January 27th, 2009

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My latest blog post -- Competition v Policy

In a rather lengthy post, I explain why the price of SMS text messaging bears no relationship whatsoever to cost and why we should not expect it to absent regulatory intervention. It is not an absence of competition or an exercise of market power. It is a question of market _structure_, which means that you will pretty much get the same result no matter how many competitors you add.

This does not answer the bigger question of "do we care?" Indeed, we may not, as a policy matter, give a tinker's damn if cell phone companies can charge $15 a month for"all you can eat" text messaging when this has no relationship to the cost (fixed and marginal) of the service. But for God's sake, stop analyzing it as a competition problem! the market works just fine, it's a question of public policy. Until we stop framing policy questions as "enough competition -- yes/no," we are never going to get anywhere in solving real public policy problems.


I will add that similar analysis applies to a number of telecom questions we keep trying to resolve by invoking competition without paying attention to market structure. "When banks compete, you win" turned out to be a really bad policy for the economy as a whole in the long run -- even if in the short term it produced great opportunities for subprime borrowers. The same is true in communications markets as well.
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GOP Continuing to Drift Away From Reality

Every time I worry about Progressives failing to organize themselves to sieze the day and push their advantage, I notice that the Republicans appear utterly unable to cope with reality.

Case in point, the outcome from this meeting between House GOP and Obama. It does not trouble me that the GOP will resist the stimulus for all its worth at this point. Why the heck not? What amused me was this:
he room burst into applause at the mention of congressional Democrats' alleged lack of bipartisan outreach. Obama did not come to their defense - a silence that many took to mean he acknowledged that lack of comity.

"I think the House Democrats have failed at bipartisanship, and I think he acknowledged that by what he didn't say as opposed to what he did," said Rep. Spencer Bachus (R-Ala.).

"He didn't say anything, but we got the message," said Rep. John Mica (R-Fla.).
I am minded of an exchange I had elsewhere in which I decided that it was simply not worthwhile to engage a particular troll, who unsurprisingly claimed victory. *shrug*

When you're in a meeting trying to have an intelligent conversation with people, and they complain that your friends are not treating them right, is there really a point in saying "guys, 'bipartisan' is not an invitation to get fucked. There are going to be accountability mechanisms in this stimulus bill and it is not going to be primarily more tax cuts. Are you willing to engage on other areas or do you want to make a stand on this with no compromise?"

This is merely an effort to try to sew dissent. But I expect some Democrats will fall for it anyway.
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A Quick Win

Congress reversed the Supreme Court decision interpreting the Equal Employment Opportunity Act statute of limitations. the Supreme Court had held that the clock starts ticking from the actionable event, rather than applying a "discovery" rule.

There is nothing intrinsicly right or wrong about which one to apply as a general case. Statutes of limitation are designed to prevent claims from becoming stale and to provide reasonable certainty in the conduct of one's affairs. The question of whether to apply a discovery rule (starting the clock from when a plaintiff could reasonably have discovered the facts giving rise to a cause of action) is one of equity.

What is significant here was that this became something of a distinguishing point between the Rs and the Ds and was potentially influential to some women voters in selecting Obama (who supported the legislation last time) to McCain (who voted against). My own feeling is that this was more about corporate interest v. individual interest than male prerogative -- which is not an improvement in my opinion.

Still, getting it passed and signed quickly is a useful symbolic victory with actual consequences.

I also note that Obama remains ridiculously popular, even in heavily Republican states. We shall see how this impacts voting in Congress and wheather the Republican/conservative punditry strategy of using the same playbook from the last 20 years will backfire.