Josh has a worthy rant on the NBC/Apple debacle on his blog right now, but I just read on The Machinist that the sticking point was that NBC wanted to double the wholesale price of TV shows on iTunes. Eddy Cue, who runs iTunes for Apple, claims that this would’ve pushed the per episode price to $4.99. Apple is fighting back by by discontinuing NBC shows at the end of the current season rather than mid-season when the contract ends in December.

I’m not sure I can add much more than what Manjoo and Josh have added at this point, but I do want to point out something here. There’s this idea that taxing at too high a rate encourages people to break the law. I suspect a similar curve exists when cartels or oligopolies set arbitrary rates, as well. How elastic is the market for downloadable TV episodes?

I’m not really sure what the fair market price is for an episode of a TV show. $1.99 seems high to me at times, quite honestly. All I know is that the marginal cost of making a copy of a TV show is something around $0.00 and so people are really paying for quality and ease of access and whatever value adds services like iTunes provide (Season Pass, auto downloads, no commercials, etc). I know that I wouldn’t pay $4.99 per episode or $60-80 per season for a show. It’s not worth that much.

Now, I’m not a file sharing kind of guy. I’m that guy that gets the FCC license for my GMRS radios even though no one actually does or enforces the requirement. That’s my point, though… many people aren’t like me. Most people don’t mind breaking the law when they feel like they’re being shafted. Something tells me that BitTorrent is about to get more popular.

(PS. If you’re not reading The Machinist blog, you’re missing out. Worth the Salon subscription alone.)

Missed this last week, but impressed that he showed up on Colbert after his meltdown the week before.

(via The Big Picture)

If you’re paying for a subscription, you really ought to stop now. In an editorial lamenting the “high” US corporate tax rate, the venerable Wall Street Journal published this graph:

That chart is egregious. We learned in high school how to draw best-fit graphs and drawing a line through the furthest outlier doesn’t quite seem to fit the bill. Hell, even Microsoft Excel will draw a better graph than this guy did.

If you want an economist’s debunking of this stupidity, I offer you Mark Thoma’s analysis as well as Kevin Drum’s post, where I originally found this story.

BTW, another serious issue with the graph is that it doesn’t actually take into account corporate tax breaks and exemptions (loopholes) written into the law. In other words, it doesn’t look at the effective tax rate for corporations, which is, obviously, much lower than the WSJ reports.

On top of that, the original research ignores reality. Norway, the very point that turns this into the authors’ version of a Laffer curve, supplements it’s low marginal corporate tax rate with an extra 50% tax (bringing the rate to 78%) on the domestic oil industry, which shares the two properties of being tied to Norway (can’t move to another country) and still highly profitable in the face of such taxes. So, uh, that whole point about lower taxes bringing higher tax revenues is, um, not really applicable to Norway.

The study referenced in the article was released by The American Enterprise Institute which must be a think-tank full of right-wing, poorly educated idiots. How else can you explain releasing this?

My sister emailed me this morning asking to check up on her flights home. She also passed along the fact that she might miss her flights because Nepal was experiencing violent protests over a hike in fuel prices. The government thought it was a good idea there to raise fuel prices by up to 38%. Diesel rates went up 11% in one shot. I can’t imagine who thought this was a good idea. If you wanted a reminder of why hard price floors and ceilings are a bad idea, Nepal provides a great example.

They’ve since backed down on the price hike so the protests have ended and my sister will be fine coming home.

The most controversial discussion in the Levitt’s best-selling book Freakonomics had to be the discussion of his paper on the impact of legalized abortion on crime. Even though I really enjoyed the book, I knew that I’d be reading about that particular section of the book and the research that was the foundation of it again.

The Economist last week reported on a study conducted by two economists at the Federal Reserve Bank of Boston that purports to find an “embarrasing hole” in the Levitt/Donohue study. You can read the Economist’s reporting on this new study to get an idea of what they found. Then go ahead and read Levitt’s response on his blog. I love it when authors have blogs.

I almost forgot to post this, but after getting the first pick in my fantasy baseball draft, I thought of this article. The Economist, of all places, described a study being conducted by two B-school profs that seems to support what we all intuitively know: the first pick in the NFL draft isn’t necessarily as great as it could be. The profs used the salaries of vets to map fair market value for different levels of performance and then compared that to intial contract offers and signing bonuses. As you might expect, the top picks are vastly overpaid. The full paper can be found at http://www.people.cornell.edu/pages/edo1/massey.pdf.

I haven’t read the whole thing, but it looks like it might be pretty interesting. Most of you are probably familiar with Bill James and his band of merry followers. Mark Cuban and folks like John Hollinger are bringing similar techniques and, more importantly, similar mindsets to basketball. It’ll be interesting to see if it pays out in other sports the same way it has in baseball. I’m still not convinced that player stats are as powerful as they are in baseball though…