Nov

11

Is there any validity to this type of analysis?

Price of Sperm Oil (in gold dollars) - Eaton, "Petroleum"

1831   $0.30

1843   $0.63

1854   $1.92

1866   $1.28

The explanation of the price drop in 1866:

"This posed (and contrived) photograph was taken by John A. Mather in the Pennsylvania oilfields, probably in 1866. It was the year of a bust, a phenomenon that visits the industry from time to time. The price of crude dipped too low for profits in 1866 and forced some operators to sell or even abandon their equipment."

Rocky Humbert writes:

At the risk of eliciting hate mail from my libertarian friends, I make two observations where the government can actually help things along:

1) Short and Long-tail externalities. Markets are ill-suited to efficiently allocating the costs of mass torts such as pollution (and man-made climate change — should it ever actually pass muster beyond any reasonable doubt). I submit that correctly applied, Pigovian Taxes improve societal outcomes, and challenge Libertarians to argue otherwise.

2) Dissemination of truthful versus fraudulent information. It's difficult to imagine that anyone still believes that smoking is not unhealthy. It was in 1963 when the original surgeon general's report reported the links between smoking, cancer and heart disease. For forty years, the tobacco industry labored feverishly to prove otherwise, and their attempts at some points came periliously close to fraud and perjury. One can reasonably argue that it should not be the government's role to interfere with a fully-informed smoker's choice, but it's a much different argument to say that the smoker should be misinformed. The incremental value from cigarette packs displaying pictures of dirty lungs and dying children is questionable — which demonstrates the saying "too much of a good thing isn't a good thing"

Which brings me to the restaurant menus in NY which must now display calorie counts…. During a recent visit to Ben & Jerry's, I winced when I read that the awesome fully-loaded Brownie Sundae had 1800 calories, and this information certainly contributed to my decision to get the small mint chip cup instead. The cost to Ben&Jerry of proving this information (other than in lost sales) is small, and my "informed decision" was probably healthier — yet, this additional knowledge certainly reduced my enjoyment of the ice cream experience. I recently read that Obamacare mandates that vending machines display calorie counts (for owners of 20+ machines), and the vending machine owners are (perhaps rightly) upset about the costs of complying with these new regulations. Once again, "too much of a good thing isn't a good thing."

Gary Rogan writes: 

The government can do a lot of good. There are many well-meaning people in government, and since it expends enormous resources it produces a lot of good. You got close to the crux of the matter towards the end: WHO should decide if the cost or the action or in fact the action itself (in resources and restrictions on freedom) is worth it? Can they reliably make the right choice? What happens when they make the wrong choice with all the firepower that stands behind them?


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