Assorted Links (7/29/2011)

Here’s a list of articles that I have been reading lately:

Apple Now Has More Cash Than The U.S. Government

finance.yahoo.com

Hat tip to my good friend Ebbesen Davis for pointing this fact out to me!

The Road to a Downgrade

professional.wsj.com

“The Wall Street Journal gives a short history of the entitlement state.”

Warren Buffett Is Wrong on Taxes

professional.wsj.com

“In The Wall Street Journal, Stephen Moore writes that millionaires and billionaires already pay a higher share of their income in taxes than the middle class.”

The GOP’s Secret Weapon—Flower Power

professional.wsj.com

“In The Wall Street Journal, Karlyn Bowman and Andrew Rugg write that aging baby boomers increasingly identify as conservative.”

China’s Banned Churches Defy Regime

professional.wsj.com

The struggle between China’s underground Protestant churches and the government is shaping up as the tensest standoff over religious freedom in China since a brutal crackdown on Falun Gong in 1999.

Emergency Team Of 8th-Grade Civics Teachers Dispatched To Washington

theonion.com

“With lawmakers still at an impasse over increasing the debt ceiling, a special team of 40 eighth-grade civics teachers was air-dropped into Washington earlier today in a last-ditch effort to teach congressional leaders how the government’s legislative process works.”

Notable & Quotable

professional.wsj.com

“Robert Rector on quality of life and the American poor.”

The Antidote for Socialism

professional.wsj.com

“We’ll have to wait for 2012, because this administration won’t administer it, Pete du Pont writes.”

Amy Winehouse’s Killers

professional.wsj.com

“In The Wall Street Journal, Sally Satel writes that attributing the British pop star’s demise to addiction is a regrettable oversimplification of what went wrong.”

How to fix higher education

slate.com

“The journalist and writer Anya Kamenetz once said that graduate students are “really smart suckers,” and I—as a Ph.D. who teaches at a liberal arts college—couldn’t agree more. It’s my view that higher education in the humanities exists mainly to provide cheap, inexperienced teachers for undergraduates so that a shrinking percentage of tenured faculty members can meet an ever-escalating demand for specialized research.”

Robin Hood Can’t Lead Us Out of the Debt Hole

online.wsj.com

“Robert Barro of Harvard University writes in The Wall Street Journal that President Obama’s obsession with higher taxes on the rich isn’t helpful.”

Five Facts About the Debt

reason.com

“Setting the economic record straight.”

Chart of the Day: The Higher Education Bubble

blog.american.com

“AEI’s Michael Barone wrote recently about the higher education bubble, which could also described as a “low-interest education loan bubble” to reflect the government’s role in subsidizing higher education, similar to its role in subsidizing homeownership.”

Tim Groseclose’s New Book on Liberal Media Bias

freakonomics.com

“My good friend and co-author Tim Groseclose has a new book out entitled Left Turn: How Liberal Media Bias Distorts the American Mind. As the title suggests, it has a definite conservative slant. It is not, however, a right-wing rant by any means. Rather, it is a carefully researched and amusingly written book by a highly regarded academic.”

Health Is the Health of the State

www.american.com

“Between 1966 and 2007, the entire increase in the size of government relative to the economy resulted from growth in tax-financed health spending.”

Why the Fed Is Not Independent

professional.wsj.com

“In The Wall Street Journal, Gerald O’Driscoll writes that the Federal Reserve’s foray into fiscal policy makes for a volatile political mix that all but guarantees control from without.”

The Flight to the Exchanges

professional.wsj.com

“The Wall Street Journal writes that ObamaCare may cause small businesses to drop insurance coverage.”

The Debt Ceiling and the Pursuit of Happiness

professional.wsj.com

“In The Wall Street Journal, Arthur C. Brooks writes that a welfare state that led to permanent austerity would betray the principles that have made American culture exceptional.”

The Downside of Mandated Sick Leave

professional.wsj.com

“Nearly 30% of its lowest-wage earners reported reduced hours or layoffs after San Francisco passed a paid-leave ordinance.”

Toying With Default

professional.wsj.com

“The President isn’t serious about real spending cuts.”

Missing Milton Friedman

economist.com

“TIM LEE asks an important question: why are conservatives and libertarians so uniformly hawkish about inflation? Mr Lee (a friend and former colleague) notes that this regularity is far from inevitable.”

Greg Mankiw Recommends Reading These 18 Economics Books

farnamstreetblog.com

“If you’d like to read more about economics issues try these 18 books reccommended by Greg Mankiw, author of Principles of Economics.”

27 Club: Amy Winehouse, Kurt Cobain & Other Members

thedailybeast.com

“With her death this week, Grammy-winning retro-singer Amy Winehouse joined a tragically long list of iconic, often tortured artists who died at 27, including Kurt Cobain, Jimi Hendrix and Janis Joplin. Together, they are known as the “27 Club.” Read their stories.”

U.S. Default Insurance Has Quirks

professional.wsj.com

“Investors looking for protection against a U.S. debt default could be in for a surprise. In the market for credit default swaps, it is currently more expensive to buy one-year insurance on Treasurys than on junk-rated Indonesian bonds.”

Assorted Links (7/23/2011)

Here’s a list of articles that I have been reading lately:

Less Academics, More Narcissism by Heather Mac Donald – City Journal
www.city-journal.org

“The University of California is cutting back on many things, but not useless diversity programs.”

Kevin Slavin: How algorithms shape our world | Video on TED.com
www.ted.com

“TED Talks Kevin Slavin argues that we’re living in a world designed for — and increasingly controlled by — algorithms. In this riveting talk from TEDGlobal, he shows how these complex computer programs determine: espionage tactics, stock prices, movie scripts, and architecture.”

The Weekend Interview with Bill Gates: Was the $5 Billion Worth It? – WSJ.com
professional.wsj.com

“In The Wall Street Journal, Jason Riley interviews Bill Gates who reflects on a decade of record-breaking education philanthropy and talks teachers, charters—and regrets.”

Margaret Hoover: How the GOP Can Win Young Voters – WSJ.com
professional.wsj.com

“In The Wall Street Journal, Margaret Hoover writes that with 37% of millennials unemployed or underemployed, the Republican party has a shot.”

Hello, Adjunct, Meet Prof. Cozy
online.wsj.com

“Frank Gannon reviews The Faculty Lounges: And Other Reasons Why You Won’t Get the College Education You Paid For by Naomi Schaefer Riley.”

Thanks to Regulatory Burdens, We’ve Got a Jobless and Creditless Recovery « The Enterprise Blog
blog.american.com

“There’s little disagreement that the U.S. labor market is struggling to create jobs in what is probably the worst “jobless recovery” in history.”

Thomas Saving: Obama’s Debt-Ceiling Scare Tactics
online.wsj.com

“Thomas R. Saving writes in The Wall Street Journal that contrary to President Obama’s recent threats, the Social Security ‘coffers’ are very far from running dry.”

Henninger: The Paul Ryan Factor – WSJ.com
professional.wsj.com

“In The Wall Street Journal, Wonder Land columnist Daniel Henninger writes that non-Obama voters want a presidential candidate who can master the details of policy in 2012.”

Richard Shelby: The Danger of an Unaccountable ‘Consumer-Protection’ Czar
online.wsj.com

“In The Wall Street Journal, Alabama Sen. Richard Shelby writes that the SEC and FDIC are led by boards—so why should one person have sweeping powers over the economy?”

Fred Barnes: How Spending Cuts—Not Higher Taxes—Saved Canada
online.wsj.com

“Fred Barnes writes in The Wall Street Journal about how spending cuts, not higher taxes, saved Canada. Because liberals up there listened to voters, the Canadian economy is now growing faster than the U.S. one.”

John Taylor: The End of the Growth Consensus
online.wsj.com

“In The Wall Street Journal, Stanford economist John Taylor writes that America added 44 million jobs in the 1980s and ’90s, when both parties showed they had learned from past mistakes—but the lessons have been forgotten.”

Chavez’s Michael Moore Moment | Via Meadia
blogs.the-american-interest.com

“Michael Moore won’t be alone if he heads to Cuba for his next doctor’s visit; Venezuelan President Hugo Chavez turned down an offer from Brazilian leader Dilma Rousseff last week to seek treatment for cancer in her country, choosing instead to rely on the healthcare system that Fidel built.”

Some federal workers more likely to die than lose jobs – USATODAY.com
usatoday.com

“Federal employees’ job security is so great that workers are more likely to die of natural causes than get fired, a USA TODAY analysis says.”

Congress Continues Debate Over Whether Or Not Nation Should Be Economically Ruined
theonion.com

“WASHINGTON—Members of the U.S. Congress reported Wednesday they were continuing to carefully debate the issue of whether or not they should allow the country to descend into a roiling economic meltdown of historically dire proportions.”

Tax Reform: The Overlooked Solution
advisorperspectives.com

Insightful article which explains, among other things, how tax revenue depends critically upon economic growth and how economic growth is impeded by debt. As the author notes, “Revenue is not the problem. It is the spending and debt.”

Naomi Schaefer Riley: Academia’s Crisis of Irrelevance
online.wsj.com

“In The Wall Street Journal, Naomi Schaefer Riley writes that as more students and their parents question rising college costs, professors defend useless research and their lack of teaching.”

Emil Henry: America’s Debt-Ceiling Opportunity
online.wsj.com

“In The Wall Street Journal, Emily W. Henry Jr. says the GOP should demand business-like accounting as a part of a government budget deal.”

William McGurn: The Beltway’s Favorite Tax Metaphor – WSJ.com
professional.wsj.com

“In The Wall Street Journal, Main Street columnist William McGurn says the Beltway establishment says politicians who raise taxes are adults, and those who want to cut spending are irresponsible.”

GOP to Senate Democrats: Obey the Law and Produce a Budget – Guy Benson
townhall.com

“As feverish, race-against-the-clock debt ceiling negotiations continue behind closed doors, Americans ought to bear in mind that there’s a simpler, far more transparent way to address federal spending priorities and debt reduction.”

Terry Moe: The Internet Will Reduce Teachers Union Power – WSJ.com
professional.wsj.com

“In The Wall Street Journal, Terry Moe of Stanford writes that online learning means fewer teachers (and union members) per student.”

Crovitz: ‘Spectrum Auctions’—There’s an App for That – WSJ.com
professional.wsj.com

“In the Wall Street Journal, Gordon Crovitz explains how an idea floated by future Nobel Prize-winning economist Ronald Coase in 1959 may finally bear fruit.”

Christianity Surging in India? | Via Meadia
blogs.the-american-interest.com

“The story of rapid Christian growth in China is well known; since the end of the Cultural Revolution tens of millions of Chinese have converted to Christianity; TAI blogger Peter Berger accepts a middle range estimate of 65 million.”

The Debt Battle Is Good for the GOP
online.wsj.com

“Clark Judge writes in The Wall Street Journal that tea party Republicans speak for a large group of voters who have been swinging back and forth between the parties for more than a decade.”

Get Ready for a 70% Marginal Tax Rate
online.wsj.com

“Stanford economist Michael Boskin writes in The Wall Street Journal that those who argue that the U.S. economy can bear higher pre-Reagan tax rates are wrong—those rates applied to a much smaller fraction of taxpayers than what we’re headed for without spending cuts.

Assorted Links (7/16/2011)

Here’s a list of articles that I have been reading (and videos that I have been viewing) lately:

Tim Harford: Trial, error and the God complex | Video on TED.com

www.ted.com

“TED Talks Economics writer Tim Harford studies complex systems — and finds a surprising link among the successful ones: they were built through trial and error. In this sparkling talk from TEDGlobal 2011, he asks us to embrace our randomness and start making better mistakes.”

McGurn: Are You Better Off? – WSJ.com

professional.wsj.com

“In The Wall Street Journal’s Main Street column, William McGurn writes that President Obama will have to answer the question Reagan asked in 1980.”


Peter Wallison: Government-Sponsored Meltdown – WSJ.com


professional.wsj.com


“In The Wall Street Journal, Peter Wallison writes that Fannie Mae did not contribute ‘marginally’ to the financial crisis, but was the source of the declining mortgage underwriting standards that brought down the system.”


John H. Cochrane: The More Bank Capital, the Safer the Bank – WSJ.com


professional.wsj.com


“John H. Cochrane writes in The Wall Street Journal that even under Dodd-Frank, banks need buffers of capital to protect taxpayers and the financial system.”


Can President Obama keep paying Social Security benefits even if the debt ceiling is reached?


www.washingtonpost.com


“President Obama says he may not be able to keep paying Social Security benefits if the debt ceiling is reached. There’s fierce debate about whether that is accurate.”


Review & Outlook: The Obama Downgrade – WSJ.com

professional.wsj.com

“The Wall Street Journal on the real reason the U.S. could lose its AAA rating.”

This Is No Time for Games – WSJ.com

professional.wsj.com

“Ronald Reagan wouldn’t be playing ‘Targeted Catastrophe,’ Peggy Noonan argues.”

Anne Jolis: Greece—Where Profit Is Taboo – WSJ.com

professional.wsj.com

“In The Wall Street Journal, Anne Jolis interviews Greek shipping magnate John Coustas about the fate of his country.”

Montreux fetes Miles Davis with “soundtrack” to his life

news.yahoo.com

“Herbie Hancock, Wayne Shorter and Marcus Miller paid tribute to their friend and mentor Miles Davis…”

Obamageddon Coming to a City Near You? | Via Meadia

the-american-interest.com

“The election of the first African-American president was widely hailed as a giant step forward for American racial politics. The future, however, may remember this administration asa giant step back for Black America during a period of deepening alienation, anger and despair in America’s inner cities.”

Kenneth C. Frazier: Will Washington Find the Cure for Cancer?

online.wsj.com

“In The Wall Street Journal, Merck CEO Kenneth C. Frazier writes that government boards and drug price controls threaten to throw sand in the gears of medical progress.”

Best of the Web Today: Raise Taxes or Granny Gets It

online.wsj.com

“James Taranto on the liberal media’s idea of a grown-up.”

The President’s offer is left of Bowles-Simpson

keithhennessey.com

“Unlike the Bowles-Simpson package, the deal Republicans are being offered by the President is such a bad one that it’s not really a tough call.”

The Method to Their Madness

www.nytimes.com

“There are reasons why the Republican Party has its heels dug in on the debt ceiling.”

Nanny Steven Chu: “We Are Taking Away a Choice that Lets You Waste Your Own Money!”

www.advancingafreesociety.org

“Steven Chu was a co-winner of the Nobel Prize in Physics in 1997. That he developed methods to cool and trap atoms with laser light does not mean he understands economics, consumer choice, or politics. A Nobel Prize does not even guarantee common sense. Often it guarantees the opposite.”

Economic Freedom & Quality of Life

www.youtube.com

“Economic Freedom and the Quality of Life is a short, informative video centered on the ideas of economic freedom and the societal benefits it produces. The video helps explain what economic freedom is and why it’s key to improving society.”

Assorted Links (7/10/2011)

Here’s a list of articles that I have been reading lately:

3D Printing Will Revive American Manufacturing

blogs.forbes.com

“The transformative technology of the 2015-2025 period could be 3D printing. This has the potential to remake the economics of manufacturing from a large-scale industry back to an artisan model of small design shops with access to 3D printers. In other words, making stuff, real stuff, could move from In other words, making stuff, real stuff, could move from being a capital intensive industry into something that looks more like art and software. This should favor the American skill set of creativity.”


A Tale of Two Job Markets: Today & ’83-’84


www.advancingafreesociety.org


“Today’s jobs report provides yet more evidence that this is a recovery in name only. The 9.2 percent unemployment rate is certainly a serious problem, but you can understand the problem a little better by looking at the percentage of working-age Americans who are actually working. This percentage declined again to 58.2 percent in June, and is well below what it was when the recovery officially began.”

Freakonomics » Hey Baby, Is That a Prius You’re Driving?


www.freakonomics.com


The authors of a study cited here find that consumers in Colorado and Washington are willing to pay $430 to $4,200 for the utility value of “conspicuous conservation” associated with purchasing a Toyota Prius. Interestingly, this effect is lacking for comparable hybrids such as the Honda Civic and Toyota Camry, cars which (unlike Prius) are manufactured as identically designed gas powered vehicles.


Freakonomics » The Wastefulness of New Jersey’s Gas Pumping Restrictions


www.freakonomics.com 


“Driving through New Jersey, we stop for gas and sit for a few minutes until the attendant comes to fill our tank. My son tells me that is because New Jersey has one of most wasteful restrictions in the Union: there is no self-service gasoline; all gas must be pumped by an attendant. This wastes drivers’ time — it’s almost always quicker to pump gas oneself.  The labor of the attendants is thus devoted to generating economic waste and could be spent productively elsewhere rather than in promoting economic inefficiency.”


Celebration: It’s Day 800 Since Senate Dems Passed a Budget


townhall.com


“Today marks the 800th day since the Senate Democrats passed a budget. For more than two years, democrats have ignored their legal obligation to pass a budget, while we’ve seen federal spending spiral out of control. Considering democrats have controlled the White House and the Senate for more than two years, with total democrat control between 2008 and 2010 in the House, Senate and White House, the failure lies with President Obama and democrat congressional leadership.”


The Divorce Generation


professional.wsj.com


“After surviving the wreckage of their own split families, Generation X parents are determined to keep their marriages together. It doesn’t always work out.”


iowahawk: Questions, So Many Questions


iowahawk.typepad.com


“President Obama graciously offered to take questions submitted via Twitter today, courtesy the #AskObama hashtag. Being an inquisitive sort, I decided to submit a few that have been nagging me.  Although he declined to answer any, I thought I’d warehouse them here in case he ever gets around to them.”

We Need a Ronald Reagan

professional.wsj.com

“Europeans pay tribute to a great American—and long for another. Peggy Noonan reports.”

Redefining “balance”

keithhennessey.com

“Over the next few weeks, you should be skeptical of anyone’s attempt to claim an objective measure of a particular deficit reduction package as balanced or unbalanced. You’re almost certainly being spun.”

The beautiful tricks of flowers

www.ted.com

“In this visually dazzling talk, Jonathan Drori shows the extraordinary ways flowering plants — over a quarter million species — have evolved to attract insects to spread their pollen: growing ‘landing-strips’ to guide the insects in, shining in ultraviolet, building elaborate traps, and even mimicking other insects in heat.”

Overcaffeinated CAFE

professional.wsj.com

“In The Wall Street Journal, Business World columnist Holman Jenkins writes that President Obama’s crusade to increase automobile fuel-economy standards makes little economic sense—and it won’t save the planet.”

A Debt-Limit Breakout

online.wsj.com

“The Wall Street Journal writes that Republicans should agree to fewer business tax deductions in return for a lower corporate tax rate.”

The Moral Outrage of ‘Missing’ Girls – WSJ.com

professional.wsj.com

“In The Wall Street Journal, Main Street columnist William McGurn writes about the debate between Maria Hvistendahl and New York Times columnist Ross Douthat about the morality of sex-selective abortion.”

Malpass and Moore: America’s Troubling Investment Gap

online.wsj.com

“David Malpass and Stephen Moore write in The Wall Street Journal that for the first time in decades, America is on net losing, not attracting, growth capital.”

John Steele Gordon: The Rise and Needless Decline of the Golden State

online.wsj.com

“John Steele Gordon writes in The Wall Street Journal that more Americans left California than arrived in the last decade. What caused this great migration? Politics.”

Head to Head on Tenure

Naomi Schaeffer Riley, a former Wall Street Journal editor and author of the book The Faculty Lounges … And Other Reasons You Won’t Get the College Education and UT-Austin economics professor Daniel Hamermesh go “head to head” on tenure (hat tip to Frank McCamant for pointing this “debate” out to me).  Also see a short Texas Tribune article entitled “The Pundit vs. the Professor: A Debate About Tenure”.

The political economy of "All cribs now must pass tough new safety rules"

Last week, the Chicago Tribune published a story entitled “All cribs now must pass tough new safety rules” which describes in some detail new regulatory crib safety standards that have been promulgated by the Consumer Products Safety Commission (CPSC).  While crib deaths are obviously incredibly tragic, they are also very rare events.  Here, I call attention to some potentially deadly (and unsavory) “unintended” consequences associated with the proposed policy changes.  I’ll do this through the lens of George Stigler’s theory of regulatory capture.

The Wikipedia definition for regulatory capture is as follows: “…regulatory capture occurs when a… regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating.”  A good place to start in this particular case is by thinking carefully about the underlying interest group politics behind this new federal regulatory initiative. The above referenced Chicago Tribune article notes, among other things, that “federal regulators recommend that families that can afford to do so buy new cribs and destroy their old ones (italics added for emphasis).” Think of the market consequences if everyone followed the CPSC’s “advice” – all of a sudden, you would have a sharp reduction in the supply of used cribs; furthermore, without the presence of a viably competitive used crib market, this means that the primary demand for baby cribs will likely be met by manufacturers whose products comply with the new regulations. Given this adverse supply shock while holding demand constant can only mean one thing – higher prices for baby cribs.  The next obvious question is, who is likely to benefit financially from these new regulations?  Baby crib manufacturers who can produce new cribs which are fully compliant with the new regulations obviously stand to benefit, particularly if the effect of the regulations is to create entry barriers (in the form of regulatory fixed costs) to this industry (hat tip to my Baylor colleague Dave VanHoose for pointing this aspect of regulatory capture out to me).  I can’t help but wonder whether the Juvenile Products Manufacturers Association has been actively lobbying for these new regulations for these very reasons.

Another interest group which stands to benefit is the plaintiffs bar who can be expected, in the wake of this change in regulatory policy, to pursue quite aggressively products liability cases against companies whose baby cribs at the time of manufacture were not fully compliant with the new safety regulations.  That it is possible to successfully litigate cases under such circumstances came as somewhat of a surprise to me, until I read Peter Huber’s book entitled Liability a number of years ago and more recently, a Supreme Court decision which seems to have established a precedent that full compliance with federal safety regulations at time of manufacture does not necessarily grant manufacturers immunity from liability after the fact (e.g., see “Supreme Court allows lawsuits over seat belts”, Reuters, February 23, 2011). It will be interesting to see whether this new regulatory initiative emboldens the plaintiffs bar to also pursue formal certification of pending baby crib lawsuits as class actions (if they haven’t already done so!). Of course, the additional legal cost will quickly become reflected in the price of new baby cribs, which will in turn make lawsuits all the more profitable to pursue (since payments to attorneys in such cases are largely based upon contingency fees) and baby cribs less affordable.

In the meantime, parents who can’t afford the sharply higher prices (due to higher direct and indirect regulatory and liability costs) for baby cribs will either violate regulatory policy outright by buying cribs off eBay and from garage sales; other parents will simply improvise their own sleeping solutions for their babies, which will likely be far more hazardous for babies than the cribs that the CPSC is currently in the process of outlawing. What a mess!

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The political economy of “All cribs now must pass tough new safety rules”

Last week, the Chicago Tribune published a story entitled “All cribs now must pass tough new safety rules” which describes in some detail new regulatory crib safety standards that have been promulgated by the Consumer Products Safety Commission (CPSC).  While crib deaths are obviously incredibly tragic, they are also very rare events.  Here, I call attention to some potentially deadly (and unsavory) “unintended” consequences associated with the proposed policy changes.  I’ll do this through the lens of George Stigler’s theory of regulatory capture.

The Wikipedia definition for regulatory capture is as follows: “…regulatory capture occurs when a… regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating.”  A good place to start in this particular case is by thinking carefully about the underlying interest group politics behind this new federal regulatory initiative. The above referenced Chicago Tribune article notes, among other things, that “federal regulators recommend that families that can afford to do so buy new cribs and destroy their old ones (italics added for emphasis).” Think of the market consequences if everyone followed the CPSC’s “advice” – all of a sudden, you would have a sharp reduction in the supply of used cribs; furthermore, without the presence of a viably competitive used crib market, this means that the primary demand for baby cribs will likely be met by manufacturers whose products comply with the new regulations. Given this adverse supply shock while holding demand constant can only mean one thing – higher prices for baby cribs.  The next obvious question is, who is likely to benefit financially from these new regulations?  Baby crib manufacturers who can produce new cribs which are fully compliant with the new regulations obviously stand to benefit, particularly if the effect of the regulations is to create entry barriers (in the form of regulatory fixed costs) to this industry (hat tip to my Baylor colleague Dave VanHoose for pointing this aspect of regulatory capture out to me).  I can’t help but wonder whether the Juvenile Products Manufacturers Association has been actively lobbying for these new regulations for these very reasons.

Another interest group which stands to benefit is the plaintiffs bar who can be expected, in the wake of this change in regulatory policy, to pursue quite aggressively products liability cases against companies whose baby cribs at the time of manufacture were not fully compliant with the new safety regulations.  That it is possible to successfully litigate cases under such circumstances came as somewhat of a surprise to me, until I read Peter Huber’s book entitled Liability a number of years ago and more recently, a Supreme Court decision which seems to have established a precedent that full compliance with federal safety regulations at time of manufacture does not necessarily grant manufacturers immunity from liability after the fact (e.g., see “Supreme Court allows lawsuits over seat belts”, Reuters, February 23, 2011). It will be interesting to see whether this new regulatory initiative emboldens the plaintiffs bar to also pursue formal certification of pending baby crib lawsuits as class actions (if they haven’t already done so!). Of course, the additional legal cost will quickly become reflected in the price of new baby cribs, which will in turn make lawsuits all the more profitable to pursue (since payments to attorneys in such cases are largely based upon contingency fees) and baby cribs less affordable.

In the meantime, parents who can’t afford the sharply higher prices (due to higher direct and indirect regulatory and liability costs) for baby cribs will either violate regulatory policy outright by buying cribs off eBay and from garage sales; other parents will simply improvise their own sleeping solutions for their babies, which will likely be far more hazardous for babies than the cribs that the CPSC is currently in the process of outlawing. What a mess!

Assorted Links (7/4/2011)

Here’s a list of articles that I have been reading lately:

American Exceptionalism

www.advancingafreesociety.org

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.”

Is There a Shortage of Primary Care Physicians?

www.advancingafreesociety.org

“Until the early part of the twentieth century, practically all physicians in the United States and elsewhere were primary care physicians, not specialists. his changed dramatically in all developed countries over the remainder of that century, so that at present, over 75% of all American doctors specialize in fields like surgery, cardiology, dermatology, urology, and oncology.”

Burning down the house

www.washingtonpost.com

“How a Dem operative started the financial crisis.”

Invisible sieve

www.economist.com

I agree with Mr. Pariser; I am concerned about the “filter bubble”, which he defines as “”a unique universe of information for each of us”, meaning that we are less likely to encounter information online that challenges our existing views or sparks serendipitous connections. “A world constructed from the familiar is a world in which there’s nothing to learn,” Mr Pariser declares. He calls this “invisible autopropaganda, indoctrinating us with our own ideas”.”

The Future Still Belongs to America

professional.wsj.com

“In The Wall Street Journal, Walter Russell Mead writes that the 21st century will throw challenges at everyone—and the U.S. is better positioned to adapt than China, Europe or the Arab world.”

For Whom The Greek Bell Tolls

www.forbes.com

Steve Forbes asks, “Why is Greece such a basket case? And what are the implications for Europe and the U.S.?”

Ronald Reagan, champion of freedom

www.advancingafreesociety.org

“Fifty-five years ago, freedom reigned for a brief moment in Communist Hungary. On October 23, 1956, student protesters marched through the streets of Budapest demanding an immediate end to their Soviet-dominated government.”

The GOP’s Debt-Ceiling Divide

professional.wsj.com

“In The Wall Street Journal’s Potomac Watch column, Kimberley Strassel writes that the Biden talks are giving budget hawks a chance to carve away some of the Republicans’ own sacred-cow subsidies.”

A Debt-Limit Election

professional.wsj.com

“In The Wall Street Journal, Wonder Land columnist Dan Henninger writes that what began as a technicality has become a metaphor for the stakes in 2012.”

Review & Outlook: Obama’s Real Revenue Problem – WSJ.com

professional.wsj.com

“The Wall Street Journal says tax receipts are low because of the mediocre economic recovery.”

Obama Calls People Earning $250,000 a Year ‘Jet Owners’

blogs.wsj.com

“President Obama has a new term for the people he wants to tax more: jet owners. The problem is that most people that would be subject to the higher taxes the president wants aren’t likely to be private-jet owners.”

The missing facts in President Obama’s news conference

washingtonpost.com

“The president left out a few details when he denounced Republicans on taxes and discussed Libyan leader Moammar Gaddafi.”

Gators get their move on in Texas

Source: statesman.com

I didn’t realize until now that the great state of Texas has a gator population in the range of 250,000 to 500,000!

Who Owns Risk?

www.cfo.com

“The ultimate responsibility for risk management has shifted away from the CFO.”