January 2012

Last night I attended a preview of the new film Swing Vote, which is being released tomorrow. It revolves around one man, Bud Johnson (Kevin Costner), who through a series of odd events winds up getting to re-cast a botched ballot in a tied presidential election in the state whose electoral votes will tip the election to either candidate, New Mexico.

Such is the scenario often put forth by non-voters — given its extreme unlikelihood, the chances that your vote will make any difference in an election’s outcome are essentially nil. However, I doubt a discussion about the rationality of voting is what inspired the makers of Swing Vote.

The film moves toward a warm and fuzzy bipartisan ending that is intended to drive home the importance of voting — and becoming duly informed to do so — as a “civic duty.” Yet the movie’s premise is so outlandish that instead of a civics lesson, it rather reinforces the view of voting as irrational, an expenditure of effort toward no discernible effect (under normal circumstances, at least) — or, in other words, that there is no Bud Johnson.

Number of farms in the U.S. — about 2.1 million.

Cost of the 2008 farm bill — $300 billion over five years.

That’s nearly $150,000 per farm, at a time of high food prices.

Last month, Google slightly improved the relevancy of the ads it displays when you search for something. In addition to taking your last search into account, Google now also factors in your immediately-previous search. Then, a couple of weeks ago, Google released more information about how it improves its search algorithm – notably, by collecting data on searches.

Today, Google has added a new feature that shows users how their results are customized, based on factors like location, recent searches, and a longer search history. CNET gives the example of a San Francisco user searching for “kiss fm” and finding the KISS-FM in San Francisco, not the KISS-FM in any other city, as her top result.

This customization is important for search. More relevant results are better results. With search competition increasing, Google needs personal data to keep its algorithm up-to-date. As Google pointed out in its comments to the FTC’s proposed behavioral ad rules, personal data of some form will have to be collected and used if the internet is ever going to improve. That means the government will have to stay out.

I reported here earlier on public safety agencies holding up spectrum owed to Sprint-Nextel. I also reported on repeated demands for even more spectrum, in spite of public safety agencies already being given an enormous chunk of the spectrum freed up by DTV.

Yesterday, a group of public safety officials met with FCC Commissioner Michael Copps and demanded even more. The public safety officials want the whole D-Block, the section of spectrum that was to be turned into a public-private venture, but failed to achieve its reserve price at auction due to extreme limitations on its use.

They should not get it. My colleague, Ryan Radia, has an upcoming On-Point detailing what is wrong with giving public safety agencies so much spectrum. Government agencies have no incentive to use spectrum efficiently, since they can just get more by demanding it. Privitization, however, would result in better public safety outcomes (not to mention opening up space for new technologies like WiMax) because private companies have an incentive to innovate and tailor their systems to the public safety agencies that would lease spectrum from them.

Bush signed into law an enormously costly mortgage bailout today, turning a deaf ear to financial experts who warned about the bill’s dangers and risks, and choosing instead to spend untold billions of dollars (potentially up to $300 billion) to bail out government-backed mortgage giants Fannie Mae and Freddie Mac.

“David M. Walker, the former comptroller general of the United States and head of the Government Accountability Office . . . said that Mr. Bush might have been unwise to sign the measure. ‘Providing authority to the secretary of the Treasury to extend credit or to buy stock is one that will end up costing the taxpayers tens of billions of dollars.’   Mr. Walker noted that other government interventions in the private market, including a rescue of the Chrysler automobile company had provided an opportunity for taxpayers to profit. But when it comes to the mortgage giants, he said, there is no upside.  ‘The way this is structured,’ he said. ‘It’s only a matter of how much the taxpayers are going to lose.’”

In signing the bill, Bush knuckled under to Congressional leaders like Barney Frank, Charles Schumer, and Chris Dodd, who used the bill to fund left-wing special interest groups that support them, and to further enrich the unaccountable government-backed mortgage giant Fannie Mae, which has long been run by liberal power-brokers, and which used massive accounting fraud to inflate its managers’ bonuses, even while helping spawn the mortgage crisis. 

In the Wall Street Journal, Holman Jenkins describes how much of the mortgage crisis remains hidden, despite its enormous scale, in places like California.  In the Washington Post, Robert Samuelson describes how the government’s “affordable housing” fetish contributed to the mortgage meltdown, and worries (as I have) that the mortgage bailout, by rewarding irresponsible lenders and borrowers, will encourage irresponsible behavior that may lead to recurring financial crises in the future.  (Regulatory pressure on banks to promote “affordable housing” and “diversity” helped spawn the mortgage crisis).

Here’s an infuriating example of bias towards irresponsible people in press coverage of the mortgage crisis.

In addition to massive federal probes of the deal, the nonexclusive Google-Yahoo ad pact is facing scrutiny from states as well. The California attorney general is being pushed to examine the advertising arrangement.

Why all this hubbub? As I’ve argued here before, the Google-Yahoo deal is fairly minor, not a merger, beneficial to consumers, and was initially thought not to even need approval.

One may particularly wonder why the states are getting involved. If there’s ever a fairly clear case for federal preemption, antitrust investigations of international companies would seem to be it. After all, isn’t it the federal government’s job to regulate interstate commerce?

While libertarians may in general be in favor of federalism, we should also recognize its limits. One big caveat is that there should be no situations where both the feds and the states are regulating something. Subjecting a voluntary, beneficial agreement to multiple levels of regulation is always worse than subjecting it to only one. Further, there are some issues where multiple regulatory jurisdictions are actually harmful. These are issues in which the most regulatory jurisdiction governs behavior, not the least.

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