Tuesday assorted links

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#3 is written by the founder of a company that makes tablet games for children. You should indicate that.

Bingo.

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That's called an "ad hominem".

Really? Since when is providing accurate information that directly relates to the subject (one assumes that this is the case) 'ad hominem'?

If somebody had written the person is an alcoholic gambler who has committed multiple frauds, etc., etc., that would be ad hominem. In contrast, pointing out that someone supporting a political position is a member of a political party that also supports that position is never ad hominem.

I agree with Willitts. The OP should try to explain why the argument/study is wrong vs. dismiss the argument/study because of the identity of the person who presented it.

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the history of Western Civilization can be described in three phrases:

"in defense of prayer time" (God grants our prayers and that is the formation of good and successful life among our fellow human beings)

"in defense of reason and philosophy" (spend some time where reason and philosophy are despised and you will understand why it is nice to be somewhere where reason and philosophy are generally respected, trust me on that, my friends)

"in defense of kindness to creatures who have not known kindness"
(if you don't get that you are a barbarian and you need to repent and become a better person)

"Screen time" is not really even in the top 200

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Good points. It is important for America that we keep trying to make sense of the world around us.

Sometimes I wonder if we haven't been beaten at our own game.

Brazilian billionaire Mr. Hang, a good friend of President Captain Bolsorano's, Brazil's leader, built a Statue of Liberty replica in Barra Velha, a city in Brazil's Southern Region. Said statue is 40 inches bigger than the original one, which is located in New York City.

I wonder if it isn't a bad sign of the times that one much cherished American patriotic symbol has been dwarfed by Brazilian people's uncompromising dynamism and unforgiving can-do spirit.

As an American taxpayer, I think we should follow Brazil's lead and built an even bigger Statue of Liberty replica.

Like Mount Rushmore, the Rio de Janeiro Jesus statue looks embarrassingly small when you get close up.

Since the Brazilians have a statue that honors USA, and it is bigger than the real thing, does that mean the Brazilians place United States above God?

Not at all. Brazil's President Captain Bolsonaro's motto is, "Brazil above everything; God above everyone".

Mr. Hang likes the United States and decided to create a giant replica of the Statue of Liberty as a homage to the United States.

My point is, Brazil's indomitable spirit showed us up. I feel humiliated and demoralized. I feel unhappy with our regime.

One must remember Rio de Janeiro City's that Christ the Redeemerwas elected one of the Seven Wonders of the Modern World. It beat the Acropolis of Athens, Angkor Wat, the Statue of Liberty and the Eiffel Tower. It was built more than 700 meters above sea level. It s pedestal is 8-meter high. The arms stretch 28 metres. It is an unparalleled work of art, skill and courage.

The Acropolis and Angkor Wat are not wonders of the *modern* world.

They exist innthe modern world.

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The statue of liberty was an import from France. Not only that, it was a gift. Thousands of Americans may well have been capable of designing and erecting such a monument and could have been compensated for the effort. But no, perhaps a few citizens received some trinkets during its construction and subsequent maintenance, but most of the fees for design and labor went into the pockets of cheese-eating surrender monkeys, just like it does when Americans purchase Sino-running shoes and cheap plastic kitchen gadgets. Free stuff is even worse than cheap in international trade.

It is sad. I really don't know what to say. Our country is being hollowed out by nefarious powers.
As we worship the false god of untrammeled free trade, our communities become ghost towns, our infrastructure decays and we are left behind to eat bold parvenus' dust.

While Brazil can afford to build a giant replica of Lady Liberty, our schools fail. While Brazil can afford to build a giant replica of Solomon's Temple, we barely can replace the World Trade Center. That is not my America.

Eu sou **corno**!

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#2 In much the same way people joke that General Motors is a health insurance company that just so happens to sell cars, it appears that theaters are convenience stores that just so happen to show movies.

#4 Niall Ferguson has been oft-quoted saying 'Rule of Law' is among the 'killer apps' of most Western style and successful civilizations. But Americans added a sub-clause to the warrant...we'll be ruled by law but if your laws are stupid and you're stupid be our guest to enforce them while we de-facto take a crap all over your 'best intentions'. From the Boston Tea Party to this, it's good for a great chuckle as well as an acknowledgement we yet remain and unconquerable people.

Laws are made to be broken.
Stupid laws are made to be completely ignored.

Great, please give us a list of the stupid ones. You know, they ones YOU deem stupid.

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Actually that's the exact opposite of what laws are made for.

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Linking back into the original study
The same OECD/EUIPO study found that while 95% of counterfeit goods seized by customs officials were protected by trademarks, only 2% were counterfeits of patent-protected goods.
This means that although there is some overlap between our estimates of the value of counterfeit goods and
patent infringement, the vast majority of patent infringement is unaccounted for in this report. We are disappointed that there is a paucity of reliable data on the economic costs of patent infringement,
but from anecdotal evidence we are led to believe the costs are substantial.

----
The software patents are bogus. Patent cooked bread by adding a micro-processor? Crap like that.

As fart as software theft, it more likely software improvement. There is little value in software except for the geeks, except it is very well logically organized, mostly a skill the Chinese are better at then us.
Or pharma, adding an inert ingredient, relabeling and renewing a patent.

I discount much of this. The intellectual property is in the skill of delivering a product, the Chinese do it, we sit around and demand government guarantees.

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Pretty crazy numbers at #5, and coincidentally Niskanen generally critical of the idea of IP theft.

I sense there is a middle to be split.

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5. The value of IP is greatly exaggerated, and for good reason: the easier it is to avoid U.S. taxes. How could Apple et al. apportion so much income to file drawers in tax havens if what's in the file drawers has limited value. Trade, IP, and tax avoidance are the peanut butter and jelly of today's economy. Of course, tax avoidance is music to the libertarian's ears.

I don't doubt that China firms copy product design of U.S. firms, but I also don't doubt that U.S. firms copy product design of U.S. firms. Indeed, the very concept of patents is anti-capitalist. Firms are supposed to compete on price, not some hidden product differentiation that is more imagined than real, with imaginative patent lawyers facilitating the scheme. People buy Apple products because they believe Apple products are different (after all, Apple's ad slogan was "Think different") not because they are. The good news is that China firms won't be copying Boeing's product design.

This is a terrible appraisal.

How many drugs would be ushered phase 1 through phase 4 clinical trials if a generic producer could immediately jump on the bandwagon without shouldering the massive cost to bring drugs to market?

Approximately zero.

Tax avoidance, talk about missing the forest for the trees.

Worse, than that, is if patents didn't exist or couldn't be enforced, companies would implement trade secrets to a much larger degree. Engineering knowledge would be actively siloed and companies would aggressively enforce draconian NDA's.

An integral part of the patent process is publicly disclosing your patents and filing it with the patent office. So that all of mankind automatically gains the knowledge and is free to use it when the patent period expires.

That's not how it works. China doesn't really enforce IP, they are a rational society, but where's the NDA's? That's right, in a society where IP is not considered real, NDA's aren't considered real either. The patent system is holding back America while China marches forward.

I can think of another alternatives to NDAs - patronage. Aka "It doesn't really matter if you know, because you won't be allowed to compete".

People might not worry about IP / NDAs in a society where they're either a connected, bought in, crony part of state managed industrial growth or not, and if they're not, knowing secrets won't make much difference.

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What often times is stolen isn't a design or raw idea (yeah, how do you appraise that?), it's software. There is a lot of labor and investment that goes into making software bug free, scalable and elegant, and that is the theft of IP that really hurts America.

Of course Professor Cochrane's labor is nearly impossible to steal, and if his work is plagerized it is easy to detect and rectify. So perhaps he has no skin in this game. Yes, Professor Cowen, it is the net position that matters precisely when property rights do not!

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"2. More on movie theatres and popcorn."

There's not much interesting in the first 90% of that article. It just leads to the well known fact that movie theaters don't make much money on ticket sales and that high priced concessions make up the difference.

However, the last part of the article is the interesting point, where they talk about the decline in movie attendance.

"Less than 10% of the US population goes to the movies, compared to 65% in 1930. And those who do go are attending less: In 2018, the average moviegoer paid for only 3.5 tickets, down from 4.9 tickets in 2002."

However, the article fails to identify the culprit in declining sales.

"Consumers have cited the high cost of tickets and concessions as a main deterrent to seeing a movie."

The high cost hasn't changed over the last 20 years. What's changed is the availability of high quality & large TVs. The difference has narrowed between the viewing experience at home versus in the theater.

Also, rude movie goers with cell phones have dropped the quality at theaters. For the last 5 years, it's been rare to go to a movie theater without some other patron either talking on the phone during the movie or having it on and lit up.

Even the fact that movie theater attendance is declining isn't news. The rise of the home theater and easier access to content (like through Netflix, not to mention direct competition from companies like Netflix offering unique content) has been steadily eroding the market share of the theaters. That's why theaters have been forced to invest in super-luxuriant seating and things like IMAX, to compete.

The next step will be to adopt ticket price differentiation based on movie freshness and quality/demand, but only small steps have been made in that direction so far.

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More generally, more things competing for your entertainment $$$

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I liked the popcorn article; it provided the most plausible explanation I have heard to date of the pricing of concession items.

Agreed. But if popcorn is that important to their business model, then why is it so awful?! (By awful I generally I mostly mean cold.)

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#7...Hassett might well be a nice guy, just muddled. On the other hand, Trump firing John Bolton, who is not...well, here's some praise of Trump from one who despises him.

#7?

#7...I have a problem with numbers and writing in these boxes. I meant number 5. Even after I saw your comment, it took me a bit to figure out what you were referring to. Thanks.

"I have a problem with numbers and writing in these boxes. "

This site has a poor commenting system.

True!

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"5. Intellectual property and the trade deficit (it’s the net asset position that matters!)."

That seems to be a poor article by Cochran.

First he uses the world wide number of $200-500 billion and applies it all to China. That's obviously absurd. Obviously China is not responsible for 100% of all IP theft in the world, though the article does state that China is responsible for roughly 50% of counterfeit goods imported into the US.

"Maybe we would like to hold lots of Chinese stocks, bonds, or government bonds rather than buy more boatloads of goods? ... If we bought worthless assets, bonds that default, or stocks whose legal rights evaporate, then, well, we're back where we started."

Or maybe it would come out of the current profits and reduce the amount of US bonds the Chinese are buying?

"One way or another, the only way that China can properly pay for intellectual property, is to put more stuff on boats and send it to us. Paying for intellectual property must increase the trade deficit."

Why? China takes all those excess dollars (profits) and buys US Treasuries. Currently China's holdings of US bonds are roughly $1.2 trillion.

It would seem that just paying for US IP instead of stealing it would just result in more US exports and a narrowing of the trade deficit. Cochrane doesn't actually make a good case (or any case) for why this "must increase the trade deficit.".

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No shock that theaters survive thanks to drinks and popcorn -- but I was surprised the distributors' take is so high. No wonder movie studios send people into theaters to count actual attendance -- they don't trust theater owners to fork over that 70 percent.

At least with movies you don't have to pay for parking. Sports teams really have a racket there.

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1) Boy she looks great for 90. That was a pretty detailed report, but did I overlook some mention of George Soros, Daisy's notorious brother-in-law? Odd detail to leave out, unless I missed it.

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#2 Either Ben Thompson or 25iq once had a good piece on why the movie studios capture close to all of the surplus of movie tickets. Same reason the NFL makes billions from the TV networks.

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#5

Cochrane wrote:

"Well, suppose China were to pay up, and pay the $200 to $500 billion a year in royalty payments. Where would it get the money from? Hmm. It would have to sell us an additional $200 to $500 billion worth of exports, that's how. The trade deficit would have to increase."

Perhaps I'm not up to date on how the trade balance is calculated, but I'm under the impression that the effect of the above on the trade deficit would be nil. If China were to actually pay, say $500 billion, for that intellectual property and would pay for it by exporting to the US $500 billion of additional goods, I would think the official sale of intellectual property would be considered exports and the $500 billion in physical goods would be considered imports. It's a wash. What am I missing?

I couldn't follow the logic in that article by Cochrane. It made little sense.

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That's the point. China could only "pay" for that IP by stealing more jobs from American manufacturing workers. Clearly, therefore, it's not in America's interest to make China pay for that IP, because it will only result in Americans having more Chinese money to purchase Chinese products with. We want to force them to buy AMERICAN products.

" China could only "pay" for that IP by stealing more jobs from American manufacturing workers. "

China runs a massive dollar surplus. They could pay for most or even all of the amount by reducing their US Bond purchases.

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Huh?

No, the point is the forced transfer of every successful R&D project and proprietary software as the entry ticket to selling in the Chinese market.

Its a devil’s bargain that ultimately results in lowered R&D spending, less business investment, fewer true new products, and arguably a slowdown of the entire technological frontier in the long run. Only Trumpian idiots care about the trade deficit, which is a function of saving ratios.

This is a Pareto local max that’s horrible for everyone. And it IS a local max. It’s terrible but stable.

Unsurprisingly there’s an analogy in meatspace economics.

How high is business investment/capital formation in countries with zero respect for property rights? Who builds the factory when the local “rebel” group/gang can burn it down?

There’s an “anomaly” in the capital markets, Hazel. Capital flows from low capital countries to high capital. Makes no sense, right?

Except that it does. One set has rule of law and property rights. The other doesn’t.

Let’s not turn the world’s framework for property rights into Somalia’s version.

Do you have concrete examples of Chinese companies “stealing” IP and profiting from it instead of a foreign company?

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Wow, Hazel, *you* really did miss *my* point. Cochrane appears to me to make a simple and fundamental mistake of accounting and arithmetic. When China is forced to pay $500 billion for IP that has until now been previously stolen, this *adds* $500 billion to US exports. When you steal goods, nothing is exported as far as the trade account is concerned. When this is balanced (eventually) by exporting $500 billion of physical goods, the net result on the balance is zero. It does not add to the trade deficit as Cochrane clearly and simply claimed. US IP *is* a US product as far as the trade accounting is concerned. Cochrane by no stretch of the imagination has made the argument about jobs or the "point" that you are trying to attribute to him. Cochrane makes this statement twice and even puts it in italics for emphasis(!):

"Paying for intellectual property must increase the trade deficit."

So, once again, in light of the above "must it"?

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And, as to your “point”, I don’t think that’s right either. The difference between the two scenarios is that US consumers get $500 billion in additional goods consumption without any effect on the trade deficit. Because this consumption is additional it does not need to take any jobs from US workers than the status quo . Chinese workers need to work a bit harder!

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#2 "Theaters use it as a way to price discriminate" seemed a better explanation than "because they don't make much money on tickets to see the movie."

Because even if they did make lots of money from ticket sales, if they could also make lots of money from concessions, why wouldn't they do so?

It's hardly a secret that ordinary food and drink items are costly at Disney and other theme parks, even though there's also plenty of price discrimination (with promotions, internet sales vs at-the door, etc.). And perhaps the Disney theme parks wouldn't be profitable without concessions, but, isn't it more likely that the reason why they charge $5. for a can of soda from a vending machine is simply because ... they can?

With the quality of home viewing getting ever-better, what the theater really has to offer is the experience of viewing as part of a larger audience. And if waving cellphones and yap-yap-yappers and youthful seat-kickers are ruining that experience for many, then perhaps the theater operators need to figure out how to discourage these behaviors?

Other than by just turning the sound up ever higher to cover all the extraneous and sometimes annoying sounds from the audience.

"Because even if they did make lots of money from ticket sales, if they could also make lots of money from concessions, why wouldn't they do so?"

+1, there's some truth to this. In venues where they can easily control whether you bring in food, they tend to ban outside food and charge high prices. In venues where it's hard to control access the prices are much cheaper.

It's noteworthy that the drive-in movies we go to have much cheaper concession prices. The "theater" facility costs are far cheaper so the price of tickets can cover those costs. And of course, people can easily sneak in food and drinks.

Also, the school or city related sporting events have cheap prices. If they tried to increase the costs, more people would just bring their own food.

Belmont, Saratoga and some other race tracks let you bring in all the food, drink and booze you want, as long as there are no glass bottles or containers. You can roll in a picnic spread for 30 people if you'd like. The concession stands are still pretty overpriced. Parking and admission are cheap, but of course they're skimming 15 percent off the top of the pool in every race to fund the operation.

"The concession stands are still pretty overpriced. P"

By how much? I would expect somewhat higher prices for the convenience, but not the $8 bag of popcorn markup you see at a theater. For reference, I believe the drive in I talked about had a $3 bag of popcorn.

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#2 David Friedman wrote about this exact thing in Price Theory: An Intermediate Text in 1986.

http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_2/PThy_CHAP_2.html

The author doesn't actually answer the reason till Chapter 10.

http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_10/PThy_Chapter_10.html

Of course the answer is discriminatory pricing.

Also, the Chapter 2 section is wrong. The author writes:

"There is an obvious explanation--the movie theater has a captive audience. While it is obvious, it is also wrong. "

The correct answer is that the theater can implement discriminatory pricing when they have a captive audience. In this situation you need both. Without a captive audience, the theater would have to lower their price.

Imagine a case of a theater with a popcorn vendor on the street in front of it selling popcorn at much lower prices. Without any kind of restriction, customers could just step out the door, buy the popcorn and walk back to the movie. Or they could buy the popcorn before entering, buy their ticket and go watch the movie. Clearly the Ban on bringing in your own food (captive audience) is critical.

Judging by my travels there’s another equilibrium where theaters are clean, classy (no sticky floors or obese kids spilling soda and candy) and have full service bars with high quality real food and good bartenders.

Tickets are slightly more expensive but are a weird mix of a theater type product and the traditional movie. Often they do double features. I assume this doesn’t take off in the US due to corruption and fiefdoms in alcohol licensing.

"I assume this doesn’t take off in the US due to corruption and fiefdoms in alcohol licensing."

It's probably more a function of the 21 year old drinking age.

That being said, a portion of theaters serve alcohol and the number is rapidly growing.

https://www.amctheatres.com/drink-specials

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#2 ZACHARY CROCKETT states, 'Less than 10% of the US population goes to the movies" If he read the article in his own link carefully it he would discover it was a weekly figure.

According to the stats I've seen, over half of American adults. 54%, see more than 1 move a year:
https://www.statista.com/statistics/264396/frequency-of-going-to-the-movies-in-the-us/

Obviously, people don't go to movies as often because they can watch almost anything at home on a fairly large screen.

I've been taking one of my daughters to Studio Ghibli films this year every month and we're having a great time even though we could save money and watch them at home. I would hate to lose the experience of going to movies.

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#2. Game of Thrones proves you don't need movie theaters to develop a franchise of blockbuster type films. My guess is over time movie theaters are going to die off and only a few will survive offering "classic" movie going experiences (and playing classic films) for a premium. Like the art-house film places. Only they will stop showing new releases and just show classics to an audience that wants to indulge in some nostalgia.

Hazel,

I think you may be missing the “just an excuse to get out of the house” market. Same with professional sports. Sure you can view it better from the 75” 4K TV in your living room. But sometimes what you want is, “Hey honey, Bill invited me to the Steelers game this weekend.” “That’s Great dear. You guys have fun.”

While the just get out of the house movie market is much smaller than it was in the 30s - it’s still a decent size.

Moviegoing, like watching sports live or going to a music show, is enhanced by having others around enjoying what you are enjoying. Funny movies are funnier in a room full of laughing viewers, action movies are more fun with people around you cheering (and on a big screen in surround sound), etc.

Plus, it's a classic place to take your date. Movies aren't going anywhere.

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2. Nothing new at all. Written about hundreds of times. The "nut" is how theaters stay open.

The question I've never seen written about is how distributors get to take so much of the door. While theaters do have monopoly rents from the "captured" market, the distributors have what appears to me to be a monopoly that violates antitrust laws.

I've noticed the few times I go to movies with the family that they dont even care if you bring your own treats in. When I was younger, they'd practically frisk you. I've also heard that they dont care if you see more than one movie, although this feels like stealing to me. Given the jointness of supply, it makes sense to not enforce doubling up.

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3. sure , some nuance and discrimination as opposed to blanket prohibitions might be warranted; baby v bathwater etc

yet something about the author makes me want to dig deeper past his hand-waving away of studies regarding inherent harm of screen tech and structural harm of many apps and games

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#1 What type of person tells her guests the color to wear at the party...and, to top it off, wears something very different herself.

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TC any words of wisdom, shock, or support for Netanyahu announcing that if elected, he is going to annex all Israeli settlements in the West Bank in coordination with Trump? What until the NYT Op-ed winds decide that one?

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#5 The question explored is not even wrong. International trades are tracked by the antiquated "Harmonized System Codes" which are mainly on physical goods and services. However, intellectual property is an intangible thing that is neither physical good nor specific service actually separately rendered which has an actual HSCode. IP payments might affect balance of payment (which incudes financial transfers) but not balance of trade.

https://www.crowell.com/files/The-Customs-Treatment-of-Royalties-and-License-Fees-with-Regard-to-Imported-Goods.pdf

"As a general matter, the term ‘royalties’ simply refers to a means by which consideration is paid for the right to use an intangible property. As such, royalty payments themselves are not inherently dutiable or not dutiable." (and so has no HSCode).

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I and everyone of my near acquaintance loved the doggie bags. Thanks!

we also +1!
the doggies/doggieduffels

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