Friday, May 22, 2009

Economist's Notebook: Some Random Friday Observations

Now they may be right, but it seems pretty clear to me that a group that is facing increased competition would have an incentive to stifle that competition, so I would not put too much weight on their analyses:

Lodging Group Pans Mayor’s HQ Hotel Plan

Perhaps some people need a lesson in incentives and behavior...


Megan McArdle thinks that increased fuel efficiency standards are a bad way to cut down on auto pollution mainly because efficient cars induce people to drive more. This is true (to some extent) and a carbon tax would be better, but she completely ignores the benefits of induced innovation: by making the price of poor fuel efficiency higher for auto makers, you prompt investment in and development of better, cleaner technologies. So it is not nearly as bad as she claims.


There is a whole political economy literature about how a small, focused interest group can subvert the common interest. I think about this a lot as a group of architects without any viable plan for the building, have managed to prevent the demolition of the Memorial Coliseum. Now we have a much more questionable proposal to put a stadium in Lents Park wallowing in the mud.


Some more small glimmers of good news: credit markets continue to improve.


Have a great holiday weekend, I am headed off to visit me mum so please wait until I arrive to hit the interstate! It's all about the externalities...

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