Daniel J. Summers » Charter Member of the VRWC

Found this over on IMAO…

This is the first time my blog and Facebook accounts have crossed.  If you’re not a member of Facebook, you may not know exactly what I’m talking about.  However, you know my enjoyment of economic discussions, and this is a good learning opportunity.

Recently, several of my Facebook friends joined a group called “We Will Not Pay for Facebook.”  They’re not alone – this group boasts over 4.4 million members.  The group had articles referring to the profit that the current owner is making on the site, and various purchase offers.  Then there was this…

Because of Facebook’s huge popularity Mark Zuckerberg is getting a lot of offers from people wanting to buy Facebook. People Who WILL turn it into a paysite.

The assumption here is that if anyone buys the service, they will change it to a pay site.  This is FUD*, and to illustrate this, we’ll look at Facebook compared to another site, Classmates.

What makes Facebook valuable is its large (and exponentially growing) user base.  Facebook can charge advertisers a premium for ads placed there, and if they make it paid-per-view, they make even more money, because they get lots of eyes on them.  There are people who, like me, pay for very few websites (the only one I’m currently paying to use is Geocaching), and were Facebook a pay site, would not have signed up it.  With this high user base, and high business value, comes the innovation – while few people I know like the new “stream” home page, there are things that Facebook can do that few other sites can match.

Contrast this with Classmates – this site has been up longer than Facebook, does pretty much the same thing as Facebook, yet is nowhere near as hot a commodity or as valuable a business as Facebook.  Why is this?  The fee model.  Classmates requires a fee for an account (or at least they did when I looked at them, which hasn’t been recently).

If someone bought Facebook and changed it to a fee model, it would kill the business value of the site.  Sure, you’d have people who got addicted to the free stuff and would pay to maintain their addiction, but you’d have other people (myself included) who would simply let the account go.  I have other ways of doing pretty much anything that site can do.  It’s nice to have it all in one place, but it’s not worth $3.95/mo to me.  All this would severely stifle the growth of the site, thereby reducing its business value.

If this happened, there would then be demand – demand for another free bring-it-all-together social networking site.  The entire science of economics is defined as the study of the allocation of scarce resources.  Demand causes resources to be allocated – whether it was “iShare,” or “Friends and Family,” or “Facepedia,” some other site would sprout up that would provide the services that Facebook used to provide.

That being said – I don’t see Facebook going to a fee model, whether it changes hands or not.  It just doesn’t make economic sense.  And, if the owners decide to go that route, it still won’t be a big deal, as something else will rise up to replace it.  Don’t believe the FUD. 

* Fear, Uncertainty, and Doubt – rumors of impending doom not based in fact

Yes, in 100 days I’ve gone from “skeptically optimistic” to hoping that 3 terms of Republicans can stem the tide from 4 years of our current administration. For all of the left’s making fun of Bush, and VP Biden’s history of gaffes, who knew that the current administration would make them look downright composed?  It’s Amateur Hour at the White House, and our kids get to pay billions of dollars for us to watch!

Economics: F (only because F- isn’t technically a grade)
You would think that this would be the current administration’s strong spot, seeing that they won the election last year based on the crappy economy (or so they’d have you believe).  Yes, the fiscal irresponsibility of the final year of the Bush v2 administration looks miserly compared with this stimporkulus and budgets we’re being asked to finance. The graph to the right gives an illustration of the impact of the current budget, compared to budgets under Reagan, Bush 1, Clinton, and Bush 2.  Just as the New Deal lengthened the Great Depression, these artificial attempts to “fix” the economy are actually doing it more harm.  Then they label those who are against it as dangerous – but more on that later.

National Security: D-
This one was not an F due to his quick response to the Somali pirates who had captured the captain of a US ship.  Regarding the F/A-22 cutbacks, these were being discussed even in the previous administration, and even so, the “cutback” still result in more airplanes being built and delivered to fill the order.  I don’t really have a good feeling one way or the other.  The F/A-22 has been in work a long time, and had a lot of money already.  To throw that away, when we used its predecessor for over 30 years, seems foolish to me.  However, with the services merging more and more operations, perhaps it’s smart to have a plane that’s built to specifications from all interested parties.  Time will tell.  The release of the CIA memos, though, was a bad move, which I discuss in the next subject below.

Foreign Affairs: F
How many ways are there to mess this up?  Maybe we should bow to another head of state.  Maybe we should give the Queen of England an iPod with your speeches?  How about giving 25 Region 1 DVDs to someone who can only legally play DVDs from Region 2?  Maybe we could use the term “England” to tick off a good portion of one of our strongest allies.  And these are the people who made fun of Bush?  Maybe they should’ve left some folks from the White House Protocol Office on staff to train the new folks.  I know that it was Kerry’s slogan and not Obama’s, but isn’t this the party that wants to make us “respected around the world”?  Ignoring years of tradition and protocol is not the way to make that happen.

And, the release of the CIA memos has made us look even worse.  We have people hyperventilating on both sides over whether waterboarding is torture.  The ones who do us harm know that they don’t have to do anything for a while, because we’re doing it to ourselves.  What the administration doesn’t seem to have thought through is that, though in this country, it may be easy to pin all that on the Bush administration, to the rest of the world, it’s still “America” that did it.  And, if they know that we don’t have the stomach for it (would it really have been that out-of-line to put a caterpillar in a room with a terrorist?), their job is easier.  The CIA agents are demoralized, and the enemy is emboldened.  Call it what you will – naive, oblivious, amateur hour – it’s dangerous, and it’s made our country weaker because of it.

And, to those hyperventilating – if you’re ever captured by them, you’d better pray that waterboarding is the worst thing they do to you.  Because we’re humane, we’ve come up with ways to make people think that they’re being tortured, when they’re really not.  Torture has lifelong implications to your health and mobility; John McCain can’t lift his hand above his shoulder – that didn’t come from waterboarding.

(Even the decision to stick by the Iraqi withdrawal timetable couldn’t raise his grade in this subject.)

Domestic Affairs: F
Janet Napolitano is a joke.  “Nonetheless, to the extent that terrorists have come into our country or suspected or known terrorists have entered our country across a border, it’s been across the Canadian border. There are real issues there.” “Crossing the border is not a crime….” Tax Day Tea Party protestors are dangerous right-wing extremists, and they could easily recruit returning combat veterans.  I don’t feel that our homeland is very secure – I feel that this department is now being run as a playground for political paybacks.  Then there’s Hilda Solis, the Labor Secretary confirmed because the Republicans just got tired of fighting.  I saw one interview on TV where she must’ve claimed “but we’ve only been here 5 weeks” about 7 different times.  That’s not the way a leader talks.  An amateur hour two-fer.

Social Affairs: F
I believe I covered Obama’s revocation of the Bush executive orders regarding federal funding for embryonic stem cell research.  (I’ve bolded the important parts, because I’m sick and tired of the liberal “You’re opposed to science!” mantra.  No, we’re not – we’re opposed to the government paying for research that destroys unborn humans, especially when it has shown no signs of finding anything, but other, similar, non-lethal-to-the-donor research has.  (And, check out #1 under “Adult Stem Cell Advantages.”)  What you fund, you get more of – fund more experiments on dead babies, you get more dead babies.  I happen to be against dead babies, born or unborn.)  When Obama rescinded that executive order, he also rescinded one that allows funding of ethical experiments.  A good analysis of what that means is here.

He gets a pat on the back for supporting traditional marriage; however, I think that battle is lost.  The demise of marriage came not from non-traditionalists, but from people who decided that a promise of forever can be undone by a piece of paper signed by a judge.

Well, he’s got a solid 0.2 GPA headed into day 101 – nowhere to go but up, eh?

I found this interesting…  Numbers for the Dow Jones Industrial Average over a couple of periods in our nation’s recent past.

September 10th, 2001 close: 9,605.51
September 21st, 2001 close (lowest before recovery): 8,235.81
Value change: -14.3%
Raw Numbers

November 4th, 2008 close: 9,625.28
January 19th, 2009 close (markets closed for MLK Day): 8,281.22
March 5th, 2009 close (lowest before recovery): 6,594.44
Value change (4 Nov – 5 Mar): -31.5%
Value change (19 Jan – 5 Mar): -20.4%
Raw Numbers

Feel free to infer (or not infer) whatever you’d like.  (Or, as one TV network likes to say, “I report, you decide.”)

First up is the latest column from Thomas Sowell entitled “Subsidizing Bad Decisions” in which he asks a very good question – “Why should taxpayers who live in apartments, perhaps because they did not feel that they could afford to buy a house, be forced to subsidize other people who could not afford to buy a house, but who went ahead and bought one anyway?”  Read the whole thing, particularly the part where he talks about “saving for a rainy day” and “sadder but wiser.”  I’d planned a longer post on the economy (and I still may do that), but this is pretty much the way I feel about it.

And, backing him up is some timeless advice from Adrian Pierce Rogers, via Neal Boortz…

You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that, my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it.

If only Washington, D. C. understood that simple truth.

Morgan Freeberg over at House of Eratosthenes has put up an allegory as his latest “Memo for File” (82nd, for those of you keeping score at home), and it’s great.  I can’t really think of a good way to tease it, but it’s excellent – go read it.

And, I saw this bumper sticker outside a building earlier today, and the more I thought about it, the more I chuckled.

Why are peace activists so violent?

Why indeed?

I found this interesting – maybe you will too…

President Barack Obama, January 27th, 2009, Al Arabiya Television:

…America is a country of Muslims, Jews, Christians, non-believers — regardless of your faith, people all have certain common hopes and common dreams.

And my job is to communicate to the American people that the Muslim world is filled with extraordinary people who simply want to live their lives and see their children live better lives. My job to the Muslim world is to communicate that the Americans are not your enemy.

…

And so you will I think see our administration be very clear in distinguishing between organizations like al Qaeda — that espouse violence, espouse terror and act on it — and people who may disagree with my administration and certain actions, or may have a particular viewpoint in terms of how their countries should develop. We can have legitimate disagreements but still be respectful. I cannot respect terrorist organizations that would kill innocent civilians and we will hunt them down.

President George W. Bush, October 5th, 2007, Al Arabiya Television:

No, it’s not [true that I am an enemy of Islam]. I’ve heard that, and it just shows [sic] to show a couple of things: One, that the radicals have done a good job of propagandizing. In other words, they’ve spread the word that this really isn’t peaceful people versus radical people or terrorists; this is really about the America not liking Islam.

Well, first of all, I believe in an almighty God, and I believe that all the world, whether they be Muslim, Christian, or any other religion, prays to the same God. That’s what I believe. I believe that Islam is a great religion that preaches peace. And I believe people who murder the innocent to achieve political objectives aren’t religious people, whether they be a Christian who does that — we had a person blow up our — blow up a federal building in Oklahoma City who professed to be a Christian, but that’s not a Christian act to kill innocent people.

…

We are having an Iftar dinner tonight — I say, “we” — it’s my wife and I. This is the seventh one in the seven years I’ve been the President. It gives me a chance to say “Ramadan Mubarak.” The reason I do this is I want people to understand about my country. In other words, I hope this message gets out of America. I want people to understand that one of the great freedoms in America is the right for people to worship any way they see fit. If you’re a Muslim, an agnostic, a Christian, a Jew, a Hindu, you’re equally American.

I guess it’s not the message, it’s the messenger…