Archives for Markets & Economics
Facebook needs a salary field
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We really seem to be moving towards a more personally transparent world and, as long as it’s voluntary, I’m not sure that’s a bad thing. I know I certainly share salary information with peers in my professional circles. As an economist quoted in the article points out, how else are you going to determine the market price for your talent? “Robert H. Frank, an economics professor at Cornell, said that an open flow of information is deemed crucial by young professionals who think of themselves as free agents, not company men.”
Finding out that someone with a similar job is making more money than me isn’t embarrassing, it’s a godsend. It tells me my skills are valued and that I’m in demand. It can also highlight options. I know lawyers who graduated with me who are making close to double my salary, but are in the office twice as much as I am. Knowing this is valuable information for both of us.
Cuba’s precipitous slow opening
Certainly not anything about which to get your hopes up, but since Raul Castro took over the reins in Cuba, there have been definite signs of opening on the island. The Sopranos announcement (below) really hit it home for me. Here’s the movement I’ve been observing over the past few weeks:- March 18 - Farmers allowed to buy their own supplies: “Agricultural sources said Cuba would soon open stores for farmers to buy tools, herbicides, boots and other supplies for the first time since the state took control of the country’s shops in the 1960s.”
- March 29 - Cuba allows more cellphones: “Cuba announced Friday that it would allow ordinary citizens to purchase cellphones, which up until now have been set aside for Communist Party elite or those with connections.”
- April 1 - Cuba Ends ‘No Cubans Allowed’ Hotel Policy: “President Raúl Castro’s new government will begin allowing Cubans to stay at hotels that were previously set aside for foreign tourists, the latest in a string of moves liberalizing internal restrictions on Cubans. In other changes, Cubans will be able to rent cars and buy cellphones, computers, microwaves and DVD players. However, with state salaries of about $20 a month, most Cubans will not be able to afford them.”
- April 5 - Cuba giving land to private farmers: “The government is preparing for a “massive distribution of land,” Orlando Lugo, president of Cuba’s national farming association, said last week. Private farmers have begun receiving land for the cash crops of coffee and tobacco, and will soon be able to lease state land for other crops.”
- April 11 - Cuba: Wage Limits Removed: “Cuba is revamping the state wage system to create more incentive by allowing workers to earn as much as they can[.]”
- April 12 - Cuba to Allow Thousands to Own Homes: “Thousands of Cubans will be able to get title to state-owned homes under regulations published Friday, a step that could lay the groundwork for broader housing reform.”
- April 21 - Sopranos and Grey’s Anatomy to be Broadcast: Tony Soprano is headed to Cuba because the go-ahead has been given for broadcasts of the prize-winning drama “The Sopranos” to begin on state-run television on Tuesday evenings, Reuters reported, citing the Communist youth newspaper Juventud Rebelde. And on Thursday nights, “Grey’s Anatomy,” about the lives of doctors working in a hospital, will be broadcast.
I knew that Raul Castro has always been a fan of the Chinese model, but these are relatively radical reforms coming as quickly as they are. In one sense this is good news for Cubans who will have a little bit more freedom and hopefully prosperity, but on the other hand it reduces the chance that there will be any democratic transition. I can see Raul opening enough to make the island into an authoritarian capitalist system without engaging in any real political reform.
NotchUp.com Arranges Pay for Job Interviews. If you have a gold-plated resume and are beating recruiters off with a stick, here’s a new twist: Companies will pay you to talk to them. You set the price. I love markets.
It’s @319 and I should go to bed
Swatch Internet Time. Reminds me of the exciting times in the late 90s when it truly started becoming apparent that distance is meaningless. Wikipedia:
Internet Time is a concept introduced in 1998 and marketed by the Swatch corporation as an alternative, decimal measure of time. … Instead of hours and minutes, the mean solar day is divided up into 1000 parts called “.beats”[.]
The most distinctive aspect of Swatch Internet Time is its notation; as an example, “@248″ would indicate a time 248 .beats after midnight … or 4:57:07.2 UTC.
Despite the ridiculous trailing dot and the fact that there were no units smaller than a .beat, his eminence Nicholas Negroponte endorsed the system: “Internet Time is absolute time for everybody. Internet Time is not geopolitical. It is global. In the future, for many people, real time will be Internet Time.”
A testament to the success of this marketing ploy: “The clock applet in the GNOME desktop can be set to display time in this manner. PHP’s date() function has a format specifier ‘B’ which returns the Swatch Internet Time notation for a given time stamp. It is also used as a time reference on ICQ[.]”
France’s high court ruled today that Amazon must stop offering free delivery of books. “Retail prices, particularly of books, are tightly regulated in France.” Not charging for delivery meant that Amazon was offering a discount above the allowed 5 percent. If you’re unclear how this is terrible for consumers and an insane public policy, you can read about price controls here.
Why is Southwest leaving money on the table?
Southwest Airlines recently changed its famous seating policy by which I’ve always been fascinated. If you’re not familiar with it, what happens is that you are not assigned a seat when you purchase a ticket. When you check in at the airport (or online up to 24 hours before the flight) you are assigned a group: A, B, or C. At boarding time the groups are called in order and passengers seat themselves wherever they like. The change now coming into effect is simply that in addition to a group assignment, passengers will now also get a position within the group (i.e. A15, B32, etc.). Still no assigned seating, though.
The change is an improvement. What would happen before is that about an hour or more prior to departure, a line would start to form in front of the gate. Even if you had a group “A” ticket, you had an incentive to be the first in the group. The incentive was even stronger for “B” and “C” passengers because the difference between the first in B and the last might be having to sit in a middle seat or not. The new assigned line position will mean that people will now likely start to queue up about five minutes before departure, sparing us a waste of time.
Now, I think I understand why Southwest wants a no-assigned-seat policy. It creates an incentive for passengers to line-up in an orderly manner and board quickly (in order to get a good seat). As my colleague Drew pointed out to me, that is an airline’s dream. What I don’t understand is why Southwest leaves money on the table by refusing to sell to passengers the order of boarding. There’s clearly a market for this as websites abound that will charge you a fee to automatically check you in at the first possible moment (and therefore get you in the “A” group). If you have an idea why, let me know.
Me in the WSJ: Failure to communicate
I promise to talk about something different soon, but for now let me plug my op-ed in The Wall Street Journal today about first responder communications. You can read it here (no subscription required). The gist:Offer Cyren Call, Frontline and others the opportunity to bid on spectrum already restricted to public safety use. That would allow firms to build national interoperable networks without affecting how much spectrum will be available for commercial use. At the very least, if spectrum now slated for commercial auction must be used, the government should identify an equal amount of existing public safety spectrum that can be auctioned commercially once the new public safety networks are built.
Whatever path we take, we should ensure that at least two competing networks are built. This works well for wireless services such as cell phones; subscribers to one service have no trouble speaking to subscribers on another while prices are kept low.
A private-sector national network for public safety first responders is not an untested idea. In the U.K., the national network that supports police, fire and over a hundred other public safety services is owned and operated by O2, a private firm. We can do even better, using competition to spur the innovations that monopoly rarely provides.
Media and neutrality regulation: contradictions?
Susan Crawford asks a good question: How does one reconcile being both “for” network neutrality regulation and rules against media concentration?To be “for” network neutrality, it seems natural to have the view that the internet is displacing many prior forms of communications modalities — the press is in a free fall, people are watching much less broadcast television, etc. — and so it’s even more important to get internet access policy right and avoid gatekeepers. You’d want to talk about the empowering, emergent communications taking place online.
But to be “for” limits on media ownership, it may be necessary to argue that nothing much has changed. You have to claim that broadcast and newspapers control news and culture, and so it’s important to avoid more consolidation. The internet isn’t changing the local news picture, you’d have to say, and so its existence doesn’t change the media landscape. Blogs aren’t legitimate alternative news sources.
One logical response might be that big media does control information and culture despite the emerging competition of the net and precisely because of this should we have neutrality regulations to protect the fledgling voices. Media ownership rules would also be necessary until the emerging competition on the net actually serves as a check on concentrated media. That’s just me thinking out loud, but I’m sure it’s not too off the mark from the argument we’re likely to see. What I always want to know, and what is rarely made clear, is how much competition is enough to make regulation unnecessary in either context.
Guardian: “Nearly a century after it was founded, Israel’s first and most famous kibbutz has voted to give up its early socialist ideals and to privatise itself.”
What congress can do about interoperability
Yesterday I explained that in my view first responders don’t need more spectrum to address their interoperability problem, but instead a different approach to using the spectrum they already have. So if Congress shouldn’t allocate more spectrum for public safety, what should it do to address the problem?Cyren Call is absolutely right about a lot of things: That we should opt for national networks, rather than 50,000 individual and incompatible radio systems for each locality or agency. That everyone benefits when public safety spectrum is shared with commercial users (as long as first responders have priority). That given the opportunity, the private sector will build public safety networks that first responders can subscribe to. Where Cyren Call goes wrong is in insisting that we need new spectrum to achieve this.
What Congress can do is very simple. Open up spectrum already allocated for public safety and allow private companies to build networks on that spectrum. Allow the FCC to assign spectrum allocated for public safety to commercial carriers (like Verizon or Cyren Call or whoever) directly. Require in the licenses1 that the carrier build a network up to public safety specs. Allow the carriers to sell excess capacity to commercial users, but ensure that first responders have priority. Voila, commercial provision of public safety communications. Don’t want to stop there? There’s more Congress can do. Continue reading this post »
First world microloans
Awesome, awesome, awesome. The WaPo reports about Prosper.com, a site that connects individuals who need to borrow money with individuals who have money to lend. God, I love markets:Lenders, who can finance small pieces of many loans, get a chance to earn higher returns than they might find elsewhere, but it’s not simply a numbers game. They get a borrower’s story, how much money they want to borrow, the interest rate they’re willing to pay, and the reason they need the money, along with monthly income and expenses. Often, pictures of borrowers, their dog or their children accompany the pitch.
According to the story, in one year the site has originated about $33 million in loans and less than 1 percent of its loans have defaulted.
Think diffident
I have a new article up at American.com on Apple’s controversial $1.99 charge to upgrade consumer’s Wi-Fi cards. Snippet: “The rule that made Apple’s mess predates Sarbanes-Oxley—but Sarbox’s stiffened penalties may well have changed Apple’s calculus. What was previously an accounting principle that could have, in a special circumstance like this one, been benignly neglected with the use of an explanatory footnote, the Act now makes rigid. The possible criminal penalties that can now attach to any unusual accounting mitigate the incentives to account for things elegantly, when the elegant way of keeping track of things requires some added explanation.”For rent
Jeremy Lott writes in the American today that as far as he’s concerned renting beats buying a home–even at his 30ish age. This is especially interesting to me because, approaching my 31st birthday, I’m beginning to consider buying an apartment or condo. His argument is mainly one of quality of life: freedom from debt means greater freedom in one’s personal and professional life. That I understand and appreciate.What I don’t get is this statement: “Home loan payments are usually structured so lenders get double their money back over a 30 year period. So a $300,000 house with a minimal down payment will cost you $600,000. The interest is deductible from your taxes but it still seems a hefty price to pay.” If interest is deductible, then you’re just paying $300k, and this objection is a non-starter, right? What am I missing? I really want to know.
American entrepreneurship
From today’s WaPo: “About 25 percent of the technology and engineering companies launched in the past decade had at least one foreign-born founder, according to a study released yesterday that throws new information into the debate over foreign workers who arrive in the United States on specialty visas.” Just the wealth created by Sergey Brin (Google), Jerry Yang (Yahoo!), and Steve Chen & Jawed Karim (YouTube) is astounding.Blockbuster Lets Netflix Customers Rent Movies From Stores for Free
According to the WSJ: “Blockbuster Inc. is letting subscribers of rival Netflix Inc. rent DVDs free from Blockbuster stores as part of a holiday promotion. The Dallas DVD rental chain said Tuesday Netflix members can exchange the tear-off address flaps from the signature red Netflix envelopes for free rentals in its stores. The promotion runs through Dec. 21.”Guarding my marginal product on election day
As a resident of the District of Columbia, I am bereft of any reason to vote. Not only because I have no real representation in Congress (I love that the election is largely held to fill fake posts), but also because the races on the ballot are not competitive. So, to make myself feel better, here are some reasons why the rest of you shouldn’t vote either.- Your vote will not affect the outcome of the election. Read Tullock and Buchanan to find out why, or, for the Cliff Notes, here’s Steven Landsburg.
- Even if you believe that in a close election your vote might count, consider this. A new study from Stanford finds that “candidates listed first on the ballot get about two percentage points more votes on average than they would have if they had been listed later (flipping a 49 to 51 defeat into a 51 to 49 victory) … the advantage of first place is even bigger — certainly big enough to win some elections these days.” No wonder George Allen can get elected.
- What’s the point? You probably don’t know what you’re doing anyway. Bryan Caplan explains at Cato Unbound that voters are irrational.
Maybe why the Zune comes in brown
From Starbucks Gossip: Dark brown previously had an earthy, utilitarian reputation. Now, in word-association studies, people described brown as “rich” and “robust,” as opposed to “dirt” or “earth.” Color forecaster Leatrice Eiseman says: “Brown coming in a more elegant kind of way can truly be attributed to Starbucks. They literally invented this whole new concept of, ‘It’s not a cup of coffee, it’s espresso.’”Up In Polls, Down On Ballot
According to the Hartford Courant, Connecticut’s senate race is probably closer than polls let on simply because of Joe Lieberman’s poor ballot position as a petitioning independent. Lieberman will be no higher than fifth on the ballot and in some towns could be as low as the sixth, seventh or eighth line. Polls show Republicans backing Lieberman, leaving Republican candidate Alan Schlesinger yet to break 5%. However, “[o]n the strength of Schlesinger’s ballot position alone [at the top of the list], many political operatives predict that Schlesinger will reach double-digits on Election Day.” Elections are fun to watch as a type of competitive sport, but their results don’t necessarily express voter preferences. It’s hilarious to me how seriously people take their perceived civic duty when something as presumably insignificant as ballot position can have such a big effect.Insurers get in tune with the iPod generation
From the (incredibly punny) Independent: Insurers get in tune with the iPod generation: “You can claim on your insurance for records, tapes and CDs but, at least until recently, any compensation request for lost music downloads will have fallen on deaf ears. And a similar attitude will have applied to any claims for cash to replace lost games, ringtones and films. But the record is no longer stuck, for insurers are finally waking up to the iPod generation, offering cover not just for our gadgets but the “intangible assets” held on them. Nationwide [Insurance] has been the trail-blazer, including music and other entertainment downloads as standard in its home contents cover.”Internet Movie Downloads vs Store DVDs - a quick biz lesson
Internet Movie Downloads vs Store DVDs - a quick biz lesson. Mark Cuban, excellent as always, on why media companies are in no hurry to have the online movie business succeed: “Its one thing to allow downloads of yesterdays TV show and create a market and revenue that didnt exist last year. Its another thing to mess with your biggest revenue stream.” Bonus contrarian nugget: “And as far as the perspective of giving users what they want and they want downloads. If we dont offer them downloads, they will find downloads on their own , just as we saw in the music business… Nope. This aint the music business. This aint 3 minute songs that download in under a minute and allow users the option of getting the 1 song they like instead of a package of 10. IF movies were sold in prepackaged albums of 10 movies. Maybe. If movies were 3 minutes in length. Maybe. If watching on a computer or on an Ipod was as good an experience and often better than watching on the smallest TV in the house, maybe. But its not.”-
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This is the personal site of Jerry Brito, a lawyer and writer in Washington, D.C. He’s an academic researcher and the creator of Unclutterer and several other blogs. More »
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