July 27, 2006
Republicans Being Democrats… Again
House GOP pressing vote on minimum wage
House Republican leaders, giving in to political reality, plan a vote to raise the $5.15 minimum wage before leaving Washington this weekend for a five-week recess.
“Whether people like it or not, we need to go ahead with it,” said Rep. Mike Castle, R-Del., who supports the idea. “There’s a general agreement among Republicans (opposing the raise) that `maybe we don’t like it much, but we need to move forward with it just for political reasons.’”
The No. 3 House GOP leader, Majority Whip Roy Blunt of Missouri, said the plan was to have a vote before week’s end. But Majority Leader John Boehner, R-Ohio, said Republicans leaders were working to pass the increase but that “no decisions have been made.”
It was a decade ago, during the hotly contested campaign year of 1996, that Congress voted to increase the minimum wage. A person working 40 hours per week at minimum wage makes $10,700, which is below the poverty line for workers with families.
Democrats have made increasing the wage a pillar of their campaign platform and are pushing to raise the wage to $7.25 per hour over two years. In June, the Republican-controlled Senate refused to raise the minimum wage, rejecting a proposal from Democrats.
The chairman of the House Education and the Workforce Committee said the GOP would embrace the increase to $7.25 per hour and probably attach a proposal passed last year that would make it easier for small business to band together and buy health insurance plans for employees at a lower cost. Rep. Howard McKeon, R-Calif., said the minimum wage bill probably will not include tax cuts such as a repeal of the estate tax.
Great… So let me get this straight.
You’re going to give the Democrats what they ask for. In order to try to make it slightly more politically palatable, you’re going to barely ease regulations on small business. And when you might have an issue worth going tit-for-tat on, and actually getting a real concession from the Democrats, you roll over.
An estate tax repeal would be the ultimate poison pill for Democrats on this bill. I can just see the quandary they’d be in, knowing they can’t vote against a minimum wage, but being against the estate tax repeal. And it’s a politically great move. If you’re going to do something to help the rich, why not do it as an offset to helping* the poor. Yet the Republicans are not going to do it.
The Republicans are showing, once again, that they’re just as statist as Democrats, but with some nice religious authoritarianism and hyper-nationalism thrown in on top of it.
Thanks, guys. I really feel good about voting for you chumps in 2004.
Below The Beltway linked with Libertarians And The GOP: What’s The Point Anymore ?
June 25, 2006
Coinstar Makes Life Better
I’m a Coinstar user. I realize they take about 9% of every dollar they count for me, but I’m lazier than I am cheap, and I’d rather take that deal than roll my own change…
amazon.com
iTunes
Virgin Digital
Starbucks
Borders
Pier 1
Linen’s & Things
Hollywood Video
So this makes me very happy. This gives me the full value of my change, which appeals to my cheap side. And it forces me to buy things for myself, which satiates my consumer need. All this without giving up my laziness!
Thank you, Coinstar!
June 19, 2006
Price Gouging for Beer?
Over on beeradvocate.com, I came across this thread in the forums. The question was whether cellarable beer should carry a premium price.
I was at an unnamed store nearby this weekend that usually overprices their beer anyway, and I saw some 2000 Bigfoot for $30 a 6er. I just about passed out!!! I thought that this was a nice example of price gouging, what are others opinions on this? Is this worth it? I don’t think it was properly cellared, there was significant fading on the packaging.
Bigfoot is a barleywine made by Sierra Nevada. At 9.6% alcohol, it stands up well against the aging process, and typical beers of the style actually tend to mellow with age. Much like wine, only a very small set of beers actually does age well, but this is one that counts.
So is it price-gouging when a beer of that age carries a premium price? After all, that’s probably at least double MSRP, and it’s pretty likely that (as the poster said) it wasn’t aged under proper conditions. It may not have been held at cellar temp, or in a dark area. Since heat and light are the two things which are most likely to cause the beer to go bad, it’s unclear exactly what’s being bought.
But as for price gouging, I find price gouging to be a very hard-to-define phenomenon. But apparently not everyone thinks so. After one person suggested that price gouging is only really applicable to “necessities”, another poster responded with this:
This store is probably the only place in Michigan with Breakfast Stout on the shelves. (unless a new batch just came out, in which case this statement will be true in a week or two). Them, charging double the retail price because they are the only one that has any left is a form of price gouging IMO. Then again, I do consider great beer to be a necessity.
The store in question will have that 6er of Bigfoot on their shelf until it sells. They will not lower the price. They will wait it out. They had 6ers of Bells Batch 4000 on their shelves for $30/6 for many years.
Of course, I had to respond:
I’ve always wanted someone to define price gouging… I guess you’ve done it well:
“Price gouging is when someone charges more than I think they’re ’supposed to’.”
Sounds like it might be time to start talking to their competitors, and telling them that if they stock it and sell it at a more reasonable price, you’ll buy it from them.
Or hell, find the owner of this place and tell him that if he lowers the price, it’ll leave his shelves. He’ll make more money selling you 10 6′ers at $5 profit each over the next year than he will waiting a year to sell that single 6′er at $15 profit.
Of course, that doesn’t take into account the fact that it is a rare product, and one which likely is much harder to find than the fresh brew of the same variety. There aren’t many places where you can find a six-pack of the 2000 Bigfoot Barleywine.
But perhaps that’s a signal that the price was too low? The discussion continued, talking about the situation with this store and non-vintage beers. A poster made the point that certain beers are commonly priced very high at this store, and when other stores run out, you’re left paying this store’s prices or not buying it at all:
What I’m concerned about is this becoming a trend. Store A sells 2 cases of Founders BS for $3/bottle and sells out immediatly and wont see anymore for a year when next years batch comes out. Store B sells their 2 cases for $6/bottle slowly over the course of a year. How long before Store A starts doing the same thing? And yes, I know, this is capitalism at work and I have no problem with that. But it is troubling nonetheless.
Apparently he’s mad that one store manages to price itself high enough to actually supply a beer over the course of an entire year. Of course, if Store A did raise their prices, it would benefit everyone except those lucky people who managed to hoard the beer Store A was selling at below-market prices.
Again, I had to try to explain basic economics:
Craft beer is a scarce resource. I remember a news story someone posted on here a few weeks ago about a small brewery. Every craft brewery that brews a quality product has much more demand than they can supply. Why doesn’t Stone distribute to more states (yet)? Because so many people want their product that their production lines can’t keep up.
So it’s simply supply and demand. With most craft breweries, store A can’t just call up Founders and say “I need more cases of beer” when they sell out, because Founders has a bunch of other customers and can only allocate a certain amount to each store. With any scarce resource, the best way to allocate the good is through the price structure. If store A is selling it for $3/bottle, people are coming in to buy a case at a time. If store B is selling it for $6/bottle, people are coming in to buy maybe half or 1/4 of a case, meaning that many more people can access the product (although not as much of it).
Simply put, MSRP is sometimes too low, because demand is so high that people will buy and hoard a good, taking it off the market for others (see the market for concert tickets, where they are usually sold way too cheaply to scalpers, who then sell them for market price). If MSRP is too low, that means that person X buys a case of Founders and person Y doesn’t get a drop of it. That’s great, if you’re person X! If you’re not (and it seems that the people complaining are not), then you’re SOL.
I only wish that some people would realize how easily they’re making my arguments. Yes, someone is upset that a bottle of beer is going for a price higher at one store than another. Obviously, that must mean that the one store is gouging! Of course, when one store runs out in a month, and the higher-priced store has the beer available for the next 4 months, they’re still upset. If prices are too low, you have shortages. If they’re too high, you have overstocked shelves. Finding the balance is key.
Store A realizes that they want to get this beer in, get it moved, and make space for the next beer. If they can’t always supply their customers with a specific variety of beer, that’s okay, because their customers will be happy to come back and buy it at good prices when it’s again available. Then, when they run out of that variety, they’ll keep the shelves stocked with a different beer, trying to move product first. Store B, on the other hand, is trying to be the go-to place. You may have to spend more money, but if you’re looking for a seasonal beer, you know it’s likely they’ll have it available. They are providing a service, keeping their shelves stocked with slow-moving beer, and that shelf space costs money. If you expect them to have a beer that’s distributed once a year in its off-season, you’re going to have to pay a little more.
I realize that to most of my readers, this is elementary. It doesn’t take much for you guys to understand basic economics, but it’s always interesting to see this sort of debate played out with people that aren’t political junkies. The average consumer thinks he’s getting ripped off, when in reality, the price structure is exactly what’s allowing him to buy the beer at all. Miller Lite is a commodity beer. Craft beer is not. It is made in relatively small batches, and these breweries aren’t sitting around twiddling their thumbs. They’re brewing as fast as they can, because they don’t have a problem selling every drop they make.
If the price of craft beer doesn’t accurately reflect the situation, you’re going to have beer that leaves stores faster than it can be restocked. If the price of craft beer does reflect the supply and demand balance, you’re going to have people complaining about how “expensive” it is. It doesn’t matter if it’s beer, gasoline, or apartments, that’s the situation. You can try to “control” the price, but then all you do is make sure that those lucky enough to get the good are happy with the price, and nobody else gets any of it. Of course, with beer I can brew my own, so I’m a little less sensitive than with oil 
June 13, 2006
AHA! Moment…
I hear a lot of people thinking the economy is in for a crash, and for a long time, I’ve been very skeptical. But I had an AHA! moment last night…
In the “Roaring Twenties”, people increasingly went into debt (against their homes, etc) to finance non-home purchases. We’ve all been taught that this debt was one of the major factors in causing the Great Depression. Of course, this was only one cause, and many of our other political moves only exacerbated the problem.
Well, what do we have now? Rising household debt. A negative savings rate. People increasing fueling their spending habits by touching rising housing equity, leaving them in deep trouble if there is a housing meltdown. We, financially, are balancing on the head of a pin. Thankfully, although the housing market appears to be stagnating, stories here and here predict it won’t be a catastrophic crash.
I think our current economy is a lot less sensitive to ripples than the economy of the 1930’s, especially with increased globalization. However, if we hit a recession, which is entirely likely if the housing market has a meltdown, rippling out into the financial services sector, construction, etc, and it becomes our response, not the underlying factors, which can turn a recession into a depression. Note that it’s the exact same model as the 2000 recession. Overspeculation in the internet boom melted down, which rippled out to chip-makers, networking companies, and eventually out into the wider engineering world, followed by some of the support industries for that whole sector of the economy.
After the 2000 recession (a minor one, IMHO), dropping interest rates and a tax cut helped to turn it around. We didn’t have a return to protectionist trade practices, and except for Sarbanes-Oxley, the government mostly stayed out of heavy interventionism in the economy. But the 2000 recession hit the technology sector, and affected business and jobs more than it affected people’s homes. If we see a housing meltdown, followed by widespread foreclosures, political pressure to “save us” will become deafening. I think the fundamentals of our economy are strong. Unemployment is low. Growth is good. But all that can go south if the politicians stick their grubby hands into the mix. And as we’ve seen with the “outlandish” rise in oil prices, politicians are more than willing to do just that.
June 12, 2006
Net Neutrality
I haven’t posted much on the whole Net Neutrality debate. As most of you know, I take a very critical look at anything that will expand government’s regulatory powers, especially into an area like the internet. Even if Net Neutrality will be ineffective and a miniscule bit of regulation, I know what happens when you let the camel’s nose in the tent!
I’ve stayed out of the debate, though, because it’s really rather confusing. And given that I’m a lot more internet-savvy than the average American, something that confuses me this much is indecipherable to others. What I didn’t understand was the hysteria generated by the pro-regulation crowd, to regulate something that seemed to be functioning well, and the lack of substance in their website. They do very little to tell you what their regulations are, or how they’ll work, yet you’re supposed to believe they solve a problem that doesn’t even exist. That’s not a red flag, that’s a truckload of red flags.
But I was struck by something. I checked out the Net Neutrality Scare Ticker, where there’s been a running tabulation of how long it’s been since the Net Neutrality movement began, without the internet implosion its supporters have predicted (it’s already been 3 1/2 years). They linked to this story talking about Microsoft joining the movement, and then this story (PDF), talking about Microsoft’s exit from the Net Neutrality movement a year after it began:
It all started about a year ago when a fuzzy group named the Coalition of Broadband Users and Innovators (CBUI) was formed. Amazon.com, Disney, eBay, Yahoo! and many Internet and technology associations threw their lot in with Microsoft to fight for the right of free passage online, otherwise known as network neutrality.
The CBUI argues that the federal government should regulate the broadband industry, effectively creating rules that would prohibit broadband providers from forming content and service partnerships that, theoretically, would harm users and competitors.
There’s one fact I have always been able to count on: when companies are lobbying for their own industry to be regulated, they’re doing so for their own sake, not the consumer. I think in this case, it may be a fight between them and the telcos, rather than them and their own competitors, but you can be sure it’s for their sake, not ours. Companies don’t spend millions of dollars on lobbyists to protect consumers, they do it to protect themselves.
June 7, 2006
Book Review: An Army of Davids
Ahh, the advantages of plane travel: I finally get a chance to read in peace!
I just finished reading Glenn Reynolds’ (of Instapundit fame) An Army of Davids. The tagline, “How Markets and Technology Empower Ordinary People to Beat Big Media, Big Government, and Other Goliaths”, pretty well sums it up. Reynolds believes we’re at a turning point in world history, where technology has leveled the playing field, chopping down the natural advantages that the “Goliaths” have had for many years. If anything, Reynolds is a firm believer in the Adam Smith “invisible hand” theory, where millions of distributed individuals, working at what they love, bring about monumental changes. It’s not government that does so, unless they find ways to harness the power of those individuals.
If you’ve read me for any period of time, you will see that I’ve had some influence by the ideas Reynolds brings up this book, although since I rarely read Instapundit.com, he hasn’t been a primary source for me. I’ve posted here, here, and here about how I believe the current shift has moved away from government to the individual. I think I had found my way, through the blogosphere and my own introspection, to agreement with Reynolds on a number of subjects presented in the book.
As for the book itself? Well, how can I dislike a book whose opening line in the introduction is “About fifteen years ago, I started brewing my own beer”?! It was a very well-written look at the ways that individuals are gaining power in the world, with only a short look at blogs and the media. Moving along, he touches on subjects like the growing ability of workers to telecommute and the rise in entrepreneurial opportunity, the change in music recording and distribution brought about by the internet, and the ability of humans (both within the blogosphere and in the meatspace world) to act as a pack of individuals with a common goal– and not a herd being led. He goes on to point out how our media has grown and will continue to grow with the revival of the citizen-journalist, and how “horizontal information”, as he calls the greater inconnectedness of information in today’s society, changes the learning curve of humanity itself. Throughout this first section of the book, he gives real-world examples of trends he’s spotted in today’s world, and where and how he sees them impacting humanity in the short and long term.
When you get into the second section, he moves farther into true futurism, such as nanotechnology, life-extension, the colonization of space, and the Singularity. Through these chapters, his greatest theme, as far as I can see, is a simple one: “Hey folks, this stuff is coming. We’d better get used to the idea, so we can plan for it.” Reynolds doesn’t ask whether these advances will occur, he asks what we’re doing to help ensure that we know how to handle life when they arrive. In this section (with the exception of the space colonization chapter), he does tend to stray from his “Army of Davids” theme, though. He occasionally comes back, with discussions of how technologies such as nanotechnology might empower individuals, but it ceases to be a central theme here. Either way, it’s still an interesting read through these chapters, especially if you’re not already well versed in these areas.
The central theme of the book, of course, is truly a heartening idea to individuals. For a very long time, the dominating change in our world has been towards greater and greater centralization of power, whether it be in corporations, media, or government. Technology, however, has now reversed that trend. We are seeing every one of those areas returning power (though reluctantly) to individuals, as individuals find their voice to demand it. From the effects of blogs on media (i.e. Dan Rather) and politics (i.e. Porkbusters), to the effect of open-source on technology (i.e. Microsoft), loosely-connected groups of individuals, working for their own personal reasons, have acheived incredible accomplishments. He points out the aftermath of the 9/11 attacks, when– in the absence of government control– individual citizens simply organized on the fly and took care of what needed to be done. As the world becomes more complex, central control becomes less useful. With the march of technology, though, it becomes unnecessary even more quickly.
Reynolds uses the example of the creation of the internet as a global information warehouse, pointing out the naysayers– had they been asked 10 years ago if our current access to information was even possible– would never have thought it could occur. The argument of “it would take every librarian in the world decades to input all that information” doesn’t make sense when you have millions of individuals willing to do it for them, for free, simply because they find it interesting. Curiously, Reynolds doesn’t use the example of the open-source movement, which has the same nay-sayers. The open-source nay-sayers think that programmers would never work tirelessly to bring about major innovations in the software world. Yet openoffice.org exists, and provides a usable alternative to Microsoft. Did someone organize huge stockpiles of capital to make it happen? Nope, a million dedicated people who wanted to see it happen simply did it.
Overall, I consider it to be a great read. However, for those of you who are already evangelizing for the “Army of Davids” world, and who consider yourself a “futurist”, there isn’t a whole lot new here. Reynolds does craft it into a very readable and cohesive package, though, so it’s a great read regardless. If the preceding description doesn’t apply to you, though, buy it now! There are a heck of a lot of people who think the world is headed for some big changes, and Reynolds lays out a simple, readable, and entertaining description of what shape he (and I) think it will take.
The world is changing, and changing quickly. If there is truly an “Army of Davids”, consider me a self-ranked Lieutenant. Glenn Reynolds may just be one of our Generals. Thankfully, though, unlike the U.S. Army, the chain of command is nonexistent, and I don’t have to fear the UCMJ. I can go tell Gen. Reynolds to go pound sand if I like, and the best he can do is not link to me. Of course, knowing his sense of humor, he’s more likely to link to me with a derisive “Heh.”, defusing my suggestion of pounding sand pre-emptively. Either way, if Gen. Reynolds ever finds his way through Marietta, I’ll have a bottle of homebrew waiting 
As for what convinced me to “serve” in the “Army of Davids”? To that, I can only say the same thing I’d expect to hear from my fellow warriors: I’m doing this to make me happy, and any benefit you receive is ancillary.
Liberty Corner linked with Carnival of Liberty XLIX
Below The Beltway linked with Around The `Sphere
June 3, 2006
This Explanation Stinks
Somebody light a match, fer crissakes!
Neal from autodogmatic uses a rather interesting approach to the problem of externalities:
Back to the original topic of this post. Passing gas is a negative externality. I reap all of the benefits while paying the majority of the cost (I’ll leave you to figure out what exactly those benefits/costs are). However, my neighbors also pay part of the price of my human air pollution.
You may believe this post crass, but understanding how farting is a negative externality can help explain human behavior.
For example, if I let one rip near my wife, I’m likely to bear more of the external cost of breaking wind: she’s going to be pissed! Thus, I’m less prone to engage in such behavior. An example we can all relate to would be where you are on an elevator with one other person. If you cut the cheese (assuming you make no sound), it doesn’t matter: not only are you going to know it was you, they’re going to know it was you, toot. The highly awkward nature of this hypothetical situation results in a specific social cost to the offender. And as a result, you’re less likely to pass gas in such a situation.
Contrast this one-on-one example with a packed elevator. Assuming you can slide one out silently, no one will ever know (for sure) it was you. Thus, you’re much more likely to poot.
Of course, I should point out that when you’re hanging out with your buddies, it becomes a positive externality, that everyone gets a kick out of… But that has more to do with the sick depravities of guys than anything else.
But either way, a very good analogy. I already used it to explain the problem of externalities to my wife, which I’m sure was incredibly interesting
May 25, 2006
Good News— But How Good?
Economy dashes ahead at 5.3 percent pace
Emerging from a year-end rut, the economy dashed ahead in the opening quarter of this year at a 5.3 percent pace, the fastest in 2 1/2 years and even stronger than previously thought.
The new snapshot showed gross domestic product during the January-to-March period exceeded the 4.8 percent annual rate initially estimated a month ago, the Commerce Department reported Thursday.
Gross domestic product measures the value of all goods and services produced within the United States and is considered the best barometer of the country’s economic fitness.
The upgraded reading on GDP, based on more complete information, mostly reflected stronger U.S. exports and better inventory building by businesses.
5.3 percent is absolutely blazing…
But considering the inflation talk I’m hearing from the hardcore gold-standard folks, I worry a little bit about what this number means. For those of you economics folks who read this blog regularly (i.e. Perry or Uncle Jack), can you answer a question?
Does inflation factor into this number? If so, how prominently? Elsewhere in the article, they were discussing a 2% rise in core consumer prices, following a 2.4% increase in Q4′05… Either way you look at it, 5.3% reported GDP growth indicates a humming economy, even if that number is masking some inflation. But I would hope to know just how much REAL growth is really there, if inflation is being counted.
May 16, 2006
Follow The Money
As I mentioned previously, I’ve been attending a new church. The theme recently has been the things within ourselves which grow to burden us, and how to avoid them. This week, perfect to be picked apart by someone like me, was greed (link points to the sermon streamed from the church web site).
Some of it was good, some of it was bad. One part that resonates, of course, is that where your treasure (i.e. money) goes, there your heart will go also. The point was made about stocks. When you invest in a stock, that stock doesn’t remain an impersonal company that you really don’t care about. It’s your baby. You’re researching constantly online to make sure the company is comporting itself the way you expect, worrying about their business practices, etc. All of a sudden, you’re not giving just your money to the company you’ve bought a part of, you’re giving them a piece of yourself.
In the sermon, there was a big message about how giving is good, and all that. I’m not too concerned about that at the moment. That’s not to say that I disagree, of course, as I feel very good when I give help and assistance, whether monetary or not, to people I care about. But the morality angle is simply an extension of the idea that where your money goes, goes everything.
Why, of course, do our money and our hearts follow each other so closely? To understand, we need to understand what money is. Money is the physical representation of our time. Time, not money, is the most precious resource in the world. Short of major life-lengthening medical breakthroughs (which will probably happen within 20-50 years), we’ve only got a century or so to get it all done. So what is money? Money is the value of our time when we’re working. Why do we want raises? Because we think our time should be more valuable than it is.
Ben Franklin said that “Time is Money“. But money is also time. Money is what we earn for spending our time, and money is normally required to be spent to enjoy our time. Money is freedom: an unlimited supply of money ensures that we have complete control over our time. When we give our money to another fellow human being, we feel like we are investing in that person, and have a vested interest in seeing them succeed. When we have our money taken by our government, we have a feeling not that we’re working for ourselves (or even for our fellow man, most of the time), but that we’re working for our government. And when our government forcibly takes part of our money, it makes us feel like they’re forcibly taking a part of our freedom.
This, of course, tends to be the most crippling aspect of debt. Once you figure out what debt is doing to you, it creates a pit in your stomach. You look not at the money you earn as paying for the things you want or need, you see it paying for the privilege of borrowing money for what you wanted or needed months or years ago. For every dollar you borrow, you pay interest. Each dollar of that interest is the quantifiable punishment for a bad mistake you’ve made with your money in the past.
On the flip side, of course, is what happens when you have savings. When you have savings, you’re paying yourself for your time, and you’re earning interest on those payments. You feel a great sense of self-worth when your actual monetary worth is in the black. You have the feeling that you have built something, and what you have built is an investment in yourself.
I find myself in a strange conundrum between these two situations. I’m a poor handler of monetary affairs, and tend not to have much self-control when it comes to spending. So I’ve got a fair amount of credit card debt, when hangs over my head like a dagger. Yet at the same time, I’ve been contributing to 401k for a few years, and have built a nice little start to a nest egg. At the moment, if I liquidated the 401k, I could pay off most (if not all) of the debt, and since the debt carries higher interest than I earn on the savings, it might even make some economic sense.
Yet I can’t bring myself to do something like that. The savings I’ve built are an accomplishment. And given the emotional state of money, they are an accomplishment in building myself. Would there be some sense in starting over at square one, clearing the debt? Maybe, but I can’t bear the thought of seeing those savings disappear, even if there was a tangible benefit in another area. That is money I’ve paid to myself. That is my “fit hits the shan” fund. That is the reminder to me that I’m doing at least something right financially.
Some have said that the love of money is the root of all evil. Perhaps the love of money itself might be, as the love of money itself leads one to do anything to achieve it. But the love of what money represents— personal accomplishment and personal freedom— can lead one to pursue greatness. I don’t desire to be rich to throw my success in the face of others, I desire to be rich to increase my own ability to live freely.
May 11, 2006
Atlas May Shrug
I might be getting ahead of myself to declare Warren of Coyote Blog to be Atlas, holding the world up. But he may find himself giving up a portion of his business, becuase operating under proposed government regulation is just too risky (italicized portion from this story):
Last week the House of Representatives expressed its collective outrage over high gas prices by voting as a herd, 389-34, to make gasoline “price gouging” a federal felony.
Really. This command and control legislation reads like the kind of law passed by the old Soviet Politburo. If an oil company is found guilty of charging a “grossly excessive” price for gasoline, it could face a $250 million fine and its executives face imprisonment. Even neighborhood service station owners could be sentenced to two years in jail and a $2 million fine for the high crime of charging too much at the pump.
…
My company operates several retail gasoline outlets. We at best break even and probably lose money on the gas, but we continue to sell it to bring people into our stores and because there are so few other local retailers (we are in very rural areas). If this law passes, I am just not going to risk going to jail because some economically ignorant jury in the future can’t figure out that gas is more expensive in rural areas or because some tragic and sympathetic figure decides to sue me. I’m out. And if someone observes that in the rural areas in which we operate, consumers will probably be worse off if we exit, then Congress should have thought of that before they passed this Marxist-populist legislation.
You know what? Good for him. I’m sorry, but I’m not going to risk 2 years and $2 million for a couple of cents of profit on gasoline, and I don’t expect somebody else to do so.
If this passes, of course, it’s just going to hurt consumers. The same consumers that will then scream for more government intervention, further screwing the whole thing up. They don’t understand the implications of voting based on their own economic ignorance, and can’t see that politicians are willing to sell them up the river just to increase their own power.
This legislation, in fact, is a boon to the major gasoline chains. They’re the ones that know that if they get investigated, their armies of lawyers will keep them clean. It’s the little guys, like Warren, who would rather hang up their spurs than face the risk. Increased regulation helps big corporations improve market share, and will only end up creating higher prices and harder-to-find gas for consumers. I said before that this problem will only improve when individuals start to see government as the problem, not the solution.
May 9, 2006
Selling Off Government Land
My wife was telling me tonight about a news story in Boulder City, NV. She said something about selling land to the government, and everyone in town was going to get rich. Well, obviously, my interest was piqued. If they’re getting rich selling land to the government, they’re probably getting rich on my dime. Knowing our government, I know it’s not a good investment with my tax dollars. Thankfully, though, it wasn’t what she said…
Initiative could make millionaires of everyone in Nevada city
Some local activists think Boulder City, where gambling has been banned for all its 75 years, is sitting on a jackpot: 167 square miles of undeveloped open land in one of the nation’s hottest real-estate markets.
Their proposal could make millionaires of every man, woman and child in the town of about 15,000 — that is, as long as city officials are wrong when they say the plan would never stand court scrutiny.
Incidentally, don’t pack your bags. Only people living in Boulder City as of March 31 would be eligible.
Eldorado Valley, an expanse of dry lake bed dotted by creosote bushes and flanked by red-rock mountains, is worth $15 billion to $50 billion, the activists estimate. That, they say, is too much dough and too much responsibility for its City Council to handle.
…
One proposal would require the land to remain untouched, set aside for the preservation of the endangered desert tortoise, public recreation and possible solar-power development.
The other would force the City Council to sell the property to the highest bidder. Ten percent of the money would pay off the city debt, build a bypass highway around town and fund education. Ninety percent would be distributed to city residents.
“The highest bidder”. Those are the words I like to hear. Since I’m not a big fan of huge tracts of land owned by governments, opening that land up to private development is a big plus. If the people of the town who owns it (instead of the city council) get rich, I’ll accept that. Considering how much real estate in this country is owned by government, it’s high time we start selling it off.
May 7, 2006
Better Fuel Efficiency?
Or chrome? Ford is banking on the fact that you’ll pick the latter.
At least someone else is actually coming up with fresh ideas:
First Fuel Banks Locks in Today’s Rates
Most motorists are feeling the pain as gasoline creeps toward, or over, $3 a gallon — but not Art Altrichter.
“This feels pretty good!” Altrichter said as he filled the tank of his Ford F-150 pickup for $2.03 a gallon on Thursday, when the average here was $2.73. “Right now, to be a few pennies over $2, when it’s as high as it is? That’s a real deal.”
A year ago, the retired milk truck driver bought 500 gallons of gas at First Fuel Banks, locking it in at the then-current price of $2.03 a gallon. He taps that reserve whenever gas rises above that mark. If the retail price drops below $2.03, he can leave his reserve alone and buy elsewhere.
First Fuel Banks bills itself as the only retailer in the country where customers can buy gasoline for the future and hedge against rising prices. It advertises no service charge and no storage charge, just a $1 lifetime membership fee.
Altrichter said one of his neighbors got in at First Fuel Banks several years ago and is now is withdrawing from a reserve that cost him 99 cents a gallon. “How about that!” he said.
I’m not sure how they’re making money at this, but from the little I saw on the First Fuel website, it doesn’t look like tax dollars are subsidizing this, so I’m all for it.
April 29, 2006
Do We Need Passenger Rail?
Maybe, maybe we do. But we don’t need to pay for it with government funds. The below story suggests Amtrak might get knocked off the public teat, but I won’t believe it until I see it…
After 35 Years, Amtrak’s Future Uncertain
Last year, President Bush proposed no federal aid for Amtrak. Its highly touted high-speed train was sidelined for months with brake problems and its president was fired. Still, the passenger railroad chugs on toward its 35th birthday Monday.
To mark the occasion, a group of analysts who have followed Amtrak’s woes over the years will gather in Washington to discuss what critics call Amtrak’s “35 years of subsidies, waste and deception.”
“Amtrak keeps making promises that things would get better, one promise after another,” said Joseph Vranich, a former Amtrak spokesman and former member of the Amtrak Reform Council. “But people fall for the promises, and Amtrak survives.”
…
David Hughes, Amtrak’s acting president, said the railroad’s future is bright. It has begun a host of initiatives to revamp some long-distance routes, streamline its finances and boost customer service while looking at several cost-cutting initiatives such as revamping its food and beverage service.
Hughes said one important thing Amtrak has accomplished was agreeing on a mission statement with its management, board of directors and the Transportation Department. The mission is to provide the country with “safe, reliable intercity passenger service in an economically sound manner that will exceed customer expectations.”
The real question, though, is whether intercity passenger rail service is even necessary. The railroads are tremendously important to this country for shipping goods, but there are much easier and cheaper ways to travel as a passenger.
As a quick test, I looked up train fare from Atlanta to Chicago. Since I regularly travel there to see family, I wanted to see how it compared to airfare. Well, Amtrak doesn’t run a direct route between the two. So a round-trip ticket cost about $380, with a stop each way in Washington, DC. And due to the extra time of those trips, the total travel time was about 30 hours each way.
Compare that to an airline flight. The same trip, by air, costs about $200 and takes about 2 hours each way. Hell, to get to Chicago is only about a 11-12 hour DRIVE, and wouldn’t cost more than about $100 in gas each way. I even checked Greyhound, and it was about a 15-hour trip, at a cost of $130 round-trip.
Of course, I’m sure I can be accused of cherry-picking the data with an Atlanta -> Chicago trip. I’m sure some other routes are more competitive in cost. In all honesty, it was simply the first choice I thought of, as it’s two major cities I’m familiar with for both auto and air travel. But if you’re going to offer intercity travel, without any direct service between the largest city in the Southeast and the largest city in the Midwest, aren’t you shooting yourself in the foot?
It’s very simple. For any long trip, it’s much more worthwhile to fly. For shorter trips, though, it might be profitable and convenient… IN WHICH CASE PRIVATE ENTERPRISE CAN TAKE CARE OF IT. And where rail lines aren’t available, bus service is.
There is absolutely no reason that American taxpayers need to continue wasting money on passenger rail service. If Amtrak can’t get themselves to profitability, it’s time for them to disappear.
A Stitch in Haste linked with Two Anniversaries
April 27, 2006
It is our most modest receptacle…
Woman nabbed driving corpse across country
A 53-year-old German woman who was driving her dead mother across country to save on mortuary transportation costs was fined by police for disturbing a dead person’s peace.
“You’re not allowed to transport dead people in your private car,” said Ralf Schomisch, police spokesman in Koblenz, where the car was found after a tip-off from a mortuary.
“The corpse was on the back seat without a seat belt, which in this case didn’t really matter. But it was covered up with clothing. It is a misdemeanor.”
He said the woman, who was not identified, was charged with violating burial laws and disturbing a dead person’s peace. She would face a modest fine, Schomisch said.
[emphasis added]
So what’s really different between a private car transporting the body, and a mortuary vehicle transporting the body? Does not a mortuary “disturb a dead person’s peace” when they transport the body?
I think I pretty much know what happened here. I’ll bet that in Germany, the mortician’s lobby has pretty well ensured that only licensed mortuaries can transport bodies, and use that government protection to charge outlandish sums to do so. It’s the same thing you’d see with any government-created monopoly. The mortuary tipped off the cops— not out of concern for anyone’s “peace”— but out of concern for their own profit…
Hat Tip: Uncle Jack
April 5, 2006
Outsourcing at Both Sides
In the outsourcing debate, there are always emotions that carry a lot of baggage. After all, everyone knows someone who’s been laid off, and almost everyone has a friend whose job moved overseas. Whether it’s manufacturing, IT, or any number of other industries, jobs are liquid things, and when someone loses one due to cost-cutting, outsourcing is an easy scapegoat. After all, when someone “over there” is doing the job you once did, it doesn’t do a lot for your feeling of self-worth. And when you start seeing people in your own industry getting the axe for cheaper labor elsewhere, you start to worry about your own job security.
Despite all that, I’m a firm believer in the idea that free markets must be allowed to work. Of course, people look at an engineer and say, “Just you wait: One of these days, they’re going to start outsourcing your job. Then you’ll feel differently.”
Those people are wrong. I’ve spent a mere 5 1/2 years in the job market, and I’ve seen outsourcing from both sides. When I first began working, I was up in Silicon Valley at the peak of the technology boom. Which is to say, when I started, I had no experience, no seniority, and the job market was falling apart all around me. My job was an “Applications Engineer”. Basically at the time, it was an advanced technical support role. Without going into who my employer was, my job consisted of working with engineers who were using our products, and helping them to work through the design issues they faced. 8-12 hours a week, this consisted of answering phones on a hotline, and the rest of the week was spent supporting more in-depth inquiries and our field engineers.
And I was outsourced. Not overseas, mind you. But still outsourced. After surviving a hiring freeze 2 months after I started, and surviving the first round of layoffs, our department at the time was about 50 people. Only those of us with little experience with the company were still on the hotline. To be fair, the hotline portion of our job didn’t really require the services of someone with a 4-year Electrical Engineering degree. And the company understood that. They axed 17 people that day (about 12 of the low-experience folks like me, and 5 others). Part of what they were doing was streamlining simply to cut costs, but they entirely closed the hotline at that location. Instead, they hired people with 2-year associates degrees down in San Diego to staff the hotline full-time. Those folks were available for about half the cost of a full-time engineer in San Jose, so they could hire enough to keep the hotline fully staffed, even counting transition and training costs, and still improve the bottom line. While it wasn’t seeing my job go to China or India, it hurt me just as much.
That began the rough time in my life, when I had to find another job. I spent a few more months in San Jose, then moved southward with my wife (who had at the time just become my fiancee, with the help of my 401k funds!). She was having trouble, having survived a few layoffs, an office move, and the general insanity of Silicon Valley at that time was causing her to have anxiety attacks. Eventually I found a job, so did she, we got married, and it’s been looking up ever since. (FYI, if you’re ever unemployed, having a motorcycle definitely makes it a little more pleasant!)
But here’s where it gets ironic. The job I found was with a company based in Asia. No longer was my job outsourced, my whole industry was outsourced and I became an Applications Engineer here for a company there, and now I’m in the business of helping replace American-designed products with those designed and built in Taiwan and China. In my industry, that’s just the way things go. The computer motherboard market is mature enough that it’s so much cheaper to have the work done there, there’s no point to doing it here. The only domestic competition we face are in custom products, where having local design engineers is enough of a boon to American-based competitors where we only win a majority of designs, instead of a crushing majority. The shoe is on the other hand now!
We’re in a global market, folks. But let’s be honest. We’re not all fighting for a slice of a small pie. The pie keeps getting bigger and bigger. Taiwanese engineers aren’t replacing American engineers. In this world, more engineers (unlike lawyers!) are a good thing. The more scientists and engineers we have in this world, the faster the rate of technological progress will occur. And that’s what makes the great pie get bigger. When engineers get laid off, they don’t go start flipping burgers. John Kerry might talk about how jobs are being replaced by worse jobs, but people don’t simply give up. They become consultants. Or they find a new job.
Or, they create a whole new company. During the bad days when I was unemployed, I read a story about engineers in San Francisco who had all gotten laid off, and had actually been living in a shelter. In that shelter they created an idea for a brand new startup! I never saw a follow up, and I don’t know whether the company succeeded, but the negative effects of outsourcing are purely temporary. It’s tough to tell that to someone who has been laid off, but it’s no less true.
America should take one lesson away from this, however. It is a good thing to slow down outsourcing at the margins. Reforming our tax system and regulatory bureaucracy (and fixing our public schooling system) will go a long way to slowing down outsourcing, and to enticing companies in other high-standard-of-living countries to set up shop here. But we need to understand that some outsourcing will never be stopped, and that it shouldn’t be stopped. What makes America great is people, and freeing up people from jobs who can be done more efficiently elsewhere gives them freedom to focus on other things. Computers are now becoming mature technology. It wouldn’t be smart for the US to have remained an agrarian society after the industrial revolution, and we won’t survive as a manufacturing power after the information revolution. Yet nanotechnology, medical research, advances in bioengineering and genetics are all occurring here on our shores, because America is still the leader of the industrial world. We have stability, we have wonderful universities, and compared to most of Europe, we have a favorable business climate. As long as we keep those things, America will always be a formidable world competitor.
The Unrepentant Individual linked with Carnival Time!
Business Opportunities Weblog | Carnival of the Capitalists linked with Business Opportunities Weblog | Carnival of the Capitalists
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anytime you can admit to voting for things you should be against for purely political reasons with such impunity, you should be thrown out of office. jeez.
who’s fault is it exactly that someone with a minimum wage job might choose to start a family?
Comment by IndianCowboy — July 27, 2006 @ 9:57 pm
Brad,
Isn’t this the same John Bohener that some of us were hoping would be a good guy just a few months ago ?
Remind me again why I should vote Republican (or vote at all) in November.
Comment by Doug Mataconis — July 27, 2006 @ 10:00 pm
[...] H/T: Brad Warbiany [link] [...]
Pingback by Below The Beltway » Blog Archive » Libertarians And The GOP: What’s The Point Anymore ? — July 27, 2006 @ 10:27 pm
“The Republicans are showing, once again, that they’re just as statist as Democrats, but with some nice religious authoritarianism and hyper-nationalism thrown in on top of it.”
The exact reason I dont vote republican, or party really.
I enjoy the blog btw, nice work
Comment by Eric — July 28, 2006 @ 8:32 pm