Arnold Kling writes about the difficulty in calculating the "real" exchange rate between currencies.#

In a previous life, I helped to popularize some international cost of living comparisons as part of the Salary Calculator. Those comparisons are very tenuous and controversial. There is local lifestyle bias, so that an Italian might say that Japan is expensive based on the price of pizza, while a Japanese might say that Italy is expensive because of the cost of sushi. There are all sorts of tax issues, regulatory issues, and retailing customs that affect relative prices. What Cowen calls the "microeconomic" view of exchange rates is sort of a straw man, in that it assumes away all of these factors and instead predicts that prices will move in the direction that they would if international goods markets were perfectly integrated.

The model of exchange rate determination that was popular when I was in graduate school was based on the view that asset markets adjust quickly, while goods prices adjust slowly. So when investors decide they want more dollar-denominated assets, the value of the dollar goes up. In the goods market, the price of Toyotas stays steady in yen, and since a dollar can buy more yen, our dollars can buy more Toyotas.

Jason Kottke links on a similar subject.

Mark Cuban explains the rules of success.#

As MicroSolutions became more and more successful, and as I paid attention to the common traits of businesses that I saw succeed and those I saw fail, I came to realize that there are "Rules of Success" that I saw in companies that excelled. Where companies failed to follow those rules, inevitably, they failed. I found myself checking with "My Rules" before I made decisions. When I traded stocks or considered investments in companies, I applied The Rules to their business before I made a decision.

[...]

The reality is that for most businesses, they don't need more cash, they need more brains.

I vote for Miss Montreal.#

Alex Tabarrok links Declan McCullogh on dismantling the FCC.#

Consider some examples of bureaucratic malfeasance that the FCC, with the complicity of the U.S. Congress, has committed. The FCC rejected long-distance telephone service competition in 1968, banned Americans from buying their own non-Bell telephones in 1956, dragged its feet in the 1970s when considering whether video telephones would be allowed and did not grant modern cellular telephone licenses until 1981--about four decades after Bell Labs invented the technology. Along the way, the FCC has preserved monopolistic practices that would have otherwise been illegal under antitrust law.

Chip Gibbons extends this to the FDA.

Don Boudreaux writes on the discrimination inherent in any government benefits package, with the example of job loss as a result of outsourcing.#

Special government assistance to workers who lose their jobs to foreign trade would discriminate against workers who lose their jobs to other forms of economic change. When consumers shift some of their spending from American firm X to Foreign firm Y, this shift is a species of economic change. But the same is true when consumers shift their spending from American firm X to American firm Z. In both cases, workers of American firm X are harmed.

Government assistance to workers who lose their jobs to foreign trade is a subsidy to firms that face some prospect of foreign competition. Such assistance enables these firms to offer employment packages (wages plus fringe benefits) of lower dollar values than otherwise to their employees. That is, part of the full costs of hiring workers will be picked up by government in the form of promised help to displaced workers. The greater the likelihood of a domestic industry confronting foreign competition, the greater the value of the subsidy to firms in that industry and, hence, the greater the difference between the dollar value of the employment packages that these firms would offer without the subsidy and the dollar value of the packages that they offer with the subsidy.

I love this movie.#

Jonathan Rentzsch explains why filler and constant postings are not good for feed producers.#

Here's the link-up for feed producers. The standard model says post regularly. Even if you have nothing interesting to say. Gotta keep the site "live" and "fresh".

I'm telling you this model breaks when applied to feeds.

The more nonsense you consistently feed me, the worse your signal/noise gets, the more likely I'm going to unsubscribe.

From the reader's standpoint, aggregation is really different than reading a bunch of websites. I don't have to remember to visit your specific site every week/day/hour. Essentially, once I'm subscribed, there's nothing else I have to do but pick & choose and read. I'm locked in. It takes effort to change. Thus, you don't need filler. You already have my attention. Regarding feeds, filler will only hurt you.

Why We Should Tax Advertising.#

Don Boudreaux on Paul Krugman: "Few pundits are as skilled and as vigilant as is Paul Krugman at exposing misleading uses of statistics. Perhaps this is why he himself is so effective at using statistics to mislead."#