Links on taxes and incentives, arbitrage, and political momentum.

Looks like there are cases where high taxes actually spur innovation and investment. (Reuters)
Why is there room for arbitrage on used books? Many professors get desk copies of textbooks, and many professors sell these copies to book buyers. Usually the arbitrageur offers about 20-30 bucks for a book they can turn over for 90-100. It makes some sense that there will be enough individual small fish for whom the spread is not big enough to justify the costs of finding the market price and finding a buyer (which, is in fact not too hard with an Amazon Marketplace seller's account). But it amazes me that a used book store isn't researching it's market better. It seems like the bookstore's proprieter would be interested in picking up those extra bills off the sidewalk. (Marginal Revolution)
Finally, an interesting nerdy statistical criticism of seemingly contrarian findings about political momentum. (Freakonomics)

Several Links

This one is oldish but I think an interesting read on the composition of US health care costs (the Incidental Economist).
China's new five-year plan (the Economist).
Underwater (The Economist).
Trade Costs (Free Exchange).
The microeffects of the Arizona immigration law (Washington Post).
Meanwhile we send mixed signals (People Move).
Where the money is in the music industry (Economist).
Oil prices (Economist).