One of the predictions I’m seeing everywhere, for instance, is how now Human Resources will need a lot more power over companies to prevent more #metoo incidents of sexual importuning of women.
The funny thing about this is that anyone with two eyes and a modicum of understanding of the world knows that this is not where the crazy is headed. As the attempt to drown out the legitimate cases of harassment — mostly by leftists, in leftist-dominated institutions — by claiming #metoo and that all men were essentially harassers becomes more frantic, it has become obvious that any man can be accused of harassment at any time by anyone.
So, here is a genuine prediction: I predict that instead of giving HR more power, this will give companies pause before hiring women, which will lead to a lot of decent and qualified women being left unemployed.
The second-order effect of that, for companies that can’t avoid hiring women, is two-fold: they’ll either hire women to “make-believe” positions, in which they interact only or primarily with other women, creating a drain on the bottom line, or they will allow a lot more work-at-home by both men and women. I predict we’ll see a great move towards that in the next year. Sure, it’s still possible to claim someone is harassing you via the phone, but one-party consent states at least will allow men to record everything in order to defend themselves.
Weirdly, I believe the long-term result of this will be the dismantling of the daycare and child-warehousing practice which has led to a lot of the left’s ascendency in education.
This is because no matter how much you wish to wishful think that companies will just give Human Resources more power, people who actually live and work in the world know this isn’t likely. Human Resources would mostly just make it impossible for anyone to get any work done.
Sarah Hoyt, “Nobody Expects These Predictions”, PJ Media, 2017-12-31.
March 16, 2020
QotD: Company incentives to prevent sexual harassment
March 11, 2020
Canadian National’s perfect storm
In Trains, Bill Stephens highlights the terrible time Canada’s largest railway has been having since the beginning of the year:
“DSC02285” by Bengt 1955 is licensed under CC BY-NC 2.0
It would be hard to imagine a worse start to the year for Canadian National, whose volume is down 16% due to a string of events that’s mostly odd, unrelated, and unrelenting. CN is taking it on the chin, as no other North American railroad has seen its volume fall by more than 10% this year and rival Canadian Pacific’s traffic is up 10%.
First, there was Mother Nature. Winter arrived in January with eight days of deep cold in Western Canada, forcing CN to restrict train length. Then powerful rainstorms lashed southern British Columbia starting Jan. 30, washing out CN’s main to Vancouver for six days.
The major washouts occurred in the rugged Fraser River canyon directional running zone where CN and CP share trackage, with CN hosting westbounds and CP carrying eastbounds. The railways had to resort to running directional fleets of 15 to 20 trains at a time over CP’s line. The single-track bottleneck caused eastbound traffic to stack up at the Port of Vancouver and westbounds to be staged as far away as the Prairies. The directional running zone ranks among the top three freight mains by tonnage in North America, alongside BNSF Railway’s Southern Transcon in the Southwest and Union Pacific’s triple track across Nebraska. So this blockage was, by itself, a big deal.
Then came nearly a month of civil protests. On Feb. 6, as CN began digging out from the washout backlog, the first of several First Nations blockades set up camp on CN’s tracks. The blockades, protesting a proposed natural gas pipeline in British Columbia, halted traffic on CN’s Montreal-Toronto mainline in the East. Also ultimately affected: CN’s line to Prince Rupert, British Columbia, which was blocked by protests for six days. Other protests came and went in Edmonton, Alberta; Winnipeg, Manitoba; Quebec; and British Columbia. CP was affected, too, but to a much lesser extent. CP even hosted detour traffic for CN between Montreal and Toronto.
As if that wasn’t enough, then came regulatory woes. The same day the protests began, a CP crude oil train derailed and caught fire in Guernsey, Sask., the second such wreck in the area since December. Hours later Transport Canada issued a ministerial order that restricted key trains – those with 20 or more cars of hazardous materials – to 20 mph in metropolitan areas and 25 mph elsewhere. With the stroke of a pen, Transport Minister Marc Garneau’s knee-jerk reaction effectively reduced CN’s overall capacity by a third. You could call this slowdown “Whoa Canada!”
QotD: Orthorexia
Our culture accepts as a scientific fact that organic food is healthier than non-organic food. You can watch TV, read popular magazines, or listen to healthy-living gurus, and overwhelmingly you will be told that organic food is healthier than non-organic food. Recipes tend to call for organic produce and ingredients. And it goes beyond organic foods. Genetically-modified foods are slandered as “frankenfoods” concocted by mad scientists in a laboratory. Further, we are admonished to avoid anything that is not “natural.”
OK then. Vaccines are genetically modified, lab-made, and certainly not natural. Being anti-vax seems a logical extension of the natural, organic lifestyle.
I know several people — including family members — who have so completely bought into the natural-organic hype that they genuinely believe GMO and non-organic foods are poisonous. They would rather starve themselves and their children to death than ingest a gram of non-organic food. They look at the shelves of a regular grocery store and see rows and rows of poison. There is a medical term for this fear of safe healthy food — it’s called “orthorexia.” I am not shocked that some of these individuals are anti-vaxxers. Instead, I am shocked (and relieved) that some of the orthorexics I know actually do vaccinate themselves and their children.
Buck Throckmorton, “Organic Food & Anti-Vaxxers – Does The Fear of Safe Food Lead to Fear of Safe Vaccines”, Ace of Spades H.Q., 2019-12-08.
March 9, 2020
One of the economic effects of the Coronavirus outbreak might actually be bottom-line positive
Tim Worstall explains:
“Trade Show Portfolio – Guy Lewis Photography” by Guy Lewis is licensed under CC BY-NC 4.0
One notable thing about tech events is that they tend to be in interesting places like Amsterdam and Barcelona, and you don’t get many self-employed attending. Because someone self-employed loses days of paid hours, has to pay for the flights and the tickets. And they can get the same stuff from YouTube or various learning sites like Lynda.com. Tech events are mostly a jolly for employees in bloated companies. You get 3 days out of the office, have some fun and the boss picks up the tab. Losing this will probably improve the bottom line. And “business conferences” are mostly the same.
For people working more from home, that’s a good thing. Reduced travel costs (time and petrol), less tiredness. This is gradually happening anyway, but Coronavirus has given it a boost.
And maybe everyone realises that a system of education inherited from the time before Gutenberg, when books were a scarce resource, is perhaps in need of reform. OK, you probably need to be at a university for cutting up cadavers in medicine, but for history or computer science you can probably do most of it from your parent’s spare room.
One thing about the way people work is that they often fall into habits. Change often comes from startups and small businesses because they don’t have habits. Sometimes, they’re even anti-habit. Someone in a large company sees something as wasteful and scraps it in the new company. Microsoft let their people wear what they wanted for work, rather than suits. And gradually, those new businesses replace the old. But there’s also sometimes crises that break habits. Someone is forced to do something and gets their eyes opened. They perhaps realise that the alternative works fine, or maybe better.
March 8, 2020
QotD: The essential difference between intentions and results
The results can be uproariously funny, like the “push model” in publishing leading eventually to the success of indie ebooks. (The short explanation is this: the push model is where, in dealing with chain bookstores, the publishers, who are overwhelmingly leftist, realized they could push them to stock whatever books they wanted to succeed, and then the customers would have to buy them because they were the only thing available. The end result was a nosedive in book sales, the death of Borders, and eventually the success of indie-published ebooks.) However, even there, on the way there, there was the tragedy of people not being able to find good things to read for a long time. (I remember us calling bookstore trips “going to be disappointed by Barnes and Noble.”)
Other times, their carefully laid plans are foiled by new technology — see, for instance, their slow-crawl through news reporting and other institutions being nullified by the internet and blogs, and a bunch of us bums working in their pajamas. […]
But often the tragic/comic effects of their action lead directly to their undoing, in a beautiful, almost Shakespearean effect.
Sarah Hoyt, “Nobody Expects These Predictions”, PJ Media, 2017-12-31.
March 3, 2020
QotD: Public service and competitive private enterprise
And I’m not suggesting that the levels of corruption and incompetence are comparable to those found in third world hellholes. A local official in your county council is very unlikely to demand a bribe and then have your daughter raped by his buddies if you decline. He’s especially unlikely to get away with it, and then douse your family in petrol and burn them alive if you complain – those are the levels of corruption found elsewhere in the world, so we need to retain some perspective here.
But those countries have not benefited from a thousand years of sacrifice to earn us a culture that has learned through bitter experience how to run a country. Our civil servants should be performing at the highest standard and be the best in the world, because what they inherited was a culture that conquered that world, and brought civilisation and progress (often at great cost) to every corner of it.
That they have fallen from these heights and now occupy such low places should be a matter for great national shame. And yet they continue to lord it over those they pretend to serve – try calling your local planning department if you want instruction in how supercilious a local functionary feels able to be when speaking to those he claims to serve. If you just want them to do their job, you better be prepared to beg.
Whereas on the flip side, we might agree that the private (voluntary) sector is largely filled with honest and hardworking people and entrepreneurs, but there are crony capitalists out there too.
Your local butcher and baker (those that have survived the regulatory avalanches under which the crony capitalists have begged their pet politicians to bury them) remain staunch servants of their customers (through regard to their own interests), whereas oligoplists (supermarkets, telcos, insurance companies, banks, energy suppliers or transport companies) deliver to us just what the monopolists of government do – an icy contempt that would soon turn to withering small arms fire if the laws allowed it.
Alex Noble, “Corruption In The Coercive And Voluntary Sectors: Rotten Apples? Or The Tips of Icebergs?”, Continental Telegraph, 2019-12-02.
February 26, 2020
“… the First World’s most dysfunctional train: The Canadian, which in theory links Vancouver to Toronto”
Chris Selley fires all his guns at the pride of VIA Rail Canada’s passenger services, The Canadian:
VIA dome observation car, on The Canadian in 2007.
Photo by Savannah Grandfather via Wikimedia.
With the Ontario Provincial Police somehow finally roused to action in Tyendinaga, Ont., it seems the CN railway blockade may not last its third week. This outstanding achievement in law enforcement will come as a relief in particular to the nation’s business community, people who enjoy staple foods, and the propane-dependent. The minority of travellers along the Windsor-to-Quebec City corridor who ride VIA Rail were not as imperilled: most essential, tight-budgeted VIA trips can also be made by bus, with only moderate time lost and with money saved as a consolation. But they too will be pleased. As maddening as VIA’s corridor services can be, with their ancient rolling stock, outrageously stale food, mostly theoretical wi-fi, schedules that get slower rather than faster and reliable delays regardless, trains are just genetically superior to buses.
Or at least, most are. The Windsor-to-Quebec City services are practically Japanese in comparison to what must be the First World’s most dysfunctional train: The Canadian, which in theory links Vancouver to Toronto. It has been shut down almost since the blockade began, and hardly anyone has noticed. It’s time we talk about this crazy thing.
What, you may ask, is the most ridiculous thing about The Canadian? Some might point to the astonishing level of subsidy: In 2018, the average corridor passenger enjoyed a subsidy of $32, or 17 cents per mile. The average passenger on The Canadian: $596, or 48 cents a mile, for a total of $49 million.
But never mind the price for a second; look what it’s buying. Fifty years ago, CN’s Super Continental was scheduled to take 67 hours. Today The Canadian, plying the same route and giving way to every freight train, is budgeted a mind-boggling 85 hours eastbound and 97 westbound.
[…]
For all the subsidies, The Canadian is eye-wateringly expensive. For the full one-way trip, a cabin for two will set you back $3,824, meals included. You can take a five-day mid-range Caribbean cruise for that, and that’s no coincidence: The Canadian is essentially a cruise ship on rails. It’s just that, well, Canadian taxpayers don’t subsidize cruise lines. Because that would be nuts.
I’ve always wanted to ride The Canadian, but I never could afford both the time and the money at the same time. (I have the time now, but I’m struggling to pay my bills, so even a GO Train trip into Toronto needs to be carefully budgeted … a trip on The Canadian would be a very significant percentage of my gross annual income!).
Canadian Pacific FP7 locomotive 1410 at the head of The Canadian stopped at Dorval, Quebec on 6 September, 1965. The Canadian was Canadian Pacific’s premier passenger train before VIA Rail was formed.
Photo by Roger Puta via Wikimedia Commons.
February 21, 2020
British wages to be further impacted by Brexit
As we were told for years, if Brexit happened there were going to be dire consequences to the British economy, and here’s the latest one:
Employers are complaining that without badly paid immigrant labour they’ll just not be able to get the staff. The answer to which is that they’d better start paying higher wages then, eh?
[…]
The analysis here stems from something Marx got right. It’s competition among capitalists for scarce labour which pushes wages up. If there’s a vast reserve army of the unemployed then anyone needing more straining backs just tosses a crust to those in that army and gets as many limbs and torsos to exploit as desired. But if all are already employed then any desire for extra labour requires tempting it away from current employer and occupation to the new. That means a better job offer. Some mixture of conditions, enjoyment of the job, cash and so on that makes up a more attractive package.
The combination of cheap flights and free movement of labour has meant that the reserve army lives in Wroclaw and Debrecen. It’s also been near unlimited – compared to the size of the UK economy – these past couple of decades.
The absence of free movement – what is being complained about here – will mean that to gain the desired labour those employers are going to have to offer higher wages, higher compensation rather, to those not ordinarily resident or stemming from central Europe.
[…]
But back to the basic complaint here. These employers are complaining that Brexit will mean they’ve got to raise the wages they pay. To which the correct response is “Ah, Diddums”.
February 20, 2020
QotD: Preventing bureaucratic mission creep
Private companies are just as vulnerable. However in that private sector we have a mechanism by which the seemingly inevitable bureaucratization is dealt with. Once it happens, the organization goes bankrupt and is removed from the scene. What we need is a similar system to deal with this process in the public sphere.
I don’t, given the above, find it at all remarkable that the WTO is regarded as succumbing to these forces, nor the UN, Amnesty, the European Union or even our own domestic governments (just how did the interstate commerce clause become a justification for Congress to restrict something that is not interstate and is not commerce?). I think it inevitable.
Various solutions appear to be available, the French one might be an example. Put up with it for 50 years then have a revolution and start again. Perhaps the answer is never to allow the public bodies to have much power in the first place, a solution that hasn’t really been tried anywhere. The Italian one? Let the system carry on adding ever more layers but ignore it? Stalin’s? Every 15 years or so shoot the bureaucrats?
All such methods have their attractions and their faults but a solution we do need to find. For one of the lessons I take from the history of the 20th century is that we don’t actually want to be ruled by those who stay awake in committee meetings.
Tim Worstall, “‘Any Organization Will, In the End, Be Run By Those Who Stay Awake in Committee'”, Ideas in Action, 2005-06-23.
February 14, 2020
The reaction to the Mohawk blockade near Belleville shows that VIA Rail isn’t a serious company
Mohawk protesters began blocking the main CN and VIA line between Toronto and Montreal near Belleville nearly a week ago. The police, having learned so often that the government and the courts won’t back them up, did little to try to get the blockade lifted other than to prevent active confrontations with the First Nations activists. Canadian National announced that they were being forced to park trains all over Eastern Canada as a result of the blockade and that deliveries of goods would be snarled for quite some time even after service is allowed to resume. VIA rail, on the other hand, seems to care not a bit about the thousands of travellers who have been stranded mid-journey and made no apparent efforts to bring in buses or any other arrangements. Chris Selley says this proves that VIA is not an essential service even in their own minds:
“The 6424” by Stephen Downes is licensed under CC BY-NC-SA 2.0
Of all the bad news to befall VIA Rail this week, with the cancellation of all its trains between Toronto and Ottawa and Toronto and Montreal — that’s roughly 50 per cent of its ridership and 60 per cent of its revenues — the worst news might be just how little news it has made. Mostly, the Mohawk blockade of the CN main line near Belleville, Ont., has been treated as a side story to the anti-pipeline protests and arrests in the British Columbia interior.
That’s what it is in the grand scheme of things: The battle between Wet’suwet’en members and chiefs and the federal government speaks to much larger, existential questions about the future of the Canadian economy, about the Liberal government’s reconciliation agenda, about the very nature of the Canadian federation and the rule of law. This blockade, launched in the name of solidarity with the Wet’suwet’en, just means people have to take the bus, or fly, instead of the train.
But that’s no small inconvenience, no small expense. Canadians in general are not quick to anger, but very few of the VIA refugees interviewed by various news outlets sounded even slightly furious, which they had every right to be. When protesters from the same First Nation blockaded the same set of tracks six years ago, VIA properly exhibited some concern with getting their customers to their destinations and put on replacement buses.
This time around, no buses. No suggestions. No response to media inquiries asking why there are no buses. Just a cancellation notice on the website and a fare-thee-well. At a time when VIA is seeking untold billions from the federal government to build a new Toronto-Ottawa-Montreal route and run vastly more trains, this does not bespeak a company that takes itself very seriously.
[…]
And never mind VIA, what sort of country lets a few people close down a key piece of national infrastructure, in violation of a court injunction — not for an hour or a day, but literally indefinitely? For a time it wasn’t even clear whose job it was to enforce the injunction: On Sunday an Ontario Provincial Police spokesperson told Global News it was up to the CN Police Service. On Tuesday, a CN spokesperson told the National Post it was up to the OPP, and indeed, late Tuesday OPP officers warned protesters to leave or they would be forced out. Perhaps the threat of massive economic disruption finally lit a fire under them: earlier in the day, CN had said it was considering shutting down huge parts of its freight network across the country. Had it just been rail passengers, though, the idea of this side-protest dragging on for weeks or even months seems absurdly plausible.
VIA Rail 918, a General Electric model P42DC locomotive, at Belleville, Ontario on 23 December 2008.
Photo by Martin Cathrae via Wikimedia Commons.
While VIA may not be serious, others are extremely serious:
Left-wing blogs have been offering instructions and maps during the #ShutDownCanada protests on how to blockade and destroy train tracks and other pieces of Canada’s infrastructure, according to True North.
Two websites in particular, these being North Shore and Warrior Up, have instructed demonstrators how to damage Canada’s pipelines, roads and railways.
In some of North Shore’s posts, for instance, they told their readers to stand in solidarity with the Wet’suwet’en tribe by destroying train tracks. In this article, the author makes it perfectly clear that he wants to damage Canada’s economy at large.
More absurdly, however, the article then went on to instruct the reader on how to compose a chemical mixture that destroys steel rail tracks — taking particular care to describe how not to leaving fingerprint or DNA evidence.
Thursday evening, VIA Rail announced their whole passenger network would be shut down until further notice: Service cancellation notice.
February 12, 2020
“… perhaps the biggest Internet cash grab in the OECD with mandated payments and levies on thousands of Internet services with Canadian users”
Michael Geist refutes the claim that the recent Broadcast and Telecommunications Legislative Review Panel report does not recommend a “Netflix tax”:
The reference to a Netflix tax in the overview is the only such reference in the 235 page report. It was likely included in the overview in the hope that media coverage would jump on the claim and seek to re-assure Canadians that there was no Netflix tax or higher prices likely for consumers as a result of the report’s recommendations.
Yet the reality for anyone that reads beyond the overview is that the panel’s report not only recommends what would widely be considered a Netflix tax but proposes perhaps the biggest Internet cash grab in the OECD with mandated payments and levies on thousands of Internet services with Canadian users. This includes online streaming services, social media companies, news aggregators, and online communications services such as Skype, WhatApp, and Viber. In the view of the panel, any service or site with Canadian users is part of the “Canadian system” and should be expected to contribute to the development of Canadian content, Canadian news organizations, or building broadband connectivity. Note that all of this is above and beyond sales taxes, which the panel also recommends should be implemented with respect to foreign services.
Some of the panel’s plans are admittedly somewhat confusing. For example, the panel states:
Media curation undertakings brought under the regime – including Netflix and other online streaming services – would be required to devote a portion of their program budgets to Canadian programs.
That statement, along with chair Janet Yale’s comment at the opening press conference that there was no need for Netflix to spend additional money on Cancon but rather merely divert existing on foreign location and service production spending in Canada, has been interpreted by some to mean that Netflix would not have to increase its Canadian programming budget. But that is apparently not what the panel means. I spoke with Yale who confirmed that the panel expects the CRTC to establish a minimum Cancon spend requirement on Netflix based on its Canadian revenues. In other words, the requirement has nothing to do with its existing spending on production in Canada. For Netflix, that could certainly represent an increase in spending costs in Canada with those costs likely passed along to consumers.
Yet the panel’s plan extends far beyond just online streaming services such as Netflix. It also envisions mandatory levies against social media services and news aggregators that would be used to fund Canadian news services. It similarly targets a myriad of communications services that would pay into funds to support broadband development.
February 10, 2020
QotD: Welfare programs as a form of subsidy to employers
But what about other programs like food stamps or housing assistance? These means tested public assistance programs are not tied to work, and we should not expect them to lower wages. Let’s take food stamps, which are available to eligible families whether or not a family member works or not. Indeed, when people are not working, they are more likely to be eligible for food stamps since their family incomes will be lower. Therefore, SNAP [Supplemental Nutrition Assistance Program] is likely to raise, and not lower a worker’s reservation wages — the fallback position if she loses her job. This will tend to contract labor supply (or improve a worker’s bargaining position), putting an upward pressure on the wage. Whether or not wages are increased is an empirical matter: there is evidence that the initial roll-out of the food stamps program across counties in the 1970s lowered work hours, consistent with an increase in the reservation wage. The key point is that it is difficult to imagine how food stamps would lower wages. And if they don’t lower wages, they can’t be thought of as subsidies to low wage employers. The same logic applies to other means tested programs like energy or housing assistance. Moreover, these conclusions hold in a wide array of models of the labor market, including ones that emphasize bargaining or efficiency wage concerns.
Arindrajit Dube, “Public Assistance, Private Subsidies and Low Wage Jobs”, Arindrajit Dube, 2015-04-19.
February 9, 2020
The lightbulb conspiracy again
I’ve banged on a few times over the years about lightbulbs, specifically about our government’s passionate desire for us to abandon the tried-and-tested (and cheap) incandescent bulbs to move first to (ultra-expensive, dim, and potentially dangerous) compact fluorescent bulbs and now to (cheaper, but still not living up to longevity promises) LED bulbs instead. Tim Worstall explains how governments were persuaded to enforce this crony capitalist plot over the years (he’s discussing the European market, but Canadian regulators were doing exactly the same thing):
We all recall when we used to use incandescent light bulbs. Simple, cheap, the result of a century’s worth of fiddling with the basic technology to make it around and about right for the use to which it was put.
A spiral compact fluorescent bulb (CFL).
Image by Sun Ladder via Wikimedia Commons.Then they were banned. Sure, there was that energy and thus planet saving argument but that was always very weak indeed. It was an excuse, not the actual reason itself. The reason was that the big three manufacturers, Phillips, Osram and GE, had invested heavily in the next generation of technology, compact fluorescents. These cost not pennies per bulb but pounds. Rather better profit margins that is. Oh, and also, not subject to that crippling competition from China.
So, we get the EU ban on incandescents, driven entirely by the manufacturers. There’s a lot of the Baptist and Bootlegger in here given the environmentalist support for it.
The problem with the technology being the use of mercury in those bulbs.
An aside, I made my living for a number of years selling weird metals that are added to that mercury. I do actually know quite a bit about the nuts and bolts here. I’m also out of the business and have been for a decade and more. So it’s knowledge driving this, not knife sharpening.
Mercury’s not good stuff to have floating around. So, what happens next? Yep, a decade or a bit more after the incandescents were banned so now they’re coming for the CFLs.
The mercury issue was not as well publicized here in Canada as it was in Australia, for example:
How many of them have looked up the Environment Department’s website to find what its bureaucrats falsely describe as the “simple and straightforward” precautions to take against poisoning should one of these lamps smash:
- Open nearby windows and doors to allow the room to ventilate for 15 minutes before cleaning up the broken lamp. Do not leave on any air conditioning or heating equipment which could recirculate mercury vapours back into the room.
- Do not use a vacuum cleaner or broom on hard surfaces because this can spread the contents of the lamp and contaminate the cleaner. Instead scoop up broken material (e.g. using stiff paper or cardboard), if possible into a glass container which can be sealed with a metal lid.
- Use disposable rubber gloves rather than bare hands.
- Use a disposable brush to carefully sweep up the pieces.
- Use sticky tape and/or a damp cloth to wipe up any remaining glass fragments and/or powders.
- On carpets or fabrics, carefully remove as much glass and/or powdered material using a scoop and sticky tape; if vacuuming of the surface is needed to remove residual material, ensure that the vacuum bag is discarded or the canister is wiped thoroughly clean.
- Dispose of cleanup equipment (i.e. gloves, brush, damp paper) and sealed containers containing pieces of the broken lamp in your outside rubbish bin – never in your recycling bin.
- While not all of the recommended cleanup and disposal equipment described above may be available (particularly a suitably sealed glass container), it is important to emphasise that the transfer of the broken CFL and clean-up materials to an outside rubbish bin (preferably sealed) as soon as possible is the most effective way of reducing potential contamination of the indoor environment.
February 6, 2020
Fallen flag – The Nickel Plate Road
Kevin J. Holland provides a brief look at the history of the New York, Chicago & St. Louis, better known as the “Nickel Plate Road”:
The New York, Chicago & St. Louis opened between Buffalo and Chicago on October 23, 1882, in many spots east of Cleveland just a stone’s throw from rival Lake Shore & Michigan Southern Railway. What would become the Nickel Plate became a Vanderbilt property in January 1883.
Although eclipsed by the Lake Shore’s plush limiteds, NYC&StL from 1893 fielded three unpretentious, reliable Chicago to Buffalo, N.Y., passenger trains, establishing a long-standing pattern of modest passenger service. In 1897, Delaware, Lackawanna & Western entered the picture, conveying NYC&StL cars from Buffalo to Hoboken, N.J.
“The great … Nickel-plated railroad”
When NYC&StL was being surveyed, Editor F. R. Loomis of Ohio’s Norwalk Chronicle waxed enthusiastically on the railroad coming to town referring to it as “the great New York and St. Louis double-track, nickel-plated railroad.” Use of “Nickel Plate Road” proliferated, in newspapers and by the road itself.In 1914, LS&MS and Nickel Plate were wards of New York Central. Passage of the Clayton Act that same year was intended to bolster the earlier Sherman Antitrust Act, and left NYC with a dilemma. Enter brothers Oris P. and Mantis J. Van Sweringen, self-made Cleveland real-estate developers who purchased acreage from NYC Vice President Alfred H. Smith. “The Vans” as the brothers were known, approached Smith, by then NYC president, to discuss their plans involving land owned by the Nickel Plate. As the Clayton Act’s divestiture deadline loomed, Smith engineered a sale to the Vans of not only the land they sought, but of the entire Nickel Plate Road. Their Alleghany Corporation holding company eventually included control of the Nickel Plate, Chesapeake & Ohio, Pere Marquette, Erie, Wheeling & Lake Erie, Chicago & Eastern Illinois, and Missouri Pacific.
The gaunt NYC&StL was ripe for re-equipping under its new owners. Addressing the Vans’ lack of railroad experience, Smith orchestrated John J. Bernet’s move from an NYC vice-presidency to be Nickel Plate’s president. Neglected physical plant and obsolete motive power received needed attention under Bernet, who reincarnated the road into a lean and aggressive contender.
Nickel Plate Road GP9 number 526 switching a way freight at Gibson City, IL on November 24, 1962.
Roger Puta photo from the Mel Finzer Collection via Wikimedia Commons.
February 2, 2020
Boeing and the kitchen sink
In the Continental Telegraph, Tim Worstall looks at the mess the new Boeing management has inherited and what they may need to do to be seen to be fixing it:
“Boeing 521 427”by pmbell64 is licensed under CC BY-SA 2.0
Which brings us to another piece of stock market wisdom, about trying to catch a falling knife. A dangerous occupation and the reference is to trying to call the bottom on some stock that has just had a disaster. At some point, surely, the tumble in price will stop and there will be a bounce. Well, yes, or perhaps maybe, for we must not forget that that proper bottom is that end of life – the bankruptcy – price of nothing. For everything that isn’t about to go bust then yes, there’s a price at which buying in the face of everyone else’s panic can be highly profitable. The question being, well, what is about to go bust? Toys R Us did, after all. Actually, so have quite a lot of retailers just recently. There was no above zero price at which it was sensible to buy in.
So, some stock crashes in price, should we buy in? After all, there is that phenomenon known as the dead cat bounce – anything will bounce at least once if you drop it from high enough. The question becomes one of, well, is this crash a result of something that can be reversed, or perhaps something that’s not going to be terminal for the organisation? Or is this just the start of that realisation process that the organisation is coming to the end of its life and going to that final resting place of a zero dollar valuation?
[…]
So, Boeing and the 737 Max. The changes in airframe had the unfortunate consequence of diving a couple of the planes into the ground. We’ve had a drip of stories about how the development process wasn’t all we would wish it to be. The FAA isn’t going to let it back up into the air until the summer at earliest. The Dreamliner seems to be having demand problems and, well, things aren’t looking good.
But is this the start of some spiral to zero? No, don’t be daft. Partly because the American government simply would not allow that. Boeing’s too much part of the backdrop of the US economy for that to be left to happen. The military business is also of significant value whatever happens to the civil aviation side. And of course the numbers we’re talking about here could be painful to stock holders – they are already in part of course – but at the very worst we’re looking at some tens of billions of problem here. That’s just not enough to drive a company Boeing’s size down to zero. Not in this decade at least, given that the only reasonable competition is Airbus. Global duopolies don’t end that way.
So, at this point there’s an argument to say that trying to catch that falling knife of the Boeing stock price might be worthwhile. So, when might that be? At which point another idea, kitchen sinking. This is when a new management team decides to make themselves look good by declaring how bad things had got under the previous one. Absolutely anything and everything that looks like, it might even smell of a problem in the future is taken out and declared. Provisions are made for this problem on this contract, for that problem that might occur over there, add a bit more and then heck, why not, double it! This has, assuming the company survives this balance sheet massacre, the obvious effect of making the new management team look good over the years. Not just because everything starts from this new low place. But also because many of those provisions – those over-provisions – won’t be needed and can be written back from reserves into the P&L.
