Economics @ ITT

California car dealers go crying to DMV about Tesla Motors’ website

Posted in economics, Regulation by ittecon on September 26, 2013

Auto dealers have been dealing with disruption just about as well as any other legacy industry has. Instead of attempting to compete, dealers have chosen to respond to Tesla’s refusal to cut them in on the middleman action by throwing up as many regulatory roadblocks as possible. Sadly, this antagonistic attitude toward both their competition and the car-buying public somehow makes sense to them, and they seem very willing to bury both the upstart and their last remaining shreds of goodwill at the same time.

California car dealers go crying to DMV about Tesla Motors’ website | The Raw Story.

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Somebody Stole 7 Milliseconds From the Fed

Posted in economics by ittecon on September 25, 2013

Last Wednesday, the Fed announced that it would not be tapering its bond buying program. This news was released at precisely 2 pm in Washington “as measured by the national atomic clock.” It takes 7 milliseconds for this information to get to Chicago. However, several huge orders that were based on the Feds decision were placed on Chicago exchanges 2-3 milliseconds after 2 pm. How did this happen?

via Somebody Stole 7 Milliseconds From the Federal Reserve | Mother Jones.

Why Are American Health Care Costs So High?

Posted in economics, Policy Issues by ittecon on September 20, 2013

Well,

Chart: Know Your Economics

Posted in economics by ittecon on September 19, 2013
economic chart

Know your branches of economics

From: http://www.smbc-comics.com/?id=3117

This was sent to me from a friend without ties to academic or professional economics.

Crack Addicts Make Surprisingly Rational Decisions

Posted in economics by ittecon on September 18, 2013

And now for something completely different. File this under Economics of Crime or The Marketing of Poor Social Policy.

“There is a belief, for example, that crack cocaine is so addictive it only took one hit to get hooked, and that it is impossible to use heroin without becoming addicted,” he said. “There was another belief that methamphetamine users are cognitively impaired. All of these are myths that have have been perpetuated primarily by law enforcement, and law enforcement deals with a limited, select group of people—people who are, in many cases, behaving badly.”

Hart’s work to understand addiction and addicts tackles common misconceptions about several forms of drug addiction and addicts. He conducted similar studies around methamphetamine addicts in the past, as the Times article points out, and “found that when he raised the alternative reward to $20, every single addict, of meth and crack alike, chose the cash. They knew they wouldn’t receive it until the experiment ended weeks later, but they were still willing to pass up an immediate high.”

via Crack Addicts Make Surprisingly Rational Decisions, Fascinating Study Reveals | Alternet.

“There is no such thing as society.”

Posted in economics by ittecon on September 18, 2013

And, you know, there is no such thing as business. There are individual men and women, and there are families. And no business can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour.

Recasting Margaret Thatcher’s Speech to Conservative Party Conference where she proclaims, “there is no such thing as society,” 9 October 1987, replacing “society” and “government” with “business.”

25+ years on, on it just struck me. Of course, there is society; there is government; and there is business. Look after your neighbours.

A Free (Rigged) Market is Good for Everyone Except 99% of Americans

Posted in economics by ittecon on September 16, 2013

A nice piece by Paul Buchheit.

Free-market libertarians go to outrageous exremes to convince themselves and others of the infallibility of the market. Even when opposing evidence smacks them in the face, they conjure up sound bites that seem vaguely convincing but are in reality meaningless. Here are some examples.

via A Free Rigged Market is Good for Everyone Except 99% of Americans.

Branding Strategy Insider | The Fall of the Purchase Funnel

Posted in class materials by ittecon on September 13, 2013

Take the relationship between supply and demand – its reversed. Today demand is scarce, supply plentiful.

via Branding Strategy Insider | The Fall Of The Purchase Funnel.

I’m not so sure this marketing guy quite understands—for what it’s worth—the concepts supply, demand, and equilibrium. That the relationship has been reversed, would indicate that the orthodox condition would be low supply to high demand (and essentially scorns the role of the market). Of course, from a Marketers position, it is quite understandable that one might want to be in a position absent of competition with the concomitant power to control prices, but this is not the correct state. It is simply a state.

Of course, given the author’s perspective, Says Law has again been undermined. If supply creates its own demand, then a surfeit of  supply should cause a surplus of demand, right?

The US economy will never recover?

Posted in economics by ittecon on September 13, 2013

Words from the “wise,” based on shaky premises. This is where corporate economics is divorced from reality.

“Significant monetary stimulus, the end of fiscal austerity, a booming housing market, a cheap dollar, record corporate cash balances…if the US economy does not significantly accelerate in coming quarters, it never will,” Michael Hartnett, Bank of America Merrill Lynch’s chief investment strategist, wrote in a report Thursday.

via We still love stocks, but not as much: Goldman.

Beats by Dre: More Disproof of a Rational Actors

Posted in economics by ittecon on September 13, 2013

In 2008, Monster, a tech company known for overpriced cables and zealous litigation against Rhode Island mini-golf courses, teamed up with Dr. Dre, the legendary hip-hop artist and producer who helped bring Snoop, Eminem, 50 Cent, and Kendrick Lamar to the masses. Just five years later you can look around any playground, subway train, or suburban mall to see the result, and it starts with a lower-case b: Beats by Dre headphones have locked down the market.

via Beats by Dre market share: How the headphones company conquered the market. – Slate Magazine.