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What money can buy you. A lot. 

Yesterday, a judge granted YouTube’s Motion for Summary Judgment in the Viacom v. YouTube litigation. This is a major victory for all user generated content (UGC) companies because it strongly affirms the DMCA safe harbor. Congrats to David Drummond and the legal team at Google. Given that…

The obligations of state and local governments have doubled in the past decade, to $2.4 trillion, according to a recent Federal Reserve report, a figure that excludes more than $1 trillion in unfunded pension and retiree health-care liabilities.

Generally, economists are not alarmed by increasing government debt during recessions because it stokes much-needed economic activity. But this time, concerns are deepening that the debt burden is too large for some municipalities to handle, forcing them into draconian service cuts or large tax increases, both of which would be a drag on the sputtering recovery. Beyond Harrisburg, other cities might have to default on their loans because most states are too strapped to bail them out. (via WaPo)

alexanderpf:

Most of us would call the BP spill a tragedy. Ask an economist what it is, however, and you’ll hear a different word: “externality.” An externality is a cost that’s not paid by the person, or people, using the good that creates the cost. The BP spill is going to cost fishermen, it’s going to cost the gulf’s ecosystem, and it’s going to cost the region’s tourism industry. But that cost won’t be paid by the people who wanted that oil for their cars. It’ll fall on taxpayers, on Gulf Coast residents who need new jobs, on the poisoned wildlife on the seafloor.

That means the gasoline you’re buying at the pump is — stick with me here — too cheap. The price you pay is less than the product’s true cost. A lot less, actually. And it’s not just catastrophic spills and dramatic disruptions in the Middle East that add to the price. Gasoline has so many hidden costs that there’s a cottage industry devoted to tallying them up. At least the ones that can be tallied up.

Topping that list is air pollution, which we breathe in whether or not we drive. Then there’s climate change, which is difficult to slap a price tag on because it involves such esoteric calculations as how much your grandchild’s climate is worth. There’s traffic congestion and accidents, which harm drivers and non-drivers alike. There’s the cost of basing our transportation economy on a resource that undergoes wild price swings.

Some of the best work on this subject has been done by Ian Parry, a senior fellow at Resources for the Future. His calculations — plus some data from other sources and studies — suggest that adding all the quantifiable costs into the price of oil would increase the cost of each gallon by about $1.65. According to the Energy Information Administration, the average price of a gallon of gas was $2.72 last week. It should really be as high as $4.37.

That, however, is almost certainly an underestimation. There are plenty of costs that we just don’t know how to put a price on. How much of our military policy is dictated by our need for secure oil resources? How much instability is created by our need to treat oil-producing monarchies such as Saudi Arabia with kid gloves? How much is the environment worth in a poor country that would prefer oil investment to air-quality regulations?

Or take the spill in the gulf. What’s the economic value of a whale? Of a pelican? Of plankton? The nation’s been horrified by the photographs of oil-soaked wildlife, but how much is not being horrified actually worth to us? And is not knowing about the problem enough to solve it? One reason we’re drilling wells far offshore and in countries with poor safety and environmental records is that we don’t want oil companies mucking about in the shallow waters near our homes, or on public lands such as the Alaska National Wildlife Reserve. But as Maureen Cropper, an environmental economist at the University of Maryland, notes, importing oil means exporting the damage associated with drilling for oil. When trying to put a price on that damage, do we think it varies by country? Is Kenya’s environment worth less than our own?

via azspot

azspot:

Alan Blinder, a Princeton professor and former Federal Reserve vice chairman, says it won’t be surprising years from now if a carpenter in the U.S. earns more than a college-educated computer operator. In fact, the data suggest that education bears little relationship to jobs that are vulnerable to offshoring, he says.

On balance, Blinder says, “there’s little doubt a college education is a good investment for most students.”

But he offers this advice: “Don’t train yourself or your children [in work] that a computer can do or a smart kid in China or India can do. Because that’s ferocious competition.”

Economic transformation from a world where a high school graduate (or even a dropout) could secure a decent job to support a stay-at-home mom and family (circa 1960) to one where even a college degree provides no certainty of economic security.

(via soupsoup)

Simmons Says Nuclear Device Only Option to Stop Oil Leak: Video Bloomberg

See my last post + he wrote several books on oil industry and peak oil.

azspot:

A group of 51 German millionaires and billionaires founded a Club of the Wealthy and wrote to Chancellor Angela Merkel proposing to give up 10 percent of their income in the form of a “Rich Tax” for 10 years to consolidate the budget.

With an estimated 800,000 millionaires (in dollars) — about 1 percent of the total population — Germany is eye-to-eye with the USA and has long overtaken the UK as Europe’s number one “millionaire-land”, both in terms of absolute numbers and as a percentage of the population.

But traditionally, the Germans don’t dare to feel good about their riches. A German would — by and large — never display his wealth too publicly. Being rich, one might think, is not necessarily viewed as a sign of success, but more as a flaw, something to be hidden rather than displayed.

The same with Bill Gates Senior (father of Bill Gates, founder of Microsoft). He is an advocate for a higher tax on the rich.

PS: Joachim Gauck (running for the President of Germany position after Horst Koehler resigned) spoke recently about the solidarity of both societal levels to each other - top and bottom.