Tuesday, August 30, 2011

A different take on Adam Smith

This morning I was rewatching a Milton Friedman clip from one of his appearances on Phil Donahue's show when I realized I had been interpreting a famous Adam Smith quote incorrectly - or at least differently from Friedman's interpretation.

Smith said in Book IV, Chapter 2 of The Wealth of Nations:
By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.
Book IV
I added my own emphasis to the key word.

I have always taken this as Smith saying that he's never seen much good happen as a result of people who made their personal business and consumer decisions with the intention of helping overall society instead of themselves.

Examples include the well-intentioned "Buy Local" movement, fair trade companies and the buy black campaign. In all these cases, noble consumers make personal sacrifices in hopes of making the world a better place, but these schemes fail to return any positive results.

I have one caveat - if I believed there was a large problem with inhumane working conditions that could be solved by boycotting those companies, such as actual slave labor, than I would support such a boycott. As it stands, I don't. However, that is a little different in avoiding contributing to harm instead of promoting good. It's subtle, but it's there.

But what Friedman said Smith meant was something different - when merchants claim they are doing something for the good of the public at large, they are really bootleggers hiding behind Baptists.

Merchants aren't above making claims that shopping at their store will benefit other people when their real goal is to increase their own profits. Friedman is saying that not much good is done when people claim they are acting in the public interest. The "Buy Local" movement is actually a great advertising scheme for merchants, as they can still attract customers with higher prices or smaller selections. I completely understand why they'd jump on this bandwagon.

But as Friedman would say, the rest of us our fools to take their word for it.

Whatever Smith meant, both interpretations hold a lot of truth.


Saturday, August 27, 2011

More standard of living and video games

In my last post I made the point that video games have gotten super cheap and vividly more complex, but I don't think I hit home just how that factors into the cost of living. I showed that prices on console games had fallen by 40 percent in some cases, comparing the cost of a modern Xbox 360 game to a technically-inferior original Nintendo game.

A Nintendo Entertainment System game from 1987 - prices around $100 in 2010 dollars - is somewhat comparable in quality to a $1 mobile phone game. The graphics will be better today, and instead of buying a console, a lot of consumers will already have the phone. In effect, the smart phone could be considered a $0 console for some consumers.

Now here's a little J. Bradford Delong to get the mental gears turning:
But what if we took some other set of prices? Instead of taking a representative sample of everything produced in 1890, stuffing it into a time machine, bringing it forward to today, selling it; suppose we took a representative sample of everything produced today, stuffed it into a time machine, took it back to 1890, and sold it then at the prices that then prevailed?

Then we would have a very different answer, for a large chunk of what is produced now was unavailable back in 1890. It has a very high - in many cases an infinite - price.
When I was in high school, I remember seeing The Toy starring Richard Pryor on television and realizing that the spoiled rich kid in 1982 with his room full of arcade cabinets could never compete with my Super Nintendo Entertainment System.

Channeling my own J. Bradford Delong, imagine a 10-year-old game like Halo set up in a LAN, with 16 player matches. What would that be worth to the Pac-Man and Donkey Kong crowd of the early 1980's? How about next month's Gears of War 3 and five on five deathmatches? Aristotle Onassis was able to finance the Olympic Tower in the 1970's, but the cost of one game of Horde 2.0 would have been too much for him - the price would have been infinite.

The improvements to the standard of living for video game is not tenfold, or even a thousandfold. It is so absurdly high it is impossible to quantify.


Friday, August 26, 2011

Standard of living and video games

I had been planning on writing a piece to prove how cheap video games have gotten over the years by factoring in inflation, but it turned out a number of other people have already done that, some with pretty graphs and video segments.

So I'm going to dig a little deeper to show that the inflation comparison only scratches the surface.

Both the consoles and the games themselves have fallen in price. The two Nintendo titles from 1989 went for $95.44 and $121.46 each in 2010 dollars, although those catalog prices were a little above average at the time. It's true, video games have never been cheaper.

It's also important to remember that the $50 to $60 modern Xbox games are much more advanced that the Nintendo games I grew up with. Russ Roberts has gone into more detail with his comparison of expanding iPod features and memory coupled with falling prices. The lesson is the same: repetitive levels, 8-bit graphics and sound effects have been replaced with rich environments, HD graphics and voice actors.

Compare the basic left-right-forward-back movements of Doom from 1993 with the 3-D environments and cover to dive behind in Gears of War from 2006. The original Legend of Zelda manual had drawings to let the player know what the items and monsters in the game were supposed to look like. Some old-school RPGs had a few choices for the player to make, but they doesn't come close to the complicated plots and moral dilemas in games like Mass Effect and Fallout 3.

And even with those price drops and quality increases, there are now substitute goods to console traditional games that give consumers even cheaper alternatives, like downloadable titles, which fall in the $5 to $20 range, and now mobile games on smart phones, which fall in the $1 to $5 range. These alternatives tend to be shorter than the console games, but some like Section 8: Prejudice or Angry Birds are known for their replay value coupled with a low price.

In fact, mobile games have been so popular as a cheap alternative that the new portable Nintendo 3DS system flopped on release this year, its $40 price for new games couldn't compete with phone games cheaper than a sandwich.

If Brad Delong ever writes an updated version of his brilliant Cornucopia: Increasing Wealth in the Twentieth Century paper showing the complications in standard of living comparisons, than he'll have need find no better example than Pac-Man versus Castle Crashers.

Edit: I have more to say on this matter.


Tuesday, August 23, 2011

Don't say you weren't warned

Everyone talks about bubbles as if they are undetectable until they burst. From the recent housing and Internet bubbles back to the (silly) Dutch tulip bubble of 1637, seemingly rational people get swept up in these financial fads, then get seriously hurt when they collapse.

But just because we're coming out of a recession doesn't mean we're not in a bubble - or bubbles - now. The price of gold has gone up once again - and any investor worth his salt knows previous metals are volatile and unpredictable. Taking into account long-term performance, gold has not been a good investment choice historically. Yet, you can still profit off an irrational investment during a craze by adapting to the situation, just as long as you're lucky enough to cash out before the crash.

So with the combination of popular risky adaptive strategies that make money, how can anyone argue that gold is not a bubble?

But that's not the only one, and unfortunately, while the gold bubble is only being pushed by Glenn Beck, the higher education bubble is being pushed by everyone - the public school system, student grants, employers and parents.

College tuition has been steadily rising for decades beyond the rate of inflation. Students are told if they make this inflated purchase, they will be able to collect higher paychecks for the rest of their lives - a promise that is routinely being broken. It's a bubble alright.

Or as Sarah Lacy put it in a summary quote I stole from The Economist:
Like the housing bubble, the education bubble is about security and insurance against the future. Both whisper a seductive promise into the ears of worried Americans: Do this and you will be safe. The excesses of both were always excused by a core national belief that no matter what happens in the world, these were the best investments you could make. Housing prices would always go up, and you will always make more money if you are college educated.
These inflated tuition - which I believe are caused by the abundance of money supplied by loans and grants - are being squandered frivolously by schools. Maybe higher education needs its own Moneyball-style visionary to come in and teach students out of decade-old math, Latin and classic literature textbooks, hire competent instructors who don't work on research projects and skip the marble stairwells and organic cafeteria food.

The collapse of the higher education bubble will happen - and it may be coming a lot sooner than anyone expects.


Saturday, August 20, 2011

Owned & operated by a Juggalo

This gem is from BuzzFeed's coverage of the Gathering of the Juggalos:

Can a "Buy Juggalo" campaign be far behind?

Thursday, August 18, 2011

Economists as political villians

I've never gotten over how large a role economics plays in politics, and by that I mean, how large a role Do-It-Yourself Economics plays. Essentially, outsiders think they can guess their way to mastery of this strange and counter-intuitive body of knowledge. That explains why there's still a debate on things like free trade, despite the issue being as firmly entrenched among experts as Darwinian evolution.

What really makes my blood boil is when I see these guess-based economists dismissing important economic scientists for political reasons. I see some of my fellow right-wingers talk about John Maynard Keynes as if he was a bumbling fool, and denounce his General Theory. In reality, Keynes was an absolute genius who cast a shadow on the intellect of thinkers as brilliant as Bertrand Russell.

Some lefties have done the same thing with my hero, Milton Friedman. From disrupting his Nobel Prize ceremony to casting him as the villain in political books, lefty hacks have never understood the moral, gentle-natured man Friedman was, or how much good he's done for the world as an intellectual.

It's no secret that I reject Keynesian policies, but that's not the same as rejecting the entirety of Keynesian economics. There are actually two Keynes, as well as two Friedmans: They each had a scientific and political side, and they each made undeniable advances to economic science.

Political commentators may think of Keynesians and Friedmanites as warring parties, but actual economists like Greg Mankiw and Brad Delong are quick to cite both as major influences. Friedman himself spoke highly of Keynes and had no qualms about borrowing ideas from him.

I do want to caution that I do not extend the same courtesy to Karl Marx, who I insist was the Trofim Lysenko of economics. He did not contribute anything meaningful to economics and his influence has lead to inexcusable calamity. He made direct calls for violence and there's a reason his modern followers are on the fringe.

Economists are scientists, looking to learn more about the clockwork of our beautiful world. Sometimes their scientific conclusions lead them to support or oppose specific policies, and it's troubling to hear people claim that is a recipe for villainy. I do not accept all of Keynes's conclusions, but I would never go so far as to lump him in with the likes of Darth Vader, Adolf Hitler or Karl Marx.


Monday, August 15, 2011

Blocked by coordination concerns

I fully intended to take advantage of the lift on the state sales tax over the weekend, but I had the unfamiliar problem of not being able to think of any items I wanted to buy.

Sunday afternoon I found myself in the toy section at Target, trying to find a gift for a friend's one-year-old daughter that I would expect her to enjoy, and wouldn't mind being associated with by the other adults.

A further restriction is the child's mother cares a lot about what materials the toys are made of, so most stuffed animals were out. While I do not share this view, a gift to a young child is really a gift to the parents, money being fungible and all, and I believe when you try to help someone, you should do so on their terms.

I ended up putting the purchase on hold because I could not decide between several Lego-style knockoff plastic blocks. The actual Lego Duplo blocks are labeled for 18 months and up, and her first birthday isn't for a month, so that's no good. On the same shelf for 12 months and up were Fisher-Price Trio Junior blocks and Mega Bloks, and I didn't see any obvious difference in quality or price.

My concern was that someone else may give her a different brand of blocks, such as the three above or a dark horse candidate like Best-Lock blocks. It would be rather inconvenient for the birthday girl to have two incompatible block "scales" in her playpen, and the two would be mixed together and cause a real headache. I needed plastic block coordination before I felt comfortable making a purchase.

What's more, with the irrational power of sunk costs, that mere $20 purchase could inspire her parents to buy more blocks of the same brand and build up a single-brand block collection. However, none of those blocks looked as sturdy and uniform as the Lego blocks I grew up with. I could be hamstringing this girl's chance for a real Lego childhood. Can that all be avoiding by waiting an extra six months to go with Lego Duplo? I'm not sure.

I thought about making the purchase anyway, but I decided to put it on hold until I could coordinate things with the parents. I had to remind myself that the gift doesn't have to be a surprise to them.

After this overly-introspective attempt buying a gift, I think I can finally relate to Dr. Manhattan. Knowing too much really can paralysis your ability to function socially.


Friday, August 12, 2011

Food police and technology standards

William Duggan said that creativity is taking two ideas from different concepts and combining them, such as how Henry Ford's breakthrough moving assembly line was just the Chicago stockyard where meat was moved along rails combined with a stationary Oldsmobile 1901 assembly system.

Earlier this morning it hit me that two unrelated ideas on my radar belong together: Flawed food control policies where consumers are forbidden or restricted from from buying foods with certain non-toxic ingredients, such as bans on trans fats or soda in schools, is similar to a technology standards, where policies try to bring about certain outcomes by forcing firms to use specific techniques, such as requiring catalytic converters, instead of targeting the actual outcomes, such as emissions.

For a more detailed account of the problems with technology standards, see my post from last year.

Supporters of legislation that uses a flawed technology standard are prone to present the issue as a false dichotomy, such as saying if you want to do something about air pollution, you have to support their bill to force factories to use certain emission-reducing devices.

It's important to avoiding thinking in terms of passing a regulation to fight air pollution or doing nothing, but instead to ask what form should the regulation take. Is that specific approach the best we can do to reach our goal, or should we just enforce that the goal be met, and give people the freedom to meet it their own way?

Banning soda is not a goal unto itself. The real goal is to reduce obesity and improve health. It is, for all intents and purposes, a technology standard. While I see improving the health of the public as a noble goal, the tactics being employed to reach that goal are flawed, in addition to being immoral.

However, the version of a performance standard here would be to fine or punish people for being overweight or unhealthy - and the ethical problems with such a policy are obvious. It would be instantly recognized as a great intrusion on liberty and privacy to weigh people and cart them off to prison if they didn't meet a rigid standard.

Yet, I see the restriction on what foods they can purchase as no less a vile trespass.

What about tobacco restrictions? The biggest issue with smoking is lung cancer, and how would the public feel about fining people with lung cancer? It wouldn't go over well, not nearly as well as telling adults under what circumstances they are allowed to smoke.

If you want to fight obesity, your best bet is to fight obesity itself. This insistence on smacking popular targets like fast food or soda - and without providing firm evidence that it will achieve the goal - is just showboating. I have seen a lot of policies and programs with the intention of fighting obesity, and I have never seen the desired results play out. Is there a community with 1980s level of obesity out there that activists can point to as a success?

Forcing people to follow your system robs them of the chance to create a better system - be it for reducing air pollution or visual pollution at the beach. The problem for the well-intentioned interventionists is that the performance standard is so obviously fascistic in nature, so they will continue to push their intrusive, ineffective technology standards.

EDIT: Mark made some good points that I wasn't clear enough in my conclusion. I have reworded several key areas and tacked on another paragraph to hit my point home.


Thursday, August 11, 2011

Harris vs. Hayek

I'm used to seeing Friedrich Hayek as a foil to John Maynard Keynes these days, but after turning some thoughts in my head lately about science and value judgments, I think he belongs in the arena with Sam Harris.

I have heard Harris argue that science can help us choose what we ought to value, a position dangerously close to saying science can rank any and all values - and Steven Novella has recently stated that Harris indeed holds that view.

I've added emphasis to what Hayek wrote on page 99 of The Road to Serfdom on why specialist intellectuals are making a mistake when they support central planning:
In our predilections and interests we are all in some measure specialists. And we all think that our personal order of values is not merely personal but that in a free discussion among rational people we would convince the others that ours is the right one. The lover of the countryside who wants above all that its traditional appearance should be preserved and that the blots already made by industry on its fair face should be removed, no less than the health enthusiast who wants all the picturesque but unsanitary old cottages cleared away, or the motorist who wishes the country cut up by big motor roads, the efficiency fanatic who desires the maximum of specialization and mechanization no less than the idealist who for development of personality wants to preserve as many independent craftsmen as possible, all know that their aim can be fully achieved only by planning – and they all want planning for that reason. But, of course, the adoption of the social planning for which they clamor can only bring out the concealed conflict between their aims.
Hayek's case against the objective truth of values leads me to two conclusions:

First, assuming Novella's summary of Harris's perspective is accurate and he believes that science can determine what values are universally superior, than Harris is committing scientism - using the trappings of science to make claims which are not scientific in nature.

As Hayek said in The Pretense of Knowledge:
There is as much reason to be apprehensive about the long run dangers created in a much wider field by the uncritical acceptance of assertions which have the appearance of being scientific as there is with regard to the problems I have just discussed. What I mainly wanted to bring out by the topical illustration is that certainly in my field, but I believe also generally in the sciences of man, what looks superficially like the most scientific procedure is often the most unscientific, and, beyond this, that in these fields there are definite limits to what we can expect science to achieve. This means that to entrust to science - or to deliberate control according to scientific principles - more than scientific method can achieve may have deplorable effects.
So not only is Harris wrong, but he is playing with fire.

Second, the illusion that values can be objectively quantified and ranked is mandatory for anyone who believes in central planning. An individual who wants to march under a red banner with modern day Marxists must take Harris's side in the issue, for how could a central planner decide which elements of society to prioritize without a concrete, indisputable list of values?


Monday, August 8, 2011

Oh yeah?!?

Over at For The Sake of Science, my liberal sparring partner Michael Hawkins discovered a Cambridge editorial attempting to refute a piece on buy local economics I wrote earlier this year for his publication Without Apology that I also submitted to Indie Skeptics.

I've never heard of the Cambridge Day before, and while I usually get a laugh by demoting a self-described online newspaper by calling it a "blog," writer Marc Levy seems to produce enough news content for it to be somewhat legitimate.

The logic behind his editorial, however, doesn't hold up. Levy attempts to sidestep most of my scientific claims, based on more than 200 years of mainstream academic economic insight on international trade, by dismissing me for labeling myself a conservative. He goes so far as to erroneously paint Hawkins with the same brush - a sloppy mistake, and far from the last.

I'm not going to write a long breakdown of every error. For example, my "a skeptical blog" subtitle is in reference to the scientific skepticism movement, not a deflection of gullibility accusations. Now that was a small error on his part, but it's completely isolated from the main point, and his main point is that he isn't an economist, and doesn't trust it as a science.

He starts off with a pithy few quotes from people like Will Rogers to show economists are not respected as proper scientists. Strangely, he did not use the best one - that if you laid all the economists in the world end to end, they still wouldn't reach an agreement. I've heard that yarn, and it's simple to deflect.

Economists, like all scientists, disagree on some things. Social sciences often have big disagreements from the different schools of thoughts. Psychology is a perfect example.

But scientists also have the occasional consensus. You will not find an economist who supports rent control, for example. But for that very reason, economic scientists do not debate rent control because a consensus exists. This issue has been put to bed plenty of times before, so I will move on.

Levy goes on to try to poke holes in the different analogies I made by treating them as full-size replicas. I use stories to illustrate economic points because a general audience finds them easier to digest than math-heavy abstract concepts, but Levy show more interest in making comparisons than attempting to learn anything.

Imagine if I said I have a rare condition that makes me shed my skin once a year, like a snake. Levy could have used this comparison to understand how my skin peels off in one complete piece, but instead tried to find subtle differences between myself and a snake. Snakes rub their heads against sharp rocks to start the peel, but say I peel off my skin using my hands. Levy would jump on that in order to reject the entire comparison. This accomplishes absolutely nothing.

When a reader misunderstands something I write, I try to take responsibly for not making my message clear enough. But several times with Levy as the reader, I can't bring myself to do it. In response to Bastiat's broken window parable, he quotes me as as saying:
The community is now a little bit poorer as the baker has one less suit then he otherwise would have.
And then responds:
It is? How is the community poorer because the baker paid a glazier instead of the tailor, especially when both planned to spend money at the cobbler’s shop?
As I just said, the baker has one less suit. Did he miss that? In the alternative model, he had to repurchase a window. Having one less suit means you are now poorer by one suit. I've never had to explain that to someone before, and it seems like he isn't even trying.

Levy also blurs the line between "buy local" and the fetish for small businesses. He assumes I am saying the solution is to only buy from large businesses. I said no such thing. In fact, my advice in the past has been to buy the best deal, however the consumer chooses to define it.

Large corporations embrace local purchasing preference in their own area. I've yet to hear a Maine localist speak against the huge LL Bean corporation based in Freeport. All of their velocity of money arguments work just as well for large companies as well as small - that's why I tend to avoid spending time on that issue.

I do not make the argument that buying locally is a bad thing to do. I do not see it as a sin, but I don't see it as a virtue either. Borders are just imaginary lines, no more relevant to economics as the color of a wallet is to the value of the money inside it.

Levy did manage to reproduce some of my best points, but I wish his responses had been more articulate or meaningful. He never addressed my central claim that he and his ilk are shrugging off hundreds of years of research and replacing it with "common sense" solutions - a mistake known as DIY economics.

It's interesting that he skipped over my take-down of the activist studies localists trumpet. They are a major component of why I insist their movement isn't merely wrong, but actual pseudoscience. This isn't Keynes vs. Hayek, it's Galileo vs. the Catholic Church.

The most puzzling part remains Levy's opening line - that my essay is "making the rounds." It's ironic that I've been writing so much about this issue for the past two years online, and it's the one article I write for Hawkins publication that gets the Internet's attention. That is, assuming my article is being circulated. My Google searches have not turned up some big list of links or comments, and my readership hasn't spiked since TAM 9. I'm curious to how Levy found it, and if it is getting more popular, does that mean the Koch brothers will finally start paying me?


Friday, August 5, 2011

Diablo III to use U.S. dollars

Everyone is talking about Blizzard's decision to use a dual-currency system in Diablo III. Players will be able to use the normal in-game gold coins in their adventures and an auction house for looted items, and also be able to sell items in a special second auction house for real U.S. dollars.

The normal reaction people have is that this will allow some rich players to "cheat" the system. Here's are the details of that view:

In the past, players entered the world of Sanctuary as true equals from the same starting point, and through skill, planning and long hours their characters grew more powerful. It's how capitalism is supposed to work.

But now with these legal tender auction houses, Brigham Thaddeus Blueblood IV can spare a few bills and instantly turn his character into a powerhouse. He doesn't have to play very often and his character will trump those of hard-working students. The class struggle has moved online.

So here's why I think that view is wrong.

World of Warcraft has already shown us that tons of players are already cheating the system by purchasing from illegal gold farmers using real money. That perfect, unspoiled online world free from real money is already dead, Blizzard just has the sense to be the one's profiting from it.

That's not to say that gold farmers are completely out of the picture. Blizzard is taking a cut of each auction item when it goes up for sale, when it's sold, and when people want to cash out their account. They've got players coming, going and going home. If these fees are too high, a secondary gold-for-cash industry may exist.

In this quest for fairness, people forget that these games with high level caps and tons of items have always allowed players to become very powerful through a Faustian bargain. Players that sacrificed their own humanity by staying inside, logged on to the game to slay the same demon hog over and over again became those mighty purple-clad level 100 warriors that could push everyone around. It just cost them five hours of each day of their lives.

This has been a battlefield where the working man couldn't compete... because he was too busy at work. It benefited people with either the privilege or curse of having lots of free time to click animated goblins to death.

Yes, you will see some rare items skip the gold-house and go straight to the cash-house. I wonder if Gresham's Law will play a role and cause players to horde their greenbacks and burn through their gold quickly. And no doubt, some cheesy rich kid will gank better, more skilled players and type a series of misspelled words into the chat window.

But it was always like this. The price items command has not yet been determined, but it's possible they will be low enough where it's rational for an average Joe to finish his Monkfish Scales and get the full set bonus for once.

This cash auction house may be a fun way for some players to make a small profit, although the margins will be so low they'd be better off keeping the per-hour rate a mystery. We have plenty of other games that use real money to compare to, and none of them drove out the regular players.

I predict this will be like a Facebook update where everyone gets really upset by the change, complains for a long time, then gets used to it and forgets it was ever any other way.


Tuesday, August 2, 2011

More mandated coverage for health insurance

I like my headline better: "Obama administration raises health insurance costs."

This week the New York Times wrote about the president forcing all health insurance plans to provide contraceptive services to women. But that's not all.
In addition to contraceptive services for women, the government will require health plans to cover screening to detect domestic violence; screening for H.I.V., the virus that causes AIDS; and counseling and equipment to promote breast-feeding, including breast pumps.

Other preventive services that must be covered, without co-payments, include screening for gestational diabetes in pregnant women; DNA testing for the human papillomavirus as part of cervical cancer screening; and annual preventive-care visits.
The recommendations come from the National Academy of Sciences, which apparently does not include any experts in economic science:
The National Academy of Sciences said the Obama administration had told its experts not to consider “the cost-effectiveness of screenings or services” in deciding which ones to recommend. Insurers expressed concern that coverage for some of the newly required preventive services could be costly.
What an absolutely beastly thing to say.

How could the National Academy of Sciences agree to go along with such a perverse order? What they are focusing on is what actions will have any improvements on health. They are not considering what the costs of those actions will be, including any side effects.

When you make an insurance company pay for more things, they will always respond with raising rates. Those increases in rates will impoverish some people, and will push insurance just out of the price range of others. Those people will be harmed, but they will not know what drove the prices up. Those people are invisible.

But the people helped by the policy will be easy to spot. They will end up in campaign ads. They are visible, and the visible always have the upper hand in politics.

There are two results that will absolutely happen as a result of this increased coverage mandate:

1: Health insurance rates will increase.

2: Those increases will be blamed on the insurance companies who have no choice but to follow the law. The administration will not be blamed or accept any responsibility.


Monday, August 1, 2011

Newsroom ethics reveal our dedication

Part of me wishes everyone could have witnessed the ethical discussions that took place in my newsroom tonight.

I've written before about the incorrect notion that all for-profit news teams sensationalize to draw a larger audience. There's a very popular knee-jerk reaction when people see a news story they don't like that it's a result of journalistic negligence; the news team is willing to compromise their integrity if it'll bring in my revenue.

I criticized this idea in my TAM 9 presentation, and I said it ignores the principal-agent problem: Reporters don't get paid more if a story is popular, so why would they be willing to make a series of sacrifices for free?

The facts from tonight perfectly reflect what I was talking about.

I'm not going to include a link to the story. I have no desire to give this family's personal tragedy any more publicity, so I will just reveal the important facts.

A man took his own life in a very public and dramatic fashion. His father managed to get close enough to the scene to see the aftermath up close, and his anguish was very visible and public. Our photographer captured the moment perfectly in one of his photos. It looks like an award-winning photo; it's both moving and tells the story.

The issue for the news team was if its right to print the photo. Everything we captured took place outside and in front of a crowd. It was a public event. But the photo also crosses into a family's very personal tragedy. No one in the story is what's called a public figure, so they deserve a higher amount of privacy than a famous person would.

I was the reporter on the story, but the decision to use the photo belonged to the editor. The photographer and I pushed for the photo to be used, but the editor decided against printing it. The discussion was on telling the story and capturing the moment versus respecting a very private tragedy in someones life. We did talk about the paper's reputation, but at no point did profits ever come up.

Now compare tonight's events to the sensationalism claim. Everyone talked about producing an important story for our readers. I do not believe the editor is compensated directly on each paper sold, but I imagine the company judges his performance on sales. Yet he wanted to play it safe. The photographer and I are not judged on sales, yet we were the ones pushing the higher-risk strategy that could be criticized as sensationalism.

Everyone involved wanted to do their job right. This was a tough story to cover for a variety of reasons, and I respect the calls that were made. It also showed how seriously our team took the ethical matters here. All of this was behind the scenes - the readers will never know how much passion was behind the different perspectives. This was professionalism at its highest, and I wish more people were able to see it unfold.