Quotulatiousness

August 25, 2016

RMS Queen Mary “was one of the epic government bailout boondoggles of the 20th century”

Filed under: Britain, Business — Tags: , , , , , — Nicholas @ 03:00

At Reason, Glenn Garvin looks at the role government subsidies had in the survival of the Cunard Line and the building of the RMS Queen Mary:

The most interesting thing about the Queen Mary, which for several decades was the largest passenger ship ever built, is not the 20-foot propellers so perfectly balanced that they could be spun with a flick of the wrist; or the 35,000 tons of metal that went into its construction; or the 10 million rivets that hold the whole thing together. It’s not even the still-mysterious question of how the ship became the springboard for the very first cheap-shot joke about Joan Collins. (Q. What’s the difference between Joan Collins and the Queen Mary? A. It takes a few tugs to get the Queen Mary out of her slip.)

No, the really special thing about the Queen Mary is that it was one of the epic government bailout boondoggles of the 20th century. In 1931, barely a year into the ship’s construction, the Cunard line went broke. The British dutifully forked over a loan of a staggering 9.5 million pounds — that’s $684 million in 2016 dollars — to keep the company afloat (dreadful pun not intended until I actually typed it). Which, as the documentary Mighty Ship at War: The Queen Mary notes, saved a whopping 2,000 jobs — at $342,000 a pop, I can only conclude that shipping lines employ a lot more neurosurgeons than I was aware — and, more importantly, England’s image: “Great Britain was at risk of losing its reputation as the world’s leading maritime nation.”

Its wide-eyed admiration of pork-slinging statecraft aside, Mighty Ship at War is a peppy and quite watchable little documentary about an oddball chapter in maritime history: the conversion of luxury liners into troop transports during World War II. When war broke out in Europe in 1939, unleashing German submarine wolfpacks on commercial shipping in the Atlantic, the cruise ships were drafted just like able-bodied men. They even got the maritime equivalent of a GI haircut, repainted a dull naval gray while their posh staterooms were ripped out to make way for towering stacks of bunks.

Even before its military makeover, Mighty Ship at War relates, the Queen Mary had found its business model remade by Europe’s gathering war clouds. Because the ship’s London-to-New York route included a stop in Cherbourg, France, it became the escape route of choice for many Jews fleeing Europe. Even families of modest means often traveled in plutocratic splendor, blowing their life savings on first-class tickets, because the Germans would confiscate any money or valuables the refugees tried to carry with them. “Give the money to the Brits, not the damn Nazis,” one refugee who made the crossing as a small child remembers his parents saying. By early 1939, every London departure of the Queen Mary was sold out.

August 22, 2016

For newspapers, paywalls are (not) the answer

Filed under: Business, Football, Media — Tags: , , — Nicholas @ 03:00

At Techdirt, Mike Masnick uses small, easily understood words to explain why your local newspaper is cutting its own financial throat by implementing a paywall:

For many years, while some journalists (and newspaper execs) have been insisting that a paywall is “the answer” for the declining news business, we’ve been pointing out how fundamentally stupid paywalls are for the news. Without going into all of the arguments again, the short version is this: the business of newspapers has never really been “the news business” (no matter how much they insist otherwise). It’s always been the community and attention business. And in the past they were able to command such attention and build a community around news because they didn’t have much competition. But the competitive landscape for community and attention has changed (massively) thanks to the internet. And putting up a paywall makes it worse. In most cases, it’s limiting the ability of these newspapers to build communities or get attention, and actively pushing people away.

And, yes, sure, people will point to the NY Times, the Wall Street Journal and the Financial Times as proof that “paywalls work.” But earth to basically every other publication: you’re not one of those publications. The paywalls there only work because of the unique content they have, and even then they don’t work as well as most people think.

Not surprisingly, more and more newspapers that bet on paywalls are discovering that they don’t really work that well and were a waste of time and effort — and may have driven away even more readers.

In my case, I look at various newspapers for links to share with my tiny audience of regular readers. Once upon a time, I’d frequently link to the two big Minnesota newspapers, the Minneapolis Star Tribune and the St. Paul Pioneer Press, mostly because I was reading their sports pages for information about my favourite football team, but fairly often when they carried other news of interest, I’d share the link with my readers. When the Star Tribune implemented a paywall, I pretty much stopped going there (they allow 10 free articles per month, and even if I only read the odd Jim Souhan column, I’d already be beyond my limit). Given the thriving fan community for the Vikings, I barely miss the mainstream coverage (but I suspect they miss me and the thousands of other out-of-state visitors they used to get in the pre-paywall days).

August 20, 2016

“[S]tudio executives from the wage-gap capital of the world mansplain feminism”

Filed under: Business, Media — Tags: , , , — Nicholas @ 02:00

Bre Payton wants Hollywood to start treating women as people:

Here’s how I imagine the pitch meeting for Ocean’s 8 went down in a smoky executive boardroom somewhere in Warner Bros.’ studio office.

    Balding Male Executive #1: Gee, Colombia Pictures got loudly applauded for that lousy ‘Ghostbusters’ reboot. We could really use some nice tweets from Lena Dunham.

    Male Executive #2: You know she doesn’t tweet anything herself, right?

    Glasses-wearing Male Executive #3: We could just make another biopic about a queen. . .

    Male Executive #2: I’ve got it! We’ll pick a well-loved film and recast all the male leads with female actors.

    Balding Male Executive #1: Brilliant! And we can pay them all less because they’re ALL women.

    Executive #2: I’ll make some calls.

I’m not the only one who’s sick of having studio executives from the wage-gap capital of the world mansplain feminism. As Amy Roberts points out, Hollywood seems to only be interested in throwing “cinematic slops” to women.

“In 2016, why is it that the movie industry feels as though it can only entrust a blockbuster movie to women as long as the film’s story and characters are based on already successful male ones?” she writes.

She has a point — this is Hollywood — the place where women are consistently paid less than men, the town that forgets about women the second they turn 40, the place where it’s hard for women to get roles any deeper than the shallow end of a kiddie pool, the city that hides its actresses of color.

August 10, 2016

QotD: “Pro-business” versus “Pro-consumer”

In popular discourse, America is said to be more “pro-business” than is France. When people use this term “pro-business” they typically have in mind some vague notion of a government policy made up of low-ish taxes and not a great deal of government regulation. That is, “pro-business” is commonly used to mean a free, or free-ish, market.

But such language is mistaken.

A true free market is at its core pro-consumer. In a genuinely free-market economy, businesses are valued only insofar as they serve consumers. The performance of a genuinely free-market economy is assessed by how well it satisfies, over time, the demands of consumers spending their own money and not by how well it satisfies the demands of business owners and managers.

Obviously, because businesses are a useful – indeed, practically indispensable – means of abundantly satisfying consumers’ demands, government policies that obstruct the smooth operation of these means are undesirable. But such policies that obstruct or discourage business operations are economically undesirable not because they harm businesses but, rather, because they harm consumers.

Anyway, for all of its faults, American culture and policy are actually much less pro-business than are the culture and policy of France. If you’re really looking for a government that is deeply pro-business – one that regards the protection of existing businesses as a worthy end in and of itself – one that forcibly transfers resources from taxpayers, consumers, and other non-businesses in order to promote the material interests of existing businesses – look at France. You’ll find there what you seek. In France you’ll find one of the most business-friendly policy regimes on the face of the earth. (HT Chris Meisenzahl)

Pity the French.

Don Boudreaux, “Pity the French Consumer and Worker”, Café Hayek, 2016-06-27.

July 26, 2016

Craft brewing has a growing trademark problem

Filed under: Business, Law, USA — Tags: , , , — Nicholas @ 02:00

At Techdirt, Timothy Geigner predicts that the craft beer market is getting close to trademark armageddon … they’re running out of punny names they can legally use for their beer:

With all the trademark actions we’ve seen taken these past few years that have revolved around the craft beer and distilling industries, it seems like some of the other folks in the mass media are finally picking up on what I’ve been saying for at least three years: the trademark apocalypse is coming for the liquor industries. It’s sort of a strange study in how an industry can evolve, starting as something artisan built on friendly competition and morphing into exactly the kind of legal-heavy, protectionist profit-beast that seems like the very antithesis of the craft brewing concept. And it should also be instructive as to how trademark law, something of the darling of intellectual properties in its intent if not application, can quickly become a major speed bump for what is an otherwise quickly growing market.

All of this appears to have caught the eye of Sara Randazzo, blogging at the Wall Street Journal, who notes that the creatively-named craft beers that have been spewing out of microbreweries across the country may be running out of those creative names.

    As today’s Wall Street Journal explores, legal disputes in the beer world are becoming the norm as new craft breweries spring up at a rate of roughly two per day. Trademark lawyers have gotten so used to the beer disputes that they are now turning on each other. Some dozen lawyers are contesting San Diego lawyer Candace Moon’s attempt to trademark the term “Craft Beer Attorney,” which she says she rightfully deserves.

Within the rest of the post, Randazzo highlights one dispute between craft brewers in order to give a sense of just how small these belligerent parties are. It’s a dispute that escaped even my radar, despite what has become something of my “beat” around Techdirt. Three professionals with day jobs decided to make a go at brewing craft beer and named their company Black Ops Brewing, the pun resting upon “hops” used in their beer, while also serving as a nod to their family members that served in the military. Three guys making beer, but the trademark dispute came almost immediately.

The problem is that once you’ve been granted a trademark, you have to defend it early and often or you’ll lose it. This means tiny companies with a couple of trademarked products are pretty much required to lawyer-up and threaten to go nuclear at the faintest hint of an infringement for fear they’ll lose the right that they’ve claimed. The gains from pursuing a possible infringement are usually tiny and the legal costs almost always outweigh any “winnings”, but the risks of not doing so are potentially huge. This is an example of a perverse incentive in law.

July 17, 2016

QotD: Regulating Napa County

Filed under: Bureaucracy, Business, Quotations, USA, Wine — Tags: , , , — Nicholas @ 01:00

… at each tour we typically got the whole backstory of the business. And the consistent theme that ran through all of these discussions was the simply incredible level of regulation of the wine business that goes on in Napa. I have no idea what the public justification of all these rules and laws are, but the consistent theme of them is that they all serve to make it very hard for small competitors or new entrants to do business in the county. There is a board, likely populated by the largest and most powerful entrenched wine makers, that seems to control the whole regulatory structure, making this a classic case of an industry where you have to ask permission of your competitors to compete against them. There are minimum sizes, in acres, one must have to start a new winery, and this size keeps increasing. Recently, large winemakers have started trying to substantially raise this number again to a size greater than the acreage of any possible available parcel of land, effectively ending all new entrants for good. I forget the exact numbers, but one has to have something like 40 acres of land as a minimum to build a structure on the land, and one must have over 300 acres to build a second structure. You want to buy ten acres and build a small house and winery to try your hand at winemaking? — forget it in Napa.

It took a couple of days and a bunch of questions to put this together. Time and again the guide would say that the (wealthy) owners had to look and wait for a long time to find a piece of land with a house on it. I couldn’t figure out why the hell this was a criteria — if you are paying millions for the land, why are you scared to build a house? But it turned out that they couldn’t build a house. We were at this beautiful little place called Gargiulo and they said they bought their land sight-unseen on 3 hours notice for millions of dollars because it had a house AND a separate barn on it grandfathered. Today, it was impossible to get acreage of the size they have and build two structures on it, but since they had the barn, they could add on to it (about 10x the original size of the barn) to build the winery and still have a separate house to live in.

This is why the Napa Valley, to my eye, has become a weird museum of rich people. It seems to be dominated by billionaires who create just fantastically lovely showplaces that produce a few thousand cases of wine that is sold on allocation for 100+ dollars a bottle to other rich people. It is spectacularly beautiful to visit — seriously, each tasting room and vineyard is like a post card, in large part because the owners are rich enough to care nothing about return on capital invested in their vineyards. The vineyards in Napa seem to have some sort of social signalling value which I don’t fully understand, but it is fun to visit for a few days. But in this set-piece, the last thing the folks who control the county want is for grubby little middle-class startups to mess up their carefully crafted stage, so they are effectively excluded.

I know zero about wines, but from other industries this seems to be a recipe for senescence. It would surprise me not at all to see articles get written 10 years from now about how Napa wines have fallen behind other, more innovative areas. I have never been there, but my friends say newer areas like Paso Robles has an entirely different vibe, with working owners on small plots trying to a) actually make a viable business of it and b) innovate and try new approaches.

Warren Meyer, “My Nomination for Corporate State of the Year: Napa County, California”, Coyote Blog, 2016-07-08.

July 13, 2016

Thirty years of corporate anti-harassment training has made no difference at all

Filed under: Business, Law, USA — Tags: , , — Nicholas @ 02:00

Amy Alkon on the not-very-surprising discovery of a recent US government Equal Employment Opportunity Commission study that after three decades of corporate anti-harassment training, no discernable difference in workplace harassment can be detected:

Anti-Harassment Training Doesn’t Work

But let’s keep it up so we can feel like we’re doing something. (More on that below.)

By the way, as I’ve written before, referencing the work of evolutionarily-driven law professor Kingsley Browne, men give each other shit — in the workplace and as a way of competing with each other.

Sure, there’s a point at which this can become toxic, but if you can’t take a joke or a bit of teasing, maybe you need to strengthen up so you can make it in the work world, as opposed to demanding that the work world conform to nursery school niceness standards.

Then again, you can always stay home and just care for the kiddies while your spouse braves those, “Hey, nice pants, dude!” jokes.

By the way, men’s competitiveness comes out of evolved sex differences — how men are the warriors (and competitors) of the species and are comfortable in competition with each other and with hierarchies in a way women are not.

Sex differences research Joyce Benenson explains that women group in “dyads” — twos — and are covert competitors, engaging in sniping and casting out any women who seem to stand out as better than the rest. (Women seem to have evolved to show vulnerabilities rather than strengths to other women in order to show they are trustworthy — which may be why women tend to be apologizers and put themselves down.)

July 8, 2016

Leonard G. Lee, 1938-2016

Filed under: Business, Cancon — Tags: , — Nicholas @ 13:21

Leonard Lee obituaryClick to read full obituary at the Lee Valley website

June 30, 2016

Do Unions Raise Wages?

Filed under: Business, Economics — Tags: , , — Nicholas @ 04:00

Published on 7 Apr 2015

Do unions raise wages for workers as a whole? If not, can unions raise the wages of some workers? The answer is, well, it depends. Unions have the ability to restrict the supply of labor to a job, which can increase wages for some workers. However, unions can also lower wages. For example, work stoppages and strikes supported by unions can slow down economic growth, lowering real wages. To illustrate this, we take a look at what happened to Great Britain’s economy during the 1970’s union strikes.

It’s important to note that unions are not just about wages — they can be helpful in protecting workers from arbitrary abuses and maintaining positive workplace relationships.

Finally, we ask — are there differences between professional associations and unions? How are they similar? Watch to learn more about how unions affect the economy.

JC Penney tries to supersize their clothing market

Filed under: Business, USA — Tags: , — Nicholas @ 02:00

The US clothing retailer recently launched a new campaign aimed at a larger target market:

You can see the commercial logic, of course. America’s obese population is growing — both numerically and horizontally — and JC Penney sells clothes. Someone has made the brilliant decision to market this once-respected brand to women who wear fumigation tents as prom dresses, and who think of Cool Ranch Doritos as a food group.

In fact, realizing how easy it is to sell to fat women I might announce a line of tea biscuits called “Milo’s Virtuous Snacks” with inspirational quotes on the boxes, such as, “You’re amazing even though you ate the whole pizza,” and, “Don’t worry that your left arm is numb, that’s just your FIERCE shining through.”

They’re $19.95 for a box of 10, but you can’t put a price on a woman’s self esteem or wellbeing. Well, JC Penney has I suppose, but my point is I too can profit from your inevitable painful death via type 2 diabetes, alone in your married sister’s attic. Of course I’m a fair bit cleverer than JC Penney: fattening up these cows will just create inventory for my other business — safari parks.

(I’m lobbying to make it legal to hunt any man over 20% body fat. But only with tranquilizer darts — I’m not a monster.)

In the long run though, this sort of business strategy doesn’t work. JC Penney is joining the ranks of consumer products companies following a bizarrely quixotic business model — help your customers feel good about themselves until they drop dead from obesity-related illnesses. The problem? When they die, they stop buying your XXXL clothing.

June 27, 2016

The twisted incentive system for government bureaucrats

Filed under: Bureaucracy, Business, Government — Tags: — Nicholas @ 02:00

At Coyote Blog, Warren Meyer explains why bureaucrats so often make what appear to be incomprehensible decisions and then double-down on the decision despite any irrational, economically destructive, or humanitarian consequences:

I want to take an aside here on incentives. It is almost NEVER the case that an organization has no incentives or performance metrics. Yes, it is frequently the case that they may not have clear written formal metrics and evaluations and incentives. But every organization has informal, unwritten incentives. Sometimes, even when there are written evaluation procedures, these informal incentives dominate.

Within government agencies, I think these informal incentives are what matter. Here are a few of them:

  1. Don’t ever get caught having not completed some important form or process step or having done some bureaucratic function incorrectly.
  2. Don’t ever get caught not knowing something you are supposed to know in your job.
  3. Don’t ever say yes to something (a project, a permit, a program, whatever) that later generates controversy, especially if this controversy gets the attention of your boss’s boss.
  4. Don’t ever admit a mistake or weakness of any sort to someone outside the organization.
  5. Don’t ever do or support anything that would cause the agency’s or department’s budget to be cut or headcount to be reduced.

You ever wonder why government agencies say no to everything and make it impossible to do new things? Its not necessarily ideology, it’s their incentives. They get little or no credit for approving something that works out well, but the walls come crashing down on them if they approve something that generates controversy.

So consider the situation of the young twenty-something woman across the desk from me at, say, the US Forest Service. She is probably reasonably bright, but has had absolutely no relevant training from the agency, because a bureaucracy will always prefer to allocate funds so that it has 50 untrained people rather than 40 well-trained people (maintaining headcount size will generally be prioritized over how well the organization performs on its mission). So here is a young person with no training, who is probably completely out of her element because she studied forestry or environment science and desperately wanted to count wolves but now finds herself dumped into a job dealing with contracts for recreation and having to work with — for God sakes — for-profit companies like mine.

One program she has to manage is a moderately technical process for my paying my concession fees in-kind with maintenance services. She has no idea how to do this. So she takes her best guess from materials she has, but that guess is wrong. But she then sticks to that answer and proceeds to defend it like its the Alamo. I know the process backwards and forwards, have run national training sessions on it, have literally hundreds of contract-years of experience on it, but she refuses to acknowledge any suggestion I make that she may be wrong. I coined the term years ago “arrogant ignorance” for this behavior, and I see it all the time.

But on deeper reflection, while it appears to be arrogance, what else could she do given her incentives? She can’t admit she doesn’t know or wasn’t trained (see #2 and #4 above). She can’t acknowledge that I might be able to help her (#4). Having given an answer, she can’t change it (#1).

June 26, 2016

The Micklethwait Alpha

Filed under: Business, Government, Liberty — Tags: , — Nicholas @ 02:00

Published on 3 Feb 2013

Brian Micklethwait describes a hypothesis of his regarding the overall effects of state intervention as compared to market liberalisations.

This topic is discussed in greater depth here: http://libertarianhome.co.uk/2013/02/…

(Linked yesterday, but too good not to get its own posting.)

June 25, 2016

Canada’s massively counter-productive protectionist racket

Filed under: Bureaucracy, Business, Cancon — Tags: , , — Nicholas @ 02:00

At (of all places) the CBC, Neil Macdonald explains why the Canadian government maintains a ridiculously low limit on what Canadians can purchase from other countries without packages being subject to duty, tax, delay, and possible damage:

As any Canadian who’s ever naively bought anything on the American version of eBay (or, for that matter, any U.S. retail website) must by now know, Ottawa is determined to spoil your bargain.

If the purchase is a penny over $20 Cdn, a federal customs agent can intercept it, open it, delay it, add federal and provincial sales taxes, and, depending on the origin of the merchandise, perhaps pile on some duty charges — basically protectionist taxes.

By the time the government is done, the price of the package can easily rise by 50 per cent. And of course customs brokers usually have to wet their beaks, inflating the final cost of the average package by another 20, 30 or 40 per cent.

Basically, Ottawa has ensured that shipping across our border is such an expensive, paperwork-heavy pain that a lot of American merchants and eBay sellers simply don’t bother shipping to Canada.

The system actually seems designed to be burdensome and sclerotic.

Normally, you’d assume it’s all about increasing the federal government’s tax revenues … the CRA must be raking in the bucks, right? Not at all:

… by keeping that purchase threshold at $20 instead of giving Canadian shoppers a break and raising it to $80, Ottawa spends about $166 million to collect $39 million in additional taxes and duties.

Think about that: Ottawa’s customs officials spend a net $127 million of taxpayers’ money annually, basically to keep Canadians trapped inside the Canadian retail corral.

H/T to SDA for the link.

June 18, 2016

QotD: The origin of the push for a minimum wage

Filed under: Business, Economics, Politics, Quotations, USA — Tags: , , , — Nicholas @ 01:00

Few policies have origins as ugly as that of the minimum wage. “Progressive” intellectuals in the early 20th century supported the minimum wage because they believed it to be an effective policy detergent to help cleanse the gene pool of ‘undesirables.’ By pricing low-skilled, ‘undesirable’ workers out of jobs, ‘undesirables’ are less likely to successfully pro-create and to immigrate. The fact that the minimum wage, by pricing ‘undesirables’ out of work, thereby artificially raises the incomes of white workers was considered to be an added benefit of this social-engineering device.

Business owners and labor unions in higher-wage regions of the United States supported the minimum wage because it would dampen the competition they were under from businesses and workers in lower-wage regions of the United States.

The ethics of these early supporters of the minimum wage were despicable. But say this much for these racist, protectionist creeps: they understood economics better than do many people today (including some economists) who believe either that the law of demand is uniquely inoperative in the market for low-skilled workers or that the American market for low-skilled workers is monopsonized.* Each belief is as inexplicable as it is unsupportable.

* And monopsonization of the labor market is only a necessary condition for a minimum wage to not destroy employment opportunities for some workers; it is not a sufficient condition.

Don Boudreaux, “Quotation of the Day…”, Café Hayek, 2016-06-01.

June 13, 2016

QotD: The absurdities of many occupational licenses

Filed under: Bureaucracy, Business, Quotations, USA — Tags: , , — Nicholas @ 01:00

In 2012, the Institute for Justice — a public-interest law firm advocating libertarian causes — looked at the number of occupations that require licensing. Specifically, the institute looked at occupations typically filled by lower- and middle-income workers. These are not your airline pilots, your certified public accountants and your neurosurgeons; they’re the nations interior decorators, auctioneers and florists. (Yes, you read that right: In at least one state, these occupations cannot be practiced without a license.)

Why, you might ask, is the state requiring a license to decorate an interior? Are customers at risk of death from collapsing piles of pillow shams? Must we fear that they will be blinded by the decorator’s decision to pair fuchsia chiffon drapes with a chartreuse brocade sofa? Do we worry that without the threat of losing their license to keep them on the straight and narrow, these fly-by-night operators might be tempted into purchasing furniture from unlicensed auctioneers, and sourcing their floral arrangements from black-market florists?

Well, no. Mostly, these regulations benefit folks who are already plying the trade. They get helpful state legislators to protect them from competition by instituting tough licensing requirements. Their income goes up; the consumer’s wallet suffers. And people who want to follow their dreams into the industry get shut out if they lack the time to study for the licensing exams, the capital to pay the licensing exam fees (which can run in to the hundreds of dollars), or the social capital to know how to work the system.

Megan McArdle, “You’re Gonna Need a License for That”, Bloomberg View, 2016-05-17.

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