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If you're looking for eloquent quotes describing the FCC as obsolete, go to this essay by Bob Frankston. It's hard to pick a favorite, but I'll go with

At 1970 prices the computer under my desk would cost a billion dollars just for the memory alone. Somehow that seems normal and no longer surprising.

But when we try to apply the same metrics to telecommunications we are ignored because it is unbelievable. It is simply too difficult for most people, especially the senior rule makers, to really believe in this kind of change.

His point is that the cost of bandwidth has fallen sharply, but consumers cannot obtain the benefits because bandwidth continues to be segregated by content: phone service goes through one channel, television through another channel, etc.

Discussion Question. Frankston's main policy prescription is to break up the phone companies vertically. But why is not market competition from wireless Internet and cable Internet sufficient to force down prices?

Paul Krugman seems to devote most of his columns to portraying the Bush Administration as the captive of evil corporations. On rare occasions, however, he mixes in a little economics, as he does in today's column.

Back in the 1970's the Clean Air Act set strict rules, but only for "new" sources of pollution. Existing power plants, factories and so on were grandfathered. The idea was that over time, old, dirty facilities would close down.

The result was predictable. Polluters kept those old facilities operating, precisely because they were exempted from the new rules. Indeed, corporations poured money into existing power plants and factories, expanding their capacity, rather than build new ones.

...There ought to be a better way, and there is. It's called "cap and trade." Under cap and trade, existing pollution sources receive permits to emit specified amounts of pollutants--but they can sell those permits to others. This creates an incentive to reduce pollution from old facilities in order to free permits for sale.

Discussion Question. Economists see these sorts of market mechanisms as having more predictable results in controlling pollution, while also minimizing the cost of obtaining cleaner air. What makes regulation more attractive to environmentalists?

Senator Ernest F. Hollings is opposed to giving the President "fast track" authority to negotiate free trade agreements.

But these cries are not really for making trade free — they are for transferring power over trade to the executive branch and favored corporate interests. This should not be the way economic policy works in a democracy.

Special interest groups are a major factor in trade policy. They work primarily through Congress, with Senator Hollings a prime example, keeping textiles from devoloping countries out of our markets in order to protect his corporate constituents.

Discussion Question. Hollings equates strong Congressional scrutiny of trade agreements with a more democratic process. Is that reasonable?

British regulator Clive Briault argues that financial service regulation should be consolidated.

economies of scale that arise from the move to a single set of central support services; unified management; and a unified approach to standard-setting, authorization, supervision, enforcement, consumer education and tackling financial crime.

In America, we tend to take the opposite view. A consolidated regulator would tend to force homogeneity and respond slowly to innovation. We think that competition is a better organizing principle than consolidation.

Discussion Question. As citizens, should we feel safer with a "diverse portfolio" of regulatory agencies or with our resources concentrated in a single regulator?

Columnist Robert J. Samuelson puts his finger on the crux of the Social Security problem.

In 2001, Social Security and Medicare cost about 6.7 percent of national income, or gross domestic product (GDP). By 2030 the costs are projected to rise to 11.1 percent of GDP. Government spending is now nearly 20 percent of GDP.

In other words, payments to retirees will go from one-third of the government budget to over half of the government budget. This is because the ratio of retirees to workers will rise dramatically.

People live longer and are healthier. They should work longer; eligibility ages should be slowly raised to somewhere between 68 and 70. Similarly, we should gradually trim (though not eliminate) benefits for the well-off.

I would argue for even larger increases in the retirement age, in order to stem the growth in government spending and taxes that otherwise would be inevitable. Unfortunately, liberal politicians are quite sanguine about creating an ever-larger welfare state for the growing elderly population, while conservatives want to believe that the stock market can be used to prop up our demographically doomed retirement system.

Discussion Question. Why is it impossible to discuss raising the retirement age for people now aged 50 and under without politicians talking as if current social security recipients will lose benefits?

In my TechCentralStation column, I argue that the music industry could make money without selling CD's.

First, music could come packaged with hardware, much like most software is packaged with computers today. ...

A second method of music delivery would be through third-party developer licenses.

On the other hand, someone named Jacob Walker has proposed a Long Bet that music CD's will still be sold in 2015.

Discussion Question. Would you bet with or against Jacob Walker?

Exponential improvements in productivity are powerful drivers of growth. If this article is correct, then computer power will continue to grow exponentially.

in the next 15 years we could expect to see density increases in the neighborhood of 106 times today's most advanced silicon chips—a threshold of computing power that could support speech, sensory and decision-making functions approximating human intelligence. And it probably could be done with a significant collateral decrease in cost per transistor.

The key is continued reduction in cost. If each gain in the number of transistors per millimeter required heavy investment, at some point growth might stall.

Discussion Question. So far, Moore's Law appears to be driven entirely by supply--as soon as researchers find ways to increase chip densities, the new methods are implemented. Will demand continue to be adequate to justify ongoing investment in better computing technology?

Economists like the idea of letting the market allocate spectrum. However, they do not like the idea of restricting spectrum uses. Thomas Hazlett makes this poin.

The block allocation system is the sine qua non of FCC spectrum regulation. It uses an economically crude, and technically obsolete, framework to separate various services in frequency space. The system...affords great opportunities for incumbent service providers to truncate entry...But the system is clearly inept at maximizing consumer welfare, as vast portions of spectrum space is left vacant and virtually all the remaining portions are under-utilized.

For more articles on this topic, see David Reed's resource page.

Discussion Question. If the government eliminated restrictions on how the owners of existing spectrum could use the spectrum that is allocated to them, would this increase or decrease the value of their spectrum?

Here is a report on gains in the economic well-being of African Americans. Among many encouraging statistics, there is this:

In 1980, barely one in two blacks over 25 held a high school diploma. Today that figure is just under 80%. For blacks in the 25-29 age group, the figure is 86%, the same as for whites.

If there is no disparity in education between blacks and whites in the youngest age cohort, then the future promises to be one of minimal income disparity as well. At some point, we may lose interest in tracking statistics by race.

Discussion Question. Is black poverty more visible than white poverty because a greater share of white poverty is rural?

Brad DeLong has posted a lengthy paper on the optimistic outlook for productivity.

Continued declines in the prices of information technology capital mean that a constant nominal flow of savings channeled to such investments will bring more and more real investment. As long as information technology capital earns the same rate of return as other capital, then labor productivity growth should continue very high. The social return to information technology investment would have to suddenly and discontinuously drop to nearly zero, or the share of nominal investment spending devoted to information technology capital would have to collapse, or both, for labor productivity growth in the next decade to reverse itself and return to its late 1970s or 1980s levels.

Discussion Question. If this optimistic outlook is correct, what does it imply about our ability to deal with health care, the environment, social security, and other "crises"?