Dispatches from District 48
A regular feature, it is explained here. Many of our ACME products come courtesy of this site.
Usually, to keep with our theme, I try to stick with products used by our friend the coyote. Given that the weekend is approaching, though, and you may be looking for the right purchase to start out your weekend, consider this great ACME product:
I can imagine the pricing:
Talking Model: $20.00
Non-Talking Model: $30.00
Enjoy!
Vote here. Make sure to click on the "best of the rest" category. And, if you are so inclined, don't hesitate to vote for this site! If you are too lazy to scroll, you can vote for us here.
Like much of the media, the proliferation of blogs are leading new bloggers to seek out new niches. Here are two pretty narrow, though as a guy, fairly compelling ones I found today:
The first is the NFL Cheerleader Blog. Hmm, if I could find a way to get paid to write that blog, my life would be complete.
The other is RemoteBlog, a blog dedicated entirely to universal remote controls. If that is too niche for you, you might like Gizmodo or Home Theater Blog.
By the way, if anyone is itching to send Coyote a Christmas gift, I will gratefully accept one of these bad boys.
Previously, I explained why I like Football Outsiders here. Their week 12 statistical rankings of teams is here.
If you really want to dig into NFL stats, this is a great site. Also, they just ran their model restrospectively on the year 2000. And, what do you know, our beloved Arizona Cardinals again came in dead last, with the worst full-season score in the history of the rankings.
I know this will come as a shock to many people, but grand jury testimony is supposed to be secret and stay that way. I mention this, because lately, "sealed" and secret court records seem to inevitably end up in the media. The most prominent example is yesterday's leak of Balco grand jury testimony, though the Clinton-related grand juries seemed to be sieves as well.
There are real reasons for secrecy in grand jury proceedings. The most obvious is that grand juries have often been used to build cases against organized crime figures, and those testifying may be risking their life to do so. More recently, with the enormous power of the press to convict people even before they go to trial, sealed testimony can help protect reputations as well as the presumption of innocence.
Now, I am not a lawyer, and I would love to hear what Volokh has to say. I suspect there are those who would argue, as they did in the (admittedly different) case of the release of Jack Ryan's divorce records, that transparency in the legal system is more important than individual privacy. This may or may not be true legally, but I think it would hurt the grand jury process, and anyway, I don't think this is what happened here - the Balco testimony looks to have been leaked illegally. By the way, I am tired of the notion that journalistic privilege stemming from the first amendment trumps legal compliance with any other laws. I know the press loves having this, sortof like the double-O license to kill, but I don't buy it.
UPDATE#1
Hey, maybe I can be a lawyer. Here is Eugene Volokh talking about journalistic privilege today!
UPDATE#2
I forgot to mention that there is an exception to secrecy - the witness may publicly discuss their own testimony. Again, however, I do not think this is the case here. I don't think Giambi released these details about his own testimony, and the format of the article - with both sides of the Q&A, is pretty clearly from the transcript of the hearings. Besides, if Giambi were going to voluntarily go public with this admission, he is much more likely to get paid $10 million to tell it to Barbara Walters than he is to anonymously leak it to the SF Chronicle.
I just got back from about 10 days on vacation. My bookkeeper takes care of all the mail that is vendor related, and I get what is left. Unsurprisingly, I had about 60 pieces of mail, which is actually pretty low since we are in our off season.
However, when I started going through it, I was struck by how much was government related. Out of those 60 pieces of mail, 5 were small checks (pay phone commissions, that type of thing), about 5 were from private parties and the rest was all government -- department of labor, department of revenue and taxation, vehicle registrations and issues, etc. Have we really come to the point that 80% of my correspondence is with government regulatory and taxation authorities? Part of this is because we are in 10 states, as I have discussed here, but it still seems excessive.
The one dominant piece of mail was a survey from the Department of Labor in every state we operate in. The first thing I do with these surveys, as discussed here, is check to see if they are voluntary. If so, they immediately get circular filed. I don't want to spend the time, and I don't think the government needs the information. In large part data is just the job security of the bureaucracy - more data means more people collecting and analyzing and reporting, and, the worst, proposing new regulations and taxes based on the data.
Two states, California and Florida, required the survey get done, so I did it. Actually completing these surveys really got me irritated, There is very little on this thing that we don't already report to the government. Already, we have to report every individual person's wages each month or quarter. Why is this not enough? Mostly, this survey just asks me to aggregate the data the government already has in different ways. Why can't they do that? What are computers for, anyway?
UPDATE #1
I got the following comment:
And you'd like them to propose regulations based on incomplete data?
It is not the accuracy of data that is objectionable - it is the ridiculous detail. For example, does the government really need to know monthly employment levels by detailed SIC code by county? This just leads to some government staffer saying - hay, the employment in the tourism business in Maricopa county fell by 1% in August - we need a taxpayer funded initiative to promote tourism there, yada yada. And whala, pork is born. See examples here.
Yes, its up again. As usual, I will be linking to some of my favorite articles later today when I get time to read through everything. Enjoy.
Wow, the concept of fair use is sure taking a beating. Politicians are sure carrying a lot of water lately for media companies. Check out this article at Incite. This is not that far-fetched. A couple of years ago, ReplayTV added a jump ahead 30 seconds button on their machine that would instantly skip a standard commercial. TIVO, the industry leader, has held off matching this function due to industry pressure.
By the way, I don't know if it works but this is posted as a hack to get a 30 second skip on TIVO machines. (more here and lots more sites via google search)
Roy Soifer recently suggested, as reported in Photon Courier, that the percentage of Harvard Business School graduates going to Wall Street jobs can be used as a reverse indicator of the market (i.e. lots of graduates going to Wall Street means the market is peaking and due for a fall).
As a graduate of that HBS in 1989, I have a few thoughts. First, the vast majority of HBS graduates go into Wall Street, consulting, or the corporate world. The relative popularity of these three destinations tends to vary over time. To some extent this variation is due to what's "hot", and to some extent its due to simply to what jobs are available and what recruiters are showing up on campus.
Second, though pride urges me to agree with this statement from Photon Courier, I really can't:
But one would hope that MBAs from a leading school--who have certainly studied business cycles--would reflect more on the principle of "buy low, sell high" before deciding among their various offers.
When I graduated from HBS, I don't remember having a clue what I wanted to do. Its all fine and good to talk about trying to get in early on a growth sector, but that implies I am taking a job to maximize NPV of future incomes. If that were the case, I would have gone to Wall Street, or remained a consultant. But I also would have probably hated it.
A more interesting HBS graduate job indicator for me has been "how has the jobs people have evolved since they graduated". When I graduated, everyone seemed to be investment bankers and consultants. At our fifth year reunion, everyone was posturing as to how successful they had been, how far they had risen, etc. Most people were still in the same type jobs, with only a few outliers who had switched careers already. Our tenth reunion was totally different. At our tenth, no one talked about their job - everyone talked about their kids. The contrast was dramatic. Many people were in different careers, including a number who were testing the dot-com waters.
At the fifteenth reunion, everyone seemed much more relaxed. Job performance stress at from the fifth and family starting stress at the tenth were mostly gone. Many, many people (including me) had their own businesses, and few of these were ones anyone would have predicted; I don't think anyone was a consultant anymore. Here are a few examples just from our 90-person section of businesses graduates are running now:
My observation - very few were the types of businesses that come recruiting at HBS.
My parting observation about career choices through life comes from Dan Simmons' great Hyperion series, where the prophet Aenea gives here famously concise advice to humanity:
Choose Again.
Certainly true with careers.
Yes, Marxists run and hide, the Capitalists are back in town at Lachlan Gemmell. Look around the site, its pretty interesting - he's posting a diary of his day to day experience bringing a new software product to market, and letting his readers comment on key decisions.
An article I saw on a new process for creating hydrogen via nuclear power (courtesy of the Commons) got me to thinking about what a screw-up our first (and really only) generation of nuclear power plant building was. Learning curve problems with a new technology, combined with an insane regulatory regime and uninformed panicky public response to nuclear power issues led to a shut down in the construction of nuclear power plants, and made the last ones built into memorable financial disasters.
Coming from the aerospace industry, I am used to a strong regime of government safety regulation. The differences in how aircraft construction and nuclear power construction are regulated are very informative, so I want to focus on them in this post.
First, however, its instructive to list some of the reasons why nuclear power is attractive:
Nuclear Plant Regulation
Nuclear plants in the U.S. were mainly designed as one-offs. In other words, each one was a relatively unique design. Each design therefore required regulatory review and approval in depth, processes that could take years. Since the process took so long, changes in personnel or public attitudes often resulted in revisiting certain already approved design decisions, sometimes even after that part of the plant was built, resulting in expensive modifications.
In addition, uninformed public hysteria was allowed to take precedence in the permitting process ahead of fact-based scientific analysis. That is not to say that there are not potential dangers - Chernobyl proved that, but one can pretty easily argue that Chernobyl was more consistent with Soviet era mega-industrial disasters that occurred in many industries than the general experience with nuclear power.
In most cases, the public has no real idea of the risks of nuclear plants, especially vs. other risks they might face. People who might never live in the vicinity of a nuclear plant live downwind of plants using hydrogen cyanide or hydrogen sulfide as process gasses; or near plants with the potential for runaway exothermic reactions, leading to explosions and/or toxic gas releases (Bhopal anyone?) Far more people were killed by the explosion of a shipful of fertilizer in Texas City than have been injured by nuclear power in the United States.
Aircraft Regulation
If aircraft construction was regulated like nuclear power plants, there would be no aviation industry. In the aircraft industry, aircraft makers go through an extensive approval and testing process to get a basic design (e.g. the 737-300) approved by the government as safe. Then, as long as they keep producing to this design, they can keep making copies with minimal additional design scrutiny. Instead, the manufacturing process is carefully checked to make sure that it is reliably producing aircraft to the design already deemed safe. If aircraft makers want to make a change to the aircraft, that change must be approved with a fairly in-depth process.
Beyond the reduction in design cost for the 2nd airplane of a series (and 3rd, etc.), this approach also yields strong regulatory benefits. For example, if the in a particular aircraft, then the government can issue a bulletin to require a new approved design be retrofitted in all other aircraft of this series. This happens all the time in commercial aviation.
One can see how this might make nuclear power plant construction viable again. Urging major construction companies to come up with a design that could be reused would greatly reduce the cost of design and construction of plants. There might still be several designs, since competing companies would likely have their own designs, but this same is true in aerospace with Boeing, Airbus and smaller jet manufacturers Embraer and Bombardier.
Nuclear Waste
The nuclear waste disposal problem is still not fully solved, but technology is making inroads, as in here and here and here.
I would argue that the issue of nuclear waste is a red herring anyway -- waste from nuclear power is not necesarily worse than from other processes, its just more visible and scary sounding. Current power plants generate millions of tons of waste a year. However, since they spread this waste evenly throughout the atmosphere, it doesn't always call attention to itself. Radioactive waste, though small in volume, tends to be concentrated and admittedly tricky to handle. It can't be just dumped in the air or in the water and forgotten about - it has to be actively tended for years.
Other Reading
Increasingly, many environmentalists are starting to revisit their opposition to nuclear power as the environmental costs are better understood (even technologies formally much-loved by environmentalists are coming under scrutiny for their costs -- do we really want all of our wilderness to look like this and this?) Such articles include this and this. Other roundups about the benefits of revisiting nuclear power are here and here.
UPDATE
My gut feel is that nuclear power, if intelligently regulated, could be economically competitive with many other energy sources today, but I don't know for sure. Jerry Taylor and Co. at Cato think otherwise, and they have certainly put a lot more research into it than I have. I am certainly loathe to start US energy policy, complete with massive subsidies, down yet another uneconomic blind alley.
I have written several times as to why the libertarian party, while philosophically sound, falls far short as a political force. Arizona Watch has a nice article and several links with suggestions to make the party a more viable political force. You can find some of my problems with the party here.
Via Scrappleface, here is an AP report of some of the special interest spending items in the most recent budget. Ughh.
"”Alabama: $4 million for the International Fertilizer Development Center in Muscle Shoals.
"”Alaska: $443,000 to develop salmon-fortified baby food.
Oh, just read them all. Not sure any branch of government needs to do most of these things, but certainly if they need to be done, they should be funded by local taxpayers who get the benefit, not the rest of us.
First, Scrappleface reports:
After a week of tough negotiating by France, Germany and Britain, the Islamic Republic of Iran has conceded to reduce the size of nuclear warheads it will use in the eventual bombing of Paris, Berlin and London.
I might have thought this was humor until I read this line, which seems all too real:
Iran has pledged to stop enriching uranium, while retaining 20 operating centrifuges, and continuing to process plutonium
LOL. Even better, Scrappleface also reports that CBS is considering emulating recent moves by the Ukraine press to abandon bias:
Inspired by a public pledge from Ukrainian TV journalists to provide unbiased reporting from now on, CBS News has launched an internal investigation to assess the potential impact of such a move.
Go read it all.
Overlawyered.com is on a roll lately, with a number of articles that want to make you beat your head on the wall:
I give up - too many good ones to link. Just go and keep scrolling - you don't want to miss the "breastaurant" suit, do you?
Cool article in Reason about the similarities between the Incredibles and Any Rand's Atlas Shrugged.
Now I definitely have to see this movie. As a side note, I actually met Mr. Incredible today at Disney World (OK, I "met" a twenty-something underpaid college student in an uncomfortable costume today). Disney World trip roundup coming soon...
This is a great idea, and one I missed the first time it came around. It seems that the US has finally gotten tired of the U.N. being a big dictators club (the membership of the U.N. human rights committee is particularly appalling) and is doing something about returning the U.N. to some sort of sane and moral mission. More here about the newly forming democracy bloc at the U.N. in a Reason article by Jonathan Rauch.
The idea has been given new currency with the growing movement to draft Vaclav Havel to replace the reprehensible and corrupt Kofi Annan, a movement currently being cheerled by Glenn Reynolds
Dan Rather will be leaving his anchor position at CBS Evening News. I haven't really gloated about this online, despite my dislike for what CBS News has become, mainly because I don't see any evidence that CBS is really going to fix anything. I mean, one clue that they are not really serious about change is that Dan Rather will be refocusing his time on 60 Minutes, the very forum that caused many of his most recent troubles in the first place.
Anyway, who should replace Dan? My gut feel is that they will choose some stiff who has put in his time for decades at CBS, but I don't think that will do much to improve ratings. What would? How about these suggestions:
Improve ratings approach #1: Finally get rid of the pretense that anchors are journalists rather than pretty talking heads. Hire Nicollette Sheridan, or maybe Terri Hatcher. Or, if you feel CBS News deserves more gravitas, in the Murrow tradition, how about Meryl Streep?
Improve ratings approach #2: Go with comedy. Bring in David Letterman from the Late Show to anchor the evening news. "Tonight, we start with the growing UN oil for food scandal. Uma - Anann. Anann - Uma." Or, if you want to segment the market differently, how about Tim Allen and the CBS News for Guys. Or, if CBS wants to keep hitting the older demographic - what about Chevy Chase - certainly he already has anchor experience from SNL.
Improving Credibility Choice: No one in the MSM really has much credibility left after the last election, but there is one man who would bring instant credibility to CBS News -- Bob Costas. CBS should hire him away from NBC, like they did with Letterman. Make him the evening news anchor. Heck, if Bryant Gumbell can make the transition to the news division, certainly Costas can.
Become the acknowledged liberal counterpoint to Fox: Hire Bill Clinton as anchor. Nothing would generate more buzz than that hire, and he is at loose ends anyway (and think about all those wonderful business trips away from home...) If Bill is not available, try James Carville. I might even have to watch that.
Let the public decide: Forget making a decision, and just create a new reality show like ESPN's Dream Job to choose the next anchor. Each week the 12 finalists can be given a new task. In week one, they have to pick up incriminating evidence about the President at a rodeo. In week 2, they have to forge a believable set of documents from the early 70's, and survive criticism from about 10,000 bloggers. They can kick one off the island each week based on the viewers votes.
Leave your own ideas in the comments section!
UPDATE #1
I want to expand on the idea in the comment below. I think it would be a great idea to just run "best of" news broadcasts when Dan is out, like they did during Carson's frequent nights off late in his tenure. The interesting part would be to see if anyone noticed.
UPDATE #2
Welcome Carnival of the Vanities. If your missed our Carnival of the Capitalists posts on reverse auctions and why Priceline really succeeded, see here. Or just browse around our most recent posts here. And, don't forget to vote in the 2004 Weblog Awards!
UPDATE #3
For a more serious handicapping of replacements, check out Rathergate.com and at RatherBiased.
Wizbang's 2004 Weblog Awards are accepting nominees. We have been nominated in the "best of the rest" category, so come back and vote when the polls open!
When was the last time you paid attention to the cost of any medical procedure (not your copay or share - but the actual cost)? When was the last time you balanced whether to have an incremental medical procedure, such as an extra test, based on cost vs. benefits? If you are like most Americans, the answer is "not lately" because our health care system does not give the end consumer any of the normal incentives to "shop" that they would when, say, buying a TV.
Marginal Revolution has a great post on laser eye surgery, probably one of the most popular medical procedures not covered by traditional insurance (I would normally guess "most" popular surgery, but having lived in Dallas and Scottsdale, I am all-too-aware of the popularity of breast implant surgery as well). Guess what - it is one of the few medical procedures with high satisfaction and falling prices.
The Knowledge Problem makes a good point:
Why has this administration said so little publicly about the development of capitalism, not merely democracy, in Iraq? Vernon [Smith] said that it's probably because we don't know how to "build" a market, and certainly Hayek and other Austrians would agree.
If the neocons are going to argue for aggressively promoting our values while toppling totalitarian regimes, they better figure out how to do it.
Business Pundit has a post today about a new auction site named jittery.
One thing BusinessPundit mentions is that the new site will have a
"Buy Offer" feature, which I believe gave him the idea in the first place. Basically, instead of buyers competing over an item and raising the price, buyers specify what they want to buy, which features are important, what prices they want to pay, and sellers compete to give them the best deal.
I am extremely skeptical that this would work. As background, I ran the marketplace portion of Mercata, that similarly tried to bring a different, more buyer focused model to table and failed fairly spectacularly. We found that you can be as innovative as you want, but you need a lot of traffic to your site, and building such traffic takes a lot of time or a lot of money or both. You also need to provide a value proposition for both buyers AND sellers.
A LOT of people have tried some sort of reversal of the auction process, where buyers specify the goods they want and sellers bring them to the table, bidding against each other (ie lower and lower prices) to get the business. FreeMarkets made some hay with this in the B2B world, but from the beginning the auctions were never really the money maker, but were a Trojan horse for supply chain consulting, which helps to explain why they merged with Ariba.
The only people to make this model work in the consumer area is Priceline. However, what most people fail to realize about Priceline is that it fulfilled a real business need for SELLERS, even more than for buyers.
Airlines have a classic fixed cost pricing problem. They want to sell as many tickets at a high price as possible, but an incremental passenger costs them nothing, so if the plane is not full, getting even $50 for a passenger to fill an empty seat at the last minute is profitable to them. The problem is somehow offering the $50 fare only to the passenger who would not fly otherwise, and not cannibalizing the customers who are willing to pay $300.
The problem is, if they offer the $50 fare to anyone, they can't hide the fact very well. The airline industry, as most know, have very transparent computer systems that let everyone know their prices on every route every minute of the day. If an airline cuts prices on a route, everyone knows - so that competitors can match the cut immediately and customers can switch from the higher to lower fairs. Airlines protect themselves somewhat with limited availability of certain fares and advanced purchase requirements - so that people, particularly business travelers, who need to maintain flexibility, have a reason to pay higher fares.
However, advanced purchase requirements were not providing enough protection. What airlines really wanted was a way to cut fares for one person who might not have flown otherwise, and let no one else see them do it. And Priceline was the answer. Yes, airlines had to tell the Priceline computers what the lowest bid they would accept from a customer for a flight was, but this did not constitute an official price that went into the reservation systems. So, the airlines could cut their price (via Priceline), but only the customer who got the price ever saw it.
In fact, the story is even better. At the time Priceline came around, one airline had a particular problem they needed to solve. When TWA got a loan from Carl Icahn, an almost unnoticed part of the deal was that a certain travel agency owned by Icahn, small at the time, would be guaranteed TWA tickets at a healthy discount off the lowest published fares. This agency, with this boondoggle, grew to enormous size as Lowestfare.com. TWA, beyond the reasons listed above, therefore had a second reason for not wanting to publish their lowest possible fare. Normal limitations that most airlines could set on how many seats would be available at their lowest fare could not be enforced by TWA. If they offered a new $100 fare, Lowestfare.com could blow out an unlimited number of tickets at $80 or less and TWA would have to accept it. Therefore, by offering discounts unpublished via Priceline, TWA prevented the travel agency from getting inventory even cheaper. And so, a huge portion of the early Priceline inventory was TWA. (ironically, after the American Airlines acquisition of TWA killed the deal, the Lowestfare.com URL was bought by ... Priceline.
Anyway, I just don't see how reverse auctions can work in the consumer world, particularly if the customers are allowed to specify price and quality and features, etc. The transaction costs for suppliers would be just too high wading through this stuff -- in fact, many companies in the B2B world, where transaction sizes are in the millions, have come to this same conclusion - for a variety of reasons, they are choosing not to participate in reverse auctions (here too).
Marketplaces must offer value to both buyer and seller. If you don't offer honest value to sellers, then no products appear on the site and it will fail.
Basically, there are two gorilla's in the online marketplace arena - eBay and Amazon. eBay had the head start in building a brand and community in the marketplace space, but Amazon has brought some really nifty technology to the table.
As a user of both, I welcome a new competitor, sortof. I hope that there will be competitors who force eBay to adopt some overdue new features (e.g. auction sniping protection and better search features on past auctions) but I don't really want any to be successful enough to create a third or fourth or fifth major platform out there, because that just increases my search costs and time when I want to buy something.
UPDATE
I missed pointing out one bit of irony. The Internet is generally attractive to consumers because it increases product information, and particularly increases knowlege about market pricing. However, in this case, Priceline's attractiveness to airlines was that it decreased pricing transparency in the market.
UPDATE #2
Welcome Carnival of the Capitalists readers. Have a look around, and check out our thoughts on replacements for Dan Rather.
We never go to DisneyWorld without Bob Sehlinger's book "the Unofficial Guide to Walt Disney World". I don't know if he does a lot of unofficial guides or just concentrates on Disney, but from reading it you would swear he spends every waking moment here. Totally recommended over every other guide out there.
Anyway, as we were reading our guide the other day in our hotel room, planning the next day, my wife happened on the Q&A section where a reader asked him "What is your favorite Florida attraction?" His answer:
What attracts me most (as opposed to my favorite attraction) is Juniper Springs, a stunningly beautiful stream about one and a half hours north of Orlando in the Ocala National Forest....Winding through palm, cypress, and live oak, the stream is more exotic that the Jungle Cruise and alive with birds, animals, turtles, and alligators.
This was really cool, since my company runs the Juniper Springs recreation area and the Juniper Springs canoe run. Yeah for us!
Just in time for your Thanksgiving holiday reading, find the new Carnival at Interested Participant.
As with any labor law or legal liability issue, there are probably more ways to trip up than you ever imagined. This article at Faegre.com, which I found via George's Employment Blawg, has a nice summary of key issues in five categories.
Because the vast majority of our employees are over 70, and a number of them have disabilities, we have to be very careful in hiring. Many of our jobs can be physically challenging, and dangerous to perform with some disabilities, so we have to take care to make sure an employee understands the work and that we mutually agree they can do it safely.
One related area that I am not sure has been tested regards our corporate insurers. Increasingly, insurers, particularly for our corporate vehicle policies, are refusing to insure over-70 drivers without some kind of letter from a doctor that they are capable of driving safely. As you can imagine, doctors face liability if they put in writing the employee can drive safely (so the doctor might be liable if there is an accident) or if they write that the employee can't drive safely (so the doctor might be liable for effectively denying the employee insurance, or even a job). As a result, doctors are reluctant to produce such letters.
It has not come up yet, but what happens if one of my employees is uninsurable for driving, and driving the company vehicle is an essential part of their job? Do I face an ADA case for discharging them? What choice would I have in that case?
We also have very severe challenges with off-duty behavior. Most all of our employees live on the job site (i.e. the campground managers live in the campground). So, off-duty behavior occurs on the job site. Until I had this company, I always said that I did not care what an employee did on her own hours at home - but now, what happens on the employee's own time occurs in front of my customers.
We continue to walk a fine line on this. To date, we have told employees that even if they are not on the clock, if they are wearing our uniform or verbally representing themself as a company employee, they are subject to on-the-job behavior rules. Once the uniform is off and they are just "Joe", and not "the manager", they are free to do as they please, though they are still bound both by federal and state laws as well as campground rules.