Monthly Archives: September 2008

Pandora saved?

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–Lauren Ruhland, 2008 MCPP intern & Science Editor

Way back in July, Hannah Mead offered up criticism of the system by which internet radio services were charged much higher royalty fees.  This weekend, it appears that the House took a break from thinking about the economy to do something about the fee structure that threatened streaming music sites like Pandora:

Congress is close to passing legislation that would buy extra time to finalize an agreement intended to save the emerging Internet radio market from a crippling hike in copyright royalty rates.

The House on Saturday unanimously passed a bill sponsored by Rep. Jay Inslee, D-Wash., that would greenlight an anticipated agreement between Webcasters and SoundExchange, a nonprofit that collects royalties on behalf of recording copyright owners and artists from Internet radio stations and other digital radio services.

The two sides have been negotiating new royalty rates following the federal Copyright Royalty Board’s ruling in March 2007 that dramatically increased the rates that Internet radio stations must pay artists and record labels. Internet radio stations say the new rates — which most but not all are paying — would effectively put them out of business.

It seems that the proposed legislation extends a deadline for these negotiations and gives the eventual outcome legal backing. Rates for traditional radio airplay (set by the Copyright Royalty Board) are low, because that medium is considered free advertisement for artists and their albums.   Internet radio was considered a different beast because the ability to make preferences in customized “stations” made it more like a product itself as opposed to advertising. (The article says that the National Association of Broadcasters, which represents AM and FM stations, “has withdrawn its own objections to the measure.”  This implies that they had previously lobbied for the distinction.)

Despite my disdain for inefficient bureaucratic institutions like the Copyright Royalty Board, I use streaming internet radio a lot.  It allows me to share my quirky musical preferences with people I think may be interested.

MI house members’bipartisanship on $700B Paulson plan

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–Lauren Ruhland, 2008 MCPP intern & Science Editor

Michigan’s representatives, like those from the rest of the country, were deeply divided on the Paulson plan’s vote this afternoon, which eventually failed 228-205. Michigan’s house delegation tilted toward a “nay” vote, with nine against and six in support. I’m a little surprised that during an election season marred by bitter partisan bickering, conservative Republicans and liberal Democrats–along with moderates of the red and blue flavors–are able to put their differences aside and stand together on any issue, even if their conclusions are derived from very different (and even contrary) thought processes.

A district-by-district breakdown follows below the fold. Continue reading →

A personal tale of health care US vs. UK

Posted on by lmruhland
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–Lauren M. Ruhland, 2008 MCPP intern & Science Editor

Brinley Bruton describe her own very different experiences with two bouts of pyelonephritis (advanced kidney infection), each taking place on different sides of the Atlantic Ocean.  Though it seems obvious that she preferred the care she received in the U.S., she’s still willing to see its faults for what they are and offers praise for the compassion and professionalism of her health care providers in the U.K.  The piece is a long two pages and doesn’t wade particularly far into the policy debate surrounding health care, but it does raise some important questions about the consequences of health care reforms.

[W]hile I recovered fully in both cases, the care I received felt quite different. In New York, I never feared that I would be overlooked. At my doctor’s office in upscale Gramercy Park, he and his nurses took their time seeing me, and were always at pains to reassure me. On my first visit, the receptionist let me sit in an empty consulting room so that I wouldn’t have to weep in the waiting room. She checked in on me and brought me water.

But unlike the personal care I received in the U.S., in London, I felt like I was on a vast and often creaking conveyor belt, and there was a big risk of falling through the cracks. British care is socialized — and feels that way.

Commentary: Bailouts will lead to rough economic ride

Posted on by razma766
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Kurt Bouwhuis, Mackinac Center Intern
This is what Ron Paul thinks about the bailouts.  The full article is located here at cnn.com
By Ron Paul
Special to CNN

Editor’s note: Ron Paul is a Republican congressman from Texas who ran for his party’s nomination for president this year. He is a doctor who specializes in obstetrics/gynecology and says he has delivered more than 4,000 babies. He served in Congress in the late 1970s and early 1980s and was elected again to Congress in 1996. Rep. Paul serves on the House Financial Services Committee.

Rep. Ron Paul says the government’s solution to the crisis is the same as the cause of it — too much government.

(CNN) — Many Americans today are asking themselves how the economy got to be in such a bad spot.

For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.

Unfortunately, the government’s preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.

Continue reading →

Shopping in Berkeley

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–Lauren Ruhland, 2008 MCPP Intern & Science Editor

This Los Angeles Times article explores the Berkeley Bowl, a produce market where you can get lectured about political correctness while fighting for the chance to glance over the 40 different kinds of tomatoes. Despite its location in perhaps the most liberal city in the nation, the proprietors take a hard-line view of property rights– get caught “tasting” produce just once and you’ll be slapped with a lifetime ban:

Store manager Larry Evans says the policy is a fair response to doctors, lawyers and college professors who help themselves to bags of cookies, nuts and vitamins, stick their fingers in pies and guzzle from bottles of sake, assuming the rules don’t apply to them.

“There’s a sense of entitlement to this town,” Evans said. “People think, ‘If I want to do it, I’ll do it, just try and stop me.’“

Seven years on the job, he said, has given him insight into the city’s sometimes sharp social elbows.

“Berkeley residents are angry — they’re mad at the president, the economy, all kinds of stuff. And this is the place where it seems to get released, the local supermarket.”

If I’m ever in the area, I think I have to check out the store for myself.  They carry eight different types of mango!  With its wide selection of merchandise, the Berkeley Bowl seems to be doing OK even as the locavore movement is taking off around the country.  At the very least, they’re doing well enough to turn away customers who disparage their employees.

“I don’t like to see them berate employees,” [bowl co-owner Diane Yasuda] said. “I’ll say, ‘I’m sorry, but we just can’t seem to please you. Why don’t you shop somewhere else?’“

Boom and Bust

Posted on by razma766
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Kurt Bouwhuis, Mackinac Center Intern

I am reading “Economics for Real People” by Gene Callahan and have found an interesting analogy.

Daily Article by | Posted on 8/9/2000

Imagine that you are a bus driver at the edge of a desert, about to take a busload of passengers across it. You have left all gas stations behind, and are now faced with a decision. There are a number of towns on the other side of the wasteland before you, each a different distance away. The farthest away of these towns also happens to be the closest to your final destination. You can try to reach any of them, but there is a trade-off: the farther away the town, the less the passengers can use the air-conditioning to alleviate the desert heat, as running the AC will use up the gas more quickly.

In order to make your decision, you look at your fuel gauge and determine how much gas you have. You tell the passengers that they must now make a trade off between comfort on the way and distance traveled, as the more air conditioning they choose to use, the faster the bus will consume fuel. Then you collect votes from the passengers on what temperature to keep the bus. You perform some calculations on mileage, speed, and fuel consumption, and pick the farthest city you can reach given the amount of gas you have and the passengers’vote on the use of air conditioning.

The passengers had to decide whether to cross the desert in greater comfort but arrive farther from their final destination, or in less comfort but with a closer arrival. The science of economics has nothing to say about the combination that they picked, other than that it seemed preferable to them at that moment.

However, also imagine that, before you began your calculations, someone had sneaked up to the bus and replaced the passengers’real votes with a fake set that choose a higher temperature, in other words, less fuel consumption. You made your choice as if the passengers would tolerate a temperature of, say, 80 degrees, whereas in reality they will demand to have the bus cooled to 70. Obviously, your calculations will prove to have been incorrect, and the trip will not come out as you had planned. Your plans will be overly ambitious. You will begin by driving as if you had available more resources than you really do, and end by phoning for help when the deception is revealed by the sputtering of your engine.

I offer the above as a metaphor for the Austrian theory of the trade cycle, which offers an explanation of why the economy swings through boom times and recessions. You, the driver, represent the entrepreneurs. The gas is the stock of capital goods. The trip across the desert is the next “round” of production. The passengers represent the consumers, and their choice on how much to use the air conditioning is analogous to how much consumers are willing to put off consumption today in order to save for the future — their time preference for current consumption over future consumption. The ultimate destination is the satisfaction of as many wants as possible. And it is the central bank — in America, the Federal Reserve — that has sneaked up and tampered with the consumers’votes.

If you would like more information, please click here.

Discovering the Mysteries of the Universe

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Kurt Bouwhuis, Mackinac Center Intern

The Large Hadron Collider — a $9 billion particle accelerator was built underground on the border of Switzerland and France.  The experiments will send atoms around a 17-mile tunnel in separate directions at the speed of light.  Upon collision, it has been hypothesized that there will be a “God” particle created, would help us better understand mass.  There are also people who believe it may help us understand multiple dimensions.

The article can be found at cnn.com as well as a video describing the project located here.

“Poor governance creates poor policy. That’s what we have.”

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–Lauren Ruhland, 2008 MCPP intern

It doesn’t get much more explicit than that.  From the Associated Press via Mlive:

Michigan’s economy suffers not from a dependance on auto manufacturing but from poor governance, said Robert Genetski, an economist from Chicago.

Genetski, Heartland Institute policy adviser, offered research that showed Michigan’s decline from being one of the healthiest economies in the nation in the 1960s to the poorest in the nation the past five years.

“Michigan ranks 50 out of 50 states,” he said.

Although many blame the state of the manufacturing industry for the state’s tough economic position, Genetski disagrees.

“Poor governance creates poor policy. That’s what we have,” he said.

He said Michigan governance is moving away from classic principles of a strong economy: low tax rates, free markets, protecting individual property rights and stable prices.

In addition to the article linked above, there’s more from Robert Genetski here.

Fed bailouts and public schools

Posted on by lmruhland
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–Lauren Ruhland, 2008 MCPP intern

Over at National Review, Michael J. Petrilli compares the recently announced federal bailouts of large financial firms with the phenomenon of states bailing out their largest and most troubled school districts:

Predictably, some education analysts are already pointing to the market meltdown as a cautionary tale about deregulation and “privatization.” I don’t know enough about high finance to say whether the 1990s-era policies that removed barriers between bankers and other investors led to this malaise. But surely there’s a better lesson in this mess for schools than just the “regulation is good” storyline that certain interests want to peddle.

Namely, in the education sector also, organizations are more likely to be bailed out if they are considered “too big to fail.” States have a long history of coming to the rescue of huge urban districts, long after they have demonstrated an utter inability to get results or balance their books. It’s only the small fry — tiny, public charter schools — that actually go under. As well they should, if they aren’t getting the job done for kids or they aren’t spending public funds prudently.

Petrilli’s case in point is the troubled Detroit Public School system.  He urges the state to declare DPS bankrupt and overhaul its operations, as opposed to bolstering the failing district with endless funding bailouts.

Somalia Better Off Stateless?

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Kurt Bouwhuis, Mackinac Center Intern

Are people really capable of governing themselves without a national government?  Peter Leeson, professor at George Mason University provides evidence in his essay “Better Off Stateless: Somalia Before and After Government Collapse.”

Peter Leeson has an assortment of essays on his website that are free to download and read.

Keep an eye out for his new book, “The Invisible Hook”, coming in 2009…

Giving a new meaning to “voting with your wallet”

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–Lauren M. Ruhland

Jones Soda, the bottling company famous for flavors like FuFu Berry and Cherry Manilow, is running a marketing campaign urging you to select a beverage based on your presidential pick.  Michigan is one of three markets in which consumers can find “Pure McCain Cola” and “Yes We Can Cola.”

Visitors to their website (CampaignCola.com) can also select “Ron Paul Revolution Cola” or “Capitol Hillary Cola.”  If you’re sick of the whole process, you can effectively make a “write-in” vote and purchase a custom case of “Ameri-cola” with a picture of your choosing.  Currently, Obama is leading the four drinks in sales with 47%, followed by Paul with 29%.  McCain keeps in third place with just over 13% of the market,  but this doesn’t necessarily mean disaster for the Republican ticket– the ad campaign is targeted at youth who may not be of voting age.

Markets Anticipate the Future

Posted on by razma766
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Kurt Bouwhuis, Mackinac Center Intern
Here is a great post from Cafe Hayek Today. Enjoy!

“Here’s a letter that I sent today to WAMU, a local DC radio station:

Dear Sir or Madam:

This morning your reporter interviewed a resident of Galveston, Texas, about the effects of hurricane Ike. The person interviewed said that she went to the gasoline station before Ike hit to “top off” her tank. But she was angry to find that gasoline prices had jumped 50 cents per gallon from the day before. “It’s ridiculous,” this woman opined. “Ike hadn’t hit yet!”

Your reporter should have immediately asked this woman: “Well, why were you topping off your tank? Ike hadn’t hit yet.”

Gasoline became more scarce — more precious — in Galveston the moment Ike’s arrival became likely. Gasoline retailers acted in anticipation of the future no more or no less than did motorists (such as your interviewee) who topped off their tanks.

Sincerely,
Donald J. Boudreaux”

Granholm Going to Japan

Posted on by razma766
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Kurt Bouwhuis, Mackinac Center Intern

“Governor Granholm leaves Monday, September 15 for a three-day jobs and investment mission in Japan. She will visit 22 companies in three different cities, highlighting all Michigan has to offer as a great place to do business.”

I thought Michigan’s business climate was so attractive that there would be no need to go searching overseas for people to invest in Michigan.  I’m glad to see that our tax dollars continue to be put to good use.