a search using the terms “is recession market failure” referred someone to this site.
It is a question to study — and to discuss whether public values failure contributed to the market failure.
Public Values – Legislation
A letter to the editor in the AJC (which does not support permalinks — so this link will die) raises some issues about a law in Georgia requiring a “comprehensive character education program” (see O.C.G.A. § 20-2-145).
(a) The State Board of Education shall develop by the start of the 1997-1998 school year a comprehensive character education program for levels K-12. This comprehensive character education program shall be known as the “character curriculum” and shall focus on the students’ development of the following character traits: courage, patriotism, citizenship, honesty, fairness, respect for others, kindness, cooperation, self-respect, self-control, courtesy, compassion, tolerance, diligence, generosity, punctuality, cleanliness, cheerfulness, school pride, respect for the environment, respect for the creator, patience, creativity, sportsmanship, loyalty, perseverance, and virtue. Such program shall also address, by the start of the 1999-2000 school year, methods of discouraging bullying and violent acts against fellow students. Local boards shall implement such a program in all grade levels at the beginning of the 2000-2001 school year and shall provide opportunities for parental involvement in establishing expected outcomes of the character education program.
(b) The Department of Education shall develop character education program workshops designed for employees of local school systems.
HISTORY: Code 1981, § 20-2-145, enacted by Ga. L. 1997, p. 1386, § 1; Ga. L. 1999, p. 362, § 2; Ga. L. 1999, p. 438, § 2.
Jonathan Herman wrote the letter, and, among many points, he says:
To be fair, I should say that of the 41 values and character traits articulated in the guide, many of them struck me as innocuous. I don’t really have any problem with “cleanliness,” “fairness,” “honesty,” or “respect for others.” Others bothered me only slightly, though they left me a bit confused. Why was “moderation” listed, but not “passion?” Why was “cooperation” listed, but not “leadership?” Why are both “honesty” and “truthfulness” included? Are these somehow understood as different qualities? Is it really the charge of public educators to instill
“cheerfulness” in the student? And what on earth do they mean by “virtue?” Aren’t the other forty traits supposedly “virtues?”
Trying to understand which “values” drive what “policy” can be an interesting test of detective skills. But, what of legislation that directly reflects public values within the text. You can’t be more explicit than the bill that created OCGA 20-02-145. And, you cannot have a more explicit example of public values failure than when you measure the outcomes of such legislation.
Filed under Government, public failure, public values
Failure – Market, Public, and Ethics
Friedman thinks we hit the trifecta of failures with regards to the financial crisis.
This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.
No time to do it now – -but need to find the Michael Lewis piece he mentions.
Filed under Market Failure, public failure
Public Value Failure — Truth as casualty?
So, an oil company hires a professor to write a peer reviewed article designed to prove that punitive damages “make no sense”. While writing the article, the professor concludes that greater transparency encourages “responsible corporate behavior.” However, the oil company’s lawyers took offense to this unsolicited conclusion and cut off the professor’s funding. To wit:
“Advocating greater openness to a lawyer,” the professor said, “is about as effective as advocating greater temperance at a bartender’s conference.”
This article points to an interesting area of examination regarding public value failure, the courts. Perhaps a discussion on science and its use/abuse in the legal system could be constructed to “pick apart” the many ways that public values are treated within an institution where justice is the goal.
But, the professor concludes with a real zinger:
“The legal system and the scientific method,” he said, “co-exist in a way that is really hard on truth.”
Filed under Government, public values
Market Failure – Public Value Failure : An Intersection
When you have a program, such as the one described in this NYT article on private Medicare insurance, that relies on the market to solve a public value problem, and that program fails — you end up in the total failure quadrant.
(need a picture here)
Private health insurance plans, which serve nearly a fourth of all Medicare beneficiaries, have increased the cost and complexity of the program without any evidence of improving care, researchers say in studies to be published Monday.
Filed under Market Failure, Policy
Market Failure — Lack of Public Information
Websites that dig for news as watchdogs
As newspapers fade away, their business model is no longer viable, a new model is appearing to provide news about your governments. The article mentions several websites that display the work of these “watchdogs” :
There is one in Atlanta, not mentioned, voic.us.
The article does frame the market failure surrounding the demise of traditional news organizations. I call it a market failure because the market has yet to provide a substitute mechanism to keep citizens informed. Thought, I could be persuaded to say this is also a public value failure as the public does not seem inclined to invest time (to read and contemplate information on their government and society) nor resources (money to pay for subscriptions). I guess this is similar to the argument over who is to blame for the demise of American auto companies — the companies for failing to adapt to new types of autos or the public for not demanding American automakers make more fuel efficient and compact vehicles.
From the article:
Mr. Woolley says he has become convinced that the nonprofit model has the best chance of survival. “Information is now a public service as much as it’s a commodity,” he said. “It should be thought of the same way as education, health care. It’s one of the things you need to operate a civil society, and the market isn’t doing it very well.”
Interestingly, Rupert Murdoch says that the news of the death of newspapers is premature:
“The newspaper, or a very close electronic cousin, will always be around,” he said. “It may not be thrown on your front doorstep the way it is today. But the thud it makes as it lands will continue to echo around society and the world.”
So, will the newspaper morph to an electronic cousin?
Filed under Uncategorized
Market Failure — Fixing Flats
Friedman rightfully pops a cork over Nardelli’s spin that Detroit is asking for $25 billion to innovate, not as a bailout:
It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?
The budget of US DOE basic research is $4.7 billion — and that IS for innovation. Total NSF budget is less than $7 billion. Total NIH budget is approx. $28 billion. Who knows how much DOD is spending. Nonetheless… Why do we need to subsidize the private sector to innovate?
Filed under Market Failure, Politics, Run like a business
Public Values – Election Day
The electorate is angry and scared. Those emotions may not get much press — but I wager the emotions will drive incumbents from office in large numbers today.
To fun stuff:
Predictors
The Redskins lost — which means the White House incumbent party loses the White House (100% correlation since 1936)
Dixville Notch — Obama – 3-1 (15-5)
Andrew Bergh, a student at university of Franklin Pierce, said today’s election result at Dixville Notch is unexpected because this palace is Republicans’ area. The result may be an indicator for Obama’s victory. China View
Read Nothing into this. Ben Smith’s Blog
President Bush won the town in 2004. Jonathan Martin’s Blog
My wife just finished voting (7:33 am) only a one hour wait — Heavily Republican precinct.
Filed under Politics
Market Failure – Deflation
A term no one wants to hear from economists. Especially when the comparison is to the burst of the Japanese economy in the 1980’s or the Great Depression.
Banks and other financial institutions are reckoning with hundreds of billions of dollars worth of disastrous investments. As they struggle to rebuild their capital, they are halting loans to many customers, demanding swift repayment from others and dumping assets — homes sold out of foreclosure, investments linked to mortgages and corporate loans. Selling is pushing prices down further, making the assets left on balance sheets worth less, in some cases prompting another round of sales. “You get this adverse feedback loop where assets keep falling in value,” Mr. Barbera said. “You’re essentially putting big downward pressure on the global economy.”
Filed under Market Failure, Policy
When Past meets Present — Or, how prices fall up quicker than they fall down!
Aug. 8, 2005 — Oil hit a record high of $64. Gasoline hit a record high as well at $1.86 per gallon.
Oct. 27, 2008 — Oil falls below $64. Gasoline is currently priced at national average pf $2.66.
Remember when the price at the pump reacted to the mere news of an increase in spot prices? (Yeah, just last month). That kind of responsiveness is missing today… wonder why? 
[Source of data is AAA]
Filed under Uncategorized
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