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Archive for August 2015

Business Licensing in Europe

We had a private tour in Vienna from a very good tour guide.  Apparently, to become a tour guide in Austria requires that one study for years and take a special government test to get a government license.  It does not matter if one wants to just focus on, say, giving special Klimt-only tours at the Belvedere or if one wants to give comprehensive cross-city tours, one still must pass the same test to practice tour-guiding.  This, by the way, is entirely parallel to how most US states require one to get a full dental license after a bajillion years of school whether one wants to repair cavities or just whiten teeth.

As a result, tour guides seem to get 80 Euros an hour and up.

Anyway, as we walked we were chatting with her as she called a cab.  We asked if they had Uber in Vienna, suspecting that they had the same conflicts with it as in, say, Paris.  But she had never heard of it, so we explained the concept to her.

To her credit, she immediately got it, so much so that she immediately thought about it in the context of her job.  She said, "Can you imagine, if any housewife could give tours and charge 30% (of her rate)?  I would be looking for work the next day."

I am not totally sure that is true -- there is more differentiation in quality of tour guides vs. cab drivers.  But she recognized that a portion of what she earned came because the license she had gotten from the government excluded a lot of potential competition.

Minimum Wage, American vs. European Restaurants

In reading reviews of European restaurants to try to find places to dine, I saw a lot of criticisms of their service.  There seems to be a meme among travelers that Austrian restaurants in particular often have bad service.

I am not sure I can agree with this -- we had a lot of good wait-staff in Austria  But I can say that they had to service a LOT more tables than a typical American waiter.  I don't know what the standard is today, but it used to be that 4-6 tables was the max American restaurants considered that a waitperson could cover and still provide acceptable service.  In Austria, the number was often double that.  I watched one gentleman memorably service almost 20 tables during the busy lunch hour at a museum cafe in Vienna.  I can tell you he was working his butt off but we still had to wait for basic service like ordering or paying our bill or getting our food delivered.

I pair this information with a second factoid from a travel book we read when trying to figure out what tipping policy was over there.  The book, as well as most other sources we consulted, said that tips for waiters in Austria and Germany could be less generous because waiters were paid much more than in the US -- a fact that the source considered a point of superiority over the US for the Europeans.

That may or may not be -- personally, I have never like the US tradition of restaurants outsourcing the paying of their staff to the customers.  But it may well be that these higher wages have their cost in the form of reduced customer service, as restaurants are forced to minimize their higher cost staff to keep prices reasonable.

A Few Thoughts on Branding After Travelling in Europe

In Europe, we stayed several times in rental apartments we found through the invaluable VRBO website.  One advantage of these apartments is that we can cook breakfast, avoiding the high-priced breakfasts at many hotels.

So I found myself shopping for orange juice in Austria, with a number of choices at hand, but none recognizable to me.  Skeptics of capitalism often point to branding and brand-based advertising as particular wastes of resources.  But I would have loved to see an orange juice brand I recognized.  Brands are essentially a guarantee of  predictability -- whether I like the taste or not, I know what a Big Mac will taste like in Omaha or Beijing.  Brands are an enormous aid to shopping and making choices, and in this manner create real value for us as consumers.  I missed recognizable brands when I was in Europe.

PS-  Coca-Cola and Pepsi are obviously the exceptions to this predictability game.  Diet Coke, called Coke Light in Europe, tastes entirely different in Europe than it does in the US -- in fact it tastes more like what Diet Pepsi tastes like in the US.  Which is ironic, and fitting I guess, because Diet Pepsi in Europe tastes a lot like American Diet Coke.

The Problem with Elon Musk

When first presented with the idea of the Hyperloop (a train running in vaccuum in an underground tube), I was extremely skeptical it made any sense.   Sure it might work (after all the London tube started out as a pneumatic system much like those that older ones of us remember sending receipts around department stores).   But did it make any economic sense.  Was it really likely that, if we can't afford rail lines above ground easily, we could afford to build thousands of miles of air-tight large-diameter tubes?  Honestly, it looked to me like any other silly idea on the cover of Popular Mechanics, right next to the titanium zeppelin the size of Connecticut that would someday be doing construction work.

So enter Elon Musk, who is very passionate about the idea, claims to be convinced it will work, and appears to be putting some money behind it.   With his support, the idea must immediately be treated as more credible, and it does indeed get a lot of press.  But here is the problem for me with Musk:  With him, the idea must also be treated as very probably another attempt by him to drain money out of the taxpayers' pockets into his.  Because that is what he does in so many of his enterprises.

Is This REALLY What Environmentalists Are After?

I have , touting some Indian airport that will, gasp, entirely power itself with solar.  Look at the picture environmentalists are bragging about.  The solar panels to power a few buildings cover perhaps 10x or more of the land taken up by the buildings themselves.  They paved paradise and put up ... a solar farm.

k彩平台登陆airport solar

The Aristocracy of Huckterism

I was thinking about the crazy populist nuttiness of Donald Trump and the misguided focus of Black Lives Matter and the musty socialism of Bernie Sanders.  As I drive around Europe and see ruins of castles and palaces, it occurred to me that we had almost always been saddled with an aristocracy exercising power over us.  Sometimes they won that position through violence and military action, and sometimes by birth.

But it struck me that we have a new sort of aristocracy today:  the Aristocracy of Hucksterism.  These new aristocrats are just as wealthy and powerful as the old sort, but they have found a new way to gain power -- By suckering millions of people to simply hand it to them.   And when they inevitably fail, and make things worse for everyone, they additionally manage to convince people that they root cause of the failure is that they had not been given enough power.

A Question for Black Lives Matter

BLM coalesced as a reaction to police brutality and lack of accountability for how they treated black citizens.  The organization claims its problems are that has robbed them of their agency.

Can I observe that both these problems are ones of an out of control, unaccountable, over-powered government?  Police are government officials allowed to operate with few checks on their behavior.  Black ghettos were explicitly created by the New Deal and maintained by Federal policy for years.  No doubt many private citizens are still racist, but they can't legally shoot you on the street or say where you can and can't buy k彩平台登陆s.

So why does the leadership of BLM so consistently support the further expansion of government power?

Cultural Innovation

I still find this whole notion of to be bizarre and awful.   I am not really an expert, but in the few areas that I know, some of the greatest moments of cultural innovation have come from cross-pollination of cultures.  For God sakes, the cultural non-appropriators would never have allowed white British boys in Liverpool and London to play black American blues, but much of modern music owes its roots to this strange synthesis.  Keith Richards and Mick Jagger spent years trying to be Howlin' Wolf before anyone heard of the Rolling Stones.  I know that black musicians were resentful of the appropriation in part because the white bands made so much more money than they did and killed what market demand there was for their music.  But that just forced African Americans, some of the greatest musical innovators the world has known, to innovate again and again to keep ahead (e.g. Motown, funk, rap, etc).

In a previous post, I observed that the opposite of cultural appropriation is cultural apartheid.  I would add that the opposite of cultural appropriation is cultural stasis and stagnation.

Doesn't The Government Know That It Has A Duty to Prop Up The Stock Market?

Fortunately, .   Because why do we have a government if not to keep asset bubbles inflated as long as possible?

Where's Coyote?

I am in Europe for a little bit.  I have not blogged because I either had a good Internet connection, but no time, or vice versa.  I am now on Lake Maggiore at a little town called Gerra for a few days, and watching the rain on the lake (perhaps this is disappointing for other travelers, but for Phoenicians watching a cold rail fall is a treat).  This area is an odd one, barely inside Switzerland.  Most of the folks are bilingual in German and Italian but most speak Italian day to day and most of the road signs are in Italian.  But they price their services in Swiss Francs, so they are no fools.  It all seems to work fine and be a source of pride for local residents.

Here are a few notes so far from our trip:

  • rock-bottom international roaming rates appear to be the real deal.  I have gotten service everywhere we went and free (if sometimes slow) data.  The only problem so far is I can't send or receive MMS (SMS is fine) so I can't send my kids the usual picture travel-log I like to send.
  • Until today, European roaming wifi hotspot was great.  It worked in Switzerland, Austria, and Germany but failed me in Austria when the separate Austrian unit they sent me turned out to have a bad sim card.  They claim the other unit that works everywhere else will work in Austria as well -- we shall see, but if that is true, why did they send me a separate Austrian unit?
  • is great.  I could have stayed all day.  I have been on a lot of plant tours, and some have been very intimate with the machinery.  But those tended to be private tours.  This is the most up-close and personal I have ever gotten on a public tour.  The tour covered a large stamping plant and a final assembly line.  We took the 1:00 English tour, which I think is the most complete one.
  • I have never been to Baden Baden, Germany before.  A beautiful town with a 19th century vibe, we stopped there only because we needed to stop somewhere not far from Stuttgart.  We ate an incredible meal at the Michelin one-star Brennar's Park Hotel Restaurant.  Lichtentaler Allee was one of the most beautiful and peaceful public parks I have ever walked.
  • Last night we went to the opera at Bregenz (you may have seen it in Quantum of Solace, or you can ).   I thought the performers were from meh to fine, but not outstanding.  The staging though was gorgeous, probably the most beautiful stage production I have ever seen.

k彩平台登陆click to enlarge

k彩平台登陆click to enlarge

We're Number 181!

181 among "Conservative" and center-right news and opinion sites sites.  I am not sure how a web site that supports gay marriage, legalized narcotics, and legalized prostitution can be "Conservative" but I understand that there are those who group everyone who is not socialist under the "conservative" moniker.  Honestly, in the age of RSS feeds and twitter and many other ways to read a site, I am not sure if this means anything.  Particularly since I see no possible way we have more readers than Volokh.  But there you go.  T, who aces us out at 159.

Memo to Vox: You Know How This Prosperity Was Achieved? We Let it Happen.

what is perhaps the greatest achievement in human history, the continuing disappearance of absolute poverty:

k彩平台登陆roser_poverty_shares

 

Readers of this blog will likely  have seen this before (though it may well be new to Vox readers).  Here is the amazing thing about the Vox article:  It never once mentions capitalism, trade, economic freedom, or any synonym.  Here is a sampling of the tone of the accompanying article:

There's still much work to be done: 14.4 percent of the world amounts to 1 billion people who . And making sure everyone's making at least $1.25 a day . The world's median income is still only $3 to $4 a day. By comparison, the for a family of four is $16.61 per person per day. Once under-$1.25-a-day poverty is eradicated, the world needs to set about , which will be a substantially harder task.

Vox is treating this like it is the result of some top-down effort, using the same language one might use to describe the eradication of Yellow Fever in Panama.  As if this resulted (and as if future progress depended on) some all-hands-on-deck technocratic government program.

No one "set about" eradicating poverty.  It happened because governments, at least to some extent, got out of the way and didn't stop it.  Chinak彩平台登陆 is a great example.  Mao "set about" trying to eliminate poverty using many of the approaches likely favored by the Vox staff, and killed a few tens of millions of people in the process.

Here is my theory of the world's accelerating wealth formation that I have written on a number of times before.  This chart largely results from:

  • There was a philosophical and intellectual change where questioning established beliefs and social patterns wentfrom being heresy and unthinkable to being acceptable, and even in vogue. In other words, men, at first just the elite but soon everyone, were urged to use their mind rather than just relying on established beliefs and appeals to authority.
  • There were social and political changes that greatly increased the number of people capable of entrepreneurship. Before this time, the vast vast majority of people were locked into social positions that allowed them no flexibility to act on a good idea, even if they had one. By starting to create a large and free middle class, first in the Netherlands and England and then in the US, more people had the ability to use their mind to create new wealth. Whereas before, perhaps 1% or
    less of any population really had the freedom to truly act on their ideas, after 1700 many more people began to have this freedom.

So today's wealth, and everything that goes with it (from shorter work hours to longer life spans) is the result of more people using their minds more freely.

Wherein I Try to Be Fair to Yelp

I need to try to be fair to Yelp.  A reader sends me some second-hand comments from an ex-employee at Yelp:

He absolutely believes that there is no way for Yelp to hide or promote reviews just based on who the company is. This doesn't mean that they're not, of course. What my colleague says, though, is that the overriding criterion that they use to determine if a review should be "recommended" is if they can verify that the writer is a real person.

There are a couple ways you can do this, but two that will actually cause all of your past reviews to suddenly become recommended:

1) Work for Yelp--not really helpful, I know. I am told that Yelp will instantly fire anyone who leaves reviews while working there. But, once you leave, all of your reviews will always be recommended.

2) Connect your Yelp account to your Facebook, then connect with 100 friends.

There are other ways to have past reviews always come up recommended. If you post a review or several reviews, and, in aggregate, you get four interactions (they are marked as funny, cool, or useful), this will happen.

So I went back and looked.  To see if one's reviews are in the non-recommended purgatory, you have to log out (Yelp will pretend to you that you are recommended until you log out**).  Sure enough, all my 9 reviews seem to be in purgatory.  In other words, any effort I expended on reviews has been wasted, because Yelp does not show them.  I tend to write longer reviews, so apparently writing fewer more detailed reviews is not a practice Yelp wants to promote.  Do they prefer folks who spam lots of short reviews?  I can see how that may be, since more reviews bulk up Yelp's numbers.

I don't know what to make of this feedback.  At one level, it seems right and makes sense.  There are a lot of not recommended reviews where the review has just that one review.  But not always.  For example, , reviewers with no picture, no name (just initials), just 2 total reviews and no friends are recommended, but someone who has a picture, a real name, 1 friend and 31 reviews is not.   I have to say that either their algorithm has some purposely random element (to defeat reverse engineering) or else there are other factors involved than just the ones listed above.  Also, some of the advice above simply has to be wrong.  For example, the last sentence makes no sense since it is impossible to upvote or favorite reviews in not-recommended purgatory (they don't even give you the buttons to do so).

I will post some more reviews over time to see if I get pulled out of spam status by their computer, or if I am permanently exiled based on a corporate complaint.

** By the way, this could be the subject of a gripe in and of itself.  It should not be so opaque that one's posts are all getting sent to the Yelp spam folder.  It is kind of insulting to invest this effort and then find out later Yelp is trashing everything I write.

Claire McCaskill Casts Herself as the Modern Donald Segretti

The people behind all of this were frightened of Muskie and that's what got him destroyed. They wanted to run against McGovern. Look who they're running against.

-- Deep Throat, in the movie "All the President's Men"

I have ever heard told about political machinations, but it is perhaps the most amazing told by a sitting politician about her own actions.  How Democratic Senator Claire McCaskill (proudly) manipulated the GOP primary to get the incredibly weak opponent she wanted.  As told by ... Claire McCaskill.

It was August 7, 2012, and I was standing in my hotel room in Kansas City about to shotgun a beer for the first time in my life. I had just made the biggest gamble of my political career—a $1.7 million gamble—and it had paid off. Running for reelection to the U.S. Senate as a Democrat from Missouri, I had successfully manipulated the Republican primary so that in the general election I would face the candidate I was most likely to beat. And this is how I had promised my daughters we would celebrate.

 

Yelp Doesn't Delete Negative Reviews Its Sponsors Don't Like -- It Merely Hides Them So They Won't Ever Be Viewed

Update:  This post may be unfair, as discussed here.  I am not fully convinced, though.

I won't repeat what I wrote before, but several months ago I wrote a long article about my suspicions that Yelp was using its review recommendation system to disappear reviews its corporate sponsors and their attorneys did not like.   My evidence was based on my actual experience writing a detailed, fact-based negative review of an insurer, only to have it disappear from the site and be left out of the insurer's overall score.

It took me a long time to find the review, along with dozens of others, in a purgatory of "not recommended" reviews reachable from a near invisible link that doesn't even look like a link.  I won't retype the whole post but my evidence was in part:

  • Yelp says it is sending reviews to not-recommended purgatory because they are of lower quality or have reviewers with less reviewing history on Yelp.  But a scan of the reviews in my case showed no such pattern.  Not-recommended reviews were at least as (and arguably more) detailed than recommended reviews, and there was no discernible difference in reviewer experience.  The not recommended reviews were also no less moderate, as there was immoderate language (and horrible grammar) in accepted reviews while there were calm and reasoned reviews that were rejected.
  • What the not-recommended reviews had in common was that they tended to be more negative on average than the recommended ones (which is hard to do because the recommended reviews average to about 1.5 stars)
  • Looking at several local independent restaurants, I saw no or few not-recommended reviews and pages and pages of recommended reviews, a ratio that was reversed for the major insurer which presumably has far more resources to intimidate or buy off Yelp.  For the insurer, there were two not-recommended reviews for every one recommended one.
  • I knew this insurer to be willing to litigate against bad reviews, since they have sued me for libel to remove my review.  Presumably, they would not hesitate to threaten Yelp as well.
  • Yelp already has a review quality system driven by upvoting by customers based on the usefulness of the review.  So why the need for an entirely parallel review-rating system unless that rating system was for an entirely different purpose than quality control.

Yelp got a lot of grief a while back accusing it of deleting reviews, so its CEO has pledged on multiple occasions that it doesn't do so.  I believe them.  Instead, it looks like Yelp disappears reviews in a way that the CEO can truthfully say they were not deleted, but they are for all intents and purposes invisible to the public.

Anyway, all this was spurred by the following trailer sent to me with from a reader.  Apparently a film called Billion Dollar Bully is being made about Yelp, and from the hints in the trailer it appears that they will be taking on many of the issues I listed above and frankly have only been able to guess at rather than prove.  Brava!

Short Apple?

Verizon's decision to stop subsidizing smartphone purchases in exchange for 2-year contract lock-ins is going to be a big change in the industry.  It will be interesting to see what happens to handset prices.  A while back someone I know had a Verizon iphone that they lost.  They were talking about going out and buying a new one to replace it.   I said, "uggh, an $800 hit."  They looked at me like I was crazy.  They said they had paid something like $300 for it.  I pointed out that that was likely with a 2-year contract lock-in, and that a replacement would go full price which can run over $800 depending on which version they had.

They did not believe me.  In fact they were almost indignant that I would suggest such a thing.  And went running off the the Verizon store with every confidence an ik彩平台登陆Phone 6 plus could be purchased for $200-$300.

This situation has obtained for a decade.  It will be interesting to see what happens to ik彩平台登陆Phone sales when customers are exposed to something closer to the true price.  Since most ik彩平台登陆Phones without contract go for more (substantially more in fact) than the laptops I am buying my employees, I can't help but think that ik彩平台登陆Phone revenues will suffer.  (Of course, the result could be everyone who wants a new ik彩平台登陆Phone switching to AT&T from Verizon  -- it is not at all clear Verizon's new no-subsidy rates are low enough to be a better net deal than the old rates+subsidy).

I use Verizon because my business operates in the boondocks and Verizon is almost always the last carrier standing when I drive out to our locations.  I wonder if Verizon will now be allowing unlocked phones?  I presume this will be the case -- T-Mobile is the other company that ended phone subsidies and I moved my unlocked Nexus to them.

By the way, the current T-Mobile $50 a month plan allows unlimited data and text when roaming in 120 countries, and $0.20 a minute international calls from any of these countries.  This is even better than you can do with the old method of buying an international sim card and switching when you land.   No other US carrier is even in the ballpark.  You have to pay Verizon $20 a month or so to get them to reduce international roaming text costs to 50 cents each with some paltry amount of data.  For international travelers, there is no other choice even close to T-Mobile among US carriers.

No on Phoenix Prop 104: The Promised Benefits Are Almost Certainly Grossly Exaggerated

A reader sent me this:   looked at large infrastructure projects (over $1 billion).  In the introduction they observe:

Rail projects, for example, go over budget by an average of 44.7 percent, and their demand is overestimated by 51.4 percent.

We actually can combine these two numbers and find that the total cost per user of these systems was over-estimated by 117%, meaning the cost per user was on averagemore than double what was promised when these projects are sold to the taxpayers.

At the end of the day, the first segment of the line cost $75,000 per round trip daily raider.  We could have bought every regular rider a prius and a lifetime of gas and still saved money.

I Have This Argument All The Time With The US Forest Service

I operate recreation areas in the US Forest Service and from time to time get criticized that my profit adds cost to the management of the facilities, and that the government would clearly be better off with a non-profit running the parks since they don't take a profit.  What they miss is that non-profits historically do a terrible job at what I do.  They begin in a burst of enthusiasm but then taper off into disorder.    Think about any non-profit you have ever been a part of.  Could they consistently run a 24/7/365 service operation to high standards?

has a great quote today that touches on this very issue

from page 114 of the 5th edition (2015) of Thomas Sowell’s :

While capitalism has a visible cost – profit – that does not exist under socialism, socialism has an invisible cost – inefficiency – that gets weeded out by losses and bankruptcy under capitalism.  The fact that most goods are more widely affordable in a capitalist economy implies that profit is less costly than inefficiency.  Put differently, profit is a price paid for efficiency.

It is also the "price" paid for innovation.

Keynesians Have Shot Their Only Bolt -- How Will They Spend Their Way Through The Next Crisis?

Governments have spent so much, to so little effect, to try to stimulate the current economy, I wonder where they will find the resources to spend more the next time?  Because you can be sure that despite the fact that we are likely near the top of a weak cycle, no one is paying back what was spent in the last recession or proposing to reduce central bank balance sheets.

This is a couple of years old,

The financial crisis that began in late 2007, with its mix of liquidity crunch, decreased tax revenues, huge economic stimulus programs, recapitalizations of banks and so on and so forth, led to a dramatic increase in the public debt for most advanced economies. Public debt as a percent of GDP in OECD countries as a whole went from hovering around 70% throughout the 1990s to almost 110% in 2012. It is now projected to grow to 112.5% of GDP by 2014, possibly rising even higher in the following years. This trend is visible not only in countries with a history of debt problems - such as Japan, Italy, Belgium and Greece - but also in countries where it was relatively low before the crisis - such as the US, UK, France, Portugal and Ireland.

So over a third of the debt that has been built up in all of history by Western nations was added in just a few years from 2007-2012.  At the same time, the central banks of these countries were adding to their balance sheets like crazy, essentially printing money in addition to this deficit spending.  In the US, the Fed's balance sheet as a percent of GDP hovered around 6% until the second half of 2008.   That had tripled to over 18% in 2012 ().  At the same time, European central bank assets grew from about 7% to over 16% of GDP.

James Taranto has a regular feature named after a reporter named Fox Butterfield.  The feature takes statements such as "Despite Mary getting a PhD in Peruvian gender studies from Harvard, she has struggled to find a job" and argues that the "despite" should be replaced by "because".

This is certainly true of the statement that "despite record stimulus and Fed balance sheet expansion, the economy has remained sluggish".  That "despite" should be "because of".  The government continues to distort the allocation of capital and wonders why investment is sluggish and tends towards bubbles in certain assets.  Japan has stimulated for 25 years to absurd levels of debt and has gotten 25 years of sluggishness in return.

All this reminds me of a story in one of my favorite business books, "Barbarians at the Gate."  Back in the day, tobacco companies had a practice of jamming inventory into the channel just ahead of the semi-annual price increase.   They called this "loading."  The channel liked it because they got cheap product to sell at the new higher prices.  The tobacco companies liked it because it boosted quarterly revenues at the end of the quarter.  But that boost only happens once.  To show growth the next quarter, one must load even more.  Over time, they were jamming huge amounts of inventory into the channel.  I have never been a smoker, but apparently freshness is an issue with cigarettes and they can go stale.  Eventually, the company was loading so much their sales started to drop because everyone was buying stale cigarettes.

In find this a powerful metaphor for government interventions in the economy today.

Postscript:  I will give another example.  In Arizona, we are on a July-June fiscal year.  Years ago, some government yahoo had the bright idea to close a budget hole by passing a law that all businesses had to pre-pay their estimate of sales taxes due in July a month earlier in June.  For that one glorious year, politicians had 13 months of revenue to spend rather than 12.

But to set things aright the next year, they would have to live with just 11 months of revenue.  No way they were going to do that!  So they did the pull-forward thing again to get a full 12 months.  And they have done it every year since.  It has become an institution.  All this costs a ton of money to process, as the state must essentially process a 13th return each year, presumably paying overtime and temp costs to do it.  All for the benefit of one year where they got the use of one month of revenue early, we have been stuck with higher state operating costs forever.

Chinak彩平台登陆 Slashes Costs for American Consumers

My headline is probably the most accurate description of how affects this country.  But I bet you will not see it portrayed that way in any other media.  What you are going to see, particularly as the Presidential election races heat up, are multiple calls to bash Chinak彩平台登陆 in some way to punish it for being so generous to American consumers.  Why?  Because the devaluation of the yuan will negatively affect the bottom line of a few export sensitive companies.  And if we have learned anything from the Ex-Im battle, things that GE and Boeing like or hate are much more likely to affect policy than things that benefit 300 million consumers.  Make no mistake, protectionist measures are the worst sort of cronyism, benefiting a few companies and workers and hurting everyone else (look up concentrated benefits, dispersed costs).

By the way, aren't the worldwide competitive devaluation sweepstakes amazing?  If everyone is doing it, then devaluations have no substantive effect on trade (except to perhaps decrease its magnitude in total), which just adds to the utter pointlessness of the game.  And it is hilarious to me to see US elected officials criticizing Chinak彩平台登陆 for "manipulating" its currency, as if the US Fed hasn't added several trillion dollars to its balance sheet over the last few years in a heroic attempt to manipulate the value (downwards) of our own currency.

I am Trying Really Hard to Be Open-Minded About the Iran Deal, But....

...the President and his supporters sure make it hard.  In his speech last week at American University he said:

Just because Iranian hardliners chant “Death to America” does not mean that that’s what all Iranians believe. (Applause.) In fact, it’s those hardliners who are most comfortable with the status quo. It’s those hardliners chanting “Death to America” who have been most opposed to the deal. They’re making common cause with the Republican caucus. (Laughter and applause.)

That last part seems to have gotten the Conservatives in an uproar, and I suppose I can see why, though I am reluctant to join in the usual Internet rush to burn someone over what may have been a ham-handed joke.

It is actually the first sentence that floors me.  Either the President is straight-out being deceptive, or he is a total foreign policy naif.  Iran is not like the US.  People in Iran are not allowed to consistently chant messages with which the rulers do not agree.  As a minimum, they are met with violence and arrest (e.g. in 2009 with the Green movement).  So if anyone is chanting "Death to America" at public events, it is with the tacit approval of the nation's rulers.  It may very well be that the mass of Iranians don't agree with that message, but in Iran, what the mass of Iranians believe is largely irrelevant.

Cargo Cult Regulation -- How Much Effect Did Card and Krueger Have on New York's Fast Food Minimum Wage Ruling?

New York is proposing a $15 minimum wage for any fast-food restaurants that are part of a national chain with 30 or more stores.  How this survives any sort of equal protection test is beyond me -- if I own a restaurant and call it "coyote's place" I don't have to pay $15, but if I own a single restaurant where I pay franchise fees to McDonald's, I do.

Let's leave the inevitable court challenges on fairness aside.  Of all the possible industries, I wonder why the focus on just fast food and on just large franchises.  Some of it is obviously mindless Progressive soak the rich thinking, and some of it is a liberal distaste for any foods that are not kale.  Is it just because the fast food workers have been the most vocal?  If so, that is pretty lame the the government is merely focusing on the squeaky wheel, a real indictment of any pretensions technocratic politicians have to legislating intelligently.

But I wonder if it is something else.  Pick a progressive on the street, and in the unlikely event they can name any economic study, that study will probably be Card and Krueger's study of the effect of a minimum wage increase in New Jersey.   Sixty bazillion studies have confirmed what most of us know in our bones to be true, that raising the price of labor decreases demand for that labor.  Card and Krueger said it did not -- and that a minimum wage increase may have even increased demand for labor -- which pretty much has made it the economic bible of the Progressive Left.

What intrigues me is that Card and Krueger specifically looked at the effect of the minimum wage on large chain fast food stores.  In this study (I will explain the likely reason in a moment) they found that when the minimum wage increased for all businesses in New Jersey, the employment at large chain fast food restaurants went up.

So I wonder if the Progressives making this ruling in New York thought to themselves -- "we want to raise the minimum wage.  Well, the one place where we KNOW it will have no negative effect from Card and Krueger is on large fast food chains, so...."

By the way, there are a lot of critiques of Card & Krueger's study.  The most powerful in my mind is that when a minimum wage is raised, often the largest volume and highest productivity companies in any given business will absorb it the best.  One explanation of the Card & Krueger result is that the minimum wage slammed employment in small ma and pa restaurants, driving business to the larger volume restaurants and chains.  As a whole, in this theory, the industry saw a net loss in employment and a shift in employment from smaller to larger firms.  By measuring only the effect on larger firms, Card and Krueger completely missed what was going on.

Worried about your privilege? Want to be treated like an abused underclass? Start a business!

John Scalzi tries to explain privilege to non-SJW-types by saying that being a white male is like playing life on "easy" difficulty.

I'll grant I benefited from a lot of things growing up others may not have had.  I had parents that set high standards, taught me a work ethic, taught me the value of education, had money, and helped send me to Ivy League schools (though the performance there, I would argue, was all my own).

Well, for those of you concerned about living down a similar life of privilege, I have a solution for you: start a business.  Doing so instantly converted me into a hated abused underclass.  Every government agency I work with treats me with a presumption of guilt -- when I get called by the California Department of Labor, I am suddenly the young black man in St. Louis called out on the street by an angry and unaccountable cop**.  Every movie and TV show and media outlet portrays me as a villain.  Every failing in the economy is somehow my fault.   When politicians make a proposal, it almost always depends on extracting something by force from me -- more wages for certain employees, more health care premiums, more hours of paperwork to comply with arcane laws, and always more taxes.

Postscript:  I will add an alternative for younger readers -- there is also a way to play college on a higher difficulty:  Try to be a vocal male libertarian there.  Write editorials for the paper that never get published.  Sit through hours of mindless sensitivity training explaining all the speech limitations you must live with on campus.  Learn how you can be charged with rape if your sex partner regrets the sex months later.  Wonder every time you honestly answer a question in class from a libertarian point of view if you are killing any chance of getting a good grade in that course.  Live every moment in a stew of intellectual opinion meant mainly to strip you of your individual liberties, while the self-same authoritarians weep and cry that your observation that minimum wage laws hurt low-skilled workers somehow is an aggression against them.

 

** OK, this is an exaggeration.  I won't likely get shot.  I don't want to understate how badly abused a lot of blacks and Hispanics are by the justice system.   I would much rather be in front of the DOL than be a Mexican ziptied by Sheriff Joe.  But it does give one the same feeling of helplessness, of inherent unfairness, of the unreasoning presumption of guilt and built-in bias.

The Worst New Idea of the 20th Century

I wanted to add something to my post on Hiroshima the other day.  The point of the post was not to argue for any comfort with atomic weapons or the killing of tens of thousands of civilians (mutual assured destruction has got to be the dumbest, scariest, craziest basis for international relations ever conceived).  The point was to argue that most arguments about Hiroshima are stripped of historical context, colored by our experience of the Cold War, and based on increasingly popular but incorrect assumptions about the rulers of Japan at the end of the war.

So as an adjunct to that post, I wanted to emphasize that I think civilian bombing (whether conventional or nuclear) to be the worst single new idea of the 20th century.  The absolute worst ideas of the 20th century were likely Marxism and genocide, but these were not new to the 2oth century.  But strategic bombing of civilian populations far to the rear of the front lines, whether convention or nuclear, by airplane or missile, was almost entirely new.  It was an awful, terrible idea that haunts us to this day.

It is in this context that I don't single out Hiroshima for particular opprobrium.  It was a change in technology in a horrendous program.  The worst of the lot in my mind was Arthur Harris.  Harris, head of the British strategic bombing effort through most of the war, did not even pretend to be targeting industries or factories.  He thought such precision bombing to be madness.  His very specific goal was to kill and "unhouse" as many civilians as possible, and he measured the British bombing effort in those terms.

The Uphill Battle to Reduce the Size of Government

Last year, when Congress did a 1-year renewal of legislation governing public recreation and fee policies (FLREA) they left out a tiny provision that discouraged government agencies from taking back tasks they had privatized.  With that gone, parts of the USFS immediately began to move to bring certain operations back in house, even when doing so required that they both spend more tax money AND reduce services levels to the public.  Such is the strength of incentives in any government bureaucracy to expand their scope, staffing, and budget, even when it makes no sense for the public.

, I tell one such story in depth. Here is an excerpt:

Consider one example: The Tahoe National Forest in California recently took the operation of some of their parks out of private hands, ending a nearly 30-year partnership with one of our competitor companies.

Did the Forest Service do it to save money? The private concessionaire operated entirely with the user fees paid by visitors, using no taxpayer money, and even paid rent back to the government. The agency’s in-house operating plan for running these campgrounds requires at least $2 million in taxpayer money over the next five years to supplement user fees.

Did they do it to improve service? The private concessionaire employed more than 60 paid workers living on site, with managers who worked weekends and holidays. The Forest Service plan calls for half this number of paid employees, and none will live on site or work weekends—the busiest time for recreation.

Did they do it to address some egregious for-profit abuse? The agency is actually planning to replace dozens of paid private workers with volunteers. At the same time that the federal government is mandating higher minimum wages for campground concessionaires, the Forest Service is replacing paid workers with unpaid labor.

Did the Forest Service do it to keep user fees low? The original stated reason for kicking out the private operator was the concessionaire’s request to increase user fees in response to recent increases in California’s minimum wage. In the end, however, the Forest Service raised fees even higher than those proposed by the concessionaire.