Bill Moyers:

In the fall of 1972, the venerable National Association of Manufacturers (NAM) made a surprising announcement: It planned to move its main offices from New York to Washington, D.C. As its chief, Burt Raynes, observed:

We have been in New York since before the turn of the century, because we regarded this city as the center of business and industry. But the thing that affects business most today is government. The interrelationship of business with business is no longer so important as the interrelationship of business with government. In the last several years, that has become very apparent to us.[1]

To be more precise, what had become very apparent to the business community was that it was getting its clock cleaned. Used to having broad sway, employers faced a series of surprising defeats in the 1960s and early 1970s. As we have seen, these defeats continued unabated when Richard Nixon won the White House. Despite electoral setbacks, the liberalism of the Great Society had surprising political momentum. “From 1969 to 1972,” as the political scientist David Vogel summarizes in one of the best books on the political role of business, “virtually the entire American business community experienced a series of political setbacks without parallel in the postwar period.” In particular, Washington undertook a vast expansion of its regulatory power, introducing tough and extensive restrictions and requirements on business in areas from the environment to occupational safety to consumer protection.[2]

EV World:

John Hofmeister doesn’t call it ‘peak oil,’ instead he calls it the ‘energy abyss,’ the point at which the global economy ceases to grow because the oil industry can no longer meet demand.

Hofmeister is the former president of Shell Oil, the same Shell Oil that is preparing to drill the deepest hole yet drilled to reach oil and gas 200 miles out in the Gulf of Mexico in 9,500 feet (2,900m) of water, surpassing the working depth of Shell’s Perdido rig, also located out in the Gulf and producing around 100,000 barrels a day. The cost of that rig: $3 billion.

In his 2010 book, Why We Hate The Oil Companies, Straight talk from an energy insider, he wrote the following:

“It’s inevitable. The industry that produces oil can’t produce enough, unless the world doesn’t grow. It’s possible that we will have such expensive oil that we will stymie growth. How many people will suffer? How many poor will become poorer, while rich become richer because we have failed rational tests of creating alternative competitive fuels? We have a choice to condemn ourselves to an energy abyss in the name of the status quo and lack of enlightened leadership, or we can choose to develop alternatives.

Why aren’t we more thoughtful about the future? Why don’t we begin the journey towards a range of alternatives that delivers increased national security, increased economic security, and multiple choice for consumers?

Charles Arthur:

He says that the growing number of accounts in app stores could also have a disruptive effect on other media types: “Whereas video, books and music are targeted to smaller user bases, apps are broadly consumed. Developers like Rovio or Supercell can offer their products to billions while TV producers can only hope for millions. Apps are becoming the universal medium for entertainment, and iTunes the universal distributor.”

Apple has been criticised by both developers and customers because every app that goes onto the store is first checked by the company’s own team. Delays are commonplace – and can stretch to weeks at busy times.

Apps have been rejected for what seem like trivial reasons (such as appearing to use an Apple name in the title) or, more egregiously, for allowing people to access nudity and for expressing political views – which saw an app from a Pulitzer prize-winning cartoonist rejected (though later reinstated).

Just as stunning have been some of the apps that have been let through – ranging from the fairly inoffensive, but trivial (such as “fart apps”, which simply make a noise) – to one called Baby Shaker which encouraged the player to shake an onscreen baby to make it be quiet. “See how long you can endure his or her adorable cries before you just have to find a way to quiet the baby down!” said the blurb.

Megan McArdle:

Last week, I asked Jim Manzi for his thoughts on the Oregon health care experiment. Manzi is a very smart guy who has founded a very successful company that helps other companies do experiments. He is also the author of the terrific Uncontrolled, a book about using randomized controlled trials to improve business, policy, and life in general. Jim was kind enough to send me his very long, very smart, very wonkish thoughts, which you’ll see below. If you have any interest in Oregon, or just want to be smarter about issues in evaluating social science, you should read this all the way through.

Some Observations on the Oregon Health Experiment

As a vocal proponent of using randomized experiments to inform policy debates, I have followed the discussion surrounding the recent Oregon Experiment with great interest. I think the only thing I’ve previously written for publication on the topic of health care finance was a review of the RAND Health Insurance Experiment. This is the only other randomized experiment of which I am aware that tested the impacts of varying levels of generosity of health care coverage on physical health. The RAND experiment concluded that (1) lower levels of coverage “reduced the use of nearly all health services,” but that (2) this reduction in services “had no adverse effect on participants’ health.” As a casual observer of the topic, that struck me as a fairly important result.

The Oregon Experiment has replicated the first part the first part of the RAND result: Providing free health care coverage increased the use of health care services. However, a debate has arisen between Austin Frakt, Kevin Drum, Avik Roy, Megan and others around the second part: Did this increase in use of health care services lead to measurable improvements in physical health?

This debate has been very informative, but here a few key points that I don’t think have been very widely noted:

1. Almost half the people who were offered free health insurance coverage didn’t bother to send back the application to get it.

About 90,000 people applied for the health insurance lottery (though selection was done at the household level). About 35,000 people won the lottery, and thus had the right to submit an application, but only about 60% of these lottery winners actually sent the application back. This ought to tell any common sense person a lot about the revealed preference for how much the uninsured value the coverage on offer.

Gideon Rachman

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As we sip our drinks, there is still time for one last dark warning about the future of Europe. Leaning forward, the president says: “Our generation have lived in such certain times, secure times, that we cannot imagine how it was in the past. But nothing is excluded. Nothing. We have banished the demons of the 20th century but we have not eliminated them: hatred, racism, anti-Semitism, nationalism. Look at what’s happening in Hungary. Young students in Budapest are painting on the door of a professor – ‘Jew’. These are students doing this, not football hooligans. We have the privilege that we have never seen such people in power but there is no guarantee it will not happen. My protection against them is a strong European Union.”

After that, there seems nothing much left to say so I call for the bill. Earlier in the evening, Schulz had said that he must pay, explaining that parliamentarians are not allowed to accept hospitality. I counter-explained that while our guests choose the restaurant, FT journalists are obliged to pay. It is one of those British rules. So, a trifle reluctantly, Schulz lets me settle the bill and heads back to his Strasbourg hotel – and his diary.

The Economist:

CALL it hyperactivity, call it the temptation to fiddle. Chief executives have a tendency to make acquisitions just to show they are doing something. Similarly, fund managers, sitting at their desks all day, have the urge to trade. Otherwise why go into the office at all?

But these trades inevitably incur costs, and not just in the form of fees disclosed to mutual-fund investors as part of a fund’s total expense ratio. When a large fund sells its stake in a small company, for example, the share price may fall significantly as supply overwhelms demand. A recent paper* in the Financial Analysts Journal (FAJ) found these hidden costs were, on average, higher than the funds’ declared expenses and had a significant negative impact on returns.

The academics looked at the record of 1,758 American equity mutual funds between 1995 and 2006. They estimated trading costs by looking at changes in portfolio holdings (which are revealed every quarter), checking the bid-ask spreads for the stocks concerned and making an allowance for the price impact of trades.

Dan McCrum:

The Berkshire Hathaway annual meeting is like Woodstock for capitalists. It draws tens of thousands of shareholders, value investors, groupies and the curious to the midwestern city Omaha, Nebraska.

They make the pilgrimage each spring to sit at the feet of Warren Buffett and Charlie Munger, the two men who have spent half a century building a sprawling $260bn conglomerate.

The FT’s Dan McCrum was there to capture the weekend festivities and the wise words from the pair of octogenarian sages.
3:53pm

I’ve landed in chilly Omaha, a big open city spread along the Nebraska side of the Missouri River, and its starting to fill up with eager investors from around the world. You can spot some of them carrying the 2013 annual report, required reading among the faithful, and by sound of discussion of the great man.

Matthew Goldstein:

Michael Marchillo, a plumber, has been trying and failing for months to buy a bigger home for his family here in Sin City. He was pre-qualified by a bank for a $130,000 mortgage, which a year ago would have landed a typical three-bedroom home in the area. No more. Now, the 36-year-old says, it’s hard to compete with “greedy investors” who come to the table flush with cash for quick deals.

Marchillo is on to something. The once-beleaguered Las Vegas housing market has been on fire since investment firms led by Blackstone Group LP, Colony Capital and American Homes 4 Rent began buying homes here some eight months ago, backed by $8 billion in investor cash to spend nationally.

These big investors and a handful of others have bought at least 55,000 single-family homes across the U.S. in the past year. In the Vegas area alone, they have accounted for at least 10 percent of the homes sold since January 2012, according to a Reuters analysis of housing transactions.