Carnival Of The Capitalists This Week At Tj’s

COTC is at TJ’s Weblog this week. I was particularly intrigued by this Geitner Simmons entry interpreting some recent import and export statistics. Who knew that almost half of the lost US exports since 2000 have come from California? That helps to explain some of the economic malaise there. And the Department of Commerce website that he uses to generate these facts is absolutely fascinating. It focuses only on products; I’d be curious to see what the numbers look like for services too.

I also recommend Steve Verdon’s post on the cost of environmental regulation. It’s interesting that the examples he’s responding to are of petroleum refining, because of the popular misconception that petroleum refiners have pretty serious market power and enjoy commensurate profit margins. Having looked at the financial data for this SIC code for the past 20 years, I can assure you that this is a misconception, that petroleum refining is not that profitable relative to the return on equity in other industries, and that its industry structure is actually such an aggressive oligopoly that they tend to compete away all “excess profits”. So Steve’s post helps to make sense of why firms would exit a seemingly profitable industry.