How To Fix Everything

A couple of weeks ago, I visited the Atlanta Federal Reserve Bank and gave a talk on “How to Fix Everything”. Here is the video:

(Edited to add: The video I originally posted was hard for several of you to view due to the large file size. I’ve shrunk the filesize by 2/3 and converted from m4v to flash, which I believe should solve the problem.)

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16 Responses to “How To Fix Everything”


  1. 1 1 Bennett Haselton

    Any particular reason you hosted the video file itself on thebigquestions.com, instead of a third-party video site like Youtube? It’s loading at less than real-time speed, so it skips a lot if you play it from the beginning, unless you pause it at the beginning and wait for most of the video to download before you start playing it. That probably wouldn’t happen if you load it from Youtube.

  2. 2 2 snowracer

    Yes, it skips so much that it’s almost unwatchable. But as a workaround it helps to start the playback, hit pause, wait an hour or two, then watch – that way you should cache enough content to solve the problem.

  3. 3 3 Ron

    Have you considered making this easier and more accessible
    by offering an audio-only version in mp3 form?

  4. 4 4 Josh

    Very interesting video. The obesity question seems very complex…You focused on the food intake, which of course is likely a big part of the issue, though I do think it’s both the quality of the food and the amount of food that’s causing problems. But let’s not forget about how activity levels might contributing. I get the feeling (so of course could be wrong) that starting 50 or 60 years ago, the average person’s activity rate began to decline, especially for women, as they moved into the workforce and began to sit at desks all day as secretaries. And when they got home, washing machines made their lives much easier from a “moving around” standpoint, so they could sit around even more and watch the new technology that was called “TV.” So perhaps washing machines and modern appliances are partly to blame for our obesity as well. So my theory would be the triple whammy of relative inactivity brought upon by modern convenience/entertainment, poor quality food, and too much of the poor quality food.

  5. 5 5 Josh

    Steven,

    Regarding capital gains taxes…I’ve seen some people use the argument that the capital gains tax is in exchange for the “limited liability” these entities receive so that it makes it “fair and just.” What would your response be to this argument?

  6. 6 6 Destin

    With the idea about patents, isn’t it also an issue what kinds of things the government buys? Or is that not a problem, since they’re just matching what the private guys are willing to pay? Then again, how many people are bidding? Is it an amount where the best price comes out?

    …In other words, could you elaborate on the whole patent auction idea :P?

  7. 7 7 Dan

    I’d love an mp3 version so I could listen to this in the car instead of having to sit by the computer.

  8. 8 8 jambarama

    I didn’t have a problem with playback. Thanks for posting this, it was very interesting.

  9. 9 9 Andrew

    Destin,

    More info on Kremer’s ‘Patent Buyouts’ can be found in a tidy little text called “Entrepreneurial Economics”, edited by A. Tabarrok (of Marginal Revolution fame). Landsburg provides the Foreword and contributes a ‘Modest Proposal to Improve Judicial Incentives’. He is brilliant, as usual.

    Landsburg,

    We need to get you on TV more frequently. Thoughts?

  10. 10 10 Ken B

    Yes, unwatchable. I second the suggestion to make the audio only available. No slides remember!

  11. 11 11 Coupon_Clipper

    Great talk. Thanks for posting it.
    Destin- SL explains more of the patent stuff in his book MSISS. But if he wants to explain it more here, I’d love to read what he says. The whole concept of having the public buy the patent rights is just awesome imho.

    With regard to obesity, Seth Roberts (of UC Berkeley) claims that we’ve gotten fatter because of “ditto foods”, i.e. foods that taste the same every time. (Consider packaged mac&cheese vs. the homemade equivalent.) It’s pretty interesting stuff.

  12. 12 12 EricK

    It played back fine for me, perhaps there was server overload at some times in the day.

    With regards to the patent idea, there seem to be a number of problems with it (although maybe these are covered in the more detailed expostiions mentioned above):
    What is to prevent me from patenting some useless invention and then bidding a very high amount in the hope that this is one of the patents which the government buys for the public domain? One solution is that you could go for an auction where, say, the winner only has to pay the third highest bid, but then I could get a number of my friends to also place large bids on the understanding that no money would actually change hands even if they won.

    And how many patents are there? It seems unfair on an inventor that they only get a samll amount for their invention just because their patent wasn’t noticed among a mass of others. Wouldn’t the highest prices go not just to those who had the best ideas, but to those who were best able to advertise their ideas prior to the patent auction?

  13. 13 13 Andrew

    EricK,

    Kremer addresses several issues including mechanisms for preventing collusion:
    1. The gov could (in fact, would) base the offered price on the 3rd highest bid (as you mentioned)
    2. Cancel the randomization process and award the patent to the highest bidder – if collusion was suspected
    3. Impose a mix of licensing fees, disclosure demands, etc.
    4. Prevent inventors from buying back their patents from winning bidders or making side payments (although, he admits this might prove difficult)

    He also briefly discusses the importance of standard procedures such as requiring sealed bids, rewarding whistle-blowers and prosecuting those found guilty of collusion. He also suggests using ‘Ceiling Prices’ – using the private value of the patent as the floor of the buyout price.

    As to your volume concerns, Kremer suggests allowing the gov discretion on which patents to purchase (i.e. if the price of a particular patent was too high – they could decline the purchase and cancel the randomization process). There are some nuances to his argument (substitute and complementary patents, etc.) that I’ve excluded, partly because of opportunity cost considerations and partly because I’m sure SL can bring light to the issue with more eloquence and concision.

  14. 14 14 SG

    Interesting talk Professor. I had one question about your proposal regarding jury reform. Just to be clear (please correct me if I am wrong) you said that you would make a rule that would direct the jurors voting for acquittal to have to allow the defendant live with them (with payment of money).

    My issue with your proposal is that this would make the jurors rely even more upon emotions than reason to judge the guilt of the defendant. To be forced to allow a stranger to camp out in your residence does evoke a visceral reaction in many people (I guess that is why we have laws against trespassing). There could be some trials where the defendant is creepy/unlikeable/unpopular/has prior record etc and to force a juror who votes to acquit to live with the former defendant would probably push jurors to vote guilty. This will lead to association of creepiness/unsociability/unpopularity with guilt rather than probability exceeding reasonable doubt. For example a defendant with some minor prior felonies would easily be convicted for a more serious felony even of reasonable doubt exists (maybe even in the face of a cast-iron alibi).

    Criminal trials are rigged (at least this was the initial intention) against the government. The government bears the burden of proof. The defendant benefits from the presumption of innocence. There are good reasons in history for this. Your proposal would weaken these procedural safeguards.

    In your talk you mention that objections have been raised regarding this proposal of yours. Could you elaborate on them?

    BTW your proposal of quizzing jurors after the evidence/testimony period to gauge their knowledge of the evidence/testimony presented and reward them with cash prizes is a damn good idea.

  15. 15 15 JLA

    One of the arguments for taxing labor income over capital income was that taxing the former results in distortions on one margin whereas taxing the latter results in distortions on two margins.

    But under some (possibly?) plausible convexity assumptions, less distortion would result from taxing both capital and labor income than from taxing only capital income.

  16. 16 16 dave

    you would think that the folks at the atlanta federal reserve bank could afford better mics.

    great presentation, doc.

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