Monday, June 16, 2014

Why Does Youtube Replay Skipped Ads?

There I am, listening to my playlist...Phenomenology...and skipping the same ads over and over.  It's great that I can skip ads...but it's rampantly ridiculous that Google doesn't remember my preferences.  

"Yes Google...for the millionth time...I'm still not even vaguely interested in an Xbox...or a PlayStation...or a..."    

Google amnesia makes me crazy...well...at least according to Einstein's definition of insanity...doing the same thing over and over but expecting different results...  

"Maybe Google will remember my preferences this time?"  *Skip*  "Maybe Google will remember my preferences this time?"  *Skip*  "Maybe Google will remember my preferences this time?"  *Skip*

If the same salesman knocked on your door every 15 minutes...even if it wasn't difficult to shoo him away...you'd probably still call the cops.  Because that's some strange and suspicious behavior for sure.  

So who benefits from Google amnesia?  I sure don't...it's a waste of my time.  Does PlayStation benefit?  Nope, I'm skipping their ads.  Does Google benefit?  I really don't think that they get paid for an ad that gets skipped.  Playing an ad that I will skip costs them the opportunity to play an ad that I won't skip.  

So what happens if Google starts to remember people's ad preferences?  There will be no Armageddon.  There will be more awesome ads.  We will all add ads to our playlists.

Everybody's seen at least a few ads that they wouldn't kick out of their playlists.  I thought it would be fun to track down and share some of my favorites.  Uh, it turns out that there were more than I remembered.  Splendad gets quite a bit of credit for jogging my memory.  Having found nearly 20 ads, I decided to create a playlist consisting entirely of commercials which are both visually and audibly appealing....

Charmercials (Charming + Commercials)

Sunday, June 15, 2014

K To Be Crucified

Reply to thread...Is "wasteful" government spending really harmful?

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Here is my problem with your reasoning here:  we're talking about economics.  There is very little that can be nailed down for sure, and we all know this. - JohnfrmClevelan

So what can be nailed down?  Let's see...

You are a limited resource.  I think we can nail this down...can't we?  Or do you want to argue that you are an unlimited resource?  Perhaps you can be in two places at the exact same time?

If you happen to agree that we can, indeed, nail down the fact that you are a limited resource...then what else can we nail down?  Can we nail you down?  If not, then why not?  My guess is that perhaps...maybe...you perceive that it would be a waste of you, a limited resource, to be nailed to...say...a cross.

But...but...we'd have to employ somebody to nail you to a cross.  That's a good thing right?   And, before you could be nailed to a cross, we'd have to have a cross in the first place.  This means that we'd need to hire somebody to cut down a tree, and then we'd have to hire somebody else to build the cross.  Plus...I think we'd need a hole to stick the cross into...so we'd also have to hire somebody to dig the hole.  How many people is that?  At least four?  This is quite a labor intensive endeavor!  Nailing you to a cross would, therefore, stimulate the economy.

Hmmm...do we really need to nail you to the cross though?  Maybe we could nail a frog to the cross instead?  We'd still have to hire at least four people.  Except, I don't think we'd be able to charge as much for admission.  Unless the frog was a prince.  A tiny prince frog nailed to a giant cross.

Not sure if people would believe us though that the frog was a prince.  But do we really care whether people are willing to pay to see a tiny frog nailed to a giant cross?  Not really right?  The economy isn't about using resources to create value for consumers.  The economy is about using resources to stimulate the economy.

It really doesn't matter how resources are used...what matters is that we use them.  This is why it doesn't really matter whether we nail you or a frog to a cross.  You and a frog are perfect substitutes.  You and a cross are perfect substitutes.  We can nail the frog to you...and vice versa.

Actually, you and Napoleon are perfect substitutes...
This means that the terraces of the Champ-de-Mars are ordered first to be built up and then to be torn down. The great Napoleon, it is said, thought he was doing philanthropic work when he had ditches dug and then filled in. He also said: "What difference does the result make? All we need is to see wealth spread among the laboring classes." - Frédéric Bastiat, What Is Seen and What Is Not Seen
Maybe some illustrations would help?








Maybe learning about opportunity cost would help?

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How many different people might be offended by the above illustrations?
  1. Christians
  2. Liberals
  3. Animal rights activists
  4. French people?
I'm not trying to be offensive.  Then again, neither am I trying not to be offensive.  I'm just trying really hard to effectively illustrate the absurdity of liberal economics.

When I was creating the illustrations, out of curiosity I googled "Would crucifying liberals stimulate the economy?"  The first result was a blog entry written by the liberal economist Miles Kimball... Quartz #17—>How Italy and the UK Can Stimulate Their Economies Without Further Damaging Their Credit Ratings.

Of course I clicked on the link.  And then I chuckled trying to imagine what would run through Kimball's mind if he checked his blog's traffic sources and saw "Would crucifying liberals stimulate the economy?" listed under "Search Keywords".  He'd have to be at least a little surprised..right?  And then perhaps a bit concerned?  Or would he be more curious than concerned?  Or maybe he would just be offended?

A while back I left a comment on one of his blog entries...maybe this one... No Tax Increase Without Recompense.  He either removed it...or never approved it.  As if my comment was a nail that I had pounded into his coffee table...




Calvin and Hobbes is second only to Charlie Brown and Snoopy.  I read both of them religiously when I was a kid.  So of course the above strip popped into my mind when I was writing my reply to JohnfrmClevelan.  There Calvin is...*WAP WAP WAP*... pounding nails into his mother's coffee table.  His mother freaks out when she discovers what he's doing.  Clearly she's clueless about the immense benefits of liberal economics.  Calvin is obviously crucifying invisible frogs...




Which will obviously stimulate the economy...




Adding them together you get...




Yup.

So how long is going to take before liberals understand that resources should be put to their most valuable uses?

I refuse to believe that it's an impossible mission.  Liberals will laugh at you if you tell them that Kings have divine authority.  Just like they'll laugh at you if you tell them that the earth is flat.  Someday they'll laugh at anybody who tells them that we need impersonal shoppers.

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The song K To Be Last by Sister Vanilla started playing while I was trying to think of a title for this blog entry.  It's a mesmerizing song...but what in the world is she saying?  *Googles for lyrics*  Nobody knows!  I sing along anyways.

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The Invisible Hand Subreddit is up to 134 subscribers.    

The Public Finance Subreddit is up to...errrr...1 subscriber.

Tax choice is up to 65 likes on facebook.

Tuesday, June 3, 2014

Mr's Critique of Pragmatarianism

"Mr." is some guy who derives utility from commenting on my blog.  But he's definitely not a fan of pragmatarianism.  On a recent post, The Ingenious Gentleman George Monbiot, Mr. posted yet another attack on the idea of allowing people to choose where their taxes go.  This time though...his comment consisted of a list of 10 points.  Who can resist such a nicely organized attack?  Not me.  It's certainly worth a blog entry.  Here's his list...

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1. Your tax choice scheme is completely unworkable, and just a vague fantasy with no practical application.

2. Your imaginary scheme is nothing like a market - it is just a Frankenstein's monster of a thing which attempts to vaguely ape market-like behaviour.

3. Individual government departments or agencies do not act like businesses in your imaginary scheme, but they are forced to vaguely ape certain aspects of businesses' behaviour. It is a completely fake construct which is logically incoherent.

4. Your imaginary scheme is based on a fundamental confusion about who legally owns tax revenue.

5. Your imaginary scheme demonstrates a basic ignorance of how government expenditure actually works.

6. Your imaginary scheme demonstrates a basic ignorance of how monetary systems work. The government creates the money you use to pay taxes.

7. Your unworkable non-market system does not "correctly determine the actual demand for public goods". All it does is express your particular political ideology.

8. Your imaginary scheme is fundamentally undemocratic. If it wasn't completely unworkable and just a vague fantasy, it would require a complete transformation of existing political and legal structures.

9. Your imaginary scheme gives far more power and control over public resources to the wealthiest individuals and corporations. This reflects your personal political ideology, but that ideology is not shared by most people.

10. You don't even believe yourself that supposed "tax choice" results in the correct allocation of resources. Your imaginary scheme only allows people to allocate taxes on certain things which are deemed to be 'public goods'. So you contradict yourself.

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Hey Mr, again, you should really start a blog.  Why not?  What's your hesitation?

Ok, on to your points...

1. Your tax choice scheme is completely unworkable, and just a vague fantasy with no practical application. 

The logistics are really straightforward.  Given your complete lack of specifics...it seems like you must have missed them.  Here they are... Tax Choice FAQ.

2. Your imaginary scheme is nothing like a market - it is just a Frankenstein's monster of a thing which attempts to vaguely ape market-like behaviour.

When you spend your time commenting on my blog...is your behavior vaguely market-like?  From my perspective...there's nothing vague about your behavior.  You perceive a threat...and you allocate your limited resources accordingly.  I love your behavior...if I didn't...then why would I want to extend your behavior over to the public sector?  I really don't want your candle to be hidden under a bushel.

3. Individual government departments or agencies do not act like businesses in your imaginary scheme, but they are forced to vaguely ape certain aspects of businesses' behaviour. It is a completely fake construct which is logically incoherent.

You're welcome to compare government organizations (GOs) in a pragmatarian system to non-profit organizations instead.  In the private sector...non-profits lose funding when they make mistakes.  Do GOs ever make mistakes?  That should be up to taxpayers to decide.

4. Your imaginary scheme is based on a fundamental confusion about who legally owns tax revenue. 

Isn't this argument more relevant to anarcho-capitalism?  In a pragmatarian system...if there was a 50% tax rate...then half the dollars in your wallet would be marked "public" and the other half would be marked "private".  And if there was a 100% tax rate...then all the dollars in your wallet would be marked "public".

5. Your imaginary scheme demonstrates a basic ignorance of how government expenditure actually works. 

Government expenditure can not possibly work if consumer valuations are not part of the equation.  And if you truly believe that the expenditure of limited resources can maximize value in the absence of consumer valuations...then please dedicate a blog to your belief.  Because how great can your belief truly be if it's not worthy of a blog?

6. Your imaginary scheme demonstrates a basic ignorance of how monetary systems work. The government creates the money you use to pay taxes. 

No no no, I create the money that I use to pay taxes.  See...I have my own printing press.  And I also have a tree that money grows on.  Sheesh.  Of course the government creates money...but so what?  Money is simply a tool that we use to give people feedback on how well they are using society's limited resources.  Maybe it works better than having to organize a wife-swapping party every time you need to buy a blanket.

7. Your unworkable non-market system does not "correctly determine the actual demand for public goods". All it does is express your particular political ideology.

It would only express my particular political ideology...because...I would be the only taxpayer?  What do you think would happen to political parties in a pragmatarian system?

8. Your imaginary scheme is fundamentally undemocratic. If it wasn't completely unworkable and just a vague fantasy, it would require a complete transformation of existing political and legal structures.

Pragmatarianism is all about ceteris paribus.  The only thing that would change is that taxpayers would have the option of directly allocating their taxes.  If you want to argue that most taxpayers would choose this option...then you're arguing that most taxpayers don't trust their impersonal shoppers.  If you want to argue that few taxpayers would choose this option...then why bother opposing it?  

9. Your imaginary scheme gives far more power and control over public resources to the wealthiest individuals and corporations. This reflects your personal political ideology, but that ideology is not shared by most people.

Most people don't want to be ripped off.  Unfortunately, most people don't appreciate that consumer choice has logical and extremely beneficial consequences.  This is why it's so important to help people understand where better options come from.

10. You don't even believe yourself that supposed "tax choice" results in the correct allocation of resources. Your imaginary scheme only allows people to allocate taxes on certain things which are deemed to be 'public goods'. So you contradict yourself.

If taxation was voluntary...then the allocation of resources would be Pareto optimal.  Except, it wouldn't be socially optimal because it wouldn't take the preference revelation problem into account.  Tax choice does take the preference revelation problem into account...which is why the allocation would be socially optimal.

Did I miss anything?  Oh yeah, it's kinda...weird...for you to critique an "imaginary" scheme.  Would you like to criticize my imaginary friend while you're at it?

Xero: Hey Mr, let me introduce you to my imaginary friend!
Mr: No way, your imaginary friend sucks!
Xero: You're wrong!  My imaginary friend is super cool!
Mr: Here are 10 reasons why your imaginary friend is super lame...
1. He doesn't exist
2. He farts all the time
3. He has the worst fashion sense
4. He has terrible taste in music
5. His laugh is obnoxious
6. His political views are absurd
7. He's always late
8. He chews too loud
9. He's always bumming cigarettes
10. He drives slow in the fast lane
Xero: WTF?!  He drives slow in the fast lane?  That's the worst.  I'm going to kick his imaginary ass to the curb.  

Pragmatarianism doesn't drive slow in the fast lane.  And it's a real ideology.  Here you are criticizing it.

Monday, June 2, 2014

Crazy Cable Confusion: Costless Content Creation

Bottom line up front:  Creating content that consumers are not willing to pay for shrinks the pool of resources available for the creation of content that consumers are willing to pay for.

Too many economists and other educated people assume that just because providing content has zero marginal cost...that creating content must have zero opportunity cost.  Somehow cable content exists in an alternate reality where it's beneficial to disregard the fundamental law of economics.  In this exceedingly fictitious realm...there's an unlimited supply of resources...such as...uh...*checks credits on a random Netflix show*...

  • Supervising producers
  • Co-executive producers
  • Executive producers
  • Creators
  • Writers
  • Directors
  • Associate producers
  • Executive story editors
  • Photography directors
  • Production designers
  • Editors
  • Music composers 
  • Production managers
  • Assistant directors
  • Casting directors
  • Costume designers
  • Set decorators
  • Property masters

Where's Power Child when I need him?  He's my resource listin' cuz.  As you can see...I only managed to list some of the human resources needed to create cable content.

In the real world...the fact of the matter is that resources are not unlimited.  Time, money and other resources spent on shows that consumers are not willing to pay for can't also be spent on shows that consumers are willing to pay for.   Hmmm...there's gotta be a more efficient way of saying this.

  • Linvoid0 = content that consumers are not willing to pay for
  • Linvoid1 = content that consumers are willing to pay for    

Linvoid0 is created at the cost of linvoid1.  Linvoid0 diverts resources away from linvoid1.  More linvoid0 means less linvoid1.

The only reason that linvoid0 is created is because it's bundled together with linvoid1.  Therefore, unbundling cable would shift resources from linvoid0 to linvoid1.  In other words...unbundling cable would free up resources for more valuable uses.

Wow, why do I have to explain this?  Ughhh...these ages are so dark...*shudder*.  Every once in a while I'm struck full force with the primitiveness of the time that I was born into...*heebie jeebies*.  How much better would it have been to be born during a period of time when everybody completely understands the significance of this fundamental principle of economics?

"Aren't you glad we don't live in those times?"  My gf sometimes asks me this question when we're watching some depiction of the past.  My usual reply is, "we do live in those times".

For sure the present could be so much worse...but it could also be so much better.  Please stop stumbling around in the dark trying to find the light switch...it's right here...*points*... let there be light...
You will recall the wonderful image at the beginning of the seventh book of Plato's Republic: those enchained cavemen whose faces are turned toward the stone wall before them. Behind them lies the source of the light which they cannot see. They are concerned only with the shadowy images that this light throws upon the wall, and they seek to fathom their interrelations. Finally one of them succeeds in shattering his fetters, turns around, and sees the sun. Blinded, he gropes about and stammers of what he saw. The others say he is raving. But gradually he learns to behold the light, and then his task is to descend to the cavemen and to lead them to the light. He is the philosopher; the sun, however, is the truth of science, which alone seizes not upon illusions and shadows but upon the true being. - Max Weber, Science as a Vocation  
How can I lead you to the light?  Please try and follow my logic...

The creation of content is never costless.  Every single one of the resources used to create some content could have been used to create some other content.  This means that the use of any resource requires the sacrifice of the alternative uses.  And given that values are super subjective...if we want to maximize value then consumers must be free to valuate the alternative uses.  If we don't know which uses consumers are least willing to sacrifice...then resources can't be put to their most valuable uses.  So the more valuation that bundling blocks...the more value that is destroyed.

Willingness to sacrifice and willingness to pay are the same thing.  Our society is so very primitive because it's widely believed that it's beneficial to create content regardless of whether or not people are truly willing to sacrifice for it.  Limited resources are used to create linvoid0...which is shoveled onto our plates.

The creation of cable linvoid0 is a small fish to fry compared to the creation of government linvoid0.  The large bulk of the linvoid0 on our plates has been created by the government.  People eat it...completely oblivious to the fact that they should be eating linvoid1 instead.  Linvoid1 is better by their own standards.  It's content that they would truly be willing to sacrifice for.  Yet, they unknowingly end up with far less linvoid1 on their plates because massive amounts of limited resources are used to create linvoid0.

Even though unbundling government is a much bigger fish to fry...it really isn't the subject of much debate.  But we are debating whether we should unbundle cable.  On the one hand, it's great because the economic argument is exactly the same.  On the other hand, unfortunately, and unsurprisingly, there are precious few arguments against bundling that are based on the fundamental economic principle that content creation isn't costless.  Will this post of mine change that?  Is this post worth the sacrifice of my time?  Here I am...so clearly I think it's worth the risk.

All this discussion of sacrifice has me thinking me about the bible.  Now I'm pretty much an atheist...but when I was a little kid I had no choice but to regularly read the bible.  Did you have to regularly read the bible when you were growing up?  If not...then perhaps you're not so familiar with the story of Cain and Abel.  From Genesis 4...

1 And Adam knew Eve his wife; and she conceived, and bare Cain, and said, I have gotten a man from the Lord.
2 And she again bare his brother Abel. And Abel was a keeper of sheep, but Cain was a tiller of the ground.
3 And in process of time it came to pass, that Cain brought of the fruit of the ground an offering unto the Lord.
4 And Abel, he also brought of the firstlings of his flock and of the fat thereof. And the Lord had respect unto Abel and to his offering:
5 But unto Cain and to his offering he had not respect. And Cain was very wroth, and his countenance fell.

When I was a little kid...it wasn't quite clear to me why God rejected Cain's sacrifice.  Why would anybody reject an offering of fruits and vegetables?  If you offered some surplus fruits and veggies from your garden to your friend...wouldn't you be surprised if they rejected your offering?  The difference is...Cain and Abel weren't giving a gift to God...they were expressing their gratitude for the gift that he had given them.  As we can see from the first verse...Cain himself was a gift from God.  So Cain owed his life to God.  And if Cain himself was a gift from God...then it stands to reason that Cain's entire harvest was also a gift from God.   Clearly Cain was hugely in debt to God.  But Cain's willingness to sacrifice/pay did not accurately reflect his enormous obligation...which is exactly why God rejected Cain's offering.  We can easily imagine God saying to Cain..."After all that I've done for you...this is how you repay me?  You really should have done a better job of counting your blessings."

So what's the moral of the story?

A. The larger the gift, the greater the obligation
B. Preference revelation is essential
C. Valuations can be incorrect
D. Correct valuations can get you killed
E. People should be free to exit from unprofitable relationships

D isn't the correct answer.  The correct answer is that it truly matters how much people are willing to sacrifice for something.

If you're still interested in reading more about sacrifice...check out this entry... Can Economics Explain Human Sacrifice?