Is Reed Hastings stupid?

Focus purely on this paragraph from Reed Hastings’ recent article in Wired about net neutrality: 

Customers pay companies like AT&T, Comcast, and Verizon a monthly fee, and some are even financially penalized if they exceed usage caps. Charging us a separate fee ultimately means consumers pay twice—first for their broadband connection and second through higher-cost or lower-quality Internet services.

First sentence: Ok Reed, same goes for Netflix. If I have a single DVD subscription and I want to get two DVDs, then guess what, I have to pay more. Same as with the carriers when I use more or want more than I initially pay for. 

Second sentence: Pick pretty much any product that you have to buy and service, like a car. You buy a car and then you pay to have it serviced. You can choose a higher or lower quality car and you pay more or less; you can choose higher or lower quality service and you pay more or less. Same as with the carriers and Netflix, except that in my example you might be paying the same entity in the case of buying and servicing. Or, different example: toll roads. Furthermore, toll roads that happen to have fast lanes which charge more. Or, toll roads that have fast lanes that actually charge less or are more convenient (for example, EZPass or IPass open road tolling with a RFID transponder). 

Reed – people – what don’t you get about the economics of supply and demand?

Other people – why in the world do you want the internet to be a public utility? Name one public utility that you like the quality, service, and price of now. 

Don’t criticize me for taking the above out of context. It’s not taken out of context; the context doesn’t matter. He’s making a general argument about economics and two/mutli-party transactions. Nothing else in the Wired article is relevant vis a vis what I’ve criticized of his writing. 

Playing Baseball in Ferguson. Who watches the watchmen?

Suppose Team X and Team Y are playing a series of games, the outcome of which is very important to both teams. Team X has superior equipment to Team Y. 

Now for some pop psychology…

Are any of the following statements conceivable?

A) In a show of sportsmanship, Team X uses inferior equipment in an attempt to evenly compete against Team Y. 

B) In a show of bravado, machismo, aggression, Team X exerts its full and best arsenal of equipment against Team Y. 

C) Team Y, being under-equipped, resorts to “dirty” tactics in an attempt to “evenly” compete against Team X. 

D) Knowing that many fans, reporters, and others are watching and that this is a unique opportunity, Team Y goes to great pains to play strictly by the rules and exhibit stellar sportsmanship. 

Now, does the conceivability of any of the above change if, in addition to be better equipped, Team X is also in the position of adjudicating the games? 

Does the conceivability of any of the above change if the rules that Team X enforces during its own matches against Team Y are penned by Governing Body Z, an organization that funds and generally supports Team X. 

In light of the previous two changes in the scenario, is there any extent of Team Y exhibiting behavior C that might be deemed “excusable” or “reasonable”? Is there any extent of Team X exhibit behavior B that might be deemed “to be expected”? 

Finally, given that each of Team X, Team Y, and Governing Body Z are collectives comprised of individuals who might not all behave in the same way, do statements about the actions of any of these collectives make any sense? Put differently: does one bad apple ruin the whole bunch? 

Note: It does not matter how Team X came to be playing against Team Y, it only matters that right now, they are playing against each other. (This point is to diffuse the anticipated question: how did such a ragtag team get to be matched against the superior Team X? It doesn’t matter; they’re playing each other now.)

For potential commentors: I am most interested in how you think statements A-D succeed or fail in capturing the most accurate yet succinct set of conceivable responses from both Team X and Team Y to the scenario (assuming that Team X and Team Y DO exhibit a singular collective behavior). 

What I believe to be excellent summaries – full of pop psychology, which I mean as neither a compliment nor detraction – of the situation without going into specifics about the situation can be found here and here

You can also read my fictional account of a different scenario but one which bears similarities here, in Evolve Part 3: Emergent Order. Note that the subtitle, Emergent Order, comes from a number of scenes and themes in the trilogy, but one scene in particular which inspires the subtitle is the storming of the compound, the scenario noted in the first sentence of this paragraph. 

-JD Cross


The cost of kidneys

It’s not infinite as some people might think, given the restricted supply. No, even with black market prices, it’s only about $200,000

We need to make selling organs legal! The price would likely come down, but even if it didn’t, many people would be helped.

-JD Cross
UPDate: Here is a link to a report on Medicare spending on dialysis. The per person per year cost of dialysis for Medicare patients (which is all dialysis patients owing to the quirk of Medicare that if you’re on dialysis, then you’re eligible for Medicare regardless of other factors like age) is about $85,000/year as of 2010. So it would be hugely cost saving to Medicare to pay for kidney transplants even if Medicare had to pay black market rates. 


Inverted Logic

George Will has an excellent article on the idiotic political grandstanding currently being done against the rational practice of “tax inversion”. 

In particular, note this paragraph, where Will highlights the contradictory whining of the left who want corporations to both be people and not be people. 

Progressives say corporations using inversions are unpatriotic, which is amusing. When the Supreme Court’s Citizens United decision stipulated that Americans do not forfeit their First Amendment right to political advocacy when they act together through corporations (including, and especially, incorporated nonprofit advocacy groups), progressives ridiculed the idea that corporations should be treated as people. Now, progressives charge that corporations resorting to inversion are not behaving like patriotic people.

People – and I do mean people – you can’t have it both ways. Until you can figure out your own position on positions like this, then, well, maybe you should just shut up. 

Logical coherency. It has to start with logical coherency…

-JD Cross


Alta is for boarders?

Snowboarders are suing Alta in an attempt to gain access to the slopes.

Property rights anybody?

And if you agree that property rights are the key issue here – namely, the rights of Alta owners to allow whomever they want to use their property – then what about on issues like net neutrality, abortion, minimum wage, and the like? Part of the reason why the world seems to be so confusing is because it is: there is a tremendous lack of consistency in the reasons why people hold and defend the views they do. This lack of consistency means that somebody might, for example, take very different views on each of the aforementioned issues even though all of them are fundamentally about property rights.

-JD Cross


Awesomeness: Amazon, standing up for innovation

Amazon sent me a wonderful email defending its position against Hachette and defending the entire concept of innovation in general. Read it here.

-JD Cross


The Minimum Consequences

A Minnesota restaurant has added a $0.35 surcharge to all tickets to offset Minnesota’s recently increased minimum wage.

Yes – actions have consequences. This is perhaps the minimum of consequences for increasing the minimum wage. Who benefits? Who suffers? Is there a net positive or negative? And perhaps most importantly: do the people who legislate ask themselves any of these questions? Do they look at the consequences? Do they compare what actually happens to what they speculated might happen?

The world is complicated and yet legislators are ever zealous to push buttons and pull levers, the implications of which are usually unknown either ex ante or ex post. And yet they continue to do it.

-JD Cross



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