1. Uh-oh. I once appeared on New Zealand TV in a penguin suit, but I would never do that.
2. The reality of jetpack use, including photos and a discussion of injuries.
3. Sectoral shifts, sectoral shifts, sectoral shifts.
4. The economics of the Kindle; best piece on the topic so far.
5. Brilliant post by Simon Johnson; too good to excerpt.
It looks like people at the highest levels of finance have been creating bank deposits to invest in leveraged funds, with everybody involved taking a fee. So the money supply has been expanding with no real goods or services created, while these people have been living at the top of the world, and making political contributions to defend “free-market” principles and keep the whole system going. Why shouldn’t they all be destroyed?
You once appeared on New Zealand TV in a penguin suit??!
S. Johnson concludes
“Derivatives have the potential to create a rent-seeking structure that is unparalleled in human history. No society can afford to allow that kind of financial system to operate. Either we figure out how to make it much more transparent – and amenable to outside review – or the re-regulation process currently in the hands of Senator Dodd and Congressman Frank needs to consider more radical alternatives.”
Although I agree with everything he said before his conclusion, I prefer to rewrite it as follows:
“Large financial entities have shown to have the potential to create a rent-seeking structure that parallels that of government in human history. No society can afford to allow that kind of financial entities to operate. Since the history of government has shown the impossibility of making big government transparent and amenable to a good system of checks and balances, we know that we should prevent the development of large financial entities (BTW, they are usually too close to big government as the hands of Senator Dodd and Congressman Frank have recently shown). The challenge is how to keep the incentives for financial innovation while preventing that development.”
I caught that piece on the Kindle, and I would ask one other question about the backlist decline: to what extent is it due to the increasing efficiency of the used book market? I ask because it’s now very easy to comparison shop for used books online, and Amazon offers used books next to new ones; I wrote about this issue in “I’m not the first or only one to have noticed Amazon.com’s utility.” If a used hardcover copy is available for a few dollars less than a new paperback copy of a book, for example, I will almost always go for the hardcover.
I haven’t seen any good numbers about the issue but would love to hear if you know of any.
Jake — I’ve wondered the same thing about the increased efficiency of the used-book market. Back in the dark ages, you either had to use a book-finder service that would take several weeks, at least, to get you the book you wanted or hope that you’d just happen upon it during your used-book-store rounds.
Of course, now that I have a Kindle, I don’t buy used books any more! Which brings up a point the linked article missed: you can’t pass around (beyond a very small circle) or resell a Kindle version of a book once you’re done with it. So in a sense, Kindles may increase book sales.
Publishers and bookstores are intermediaries.
Any intermediary runs the risk of disintermediation. The risk of disintermediation (and the opportunities for new intermediaries to start) is significantly increased during a time of technological innovation.
It’s the future: live it or live with it.
@Barkley Rosser: Indeed!
Maybe I’ve lived too long in Chicago, but when they won’t tell you something, there’s usually something to hide.
Just be thankful of all the disasters they are preventing that you can never know about!
Oh, wait, that was the TWAT (The War Against Terror) slogan, not the TWERP (The War for Economic Recovery Programs). Oh well, let’s recycle it.
Greg Ransom, whoever is useful will be subsumed. What is odder is that anyone over the age of 18 buys into the “free-market” theology to begin with. Certainly no one making the political contributions — they just wanted deregulation, and easily sold it to a country full of clowns.
#3: I don’t know about all the theory, but it certainly looks/feels like a debt-fueled bubble peaking at the time of a sectoral shift. I don’t really think everyone has suddenly turned to frugality and eschewed wants. It feels like everyone got a plasma TV in every room, then realized they had too many rooms. Inertia would dictate that the plasma TV maker would keep making TVs until the consumer shift slaps them in the face. Why does the music stop all at once for all producers? Aside from a shift in ease of credit, the music has to stop some time, so, why wouldn’t it stop all at once? Because entrepreneurs want to avoid losses, right? But they aren’t booking losses right up until they are. I mean, the banks still aren’t really booking their losses.
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