Paul M. Jones

Depression? Anxiety? Listen to Ed Finkler talk about his experiences. This is a great act of generosity from Ed and well worth your time.

On today’s Very Special Episode of /dev/hell, we talk about Ed’s struggles with depression and anxiety, and how it’s impacted him as a member of the open source community. Yeah, we know, total buzzkill, but this is important stuff. We hope that by talking about it, folks with similar issues will be more likely to seek help.

via Episode 15: Whack Job Central - /dev/hell.

It's not enough that there be no laws against so-called "price gouging. We also have to acknowledge the reluctance of sellers to raise prices when they expect negative customer sentiment afterwards.

There were no laws against price gouging. But the petrol stations knew that every single customer would hate them if they were the only station to let prices rise such that supply and demand came back into equilibrium. And so because the stations didn’t gouge, we were in a terrible equilibrium where everyone’s rational response to the below-clearing price was to hoard, because there was real risk that the stations would run out of fuel. And there was real risk of running out of fuel because of the hoarding. Breaking the hoarding equilibrium would have required a coordinated price hike that both allocated fuel to its highest valued uses and told everyone that there would be fuel available for them in an emergency if they really really needed it. That latter part is crucial – it kills the incentive to hoard.

How to solve that particular problem? Via When the hoarding equilibrium sets in.

When the government delivers something, even in an atrocious and/or wasteful fashion, it gets credit for caring. Take Medicare -- the market could distribute all the health care dollars and services in a far more efficient manner, but then people would have no one to thank.

Markets just work, in a stunningly efficient and yet thankless way. Why?

The problem is one of agency. The agent of a government is a politician whom the people have placed in office for the management of government services. The beneficiaries of this agency are both the people (Food stamps! Auto bailouts!) and the politicians themselves (votes from food stamp recipients). Because the recipients of the goodies see a direct causal line from government to their mouths, they do not see the politician as acting in his own interest (basically bribing voters into keeping him in power). The voter thinks of his vote as a reward.

But who are the agents of the "market?" Businessmen. Their activity benefits the people, as well, of course. But the benefits to the people in the businessman's case are unintended -- his prime objective, about which he is nearly always straightforward, is to enrich himself.

So, "who you gonna trust?" A greedy, selfish businessman whose activities benefit you in a spectacular fashion by accident, or a paternalistic government that takes care of you dismally, though on purpose? Sadly for many, the questions of agency and purpose trump the only metric that really matters in economics -- results.

via Markets or government: Whom do you trust? | WashingtonExaminer.com.

Intense competition by new entrants, who put old companies out of business or force unwelcome and disruptive changes. Microsoft displaced IBM, and Google is displacing Microsoft. Walmart displaced Sears, and Amazon.com may displace Wal?Mart. Typewriter companies didn't invent the world processor, nor did they adapt. The post office didn't invent FedEx or email. Kodak is out of business. Toyota gave us cheaper and better cars, not Ford/GM/Chrysler competition. When the older businesses survive, it is only the pressure from new entrants that forces them to adapt.

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So, where are the Walmarts and Southwest Airlines of health care? They are missing, and for a rather obvious reason: regulation and legal impediments.

A small example: In Illinois as in 35 other states7, every new hospital, or even major purchase, requires a "certificate of need." This certificate is issued by our "hospital equalization board," appointed by the governor (insert joke here) and regularly in the newspapers for various scandals. The board has an explicit mandate to defend the profitability of existing hospitals. It holds hearings at which they can complain that a new entrant would hurt their bottom line.

via You Should Repeatedly Read Cochrane's "After the ACA", Bryan Caplan | EconLog | Library of Economics and Liberty.

Anthropomorphizing the collective – that is, assuming that this mythically single-minded collective possesses a set of ordered preferences that are analogous to a set of ordered preferences of a sort that is possessed and acted upon by each flesh-and-blood individual – and assuming, in addition, that actions by the state faithfully reflect and pursue these preferences, is a never-ending source of deep confusion.

If it is stipulated that Jones and Smith are one entity – that Jones and Smith are to each other much like a person’s left side is to that same person’s right side – then if Jones, say, steals $1,000 from Smith, no relevant harm is done.  Jones and Smith are assured by some furiously typing professor that they “stole” it from themselves.  Smith possesses $1,000 less than before; Jones possesses $1,000 more than before.  Being, by assumption, the same entity – “Jonessmith” – this collective entity Jonessmith bothers itself unnecessarily if it should worry that it might be made worse off if its Jones part routinely snatches resources from its Smith part.

Likewise, if the Jones part borrows money from the Smith part: the furiously typing professor – who sees “Jonessmith,” rather than Jones and Smith – concludes that the Jones’s-part obligation to repay the Smith-part cannot possibly be a burden to “Jonessmith” because, well, Jonessmith is a single entity.  It owes it to itself.  Therefore, concludes the furiously typing professor, it is naive to worry about the amounts of money that the Jones part of Jonessmith owes to the Smith part of Jonessmeith – and, hence, equally naive to worry that the Jones part of Jonessmith might today be borrowing (quaint word here!) too much from the Smith part of Jonessmith.

via Quotation of the Day….

The city left more than a dozen generators desperately needed by cold and hungry New Yorkers who lost their homes to Hurricane Sandy still stranded in Central Park yesterday.And that’s not all -- stashed near the finish line of the canceled marathon were 20 heaters, tens of thousands of Mylar “space” blankets, jackets, 106 crates of apples and peanuts, at least 14 pallets of bottled water and 22 five-gallon jugs of water.This while people who lost their homes in the Rockaways, Coney Island and Staten Island were freezing and going hungry.Warzer JaffTHE GOODS: Would-be marathoners who circled Central Park yesterday were the reason given for not moving some crucial supplies.THE GOODS: Would-be marathoners who circled Central Park yesterday were the reason given for not moving these crucial supplies above.THE GOODS: Would-be marathoners who circled Central Park yesterday were the reason given for not moving these crucial supplies above.see more videosMichael Murphy, of Staten Island, who had no power and no heat, said yesterday, “We needed 100 percent of the resources here.”

This is the most that the best and brightest are capable of? Via New York City Marathon canceled but still has generators and supplies unused in park in spite of Hurricane Sandy recovery needs - NYPOST.com.

The agency appears to have been completely unprepared to distribute bottled water to Hurricane Sandy victims when the storm hit this Monday. In contrast to its stated policy, FEMA failed to have any meaningful supplies of bottled water -- or any other supplies, for that matter -- stored in nearby facilities as it had proclaimed it would on its website. This was the case despite several days advance warning of the impending storm.

FEMA only began to solicit bids for vendors to provide bottled water for distribution to Hurricane Sandy victims on Friday, sending out a solicitation request for 2.3 million gallons of bottled water at the FedBizOpps.gov website.

Hey, instead of bidding on a federal contract, how about you suspend "anti-gouging" laws and let people charge what they want for water? The price incentives will cause people to truck it in by the ton, in hopes of making a profit. Via FEMA Taps Private Vendors to Meet Sandy Victim's Needs.

The basic imperative to allocate goods efficiently doesn’t vanish in a storm or other crisis. If anything, it becomes more important. And price controls in an emergency have the same results as they do any other time:  They lead to shortages and overconsumption. Letting merchants raise prices if they think customers will be willing to pay more isn’t a concession to greed. Rather, it creates much-needed incentives for people to think harder about what they really need and appropriately rewards vendors who manage their inventories well.

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Indeed, many of the problems associated with weather emergencies are precisely caused by the fact that we can’t count on shops to “gouge” their customers. I live in a neighborhood with buried power lines in a building that contains a supermarket on the ground floor. But I nonetheless found myself stuck in line Sunday evening at the Safeway stockpiling emergency supplies just in case something went badly wrong and knocked power out throughout the city. The issue wasn’t that I wouldn’t be able to get to the store in a worst-case scenario, as that I was afraid other people would already have bought up all the stuff. And indeed, by the time I made it, the shelves had been largely denuded of essentials such as bottled water, canned soup, batteries, and Diet Coke. Greater flexibility to raise prices would not only tend to curb overconsumption directly by encouraging people to buy less, it would inspire confidence that shortages wouldn’t arise, reducing the tendency toward panicky preemptive hoarding.

Last but by no means least, more price gouging would greatly improve inventory management. There is a large class of goods--flashlights, snow shovels, sand bags--for which demand is highly irregular. Maintaining large inventories of these items is, on most days, a costly misuse of storage space. If retailers can earn windfall profits when demand for them spikes, that creates a situation in which it makes financial sense to keep them on hand. Trying to curtail price gouging does the reverse.

Some sense from Slate. Via Sandy price gouging: Anti-gouging laws make natural disasters worse. - Slate Magazine.

Residents with license plates ending in an odd number can make gas purchases on odd-numbered days of the month Residents with plates ending in an even number will be able to buy gas on even-numbered days, the governor said.

Specialized plates or those not displaying a number will be considered odd numbered plates, a release from the governor’s office stated.

Instead, let sellers raise prices to something more in line with supply/demand curve. If that means $20/gallon, so be it. The pricing will make sure people know how valuable the resource is, and cause them to re-evaluate their use of gasoline. Then everybody gets at least some of what they *actually need*. Heartless? Hardly.

Via Christie Orders Odd-Even Rationing System For Filling Up Gas Tanks « CBS New York.

Men should not be making health care decisions for women, right?

The life of an 11-week-old unborn baby and the future of his or her 32-year-old mother hang in the balance as a judge considers whether or not to order the woman to undergo an abortion and sterilization against her will.

Elisa Bauer, who suffers from severe mental and physical disabilities attributed to fetal alcohol syndrome, is currently in the final weeks of her first trimester. The second-oldest of six children adopted by William and Amy Bauer in 1992, Elisa has epilepsy and is said to have the mental and social capacity of a 6-year-old.

The circumstances surrounding her pregnancy are unknown. Her family suspects she may have been raped, but it’s possible the sexual encounter that led to her pregnancy was consensual.

via Court May Force Mentally Disabled Nevada Woman to Have Abortion | LifeNews.com.