Coyote Blog

Marginal Revolution cites a James Surowiecki article on branding, arguing that increased information flow, particularly over the Internet, is reducing the power of brands.  This seems right to me.  Brands exist and command premiums for many reasons.  One role of brands is that they serve to reduce risk - without any other information about a product, many people would likely assume an electronics product from Sony to be more trustworthy than a no-name brand with the same features, and might be willing to pay a premium for the Sony product. However, with all the review information on the Internet, people may be more comfortable buying the off-brand, if it has good reviews, and saving the Sony premium.

Of course, brands serve some communication roles that are likely not threatened by the Internet.  For example, high end brands like Prada or Gucci have power because they allow the owner to communicate things about themselves to others.

I would argue that, even with Internet reviews, brands will continue to be powerful in the service sector.  In fact, with the growing complexity of some service offerings and the increasingly high standards of consumers, they may be more important.  Why?  Consistent product quality is much easier than consistent service quality.  A no-name product maker can get high quality product all over the world from one single factory -- all they have to do is to get that one location right.  This is much easier to do than with McDonalds, where there are thousands of locations, or even in our business, where we have hundreds of locations.  Service quality happens in real time, often in many dispersed locations miles away from supervision and the management staff. 

Also, in many cases, service failures are more critical and are harder to correct than product failures.  If my printer does not work, I get mad and box it up and return it for a new one.  But what happens if FedEx fails me on a critical shipment?  Or worse, what if United Airlines fails on me mid-flight? 

An interesting way to prove this is to go to a site like epinions.  Service reviews are generally much more variable than product reviews.  Compare Fedex, who's review is a mix of the lowest and highest scores, with this Apple Ipod, where reviews are much more consistent.  Even when products get a mix of low and high scores, often the low scores are driven by service and support and not the product itself.  In positioning their brand today, does Dell emphasize the product or their service around the product?

A while back, I wrote here with a wrap-up of what I believed about Global Warming and the Kyoto Treaty.  My point of view is that the earth is probably warming, but not nearly as fast as doomsayers predict; that the certainty the major media puts forth on global warming bears no resemblance to the messy, chaotic nature of climate and climate research; and that Kyoto is a bad treaty aimed at screwing the US, and that the costs don't outweigh the (marginal) benefits of its adoption.

Reason has a nice roundup of some new evidence pertaining to climate, that helps confirm at least the first 2 of my 3 hypotheses above.  About half the evidence points to warming and about half refutes rapid warming.  It would be interesting to do a media search to see which of these made the papers, but I think you can probably guess.

One of the government habits that consistently irritate me is the public funding of stadiums.  Never has so much public money been transferred for so little economic benefit to so many billionaires who don't need it.  For example, Seattle ponied up hundreds of millions of dollars for a stadium for Paul Allen, one of the five richest people in the world (and who probably has spent more than the cost of the stadium searching for aliens). 

Credit the owners of sports teams, I guess, for they have learned to use gun-to-the-head threats of moving the team out of town to get local taxpayers to vote them new stadiums.  I mean, for god sakes, we are building a stadium here in Arizona for the hapless Cardinals (and here is our new Glendale Arena, constructed by taxpayers just in time for the NHL strike - but we get roller derby!) Some thoughts:

• Public funding is totally unnecessary.  Many private owners have built their own stadiums, either through private capital or Personal Seat Licenses.  In fact, with naming rights and luxury boxes, there are more revenue streams than ever to pay for these stadiums.
• Its all about blackmail. If the mayors of the 50 largest cities in the country got together tomorrow and made a no-public-stadium funding pledge, then owners would be forced to build their own stadiums.  Congrats to Los Angeles for resisting the the NFL's outstretched hand.  What the owners have created is a classic prisoners dilemma for the cities (see update#1 below)
• Sports teams bring little net economic benefit.  No disinterested economist has found any justification for the premise that they improve the local economy - instead, they just shift benefit around.
• Teams take better care of stadiums they actually own.  Private stadiums are steadily improved, year-in and year-out.  Public stadiums (I am thinking of Veterans Stadium and the Astrodome in particular) are used up and thrown away.
• Teams always underestimate the tax burden of the stadium and the implied subsidy.  Often you see them arguing that the stadium will be funded only out of the revenues from the stadium itself -- well if that's the case, then why does the public need to be involved at all?

Here is a Cato paper debunking the economics of the proposed new DC baseball stadium.  Matt Welch has a great article on this topic in Reason here.  Hit and Run has an update today on the Angels' jacking both Anaheim and Tempe at the same time.  Makes Me Ralph (lol) has a series of posts here, just keep scrolling.  For even more, see the website Field of Schemes and the related book Field of Schemes : How the Great Stadium Swindle Turns Public Money into Private Profit.

UPDATE#1

Marginal Revolution makes the counter-case for public funding, citing a study by two economists who try to put a value on the intangibles of having a team in town.

I have to disagree for three reasons:

• I am against taxing for such value.  If everyone finds value, find a free-market approach to get the same thing.  Have a telethon or something.  And by the way, this value is fleeting and much more limited than owners let on.  One good example - has anyone south of Chicago noticed that the NHL season has not started?
• This is a very slippery slope argument.  How many times have you heard politicians say something like "Everyone I know would pay a dollar a week to get this, its not that much".  Yeah, it sounds great, but a dollar a week per person in the US gets us a new $15 billion a year program or tax. 
• Most importantly, though, is that private enterprises don't NEED the public funding to make stadiums work.  If the product works, like the NFL, they don't need public funding.  And if the product isn't working, like the NHL, then no amount of public funding, like our new arena here, will save it.  Team owners get public funding only because they can, not because they have to.  And they can because of the threat of moving the team out of town.  This is a classic prisoner's dilemma.  If all major cities collude and refuse to fund public stadiums (like the two prisoners agreeing not to cooperate with police) then everyone except the owners is better off, because the NFL will still exist but without public subsidies. 

UPDATE #2

A nice post with lots of good links from Houston's Clear Thinkers.  A nice blog based in my old hometown and birthplace.

Just finished up preparing our sales tax returns for October.  We file in 9 states (Oregon does not have a sales tax) and about 5 municipalities or counties.  Being located outside of cities cuts down on the number of separate returns we have to file, but being in the lodging business adds returns (there are a lot of local lodging taxes out there).  NONE of these taxes work the same, and every return is unique.

I am working on a longer post with some observations about sales taxes, the states that have it right and the states that are over-complicated messes.  However, in the mean time, one observation.  Most states offer an online filing option.  If every state had a nice online tool, or better yet, a tool I could upload data to right out of Excel, I would love it.  This is a true win-win, with the business owner saving time and the state saving LOTS of time by not having to re-key handwritten returns.

However, several states currently have awful, totally non-intuitive online filing systems, or systems that are down all the time, or systems that make correcting errors a real pain in the butt, or all three.  The problem is, in most states, there is no way to try before you switch.  Many states play a kind of brinkmanship, requiring that if you file even once online, you can never go back to paper.  I did this with one state and the online tool really sucked, and now I am stuck  using it, despite the fact that their paper return is easier to use.

So, as a result of this nutty requirement, despite being totally committed to doing things online, I sit here filing paper returns, too risk-adverse to play Russian Roulette with various states' online filing systems.

This week's Carnival of the Vanities is up at Lets Try Freedom.  Look who's right up top!

OK, the 1993 movie Demolition Man was not that great of a movie, though Wesley Snipes was pretty cool and Stallone was a lot less stiff than usual.  And the shell gag was pretty funny.  The highlight, however, was the debut (I think) of Sandra Bullock in a major picture.

For a number of years, Stallone and Governor Arnold, the two major action movie stars of the time, traded barbs with each other in their flicks.  For example, in the 1993's Last Action Hero, Arnold makes a joke about Stallone in a video rental store.  In 1994's True Lies (an awesome movie) Jamie Lee Curtis, Arnold's movie wife, says "I married Rambo". 

In Demolition Man, it was Stallone's turn.  Driving through future-era LA, Stallone is trying to adjust to waking up in the future after being frozen for a fifty years or so.  He has this conversation after seeing a large building out his window:

Stallone: "Hold it! The Schwarzenegger Library?"
Bullock: "Yes, the Schwarzenegger Presidential Library. Wasn't he an actor?"
Stallone: "Stop! He was President?"
Bullock: "Yes. Even though he was not born in this country, his popularity at the time caused the 61st Amendment"¦"

After which Stallone looks like he is going to puke.  At the time, in 1993, this was a ridiculous joke, the stupidest thing you could imagine.  Now, ?

PS, how did I ever leave True Lies off this list?  Gotta add it.

Previously, I explained why I like Football Outsiders here. Their week 9 statistical rankings of teams is here.

Miami still can't nail down that bottom spot. San Francisco and the Raiders both have fallen below the Fish (so much for Bay Area football). Miami has the worst offense in the league by a HUGE margin, but its defense keeps it off the bottom, as it probably should:  A good defense will win you a few games, no matter how bad the offense is.  My Arizona Cardinals continue to fall, down to their rightful place in the bottom quartile, despite having a pretty good defense. At the top, Pittsburgh, New England and Philly are threatening to run away and hide, which just goes to show that every once in a while, BCS notwithstanding, computers and common sense can converge.

OK, I could not ultimately resist the need for a red/blue map on my site.  This map is county by county, and shows bright red or blue in counties Bush and Kerry won over 70% of the vote.  Counties with votes in between are shades of blue-purple to red-purple.  Courtesy of Michael Gastner, Cosma Shalizi, and Mark Newman, University of Michigan

Click for Larger Image

Our business is seasonal, meaning that most of the facilities we run are open from about mid-April to mid-September.  Our employees are hired in the spring and then laid off in the early fall.

The unemployment bill is a killer.  Everyone we lay off in the fall, whether they intend to work in the winter or not, files for unemployment.  Like any insurance, your premiums are based on your actual claims, and as a result our unemployment insurance rates are sky-high. 

A few or our employees are actively looking for winter work, and I am OK with their claiming unemployment.  However, the vast vast majority of our employees work for the summer and vacation all winter, since working for us really just supplements their retirement pay.  I know for a fact that some of those who have claimed unemployment in the past weeks are in Mexico on vacation or on the Colorado River or wherever.

Unemployment agencies are NOT doing their job.  By law, in most states, they are not supposed to pay unemployment to people unless they are actively looking for work.  Heck, most of our employees, during the winter, are not even in the state that is paying them unemployment - they are down south or even out of the country vacationing.  However, I have not found a state agency yet that has any interest in dealing with this fraud.

One of my favorite blogs, Marginal Revolution, pointed to a digital beauty contest here.  The imagery is pretty amazing - this, for example, can hardly be discerned from a photo of a real person.

This imagery reminded me of the old Turing test.  I don't hear much about Turing tests nowadays, which is odd, because we are so close to having systems that will pass it.  (Jerry Pournelle, in the old Chaos Manner columns in Byte, use to write a lot about Turing tests).    In a Turing test, a person is connected in some blind manner to another entity, and they have to determine if it is a machine or a live human.  Having a computer pass a Turing test means that a human, in interacting with it blindly, could not discern that it was not another human.  In the same way, one could propose a Turing test for digital imagery like the one above, ie is it Live or is it Memorex?

By the way, no one asked me, but in my mind the reigning beauty queen of digital imagery is still Aki from the otherwise forgettable computer-animated movie Final Fantasy. 

I try not to impose too much of my personal life on this blog, but I couldn't resist showing off our weekend project.

This is my 10-year-old son's recent science project.  They are required to do a report on a subject (in this case, he chose the biology and physics of hitting a home run) and supplement the report with a model that has to be entirely edible - i.e. all made out of food (Seriously - what sadistic maniac thinks up this stuff?).  He and I worked most of Sunday on this, while mom laughed her butt off watching.  He presents tomorrow, and then the class eats it (who wants to bet that they will fight over eating the eye?)

(Click for larger image)

Anyway, this thing includes cookie bones (we used foil for molds for the bones and bat) licorice muscles, gummi worm brains and nerves, cake baseball, chocolate bat, and fondant hand and eye (with almond nails).  Thank God for fondant - usually a smooth finish layer for cakes, it basically acts like edible clay.

Move over Martha, coyote is here!

For several years, I worked for a major supplier to the commercial airline industry.  Eventually, I had to leave, because the entire industry just drove me nuts - some of the worst structural problems in any industry I have seen combined with an incredible unwillingness to do anything about them.  Marginal Revolution reminds me about the airline industry with this post.

Through the 1990s, the average weight of Americans increased by 10 pounds, according to the Centers for Disease Control and Prevention. The extra weight caused airlines to spend $275 million to burn 350 million more gallons of fuel in 2000 just to carry the additional weight of Americans, the federal agency estimated in a recent issue of the American Journal of Preventive Medicine (fee req'd).

As entertaining as this is, the industry is still totally unwilling to address the real problems in the industry.

Continue reading ‘Airline Industry and Inventory Pooling’ »

America experienced no major terrorist attack on its soil in the run-up to the election.  This can't be for lack of trying.  If the terrorists bombed Spain, at best a peripheral country in the war on terror, to influence its election, you know that they would have loved to have bombed the Great Satan.  But they didn't.  All we got was a VHS valentine from Osama.

Thank you to the US Military, to the administration, to the department of homeland security, to the FAA, to the Phoenix Police, to the FBI, to the CIA, and to everyone else who made this non-event possible.  And, thank you to all the citizens of the US, who, whatever issues they might have with those in power, would never harbor a terrorist.  This sounds like an obvious statement, but its not.  It is in fact our best defense against terrorism.  Europe is much more vulnerable, because it has communities and groups and various cities who ARE willing to aid and abet terrorists.

First, I will say there are no books out there about what business is really like, probably because reality can be pretty grim -- I don't think that people would be hanging on the edge of their seat reading about a manager arguing with the Department of Labor about a fine for his minimum wage poster not being in the right location.  Maybe if Dave Berry wrote it.

Anyway, most fiction that involves a business is either about some rapacious capitalist who is stealing or killing or destroying the environment or whatever or it is a sort of Machiavellian opera ala Dallas or Dynasty. Few actually portray a business leader as a hero.

For business people that are heroic and multi-dimensional, and exempting Atlas Shrugged as in a class by itself, I recommend James Clavell's Noble House.  This zillion page book covers but 8 days of time in early 1960's Hong Kong, but is epic none-the-less.  I just finished reading it a second time and I enjoyed it even more than the first time.

Readers may or may not know that our company runs campgrounds, mostly on public lands.  I must say, though, despite running hundreds of campgrounds, I have never seen this.  It just looks....wrong.

More here on Gizmodo, one of my favorite sites. If you are not reading Gizmodo, particularly if you have a Y chromosome, you should be.

This series explained, and other past featured products, here. We get many of our featured products here.

This week's product was purchased by the Bush administration, soon to be used in Fallujah:

Two election-related Princess Bride posts in one day.

From Vodkapundit - "Incomceiveable"

From Asymmetrical Infromation - "Iocane powder"

I think the Princess Bride is one of the 10 most quotable movies of all time, at least for guys (Caddyshack being #1).  So here is my Princess Bride reference for the election:

Rove (election night, 7PM EST): I admit it, Kerry is leading us in the exit polls
McAuliff: Then why are you smiling?
Rove:  Because I know something you don't know.
McAuliff: And what is that?
Rove: I... am not left-handed.

UPDATE

Jane Galt & Co. have their servers down at Asymmetrical Information.  Here's hoping they are back soon.

This is a pretty good list of the 50 best "guy" films of all time.

Films I would add:

• Where Eagles Dare
• Kelley's Heroes
• Deliverance
• Patton

UPDATE

And True Lies, how could I leave that off?  Also, I might tend to add Monty Python and the Holy Grail.  Not a classic guy movie in the action sense, but there are sure dang few women who seem to get into it like guys do.  Nee.

According to Overlawyered.com, notorious judicial hellhole Madison County, IL has elected a new set of judges much less likely to be in the pocket of the litigation bar.

This is awesome:

Robert Swetich and Raymond Urrizaga each received 1,847 votes in Tuesday's general election. Under the law in this gambling state, tied elections can be settled by lot.

After the election was certified by the commission Thursday morning, the two settled over a shuffled and fanned deck of cards.

Urrizaga drew first. Queen of clubs. Swetich pulled a seven of diamonds, then offered his congratulations to the winner.

Via Reason's Hit and Run

Hello to Arizona Watch, which seems to focus on politics and news here in AZ.  Anyone with links all over their site to Cato, Eugene Volokh, Virginia Postrel, and Assymetrical Information can't be all bad!

CNN has some pretty fun exit poll data here.  As both an engineer and an analyst at heart, I enjoy plowing around in data to find new conclusions.

One interesting thing I found was where the vote for Bush and Kerry came from in terms of urban vs. rural locations:

Because people are thinking of the red/blue state map, and even more the red/blue county map, they want to portray the red/blue split in part as an urban-rural split.  This is reinforced by the perception of Bush as the NASCAR loving gun toting country redneck and Kerry as the overeducated stiff urban intellectual. 

The problem is that the exit poll results don't necessarily support this.  Note two things:

1. The suburbs drive the result.  Rural and urban basically cancel each other out, with a larger urban than rural population but a larger relative Bush lead in rural.  In both '00 and '04, the suburban vote split closely mirrors the total tally.
2. Bush won the popular vote because he improved about 3 points and added 4 million votes to his differential.  This table says that nearly all of that came in the urban vote, with a whopping 10 point improvement that drove a 3 point improvement in the total.

Because a lot of this urban improvement occurred in Blue states, the electoral college margin was still close because he ended up closing the gap in blue states rather than flipping many.

Assymetrical Information mines the same data to demonstrate the surge in Latino support for Bush.  Interestingly, it also shows that Bush led among both high school and college graduates (defeating some of his stereotype).  Kerry, on the other hand, carried both high school dropouts and post-grads (ie, the under and over-educated)

UPDATE

Welcome to Professor Bainbridge readers.  If you are not burned out on election news, here is my winner for the most over the top post-election article, and my response.

UPDATE #2

Confirming data from New York City via The Galvin Opinion

I am feeling a little guilty tonight.  I just dumped a pain in the butt troublesome employee on another company.  Without warning.  Specifically, we fired him a couple of weeks ago, for a variety of issues, but mentioned no negative information in his reference check from his new employer.  Here's why.

It has become dangerous to give out negative references.  Ex-employees have become increasingly succesful at suing employers for bad references.  I don't have to tell any small business owners that  lazy, incompetent, unreliable, whining, trouble-making employees never believe that they are lazy, incompetent, unreliable, whining, or trouble-making.  You give them a negative reference, and before you know it they are in front of a jury saying "I never did any of those things, that employer was just biased against me, that's why he fired me and then tried to get revenge on me by lying to all these other companies and blackballing me from getting a job to feed my family".  Now, you are stuck trying to prove in a court of law that the reasons for termination, and what you said in the reference check, are valid.  It's always good to document these situations well, but no business documents this stuff well enough to survive a plaintiff's attorney's cross examination.

You can learn more about these lawsuits here and here and here.

As a result, our company policy is to not allow any employee to give out any references whatsoever.  They are not allowed to give out any information about employees except the dates of their employment.  They are most definitely not allowed to discuss reason for termination.  In a few cases, I will make an exception for good employees, but even in that case I require their permision in writing.

So, sorry employers out there.  I feel bad about it, but I have to protect myself because the sharks are always circling.  While its inconvinient to hire a bad employee in our business, it can be a disaster in places like hospitals that have life and death situations.  Crazy?  Check this out.

Dear Congress:  If you would like to do something useful for a change, please consider granting employers some sort of liability shield for the information they give out in references.

I like this list. The over-under for actual legislation is maybe 1.

Hat tip: Cal Ulmann

I had this turly over-the-top article from Mark Morford in SF Gate forwarded to me via email, with the forwarding comment "This about sums it up..." After today, I will return to more business topics from politics, but this article gives me the excuse to write my own post-election recap.

Its hard to do this article justice in excerpting it, so I encourage you to follow the link above and read the whole thing, but hear are some choice highlights (bold emphasizes some particular passages I will comment on)

And now Kerry's conceded and the white flag has been raised and we are headed toward the utterly appalling notion of another four years of Bush and another Republican stranglehold of Congress and repeated GOP chants of "More War in '04!"

Which is, well, simply staggering. Mind blowing. Odd. Gut wrenching. Colon knotting. Eyeball gouging. And so on.

You want to block it out. You want to rend your flesh and yank your hair and say no way in hell and lean out your window and scream into the Void and pray it will all be over soon, even though you know you're an atheist Buddhist Taoist Rosicrucian Zen Orgasmican and you don't normally pray to anything except maybe the gods of really exceptional sake and skin-tingling sex and maybe a few luminous transcendental deities that look remarkably like Jenna Jameson.

It simply boggles the mind: we've already had four years of some of the most appalling and abusive foreign and domestic policy in American history, some of the most well-documented atrocities ever wrought on the American populace and it's all combined with the biggest and most violently botched and grossly mismanaged war since Vietnam, and much of the nation still insists in living in a giant vat of utter blind faith, still insists on believing the man in the White House couldn't possibly be treating them like a dog treats a fire hydrant....

This election's outcome, this heartbreaking proof of a nation split more deeply and decisively than ever, it simply reinforces the feeling among much of the educated populace: It is a weirdly embarrassing time to be an American. It is jarring and oddly shattering and makes you rethink what it really means to be a part of this country. The answer: It doesn't mean much at all. Not really. Not anymore...

Maybe we're not all that sophisticated or nuanced or respectable a nation as we sometimes dare to dream....

Maybe, in fact, we're regressing, back to the days of guns and sexism and pre-emptive violence, of environmental abuse and no rights for women and a sincere hatred of gays and foreigners and minorities. Sound familiar? It should: it's the modern GOP platform....

So then, to much of Europe, Russia, Asia, Canada, Mexico, the Middle East -- to all those dozens of major world nations who want Bush out almost as much as the educated people of America, to you we can only say: We are so very, very sorry. We don't know how it happened, either. For tens of millions of us, Bush is not our president and never will be. That's how divisive. That's how dangerous. That's how very sad it has become.

We are not, with another four years of what we just endured, headed toward any sort of easing of bitter tension, a sense of levity, or sexual openness, or true education, or gender respect, or a lightness of spirit and of step.

It is important to recognize that this article is insane. Not slightly over the top or humorous exaggeration, but a truly insane loss of perspective.

Continue reading ‘On Totally Losing Perspective’ »