October 1, 2009
Maria Petrova of the New Economic School recently published a study titled ‘Newspapers and Parties: How Advertising Revenues Created an Independent Press.’ Below is the abstract:
Does economic development promote media freedom? Do higher advertising revenues tend to make media outlets independent of political groups’ influence? Using data on the 19th century American newspapers, I show that in places with higher advertising revenues, newspapers were more likely to be independent from political parties. Similar results hold when local advertising rates are instrumented by regulations on outdoor advertising and newspaper distribution. I also show that newly created newspapers were more likely to enter the market as independents in markets with higher advertising rates.
September 23, 2009
I’ve insisted that like any private insurance company, the public insurance option would have to be self-sufficient and rely on the premiums it collects. But by avoiding some of the overhead that gets eaten up at private companies by profits and excessive administrative costs and executive salaries, it could provide a good deal for consumers, and would also keep pressure on private insurers to keep their policies affordable and treat their customers better. . . .
Henry Hazlitt, Economics in One Lesson:
In a free economy, in which wages, costs and prices are left to the free play of the competitive market, the prospect of profits decides what articles will be made, and in what quantities — and what articles will not be made at all. If there is no profit in making an article, it is a sign that the labor and capital devoted to its production are misdirected: the value of the resources that must be used up in making the article is greater than the value of the article itself.
One function of profits, in brief, is to guide and channel the factors of production so as to apportion the relative output of thousands of different commodities in accordance with demand. No bureaucrat, no matter how brilliant, can solve this problem arbitrarily. Free prices and free profits will maximize production and relieve shortages quicker than any other system. Arbitrarily fixed prices and arbitrarily limited profits can only prolong shortages and reduce production and employment.
The function of profits, finally, is to put constant and unremitting pressure on the head of every competitive business to introduce further economies and efficiencies, no matter to what stage these may already have been brought.
August 28, 2009
According to a report released yesterday on economic growth and corporate profits by the Bureau of Economic Analysis, the Federal Reserve seems to boast impressive profits:
(Click to enlarge)
The Commerce Depart report shows the Fed earned money at a $46 billion annual rate in the second quarter. That figure is up 48% from this point last year. Jon Hilsenrath of the Wall Street Journal attributes this to the Feds ability to “borrow money for next to nothing-– from mortgage backed securities purchases to commercial paper loans to emergency loans to banks.”
August 1, 2009
“The worst crime against working people is a company which fails to operate at a profit.”
~ Samuel Gompers, 1908