Archive for June 2nd, 2009

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KP convergence in Chicago

June 2, 2009

Lynne Kiesling

For once, both erstwhile KP authors are in the same place! I’ve organized a research roundtable at the Searle Center on Law, Regulation, and Economic Growth at Northwestern University, and Mike’s in town to attend. The event’s called Energy, Technology, and Institutions, and you can read the working papers to be discussed if you are interested:

Combined Issues of Climate Policy and Energy Policy: Reducing Greenhouse Gas Emissions while Meeting Increasing Global Energy Demand
Daniel H. Cole, Indiana University School of Law

The Political Economy of Energy and Its Implications for Climate Change Legislation
Jim Rossi, Florida State University School of Law

Beneficial Complexity: A Field Experiment in Technology, Institutions, and Institutional Change in the Electric Power Industry
Lynne Kiesling, Department of Economics, Northwestern University
David Chassin, Pacific Northwest National Laboratory

The Challenges of Valuing Carbon
Rick Mattoon, Federal Reserve Bank of Chicago
Margrethe Kearney, Latham & Watkins LLP

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Tim Haab: Michael Moore is a bad economist

June 2, 2009

Lynne Kiesling

Sorry, Tim, but that’s not really earth-shattering news, is it? Anyway, Tim’s post critiquing Michael Moore’s recommendations to the Obama administration as majority shareholder in GM is highly entertaining. A taste to whet your appetite, but please do read Tim’s foment in all its glory:

And as the end days of oil approach us, get ready for some very desperate people willing to kill and be killed just to get their hands on a gallon can of gasoline.

I’m going out tonight to rent Mad Max and learn how to handle this.  On second thought, that would mean driving my evil-machine of death and destruction, er I mean car.  Better, I’ll use my HDTV and video on demand to learn how to save the planet Mel Gibson style.

President Obama, now that he has taken control of GM, needs to convert the factories to new and needed uses immediately.

Because government knows best.

2. Don’t put another $30 billion into the coffers of GM to build cars. Instead, use that money to keep the current workforce — and most of those who have been laid off — employed so that they can build the new modes of 21st century transportation. Let them start the conversion work now.

Slight rewrite: Don’t put another $30 billion into the coffers of GM to build cars. Instead let them sink or swim on their own. You know, like any other business that hasn’t been bailed out recently.

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Health care policy

June 2, 2009

Lynne Kiesling

We don’t write much about health care economics here, but in many respects it does raise some of the same issues that I find fascinating in electricity, telecom, and technology industries. David Zetland has a good post today about how third-party payer health care rules lead to cost increases and overconsumption of health care. I heartily endorse his conclusion:

My main suggestion on medical care is that we cut out the employer. The employer will instead transfer insurance payment money to employees, who are then required to buy insurance.* The patient can buy high or low deductible insurance.** …

Bottom Line: Incentives matter, even with incomplete and asymmetric information. The way to improve your health care is by putting you in charge of it.

[You'll have to click through to his post to see what his asterisks signify :-) ...] I could say the same about electricity consumption, information technology, and dynamic pricing — the way to improve your value for money from electricity consumption is by enabling you to make the decisions, not leaving the decisions in the hands of regulators or a regulated utility in the form of regulated pricing.

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