Tag Archives: Free Market

Corportations Are Evel Greedy Killers

Further evidence that the government is too slow and inefficient to react and that the private space will always do a better job:

On Tuesday federal officials said that there had been at least 19 previous outbreaks involving more than 1,000 illnesses and three deaths resulting from cantaloupe consumption since 1984. The current outbreak, caused by cantaloupes grown in Colorado, has sickened more than 70 people and killed at least 13, making it the deadliest food-borne outbreak in the United States in more than a decade.

“I don’t think the cantaloupe industry can continue on doing the very same thing and expecting a different result,” said Craig Wilson, the head of food safety for Costco, the Seattle-based warehouse retailer, which is regarded as a leader in requiring food safety measures from its suppliers.

Why would a private company do this?

It turns out that a company is more profitable when its products don’t kill its customers.

Markets In Everything: Domain Names

If you’re lucky you too can make money on the internet:

The owner of the domain names Romney-Perry2012.com and Perry-Romney2012.com has put a price on the rights to the websites: $50,000 each.

The auction is a clear sign that the presidential race is heating up, as the cottage industry of presidential domain names gears up for profit.

Funny world.

Disaster Planning: Free Market vs. Government

Sadly, most conversations regarding damage, preparedness and reaction to catastrophes take place during or AFTER an event takes place.  Such is the nature of people, and is what separates us from even squirrels.  Even they gather for the winter.

However, there are people, organizations who do look ahead and plan.  They take the responsibility seriously and give great thought to the subject.  These people study disasters and recoveries.  In fact, the organizations they work in are aptly named; Disaster Recovery.  We have one for my company, in fact, we have staff at my building.

As with anything, there are certain people more skilled at this than others.  In fact, again, just like we would expect, there are groups of people, organizations, that are better at it than other groups of people.  It should not surprise anyone that when it comes to government preparedness and the private sector’s planning, who’s side I’ll take.

Consider this: Via Carpe Diem

Forecasters don’t expect Hurricane Irene to make landfall until Saturday. But for nearly a week now, big-box retailers like Walmart and Home Depot have been getting ready.

They’ve deployed hundreds of trucks carrying everything from plywood to Pop-Tarts to stores in the storm’s path. It’s all possible because these retailers have turned hurricane preparation into a science.

At Home Depot’s Hurricane Command Center in Atlanta, for example, about 100 associates have been trying to anticipate how Irene will affect its East Coast stores from the Carolinas to New York.

At times like this, the Command Center looks much like NASA Mission Control during a shuttle launch, says Russ Householder, the company’s emergency-response captain.

“We’ve got all the key news agencies on the big screens up front,” he says. “We’re also monitoring our store sales so we can better be in tune to what’s happening in our stores, and we’re also connected live one-on-one with district managers in the impacted areas.”

Walmart is able to anticipate surges in demand during emergencies by using a huge historical database of sales from each store as well as sophisticated predictive techniques, Cooper says.

He says that with Irene on the way, that system is helping them allocate things like batteries, ready-to-eat foods and cleaning supplies to areas in the storm’s path.

Walmart also has the advantage of having a staff meteorologist, Cooper says.

Walmart’s preparedness system helped the company emerge as a hero after Katrina, says Steve Horwitz, an economist at St. Lawrence University in Canton, N.Y., who studied the company’s response.

“They know exactly what people want after a hurricane,” he says. “One of my favorite stories from Katrina is that the most popular food item after a major storm like this is strawberry Pop-Tarts.”

Wanna see what Wal-Mart’s preparation for moving supplies in, before Katrina, looked like?

Care to see the Government’s preparation for moving people OUT?

As 1,000’s of people needed to leave the city, a city that sits BELOW sea level, the government left a fleet of buses to simply flood.

Government simply can not DO like the private, for profit, sector operating in a free market.

 

Capitalism Gone Wrong?

6 months ago I was involved in a head on collision as I attempted to turn left onto  the Inter-State near where I live.   I suspect that the little college girl was texting right as she managed to miss the first car in front  of me turning left and hit me, the second car.  However, I can’t know for sure. I was lucky that night and walked away from the wreck.  Because I suffered no injuries and her insurance eventually covered my car I didn’t press charges or bring suit; I haven’t seen her since.  In fact, I’ve waited this 6 months to say anything about it on anything resembling “social-media” in the event some consequence of that accident made itself known.

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Stagnant Wages and Employee Compensation

Do you feel that you are fairly compensated at work?  That is, are you getting from the company a fair return for what you give?  Maybe, maybe not.  I betcha that in this economy more people feel that they are NOT earning what they feel they are worth.

Is that true, though, over time?  Has out income stopped keeping pace with the times?  According to some, it would seem so:

It would seem that since 1970 or so, wages in America have been flat.  In fact, for much of the time since 1970, we have seen wages below the 1970 level.  And this fact is to be used against us to demonstrate that somehow the working class, the middle class, has it worse of now than in, well, than in 1969 apparently.

But is that the whole story?

I don’t think so:

…the level of productivity doubled in the U.S. non-farm business sector between 1970 and 2006. Wages, or more accurately total compensation per hour, increased at approximately the same annual rate during that period — if nominal compensation is adjusted for inflation in the same way as the nominal output measure that is used to calculate productivity.

Total employee compensation was 66 percent of national income in 1970 and 64 percent in 2006. This measure of the labor compensation share has been remarkably stable since the 1970s. It rose from an average of 62 percent in the 1960s to 66 percent in the 1970s and 1980s, and then declined to 65 percent in the 1990s where it has remained from 2000 until the end of 2007.

From the actual report:

Another useful way to examine changes in the compensation share is to
focus on the nonfinancial corporate sector (as presented in table B14 of the 2007 Economic Report of the President.) This eliminates some of the very highly compensated individuals in the financial sector. It also avoids the problems raised by separating capital and labor income of sole proprietors . Comparing the compensation paid by the nonfinancial corporations to the net value added of the nonfinancial corporations reinforces the conclusions based on the larger scope of industries. In 1970 compensation was 74 percent of the value added of the nonfinancial corporate sector. In 2006, it was 73 percent. The decade averages rose from 70 percent in the 1960s and were very stable after that: 73 percent in the 1970s and 1990s, 74 percent in the 1980s and 75 percent since 2000.

What’s this all mean?

It means that there are other ways to compensate individual besides “wages”.  For proof of this, listen to the screeching of the Unionista as he complains that having to pay for his own health insurance (actually, just 12% of it) is a “pay cut”.  Of course, that implies that the benefit was first a “pay”, or what we in the biz call a “compensation”.  Similar to health benefits are paid days off, training, 401k and sick days.  To name a few.

I “get” a pager.

So, what does that graph look like if you graph compensation rather than just cash?

That there is total hourly compensation since 1950.  If you notice, right at 1970, we have a massive arc upwards.  Contrary to what you hear, the worker is better off than he was.

Drill Baby Drill

Three words. Two if you don’t count ’em twice.

But they’re pretty powerful.

On each side, Left and Right, those words elicit emotion. On one, it brings to mind an independence. On an ability to depend on one’s self for the requisite needs.

On the other, it brings to mind ugly environmental dangers, global warming and corporate greed.

But the biggest argument against increasing our domestic output of oil is that it simply won’t impact the price of a gallon of gas. The incremental gains that we would see will take years to realize. And even then they won’t amount to any meaningful impact on the global supply of oil.

I have a thought experiment.

If the addition of oil to the market won’t lower the price, then the reduction of oil to the market shouldn’t raise the price.

Right?

Wrong.

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Economics: Supply and Deman – Twins Style

So, yeah, the Twins have been horrible since the start of the season.  Some of that has to do with some guys getting hurt, to be sure, but I think most of it has to do with not having very many good players.

However, as fate would have it, the Twins play in a  horrible division of baseball and are only 6 games out of 1st.

The Twins think they’re “in it”.

And so too, it seems, do the fans:

The defending American League Central champs struggled out of the gate with a mixture of poor play and injuries. Throw in some inclement weather and it was the “perfect storm” according to Michael Nowakowski, one of the owners of Ticket King, an online ticket broker. A representative from StubHub agreed, saying brokers were “giving away 400 to 500 tickets a game.”

As he negotiated a deal Thursday, one scalper said he was selling $60 tickets for $5 early in the season. “There was an abundance of tickets on the street. It was bad,” he said. But scalpers were getting as much as $35 more than face value per ticket for the first game following the All-Star break.

In a market that’s widely seen as free, the street, literally, is determining the value of a Twins game.

Fascinating.

An interesting side note:  Notice that in each case, the two parties that exchanged goods–one money for tickets, the other tickets for money–walked away feeling “richer” than they did when they met.  One party was able to ttrade some amount of cash for something that meant more to them; a baseball game.  The other party was able to trade a baseball game for something that meant more to them; cash.

This is the text book example of how trade creates wealth.

Markets In Everything: Domain Names

It seems that where anything is bought and sold, certain rules are true:

A new index launched on Wednesday shows for the first time that even domain names can offer a window into the economy, just as stocks do.

The first-ever domain pricing index, which was created by economist Dr. Thies Lindenthal, joins the ranks of similar economic indicators that track everything from consumer products and homes to truck loads.

Domain prices rapidly gained in value from 2006 through 2007 before peaking in September of that year prior to the recession. Not surprisingly, so did the Nasdaq.

Shortly after, when valuations across the board started to fall, both tumbled. The biggest drop was in the heart of the recession between September 2007 and January 2009, with the IDNX and Nasdaq sliding about 31% and 50%, respectively.

Both started to gradually rebound in the first half of 2009 and now sit at their highest valuation since the IDNX began tracking domains in 2005.

While the two are neatly aligned, the IDNX always seems to stay ahead of the Nasdaq and remains stable when compared with Google (GOOG), showing it is less volatile in the face of severe economic headwinds.

Baseball And Hopscotch Are More Fun

It’s no secret, the hard makes the great.

This is true in sports, in business and in baseball.

That it wouldn’t be equally so in governing is silly.  Look, do I want people to do the right thing?  Of course.  Do I want money to flow from those that have to those that need?  Yes.  Is it hard to manage a group of people into doing that right thing?  Without a doubt.  Would it be easier to just pass a law? For sure.

But there can be little doubt that a group of people voting that property be transferred from one to another is as tyrannical as a feudal king simply taking it.

Liberty is tough; but the tough is what makes it great.  Demonstrated here via

How To Break A Monopoly

We hate monopolies.

People fear ’em and the government works to find and destroy ’em.

They’re bad and they’re evil; scourges  on civilization.

I mostly agree.  I think monopolies would be able to take advantage of markets and prices and demand and supply to benefit themselves without being subject to normal natural checks and balances.

With that said, I do not, do NOT, believe that a monopoly can exits in an open market without the aid of government.

That is government regulation creates and sustains monopolies, not free markets.

Thought experiment:  Think of one single naturally occurring monopoly in the real world.

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