China, to spend on creating jobs, I have to ask: how many jobs did the stimulus destroy?

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Sat, 10 Oct 2009

Ride starting Sat Oct 10 13:47:35 2009

16.27 km 53373.41 feet 10.11 mi 3177.00 seconds 52.95 minutes 0.88 hours 11.45 mi/hr

Was a bit of a cool day. Had a bit of time to go for a ride. Might have been the last ride of the season unless we get another indian summer day.

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Fri, 09 Oct 2009

2009 Peace Prize

If being in charge of wars in two different countries, and having your troops stationed in nearly every continent doesn't qualify you for the Nobel Peace Prize, I don't know what does.

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Wed, 07 Oct 2009

Ride starting Wed Oct 7 17:27:03 2009

15.26 km 50070.49 feet 9.48 mi 3526.00 seconds 58.77 minutes 0.98 hours 9.68 mi/hr

Rode the Uncle Sam Bikeway way back in October. Had to be down in Albany, so I took the bike with, found the trail, and went for a nice ride. Didn't know where the trailhead was, so I just parked on a side street and went north looking for an entrance. It's a nice trail, if a bit short. Would be much nicer if they lengthened it on the north end. South end has been built upon and so is unusable.

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Tue, 06 Oct 2009


Gary Reback is one of those attorneys who understands his subject very well. Unfortunately, since he isn't an economist, and shows no evidence of having studied, it doesn't MATTER how well he understands antitrust. You can always tell someone who is ignorant of the operation of markets when they say "self-policing" in reference to how companies behave when not regulated by legislation.

First, understand that free markets are not without regulation. The participants in the market regulate the behavior of other participants, by their choice of who to cooperate with and who to spurn. But secondly, corporations never Never NEVER NEVER self-police. Never. Ever. Not on a good day, not on a bad day. That's not how free markets work. Somebody who understands how they work would NEVER use that phrase. Corporations regulate the behavior of other corporations. They're all greedy sons-of-bitches, and they wouldn't hesitate to cut their mother's throat, OR their own prices in order to gain market share.

Consequently, the only way for a company to persistently[1] dominate their market is with assistance of the government. You know. The same government that Gary Reback wants to have the power to regulate markets.

Yeah. That's why this article is entitled "Dimbulb". That would be Gary.

[1] I would note that Pedipaws is currently dominating the market for pet claw grinders. That's okay, they created the market, they should be allowed to own it, for a while. The only way to dominate a market is by creating a new product that nobody else has, by getting a government monopoly (e.g. a patent), or by constantly offering a better deal than anyone else. That's how Standard Oil got and kept its monopoly -- by constantly improving its process and driving the price of a barrel of oil into the ground.

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Thu, 01 Oct 2009

Cornering the Market on Legislators

My friend Nat Friedman proposes on Twitter "If it's really only $19M in health industry lobbying holding us back, why doesn't some rich guy just spend $50M and get this done?". Won't work. Here's why.

The health industry lobbies for its interest. They spend a certain amount only because they don't need to spend any more. They're buying influence with legislators.

Now, introduce some rich guy and have him try to buy up all the influence, so that the health care industry doesn't get its way any more. This is an attempt to "corner the market" -- to own all of it so you can demand the price you want.

The problem with trying to corner any market is that the other participants in the market still desire the product. As you buy up more and more of the product, the other participants still want to buy it, so the price rises higher and higher. You have to be willing to spend as much for the last item as the richest customer for the produce.

In this case, the intent is to extinguish the industry. So the price for the lobbying is not $19M. The price is the entire value of the health industry. No way is $50M going to cover that price.

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