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Surprises in the Strangest Places

From MUSIC CHOICE on Comcast digital cable :

Q. Can I get a playlist?
A. We are unable to offer a playlist. The Digital Performance Right in Sound Recordings Act of 1995 passed by Congress prevents us from disclosing such information. The Digital Law states that if one is transmitting a digital signal, song information cannot be pre-announced. It is a Music Choice policy not to release a playlist of upcoming or previously played songs.

Congress, home of the best laws money can buy.


Markets and Knowledge

This is not a criticism of Rob, who produces a nice blog at BusinessPundit , but he just happened to post the wrong thing at the wrong time. From his post commenting on Prescription Drugs, he ties the merit of markets to the distribution of information.

I've said it plenty of times on this blog and I'll say it again. Markets aren't always perfect, because the distribution of information isn't perfect. But they are the best we have.

Drug Advertising vs R&D

When many critics of drug companies want to contest the fact that the long term viability of drug companies requires that revenues must eventually both cover development costs and produce profits, they go to a company's annual financial report and point out that marketing and advertising costs are often a large percentage of revenue. They are quick to claim that the advertising costs can be re-assigned to development. This a superficially self-satisfying claim, but completely at odds with economic reality. Read more »


Choice of Economies, a Followup

In this post, I attempted to ask the question as to what criterion should be used to prefer one economy over another. Read more »


What is the Proper Criterion to Prefer One Theoretical Economy to Another?

Take two theoretical economies as follows:

Economy A -- An economy that has 1000 industry segments each of which initially contains two similar products, such as Coke and Pepsi, each of which is produced by separate firms which are not allowed to merge even if they desire to do so.

Economy B -- An economy that differs only from A above in that firms ARE allowed to merge, resulting in Coke and Pepsi being only separate brands of a single firm, for example.

Both of the above economies are to be considered as starting points, which may further evolve. Read more »


The Connection Between Drug Prices and Development Costs, Not What It Appears

In a nice TCS article, Economic Illiteracy Quadrifecta, Arnold Kling analyses the level and state of John Kerry's economic rhetoric. In doing so, Arnold inadvertently propagates an economic fallacy relating drug prices and development costs.

...The basic economics of drug prices is that drugs are expensive because of the high cost of developing and testing them, including the need to write off the expense of the many efforts that fail to yield a marketable medication...

Delayed Comment on Drug Advertising

In a much delayed comment to a January 31 post, a self-described economist takes issue with my take on drug advertising. Read more »


The Problem of Social Security Solvency, Beneath the Monetary Facade

It seems likely that the problem of SS solvency is generally thought of as a problem of financing, possibly described by accounting. In this view, the inevitable retirement of the Baby Boom generation will result in a reduction of payroll tax receipts and an increase of SS payouts, resulting in a substantial SS deficit as less and less workers are available to pay the payroll taxes that support the payments to each retired SS recipient. Read more »


English Capitalism, ca 1553

An Incidental Description from Unknown Shore, The Lost History of England's Arctic Colony, by Robert Ruby, page 18 Read more »


Drug Reimportation Economics

Almost every day it is possible to read a suggestion or comment about the issue of drug reimportation. In nearly every case, the result displays a confidence in economic understanding unjustified by the content. This is understandable, although unfortunate, because the economics of drug reimportation is complex and multi-faceted, even if significant simplifying assumptions are made. Read more »


Logic is in the Eye of the Beholder

From an interview with psychologist Daniel Kahneman, the first psychologist to win the Nobel prize in economics. --

A shopper, for example, might drive across town to buy a $10 calculator instead of a $15 one, but forgo the same trip to purchase a $125 jacket for $5 less, illogically believing the greater percentage saved on the calculator makes the trip more worthwhile.

Is paying attention to percentages really illogical? Read more »


Business Journalism, self-indicted

The following is a business section article from the August 6, 2004 Boston Globe. It contains such an incredible mix of distortions and misconceptions that even trying to unravel them is just too painful to contemplate, so I'll just let Steve Bailey speak for himself --

CORPORATE FREELOADERS

Author(s): STEVE BAILEY Date: August 6, 2004 Page: D1 Section: Business

We have a list of deadbeat dads. We have a registry of sex offenders, which we now post on the Internet. Coming soon: a list of Massachusetts' corporate freeloaders. This could be good reading.



Gold Standard Resource Costs

Historically, one of the pre-dominant arguments against the gold standard was the supposed waste of resources involved in mining gold and then storing it in a vault somewhere.

With only some disagreement, it is the Austrian view that any amount of money can provide all of the services that money is capable of providing, with prices adjusting as required to quantity changes. Thus, the question comes up as to why not just allow government to prohibit the mining of gold to increase the supply of gold money if the expenditure of resources is just a waste, as far as society is concerned. Read more »