It feels like real green innovation gets done on the micro level. Big firms make a show out of it, “greenwashing” for marketing reasons (for example, the Prius is a joke, if you really cared about fuel efficiency you’d drive a 1992 Honda VX). Large scale operations can’t change their methods without incurring huge training and equipment costs. Meanwhile, smaller operations can experiment with new products: fail cheap, make small wins worth doing, maybe hit a home run. Also, there’s no committee to screw up good ideas.

It’s also possible I have no idea what I’m talking about and that there are market distorting regulations and farm subsidies at work here.

In any case, it was fun seeing Mike Rowe turn poop into gold.

Good point Ronnie.

U.S. tax day was yesterday, but Tax Freedom Day — the day when most of us have worked enough to pay off our federal, state, sales, and local taxes — is still a ways off. Politics is not something I usually get into here because it’s even worse than talking about religion. These days thoughtful people can talk about religion dispassionately, but the same people act as if their candidate’s talking points were brought down the mountain by Mel Brooks.

Anyway, I will say that whatever your political bent, you must have some reservations about working 3-4 months out of the year to pay for Uncle Sam’s misadventures.

The Black Swan is a matter of perspective. A turkey is fed for 1,000 days - every day lulling it more and more into the feeling that the human feeders are acting in its best interest. Except that on the 1,001st day, the butcher shows up and there is a surprise. The surprise is for the turkey, not the butcher. Anyone who knows anything about the history of banking… will tell you that the subprime crisis was so bound to happen. Banks are exposed to such blowups. Bankers have been the turkey, historically.– Nassim Taleb in Fortune Magazine

See also: Taleb on the EconTalk podcast.

Congratulations Mr. Mamet, welcome to the party.

I was a bit shocked to hear him call Thomas Sowell “our greatest living philosopher”. Thomas Sowell’s Basic Economics is the book that turned me into a nigh anarcho-capitalist, but it can be an uncomfortable read if you’re not ready to question the dissonance between the intentions of government policies and the actual results of those policies.

What I really liked about Mamet’s piece is that he seems to think that political views should be based on facts and observation and NOT what your friends think, or what your parents taught you, or what your emotions dictate. The former is science; the latter is religion.

Globalization, outsourcing, union attrition, technology, and free trade are all contrary to the interests of government.

The government wants you to:

• Work in a factory - Immobile companies that make tangible products are easier to tax, regulate, and demand campaign contributions from.
• Be in a union - It’s a lot of work for politicians to pander to disparate groups. It’s much easier to count on and make promises to homogeneous blocks of supporters.
• Own a home and not move around a lot - Again, it’ a lot easier to count, tax, and gerrymander people that stay put.

Now, let’s look at global economic trends:

• Nobody works in factories anymore - That’s not to say that there isn’t a lot of manufacturing going on, it’s just that machines are doing most of the work. Politicians love to appeal to anti-foreign sentiment and say that “all our jobs are going to China!!!” but in reality HAL and Johnny5 took those blue collar jobs a long time ago.
• Intangibles like software, data mining, services, banking, advertising, and media have eclipsed old school manufacturing in value and importance - All of these industries are much easier to move to the next city or the next country if local or national governments get too grabby with taxes and regulations.
• Workers are going to the places with the most opportunity in person or via telecommuting - Immigration to countries with more freedom and lower taxes will continue, whether the countries on both ends of the deal like it or not.
• Everyone works with their brains instead of their hands, and we’re all better for it - I for one am glad that I don’t have to pick cotton in Arkansas or bail hay in Indiana like my grandfathers did when they were children. Yes, now we all have to compete with software developers in India, but the flip side is that your local employer has to pay wages competitive with other local employers AND whoever is hiring anywhere in the world.

You (and probably your parents) are already part of the post-industrial economy. Certainly the children of any remaining blue collar union workers have no intention of working blue collar union jobs, just as farmers’ sons left to build those fancy horseless carriages.

It’s OK to stop worrying and love the information economy.

Once again EconTalk earns its place as the one podcast I absolutely will not miss.

In this episode Russ Roberts interviews Timothy Brook, author of Vermeer’s Hat: The Seventeenth Century and the Dawn of the Global World.

Brook uses Vermeer’s paintings to illustrate points about the way global trade exploded in the 17th century. For example, look deeper into Vermeer’s The Officer and the Laughing Girl and you’ll see a beaver skin hat that tells a story of the New World fur trade. You’ll also see a map that illustrates a new obsession with cartography in the age of discovery. Start listening at about 20:30 to hear all about it.

“Why?” I asked.

“Because then we’d have an acceptable reason to be able to take a few days off.”

Apparently some of her medical doctor friends felt the same way.

Let’s run a totally unscientific PoA career study of your average doctor:

1. High School: 4 years of working really hard at advanced placement sciences and math instead of making out under the bleachers.
2. College: 4 years of working really hard and doing whatever extra curriculars pre-med types do.
3. Med School: 4 years of working really really hard and probably developing a speed problem like that guy in Gross Anatomy.
4. A year of residency @ 80 hours a week and ungodly stress plus many hours of extra training and continuing education in your specialty.
5. At this point you’ve spent about $300,000 and your youth on your education and you’re making way less than an hourly minimum wage.
6. Then, after some magical day you’re making $130,000 to $400,000 a year depending on your specialty, but you can’t take much vacation, you have to carry a pager, and your practice is beholden to a location and client base.

There are easier ways to make money than sacrificing your youth for a career you won’t even know you’ll like until it’s too late to turn back.

The hardest problems to cope with are those you blame on other people.

Another great thing about economics is that it helps you figure out what is actually worth worrying about while the media labels everything a “CRISIS!!!!!” Here are some crises that aren’t really: health care, oil, and income inequality (why these aren’t troubling is something I hope to talk about in future posts).

One more great thing is when your favorite economics blog makes several posts in a row that feature sharp econ-wit:

I’m in the camp whose members - finding nothing especially magical, glorious, magnanimous, informed, or trustworthy about the state or political actions - hold that hiring the state to forcibly stop people from patronizing competitors at mutually agreeable prices is no different morally than hiring a street gang or your brother-in-law to do the same. — Misbehaving Amazon? Or Misbehaving State?

Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside? — What to Expect When You’re Free Trading

Commenters: I’m working on some future economics posts, so if there’s any topic related to economics/money/technology you’d like me to talk about say so in the comments. Some examples would be: “Wasn’t Adam Smith just an apologists for business interests?” or “Why aren’t money and wealth considered the same thing?” or “If econ is so great, why did my college econ class suck so bad?”

Not surprising since xenophobia is always popular with American voters.

Anyway, today the Washington Post ran a piece showing 5 ways that energy independence is both impossible and irrelevant.

If you want to change behavior, the smartest approach is to change the price most directly relevant to that behavior. If you want to cut carbon dioxide emissions, the smartest approach is not to start spending money like a drunken sailor on anything vaguely related to carbon dioxide. The smartest approach is to raise the price of emitting carbon dioxide.

This is why I always vote against subsidies for the alternative energy industry. It’s not because I wouldn’t love a hydrogen/solar/zero-point utopia, it’s because giving politicians power to pick technology winners is a fantastically bad idea.

Why? It’s because instead of getting a variety of emergent solutions, you get a permanent, one size fits all solution that inevitably benefits established players.

Here’s a real world example: even though Honda cars exceeded emissions requirements without catalytic converters, they still had to bolt them on when catalytic converters were mandated. It was in the interest of U.S. car makers to force higher compliance costs on Honda, and GM held patents on catalytic converters to boot. For details and more examples, listen to this excellent EconTalk podcast from 24:06 to 27:00.

So, instead of incurring huge compliance costs and giving politicians invasive powers to control our light bulbs and thermostats, we’d be better off taxing emissions and letting the effect of those taxes create broad incentives for everyone to pollute less and use energy efficiently.

Guess what. The gatekeepers are seriously poked.

I’m trying to think of situations where it would be advantageous for a creative person to sign with a record label, take VC money, or do a book deal in a world of cheap computers and the internet.

To produce and sell music you need a computer, a network connection, some friends to jam with, and 7 milk crates full of guitar pedals. Only no-talent pop tarts need labels to run the old school marketing machine.

To start a software company you need the same things as a musician; the only difference is that your milk crates are full of outmoded video cards and SCSI cables. You certainly don’t need VC money. If you have a bootstrappable business model you’ll grow organically and eventually VCs will be knocking on your door.

In theory book publishers pay for editors, marketing, shelf space, and book tours, but in reality it all comes out of the author’s cut while the publisher gets the tax write offs. Even authors with advances find that book deals are bad news. Consider the software company 37signals: their first book published the traditional way earned them about $11,000. They self published their second book as a paid PDF and as a paperback from lulu.com. When the second book winds down it probably will outperform their previous book by at least a factor of 20.

Authors may object to that story with, “but 37signals were able to do this because they had a huge blog audience.” That’s true, but guess what authors? You should be doing the same: writing every day, blogging, interacting with readers, building equity. I can’t think of anything more terrifying than spending months or years writing a book without knowing if real readers are even interested. Software and music singles should be released early and often for the same reason.

This post was inspired by some of my comments on the ZenHabits post about open sourcing blog content.

See also: Print is Dead on bad book deals, 37signals on self publishing, David Byrne interviewing Thom Yorke, and my earlier post on VC funding.

One of my favorite quotes on gatekeepers is by Barry Diller, who is a successful gatekeeper himself: “How can you trust a gatekeeper when you know the purpose of a gate is to open and close?“

Image from http://www.flickr.com/photos/aga_d/359636316/

Tough call.

I can understand why someone might go to Baghdad to do certain types of consulting like setting up data centers, networks, and computer security, but HTML?!? Even with secrecy and time zone concerns, there has to be a better way to fill this job than to send an HTML/CSS person to Iraq. Subversion over https will work for me thanks very much.

Eventually this job posting will expire, so here is a screenshot for posterity: