Results for “licensing” 122 found
Television gets you to spend money
Especially on cars (and other durable goods):
I compare growth in retail sales between areas with and without local TV service over the unanticipated Federal Communications Commission (FCC) Freeze, which halted the licensing of new TV stations from 1948–52. I find three results that corroborate TV’s long-attributed role in American consumerism. First, during the Freeze, total retail sales in counties with TV access increased by 3–4% more on average than in counties without access. Second, the effect of TV was concentrated in the automobile sector, which alone accounted for a third of the total difference.
Here is the full paper by Woojin Kim, via the excellent Kevin Lewis.
Most Popular MR Posts of the Year!
As measured by page views here are the most popular MR posts of 2021. Coming in at number 10 was Tyler’s post:
10. Best non-fiction books of 2021
Lots of good material there and well worth revisiting. Number 9 was by myself:
9. Revisionism on Deborah Birx, Trump, and the CDC
TDS infected many people but as the Biden administration quickly discovered the problems were much deeper than the president, leading to revisionism especially on the failures of the CDC and the FDA. Much more could be written here but this was a good start.
Number 8 was Tyler’s post:
8. The tax on unrealized capital gains
which asked some good questions about a bad plan.
7. We Will Get to Herd Immunity in 2021…One Way or Another
Sadly this post, written by me in January of 2021, had everything exactly right–we bottomed out at the end of June/early July as predicted. But then Delta hit and things went to hell. Sooner or later the virus makes fools of us all.
6. Half Doses of Moderna Produce Neutralizing Antibodies
One of my earlier pieces (written in Feb. 21) on fractional dosing. See also my later post A Half Dose of Moderna is More Effective Than a Full Dose of AstraZeneca. We have been slow, slow, slow. I hope for new results in 2022.
5. A few observations on my latest podcast with Amia Srinivasan
Listener’s took umbrage, perhaps even on Tyler’s behalf, at Srinivasan but Tyler comes away from every conversation having learned something and that makes him happy.
4. The Most Impressive AI Demo I Have Ever Seen
Still true. Still jaw-dropping.
3. Patents are Not the Problem!
I let loose on the Biden administration’s silly attacks on vaccine patents. Also still true. Note also that as my view predicts, Pfizer has made many licensing deals on Paxalovid which has a much simpler and easier to duplicate production process (albeit raw materials are still a problem.)
2. A Nobel Prize for the Credibility Revolution
A very good post, if I don’t say so myself, on this year’s Nobel prize recipients, Card, Angrist and Imbens.
1. How do you ask good questions?
Who else but Tyler?
To round out the top ten I’d point to Tyler’s post John O. Brennan on UFOs which still seems underrated in importance even if p is very low.
Erza Klein’s profile of me still makes me laugh, “He’s become a thorn in the side of public health experts…more than one groaned when I mentioned his name.” Yet, even though published in April many of these same experts are now openly criticizing the FDA and the CDC in unprecedented ways.
UFOs going mainstream or Tabarrok’s view of the FDA going mainstream. I’m not sure which of these scenarios was more unlikely ex ante. Strange world.
Let us know your favorite MR posts in the comments.
Labor Market Participation Rates and Male Incarceration Rates
In our textbook, Modern Principles, Tyler and I write
Another factor that may be important in explaining the decline in the labor force participation rate of less-skilled men is the rise in mass incarceration. The male incarceration rate in the United States increased from 200 per 100,000 in 1970 to nearly 1,000 per 100,000 at is peak in 2007, as shown in Figure 30.18. Incarceration doesn’t reduce the labor force participation rate directly because the rate is measured as the ratio of the labor force to the adult non-institutionalized population. But what happens to prisoners when they are released? It’s difficult to get a job with an arrest record let alone a prison record. In fact, due to occupational licensing, it’s illegal for ex-felons to work in many industries. Approximately 7% of prime-aged men have been incarcerated. Thus, the rising incarceration rates of the past could be causing some of today’s low labor force participation rates.
A recent paper provides some evidence: Felony history and change in U.S. Employment rates, estimates that “a 1 percentage point increase in the share of a state’s adult population with a felony history is associated with 0.3 percentage point increase in non-employment (being unemployed or not in the labor force) among those aged 18 to 54.”
Make TeleMedicine Permanent
One of the silver linings of the pandemic was the ability to see a doctor and be prescribed medicine online. I used telemedicine multiple times during the pandemic and it was great–telemedicine saved me at least an hour each visit and I think my medical care was as good as if I had been in person. I already knew I had poison ivy! No need for the doctor to get it also.
Telemedicine has been possible for a long time. What allowed it to take off during the pandemic wasn’t new technology but deregulation. HIPAA rules, for example, were waived for good faith use of standard communication technologies such as Zoom and Facetime even though these would ordinarily have been prohibited.
The Federal Ryan Haight Act was lifted which let physicians prescribe controlled substances (narcotics, depressants, stimulants, hallucinogens, and anabolic steroids) in a telemedicine appointment–prior to COVID an in-person appointment was required.
Prior to COVID Medicaid and Medicare wouldn’t pay for many services delivered over the internet. But during the pandemic the list of telemedicine approved services was expanded. Tennessee, for example, allowed speech therapists to bill for an online session. Alaska allowed mental health and counseling services and West Virginia allowed psychological testing to be delivered via telemedicine. Wisconsin allowed durable medical equipment such as prosthetics and orthotics to be prescribed without a face-to-face meeting.
Another very important lifting of regulation was allowing cross-state licensing which let out-of-state physicians have appointments with in-state patients (so long, of course, as the physicians were licensed in their state of residence.)
The kicker is that almost all of these changes are temporary. Regulatory burdens that were lifted for COVID will all be reinstated once the Public Health Emergency (PHE) expires. The PHE has been repeatedly extended but that will only push off the crux of the issue which is whether many of the innovations that we were forced to adopt during the pandemic shouldn’t be made permanent.
Working from home has worked better and been much more popular than anyone anticipated. Not everyone who was forced to work at home because of COVID wants to continue to work at home but many businesses are finding that allowing some work from home as an option is a valuable benefit they can offer their workers without a loss in productivity.
In the same way, many telemedicine innovations pioneered during the pandemic should remain as options. No one doubts that some medical services are better performed in-person nor that requiring in-person visits limits some types of fraud and abuse. Nevertheless, the goal should be to ensure quality by regulating the provider of medical services not regulating how they perform their services. Communications technology is improving at a record pace. We have moved from telephones to Facetime and soon will have even more sophisticated virtual presence technology that can be integrated with next generation Apple watches and Fitbits that gather medical information. We want medical care to build on the progress in other industries and not be bound to 19th and 20th century technology.
The growth of telemedicine is one of the few benefits of the pandemic. As the pandemic ends, let’s make this silver lining permanent.
What to Watch
A few things I have watched recently:
The Courier–a taut, spy drama about the true story of Greville Wynne, an ordinary British businessman who was recruited by the British and American spy services to courier information in the 1960s from Russian agent Oleg Penkovsky–information that proved crucial to the United States during the Cuban Missile Crisis. Stars Benedict Cumberbatch and Rachel Brosnahan. On Amazon Prime.
The Hitman’s Wife’s Bodyguard–I thought this action-comedy was hilarious (in the spirit of Deadpool). The plot makes no sense but who cares? It stars Ryan Reynolds, Samuel Jackson, Morgan Freeman, Antonio Banderas and Salma Hayek all of whom are clearly having a good time. Salma Hayek’s over-the-top performance makes the film. It even has an attack on occupational licensing. Saw it on a plane.
Worth–who would have thought that debates about estimating the value of a life would make a good movie? Michael Keaton plays Kenneth Feinberg, the lawyer who headed the September 11th Victim Compensation Fund. How much for a waiter? How much for a Wall Street trader? This is the philosophical question that gets the movie going but more practical problems also intercede. What do you do when the wife and the mistress both file for compensation? In the end, the movie bails on the big questions but succeeds on the quality of the performance by Michael Keaton. The tort system is a very expensive way to compensate victims. The Victim Compensation fund was a successful application of no-fault rules. On Netflix.
Billions–I will finish out the the fifth season but the plots are now repetitive and while I wouldn’t say it has jumped the shark it will never rise again to the heights of The Third Ortolan. I did appreciate the Neil Peart reference but it should never have been explained. Love Jason Isbell but it feels like the writers are reaching for relevance. On Showtime.
Only Murders in the Building–An old-time murder mystery starring Steve Martin, Martin Short, and Selena Gomez. It’s fun but will they pull off a satisfying ending? I hope so. A show I can watch with my wife. On Hulu.
The Biden Executive Order on promoting competition
Here is the text, I won’t attempt a summary but here are some running comments:
1. The beginning of the piece suggests that concentration is rising in the American economy. But this probably isn’t true. See also these comments by me.
2. Industry concentration has not driven wages down by “as much as 17%” — that’s a porky! OK, they say “advertised wages,” but come on…
3. I am happy to see the document take on occupational licensing.
4. Contra to the recommendation, we should not ban non-compete agreements outright. Many non-compete agreements are perfectly normal institutions designed to protect corporate assets against IP theft, client lists for instance. We should restrict non-compete agreements in some more sophisticated manner, still to be determined.
5. Lower prescription drug prices? Maybe. Do they estimate the elasticity of supply? No. Thus this discussion would fail my Econ 101 class. We do know, however, that prescription drugs are one of the very cheapest ways our health care system saves lives, so this is not obviously a good idea.
6. Right to repair laws? Again, maybe. But show me the trade-off and cite a cost-benefit analysis. If software gives more consumer surplus to consumers (again, a maybe), should we be wanting to tax it with contractual restrictions? Should we be wanting to tax Tesla right now?
7. Portability of bank account information is a good idea.
8. “Empower family farmers…” — do you even need to know what comes next? Aarghh!!!
9. The order “encourages” the DOJ and FTC to take various actions. I won’t blame Biden for this, but we’ve way overstepped what executive orders should be doing, some time ago. The net feeling the honest reader of this section receives is that our antitrust policies toward the large tech companies are not based in much of a notion of rule of law.
10. Should HHS “standardize plan options” in the NHIM to make price shopping easier? Makes me nervous — diverse market offerings can be good.
11. Lots of tired and not typically true claims and insinuations about concentration in airline markets; see my book Big Business or read Gary Leff. And shouldn’t airlines charge for bags? Maybe yes, maybe no, but prices per item are not in general a bad thing.
12. We are warned that farmers and ranchers take in an ever-smaller share of the food dollar spent — thank goodness! And there are a bunch of other selective, scattered observations about food prices (“corn seed prices have gone up as much as 30% annually…”), but nothing close to systematic or showing an actual market failure (corn prices by the way have been plummeting since 2012).
13. Broadband policy should indeed be improved, but this section reads as messy, should do more to emphasize the notion of competition and common carrier platforms, and how about a mention of StarLink?
14. There’s not really any point in marching through a discussion of the “Big Tech” section.
15. Is there a problem with bank concentration in this country? Not where I live. Maybe in some rural areas?
16. YIMBY > NIMBY would do more to limit market power than just about anything else, by the way.
17. Is there even a peep about this country’s biggest and worst-performing monopoly in K-12? Of course not. It is Amazon you have to worry about!
So overall this is not great economics. It is good to see the Biden administration pick up on a few pro-competition issues, but much of the document is not clearly pro-competition either. The reasoning and evidence are pretty much politicized from start to finish.
What should we regulate *more*?
Since the Biden team does not seem too favorably disposed to deregulation, perhaps it is worth asking in which areas we should be pushing for additional regulation. Here are a few possible picks, leaving pandemic-related issues aside, noting that I am throwing these ideas out and in each case it will depend greatly on the details:
1. Air pollution. No need to go through this whole topic again, carbon and otherwise. Remember the “weird early libertarian days” when all air pollution was considered an act of intolerable aggression?
2. Noise pollution. There is good evidence of cognitive effects here, but what exactly are we supposed to do? Can’t opt for NIMBY now can we!?
3. Something around chemicals? How about more studies at least?
4. Housing production. You can look at this as more or less regulation depending on your point of view. But perhaps cities of a certain size should be required by the state government to maintain sufficient affordability.
5. Mandates for standardized reporting of data? For example, the NIH requires that scientists report various genomic data in standardized ways, and this is a huge positive for science. What else might work in this regard?
6. Federal occupational licensing, in lieu of state and local.
7. Software as a service from China?
8. Animal welfare and meat production.
9. Is there a useful way to regulate to move toward less antibiotic use?
10. Should we have more regulation of AI that measures human emotions? How about facial and gait surveillance in public spaces?
11. How about regulating regulation itself?
What else?
I thank an MR reader for some useful suggestions behind this post.
Some of the Covid-era deregulations will stick
Lawmakers in Texas and at least 19 other states that let bars and restaurants sell to-go cocktails during the pandemic are moving to make those allowances permanent. Many states that made it easier for healthcare providers to work across state lines are considering bills to indefinitely ease interstate licensing rules. Lawmakers in Washington are pushing for Medicare to extend its policy of reimbursing for certain telehealth visits. States also are trying to lock in pandemic rules that spawned new online services, from document notarization to marijuana sales.
Deregulation has long been a central tenet among Republican politicians, but many of the coronavirus-inspired changes have gained bipartisan support…
In February, California State Sen. Scott Wiener, a San Francisco Democrat, co-authored legislation with a Republican lawmaker to make permanent the coronavirus-era suspension of liquor laws that prohibited drinking in sidewalk extensions known as parklets and other outdoor dining spaces used by multiple vendors. If approved by two-thirds of the legislature and signed by the Democratic governor, it would take effect in September.
State legislatures in Connecticut and Arkansas also are weighing bills to extend outdoor dining allowances made during the pandemic.
Mr. Wiener said he has spent years studying ways to modernize the state’s liquor laws, some of which are 100 years old.
Here is much more from Aaron Zitner and Julie Bykowicz at the WSJ. For the pointer I thank Greg Roemer.
India Should Embrace Not Ban Crypto
Should India ban crypto in a return to foreign currency regulations of the past or embrace cryptocurrency? Shruti Rajagopalan has an excellent column reminding us of India’s old system of currency control under the License Raj.
If India proceeds with a rumored ban on cryptocurrency, it wouldn’t be the country’s first attempt to impose currency controls. This time, however, a ban is even less likely to succeed — and the consequences for India’s economy could be more dire. The country shouldn’t make the same mistake twice.
In the 1970s and 80s, at the height of what was known as the License Raj, Indians could only hold foreign currency for a specific purpose and with a permit from the central bank. If a businessman bought foreign exchange to spend over two days in Paris and one in Frankfurt, and instead spent two days in Germany, the Reserve Bank of India would demand to know why he’d deviated from the currency permit. Violators were routinely threatened with fines and jail time of up to seven years.
Imports required additional permits. Infosys Ltd. founder Narayana Murthy recalls spending about $25,000 (including bribes) to make 50 trips to Delhi over three years, just to get permission to import a $150,000 computer. Plus, since any foreign exchange that the company earned notionally belonged to the government, the RBI would release only half of Infosys’s earnings for the firm to spend on business expenses abroad.
Naturally a black market, with all its unsavory elements, emerged for foreign currency. The government doubled down, subjecting those dealing in illicit foreign exchange to preventative detention, usually reserved for terrorists. Businessmen selling Nike shoes and Sony stereos were arrested as smugglers.
The system impoverished Indians and made it impossible for Indian firms to compete globally. There’s a reason the country’s world-class IT sector took off only after a balance of payments crisis forced India to open up its economy in 1991.
…While details of the possible crypto ban remain unclear, a draft bill from 2019 bears eerie resemblance to the 1970s controls. It would criminalize the possession, mining, trading or transferring of cryptocurrency assets. Offenders could face up to ten years in jail as well as fines. Such a blanket prohibition would be foolish on multiple levels….
A related problem is that you may think you are banning a cryptocurrency but if you are banning something like Ethereum or Elrond what you are really banning is an experimental workspace, a platform capable of supporting an ecosystem of innovations in finance, art and new forms of cooperation and organization. As I said some time ago:
The Decentralized Autonomous Organization (DAO) is a new organizational form potentially as important as the creation of the corporate form in the 1600s.
and that’s just one example of how crypto will–in one form or another–under-gird much of our life in the 21st century in ways we don’t yet fully see. Banning is premature to say the least.
Moreover, the irony is that India has one of the world’s most advanced identity and payments systems, the India stack. By integrating the India stack with crypto systems regulated similarly to foreign currencies under India’s Foreign Exchange Management Act, India could become a leader in fintech. Balaji Srinivasan presents practical steps forward:
Basically, India doesn’t need to take a risk with a novel ban on the financial internet. It can just modify FEMA to regulate decentralized cryptocurrencies and national digital currencies as foreign assets. A 64-page report by the Indian law firm Nishith Desai Associates outlines in detail how that could work. In brief, the report recommends:
- Treating crypto as a foreign asset. FEMA provides language that could be used to expressly classify digital assets as “securities”, “goods”, “software”, or “foreign currencies” depending on their features and attributes.
- Regulating exchanges with startup-friendly licensing. RBI could use FEMA to regulate crypto exchanges as “authorised persons” per the Act, thereby permitting them to deal in foreign currency. Some provision would need to be made to accommodate startups, perhaps by monitoring small new licensees under a regulatory sandbox framework. By repurposing this well-established regulatory mechanism, crypto-assets become subject to all the existing safeguards that the Act provides, including RBI oversight and KYC/AML.
- Adopting KYC/AML rules. Most developed jurisdictions, including Australia, Canada, the EU, Japan, South Korea, and the US, have brought crypto-asset business activity within their AML regimes. Such an approach has also been recommended by the FATF. India can do this with a simple Central Government notification under the Prevention of Money-Laundering Act.
The FEMA-based model (or a close alternative) would allow us to turn all licensed, regulated Indian exchanges like CoinDCX, WazirX, Coinswitch, Zebpay, Unocoin, and Pocketbits into well-lit venues for trading cryptocurrency. Over time, they will also become huge drivers of remittances for Indians abroad performing remote work, thereby bringing capital into India.
UK to fast track drug trials
Drugmakers will be offered fast-tracked approvals for innovative medicines in the UK as ministers seek to build on the country’s world-leading approval of a Covid vaccine and attract life sciences companies to invest post-Brexit.
The UK’s medicines regulator will become independent of EU pharmaceutical rulemaking when Britain quits the European Medicines Agency at the end of the year, which means companies will need to apply separately to register drugs.
With ministers eager to try to refashion the UK as a post-Brexit hub for global life sciences, companies with drugs that promise to treat unmet medical needs will be offered help through the development process, including manufacturing, according to three people familiar with the situation.
Under the so-called Innovative Licensing and Access Pathway, companies are set to be offered the same rolling review of data that speeded approval of the Pfizer/BioNTech Covid-19 vaccine ahead of the rest of the world.
Here is more from Sarah Neville at the FT, via J.
The AstraZeneca Factory in Baltimore
Emergent BioSolutions has a factory in Baltimore that operates under an innovative long-term private-partnership agreement with BARDA. Essentially BARDA subsidized the factory in return for an option to use it in an emergency–Operation Warp Speed exercised that option and in June-July AstraZeneca signed a licensing agreement with Emergent for large-scale manufacturing of its vaccine.
According to the Baltimore Sun the AZ vaccine is already being made at the facility. I hope they are making millions of doses. I want the AZ vaccine approved in the United States immediately but if we won’t take it (yet) they can still export it to Britain and the many other countries which will approve the vaccine.
More generally, there are three vaccines in the near term pipeline. AstraZeneca, Johnson and Johnson and Novavax. If there is anything that we can do to speed these vaccines to people it would be worth billions. All of these vaccine manufacturers should be making and storing millions of doses now.
It’s important to understand that a policy like First Doses First works best when capacity is increasing rapidly so approving these additional vaccines is part of an integrated plan.
Here’s the factory in Baltimore. It’s capable of producing tens to hundreds of millions of vaccine doses a year. Isn’t it beautiful?
Addendum: One more thing. Stop telling me that the problem is vaccine distribution not supply. Guess what? I am thinking ahead.
The Australian Aboriginal flag
For those who don’t know, the Australian Aboriginal flag (https://i.imgur.com/sGsnLkv.png) is actually copy-righted by an individual although it is recognized as a national flag.
It was created in 1971 by an artist named Harold Thomas and went onto to become culturally accepted as the flag of the Aboriginal people. And then as above, went onto being proclaimed a national flag by the government.
Unfortunately, since then, Harold Thomas has licensed the flag to various private agencies. One of the licenses was exclusive to a clothing label, which now means that no other Aboriginal business can print clothes with the flag on it without paying royalties. (Sitting around 20%) A lot of Aboriginals feel dismay at the current situation of the licensing.
I am rather free market orientated and do respect the artists desires.
But, the situation is rather unique, I can’t seem to find any other examples in the world of a nations/cultures flag being owned by an individual.
The creator has no intention to relinquish the copyright, so movements have already sprung up.
Here is further discussion, via Andrew Burchill. Imagine in the United States if private individuals had copyrights over the flag (in general, not just particular images), the American bald eagle, the U.S. dollar, and so on.
Monday assorted links
Tales from Trinidad barter markets in everything
One of my favorite countries, this is from the newspaper:
DESPERATE to get his taxi badge, a man bought a $500 used typewriter and donated it to the Licensing Office…
The seller, who asked not to be named, wrote: “So funny story. I had a typewriter for sale on Facebook marketplace for some time. I get this call from a young man. We chat for a bit. He says he’s down at licensing office. He’s coming right now.
“When he arrives he gives me the story. Since December he’s been trying to get his taxi badge. He bought a maxi taxi and can’t use it because he’s waiting for his badge. Then when he passed pandemic lockdown happened. Three months later, Licensing Office opens with an appointment system, appointment to pay, then appointment to collect. The day arrives to collect. He’s told typewriter is not working over a week.”
The post goes on to say that officials at Licensing agreed that if they got a typewriter they would be able to provide the taxi badge.
The seller continues: “He finds me on Facebook marketplace. When he arrives he says ‘You ever heard of a private person buying a typewriter for the State?’ Money paid. He calls later to say everyone is getting their license today. He actually called twice while at licensing office to get further instruction on operating the typewriter. Well done, young man. Well done!”
Via K.
Labor market restructuring and its possible permanence
We find 3 new hires for every 10 layoffs caused by the shock and estimate that 42 percent of recent layoffs will result in permanent job loss.
That is from a new paper by Jose Maria Barrero, Nick Bloom, and Steven J. Davis, top experts on this and related topics. As for policy:
Unemployment benefit levels that exceed worker earnings, policies that subsidize employee retention, occupational licensing restrictions, and regulatory barriers to business formation will impede reallocation responses to the COVID-19 shock.