voluntaryXchange

I Wonder What They Spent It On?

Just a quick reminder that the government - because it taxes the product first and then the profits made from the product - reaped a lot of extra tax revenue with the run up in oil prices last year.

Maybe they bought Manolo's ...

Cool Idea Mapping Site

Check out gnod. It is one of these sites that, if you enter a name, it produces a visual map of other names that you will find similar. The nice thing about this is that it does movies, authors, music and other things.

Winterspeak On Healthcare Rationing

Over at Asymmetrical Information, Winterspeak has an interesting take on the economics of containing healthcare costs.

Specifically, he notes that rationing through prices today is a transfer of healthcare from future users to current users. The latter get access to cheaper technology that is currently available, and the former lose technology that is not developed as quickly because there is less free cash to fund its development.

Government Imposed Monopolistic Competition

Who is reaping the monopoly profits from gasoline differentation?

In principles, we teach students that one of the points of differentiating your product is that it allows you some latitude to act as a monopolist. That's desirable because it allows you to potentially sell your product at a price above marginal cost, thus making profits. However, differentiation is not a sustainable way to make profits because other folks can create substitutes that are differentiated, and eventunally drive your demand down to the point where your profits are zero.

At least, this is how it works in free markets.

But, the market for gasoline is not free. One of the many manifestations of that is the differentiation of what is otherwise a fairly fungible product by government regulation. Here is a map of the different blends of gas required in the U.S.

An additional way in which the market is not free is that the producers are not the ones creating this differentiation, the government is. So, there is no free entry to push profits towards zero.

The thing is, I know of no research that suggests that the source of differentiation influences the ability to make profits. Differentiation leads to some ability to price above marginal cost ... period.

But, it can hardly be the oil companies that are profiting from this because they have to incur higher marginal costs in order to produce these differentiated fuels.

So, where do the profits go? This is closest to the textbook case of a lazy monopolist - one that does not keep costs down because it doesn't have to. This leads me to conclude that what we have here is the government awarding monopoly power to politically connected vendors.

Hey ... wasn't that part of the economic model of fascism? (Sorry ... I forgot that environmentalists are among the annointed).

Via Heavy Lifting.

Very Cool and Very Informative

Watch new bookmarks get added to Del.icio.us in real time.

The only problem with this is that you can quickly push the marginal benefit of the cool stuff you find to zero - it's just too easy to accumulate interesting links.

Katrina Cleanup Issues

There's a fairly even-handed article on the clean up of Katrina damage in Christmas Day The New York Times. Jackson County, Mississippi hired the Army Corps of Engineers to do the clean up, while neighboring Harrison County contracted the work out privately. Not surprisingly, Jackson is having the cadillac of cleanups imposed on them, while Harrison chose the Chevy version.

And ... lest we forget ... Washington is enforcing the Davis-Bacon act on cleanups in New Orleans, making them more expensive.

Via Cafe Hayek and the Mises Economics Blog.

Sacco and Vanzetti

My Dad is going to flip over this.

A letter - as yet unverified by experts - has been found with new details about the Sacco and Vanzetti case of the 1920s.

Sacco and Vanzetti were executed for murder in 1927. The were convicted of murder in the course of a robbery. They were believed to be using the money to pursue an anarchist political agenda including bombings.

They were a cause celebre for decades because it was felt they were railroaded by the American establishment.

Now comes a letter from Upton Sinclair - a leftist supporter of S&V - that was found at a rummage sale in California. In it, Sinclair admits to having inside information from the defense lawyer that S&V were guilty, and that he needs to clear his conscience about his vocal support of them in spite of this knowledge.

My Dad always thought S&V were guilty, but even so this is one of the touchstones of his life. For him, this will be like finding a letter from Johnny Cochrane in 2040 about how he made up the whole O.J. innocence thing.

Via Asymmetrical Information.

Krauthammer On Iran

Excerpts from the December 16 Washington Post:

...That something serious might accrue to Iran for this -- say, expulsion from the United Nations for violating its most basic principle by advocating the outright eradication of a member state -- is, of course, out of the question.

Everyone knows where Iran's nuclear weapons will be aimed. Everyone knows they will be put on Shahab rockets, which have been modified so that they can reach Israel. And everyone knows that if the button is ever pushed, it will be the end of Israel.

But it gets worse. The president of a country about to go nuclear is a confirmed believer in the coming apocalypse...

So a Holocaust-denying, virulently anti-Semitic, aspiring genocidist, on the verge of acquiring weapons of the apocalypse, believes that the end is not only near but nearer than the next American presidential election... This kind of man would have, to put it gently, less inhibition about starting Armageddon than a normal person.

...He was not in charge of nuclear weapons to be placed on missiles that are paraded through the streets with, literally, Israel's name on them. (They are adorned with banners reading "Israel must be wiped off the map.")

Negotiations to deny this certifiable lunatic genocidal weapons have been going nowhere. Everyone knows they will go nowhere. And no one will do anything about it.

Love That Central Planning

Roadside service calls for a gallon of gas have doubled since Hawaii instituted a system in which gas prices are set centrally a week at a time. They are announced 5 days in advance, and if there is a big price drop in the future, folks run their cars dry.

Via Mises Economics Blog.

I Wonder About Iran's New Policy

So, if it is the policy of Iran that the Holocaust did not take place, what is their position on the extermination of people who were not Jews?

I'm kinda wondering seeing as my wife's Polish Catholic relatives haven't been seen in 60 years or so ... not since they started working for the resistance after the Nazi's starting sending Jews away never to return.