Addiction To Consuming As A Market Failure

Various things have been identified as market failures - that is, their existence causes the free market not to work as efficiently as it is touted.  I've written about some in detail in

Capitalism v. Democracy: Why The Free Market Needs Government To Work.

The one that people who have taken economics tend to remember is 'externalities.'  These are costs to society that the manufacturer doesn't have to recover in the price because they don't pay them.  Pollution is the general example.  Thus their product costs them less than it really costs, because they don't pay the full costs.  The rest of us do in additional health care, in pollution clean up, in chemicals showing up in our food, etc.  

It's why the Citizens' Climate Lobby wants a carbon tax.  It will raise the cost of carbon based products to reflect the externalities and thus make non-carbon alternatives comparatively less expensive.  

But I want to talk about addiction itself as a market failure.  

Markets are supposed to work when there is a knowledgeable buyer and knowledgeable seller, both of whom can walk away from the deal if it isn't a good deal for either of them.  The buyer can say, sorry, that price is too high, I'm not buying.  And the seller won't lower the price past a certain point.  

But what happens if consumers are addicted to a product - say like heroin?  There is no price too high.  Or gasoline?

Those are easy examples.  

What if Americans are simply addicted to consuming?  

They sort of look at prices (that's why most places always have 'sales') but they believe they can't live without the product?  Or they have so many sunk costs in the product that they can't give it up and so they can be continually seduced into buying updates?

Cell phones.  Why is service so expensive?  Because people simply pay whatever is asked. 

Credit card and other bank fees and interest?  Even with newish credit card reform, there are still lots of problems.

What about computer updates?  After a while you have to get the new software because your old software no longer works, or is maintained.   

Or you have no option to buy a car without automatic transmission and windows and door locks?

When the buyer is no longer paying much attention to price, and buys regardless of the price,  or has no choice but to buy features she doesn't want or do totally without, the basic mechanism that's supposed to make the market efficient breaks down.  And I think we're pretty much there these days.  (Think of all the people who can't live without a smart phone.  Or their daily lattes.)

OK, this is just a thought that popped into my head and I haven't fully thought it out or looked to see if someone already worked this out more.  But I'm jotting it down so I don't forget. 

[Of course, I can't post something like this without googling.  There are lots of hits for "addiction as a market failure"  but they seem to be specific - tobacco, gambling, oil* - but not generalized to addiction to consuming itself.  

*the word addiction is in footnote 17

This Time No Cops, Just Moose On Way Home

A little less exciting, a lot more fulfilling, was my ride home from a meeting Tuesday afternoon, compared to Monday afternoon.   Two moose grazing near the airport.

You don't get this in London, Jacob.  Or having everything 15 minutes or less away. 

Cops Surround Car Come Out With Guns Aimed

We just dropped off the wood chipper we rented today and were headed along Commercial to Mt. View when a police car passed us quickly and we saw others ahead.  The cop jumped out of the car and had his  gun out and pointed at the car ahead.  Two more cars came racing in as we sat there trying to figure out what to do.  Here's a picture after an ambulance arrived.  I took some video, but I was too far back for you to see it clearly.

Finally, another officer tapped my window and gestured to turn around and go back.

KTUU has this:

According to APD spokesperson Dani Myren, police were conducting an agency assist for “U.S. Treasury federal agents” near the intersection of Bragaw Street and Mountain View Drive at about 4:15 p.m.

“It looks like we were assisting on a felony extraditable warrant,” Myren said.

Myren says it’s not clear whether the man was trying to commit suicide, but confirms that he did shoot himself and is in unknown condition.

“It looks like there’s a self-inflicted injury at the very least,” Myren said.

"Don't Even Begin to Talk To Them Until You've Forgiven Them For Everything"

It's just too nice to be inside blogging.  So here are a few pics about things I'm not blogging about.  [It turns out I couldn't keep to that goal when I tried to briefly summarize the Citizens' Climate Lobby meeting.  The title gets explained near the end.]

Goose Lake still had ice Saturday

After the Citizens' Climate Lobby (CCL) meeting Saturday morning I biked the long way home and digested what I'd heard.   Dana Nuccitelli, a physicist who writes, among other places, at Skeptical Science,  gave some highlights of the latest U.N. Intergovernmental Panel on Climate Change Report.  There were actually three recent reports.  The key findings he reported for the first report:

1. 95% confidence level that humans are the main cause of global warming since 1950.
   And that humans are responsible for about 100% of global warming since 1950.  In each of the reports since the 1990s, they've grown in confidence level that humans are the cause.  
2. Predict how much warmer it will get under three different scenarios
1. Business as usual - about 4 or 5˚C (about 9˚F) warming by 2100 as compared to pre-industrial temperatures
2. The GOOD NEWS:  If take action to limit greenhouse gas emissions we can still limit global warming to 2˚C by 2100.  He said 2˚C is a critical number because scientist believe if we go above that we'll have really severe climate effects.  Some scientists say that 2˚C is already too much, but we've already risen 1˚ and another 1/2 will result from the greenhouse gasses already emitted.  So 2˚ is the only reasonable goal we could achieve. 

The second report focused on Climate Impacts and Adaptation - how various scenarios will impact humans and how we can adapt to them and one of the key findings was:

1. For another 2˚C increase we will see an annual decrease of 2% of global income per year and potentially more than that, and if beyond that, economists aren't even comfortable estimating how large they'll be.   Basically it gives us an economic incentive not to go beyond that 2˚C limit.

The third report that came out about a month ago, focused on climate change and  mitigation and the key finding he reported was that:

1. If we act efficiently we can keep global warming going beyond that 2˚C  and it will only cost 0.06% of annual global economic growth.  Putting that into perspective if the global economy grows at 2.3% per year, using that 0.06% figure, it would grow at 2.24% per year.  

So, for a pretty minimal cost, we could prevent very dangerous global warming.  

You can listen to the international phone in presentation here.   These meetings are content rich and move right along.  If you just want to hear the part where Dana talks, go to 11 minutes, where he's being introduced.  and goes to 27:16. 

This post's title comes from a little earlier in the tape where CCL Executive Director and meeting host Mark Reynolds  is talking about one of the CCL staff who was planning a meeting with the Koch brothers. He was trying to explain his difference between being 'nice' and being 'generous.' 

"Sometimes people get confused about what we're trying to do when we we're attempting to do this in the most generous way we possibly can.   What people translate that into sometimes is thinking that we're trying to be a nice organization.  And I don't have any problem with being nice and I'm not against nice people, but that is not what we're trying to do.  53  In my view, being nice implies a certain phoniness, like when you pretend to like someone you don't like.  Whereas human generosity is asking yourself to do something you can't possibly do.  Let me give you one simple example.  I was at a luncheon last November with [corrected spelling: Peter Fiekowsky] who heads up a couple of big projects for CCL.  He's the head of Team Loyal [Oil] and he's also in charge of our hundred year plan.  We were talking before lunch and he had said he'd scheduled his first meeting with the Koch brothers and he asked my advice on what he should talk about.  I try to take as big and generous a view as I possibly can of dealing with people and I really failed in that case because I told Peter I don't know why you're talking to them, I think these are terrible people, I can't imagine meeting with them, I think they're evil, and it's a bad thing.  Peter's always great with me and he's like, OK, Mark, I got that, that's your feedback [?], do you mind if I talk to Father Gerry?  Father Gerry O'Rourke is an 89 year old Catholic priest, who both Peter and I have known for decades and he was instrumental in the North Ireland peace process.  So Peter went off and talked to Father Gerry and we talked later and I said, what did Father Gerry say to you?  And he said, well, he started by saying basically what you said.  And I'm like, see, Peter?  I told you so.  And then he said this:  I'm going to tell you to do what I told the people in Northern Ireland they had to do.  And that is, Don't even begin to talk to them until you have forgiven them for everything.

So that doesn't mean you say out loud to someone "I forgive you."  But it's asking yourself to do something you're not capable of doing at that moment.  You know, I think Charles Du Bois said it correctly.  "The important thing is this:  At any moment to be able to sacrifice what we are for what we could become."  I think that's the organization we're trying to be and the way of working we're trying to emulate  and sometimes people confuse that with something simple called "nice" and I just wanted to be clear that we're all talking about the same thing."

 As you can see, I got carried away with the meeting and actually did write a whole post.  the picture is of Goose Lake which still had, yesterday, ice on the surface of most of the lake.  But we've had several days with temperatures into the 70s (at least in our backyard) so it can't last long.

I'll put up the other pictures later.   Maybe.

How Much Do You Pay Your Lobbyist? Nothing? Maybe That's Why

. . . the things you want your legislature to pass don't get passed.  The Alaska Public Offices Commission posted the list of Alaskan lobbyists, their clients, and their fee on April 24, 2014.

This list is by the lobbyist, with a list of their clients and their fee for each client.  They vary, some are 'annual fee', some 'hourly fee', some 'monthly fee.'

Check out how much different organizations are paying to get continuous monitoring of legislation and access to legislators.  And consider how much you are paying for this kind of service.

I really haven't had much time to look at this list carefully, but, for example,  I'd note that GCI pays:

• Ashley Reed $50,000 a year
  "All legislation, and administrative activities,
  regarding or impacting phone and
  telecommunications services"
• Reed Stoops $40,000 a year for
  
  "All telecommunications issues relating to GCIs
  internet, cable, telephone, wireless and TV
  business in Alaska."
• Sam Kito Jr. $40,000 a year for
  
  "All things regarding telecommunication issues
  and broadcasting issues"
• Eldon Mulder $40,000 a year
  
  "All issues pertaining to information
  technology, broadband and
  telecommunications."

Be careful.  This is probably more complicated than just looking at the list.  Anyone who has insights to things or people on the list, please leave them in the comments.   Below is a scribd version, but you can go to the APOC website and download it yourself here.

Alaska Lobbyist Directory 4-24-2014

Anchorage Summer Begins When . . .

the birch leaves open. 

That's my calculation anyway.  Our backyard thermometer says 75˚F  (23˚C).  It's been too nice to stay inside and try to write something serious.  These are the birch leaves in front of our house.  I don't remember them ever being this early. 

So I've been in the yard doing work that doesn't yet feel like work. 

LVN IT - License Plate Ambiguity

So, it says ALASKA on top.  We were guessing what the bottom meant:

Loving It?

Living It?

Leaving It?

The Terns Have Returned

The Arctic Tern is one of my favorite Alaska birds.  It's sleek, it can hover (as in this photo) and it travels all the way to the Antarctic for our winter.  And they move so fast that I've never been able to get a decent picture.  But the new camera is changing things.  The pictures will get better. 

Most of the birds haven't arrived yet.  It's still only April.  Mostly there were gulls - like these mew gulls. 

Another mew gull making lots of noise. 

Red necked grebe.


You'll have to make do with bird pictures.  I really didn't want to write about basketball owners, or sexual harassment in the Alaska National Guard.  It was such a beautiful day, and now, at almost 10 pm, it's still quite light out. (I just checked.  Sunset is at 9:59pm today.)

Cloud Show

 

The clouds were putting on a show this afternoon when I went out for an errand.  A nice thing about traveling by bike, there's nothing between you and the sky and you can stop easily to take it all in.  Despite being almost 60˚F (16˚C), there was a cooling, more-than-light breeze and the clouds were moving and reshaping.

The cumulus was up against this other clouds with streaks going up and to the left.  Looked on Wikipedia's cloud page which has been helpful in the past, but couldn't figure out the cloud on the left.

This cloud was hanging over 36th and stretched way out toward the Chugach mountains.


And I passed by where Nino's Italian Eatery used to be.  It looks like the Department of Transportation, which bought the building two years ago,  has removed the building completely now.  Eventually they plan to reconfigure the turn from New Seward from south to west on 36th in this spot.

You can see how fast those clouds were moving.  This picture looks east toward New Seward and 36th.  The sky is mostly blue and it wasn't more than three or four minutes later that I took the other pictures from 36th on the other side of New Seward. 

Get Your Bikes Out - Trails Are Clearing

Last week on the Campbell Creek trail east of Lake Otis (south of Tudor) the trail was mostly snow and ice, but today it was clear all the way to Elmore.  I'd show you pictures, but my camera was free of its sound card.  There are even buds starting on a birch tree in front of the house.  People who used last year's cold May - it snowed the 21st - as evidence that global warming wasn't happening, have this year to remind the there's a difference between weather and climate and there can be annual variations.  But overall things are getting warmer each year and I've got some sweet pea seeds I'm soaking overnight to plant outside tomorrow.  (When we got to Anchorage in 1977, the rule of thumb was not to plant anything outside before June 1.)

I don't know how Chester Creek trail is doing;  anyone try that out this weekend?