Jim Ulvog

When government whim can make or break a company, it makes sense to pay big bucks for political intelligence.

When you read the Wall Street Journal article on a company that gathers political intelligence and sells their knowledge to well-heeled customers, don’t get upset with the company or their customers. Check out Buying ‘Political Intelligence” Can Pay Off Big for Wall Street.

If that irritates you, perhaps the cause is a regulatory structure that can make or break a company based on one single decision.  Huge fortunes ride on decisions made every hour.

The front page article in last week’s paper reports that the SEC is investigating an outfit called Marwood Group. They gather all the public information they can find on decisions the FDA, and presumably other regulators, might make. If I read the article right, their focus is health care issues. 

They read the tea leaves and report back to their subscribers, who then make their own investment decisions.

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By Jim Ulvog, ago

How the price of eggs show we have seen a twentyfold increase in the standard of living in the last 100 years. – 8

Found an incredibly helpful explanation of the radical change in the standard of living over the last 100 years. It is an explanation of the change in the price of eggs provided by Prof. Russell Roberts in his book The Price of Everything. I’ve been discussing this book in the last several posts starting here and most recently here and here.

A challenge I have had when looking at history, particularly the Civil War, is trying to relate salaries or costs from back then to today. It’s one thing to say a soldier made $10 a month or a skilled laborer made $100 a month or a set of uniforms cost $17 or a barrel of flour went from this price to that price in the South. However, I can’t relate that to anything.

How do those prices compare to now? Adjusting for inflation doesn’t really work. Comparing those prices to the cost of an ounce of gold or an ounce of silver helps a little, but that brings in distortions from inflation that we have seen in the last 30 years along with the odd things in today’s economy.

How about using a comparable job to buy a comparable product then and now?

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By Jim Ulvog, ago

Comparative advantage is humane, encourages tolerance, and is a force for peace

Comparative advantage is the idea that if I am better at one task and you are better at another task, we will both be far better off if we trade in what we are each better at.

In this video, Jonathan Sacks explains the deeper, moral benefits of comparative advantage.

[youtube=http://www.youtube.com/watch?v=50tQT1dmIHQ&feature=player_embedded]

A few of his comments and my observations:

He suggests that comparative advantage builds human dignity, peace, and tolerance.

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By Jim Ulvog, ago

Pro Free Enterprise is not the same as Pro Business

Being ‘pro business’ is not the same as ‘pro free enterprise’. 

When the government is giving big favors away it means whoever gets their favors makes a lot of money.  Businesses are highly motivated to seek those favors. That is not being pro free enterprise.

In this video, the Nobel laureate Milton Friedman explains the why “pro free enterprise” is not the same as “pro business.”

 [youtube=http://www.youtube.com/watch?feature=player_embedded&v=0gFV7bQQClg#t=219s]

Here’s a few ideas to ponder:

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By Jim Ulvog, ago

100 years ago only the very richest people had servants – today even the poor have servants – 5

I have discussed Russell Roberts’ book, The Price of Everything, here, here, and here. At one point in the book, he suggests that today even poor people have servants.

As a way of measuring increasing standard of living in the last hundred years, the main character in his book compares a rich guy served dinner at a restaurant by a waiter today to a rich guy 100 years ago served dinner by a servant.

As a starting point, consider one of Prof. Roberts’ comparisons: the rich guy back then had an expensive, fancy watch while the servant had no watch. Today, the rich guy has an exquisitely expensive, fancy watch, while the waiter has an inexpensive digital watch.

Which do you suppose keeps better time and requires less maintenance?

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By Jim Ulvog, ago