More on Angioplasty

The Washington Post’s Rob Stein writes about angioplasty and its effectiveness:

The study of more than 2,000 patients found that those who underwent the expensive procedure, known as angioplasty, in non-emergency situations were no less likely to suffer a heart attack or die than those who only took aspirin and other medicines to thin their blood and lower blood pressure and cholesterol, along with adopting life style changes.

I have written on this topic before. This article gets my hopes up in the possibility that the US can start to turn the corner on being able to bring healthcare costs lower. If we can continue to find out what procedures are not worth it under certain circumstances, then maybe doctors can continue to prescribe less costly procedures. However, as Arnold Kling has said many times before, doctors don’t always have an incentive to tell their patients to take a less costly approach. This is especially true if their patients are insistent on having a certain procedure because they simply believe in only the latest and greatest. If the procedures had more of an impact on what we pay, then maybe healthcare consumers would be more discouraged from unnecessary procedures.

Maybe, for angioplasty, if the procedure weren’t done immediately after a heart attack (after 12 hours, angioplasty is not much more affective than other less costly treatments) but much later, the patient would have to pay more. The problem with that though is that we don’t even know if it was the patient’s call, so why should we make them pay for it. As I said before, the doctor doesn’t have much incentive either way in terms of costly procedures. But all that might change so long as these studies continue to prove that costly procedures aren’t always the most effective.

Being a MySpace Musician

It’s hard to take this article very seriously. It’s about an unsigned MySpace music artist named Tila Tequila (can you tell that’s not her real name?).

I mention it because I hark back to my previous post on MySpace. This “recording artist” has 1.7 million friends, and yet her single on iTunes:

Sold 14,000 99-cent downloads in its first week -- a figure that doesn't even equal 1 percent of Tequila's MySpace friends.

Another reason why I don’t think MySpace will last for a long time unless it comes up with something new is that not much of its content is genuine. And when it is genuine, it’s mostly just gossip that does nothing for anyone. Simply put, MySpace lacks an ability to be serious overall, and the brand will require some invigoration in the future if wants to remain viable.

As for Tequila’s music career:

There are other hurdles, too, says Craig Marks, editor of Blender magazine. "Her problem is that she's just not that good. As a test case, I'm not sure she's going to measure up because I don't think she has the skill."

Strictly speaking economically, for Tila Tequila, this venture of hers has had a huge payoff. She’s signed with a prominent publicist, represented by United Artist Talent Agency, and an artist management firm. And obviously if I’m even mentioning her, then the buzz being generated for her must be working. I will disclose this though: I have yet to go to her MySpace page, or even hear a snippet of her song on iTunes.

In the end, my favorite quote from the Washington Post article was in regards as to how staff writer J. Freedom du Lac described Tequila’s single:

An abrasive, expletive-laced rap-rock revenge fantasy

Only on MySpace…

Pick Up Artists

Well, because I’ve talked about dating before, this post from Ben Casnocha is very intriguing. I dare you to not read the post. And while mentioning Ben, his blog is always worth reading.

Chiquita in Columbia

As much as I love a free-market economy, I also love and adore a judicial system and government that regulates and intervenes when necessary. For anyone who doesn’t watch The Colbert Report, this Washing Post article should help explain.

To Quote:

The Justice Department said that Chiquita's senior executives reviewed and approved the payments, even though they had the knowledge that the AUC was "a violent paramilitary organization," court documents showed. In corporate books, the company called the money security payments, doling out checks at first and then paying in cash. Even after the State Department labeled the AUC a terrorist group, Chiquita made 50 payments totaling $825,000, court documents showed.

Hedge Your Bets

Back to economics.

I think one of the biggest ways in which I’m emulating Greg Mankiw is by frequently linking to articles written by Sebastian Mallaby from the Washington Post.

In his latest Op-Ed, Mallaby shows how sub-prime lending market “bubble” is different the tech-stock bubble because the losers back then in with the tech stocks younger adventurers, whereas now…

There's no fodder for advertising laughs in the mortgage debacle. Many of the liar loans and exploding ARMs were extended to low-income families, who now can't meet their payments and face the prospect of eviction. According to the Center for Responsible Lending, one in 10 recent home buyers who are black will lose their properties, 2 1/2 times the likely rate for whites.

This is definitely a lot more serious in terms of what the consequences mean. We’re talking about people losing their homes.

However, I (nor Sebastian Mallaby for that matter) don’t mean to strike fear. And what’s why Mallaby writes that more government regulation isn’t the answer, and might make the problem a catastrophe. In my opinion, this shows that the lending banks here are at fault because they wanted to give those loans to those customers with those terms. Don’t be surprised if I can’t make the payment when my interest rate jumps after the second year. And not only that, but if you’re making that kind of loan, where’s your hedge? Even I took a class on risk management, hedging, derivatives and options securities. I know those wunderkids who took those same courses are in your firm somewhere toiling away playing solitaire. So, get them working on some new hedges, or rather, actual hedges.

I digress though because these firms probably do have hedges working, and that’s why they aren’t in the tank yet. However, their stock prices are suffering and I am trying to understand why the market thinks matters will continue in this manner for some time. I think we’ll find out soon enough when more lending firms give out earnings reports, and give statements regarding their financial and cash positions. Hopefully then, we’ll see that that they are still sound.

Australian Grand Prix Roundup

Well, when I wrote no news means “finishing in the middle of the pack,” I really didn’t know I’d be that right. Toyota made almost no news during winter testing, and during the practice sessions of the first grand prix, Toyota was being scoffed at by the commentators from Speed Channel. Nevertheless, they surprised a few people when they qualified AND finished 8th and 9th place in the grand prix.

What remains to be seen is if they can improve their performance. Toyota did improve ever so slightly last season after they started the year quite badly. Perhaps they can do the same this year. Although, I do have a sneaking suspicion that most of Toyota’s motivations comes from trying to beat Honda, which is having an almost embarrassing time of it so far this year due to the Super Aguri team using last year’s Honda chassis and outpacing the Honda factory team. Yikes.

Kimi Raikonnen won the race from pole for Ferrari, and many people think Ferrari will be un-catch-able this year. We’ll have to wait and see if the McLaren Mercedes team with defending driver’s champion Fernando Alonso will be able to match the pace. Also, while everyone discounts Fisichella and the Renault team, I do believe that they might be able to provide solid points finishes on a consistent basis and by doing so the Renault team will make things interesting towards the end of the year.

WRC Rally Mexico

I apologize for not reviewing Round 4 of the WRC championship earlier, but I have fallen ill since Wednesday night. (I had written my post on Christianity earlier in the week and just simply had to hit the publish button.)

Rally Mexico marked the return of the normalcy that was seen last season where Sebastian Loeb won, Marcos Gronholm finished second, Miko Hirvonen third, Daniel Sordo fourth, Chris Atkinson in fifth, and Petter Solberg retiring due to a freak breakdown.

The new Subaru WRC 2007 car was a fantastic improvement, but a freak oil cooler fan shroud piece broke off and cut a whole in Petter Solberg’s oil line somewhere preventing him from even finishing the first day. His teammate, Chris Atkinson, faired better finishing fifth, and may have finished better if it weren’t for a change in his car’s setup on the last day that he later regretted.

Here’s hoping for better luck with Subaru in the next rally in two weeks time in Portugal.

On My Christianity

As disclosure on my part to any and all readers, I would like write some of my own feelings on Christianity, more specifically on Creation.

As I’ve joined a new Bible study group, I feel the need to disclose the unfortunate finding - on my own - that is the widespread permeation of fundamentalist thought in what I feel should be a more personal religious travel. That is to say, fundamentalism tries to strictly control other people’s actions no matter what they believe (so much for the first amendment), and these fundamentalists and their teachings are slowly creeping their way into many churches. This fundamentalism is being brought up in one major way to me: apologetics for fundamentalism. In other words, fundamentalists (e.g. James Dobson) claim that they’re being persecuted (e.g. War on Christmas) and also try to instill pride in anyone willing to listen to them saying that they need to engage in a battle for God.

When in reality – the place I live in – Christianity is not under attack. No one is telling me not to be a Christian, or pray whenever I want, or to live my life any differently. But back to fundamentalism…

The most visible and easiest way to reveal this is through speaking about creationism. Personally, as much as I believe in what are amazing things (e.g. Jesus being the messiah), I also believe that science is bringing us closer to the true and factual answers of our origins and how God has created us. Once again, let me reiterate in case you are breezing your way through this: I believe that science is continuing to show us how we got to be where we are. Now, as Neil de Grasse Tyson will tell me, religion can become a philosophy of ignorance, but I most enjoy the effort of seeing how science proves and sheds light on my faith in God.

And while I feared for the longest time that I was alone, stuck between strict fundamentalists and scientists who would most likely scoff at my belief in deity, I have in the past, recently, and now continuously come across people of similar beliefs in allowing science to affirm and guide our faith.

Firstly, there’s Andrew Sullivan, who linked to this article where:

He [Vatican astronomer Guy Consolmagno] described creationism, whose supporters want it taught in schools alongside evolution, as a "kind of paganism" because it harked back to the days of "nature gods" who were responsible for natural events.

So, the Catholic Church also seems to be on board with evolution. Even Rowan Williams, the archbishop of Canterbury said:

[for] most of the history of Christianity there's been an awareness that a belief that everything depends on the creative act of God, is quite compatible with a degree of uncertainty or latitude about how precisely that unfolds in creative time.

Personally, I’ve still struggled to speak up for what I believe is the proper search for our own history and who God truly is, rather than accepting the fallacy of man’s descriptions for deity, which by definition should be beyond our comprehension. But man’s history, earth’s history, the universe’s history, these are areas we can fully explore and discover to shed light on ourselves. However, I have fear to bring out this conversation because I’m afraid to lose an argument. But I soon found this excerpt from Stephen Jay Gould when he spoke at Caltech in 1985 (from Shermer, Michael. Why People Believe Weird Things, Owl Books, 2002. Paperback ed, p. 153)

Debate is an art form. It is about the winning of arguments. It is not about the discovery of truth. There are certain rules and procedures to debate that really have nothing to do with establishing fact — which creationists have mastered. Some of those rules are: never say anything positive about your own position because it can be attacked, but chip away at what appear to be the weaknesses in your opponent's position. They are good at that. I don't think I could beat the creationists at debate. I can tie them. But in courtrooms they are terrible, because in courtrooms you cannot give speeches. In a courtroom you have to answer direct questions about the positive status of your belief. We destroyed them in Arkansas. On the second day of the two-week trial we had our victory party.

Andrew Sullivan, whom I believe has more guts than I do, is still writing in a dialogue with Sam Harris about faith (or as Sam would put it, our error in having faith). In this latest piece, Andrew touches on the topic of creation again.

Also, while I know he’s a humorist, Scott Adams describes in this blog post some of the feelings I have on the science. I have doubts all the time, even in the science, but I’ll continue to read the latest research as I too look for answers to my questions.

The Demand Function

As an economist, I must beg Kevin Tressler pardon, for I am about to call him a moron. He is in fact a moron economically speaking, or a terrible reader I might gather.

As an amateur mass communication scholar and someone who studied under Scott Caplan, I have to disagree with the assertion that MySpace is on the decline for one primary reason that I know Mikey K will appreciate: economics. MySpace currently boasts 84 million registered users, and in 2007, collects another 2 million users per week (that's about the size of the population of Houston, TX.) In accounting for repeat log-ins and visits, the site registers 48 million unique visitors per month. Here's the home run, though. More than 70% of MySpace users fall in the coveted 18-24 demographic, making MySpace an advertisers wet dream. Free access to the golden demographic - yeah, I'm willing to bet MySpace is secure for a long time.

Let us start with the article that Sullivan mentions. What we’re talking about in economics here is demand. The demand function, Tressler blithely tries to tackle with statistics that leave even more questions. He wrote, “Currently boasts 84 million registered users.” Of which how many come back? Of which how many are still active? Okay, he tries to counter that argument as he knows it will come up with, “In accounting for repeat log-ins and visits, the site registers 48 million unique visitors per month.”

Here’s a pose as to why there are so many users. What about substitution? For a musician to construct a functional website that allows people to download and look at their music and work that costs money and/or time. So, there’s a whole bunch of your users right there.

But that’s not even the point of the article. The article is about the future of MySpace. So, what happens when – as Michael Hirschorn says:

But what's remarkable soon becomes ordinary. MySpace remains cool — thanks to surprisingly deft stewardship by its new owner, News Corp. — but nothing is cool forever. And once the tantalizing pull of millions of people you could possibly be best friends with wears off, you're left with some by now pretty ordinary functionality: blogging; instant messaging; photo, video, and audio uploads; networking tools. Thanks to the inexorable process of Web innovation, such stuff goes from 'OMG' to 'Whatever' in no time flat.

So, Kevin is right, it’s economics. But Kevin obviously either sucks at economics or doesn’t bother to read entire articles because he doesn’t understand that the question is about what is going to happen to the demand function, and what will MySpace add that will allow their product to re-enter the product cycle. For those who don’t know, MySpace is in the end of the realization stage.

The Demand Function will change because people won’t think MySpace is cool anymore. Users won’t think it’s cool anymore because the functionality of MySpace will be surpassed by something else. Again, this question and reasoning of the article was regarding MySpace’s future, not it’s present. So, why is he "willing to bet MySpace is secure for a long time"? Does Kevin think the internet innovation is over?

Normally I would not create such a tirade, but I refuse to allow anyone to sully economics for the application of some silly contrarian argument.

More on Social Networking

Via Andrew Sullivan. The demise of My Space might soon be upon us. I can't wait.

Al Gore's Electric Bill

After a conservative friend of mine lambasted Al Gore for his very high electric bill, I felt I needed to look into that matter further. As with my previous post, I think it’s important to understand what Arnold Kling was saying in his article at TCS Daily. So, here is my opinion.

Due to recent revelation of Al Gore’s electric bill, many conservatives (new and old, theo-con and neo-con) are now or continuing to decry Gore as a hypocrite. I offer a different take. What I believe is that Mr. Gore’s fault doesn’t lie in political maneuvering, but rather his unfortunately false belief that buying carbon permits is the same as conservation. Once again, this is touched on by Arnold Kling:

If you are not really all that worried about carbon emissions, but you get pleasure from making empty, self-righteous gestures, then do what Al Gore does -- buy carbon offsets.

Once again, I don’t believe that Al Gore is acting in terms of political maneuvering; I merely think his logic is flawed in terms of how he should help the environment. But if you still feel the need to lambaste Al Gore on his purchasing of carbon offsets, then maybe we should sit down and have a talk about farm and sugar subsidies.

On Social Networking Sites

In this article from The Washington Post, we find that social networking sites have a problem in dealing with libel.

About one-third of the searches yielded content used to deny a job, the survey said. The legal hiring market is very competitive. What could tip the balance is the appearance that a candidate is a lightning rod for controversy, said Mark Rasch, a Washington lawyer and consultant who specializes in Internet issues.

If I understand that above quote properly, I feel the need to ask why people still love Ann Coulter. Wouldn’t her countless bouts of controversy all but eliminate her standing as a legal expert? I guess this is why she is a professional pundit. But, I still digress; I would not find it unimaginable if at some time in the future, a Republican candidate or congressperson would seek her legal counsel on something.

So, this is my conclusion: controversy is bad for a new hire. But, if you’re a pundit and controversy makes money for your or your publisher, then well, say whatever you want. However, another caveat… The person who was damaged in the Washington Post story had things written about her; it’s not like the firms who didn’t hire her weren’t happy with something that she wrote. Yet another example of why I continue to be wary of social networking sites in how they’re used, who uses them, and how they’re treated as truth machines (For example, Wikipedia).

Loeb Wins in Mexico

Sebastian Loeb won the fourth round of the 2007 WRC season in Mexico this past weekend. I’ve recorded the coverage from satellite/Eurosport, and I’ll provide a review on Thursday. Before Petter Solberg retired, he was leading, and I’ll give my own impressions on the Subaru Impreza WRC2007 on Thursday as well.

Oh, and by the way, while I was watching this past weekend’s Speed Report this morning, Bob Varsha had a segment on the upcoming Formula 1 season. It was quite decent, but finally ended with what I will paraphrase as: as much as I’ve talked about testing, we’ll have to find out how fast each team is in Australia. Oh, and as is the usual now, Toyota received only about 10 seconds of coverage. In the off-season, they have had no real stories. As a fan of theirs, I’ll have to admit that I’m hoping for a “no news is good news” scenario, which in racing usually means you’ll finish middle of the pack.

On tomorrow or Wednesday, I’ll provide my own comment on the hypocrisy of politicians and the sheer anger that seems to be coming from the right wing over Al Gore’s electric bill.

Carbon Tax v. Carbon Trading Permits

Once again, Arnold Kling provides some insight to an issue that I think deserves some thought. He lays out the differences between putting out a carbon tax, carbon offsets, and purchases of carbon permits.

My favorite takeaway from the article is when Arnold writes:

It may be true, as Greg Mankiw argues in his Pigou Club Manifesto, that higher taxes on bad energy are justified. Figuring out the optimum tax is a difficult challenge, even for the Pigou Club. However, once the correct tax is set, that by itself provides all the incentive that is needed to get people to switch to good energy. The tax on bad energy will raise the price that people are willing to pay for good energy. That higher price for good energy is all of the incentive that producers need to undertake the effort to provide more good energy.

At then end of Arnold’s article, I thought to myself how ironic it was that if I were to buy a carbon offset, I would not be committing an economically efficient act. Why, because I had already used the “bad energy.” While my carbon offset would subsidize good energy, it wouldn’t really discourage use in bad energy for anyone else, which is why a broad tax for everyone would be more efficient.

F1 and WRC Preview

Andrew Sullivan’s face of the day for March 1, 2007 was Ralf Schumacher in the Toyota paddock during testing at Bahrain.

Sullivan’s post reminded me that I hadn’t commented on racing events for quite some time now. Of course, there was the off season, but as well, while testing has begun in Formula 1, there’s not much to comment on because each team is testing differently. I will say this though; the teams no one is talking about are Spyker and Toyota. And as much as I love Toyota, I believe the F1 media aren’t mentioning them because Toyota isn’t doing much of anything to note. But I’ll still be rooting for them.

In WRC news, I’ve been way behind. Subaru has actually managed to score drivers and manufacturers points so far after three rounds this season. Chris Atkinson is the #2 driver for SWRT and is in his final year of contract for Subaru. While I do believe Atkinson’s come a long way and consistently shows potential, it’s obvious that Subaru will be looking at this season as an evaluation of his merit. Personally, I’ll be pulling for him along with the Subaru world Rally Team.

With that said, after three rounds Subaru lies third in the manufacturer’s standings. I look forward to Rally Mexico when Subaru finally has a chance to out its 2007 WRC car. I know they and their fans are hoping for significant improvements over the 2006 spec car. It will definitely take a win though for Petter Solberg to get back in the driver’s championship.

By the way, Daniel Carlsson tied in 7th place in points is racing in a two year old Mitsubishi Lancer WRC. Mitsubishi is not going with a full factory outfit this season, but merely providing what I would like to call moral support to a privateer team.

For any NHRA fans, check out Kevin Tressler’s blog. For those wanting information on NASCAR, just turn on the television or a newspaper, you can’t miss it.

Plug for Bryan Caplan's Book

Even though Caplan’s book hasn’t been released yet, I was reminded of its impending release when one of Andrew Sullivan’s readers wrote this:

Someone like Kos or Josh Marshall will never, ever get this about us – we (Republicans) are an extremely pragmatic group of people who like to win and aren't willing to lose just because liberal bloggers and the Media say we should lose.

I’m not arguing with any points that Sullivan’s reader makes, but the tone of Sullivan’s reader reminded me about what Bryan Caplan wrote in an essay a few months back:

My view is that these are symptoms not of ignorance, but of irrationality. In politics as in religion, some beliefs are more emotionally appealing than others. For example, it feels a lot better to blame sneaky foreigners for our economic problems than it does to blame ourselves. This creates a temptation to relax normal intellectual standards and insulate cherished beliefs from criticism — in short, to be irrational.

A “pragmatic group of people who like to win…” It would be pretty hard to argue against that statement’s rationale.

On Stephen Kirchner

For anyone who may not be aware, Stephen Kirchner has been a vocal critic of Nouriel Roubini for quite some time.

(As an aside, what has really made me a fan of reading Kirchner’s blog is the fact that I’ve never heard his foreign policy views; so I neither know if he’s pro-Iraq War or not. As much as I’ve agreed with Larry Kudlow and Hugh Hewitt on a few economic issues, I fear their other policy goals as I would the plague.)

But what I do know and love about Kirchner is his total lack of fear in confronting Roubini on what Larry Kudlow would call Roubini's “perma-bear” status. As Kirchner himself documents, Roubini wrongly predicts the demise of the U.S.’ markets on a surprisingly consistent basis.

If you want to see someone who is unabashed in commenting on financial economics, then look no further then Stephen Kirchner.

Globalization

Sebastian Mallaby writes in the Washington Post today about how the Democrats current platform towards Globalization might create more economic woes than it would actually protect the U.S. economy.

Mallaby illustrates that globalization today is not the same as it was twenty years ago. Whereas, in the 80s, an entire industry might be at risk, in today’s age only specific tasks (or specific jobs) are at risk.

An excerpt:

But the new competition in tasks rather than industries renders the tragedy of the company town increasingly rare. If a data-entry clerk loses her job in Omaha, she can probably find other work without having to move.

Cheap labor means cheaper goods, and while we may fear the short term, in the long run, free trade will make everyone better off.

Stock Option Backdating

I had posted before on stock option backdating, and we have yet another executive who is being found guilty on backdating stock options.

As Pat Milton (AP) reports:

McKelvey became just another casualty in the widening scandal over the accounting of past options grants. At least 135 U.S. companies have disclosed internal inquiries or government investigations, and at least 39 executives and board directors at 19 companies have been fired or have resigned.

I remember in my previous post on the topic saying that Sarbanes-Oxley curtailed some of the practice. That is to say, I think it happens less frequently, as did the paper I mentioned surmise. I still have to gawk at the number though, and realize that the amount of money to be made by backdating has to be too good to pass up.

Milli Vanilli

In case you didn’t know already, we may be seeing a movie sometime in the future about Milli Vanilli.