Quotulatiousness

April 15, 2010

A very disturbing notion

Filed under: Economics, Europe, Government, Politics, USA — Tags: , , , — Nicholas @ 12:59

The Cato Institute’s Richard W. Rahn speculates about some very disturbing notions:

Politicians in developed countries have found that their citizens often get upset when inflation reaches high levels and then tend to vote out the culprits. You may recall that the less-than-astute Jimmy Carter lost his re-election campaign, in part, because inflation at one point reached 14 percent and the prime interest rate hit 21 percent.

An insightful European banker suggested to me over breakfast a couple of weeks ago that the European political class would use selective expropriation, rather than inflation, to avoid paying back all of the debt. The way this would be done would be that the political leaders would announce they would only pay back those bonds with full interest that were held by labor unions and other “politically correct” interest groups but not the bonds held by “greedy bankers” and rich people. Maturities would be extended and promised interest rates lowered – effectively reducing the value of the bonds.

My initial reaction was that, yes, such a selective expropriation might work in Europe, but not in the United States. As I thought more about it, however, looked at what was happening and heard President Obama’s rhetoric attacking “greedy” bankers and insurance companies, I began to think that not only was my European friend right about Europe, but his scenario was equally valid here.

The Obama administration has already indicated that it’s quite comfortable with protecting unions at the expense of other contracting parties (in the Government Motors case, at the very least), so it’s not much of a stretch to see this as a possibility in larger matters.

QotD: Chinese espionage in Canada

Filed under: Cancon, China, Economics, Quotations — Tags: , , — Nicholas @ 12:39

China’s not buying our oil; it’s buying the reliable flow of Canadian corporate profits and our stable economic outlook.

Is it a national security risk to Canada?

No, again. It is true that, according to CSIS, the Chinese government represents the largest espionage threat to Canada, stealing the equivalent of $1-billion a month from our country in industrial secrets. (That’s more than our annual exports to China.)

But that espionage is done illegally by Chinese students, expats and other sympathizers, not through the legal ownership of share certificates. No doubt our high-tech energy secrets are being stolen and will continue to be stolen, but that is not happening because of a Wall Street deal. The central strategic value of the oil sands is not at risk.

Ezra Levant, “Pipeline to Asia”, National Post, 2010-04-15

The technical term is “totally insane”

Filed under: Law, Media, Technology — Tags: , , , , — Nicholas @ 12:12

Cory Doctorow has a horrible dystopian future in mind. No, it’s not the background to his next science fiction novel — it’s what the MPAA and RIAA think our future should be like:

The MPAA and RIAA have submitted their master plan for enforcing copyright to the new Office of Intellectual Property Enforcement. As the Electronic Frontier Foundation’s Richard Esguerra points out, it’s a startlingly distopian work of science fiction. The entertainment industry calls for:

* spyware on your computer that detects and deletes infringing materials;
* mandatory censorware on all Internet connections to interdict transfers of infringing material;
* border searches of personal media players, laptops and thumb-drives;
* international bullying to force other countries to implement the same policies;
* and free copyright enforcement provided by Fed cops and agencies (including the Department of Homeland Security!).

There’s a technical term for this in policy circles. I believe it’s “Totally insane.”

I find the audacity of (as Cory calls ’em) “Big Content” to be breathtaking: it’s as if they’ve never heard of fairness or privacy. If they get their wish, we’ll never hear of ’em again either.

As Greg Sandoval points out, there’s almost no reliable data to quantify the problem all this draconian lawmaking and enforcement is supposed to address:

“Three widely cited U.S. government estimates of economic losses resulting from counterfeiting cannot be substantiated due to the absence of underlying studies,” the GAO said. “Each method (of measuring) has limitations, and most experts observed that it is difficult, if not impossible, to quantify the economy-wide impacts.”

In what appears to be a setback for Hollywood and the recording industry, the government said that it sees problems with the methodology used in studies those sectors have long relied on to support claims that piracy was destructive to their businesses. The accountability office even noted the existence of data that shows piracy may benefit consumers in some cases.

[. . .]

“Consumers may use pirated goods to ‘sample’ music, movies, software, or electronic games before purchasing legitimate copies,” the GAO continued. “(This) may lead to increased sales of legitimate goods.”

Volcano eruptions, historically speaking

Filed under: Science — Tags: , , — Nicholas @ 12:06

An interesting slideshow at New Scientist shows that the eruption of Eyjafjallajökull-Fimmvörduháls in Iceland barely even ranks as an eruption, compared to past geological events (not limited to volcanic action).

Incidentally, if you want to know how to pronounce Eyjafjallajökull, there’s a Wikimedia file here. To be honest, even after hearing it pronounced correctly, I can’t reproduce it . . .

“Wolf! Wolf! Wolf! Oh, never mind . . .”

Filed under: Bureaucracy, Health, Media — Tags: , , , , , — Nicholas @ 09:04

Marni Soupcoff points out that the World Health Organization should have been far more forthcoming after their intial “the sky is falling” announcements caused panic last year over H1N1:

Admit your mistakes before others exaggerate them. That’s the oft-quoted wry advice of writer and retired surgeon Dr. Andrew V. Mason. Perhaps the World Health Organization (WHO) was trying to follow it this week by convening a three-day meeting of outside experts to review the organization’s handling of the recent swine flu outbreak. The problem is, despite claiming to want to know what went wrong as much as what went right, the WHO seems unwilling to even entertain the possibility that it created a counterproductive panic by labelling H1N1 a pandemic of the highest order (“level 6”).

Swine flu, as you’ve probably realized by now, has turned out to be a mild, not particularly deadly virus — it’s certainly far less deadly than the regular seasonal flu that most of us consider a mundane part of everyday life. If one were feeling charitable toward the WHO, one could point out that it didn’t know back in the spring of last year — when it shouted “level 6!” from the rooftops — that H1N1 would prove to be such a relatively innocuous bug. But it’s precisely because it didn’t know that the WHO should have been more cautious with its labelling. You don’t shout “fire” in a crowded theatre just because it smells like the popcorn might be a little on the burnt side. It’s not worth the chaos and alarm you might cause. (Or in this case, the run on vaccines and the resorting to quacks and sketchy “home” remedies.)

Between the unrestrained use of the term “pandemic” and the noted ability of the mass media to hype real and imagined risks, it’s almost surprising we didn’t have doomsday-style cults spring up over H1N1.

Properly defining what are “public goods”

Filed under: Economics, Law, Media, Technology — Tags: , , , — Nicholas @ 07:50

Milena Popova, guest-blogging while Charles Stross is out experiencing Japan, has a long discussion up about public goods and why content (digitally speaking) is a classic example:

There’s a theory in economics about things called “public goods”. To understand the distinction between private goods, public goods and the couple of shades of grey in between, you first need to get your head around two concepts: rival and excludable.

Rival: (Wikipedia seems to call this “rivalrous”, but when I were a young economist lass we used to call it rival so I’ll stick with that.) A good is rival if my consumption of it diminishes the amount of the good that you can consume. Say we had 10 apples, and I ate one. There would now be 9 apples left which you could eat. If we had one apple and I ate all of it, tough luck, no apples for you. Knowing whether a good is rival or not tells you whether you want to use the market (if I were a good economist that would possibly be capital-M Market 😉 to allocate access to that good. If it’s rival, then the market is an efficient way of allocating the good; if it’s not, then you might want to think about other ways of getting your good to people. Remember that scary anti-piracy clip at the start of your DVDs which says “You wouldn’t steal a handbag”? Hold that thought for a minute.

Excludable: A good is excludable if you physically have a way of stopping people from consuming it. Back to the apples: if they’re in my fridge, inside my locked house and you don’t have a key, you can’t have my apples. (Yes, yes, you could break in. The law provides additional protection here, but ultimately there’s probably a better way for you to obtain an apple than breaking into my house, right?) Knowing whether a good is excludable tells you whether you can use the market to distribute the good. If your good is excludable, go ahead and sell it on the open market; if it’s not — you might struggle because you can’t stop people from just taking it for free.

So. Most of the goods you deal with in your day-to-day life are both rival and excludable. We call them pure private goods. But there’s a few things here and there that aren’t as clear-cut, and this is where it gets a little messy.

Uninhabited islands could be flashpoint in Sino-Japanese conflict

Filed under: China, Japan, Military — Tags: , , , — Nicholas @ 07:35

A group of uninhabited islands south of Okinawa have the potential to increase tensions between China and Japan. The Senkaku island group is subject to overlapping claims from China, Taiwan, and Japan:

Japan reports that, for the third time in the past 18 months, Chinese warships have been spotted south of the Japanese Island of Okinawa. This time, it was two Chinese submarines, running on the surface. That had never been seen before, in the area near the Senkaku islands (which are claimed by China, Taiwan and Japan). The Senkakus are eight uninhabited islands, which in the past were only used occasionally by fishermen. The Senkakus are 220 kilometers from Taiwan, 360 kilometers from China and 360 kilometers from Okinawa (which is part of Japan).

[. . .]

Five years ago, a Chinese oil drilling platform, in disputed waters halfway between China and the Japanese island of Okinawa, began producing natural gas, despite ongoing negotiations over who owns what in that patch of ocean. The Chinese spent two years building that platform, in waters claimed by Japan. A second platform was later built, as well as an underwater oil pipeline for both platforms. China regularly sends groups of warships to patrol the area, to underline their belief that this bit of water is under Chinese control. Japan would probably win any naval war with China, but since China has nuclear weapons, and Japan does not (at least not right now), such a war could go seriously against Japan. This has been brought up in Japan before, and it is feared that the issue may lead to Japan secretly, or openly, building nuclear weapons (which it could certainly do, and quite quickly.)

I’m certainly hoping that this is just speculation on the part of Strategy Page (the bit about nuclear weapons), as territorial disputes over islands do have a way of getting out of hand (see Falkland Islands, for example).

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