more or less :: explanations for certain observations
4 Mar
21 Jan
So long as the Democrats rule the political landscape in Congress and in the Executive branch, I’m willing to pull out my magical 8-ball to make a few predictions.
Now if you made it this far, you’ll realize that I think I can have most of these crossed off as accomplished in about a month or so. My larger point is that if you expect there to be some great change afoot, you’re probably more wrong than I am.
Sphere: Related Content21 Jan
I ran across a post at one of the companies I like to keep tabs on, Cleversafe. They have an interesting product that allows you to disperse data across a network rather than just simply copying data. This gives the advantage of using far less disk space than you would use by copying data over RAID and several backups. But that isn’t my point.
There was an interesting post in their blog with some informative economic insight that you normally wouldn’t think twice about. In the post, the author notes that back in 1956, a 5MB hard disk drive cost roughly $50,000 or $10,000 per MegaByte.
With the recent announcements of 4TB hard drives on the horizon, the author reflexively does the calculations to arrive at the 1956 cost of the same disk space: $40 billion. That’s right, if you needed 4TB of storage in 1956, you would have… a $40 billion investment. Of course, that is in 1956 dollars. In today’s dollars, inflation adjusted, the grand total a 4TB size of a drive would have cost is:
$302,002,380,304
You are reading that right. If a 4TB hard drive was built in 1956 by IBM, it would have cost you roughly $302 billion in today’s dollars. So what is the lesson? It isn’t that a 4TB hard drive is really worth $302 billion dollars.
There are quite a few different lessons that can be derived from this. For many of us in technology, we tend to take progress for granted. However the technology and PC market is one where we can see how markets really work. Prices are continually driven down by innovation. Think about that – our current computers are yesterday’s “super” computers. Many “super” computers are nothing more than a chain of systems similar to what we have on the desk top now.
The real economic lesson in this story is that while a lot of people complain about the “stagnating wages” of the “middle” and “lower” classes, you can only complain insofar as you are able to ignore progress where prices are constantly driven downwards.
Sphere: Related Content20 Jan
5 Jan
One of my favorite anecdotes that exemplifies unintended consequences is one call “Bootleggers and Baptists”. Wikipedia has a decent explanation.
If you want to skip the link and get the summary it goes something like this:
It isn’t often that you find bootleggers and baptists on the same side of the fence. Consider moral laws that prevent merchants from selling booze on Sunday. Now a baptist would wish alcohol not be sold at all, and especially on the day God rests. Afterall, would you really want drunks out on the road while all of the fine church-going folk are spending time with their families?
The problem that most people miss is that the bootleggers are more than happy to sell alcohol when the churchgoers are busy praying and singing. They could charge a markup specifically because the law does not permit alcohol sales on Sundays.
If you’re not too slow, you might see the bit of the paradox arising. If someone were to challenge the law because it is absurd on its face, you end up with the bootleggers and the baptists on the same side of the voting booth. Bootleggers would end up with very little money and the baptists would lose out on forcing their moral superiority on anyone who doesn’t agree.
A bootlegger therefore has to do very little if the baptists pursue keeping alcohol sales illegal on Sunday. In fact, they will throw as much support behind the baptists as possible if they were smart.
Whodathunkit.
Sphere: Related Content29 Dec
LA Times runs an article where David Axelrod, an Obama advisor states:
Appearing on NBC’s “Meet the Press,” David Axelrod, a senior advisor to Obama, said, “We have to act. Every economist from left to right agrees that we have to do something big in terms of job creation, but we want to do it in a way that will leave a lasting footprint.”
I bet I can think of at least two economists who disagree with Axelrod’s assumption. And there are a host of other economists who disagree, whether they view the Austrian tradition in a positive/negative light.
The problem here is that our new administration is posturing this as a Global Warming-type “scientific consensus” issue that has already been used and beat into the ground. I’m sure Axelrod will start backpedaling and trying to reign in the comment with something to the effect of “the best economists” or the “brightest economists” to properly qualify the statement. Unfortunately, those definitions would be at the sole discretion of Axelrod and only as qualified as Axelrod is to determine who is the best and brightest.
The problem is that we don’t turn to scientific study to determine what the future is. We infer from the data that we have in an attempt to predict, with some reasonable probability, of future events. There is a significant difference. Prediction carries the inherent possibility of chance – the product or outcome of the unexpected is a distinct probability.
With this in mind, an economist’s opinion is only that – the opinion of the scientist. To assume an economist can predict the future with any certainty, which Axelrod appears willing to assume through the “consensus” opinion, is nothing short of malarky. If you believe that an economist knows the future any better than a carnival fortune teller, you are sadly mistaken.
Sphere: Related Content10 Jun
“Fair trade” appears to be a noble assembly of words. We all trade and it should be fair, right? A quote, which I can not adequately attribute to a proper author, was told to me that generally questions the premise of fairness: “Fair? to whom?”(1)
Sphere: Related Content24 Mar
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In a free land, you do not need the permission of the government in order to conduct private business.
Sphere: Related Content16 Jul
I love the “fabulously” wealthy, rich people who earned their stripes working from the ground up to build business empires. The modern business is truly a study in the success and failure of human groups. So it is no surprise to see some wealthy people patting themselves on the back for a job “well” done. And it is no surprise that there are those amongst their very ranks who tend to spank themselves for the wealth they have created and/or amassed over time.
A recent article in the NY Times interviews several business executives considered to be at the “pinnacle” of wealth. There were those who compared their gains to the efforts of the early American industrialists (Carnegie, et al.) while the authors made no effort to diminish these comparisons. The oddity that struck me is how wealthy industrialists of the modern era appear to be largely mixed in their opinions regarding the re-distribution of their wealth. Some feel that they should be taxed more. Others feel they should be taxed less. Yet still others think the current system is just fine.
What I found odd is that Warren Buffet seems to take a conflicted stance. As many books and lore about the guy state: he’s a simple guy who likes simple things who lives a simple life – and he never gave his kids any of his money. None of Warren Buffet’s money is going to his kids – instead he’s giving it all away to the Gates Foundation. The confusing part? He feels that (from my impression of the article) we need to distribute the income after it is earned. Redistribution is essentially a forceful method of taking one’s wealth and giving it to others. In much the same way he wouldn’t give his children any money – they had to earn it independently, why should he give it to someone else? On either hand, you’re giving your money away so what does it matter whether it is your children or others? Neither group (family or government) earned it within the marketplace.
Sphere: Related Content16 Jul
The Baltimore Sun reports: recent fee hikes granted by a royalty review board is knee-capping the bootstrapping Internet radio industry. The recent hoopla over the royalty hikes is causing many casual participants in the marketplace to drop out. So just what are the issues involved?
The Copyright Royalty Board has removed some of the caps on royalty fees. For some broadcasters, the fee increases amount to doubling their dues to the cult of the music industry. In some cases, I can understand and side with the music industry. They are seeking to gain on their investments. But more of my mind and heart fall on the opposite side, with the radiomen.
Music and entertainment are interesting things. In the case of radio, while many stations make money off marketing breaks, or in the case of Internet radio – off of advertising links or banners, etc, radio also does a double service for the music industry. Think about it – the music industry charges you to market their product for them; radio has long been a marketing driver of new music, not the end point on the marketing tool chain.
We have our blessed government who likes to step in and manipulate the marketplace: remove “payolla” marketing dollars from broadcasters hands, regulating radio frequencies to stratospheric price levels for access to airwaves, and other pieces of legislation that is, purposefully or not, keeping people out of radio instead of removing barriers to enter the radio market.
Bands and labels with lesser muscle can not gain traction, even in niche radio, that would put them in spots next to similar and more popular, if not equally talented, artists. Traditional mainstream radio is less apt to take large risks on unknown talent – an area that has been well served by Internet radio. All of the risk falls on broadcasters with little to no risk involved by the music industry. How they think they can cannibalize this marketing channel is beyond me. It makes for stupid business; at the same time, it makes more sense to use ideas such as Creative Commons.
If people ever wonder why I think Steve Albini is a god – here is why.
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