Truck and Barter

It's about RAND, so I have no comment

I'm thinking of starting a new category: Interesting conversations I can't join because of my work.

The first entry would be the recent essay by Edward Fulbrook entitled "The RAND Portcullis and PAE" in the Post-Autistic Economics Newsletter. Snip below the fold:

Following the second world war, the United States increasingly came to determine (one might say dictate) the shape of economics worldwide.... engineered in significant part by the US Department of Defence, especially its Navy and Air Force.... Arrow’s early research had been partly, in his words, ‘carried on at the RAND Corporation, a project of the United States Air Force’.... In 1965, RAND created a fellowship program for economics graduate students at the Universities of California, Harvard, Stanford, Yale, Chicago, Columbia and Princeton, and in addition provided postdoctoral funds for those who best fitted the mold. These seven economics departments, along with that of MIT - an institution long regarded by many as a branch of the Pentagon - have subsequently come to dominate economics globally to an astonishing extent....

For the QJE it found that the eight departments with the most articles were the seven favoured through RAND by the US Department of Defence plus MIT, and that this Big Eight accounted for 77.3 per cent of the articles published. In the JPE all of the RAND Seven were in the top ten and, together with MIT, accounted for 63.1 per cent of the articles published. In the AER the top eight contributing departments were again the RAND Seven plus MIT, which together accounted for 59.3 per cent of the articles published....

Online Travel: A Peek Behind the Curtain

Note: Take this as the anecdotal evidence it is.

During recent trip planning, an acquaintance of mine had some difficulty dealing with the online reservation system at Expedia. This forced contact-by-phone, resulting in a rather long discussion to figure out what had gone wrong. It appeared that a fare that was once available was no longer, even though my friend believed she had procured that fare.

Details aside, the end of the conversation resulted in an odd (to me) piece of advice: the customer service person recommended that my friend NOT repeatedly check the online fare using her single account. (That is, don't log on multiple times looking for a fare with the same dates/times/locations.) As it turns out, the price will be increased as the user checks more frequently. How many times it takes to raise the price was not indicated. The advice was to create a new account and search again for the fare. The price may well be lower.

My intial thought was that this makes little sense. If the person logs into an account multiple times, it seems reasonable to think that their decision to purchase is tentative. Their willingness to buy may be put off by seeing a higher price. In addition, unless people were made aware of this policy, there would be no benefit from pricing in this way. The pressure to "buy now before prices climb" would only be effective if people knew to expect a price increase the next time they logged on to search for a fare.

Like I mentioned, this is entirely anecdotal. Does anyone know for a fact this is how it works? And what would be the motive to do so? Is there enough to be made by increasing the fare a few dollars for those people on the bubble between buying and not, under the hopes that they don't notice the increase (or don't feel it large enough to sway their decision towards not buying). Is this a policy of the airlines put into place by the travel booking companies?

Any insight would be helpful.

The Corporate Erin Brockovich?

Pardon the echo-chamber post, but this one really deserves an airing, I think. Via Asymmetrical Information, this post from Matt Yglesias.

The key point?

Speaking of which, fuck the small businessman.

Just a reminder, from the government Matt apparently so apparently and fervently believes has original claims on our money: over 99% of the employers in the US are classified as "Small".

Which makes Matt's suggestion rediculously narrow in vision, not to mention sounding really quite tiring.

Honestly, this sounds similar to the argument about drug company profits being "too large", and believing that simply scaling them back through capping prices won't have any effect on the number of new drugs that might (or might not) get developed. That is to say, this can't be viewed as a static action that simply lowers the coffers of the government. With the repeal of the estate tax comes a reduction in the contortionist practices people go through in order to avoid those same taxes. Add to this the possibility of increasing activity once the money that is currently taxed is back in the hands of the business owner.

To head one thing off now: no, I don't generally believe that tax cuts pay for themselves because of increased economic activity alone. In this case, however, businesses changing hands and retaining more capital create owners far more likely to reinvest in that business than possibly non-owners are to go out and spend their tax cut (of course, while people worry that tax cuts are spent on reducing debt or are simply being socked away, much heavy weather is made of the US savings rate being "irresponsibly low"). One of the major benefits, to me, of simplifying/eliminating taxes is avoiding the productive efforts spent in trying to avoid those taxes. In Matt's laughably naive formulation of "inheriting X" and having to "pay Y", and thus getting a net increase of "X-Y" -- the "very good problem to have" -- there is no mention of liquidity. That is, the business is worth a sum total of X, but possibly only because of its assets. The payment Y can, and in fact often does, surpass the liquid capital within the sum X. To pay Y, X has to be sold.

How many small businesses can you name are able to pay employees and produce goods...with no assets?

Comcast's Advertising

Speaking of Comcast, although Bob notes their quick service compared to socialized medicine, I find their advertising, which is regularly mailed to me and reproduced at left, annoyingly deceptive.

Frankly, who really cares about the $1 for one month gimmick? What's the bottom line? How much will the basic & digital cost me, after all taxes, every month. The fine print offers no assistance to the snarky consumer:

Offer applies to Full Basic and Digital service for $1.00 per month for 1 month. After promotional period, regularly [sic] monthly rates apply.

Of course, it is impossible for Comcast to list all of its prices in print advertising, given the plethora of options and plans.

They have much better pricing options online. Just entering your address brings up all the monthly rates, but does not include applicable "franchise fees, taxes and other fees" that "may" apply.

Of course, most retail establishments do not list after-tax prices, but then final prices are obvious, as sales tax on retail goods and services is a standard flat percentage, depending on type of the good or service in question.

Companies selling goods that have multiple taxes, fees, and other charges -- like telephone, cable tv, and airlines -- can always insist that it is not their fault that the tax schemes are so complicated, but I'm not so sure the mess is to their disadvantage...

I forgot to mention that I must also thank my neighbors in our large condominium building for leaving their wi-fi networks open. As far as I know, it's illegal to run your cable TV wiring into your neighbor's home, but of course, it is not illegal to run your wi-fi internet through your neighbor's wall... what happens iif TV becomes available on demand through your internet connection?

Demand for Wi-Fi

Got a great e-mail from Kevin about the Muni Wi-Fi post below. Tons of interesting questions and issues, and I owe him a decent reply. Part of the note, however, was a question about data concerning the demand for wi-fi services. Having spent a few minutes online looking, I've yet to find anything decent that doesn't cost over cool grand (though, there are some really interesting reports out there -- if anyone cares to forward something on, I'd be obliged, but I'm not encouraging breaking distribution or licensing agreements).

This Yahoo news item reports some interesting facts from a report (that I've attempted to request -- no response yet) done by TeleAnalytics.

-- In June 2004, there were more than 25,804 broadband-provisioned hotels in the 28 countries researched, with more than 91% having one or more Wi-Fi Access Points. -- More than 15,662 of these hotels were in the US, and they are responsible this year for 44% of the total, worldwide Wi-Fi business plus consumer segment revenue. -- In June 2004, Marriott International, Inc. was leading, with more than 314,000 rooms in US broadband-provisioned hotels. Holiday Inn was second with 288,000 rooms. -- Hotel Wi-Fi Usage growth was found to depend heavily on Wi-Fi coverage. Between March 2003 and March 2004, US usage growth for most market subsegments was, percentage wise, in the three digits range. -- The airports Wi-Fi segment was a late bloomer, but today usage growth is phenomenal. The current growth rates, sometimes over 350% in a six-month period, are clearly nonsustainable. But, with current usage at a fraction of one percent of enplaned passengers, the untapped potential is significant. -- Consumer hotspots usage shows none of the uniformity of the hotel Wi- Fi service adoption. In the observation window (March 2003 to March 2004), there were scores of consumer hotspots with less than 7 sessions a week, but few had as many as 300 a month. -- Usage growth in the consumer segment was non-uniform as well, and few market subsegments managed even a 50% year-to-year increase.

It's just an excerpt. The one big thing I took from this limited view is that demand for wi-fi is still concentrated on the traveling business user. The exceptionally high variance in usage of consumer hotspots (7 a week to 300 a month) shows, at the very least, a highly uneven demand for wireless services throughout cities. That, of course, may help to explain why companies aren't clamoring to wire up massive tracts of land simply in the speculative hopes that people will suddenly run out to buy wireless cards and sign up for service.

(If they did, in fact, do so, would internet service companies end up with an "abundance problem" akin to what Chris Anderson talks about at The Long Tail? And for that matter, would the "economics of abundance" issues be a case to examine Say's v. Keynes' views of gluts? Anyway...)

I won't link to the stories, but rather just to the Google search results for "demand for wifi", if you'd like a sense of the writings on the subject. By and large it's technology companies simply reporting, without much to back it up, that the demand for wireless is "skyrockting", or some other positive-sounding adjective. I'm perfectly happy believing that the demand for wireless is increasing. If that's the case, though, the companies will certainly follow to provide service. If it's not, however, beyond the obvious places like airports and hotels serving business travelers, then perhaps the proponents of wireless everywhere are overestimating the benefits of rolling out such a system?

Disorganized Borders

Today, I'm in Bohemia, NY.

Being near the center of Long Island, Bohemia is not really notable, or even separable from any other "town" or "village", except that it is really close to Southwest-friendly MacArthur Airport. Unfortunately, the Bohemia Borders bookstore is also notable -- for having no economics section. I expect this at Waldenbooks and the like, but a regular-sized Borders? Thomas Sowell is crammed into Marketing and James Surowiecki is in Small Business something-or-other. Henry Hazlitt is dismembered...

This would not be so bad except that the nonfiction books are not shelved by major category and author. In fact, they're sorted by an Borders-internal 4 digit code not indicated on the exterior of the shelves, and then by author within each major category and subcategory. Without staff assistance, it could take somebody ten or fifteen minutes of searching to actually find the book he's looking for.

Is this an intentional disorienting strategy to get people to ask for help, or just plain stupidity?

UPDATE 3/8/05: The Borders in Riverhead, NY has a three-shelf economics section, but the Borders Cafe here upped its coffee price to $1.75 while leaving the price on the board at $1.65. That's a big no-no in my book; Wal-Mart would be lambasted for such practices. To me, it looked at first that the server was pocketing a dime per cup, and I couldn't understand how that could possibly be worth it. And I only noticed because the bill came to $1.90, and I was agast that the sales tax rate on coffee would be 25/165=15.2%, but it was actually only 15/175 or 8.76%.

Panera's Wi-Fi Down Nationally

There are about 6 weeks left before my dissertation must be defended; I have traveled to NY so my mother can babysit while I write. And write I did, as Panera Bread's free Wi-fi service is down in every store nationally. It has been out since yesterday, and though leaving me with no distractions, greatly inconveniencing me.

There is no alert on Panera's webpage, the store managers here are clueless, and tech support was unhelpful. At least the latter removed the silly recorded warning message they had up yesterday: "we expect to have this resolved as soon as possible", or something very close.

Also, after living away from Long Island for about 5 years, I can finally hear the LI accent. Wow.

Unfortunate for whom?

Google's Toolbar feature apparently has a few people in a huff.

The AutoLink feature comes with Google's latest toolbar and provides links in a webpage to Amazon.com if it finds a book's ISBN number on the site.

It also links to Google's map service, if there is an address, or to car firm Carfax, if there is a licence plate.

Google said the feature, available only in the US, "adds useful links".

But some users are concerned that Google's dominant position in the search engine market place could mean it would be giving a competitive edge to firms like Amazon.

Since the Toolbar isn't yet available for Firefox (at least, not that I've seen, though I tend to be a good bit behind in browser modifications), I've not used the AutoLink feature. Sounds like a pretty cool feature to me, though. I use Amazon for 95% of my book purchases anyway.

My favorite bit from the piece is this snarky comment:

Dan Gillmor, founder of Grassroots Media, which supports citizen-based media, said the tool was a "bad idea, and an unfortunate move by a company that is looking to continue its hypergrowth".

I'm sorry, but what's so wrong about a company looking for "hypergrowth", again? As a citizen myself, I support well-built media, and find that Google does one hell of a job with the products it releases. That it also happens to offer its primary service to anyone who can get online for free and still manages to reap profit enough to have hypergrowth leads me to suggest that we concern ourselves with the company in order to learn, rather than sneer and snipe. Methinks a "bad idea" here is one Dan's "citizens" didn't think of first.

If there's one thing we ought to have learned from Google, it's that the spectre of "monopoly" is frequently without substance, and serves only as a sop to competitors looking for government to tie the hands of a market giant. Not so long ago "we" were worried about the prospect of a Microsoft-branded online world where Bill Gates' latest project was the sole gatekeeper of the internet.

Now, if you don't mind, I've got to go pick up my new Linux-based phone.

T&B is Now a Business

Sorry for the lack of posting from me (although Ian's been doing a bang-up job in my stead). My schedule has been turned upside-down, as I am now a full-time, house-cleaning, dinner-cooking, grocery-shopping, stay-at-home father of a 1.5 year old. My wife now goes to the university library and Panera Bread to write her dissertation. We libertarians don't just believe in freedom, you know; we believe in responsibility.

Anyway, as my son napped yesterday, I used Turbotax to easily and quickly polish off my 2004 income tax returns. The software asked me if I am running a business, and it occured to me that I am -- in 2004 T&B and ALP became businesses. They have assets (a notebook computer that I use 50% of the time for blogging), expenses (web address & hosting), revenue (Google Ads), unpaid employees (Ian and the rest), and most of all, profit. This last is considerably more than others have earned from Google ads, and it is mostly due to the folks who use T&B as a forum to discuss Iraqi Dinar, though I have had a few posts that have brought in some money. (More on the revenue later).

My logic: if I'm earning ad revenue, I am running a business. I should be able to deduct expenses from running that business.

I already had T&B's and ALP's records in print and summed in Excel, and so I decided to file a schedule C for my blogs. It seems a justifiable and reasonable course of action to take, and I can fully justify all aspects of my business for an audit, the risks of which increase when filing a schedule C. However, my blogs have a positive cash flow, and I do not have a home office.

I haven't yet filed my taxes, since it's best to review these things with a clear head, but I thought I'd throw it out there.

Travelocity's Wishful Thinking

While booking a trip from DC to NY, Travelocity, which btw I can't get to work with Firefox, suggested the following deal:

Now, I'm not one to be unthankful when offered cross-marketed products, but to add $3600 14 day hotel stay to a $167 flight seems like either really wishful thinking or the absence of clear thinking. This is especially so considering I had not indicated I wanted a hotel...

Google Axes a Blogger?

Looks like Google may be taking on the habits of more traditional companies. A blogger -- whose site is NinetyNineZeros (a nifty nod towards his employer, as a 10 followed by ninety nine zeros is a "googol") -- named Mark Jen is "no longer an employee at Google", thanks, it seems , in large part due to his blog. This from the company that just acquired Blogger.

Castle Megastore

Sometimes, when you're researching Wal-Mart, the oddest things pop up, like the apparently well-lit Castle Megastore:

Keeping the customers from embarrassment is key here at Castle Megastore, on East Fifth Avenue across from Merrill Field. It's just after 9 on a recent Wednesday morning, and Arthur is restocking shelves at Anchorage's new adults-only shop, with pornography, lingerie, sex manuals and naughty toys.

For years the same handful of porn stores have served customers in town, but now there's something for them that's bigger, brighter and quite different. Also, it's quite busy.

The kicker...

Everybody wants a brighter, safer porn store...

It seems so. Stephanie Simon wrote up a different chain last December:

ABILENE, Kan. — Outside, the prairie lies dark and still. In the windowless gray building by the Interstate 70 offramp, a clerk with a tired face rings up sex toys. "Need batteries for that?" she asks politely, again and again.

Two women in prim business suits gawk at a shelf of raunchy gag gifts, giggling. A truck driver searches thousands of DVDs for a pornographic movie. Near the Love Sling of Ecstasy, a wife confers with her husband by cellphone as she studies a tidy display of vibrators, hundreds of them, in every size and color.

Adult "superstores" like this are popping up all over rural America — brightly lighted, clean, as well-organized and well-stocked as a Wal-Mart.

However, according to Luke Ford, the Castle chain has had some serious financial trouble in the past, and has been accused of stiffing vendors.

My advice for these stores is to just be like every other store; most small-store owners know that placing giant condom balloons on store roofs will attract both wanted and unwanted attention.

Quote of the Day: Trump Edition

It's not by Trump, but about him:

In the past the arc of social ascendancy was usually tied to a narrative driven by philanthropy and art. Rockefellers, Mellons and Carnegies bought their way up with museums, hospitals and libraries, just as Wrightsmans, Kravises and Weills put their names on wings at the Met, the Guggenheim or New York Hospital. Trump is the first to get to American royalty by making his alliance instead with the tabs and the TV culture, where everything is commodified, everything is transactional. The man who first understood that the only thing that matters is protecting the brand is now the reigning aristocrat of our promotional culture. To the happy couple, a toast!

I can't believe I just quoted Tina Brown.

Panera Bread: Some History and Commentary (UPDATED)

I have written before that I spend much time at Panera Bread, drinking coffee as I write my dissertation.

Naturally, this is leading to an extensive side research project on Panera itself. PNRA's stock price has not been a stellar performer--peaking in late 2003. Buy ratings have been mixed.

Nevertheless, expansion continues, and the company is looking for managers and assistant managers all over the country. Regions opening for franchise rights include:

• Four Boroughs, New York (excluding Manhattan)
• Santa Barbara/Ventura, California
• San Bernardino/Riverside, California
• San Francisco/Marin, California
• Phoenix, Arizona
• Austin, Texas
• San Antonio, Texas

Many other people agree that Panera is a good place to spend time and money: it has 4 1/2 stars on Epinions:

Panera started as St. Louis Bread , was bought by Au Bon Pain, which renamed St. Louis to Panera outside of the Midwest, then sold Au Bon Pain and other units, and renamed itself Panera. St. Loius' history is here. Got it?

Also, as Glenn Reynolds noted--er, twice--the SonicWall firewall really sucks, and prevents users from accessing even the most educational sites:

More importantly, Panera's internet provider forbids the sending of email to SMTP servers, for "safety" reasons. Whatever. This has led to much grumbling from me and others, to no avail.

However, if you think the free Wi-Fi at Panera is a big deal, just wait until all McDonalds joints have it...

UPDATE 1/8/05: T&B is now the #1 google search hit for "Panera Bread Sucks". See also Tintopia, failing to blog from Reston Town Center a few dozen miles away because Panera's internet connection failed:

This is the problem with ‘free’ goods. That I’m not directly and overtly paying for the service means that Panera doesn’t expend a lot of effort to make sure that I’m satisfied with my non-purchase. On Panera’s regular public website, there appears to be no mention at all — aside from notations in the location-finder — of their wireless network service. I actually approve of this, because they don’t mention that they have air conditioning and electric lighting either, and I think the network in a place like this should be a basic utility.

UPDATE 1/11/05: Melanie Williams looks at what capitalism lets her take for granted:

Actually, I think about just how much we Americans take for granted. I mean really. Panera Bread? Plentiful coffee and overstuffed muffins in a warmly lit atmosphere? What is there to complain about? The most disturbing part of this scenario is when the automatic paper towel dispenser doesn't detect my first wave.

Also, Scott McGerick shows how Panera's employees discriminate against men:

Kat and I are eating at Panera Bread Co, located on the corner of University Ave NE and Hennepin Ave E in NE Minneapolis. A 20-/30-ish guy walks up to the sandwich/soup ordering counter. However, all of the employees for that counter were engaged in a chat session at the other end of the counter. I see that they see the guy, but none of them wants to break away...

A few minutes later, two attractive women walk up to the the vacant soup/sandwich ordering counter. Immediately, a male employee breaks from the power chat to take the order...

Viral Marketing at its Best

You know you've tapped into something when people are willing to pay to make more of your ads.

iPod my Photo is a service for turning a photo into an iPod-ad lookalike. Now you can make your kids, pets, neighbors, plants or midnight snack part of the cultural landscape by turning them into ad-based kitsch and putting an iPod in their hands.

Nice, but can they make me sing like Bono?

The Little Things

Customer service starts and ends with the little details. I prefer proper courtesy and attire, although I never expect a salesperson to remember my name and preferences. Binary Bonsai prefers to never fill out any more web form fields than absolutely necessary:

Here's why: In Denmark... we do not have 'states' or 'provinces'!

So stop forcing me in to filling out it out with something as redundant as NA. It's easy, here's how you do it: If I pick Denmark or any other non-state/provincial country from the dropdown, make the state/province input field non-required.

You've got dynamic pages and everything, it's not that hard.

Are online retail companies lazy, or are the costs greater than the benefits?

From the comments, we discover that regions come in many flavors: state, district, province, county, oblast, etc. And in Ireland, there are no postal codes--except for Dublin city--but most online forms require a postal code.