“…we should expect a linear relationship between costs imposed on broadcasters and the likelihood of them abandoning over-the-air broadcasting. Every dollar of additional costs for broadcasters is one less dollar of profit, and thus reduces the attractiveness of over-the-air broadcasting as a business model. And don’t forget the pot of gold at the end of the rainbow: once broadcasting leaves the spectrum, much more valuable services can utilize those frequencies.” Thus spake Stuart Benjamin in early 2009 in “Roasting the Pig to Burn Down the House: A Modest Proposal”
http://scholarship.law.duke.edu/faculty_scholarship/1949/
Professor Stuart was hired by the FCC Chairman Julius Genachowski later that same year, he “joined the Commission in December 2009 as the agency’s first Distinguished Scholar in Residence. He resides in OSP (Office of Strategic Planning) and works on spectrum reform, First Amendment issues, and long-term strategy (emphasis added). He is on leave from Duke Law School, where he is the Douglas B. Maggs Professor of Law. He specializes in telecommunications law, the First Amendment, and administrative law.” http://www.fcc.gov/osp/resident-scholar.html
It appears the FCC is beginning to take action in keeping with the ideas of Professor Benjamin. On November 30 TVNewsCheck published an article “FCC begins TV Spectrum Revamp”. In the article Chairman Genachowski said, “The spectrum is too valuable and our spectrum needs too great for it to be used inefficiently in this manner, especially given that less than 10% of Americans receive broadcast television only through over-the-air spectrum signals.’’
So, the plan is to move more stations to the VHF band, a band by-the-way that has proved problematic after the digital transition. The idea is to have 2 stations share a single 6MHZ band while retaining their right to “must carry” on cable. This will free up the more desirable UHF band for wireless broadband. But it will also impose yet more cost by forcing some broadcasters to, yet again, buy VHF transmission equipment.
On December 2 TVNewsCheck published a story “FCC Plan Makes VHF a High Priority”. I’ll simply quote from the beginning and end of this piece.
“As part of its plan to shift 120 MHz of spectrum from TV broadcasting to wireless broadband, the FCC wants to pack TV stations more tightly together in the remaining 180 MHz of spectrum to free up some for auction.
To do that most efficiently, it must make the VHF portion of that remaining spectrum (chs. 2-13) more hospitable to broadcasting.”
The article goes into the issues with VHF, citing Television consulting experts who discuss some of the additional costs and reduction in performance broadcasting would experience going back to VHF, concluding with the following paragraphs.
“Since the digital transition, most stations are now broadcasting in the UHF band. Some of them are worried that in trying to improve the VHF band, the FCC is signaling that it intends to force some UHF stations back to the VHF band.”
“Among them is Dan Ullmer, chief engineer at WECT Wilmington, N.C., which made the leap from VHF to UHF in September 2008 when it because (sic) the first station in the nation to switch to all-digital service.”
‘“We have really good coverage along the coast now,” he said. “Going to VHF would be going backwards for us. We have built out all-new UHF facilities, UHF antennas. All that would have to be changed out. We'd have to enter another major transition in the market, which would likely disenfranchise our viewers. They've already been through a major transition here.”’
So, Professor Benjamin’s ideas are becoming manifest. There is no doubt where this is headed. They have made it very clear that the goal is to promote wireless broadband at the expense of terrestrial broadcasting. With the rulemaking vote of November 30, the process begins. It sets the stage for forcing broadcasters back to an inferior frequency band and having THEM pay for it, both of which make broadcasting less viable. Recall Professor Benjamin, “Every dollar of additional costs for broadcasters is one less dollar of profit, and thus reduces the attractiveness of over-the-air broadcasting as a business model.”
Saturday, December 4, 2010
Friday, November 26, 2010
Debt, Moral Hazard, Praxeology
There is a common thread through most of Professor Krugman’s essays; Selective Moral Hazard.
He believes in the concept of moral hazard, but apparently only for bankers. I agree with the conclusion of today’s essay, I just wish he were more consistent in his application. Were we to take into consideration moral hazard when implementing economic/public policies affecting individuals we would bring personal responsibility and praxeology back into our economics.
As a good Keynesian Leftist (excuse the redundancy), Professor Krugman believes government should take responsibility for solving the current financial mess. And in applying moral hazard to this situation it would be logical to ask government to solve a problem for which they are primarily responsible. But that would be like asking a committed AND currently intoxicated alcoholic to run an AA meeting. It’s a mockery.
Our financial system is built on a scheme that has been gradually implemented over the last 100 years. We’ve made the transition from the gold standard to a complete fiat monetary system in several stages, culminating in Nixon’s closing of the gold window in 1971. At that point all international currencies were floating, each against all the others, and countries could no longer exchange American dollars for gold. But money has been created by debt for many, many years because that’s what a fractional banking system does, it creates money through debt. But 100 years ago, at least SOME of the money was back by gold. Now, none of it is. We are currently on a debt standard. Practically all money is created by debt and backed by the economic strength of the issuing country or in the case of the Euro, countries; Hence the problem.
We are reaching the limits of the “debt standard”. Eastern philosophy embraces Yin and Yang and the ebb and flow of change. Everything changes and nothing lasts forever. This debt standard will come to an end. With what shall we replace it? Anything we do will be painful. We could start all over with new debt but it will start us back on the same road. We know where it ends. Perhaps we should take another look at gold. It too will be painful and to implement a classic gold standard would require going back to a true laisser-faire economic system. But doing that would also apply moral hazard equally to all participants in the economy; bankers as well, with bad decisions resulting in bankruptcy. What could be more fair that that?
He believes in the concept of moral hazard, but apparently only for bankers. I agree with the conclusion of today’s essay, I just wish he were more consistent in his application. Were we to take into consideration moral hazard when implementing economic/public policies affecting individuals we would bring personal responsibility and praxeology back into our economics.
As a good Keynesian Leftist (excuse the redundancy), Professor Krugman believes government should take responsibility for solving the current financial mess. And in applying moral hazard to this situation it would be logical to ask government to solve a problem for which they are primarily responsible. But that would be like asking a committed AND currently intoxicated alcoholic to run an AA meeting. It’s a mockery.
Our financial system is built on a scheme that has been gradually implemented over the last 100 years. We’ve made the transition from the gold standard to a complete fiat monetary system in several stages, culminating in Nixon’s closing of the gold window in 1971. At that point all international currencies were floating, each against all the others, and countries could no longer exchange American dollars for gold. But money has been created by debt for many, many years because that’s what a fractional banking system does, it creates money through debt. But 100 years ago, at least SOME of the money was back by gold. Now, none of it is. We are currently on a debt standard. Practically all money is created by debt and backed by the economic strength of the issuing country or in the case of the Euro, countries; Hence the problem.
We are reaching the limits of the “debt standard”. Eastern philosophy embraces Yin and Yang and the ebb and flow of change. Everything changes and nothing lasts forever. This debt standard will come to an end. With what shall we replace it? Anything we do will be painful. We could start all over with new debt but it will start us back on the same road. We know where it ends. Perhaps we should take another look at gold. It too will be painful and to implement a classic gold standard would require going back to a true laisser-faire economic system. But doing that would also apply moral hazard equally to all participants in the economy; bankers as well, with bad decisions resulting in bankruptcy. What could be more fair that that?
Thursday, November 18, 2010
Socialism, Alaska Style
What's the first thing that comes to you mind when you think of Alaskans? For me, it's rugged individualism. I've always seen Alaska as the state where its citizens preserve, at least to some degree, the ideal of frontier life. The people there are unique and embody the core ideals of America; tough, self-reliant individuals who make a living in a demanding and somewhat hostile environment.
The state has consistently been represented by Republicans; currently its Governor and Lt. Governor are Republicans, of the 3 person Congressional delegation, two are Republicans and the state legislature is Republican 55 to 45 %. The recently Senatorial election where Lisa Murkowski was re-elected as a write-in over the Tea Party selected Joe Miller should on its surface be somewhat surprising. But I think this election underscores my contention that most Americans are comfortable with a large federal government.
Alaska, I learned depends on the largess of the Federal Government for about 1/3 of its GDP. A significant portion of that is probably the oil profits that are distributed to all the citizens the amount of which was increased by a previous governor, Sarah Palin.
Lisa Murkowski who pretty much inherited her Senate seat when her father died was a protege of Ted Stephens who was famous for his ability to bring home the pork. She instinctively knew that Alaskans didn't want that to end. Joe Miller, whose nomination was endorsed by the Tea Party movement, would have been obligated to not use earmarks and other schemes to raid the federal treasury. So Ms. Murkowski embarked on a write-in campaign and became the first federally elected official to win by write-in since Strom Thurmond in 1954.
This election is just more anecdotal evidence that Americans, even Republicans, are comfortable with the concept of looting ones fellow citizens.
The state has consistently been represented by Republicans; currently its Governor and Lt. Governor are Republicans, of the 3 person Congressional delegation, two are Republicans and the state legislature is Republican 55 to 45 %. The recently Senatorial election where Lisa Murkowski was re-elected as a write-in over the Tea Party selected Joe Miller should on its surface be somewhat surprising. But I think this election underscores my contention that most Americans are comfortable with a large federal government.
Alaska, I learned depends on the largess of the Federal Government for about 1/3 of its GDP. A significant portion of that is probably the oil profits that are distributed to all the citizens the amount of which was increased by a previous governor, Sarah Palin.
Lisa Murkowski who pretty much inherited her Senate seat when her father died was a protege of Ted Stephens who was famous for his ability to bring home the pork. She instinctively knew that Alaskans didn't want that to end. Joe Miller, whose nomination was endorsed by the Tea Party movement, would have been obligated to not use earmarks and other schemes to raid the federal treasury. So Ms. Murkowski embarked on a write-in campaign and became the first federally elected official to win by write-in since Strom Thurmond in 1954.
This election is just more anecdotal evidence that Americans, even Republicans, are comfortable with the concept of looting ones fellow citizens.
Sunday, November 7, 2010
Nancy Pelosi, Minority Leader
Nancy Pelosi has decided to run for Minority Leader and the polticial literati is shocked. They all expected her to resign her seat and go back to San Francisco to play with her grandchildren. Really?? This is a woman who craves power and enjoys the trappings of power. She's an idealogue who wants to impose her policy proscriptions on the masses but make no mistake this is also about Nancy Pelosi, her ego and desire to remain relevant.
C-SPAN this morning is taking calls on the question, "should there be a change of leadership in both parties". It's amazing how much agreement there is on Ms. Pelosi; the Democrats and Republican callers generally agree she should become "Minority Leader". It's been a while since I've seen this level of agreement by Republicans and Democrats.
C-SPAN this morning is taking calls on the question, "should there be a change of leadership in both parties". It's amazing how much agreement there is on Ms. Pelosi; the Democrats and Republican callers generally agree she should become "Minority Leader". It's been a while since I've seen this level of agreement by Republicans and Democrats.
The Hypocrisy of the Tea Party (and Republicans)
I saw an interesting statistic recently. A poll on the popularity of Social Security and Medicare revealed that 73 or so percent of the American people support these programs. That’s not very surprising. What is surprising is 62% of self identified Tea Party supporters also are in favor of these programs. Keep in mind that both of these programs were initiated by Democrats, Social Security by F.D.R. and Medicare by Lyndon Johnson. These programs are straight-forward wealth transfer entitlement programs designed to pay benefits to one group with the taxes extracted from another group. The very same type of socialistic programs the Tea Party rails against.
The Tea Party movement is primarily a response to the alarming levels of debt that have accumulated in the Bush 43 and Obama administrations, most of which was caused by the recent economic/financial crisis. But I don’t see the Tea Party as our salvation. True, they’ve awakened many to the problem, but the fact of the matter is they, like many of us, are also part of the problem.
Thirty-two percent of the current Federal Budget goes to Social Security and Medicare. Only 38.6% of the 2011 $3.554T budget is discretionary and almost half of that is defense spending, probably the most constitutional of all spending and the spending that supports what all politicians agree is the “primary” role of government, protection of its citizens. So, from where are the cuts to come??
Most Republicans who are sympathetic to the Tea Party movement like Marsha Blackburn of Tennessee equivocate and only promise an “adult conversation” about solutions while Tea Party politicians like Michele Bachmann are actually discussing cuts in Medicare and Social Security by “weaning” those that don’t need it from the system, this is known in policy circles as “means testing”. It’ll be interesting to see how long she supports such policies when her constituents get wind of this…assuming her constituency tracks the same as those in the above poll.
The Tea Party movement should give freedom loving Americans hope. It shows that liberty still has a pulse. But my point is it’s a weak pulse. To rail against socialism but support SOCIAL security and Medicare when it benefits oneself is hypocritical in the extreme and reveals a perverse understanding of freedom and its corollary, personal responsibility.
The Tea Party movement is primarily a response to the alarming levels of debt that have accumulated in the Bush 43 and Obama administrations, most of which was caused by the recent economic/financial crisis. But I don’t see the Tea Party as our salvation. True, they’ve awakened many to the problem, but the fact of the matter is they, like many of us, are also part of the problem.
Thirty-two percent of the current Federal Budget goes to Social Security and Medicare. Only 38.6% of the 2011 $3.554T budget is discretionary and almost half of that is defense spending, probably the most constitutional of all spending and the spending that supports what all politicians agree is the “primary” role of government, protection of its citizens. So, from where are the cuts to come??
Most Republicans who are sympathetic to the Tea Party movement like Marsha Blackburn of Tennessee equivocate and only promise an “adult conversation” about solutions while Tea Party politicians like Michele Bachmann are actually discussing cuts in Medicare and Social Security by “weaning” those that don’t need it from the system, this is known in policy circles as “means testing”. It’ll be interesting to see how long she supports such policies when her constituents get wind of this…assuming her constituency tracks the same as those in the above poll.
The Tea Party movement should give freedom loving Americans hope. It shows that liberty still has a pulse. But my point is it’s a weak pulse. To rail against socialism but support SOCIAL security and Medicare when it benefits oneself is hypocritical in the extreme and reveals a perverse understanding of freedom and its corollary, personal responsibility.
Sunday, October 17, 2010
Two Questions for Candidate Rob Woodall
I have two questions. The first is rhetorical for Tea Party supporters and Republicans but I would like an answer from Mr. Woodall. I will preface this question to Mr. Woodall and this audience by telling you I’m a big and small L libertarian and I plan to vote for Mr. Woodall.
We all say we are for small government. We all are concerned about the deficit and the mounting national debt that we will leave for the next generations to pay. We also all know that entitlements, particularly social security and medicare benefits for the Baby Boom generation are the crux of the problem.
Many think it is immoral for the government to tax us and redistribute the money. Well, the government has been taxing us for social security and medicare for decades and redistributing those funds. When the system began to slip toward insolvency in 1983 Congress increased social security taxes ostensibly to shore up Social Security but put the money in the general fund and spent it, leaving IOUs that will need to be funded soon.
Without discussing the constitutionality of SS and Medicare as a redistribution program it is immoral. If so why is it moral for us, when it’s our turn, to accept medicare and social security, knowing full well that we are burdening the next generation with economically debilitating debt and/or additional taxes? Is that not just as immoral? That’s question one. So, we have a choice, or do we, which leads to my second question.
There’s no law that I can find requiring me to register for social security but it appears to be illegal to NOT sign up for medicare when I turn 65? Is that true?
We all say we are for small government. We all are concerned about the deficit and the mounting national debt that we will leave for the next generations to pay. We also all know that entitlements, particularly social security and medicare benefits for the Baby Boom generation are the crux of the problem.
Many think it is immoral for the government to tax us and redistribute the money. Well, the government has been taxing us for social security and medicare for decades and redistributing those funds. When the system began to slip toward insolvency in 1983 Congress increased social security taxes ostensibly to shore up Social Security but put the money in the general fund and spent it, leaving IOUs that will need to be funded soon.
Without discussing the constitutionality of SS and Medicare as a redistribution program it is immoral. If so why is it moral for us, when it’s our turn, to accept medicare and social security, knowing full well that we are burdening the next generation with economically debilitating debt and/or additional taxes? Is that not just as immoral? That’s question one. So, we have a choice, or do we, which leads to my second question.
There’s no law that I can find requiring me to register for social security but it appears to be illegal to NOT sign up for medicare when I turn 65? Is that true?
Friday, July 23, 2010
Addicted to Bush? Addicted to Socialism!
I have no reason to doubt most of Mr. Krugman's figures (See Paul Krugman's editorial in the July 23 edition of the New York Times). Although I suspect the 9% of GDP deficit number being assigned to Mr. Bush is probably not totally accurate. As Mr. Law from Texas who supports "His Eminence" Mr. Krugman's arguments notes the "newly-elected POTUS was required to go to work early by going to DC to engender confidence and leadership during the '08 financial crisis". If so, then he can also take some responsibility for the current deficit. You can't have it both ways.
As a Libertarian, I don't support Republican or Democrats as they are two sides of the same coin and have basically similar policies that change only on the margin. But should the Republicans regain control of Congress in November, something I doubt will happen, the constraints of our current financial situation will hopefully force them to embrace something considered radical. We cannot extricate ourselves from this current mess by traditional tax cuts, or by the quasi-central planning schemes of the Democrats.
We need to change our tax system and go to something consumption based like the FairTax. We need to release private business to do what only free-market capitalism can do, create wealth. If one looks at the miracle of the American experiment since its founding, it has been our belief in the free-market and the actions of individuals in that free-market that has created the wealth we have enjoyed. Even the poorest in this country live lives of relative plenty compared to the poor in the 3rd world.
The causes of our financial situation extend back much longer than the recent Bush administration and I would argue go back decades when the seeds of the housing crisis were planted. Those policies and subsequent Federal Reserve policy and the belief of our ruling class in Keynesian economics' reliance on perpetually low interest rates, promote boom-bust cycles. And so here we are.
It's unrealistic to believe that the ruling class will come to embrace some of the lessons of "Austrian" economics any time soon but leaving that alone, releasing capitalism by radically changing our tax system offers the best hope for the future. Some may consider it risky and ill-advised. I think it's safer than going back to the policies of George Bush or even worse European-style democratic-socialism, both of which won't work and can only make the situation worse.
As a Libertarian, I don't support Republican or Democrats as they are two sides of the same coin and have basically similar policies that change only on the margin. But should the Republicans regain control of Congress in November, something I doubt will happen, the constraints of our current financial situation will hopefully force them to embrace something considered radical. We cannot extricate ourselves from this current mess by traditional tax cuts, or by the quasi-central planning schemes of the Democrats.
We need to change our tax system and go to something consumption based like the FairTax. We need to release private business to do what only free-market capitalism can do, create wealth. If one looks at the miracle of the American experiment since its founding, it has been our belief in the free-market and the actions of individuals in that free-market that has created the wealth we have enjoyed. Even the poorest in this country live lives of relative plenty compared to the poor in the 3rd world.
The causes of our financial situation extend back much longer than the recent Bush administration and I would argue go back decades when the seeds of the housing crisis were planted. Those policies and subsequent Federal Reserve policy and the belief of our ruling class in Keynesian economics' reliance on perpetually low interest rates, promote boom-bust cycles. And so here we are.
It's unrealistic to believe that the ruling class will come to embrace some of the lessons of "Austrian" economics any time soon but leaving that alone, releasing capitalism by radically changing our tax system offers the best hope for the future. Some may consider it risky and ill-advised. I think it's safer than going back to the policies of George Bush or even worse European-style democratic-socialism, both of which won't work and can only make the situation worse.
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