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May 2005

Serious errors by the mainstream media are breaches of trust

Posner calls serious errors by the mainstream media as breaches of trust:

Inaccuracies in blogs are less pernicious than inaccuracies in the mainstream media even apart from the superior opportunity for prompt correction of bloggers' errors. The reason is that bloggers are known not to employ fact checkers or editors; there is no pretense that they have the resources to eliminate all errors in their postings. The mainstream media, in contrast, represent to their public that they endeavor assiduously to prevent errors from finding their way into articles and broadcasts. They ask the public to repose trust in them. Bloggers do not. That is why serious errors by the mainstream media are played as scandals; they are not merely mistakes--they are breaches of trust.

I couldn't agree more!
Update: Derek Rose disagrees as he thinks that bloggers should be responsible for what they write and should be held accountable. My response is that bloggers present themselves as a network. The debate conducted by bloggers through the network of posts linking to each other as a whole makes more sense than a single post on its own. This is unlike newspaper articles which generally stand on their own and the sources cited (case in point, the Newsweek's article about Kuran abuse). This is an important difference. I haven't seen many cases where inaccuracies in any newspaper article were exposed by another newspaper. But in case of bloggers it is routine to comment and debate among each other.

Thou shalt not charge more or less than or same as your competitors

Via Coyote Blog: Protecting the Consumers from Low Gas Prices and The Mises Blog, this great poem by R.W. Grants, the Incredible Bread Machine, includes this stanza:


"These very simple guidelines,
You can rely upon:
You're gouging on your prices if
You charge more than the rest.
But it's unfair competition if
You think you can charge less!
"A second point that we would make
To help avoid confusion...
Don't try to charge the same amount,
That would be Collusion!
You must compete. But not too much,
For if you do you see,
Then the market would be yours -
And that's Monopoly!

Amazing service from USPS

Via Sluggo Needs a Nap, this letter from a reader of the Metropolitan Diary:

Dear Diary:

Ordering stamps online - what a concept! No lines. No dollar
bills jamming the self-service machine. No walks to and
from the post office in the rain or snow or gloom of night.

About 10 days after placing my first online order for a roll of
stamps and some postcards, I found in my mailbox a pink
slip notifying me that there was a package being held for me
at the post office. The sender: the United States Postal
Service's Stamp Fulfillment Center.

What? I now need to stand on line at the post office to claim
my order for stamps that I placed online so that I would not
have to stand on line at the post office?

The final indignity was that the postal clerk would not release
the package until I produced proof of my identity.

Phyllis Ilie

Funding Social Security through Estate Taxes

Link: Economist's View: Cato: Social Security Linked to Reduction in Fertility.

A new study by Michele Boldrin and colleagues examines the link between government-provided old-age pensions and the continual dramatic reduction in fertility throughout the developed world during the twentieth century.

Declining workers-to-retirees ratio is cited as a major reason why Social Security will be in trouble.  Technically it is true! In pay-as-you-go social security systems, if there are lesser number of workers to support each retiree then either benefits will have to cut or tax rates will have to be raised. But I don't understand why raising the taxes should be a problem to fund the "gap". Lesser number of workers for each retiree means that current retirees had lesser number of children. That means, their spending on kids, such as for education, food, clothing, etc., must have spread over lesser number of children. Not only that, but these lesser number of workers stand to inherit more wealth per-capita as compared with their previous generation. Thus, it is only fair that they pay for these benefits through higher taxes. If that is not politically acceptable  Govt. can always fund the "gap" through higher estate tax rates. As immigrant workers neither benefitted from higher spending when they were young, nor stand to receive inheritance from the current retirees, raising social security tax can discourage immigration of workers to US. If US reduces social security tax rates and increases death tax rates in a revenue-neutral fashion it will still come out ahead as lower social security tax rates will attract more immigrant workers.

None of this means that I support Govt. sponsored tax-funded social security schemes. All I want to point out that workers-to-retirees ratio does not stand in isolation and decline in that will not invalidate or trouble the Social Security on its own! Best argument against Social Security is lack of freedom and not some declining ratio or temporary deficit.

The Trade Deficit and Immigrants

Link: The Trade Deficit vs. Human Capital.

Given those assumptions, it follows that new foreign workers are bringing about $200 billion of human capital into the U.S. each year. True, this is a rough estimate -- further refinements could make that number quite a bit higher or lower. But what's important is that even as America is building up bigger foreign debts on the negative side of the national balance sheet, it's also building up bigger human capital assets on the positive side.

The benefits from immigrant human capital spread through the economy in diverse ways, not just on the corporate side. For example, the large number of immigrants partly accounts for the national housing market's strength in recent years.

This is really a neat point! It is also interesting to note that countries that are exporting capital to US (India, China etc.) are the same ones helping cause the huge trade deficits.