Entropy Economics

Over the July 4 weekend, relatives and friends kept asking me: Which mobile phone should I buy? There are so many choices.

I told them I love my iPhone, but all kinds of new devices from BlackBerries and Samsungs to Palm’s new Pre make strong showings, and the less well-known HTC, one of the biggest innovators of the last couple years, is churning out cool phones across the price-point and capability spectrum. Several days before, on Wednesday, July 1, I had made a mid-afternoon stop at the local Apple store. It was packed. A short line formed at the entrance where a salesperson was taking names on a clipboard. After 15 minutes of browsing, it was my turn to talk to a salesman, and I asked: “Why is the store so crowded? Some special event?”

“Nope,” he answered. “This is pretty normal for a Wednesday afternoon, especially since the iPhone 3G S release.” Read the rest of this entry »

See our new paper estimating the growth of consumer bandwidth – or our capacity to communicate – from 2000 to 2008. We found:

• – a huge 5,400% increase in residential bandwidth;
• – an astounding 54,200% boom in wireless bandwidth; and
• – an almost 100-fold increase in total consumer bandwidth

U.S. consumer bandwidth at the end of 2008 totaled more than 717 terabits per second, yielding, on a per capita basis, almost 2.4 megabits per second of communications power.

After the EU antitrust authority today leveled a €1.06 billion fine against Intel, the company’s general counsel Bruce Sewell gave an illuminating interview to CNBC:

We better come up with a better way to restrict the EU’s range of motion on these matters. Sewell called the action “arbitrary.” The CNBC reporters called it a “shakedown.” They’re both right. Read rest of post »

Last night on Charlie Rose, Treasury Secretary Tim Geithner made an extraordinary admission. Here’s the exchange:

Rose: “Looking back, what are the mistakes, and what should you have done more of? Where were your instincts right but you didn’t go far enough?”

Geithner: “There were three broad types of errors in policy. One was that monetary policy here and around the world was too loose for too long.  And, that created just this huge boom in asset prices; money chasing risk; people trying to get a higher return; that was just overwhelmingly powerful.” 

Rose: “Money was too easy.”

Geithner: “Money was too easy, yeah . . . . Real interest rates were very low for a long period of time . . . .”

There you have it. Pretty simple. And yet it is the first time I can recall that any U.S. executive branch official, spanning the Bush and Obama Administrations, has admitted monetary policy was even one factor, let alone the central factor, leading to the crash. This is very big stuff. Read the rest of this entry »