Jodi Beggs

First, this comic presupposes that higher compensation will result in our economic superhero working more…but one thing that I’ve noticed about superheroes, specifically those who technically have no superpowers (looking at you, Batman and Iron Man), is that they’re really rich. If our econ superhero follows this pattern (sidenote: HAHAHAHAHAHAHAHA), I’m not convinced she’d be particularly motivated by monetary compensation- even worse, she could be on the backward bending part of the labor supply curve, in which case higher compensation could result in her doing less superheroing rather than more! Shouldn’t Captain Surge be going to places where there’s s superhero shortage, not just show up to places that already have superheros and create a superhero glut? I guess what I’m saying is, like my feelings regarding much other surge pricing implementation, I am largely unimpressed by Captain Surge (but do find him pretty realistic).

In speaking with some of the world’s top business leaders I asked what it is that would make business (jobs) even better in the U. S. “Stop quarterly reporting & go to a six month system,” said one. This basically creates the corporate equivalent of being judged on your weight-loss progress on a weekly basis, and, just like such reporting can lead to unsustainable binge dieting, quarterly financial reporting can lead companies to engage in analogous, say, inefficient cost-cutting measures. In a similar sense, professional investors would often be well served to take the quarterly reports and put them in the desk drawer rather than poring over them…or at least focusing on the information that pertains to long-term plans rather than short-term results. In addition, it’s harder to stop being myopic when others involved in a market are still committed to the myopic behavior, and it’s extra hard to convince a whole bunch of people to change their thought processes at the same time.

We’ve officially gotten to the “actually insider trading is kind of fine” stage of the universe… Spoiler alert: it’s not fine, and here’s why: Since I’m guessing that I have a more knowledgeable than average audience here, I’ll elaborate on one point from the original article that is basically correct. Technically speaking, the efficient markets hypothesis (EMH) comes in three flavors: Not surprisingly, the strong form of the EMH can’t really hold without substantial insider trading in a market, so in a very specific way insider trading can make markets satisfy a stronger form of efficiency. Oh, wait, one other thing…while McArdle is correct in that random people probably shouldn’t try to pick individual stocks, she leaves out that many people absolutely *should* hold a diversified portfolio that includes stocks (generally via index funds or other low-fee products). Unfortunately, the insider/outsider divide isn’t between individual and professional investors, and there’s no reason to think that asset managers and the like wouldn’t also find themselves on the losing end of insider trading, so “don’t hold individual stocks” isn’t really relevant to the discussion at hand or a solution to the insider trader problem.

Along these lines, one thing I’m curious about is how people’s willingness to pay for music is affected by the financial situation of the people creating the music- in other words, are people more willing to pay for music (as opposed to download illegally, stream, whatever) when they know the money matters to the musicians? Obviously I’m curious as to the effect that such airplay has on streaming and sales behavior…unfortunately, I don’t have data on streaming, but here’s the sales trajectory: That’s a little weird but interesting, since it suggests a couple of things: one, that the sales interest preceded the airplay interest rather than the other way around, and two, that the airplay and chart recognition didn’t lead to a huge spike in sales. (Granted, we don’t know that we wouldn’t have seen more of a decline if the airplay hadn’t happened, but the magnitude of the effect is still limited by the fact that sales couldn’t have been less than zero in the “counterfactual” situation.)