Blog - Page 64

Hu’s the Supply-sider Now?

U.S. Treasury Secretary John Snow is in China for a nine day visit. But which nation’s leader is offering supply-side economic advice? If you guessed Chinese President Hu Jintao, you are correct. Citing evanescent “imbalances,” Snow continues his calls for de-linkage of the yuan from the dollar and subtly still pushes for a major yuan appreciation. The U.S. thus inexplicably continues its weak dollar currency policy. Hu, on the other hand, believes that “All countries, major economies in particular, should keep major currencies reasonably stable and prevent trade protectionism.” Bingo. Over the past decade, the dollar-yuan link has been a key source of growth and stability not only for the U.S. and China but also across the global economy. China’s Read More ›

The Tax Reform Swamp

“The President’s Advisory Panel on Middle Class Tax Hikes” That’s what the Free Enterprise Fund is calling the Tax Reform Commission that met for the 11th time this year on Tuesday. The meeting focused on ways to limit the home mortgage deduction, thus raising revenue to “pay for” the elimination of the Alternative Minimum Tax (AMT). Although we don’t yet know what the Panel’s final report will say when it is released on November 1, it looks like its recommendations will be much less ambitious than many of us would like — and less ambitious than the U.S. economy needs. News accounts today suggest that the major “reform” will be elimination of the AMT in return for limits on the Read More ›

Wireless: Listen to the Technology

Often lost in the public policy debate on municipal telecom networks is any halfway serious discussion of technology, and thus of economics. Yes, I know that Wi-Fi wireless access has been upgraded to a “fundamental right” in San Francisco even as the Supreme Court says mere property rights have now been Constitutionally downgraded. But beyond these silly new assertions by politicians and judges, what does the technology tell us about where broadband access in general and wireless access in particular are headed? Helping to answer these questions is a Qualcomm marketing executive named Jeff Belk. Several years ago, Jeff penned a series of popular riffs and white papers chronicling his experiences with Wi-Fi hotspots. Wi-Fi is great, he insisted, for Read More ›

Surprising Media Numbers from the Heartland

Ball State University has released findings from Middletown University Studies 2, which it terms “the most comrehensive observational media use study ever undertaken”: involving 400 participants, 5,000 hours of media use in Muncie and Indianapolis, recording information every 15 seconds on the use of 15 varieties of media–print, broadcast, telecom and Internet. The study’s key findings: (1) per waking day (figure 16 hours), 30% with media as sole activiy, 39% with media while doing something else and 21% work activity; (2) in any given hour 30% had the TV on, with 70% in peak hours; (3) TV still tops at 240.9 minutes (4 hours). cedon is the computer at 120 mins. (2 hours); (4) 30% of all media time is Read More ›

How can the cost of Universal Service double while technology is driving down costs?

The FCC took comments Friday on what to do about an enormous rate of growth in the demand for Universal Service subsidies. The High Cost Fund has almost doubled in size since 1999. Part of the growth is attributable to a variety of familiar problems. For example, support for rural carriers is still determined using a rate-of-return methodology despite the fact that price-cap regulation has proven to be far more effective in controlling costs. And rural carriers can choose to be subsidized not on the basis of their own actual costs, but according to an “average” cost incurred by many carriers. So it doesn’t matter that some rural carriers contend with mountains, deserts, lakes and rivers while there are others Read More ›

Coast to Coast

Ten Days of Quantum Science and Supply-side Economics With our annual Telecosm conference in Lake Tahoe sandwiched by two trips to Washington, D.C., it was a whirlwind two weeks. Seeing old friends and meeting new ones from the Telecosm Lounge (www.gildertech.com) is always a great part of Telecosm. It was no different this year, as we had enough EZchip (LNOP) owners to convene a significant shareholders meeting with CEO Eli Fruchter at lunch on Wednesday even though the company’s official annual meeting was taking place that very day in Israel. “No one comes to our official meeting,” Eli said. He was amazed that Glen had memorized every word of every press release of the last five years and that West Read More ›

Net Testimony in Hoosierland

On Monday morning I testified before the Indiana Joint Committe on Regulatory Flexibility. Sexy, I know. I was joined by Ray Gifford and John Rutledge of the Progress and Freedom Foundation. Some 30 legislators listened as Rutledge expertly surveyed the global economic scene, with emphasis on energy, telecom, and Asian growth. I described the American technology scene and tried to show how a number of recent events — eBay’s purchase of voice-over-IP provider Skype, Google’s entry into VoIP and even wireless infrastructure, Yahoo!’s invasion of Hollywood, and the CableCos’ and TelCos’ invasions of each other’s businesses — make our already antiquated telecom laws and regulations more useless than ever. Ray Gifford then offered a cogent history of telecom law at Read More ›

Malpass or Manny?

The Wall Street Journal reports this morning that the White House may be looking beyond the presumed “list of four” (Lindsey, Bernanke, G. Hubbard, Feldstein) to fill Alan Greenspan’s chair at the Fed. This is great news, as it may open the door for monetary stalwarts like David Malpass of Bear Stearns, or, as Cesar Conda suggests on the Journal’s editorial page, Manuel Johnson, who in 1996 wrote one of the very best books on monetary policy. Malpass and Johnson are supply-siders who favor a price-rule to maintain a stable value of the dollar and who deeply understand the global nature of all economic policy. Columbia’s Glenn Hubbard, who was President Bush’s CEA chair in charge of the excellent 2003 Read More ›

Dark side of municipal networks

What happens when a municipal broadband network fails to cover its costs? The costs get shifted. Residents of Ashland, Oregon will see a monthly surcharge of $7.50 on their electricity bills. Ashland’s cable rate payers will also get hit with a surcharge. (See the article from the Ashland Daily Tidings.) The fact that Ashland’s fiber network is not profitable, that Ashland cross-subsidizes it and that Ashland’s taxpayers/captive rate payers will foot the bill for a bailout proves what many of us have been saying about municipal networks: (1) Cities lack the expertise to successfully build and operate broadband networks, (2) Cities will discriminate in favor of their own network ventures and (3) Cities are unprepared to continually modernize the networks Read More ›

House telecom proposal a wake up call

The reaction to the draft broadband proposal in the House reminds me of the horror and/or ridicule that greeted each one of the many drafts of what became the Telecommunications Act of 1996. A proposal that is designed to hopefully have a chance of being enacted is always a disappointment (see House telecom proposal opens new frontiers for regulation). Its also not a bad indication where the process would ultimately lead if nothing is done to educate the public about the benefits of deregulation. The problem is a lack of faith in free markets and a skepticism that deregulation works. Even supporters of deregulation fret over whether there is a right way and a wrong way to do it — Read More ›