Extraordinary Observations

No I’m not talking about damming rivers to produce electricity. In the home of Big Oil, Houston, TX, a man claims to have invented a technology that will cripple the oil and gas industry forever. Sound too good to be true?



Granted, I’m not chemist, but as far as I know, the process of electrolysis is nothing new; but like any other renewable energy source, the amount of energy needed to produce the fuel is so large it makes the whole thing impractical. Has Mr. Klein invented a new technology or super efficient way of doing electrolysis? I wish I could believe Mr. Klein has discovered a clean, renewable way of producing energy. Of course, with everything else that seems to good to be true… it probably is.

Christmas is a time for family, friends, and me to write about how much i dislike the concept of gift-giving. I do it every year... but it has always the same mumbo jumbo about commercializing a Christian holiday and so forth. So this year I decided to change things a bit. I got my inspiration for the blog from an article that Johnathan Chait wrote in The New Republic. I'm sure all of you free market lovers will appreciate this rare step away from my traditional socialist blogs. So without further ado... I declare what Bill O'Reiley likes to call "War on Christmas."

Gift giving is economically inefficient. The concept of gift giving brings our society back to the primitive system of bartering. Of course, we did away with that economic system long ago because it’s so stupid! Can you imaging trying to buy something under the barter system? I’ll trade you my donkey if you fix my roof… yeah right. The problem lies in the fact that for a barter system to work there always has to be a “double coincidence of wants.” In other words, you always have to be willing to pay exactly what I want. Eventually society realized that transactions would be so much easier by trading bricks of gold, then paper currency, and now magical credit that appears on computer screens.

The second inefficiency lies in the fact that Christmas gifts are “in-kind” benefits, rather than “in-cash” benefits. Lets take a quick example. I tell Mom I’m hungry so she buys me McDonalds. Sure, I got to eat, but if she would have given me 5 bucks I would have been much better off because I would have spent it on Taco Bell, which I prefer to McDonalds. Now lets apply this theory to Christmas gifts. Lets say I want chocolate for Christmas, so you go out and buy me a $50 box of Godiva chocolates. You got me what I wanted, right? Not exactly. You would have been better off giving me $50 in cash, because I would have bought a pack of M&Ms, a sub sandwich, a DVD and a hat. I’m happy with the Godiva chocolates, but with cash I get chocolate (M&Ms) plus a whole bunch of other stuff I want. The Godiva chocolates are OK… but they don’t maximize my welfare.

So I know what your thinking… what if the only thing I want for Christmas is a Nintendo Wii, and that’s what Grandma and Grandpa get me. Then sure, that is efficient, but how often does this actually happen? According to the New York Department of Stores, 15% of all retail gifts are returned in the month after Christmas; and this doesn’t account for the fact that children have no ability to return gifts they don’t want and the fact that some people are just too busy or lazy to return crummy gifts. The high return rate means one thing: gift giving is horribly inefficient.

Now you’re probably saying… if it weren’t for Christmas retail stores would be doomed; they need Christmas to boost sales. Not so. Economists are baffled by Americans’ inability to responsibly save or invest money as it is; they certainly would have no problem with less mindless consumption. Plus, without Christmas, we would consume goods and services we actually want. Perhaps I wasn’t able to buy the cool new bike I wanted this year because I needed money to buy my relatives Christmas sweaters (which they wouldn’t have bought otherwise, by the way). Not only would consumer welfare be maximized, but our economic system would be much more efficient. And don’t worry, those extra people that KB Toys hires around the holidays would be working to produce goods and services that we actually want.

But so what, gift giving makes us feel good, gives us a nice warm feeling inside, and that benefit trumps any economic inefficiency, right? If gift giving is so wonderful we should be doing it all the time, not once a year on a date arbitrarily chosen hundreds of years ago (and yes, nobody knows what day Jesus was actually born). If Christmas brings out the best in people, then that just means we’re acting like jerks the other 11 months out of the year. Why are we more likely to donate to a soup kitchen around the holidays?.. we should be doing it all the time. Not to mention the fact that Christmas is one of the most stressful times of the year for many of us. I sure wasn’t feeling too great about myself sitting in a huge traffic jam of cars trying to get to stores to buy! buy! buy!

Is Christmas good for society? I don’t believe it is. Call me Scrooge, the Grinch, or whatever else you want. Christmas season changes people; some for the better, but many for the worse. Images of Christmas that come to my mind are animal like stampedes inside Wal-marts and SWAT being called in to break up a Playstation 3 riot at a Best Buy. It’s so much easier to find stories about people doing stupid things like this than it is to find a story about people acting in the image of Jesus. Christmas was once a great celebration, but now… ruined.

25% of the population smokes… and they sure are pissed off about the new Smoke Free Ohio legislation. As a result they are throwing around all kinds of arguments trying to convince us that the smoking ban will ruin our lives and our wonderful state.

I’m not buying it.

The common argument is that the smoking ban will devastate local businesses. Sports bars and bowling alleys will have to board up their windows and move to Pennsylvania where smoking is still allowed. The way they spin it makes it sound like smokers are the only people in the whole state who go out and eat/drink/bowl. Keep in mind that 75% of us don’t smoke, and more than 50% of us don’t want to inhale it. Is it not possible that non-smokers will be more willing to visit these places now that they are smoke free? I know I will certainly be more likely to eat at a Buffalo Wild Wings or Dennys now that these places have clean air. Smokers aren’t the only people who these places do business with.

Additionally, overwhelming empirical evidence supports the fact that smoking bans do not hurt businesses. In Toledo, the citywide smoking ban showed no negative impact on bars and restaurants, and business in surrounding suburbs like Sylvania and Perrysburg, where smoking was allowed, did not change. A University of Florida report shows that since the smoking ban in Florida too effect restaurant sales are up 7%. A study done on the one-year anniversary of the smoking ban in New York City found that restaurant sales were up 8.7% compared to the previous year and employment in bars and restaurants increased by the largest proportion in a decade. In California, Paul McIntyre, former PR rep for the California Restaurant Association, was adamantly convinced that a state wide smoking ban would doom the restaurant business in California. Later, he made the following statement:

“My concerns about the success of the smoke-free law, however, quickly vanished soon after it was enacted. While there was an adjustment period— for restaurants it was four to six weeks, and for bars a little longer, the public still accepted it. California was in the depths of the greatest recession since World War II, but restaurant sales did not slump as the tobacco industry threatened they would. Rather, they continued to climb at rates of four to eleven percent annually. No jobs were lost. Tourists continued to come to California from all over the world. Even when the bar portion kicked in in 1998, liquor sales continued growing in restaurants and bars without interruption.”

Smokers also want you to believe that the smoking ban will lead to a slippery slope where the government will take away all of our civil liberties. I admit, this is a tough issue, but I think the smokers are wrong for a few reasons. First, it is important to remember that Smoke Free Ohio is not straight up government regulation; voters decided the outcome of this issue. Second, the right to smoke is not a clear/cut, black and white issue. When I am sitting in the “non-smoking” section at Dennys, I should have the right NOT to inhale your second hand smoke. But that’s not something that I have control over. Compare this to, say, the right to chew gum in a restaurant. Your gum chewing has no impact on me, whether or not I think gum chewing is good or bad. Finally, remember that Smoke Free Ohio does not make cigarettes illegal. Smoking outside, on the street is still allowed. Regardless of which way the issue goes, someone will always claim their rights are being taken away.

Most (if not all) smokers know that cigarettes are bad for your health; and for the most part, they simply don’t care. It sucks that your right to smoke indoors infringes on my right to eat dinner and not have to come home smelling like an ashtray. Don’t buy the hype - Smoke Free Ohio will be beneficial to our state in the long term.

Edited: November 23, 2006 | 2:50 PM

While watching Home Alone on TBS this weekend I saw the following anti-net-neutrality commercial air a couple of times.



Did anyone catch the small print at the end of the advertisement? The National Cable and Telecommunications Association (NCTA) produced this commercial; I’ll get to the significance of that in a minute.

So what is net-neutrality? Right now, the user decides what is on the internet. If I want to run a search on Google, I use Google; if I want to run a search on Yahoo; I use Yahoo. The ability I have to choose is thanks to net-neutrality. So why is the NCTA concerned? Keep in mind that this is the same lobbying group that wants you to buy cable packages rather than individual channels and wants to ban VOIP services like Vonage and Skype… Getting rid of net-neutrality is a scheme by “the multi-billion dollar cable and telecom companies” to take away your freedom to surf freely on the internet.

How can they possibly do this you ask? Consider the following hypothetical scenario: I pay the Concast Cable Company every month and they supply me with TV and internet service. One day Concast signs a million dollar deal with Yahoo and guarantees to increase Yahoo’s traffic. I log on to the internet and find I can no longer use my favorite search engine, Google, because it is in the best interest of Concast for me to use Yahoo. The freedom to choose that I used to have is now gone.

Consider scenario two: I log onto YouTube every day because I find amateur videos entertaining. One day, Concast Cable Company decides that it is going to launch its own video sharing service. So in order to get people to use their service, Concast blocks access to YouTube for all of their subscribers. They Concast video service might be the crappiest software on the web, but what choice do I have?

Now scenario three: I pay HellSouth every month and they supply me with phone and DSL service. I think HellSouth ‘s long distance rates are highway robbery, but stick with it because I don’t have much other choice. One day I discover a program called Skype, which allows me to call anywhere in the United States for free. So I cancel my long-distance service from HellSouth and save a ton of money. In a world without net-neutrality, HellSouth can block access to Skype for all of their users. And now I’m back to paying outrageous monthly rates for long-distance. This is already happening in some cities, so don’t think this some sort of conspiracy.

I don’t care if you are liberal, conservative, libertarian, communist, or whatever… net-neutrality is absolutely necessary for anyone who values freedom on the internet. The debate over net-neutrality is more than a question of who should control the internet. It is a question of whether our “democracy” is controlled by The People or by The Corporation. Having said all that, check out this advertisement in favor of net-neutrality:



Edit: December 19: This video was first posted on the day after I wrote this blog, but it is possibly the best 3 minute summary of the situation at hand and what we can do about it.



Senator Ted Stevens proposed a bill in congress at the end of last year in favor of net-neutrality. Sadly, the bill died by the time congress ended. Of course, the NCTA spent nearly $150 million lobbying conservatives to pass a bill doing exactly the opposite. The government will ultimately decide who wins and who loses. In a country where we promote freedom and democracy as the greatest thing since sliced bread, it would be a shame if even we couldn’t make it work.

In September the Tonight Show with Jay Lenno did a spoof interview with Bill Clinton. I'll admit, the interview is pretty funny and anyone watching it on the Tonight Show knew the nature of the show and that it was obviously a fake. I became concerned when I saw the clip on Special Report with Brit Hume. Has Fox News become so desperate to make liberals look bad that they're running satire pieces on a their popular primetime news program? As if TV news in America wasn't already bad enough...

The following is an open letter to John McCain regarding legislation he recently introduced which would force bloggers to censor material posted on their blogs or face criminal penalties.

Dear Senator McCain,

I am disturbed by the language of the Stop the Online Exploitation of Our Children Act of 2006, which you recently introduced in the Senate. Certainly I support protecting children from predators on the Internet; but your bill takes an entirely incorrect approach to the situation. According to your bill, I must watch the comments posted on my blog like a hawk, and if I don’t report illegal videos or photos posted by my readers I would have to pay a fine of up to $300,000… And if a sex offender signs up to post comments on my website I must delete his account… And if one of my readers posts a link to a website associated with a sex offender I must delete the post and his account. I ask why I am being held to a higher standard than Time Warner, my internet service provider, who must comply with the same regulations?

Granted, my blog has relatively small readership, and I might be able to effectively police all of my readers; but what about some of the popular blogs with millions of readers? These blogs offer one of the last remaining channels for open expression and discussion. Blogs increased civic activism and discussion during the 2004 presidential election. Thousands of young people, who wouldn’t have otherwise been interested in politics got involved in the Democratic primary thanks to discussions on political blogs. Civic participation among young people is already at an embarrassingly low level, and your bill would certainly do nothing to remedy that situation. Your bill goes too far and restricts one of the last forms of free speech we Americans have. Your party loves to talk about bringing freedom and liberty to Iraq; so why don’t you live up to your word in the US? For the sake of free expression and open discussion, please reconsider your new bill.

Sincerely,
Rob Pitingolo

Most of us are accustomed to buying Pepsi or potato chips from a vending machine. Sometimes vending machines have useful products like laundry detergent and batteries; but whatever the machine is selling, it’s usually something you can get for less than five bucks. This weekend on a trip to the University of Kentucky, I made an interesting find in the lobby of the student center: an iPod vending machine. Yes, that’s right, an iPod vending machine.



You can buy everything from a 1 GB shuffle to a 60 GB video. Plus, you can pick up extra accessories like headphones, plastic cases and portable travel speakers right at the machine. You can pay with cash or any major credit/debit card. Once you make your selection on the computerized touch screen, the machine dispenses your item similarly to the modern Coker and Pepsi machines.



Its amazing that the iPod has become such a norm in society that it’s now something we are willing to “pick up” from a vending machine in a lobby. Why does everyone have iPods anyway? I have one… and I’m not even sure why. Have consumers been tricked into thinking iPods are now a necessity rather than a luxury good? For most of us, the only difference that an iPod makes in our lives is that we have some tunes to listen to while walking to class or driving to work. Sure, it’s a cool gizmo, there are plenty of those out there. The iPod is definitely the first (and probably only, right now) “cool gizmo” sold in vending machines. What are we going to buy from vending machines next?