There are two stories that illustrate some basic economics in the news today.
Why didn't Brokeback Mountain win best picture? - As pointed out in Marginal Revolution - the uptick that the best picture usually gets could not be expected for Brokeback Mountain - which at its best is a marginal money film. The new audience was not there. Better give it to Crash for a couple of reasons - first, it is edgy so Hollywood can still make a statement. Second, the uptick - more people will go to look at the movie. Finally, they made their statement with the Director's award to Ang Lee.
Sugar Quotas - For the past several decades we have had a sugar quota which imposes high costs on US consumers, allegedly to save jobs in the sugar industry. The WSJ this morning had a couple of facts on why the policy is folly. For every job we have saved in the production of sugar we have lost at least two in the confectionary industries. Candy jobs are going where sugar is better priced. Can you guess which jobs pay higher - harvesting or making confections? At the same time we pay about two to three times the world price for sugar. That policy didn't make sense for its original purpose - to isolate Castro - it makes even less now.
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