Anyway, my point is that the Big Six’s pig-headed insistence on DRM on ebooks is handing Amazon a stick with which to beat them harder.

DRM on ebooks gives Amazon a great tool for locking ebook customers into the Kindle platform. If you buy a book that you can only read on the Kindle, you’re naturally going to be reluctant to move to other ebook platforms that can’t read those locked Kindle ebooks — and even more reluctant to buy ebooks from rival stores that use incompatible DRM. Amazon acquired an early lead in the ebook field (by selling below cost in the early days, and subsidizing the Kindle hardware price to consumers), and customers are locked into the platform by their existing purchases. Which is pretty much how they gained their 80% market share.

An 80% share of a tiny market slice worth maybe 1% of the publishing sector was of no concern to the big six, back in 2008. But today, with it rising towards 40%, it’s another matter entirely.

As ebook sales mushroom, the Big Six’s insistence on DRM has proven to be a hideous mistake. Rather than reducing piracy[*], it has locked customers in Amazon’s walled garden, which in turn increases Amazon’s leverage over publishers. And unlike pirated copies (which don’t automatically represent lost sales) Amazon is a direct revenue threat because Amazon are have no qualms about squeezing their suppliers — or trying to poach authors for their “direct” publishing channel by offering initially favourable terms. (Which will doubtless get a lot less favourable once the monopoly is secured …)

If the big six began selling ebooks without DRM, readers would at least be able to buy from other retailers and read their ebooks on whatever platform they wanted, thus eroding Amazon’s monopoly position. But it’s not clear that the folks in the boardrooms are agile enough to recognize the tar pit they’ve fallen into …

[*] It doesn’t reduce piracy; if you poke around bittorrent you’ll find plenty of DRM-cracked ebooks — including all of my titles. DRM is snake oil; ultimately the reader has to be able to read whatever they bought, which means shipping a decryption key along with the encrypted file. And once they’ve got the key, someone will figure out how to use it to unlock the book.

What is so striking about Obama’s shopworn rhetoric is its juvenile intellectual quality. His explanation for how the AJA will create jobs is a non-starter because he does not explain how we get from here to there. As in so many other cases, the president thinks that waving a wand over a problem will make his most ardent wishes come true, even when similar earlier efforts have proved to be dismal failures. This dreadful hodgepodge of a bill will likely be dead-on-arrival in Congress, but it remains a patriotic duty to explicate some of its worst provisions.

The most evident feature of the AJA is that it is a combination of ill-conceived, disparate measures. The wandering quality of the bill makes it impossible to cover all of its silliness, but it is possible to focus on some of the core job provisions, all of which kill the very jobs that the AJA is supposed to create.

One does not have to dip very far into the bill to find trouble. Section 4 of the AJA imposes "Buy American" restrictions on the use of funds appropriated under this statute for work on public buildings. "[A]ll the iron, steel and manufactured goods" used on such projects are to be fabricated in the United States. There are obvious administrative difficulties in deciding what counts as a "manufactured good" for the purposes of the act. But don’t sweat the small stuff. The fatal problem with this form of jingoism is that, in the name of economic efficiency, it forces American taxpayers to pay more for less. That upside down logic may seem sensible to a die-hard Keynesian, but not to ordinary people who realize that deliberate overpayment for inferior goods makes no more sense in the public sector than in the private one.

when you take the government share out of the GNP growth numbers, a very different picture emerges. Economist Robert Higgs has shown that nongovernment GNP growth, which was moving ahead in 1940, actually slowed down in 1942 and then slowed still further in 1943. Far from getting stimulated by the frenzy of government spending, the nongovernment share of GNP recovered its earlier pace of growth only once the war was over.

In short, the war may have killed off a recovery already under way. All evidence suggests that the crucial turnaround from the Great Depression came before U.S. entry into the war: GNP jumped from $90.5 billion in 1939 to $124.5 billion just before Pearl Harbor, when government spending was still at relatively low levels. Then with mobilization, private consumption and investment slowed and headed south—while government deficit spending headed sharply north, rising from $6 billion in 1940 to $89 billion in 1944.

If you really want to light the fuse of a liberal Democrat, compare Barack Obama’s economic performance after 30 months in office with that of Ronald Reagan. It’s not at all flattering for Mr. Obama.

The two presidents have a lot in common. Both inherited an American economy in collapse. And both applied daring, expensive remedies. Mr. Reagan passed the biggest tax cut ever, combined with an agenda of deregulation, monetary restraint and spending controls. Mr. Obama, of course, has given us a $1 trillion spending stimulus.

By the end of the summer of Reagan’s third year in office, the economy was soaring. The GDP growth rate was 5% and racing toward 7%, even 8% growth. In 1983 and ’84 output was growing so fast the biggest worry was that the economy would “overheat.” In the summer of 2011 we have an economy limping along at barely 1% growth and by some indications headed toward a “double-dip” recession. By the end of Reagan’s first term, it was Morning in America. Today there is gloomy talk of America in its twilight.

My purpose here is not more Reagan idolatry, but to point out an incontrovertible truth: One program for recovery worked, and the other hasn’t.

The Reagan philosophy was to incentivize production—i.e., the “supply side” of the economy—by lowering restraints on business expansion and investment. This was done by slashing marginal income tax rates, eliminating regulatory high hurdles, and reining in inflation with a tighter monetary policy.The Keynesians in the early 1980s assured us that the Reagan expansion would not and could not happen. Rapid growth with new jobs and falling rates of inflation (to 4% in 1983 from 13% in 1980) is an impossibility in Keynesian textbooks. If you increase demand, prices go up. If you increase supply—as Reagan did—prices go down.

First, if your regulations rely on getting the “right people” or “tough and experienced regulators” as the NY Times wants, then the regulations are destined to fail or fall short. The reason is simple. If you are a “tough and experienced” regulator, would you make $150,000 at most working as a federal bureaucrat, or would you many multiples of that working for big Wall Street firms figuring out how to game the regulations.

Second, your regulations are destined to fail if they can’t be implemented within a year. This means they are too complex and therefore possible to be gamed.

Rather that relying on getting the right people, the federal government should be in the business of transparency, information, and being the sheriff for disputes. Instead of rushing to save big banks and their investors from their bad decisions, banks need to fail as a result of their mistakes and misdeeds instead of being bailed out by the average Joe. Dodd-Frank was created because President Bush and Obama wanted to help their friends on Wall Street. It would have been far better to practice tough love.

There are many more problems with Dodd-Frank. If you want to know why here’s a primer on how its quack federal corporate governance. 

This was produced by e21—a neocon economics groups headed by Keith Hennessey. Their blog post describing the graph is good. Ironically, Hennessey deserves some derision for the Obama stimulus. As one of President Bush’s senior economic advisors he advocated the Bush stimuli plans. Bush’s economic plans enabled Obama to take the economic non-sense a few steps further. That would have been more difficult if Bush hadn’t led the way. 

I am interested in U.S.-western Europe city comparisons and found "Transit and Density: Atlanta, the U.S. and Western Europe" by Alain Bertaud and Harry Richardson (chapter 17 in Richardson and Bae).  Here is the paragraph I liked best:

Hypothetically, suppose that the city of Atlanta wanted to provide its population with the same metro accessibility that exists in Barcelona, i.e. 60 percent of the population within 600 meters from a metro station.  Atlanta would have to build an additional 3,400 kilometers of metro tracks and about 2,800 new metro stations.  This huge new capital investment would allow Atlanta’s MARTA to potentially transport the same number of people that Barcelona does with only 99 kilometers of tracks and 136 stations.  The effect of density on the viability of transit is far from trivial. (p. 307)

U.S. planners have learned about this the hard way.  Look at rail transit’s performance in U.S. cities. 
Or have they?  The response is actually, "build it and they will come."  "Transit-oriented development" will make Atlanta more like Barcelona.