In honor of Janet Yellen, the former President of the San Francisco Federal Reserve, being recently elevated to "frontrunner" status for the chair of the Federal Reserve Board, I present a list of past quotations from Mrs. Yellen here. All emphasis is my own.
"While a tightening of credit to the subprime sector and foreclosures on existing properties have the potential to deepen the housing downturn, I do not consider it very likely that such developments will have a big effect on overall U.S. economic performance." - Speech to the Money Marketeers of New York University, April 26, 2007 (link)
Of course, these events very much did have an impact on overall economic performance, and continue to do so today, some 6 years later.
Over the course of the last year, Kickstarter has risen to prominence as one of the easiest and most effective ways to fund projects and ideas. By relying on the collective wisdom of crowds, Kickstarter tends to fund projects which are generally recognized by would-be investors as good ideas. The market forces at work here are generally no different than those which govern the more established, more institutional market for venture capital. It's no secret that financial incentive is a great motivator for producing discerning analysis and careful decision-making.
However, there are several variables that separate Kickstarter projects from venture capital investing. Most of these involve reducing the barriers to entry for small-time investors. An analogy to political fundraising is appropriate: large institutions may dominate funding in federal elections (particularly for the presidency), but it would be impractical for these institutions to devote time and resources supporting candidates for state and local offices. Nevertheless, funding is no less important for those candidates - and in fact, campaign dollars spent there have a much greater impact on the race.
How do life insurance markets operate within the classic textbook framework? Is the market perfectly competitive, or do some frictions exist that cause macro-level inefficiencies? The answer depends on what type of insurance product you are looking at, as term insurance and universal life insurance markets have drastically different competitive elements.1
Term life insurance is, all things considered, a very simple form of insurance which is consistent with other lines of insurance such as health or auto. Assuming, for example, that a 35 year old male will need coverage for 10 years, a fixed cost payable annually can cover that risk. When shopping competitively for rates, this individual has one primary element to consider: the amount of the premium. Because of the simplicity of the insurance, consumers can fairly easily compare rates to find the lowest cost policy. This is as close to a perfectly competitive market as exists in financial markets, on par with bonds and other "plain vanilla" assets.
Much has been written about MLB's investigation of the Biogenesis clinic, and the several players who have been banned pursuant to the investigation under the league's drug policy. Most that has been written has focused on the legacy of the sport itself, the ethics of the use of performance-enhancing drugs, and the appropriateness of the suspensions in light of what little is known of the evidence.
What is less talked about is the nature of baseball's employer-employee relationship and the contractual obligations of clubs to players after these suspensions have been handed down. The labor market for athletes has operated in much the same way as the market for film actors has for the last 30 years or so - which is to say, it has operated in a much different fashion than the labor markets you or I are familiar with. Individuals with such specialized skill sets, and employers which demand exactly those skill sets, would alone result in higher clearing rates in these professions. But these labor markets are also notable because of the relative stranglehold that unions have on the supply side. One cannot act in a major studio production without paying dues to the Screen Actors Guild1, and one cannot play in the major leagues without membership in the MLB Players Association.
Unions are a highly politicized issue in other industries. Even setting aside the recent controversies involving public unions in Wisconsin and elsewhere, private unions have been the subject of scrutiny from the right side of the political spectrum in the automotive industry (among many others). In key political battleground states, right-to-work laws have become hot topics in recent elections. Yet, in baseball and other sports, unions seem to have produced substantially higher wages for workers without compromising the business model of the business (team) owners. The MLBPA is a shining example of success for union backers to hold up. Right?
