Category Archives: Business

Why Is Congress Grilling Airline Executives?

Posted on by

congress airlineThe recent spate of public incidents involving various airlines has motivated members of Congress to get up from dining room table and push away lobbyist provided meals. Why is this happening? Why can Congress yell at airline executives and tell them what to do? Don’t they have anything better to occupy their time?

Congress believes they have a right to intervene in this situation because airports are largely run by the government, particular small airports without a lot of traffic. All air traffic controllers are employed by the government. The FAA maintains a large degree of control over the entire industry. They make many of the regulations by which the airlines must abide. Therefore, they think they can instruct airline executives on how to properly manage their business.

All that being said, there is one simple explanation as to why Congress is holding these hearings. Members of Congress noted that lots of people were upset by the incidents and saw a golden opportunity to prove to their constituents they are doing something, not that they actually are doing anything. Hey, let’s yell at the bad guys and everyone will love us. What will be the result of all this shouting? Nothing that wouldn’t have happened anyway.

The reason airline executives are apologizing all over themselves is not because members of Congress are lambasting them. It’s because of the immediacy of social media and the power of the consumer. When nasty incidents happen today they are promulgated throughout the country within minutes. We the people now have far more information at our fingertips than it any time in the history of the world, and this changes the way we do business.

There is no longer a need for Congress to provide certain forms of oversight to the airline industry. Capitalism can now be wielded like a club in a way never before known. The ability of consumers to purchase the products they desire has always been a powerful driving force in the economy but in the modern age, this power can be brought to bear within hours of an incident.

This is clearly a situation where Congress need not get involved. The people have spoken and airline executives can either listen or not. This is simply a case of members of Congress acting like small children who want their mother to watch them leap from the diving board. It’s an opportunity to pretend they are doing something, and that enrages me.

There are plenty of serious issues they could actually be spending time trying to resolve. They could work together to try and find reasonable solutions to the problems that divide us. They could spend time in meetings with one another discussing various resolutions to complex issues. They could hold hearings with various parties and rationally discuss realistic ideas. They could prove they are mature adults working hard to make this nation a better place.

Instead they spend their time in what can only be called a dog and pony show. They think we are utter fools who won’t notice. I’m sad to say they’re probably right.

Tom Liberman

Rick Friday and the Cartoon that Got Him Fired

Posted on by

rick fridayA fellow named Rick Friday wrote a cartoon for Farm News in Iowa and was fired after one of his humorous pieces offended some people. Details are a bit fuzzy, but Friday indicated an editor of the Farm News told him a seed company dropped its advertisement, which in turn prompted Farm News to no longer publish Friday’s cartoons.

The cartoon in question points out that the CEOs of major agricultural businesses make far more money than the average Iowa farmer.

What should we make of this development? Is it a terrible thing? That’s certainly the general sentiment I’m reading. People are largely on the side of Friday and feel it is a terrible injustice that he lost his job. It’s the small farmer against the giant corporation. Most people will be rooting for the small farmer. I think the issue is far more complex than simply big guy versus little guy.

In this case, the farmers largely exist because of large agricultural businesses. Companies mentioned in Friday’s cartoon include Monsanto, DuPont Pioneer, and John Deere although certainly others like Archer Daniels Midland exist. If it wasn’t for the research and development and technological know-how of these companies, most farms would simply not exist.

A farm that doesn’t take advantage of these technological marvels does not have nearly as much income as one that does. From modern machinery that costs millions of dollars to resistant seeds that prevent the loss of entire harvests; farmers are wholly and completely reliant on these businesses.

Likewise, farmers are the market for these companies. Without the farmers to buy the tractors and seed the fields, these companies go bankrupt. The two are wholly reliant upon each other.

What Friday wrote is completely true but it’s also a product of how much money the average farmer in Iowa makes as compared to the earnings of a multinational agricultural business. Companies like those mentioned generate billions of dollars in revenue. The leaders of businesses like that are compensated accordingly.

It is entirely proper for one of those businesses to withdraw advertising because they don’t like the content of a particular newspaper. Likewise, a farmer might decide to stop using the products from one of those companies in a similar fashion. Perhaps tens of thousands of farmers might stop doing so in response to the firing of Friday. That’s essentially the power of unionization. If they wanted to do it, if they found common ground, there is nothing to prevent them.

I sympathize with Friday. I think the company that withdrew their support in order to get Friday fired is being a bully and bringing unnecessary bad publicity upon itself. I think it shows not only a lack of good humor but also foregoes an opportunity for dialog. The farmers have a complaint. It wouldn’t hurt to address it.

Finally, I have words of advice for Friday: Be careful when you bite the hand that feeds you, it might stop providing food.

Tom Liberman

Legislating Job Interview Questions Hoping for Gender Pay Equality

Posted on by

gender payThere are a number of cities and states considering legislation barring interviewers from asking you questions about your last or current salary. Some have already implemented it. This is being done in an effort to eliminate gender pay inequality. The basic idea is that women are paid less than men, and this particular question contributes to that problem.

I’m not going to get mired into a discussion about pay equality for women because it’s a complex topic. There are arguments that such inequalities do not exist, and other arguments indicating they do. What I’d like to discuss is if the proposed solution is going to solve the problem, and what sort of ancillary issues it will engender.

The idea is that a woman who is currently being paid less money than her male counterpart won’t have to reveal her salary, and thus an employer will offer her the standard amount given to a man. There are a number of problems with this plan.

A woman doesn’t have to accept a lower salary offer initially. She could easily say no.

If an employer doesn’t have any idea of previous salary, then she or he is probably going to lowball to start off. This could result in exactly the opposite of the desired outcome. The employee might well accept this initial offer.

Such laws are an attempt to protect people from themselves and, as a Libertarian, I’m almost always opposed to legislation of this nature. It is up to the employee to know their value and negotiate for a better salary. When we try to legislate things like this, we create a false sense of security. An employee is under the impression they are protected, when they are not. A potential employee in that situation might well be more vulnerable to being underpaid.

Let’s also take a moment to examine the unintended damage such legislation might cause. Mainly, the employer is less able to judge the potential employee. By understanding the prospect’s current salary, the employer can make various value judgments. The employer might make mistakes in their hiring process without this information. They might hire the wrong person and that can be extremely damaging to a business, particular a small business.

Finally, there is the idea this information is no longer as secret as it once was in this world. There was a time when no one really knew what anyone else was making. People kept that information secret. In this modern world with internet connectivity, people are much more aware of what their counterparts within a business and in similar positions with other companies are earning.

Nowadays, a business is much more likely to post basic salary information with every job opening. The potential employee is far better equipped with information than at any time in the history of the world. This means the part of the problem we are trying to fix, women getting offered a lower salary based on previous remuneration and not knowing it is a lowball offer, doesn’t really exist.

I know my opinion is going to cause certain people to shove me into particular categories and that’s up to them. What I want to be clear about is my feeling on wages. People should be paid based on their work. Sex, religion, disability, and all those other supposed factors don’t have much of a role in salary determination.

In summation, the fix doesn’t really solve the gender pay issue and could potentially cause other problems. Don’t do it.

Tom Liberman

Whoppers, Wikipedia, and Google oh My!

Posted on by

whoppersThere are a lot of people angry about a clever advertising campaign created by Burger King for Whoppers that uses our connected technology in an innovative way. I’m not as upset as everyone else, I think it’s pretty cool. Heavy-handed certainly, but it demonstrates possibilities.

What the executives at 3G Capital, owners of Burger King, authorized was a combined arms attack. The technologically savvy among us know that many people have devices that respond to voice commands. The executives authorized an advertising campaign that starts with the phrase, “Ok Google.” This command triggers anyone’s android device to assume it is the target of the communication. The advertisement then asks, “What is the Whopper Burger?”. This further prompts the device to search Wikipedia for Whopper Burger.

Staff writers at 3G Capital had prepared for the advertisement by editing the Wikipedia page to include an ingredient list for the Whopper.
Most of the world – Horror.

Me – Coolio!

The basic idea is strong. Advertisers are trying to reach their intended target. The person who owns the electronic device suddenly sees a picture of a mouth-watering Whopper on the screen. Some of them investigate the ingredient list, a few are hungry, and some small percentage head on over to Burger King to get some food.

There are problems here. The usurpation of someone else’s device and the editing of your own content on Wikipedia. If the advertisers had simply shown a little more deftness, all would have been fine.

The advertisement should have instructed the user to ask their device about the new and wonderful Whopper. 3G Capital should have released information about their product publicly and waited for the Wikipedia page to be updated organically. Basically, have a person monitoring the Wikipedia page until the desired change appears, then release the advertisement.

This strategy allows advertisers to reach their target audience and, this is the important thing, those who want to eat the new Whopper are made aware of its existence before they normally might have been. I can certainly think of a few improvements to this strategy right off the top of my head. Direct users to the website where a coupon resides, show the Wikipedia page on your device to servers at Burger King for the next hour and get a free Whopper with your purchase, I’m certain creative people can come up with more such ideas.

There is a lot of anti-advertisement sentiment in the world but there is nothing wrong with making people aware of a product they wish to purchase. No one buys anything under some sort of hypnotic spell engendered by the advertisement. We have laws against false advertising and that’s a good thing.

I love that targeted advertisement is aware of my search habits and offers me up choices that match said queries. I’ve been alerted to any number of price discounts through this sort of direct marketing. I see nothing wrong with a business informing their consumers of various products that might be of interest.

When I browse Facebook, I don’t see advertisements for women’s products. Why? I’m not a woman. I’m not interested in such things. It benefits us all when advertisements are targeted, both company and individual.

Sure, this foray was a bit brutish, but it’s a sign of things to come. I say that in a good way.

Tom Liberman

Overbooking at Airports and Hotels is there a Solution?

Posted on by

OverbookingThe recent case involving United Airlines has brought to the forefront of people’s consciousness the industry practice of overbooking on flights and in hotels. I understand the United Airlines case didn’t actually involve overbooking but that’s irrelevant to the topic at hand. The question is, should the airline and hotel industries engage in the practice?

In order to make a judgment in this regard we must understand why they do so. Overbooking is done primarily to maximize profits. There are always people who book a hotel room or a flight but don’t show up when the time arrives. This translates into losses for the airline or hotel as they would normally have reserved that ticket or room for someone else. Now it is too late to do so.

The problem occurs when fewer people fail to show up than are overbooked. The flight or hotel now doesn’t have enough room for all the customers. This is resolved in a number of ways, generally by offering incentives to take a later flight or providing a room at another location.

But how is it solved? There are basically two methods.

Laws might be passed that forbid the practice. This leads to decreased profits for the industries involved. Hotel rooms go unfilled and flights take off at less than maximum capacity.

The second method is for the hotel or airline to voluntarily refuse to overbook. This generally involves non-refundable transactions. If you purchase a ticket and are unable to make the flight or stay, you do not get any of your money back. It is as if you actually took the flight or stayed in the hotel.

Both solutions have significant problems.

When we reduce profit, there is a negative effect on all aspects of the business. The company might not be able to employ as many people, they might economize on things like safety, they might even go completely out of business. If laws are passed in one state or community rather than another, we create obstacles to the free market. One supplier has an advantage over another. In addition, companies are now given an incentive to break the law. When you make breaking the law profitable, you encourage crime. Companies that find ways around the restrictions are going to be more profitable than those who follow the regulations. These criminal companies succeed where their competitors fail.

The second solution is problematic for the consumer. Sometimes when we miss a flight or fail to stay at a hotel the cause is unavoidable. Perhaps a death in the family or an illness. It comes across as cruel and certainly generates an enormous amount of bad publicity in this information age to force people to pay for tickets under these circumstances. People lie. It would be impossible for an airline or hotel to track down everyone who failed to show up and prove their excuse, a death in the family, didn’t actually happen. Thus, they either stick to policy or face social media retribution.

I totally understand the outrage of a person who suffers because of overbooking. I’d be angry as well. I just think it’s important to understand the cause of a problem before going about trying to solve it. In this case, there are solutions but they are imperfect.

That’s the nature of this world sometimes. Contrary to what people might be saying, there aren’t always easy solutions.

Happy travels, my friends!

Tom Liberman

Perceived Value of Starbucks Coffee and Organic Eggs

Posted on by

starbucks-perceived-valueA friend of mine on Facebook recently passed along a meme comparing the price of a dozen organic eggs to the price of a coffee at Starbucks. The ostensible reason for the post was to ridicule people paying five or more dollars for a coffee who then complain a dozen eggs is too expensive. The reality of both situations is something called Perceived Value.

The basic idea is that people want value for their money. The relative worth of a product and the value associated with expenditures are different for each person. For some people a dozen eggs has much more value than a cup of coffee from Starbucks, while for others it is reversed.

I don’t want to get into a long discussion of Perceived Value, although it’s certainly a fascinating subject. I want to examine why people in the United States, and much of the developed world, seem to value a cup of flavorful coffee at a higher level than a dozen organic eggs.

It’s because cheap eggs abound and we don’t need to purchase expensive eggs to stave off starvation. There are plenty of eggs in this part of the world. Eggs go for a very low price thanks to factory farming and other capitalistic endeavors. Thus, we balk when we see a high price associated with a dozen organic versions of the product we could get more cheaply.

But wait, you say. You can also get a cup of coffee for less than five dollars many places. This is true; however, a cup of coffee is not a vital human need. Eggs, as in nourishment, are something we absolutely must have. If we go without eating for a long period of time we die. Eggs are a human need. Coffee is simply a human desire; in other words, a luxury. We don’t mind paying extra for a cup of coffee as long as we really enjoy it. We don’t need the coffee to survive. We justify the expense as disposable income.

The reality is we cannot change anyone else’s perceived value of a product. If some people balk at spending a certain amount on eggs, that’s their business. The same for coffee.

The important lesson to be learned is that capitalism has brought us abundance. Certainly, arguments against factory farming can be made. The practices that allow for cheap eggs are not particularly savory. That being said, we can actually purchase a dozen eggs for a couple of dollars. In fact, most people in the developed world spend far less of their income and time getting enough food to survive than do those in underdeveloped countries. This allows us to purchase an expensive cup of coffee.

I’m of the opinion this is something we often overlook in an age of abundance and wealth. Sure, things aren’t perfect, but capitalism and technology have brought many of us to a level of wealth and luxury beyond the wildest imaginations of previous generations.

Rich people are very rich but poor people are a lot wealthier than their counterparts in underdeveloped nations.

It’s going to take some time before we achieve super-abundance. Where everything we truly need is available for almost nothing at all. Where the only money we spend is on luxuries. There are still people in the developed world suffering and hungry but that doesn’t mean we should turn back to older times.

The path to this level of abundance is through the expansion of capitalism, not the restricting of it. Five dollar coffee proves it.

Tom Liberman

The Benefits of Autonomous Cars

Posted on by

autonomous-carI’ve long been a proponent of Autonomous Cars, or as they are often called, Self-Driving Cars. When I try to argue for them I generally get a lot of resistance. Some people don’t want to give control of the car to a machine, which they feel less able to safely navigate the roads. Others feel the cars are likely to have their computer systems hacked.

Both of those things are fairly unlikely but I really want to discuss the many and varied benefits of autonomous cars for all of us. The arguments I present here really aren’t going to promote the march toward such vehicles. The cars are coming and there is nothing to be done about it.

One of the major benefits is simply an enormous savings in money of law-enforcement expenses and the transfer of such assets to criminal, rather than traffic, duties. That is to say we’ll save huge amounts of taxpayer money. Autonomous cars won’t make illegal turns or exceed the speed limit. They will follow the restrictions of the software, which will be to obey the law.

Another huge savings in tax dollars will be on emergency services. Autonomous cars will get into accident far less frequently than human driven cars. This means hospital services will decrease dramatically. Doctors will have much more time to deal with sick patients, not accidents victims.

More tax dollars will be saved on construction and maintenance of road signs and signals which will be unnecessary.

Your insurance payment will be reduced by the amount of liability you are paying. You will not be responsible for any accidents.

People unable to drive will be able to move about their communities as desired.

Handicapped passengers will be dropped at the front door of their destination and picked up at the same spot at a time of their convenience.

There will be no more intoxicated drivers on the road

Some fifty-thousand lives will be saved in the United States every year.

The land devoted to parking lots will be greatly reduced. Autonomous cars will deliver a passenger to the front door of a location and then motor off to park in huge lots built off the beaten path. This will create a network of shops and businesses in a much smaller area and allow the greening of your community with more parks and other amenities.

These cars will increase productivity as passengers will perform their work while commuting from their origin to their destination. In addition, the travel time from points will be reduced dramatically as the cars will be able to travel at far higher speeds than a human can manage and also in herds, thus avoiding the stop and go of normal traffic.

Security measures will prevent your car from being stolen by anyone other than an identified driver.

You will be far less stressed. Driving is, without question, the most stressful thing I do.

Travel will be increased as any destination within eight hours can easily be reached while the passengers sleep. This will lead to the closing of many small airports which are largely supported by tax dollars. Thus, yet another saving for taxpayers.

You may not like the idea of an autonomous car but your children will never learn to drive. And, in this man’s humble opinion, that’s a wonderful thing.

Tom Liberman

Why are Manufacturing Jobs in China?

Posted on by

manufacturing-jobs-chinaI just read a lengthy but amazingly interesting article describing a firsthand account of working in a Chinese electronics factory, apparently one of the better ones. The account of what happens in the factory and how the workers are treated is an eye-opening experience. It also explains why manufacturing jobs are vanishing in the developed world.

Why so illuminating? Not because it gives the reader an insight into the working conditions of the workers. I have, nor do I think most people have, any illusions about that particular issue. It’s fascinating because it shows, in the starkest possible terms, why such manufacturing is happening in China and other less-developed nations.

There is good, bad, and awful about how these factories operate. I’m not going to go into detail on the various issues. My goal today is to simply explain why such jobs are being performed in China and other countries like them.

It’s really quite simple. In developed countries, we lead amazing and largely wonderful lives. We have access to things people in other countries can only dream about. China and countries like it have a huge and largely disposable workforce. Turnover rates at such factories are enormous. Young people come, work a few months or so to earn enough money to help their families, and then leave.

Suffice it to say that the workers in developed countries would simply refuse to work in such conditions because of our way of life. I’m fairly certain the so-called bad guys here, factory owners, would not want a world in which such factories were possible in the United States.

Consumers drive business. If the United States were China or Mexico as far as the average user’s buying power, well, manufacturers wouldn’t be able to sell their product. They would go bankrupt.

What’s happening is that we have disparity. Wealthy nations have workers who don’t want to do awful jobs whereas poor nations have a plethora of such employees.

The good news is that such jobs, unpleasant as they are, raise the economic profile of countries like China. As the average Chinese citizens gets more wealth then there will be fewer workers to do this sort of work. Automation in the form of robots will continue to take over.

As wealth increases so does quality of life. Eventually the entire world will catch up and there will be no profitable way to exploit workers in this fashion. Not without turning back the clock in way that is detrimental to the super-rich as well as the poor.

This kind of manufacturing job is gone. It won’t be back. And that’s a good thing.

Tom Liberman

Charging Bull and Fearless Girl Statues at Odds in more ways than One

Posted on by

Girl-and-Charging-BullThe fight between the Charging Bull and the Fearless Girl just left the park and headed to the courts!

I am the son of a lawyer, the brother of two lawyers, and the cousin of even more lawyers. I find law fascinating and when I read the artist who created the Charging Bull, Arturo Di Modica, plans to file a lawsuit against New York City in regards to the Fearless Girl statue placed nearby, well, I had to learn more. And learn I did!

I suspect Di Modica doesn’t have a case seeing as he installed the Charging Bull as an act of Guerilla Art back in 1989. The police seized it but then replaced it a few blocks away because of its popularity. It has remained there on a temporary permit ever since. The worst-case scenario for the city is likely that Di Modica moves it to a new location, at his expense.

Di Modica is a rather litigious fellow so we will see.

Meanwhile, the statue of a young girl facing down the bull was commissioned, created, and placed by State Street Global Advisors as part of an advertising campaign coinciding with International Women’s Day. This statue is referenced as the Fearless Girl. It was placed legally with a permit for one week. It also proved popular and the temporary permit has been extended in the same way as the Charging Bull’s was.

Another incredibly interesting thing is why Di Modica is planning to involve the courts. It is something called Artistic Integrity. Di Modica believes Fearless Girl changes the integrity of his art. The Charging Bull is meant to symbolize aggressive financial optimism. Fearless Girl staring down the bull seems to change this meaning. Now, at least in the minds of some people, Charging Bull is a symbol of aggressive bullying.

As I mentioned earlier, I don’t think Di Modica has a chance in court, but I still wanted to examine this idea. I’m an artist. I write books. Is it really up to me challenge the meaning one, or many, of my readers choose to assign to events in those books? When Jon Gray tangles with High Priest Amalagaz I certainly intend the scene to have particularly meaning, specific artistic integrity. There is a point to it.

If a reader came to me with a completely difference conclusion, I’d certainly explain what I meant by the scene. That being said, I’d have no legal basis to challenge the right of someone else to believe what they want. Likewise, if Barnes & Noble chose to put my ostensibly Sword and Sorcery Fantasy books on the shelf with Mystery Novels I would have little recourse other than telling them not to sell my books.

I strongly suspect Di Modica is simply drumming up publicity and his threatened lawsuit will eventually go away.

Still, I’m glad he filed it because I learned a lot of things today. I hope you did also.

Tom Liberman

FCC Decides Against Cell Phone Use Because They’re Noisy

Posted on by

cellphone-airlineYep. Not because they pose a threat to communications between pilots and air traffic controllers. Because FCC Chairman Ajit Pai thinks people want some peace and quiet in flight. Pai believes the government has the right to prevent you from using a cell phone because it might disturb someone else.

This is government that Libertarians like myself not only hate, but fear.

If there was a technical reason using your cell phone on a flight was dangerous, I’d fully support the airlines preventing you from doing so. The reason Pai doesn’t mention this as an excuse is because there is little evidence doing so is dangerous.

In a survey, it was found the majority of people don’t really want the person next to them on the plane gabbing away on her or his cell phone. And therefore, the FCC seems to be of the opinion that it should be made illegal. That because people don’t like it, it should be against the law.

I’m certainly not opposed to each airline creating rules about cell phones. If one airline wants to restrict their use during flight then that’s their business. Consumers might flock to that airline for the silence. Other consumers might patronize airlines that allow cell phone use because of the convenience. That’s a free market. That’s the way it should be.

This is an important distinction. When the government is allowed to make things illegal because other people don’t like them we’re treading in dangerous waters. Let’s face facts. We’re not merely treading in such waters. We’re up to our necks with our heads tilted back trying to breathe.

The United States is certainly not a totalitarian regime. We have many freedoms in this country that are not available in places like Russia, Saudi Arabia, and China. I’m grateful for those freedoms but that doesn’t mean we shouldn’t fight against even minor grievances like this one.

The government has no good reason to restrict the use of cell phones on planes. We should not be making laws based on what the majority of people may or may not find annoying. Remember that someone else might very well find something you do to be irritating. When you support government restricting someone else, you inevitably open the door to rules prohibiting you from doing something you would enjoy. Resist such temptations.

Tom Liberman

 

Are Vitamins Worth Purchasing?

Posted on by

vitamins-supplementsThe Annals of Internal Medicine recently posted an editorial pretty much blasting the use of multivitamins and supplements. I originally came across the study in an article from Business Insider and the comment section was pretty universal in condemnation of the story.

I’ve long felt that supplements and vitamins were a waste of money and almost universally placebos but the recent studies and this article seems to affirm my opinions. Wikipedia also confirms this idea.

It is important to note that the studies do not address what are called micronutrient deficiencies. Those who suffer from such deficiencies benefit greatly from vitamins and supplements. The editorial specifically excludes them from the study and is talking only about otherwise healthy people who spend considerable money on vitamins and supplements.

And I do mean considerable. The vitamin and supplement industry generates over $28 billion in sales annually and that amount continues to rise each year. I think it’s important to understand that the vast majority of people spending money on multivitamins and supplements are simply spending money on a product that does them no good whatsoever and, in some cases, actually causes harm.

In addition, many of these supplements and vitamins are produced in foreign countries with China making up the lion’s share.

As you may or may not know, I’m a Libertarian. If people choose to purchase vitamins and supplements that’s their business. I’m merely suggesting that you stop. Spend your money elsewhere. Perhaps a food service that brings you healthy meals each day. I’m a big believer in capitalism as a driving force of making the world a better place. It is to the benefit of all of us to have a healthier population. More work is done, less healthcare is necessary, etc. If people transfer part of the expenditures from something that is not helping their health to something that is helping their health, I benefit. We all benefit.

I know quite a few people who take vitamins and supplements and I suspect I’m going to take some heat for my stance on this issue. That’s all right. I’m tough.

Take a look at the studies and decide for yourself.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
April 2017 Release: For the Gray

Chevy Chase, Community, Hate, and Success

Posted on by

community_paintball_explosionI was browsing through some of the glorious paintball clips of the television show Community on YouTube when I came across this video. It reminded me one of the show’s stars, Chevy Chase, hated being on the show and most of the cast and creator were not particular fond of him.

If Chase hated being on the show and most of the people he worked with didn’t like him, how was the show so hysterically funny? How was Chase so good? How did the other actors create comedy gold in scenes with him? How did the show runner produce hilarious episodes one after the other?

In team sports there is something called chemistry. This is how the players and coaches interact with one another. It is universally considered a benefit when everyone gets along. When the culture of the team is good. But perhaps the reality is different. At least that’s what I’m thinking. Maybe liking each other isn’t all that important to success. Maybe working with talented people you hate can be and is far more of an indicator of success than so-called team chemistry.

As an extreme example; it’s pretty clear no matter how much the other players on the St. Louis Cardinals might like me as a person, I would be an anchor on the team, what with me striking out nine out of ten plate appearance (ok, 99 out of 100).

Is it pleasant to be around those we like? To spend time in the company of those we enjoy? Yes. Why, yes, it is. I enjoy life more when I’m surrounded by people whose company I enjoy. The question becomes, is it an element of success? It seems like it should be an obvious answer. If the team, be it sports or business, likes one another they should be happier and thus more willing to perform excellently. Yet, is it?

Does happiness engender success? These are the question managers must ask themselves while building their teams. Is this new person we’re adding going to improve the culture? Is this new person we’re adding going to improve our chances of succeeding at the project?

Who is more important? Douchebag super-talent or sweet person average talent?

Obviously we’d love both, but what I’m asking is which takes priority. You want the job done. You are the manager. What’s your choice? The more I think about it, the more I come to the conclusion that success is more related to talent than chemistry. Much more. What do you think?

The poll question is a bit black and white and I understand there are nuances.

If you were building a team which would you place in higher esteem?

View Results

Loading ... Loading ...

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
April 2017 Release: For the Gray

Girl Scout Cookies and where the Money Goes

Posted on by

girl-scout-cookiesGirl Scouts sell lots of cookies. Lots of them. I refuse to purchase for the same reason I don’t buy candy from a kid standing at the corner. I don’t by coupon books from the children of my friends. I’m not convinced it is a good use of my money, frankly, I’m convinced it’s a bad way to help. I suspect I’m going to take some heat for this post but it’s been on my mind for years.

Here is the problem. Much of the money I’m giving to help out the children of my friends goes to someone beside those children. The vast majority of the money goes somewhere else. In the case of the Girl Scouts, the troop itself receives about 13% of the sale. A box of cookies costs $4.00. You’d double the amount you’re giving to the girls if you simply gave the young entrepreneur $1.00.

Some 21% of the sale goes to the baker. The rest goes to the local council. They spend this money largely on salary although it’s difficult to find how much goes to the community, certainly some of it.

Here is what I think is important. I don’t hate Girl Scouts. I don’t hate the Girl Scout Council. I’m saying the method of donating to their cause is somewhat dubious.

This website lists lots of charities and their guidelines for what makes an organization credible or not. They have not rated the Girl Scouts but their general guidelines is that more than 66% of the donated money should go directly to the cause. For those without a math inclination: 66% > 12.5%.

I’m not telling you to stop buying Girl Scout Cookies. I’m telling you, if the reason you are buying them is to help out the daughters of friends, perhaps you should find another way to give. When they come by with their tally sheets, simply give them $1.00 per box that you would normally purchase.

We like to do good. We like to help others. Sometimes that gets taken advantage of by people who don’t even realize they are doing so. The Girl Scouts are filling the wallets of other people. They are doing the work. They are essentially a labor source being exploited by a business.

Therefore I don’t purchase. You may feel differently.

Tom Liberman

Anita Krajnc and Giving Water to Pigs

Posted on by

anita-krajnc-water-pigsThere’s an interesting case about to be adjudicated in Ontario, Canada in which a woman named Anita Krajnc poured water into a truck full of pigs heading to slaughter from Fearmans Pork. She is only charged with a misdemeanor charge of mischief and the case is not exactly earth shattering but it demonstrates a fundamental problem, as I see it, with our general society these days.

What we have is two groups who seem to be, at a cursory glance, at complete and total opposite ends of a spectrum. Krajnc belongs to a group called Toronto Pig Save and Fearmans Pork makes a living off raising and slaughtering pigs.

I don’t think I need to go into details as to why these two groups are facing off in court. Nor do I want to spend time talking about the merits of the case against Krajnc. I won’t extoll on the virtues of the cause nor talk about the value of bringing the pigs to slaughter or even of a free market and supply side economics. All of those things are worth discussing but not by me and not today.

What do I want to talk about? Good question.

What I want to talk about is how people on opposite sides of the spectrum all too often, and as a first response, resort to antagonistic behavior when there is actually common ground upon which they could join.

Common ground? Between Pig Save activists and Fearmans Pork? Yes, indeed. There is far more common ground on a lot of issues than people realize.

Krajnc would like to give the pigs some water while they are in the truck heading to slaughter. That’s a nice sentiment to be honest. Animals heading to slaughter are sometimes not properly cared for near the end of their life because to feed and water them at such a late stage is an expense. It’s cheaper not to do so.

What Krajnc did was climb on the truck and pour water from a bottle onto the pigs. The truck driver and pig owners were naturally worried that something more nefarious is going on and want to protect their property.

A better choice from my perspective would be Toronto Pig Save simply asking Fearmans Pork if they could pay for the expense of giving the pigs one last drink of water before heading to slaughter. When Fearmans Pork found out what Krajnc was up to they could have offered some sort of system by which she was allowed to water the pigs more effectively.

Would this have solved the issue from Toronto Pig Save’s perspective? No, naturally not. They don’t want pigs going to slaughter at all, but at least they could have given the animals some water before the inevitable. Can Fearmans Pork simply have such activists arrested for such behavior? Yes, of course, and they did. But couldn’t they also have suggested a system by which the pigs did get a last drink of water at the expense of Toronto Pig Save?

No solution is going to make everyone happy but it seems to me that we can get more accomplished if we work together, even with those who are apparently on the opposite side of an issue.

What if abortion foes and supporters worked together, spent their time and money, on preventing unwanted pregnancies? What if Animal Activists and Factory Farm owners worked together to improve the life and health of the animals?

How much time, passion, and money is spent on activities that don’t do anything to make the problem better, but simply caress the egos of the parties on both sides. “We’ll put those animal nutcases in prison!” “We’ll show the world the horror of factory farms!”

The comment sections of every story are filled with people who live in this black and white world. My way or no way at all.

I’ll end my post in the same way President Trump often does. However, unlike him; I don’t mean it as in pathetic. I mean it as so much wasted energy, effort, time, and money.

Sad.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
April 2017 Release: For the Gray

 

Pre-Industrial to Industrial to Information

Posted on by

Industrial-revolutionI’ve seen quite a bit of debate both in person and online about the idea of Protectionism and why we either need to avoid it or embrace it. I find that people who believe one side of the argument seem to be largely immune to attempts to convince them otherwise. As you might imagine much of this debate is fueled by the current political climate in the United States.

President Trump is a strong protectionist. He believes that we must protect our workers from foreign depredation. On the other hand we have Libertarians like myself who believe in Free Trade. What I’d like to do today is not argue with you but ask you to argue my point. Perhaps no one will take me up on it, my blog viewership is somewhat short of the millions. However, perhaps a few people who believe in the Protectionist mantra will be willing to step forward.

So here we go.

Imagine that is not 2017 but in fact it is 1760. Before even the United States existed as a free nation.

Our economy is based almost completely on Pre-Industrial economics. Agriculture is the primary form of employment and wealth generation, as it has been for tens of thousands of years. People are born, live, and die all within fifty miles of a single location. On the horizon is a frightening thing. The Industrial Revolution.

The Industrial Revolution will destroy virtually every single job that exists today. I am a precursor of the Luddites. I believe this new way of doing things will destroy my family and my life. I will no longer be able to work, to make money. Tell me why I should embrace textile manufacturing, metallurgy, steam power, machine tools, chemicals, cement (my job is a brick layer), gas lighting, glass making, paper machines, automated agriculture, mining, canals, roads, railways.

These things will destroy my family. My children will work in a factory instead of providing subsistence farming at home. I don’t know the skills required to live in this coming world.

I will suffer. I will not have a job. You, the government, must protect me and my job from this new way of doing things. I don’t know how to write code, I mean fix a steam engine. Explain to me how it could possible be to my benefit, to my nation’s benefit, to the world’s benefit to move from pre-industrial to industrial. Why should we not fight this?

Go!

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
Next Release: For the Gray

Mexico, USA, Cars, and the Complexity of the Protectionist

Posted on by

protectionismThe recent election in the United States brought an avowed Protectionist to power and this raises interesting and complex economic questions. As a Libertarian I’m opposed to such policies.

I will not pretend that economics is a simple or easy to understand discipline. Nor do I even hope to convince those who agree with a protectionist agenda. I only hope to show you the situation is more difficult to understand than you might think.

At issue is the manufacturing of cars in Mexico. In the last twenty years building small cars in the United States has become an unprofitable business. When NAFTA was passed protectionism in North America was largely abolished. If you produced your goods in Mexico, Canada, or the United States then other countries are forbidden protectionist policies like tariffs, taxes, or other means. Free trade. If you can produce something more cheaply than the people in a neighboring country then you were allowed unfettered access to that market.

This means economic hardship for some and prosperity for others. If making a car in the United States cost X and making the same car in Mexico cost Y then manufacturers have a decision to make. In the last twenty years that decision was largely to move facilities to Mexico for production of small cars. The vagaries of economics made manufacturing them in the United States less or not at all profitable. This meant the loss of certain jobs. And that’s what Protectionists talk about the most. Yes, there is a loss of jobs.

However, let’s examine the likely outcome if the United States propped up the manufacturing of small cars through tariffs and other protectionist ideas. Japan and other car making nations would have gone to Mexico, as they have done and continue to do. They would then have been able to offer cars at a significantly better price than the U.S. companies could match. The only way to save those jobs would be for the U.S. to provide increasingly aggressive tariffs or to cut wages dramatically. Thus people in this country would be paying far more for cars or earning less, all to support jobs. That’s reality. That’s the inevitable outcome of protectionism.

Protectionists paint jobs going to Mexico and businesses moving plants to Mexico as a terrible thing. As stealing jobs from U.S. citizens. Movement of manufacturing to where it is best performed certainly saves consumers money but in the long run saves jobs as well. The jobs supposedly saved through protectionism come at a terrible cost and only delay the inevitable.

Imagine Protectionism comes to rule the day in the United States. Manufacturing comes back to the United States. What will be the result?

You will pay more for the same car until propping up the difference in price becomes unsustainable and the plant goes out of business anyway. The United States will produce goods at a higher price than everyone else in the world, meaning only we will purchase such products. Our global competitors will slowly take all our markets and in the meantime we’ll be paying more for everything. Businesses will eventually go bankrupt in increasing numbers and job losses and unemployment will rise as an inevitable result.

All to artificially preserve unsustainable jobs.

Protectionists wail about how manufacturing is going to other countries but the reality is the number one employer in the United States, besides the government, is Wal-Mart. They employ nearly six times more than the runner-up, McDonald’s. The main reason? Manufacturing performed in China. When Ford and Chrysler move plants to Mexico it actually creates wealth in this country. It creates jobs. Just different ones.

Protectionism has an allure. Be aware of the long-term dangers it presents.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
Next Release: For the Gray

Is Your Grocer Stealing from You? Probably.

Posted on by

grocer-weigh-shortA friend of mine recently posted on Facebook that she’s been weighing her food of late and noticed a trend. Certain grocers systematically short you on weight. Let’s say you purchase a pound of turkey but when you put it on the scale it is .97 lbs. While .03 lbs is a small amount, it adds up over thousands and millions of purchases.

The state of New York recently fined Whole Foods for this practice. The behavior essentially steals a few pennies from consumers each time they make a purchase. If the mistake is random and sometimes the weight is over and sometimes it is under then it should all balance out in the end. However, if the mistake is systematically lower, then consumers are being charged for a huge amount of product they have not purchased. This is stealing. Plain and simple.

If the weight is short again and it again it proves the butcher or whichever employee or machine is doing the packaging is fully capable of measuring accurately and chooses to put in less. This is a conscious and measured decision to steal with the hope that no one will really care enough about the tiny difference to complain. There is no excuse for this behavior. It is illegal and fines of $500,000 like that which the state of New York imposed on Whole Foods is one way to stop it. This method relies on a state that is willing to prosecute. This is a big assumption. Rather than change their practices it might well be in the financial interest of the grocer to simply give out piles of money to politicians in the hopes of garnering favor. It happens all the time.

Another way, a better way, a more Libertarian way, would be to file charges against the person, not the corporate entity, who packaged the meat or the person who programmed the machine that is packaging the item. If that person is found guilty of theft then I find it reasonable to assume that all the other people who are engaging in this practice will stop. I think even just the act of filing charges against individuals would be enough to change the practice nationwide. A few dozen cases of consumers taking matters into their own hands would have a profound effect.

What individual is willing to risk prison for so little personal gain? I do not deny this path is more difficult than relying on the state. We have to hire a lawyer. We have to go through a time-consuming process. But I think the solution is better for everyone. Honest grocers. People buying and packaging.

This is my interpretation of what it means to be a Libertarian in a nutshell. Don’t rely on an inherently unreliable state to protect you. Don’t sue your grocery store. Charge the person who is stealing from you. The person who perpetrated the crime. Not the faceless corporation. This forces personal responsibility upon society. And that is a good thing.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
Next Release: For the Gray

Regulation Quagmire of EpiPen

Posted on by

epipenEpiPen is in the news and many people are angry.

There is, in fact, quite a lot to be angry about. The government encouraged the entire thing. Don’t get me wrong, I’m not absolving Mylan and CEO Heather Bresch of wrongdoing. They took advantages of a system to steal perhaps hundreds of millions of dollars from both the government and average people. But the system is all but designed to be abused.

EpiPen is a medical device that injects a measured dose of epinephrine. It was brought to market in 1987 after approval from the FDA. Things get quite complicated from there and I’ll try to summarize as best I can. If you want to know the entire sordid story read the Wiki article.

Basically the manufacturer of the device changed hands many times. Each time the new company aggressively sought to protect their patent, buy out competitors, and maximize their profit. The most recent company to acquire EpiPen is named Mylan.

The United States government helped Mylan greatly with draconian patent laws. In addition the FDA makes it extremely difficult and expensive to introduce competitive drugs to the market. Using these two factors to their advantage EpiPen managed to control a monopoly on the drug.

Price Gouging is largely not illegal so EpiPen can charge whatever they want for their product, and they did. However, if getting competitive products to the market was not so difficult, if the government did not tacitly help Mylan maintain their dominance in the market, bargain price manufacturers would certainly have undercut Mylan and restored the market to an equilibrium. In a word, capitalism.

In addition Mylan used a private non-profit called the National Association of State Boards of Education to influence, read bribe, state and local governments to pass laws protecting schools from all liability when using EpiPens. This meant schools across the nation purchased that particular product because it was legally, thanks to state government, less risky. The close ties between Mylan executives and the NASBE, Heather Bresch’s mother is the president having been appointed after large donations from Mylan, is disturbing if not illegal.

Into this mix comes Medicare. Medicare is an enormous government agency designed to make sure elderly people don’t go without medical care. Among their many regulations are different fees for generic and brand-name drugs. Generic drugs pay a significantly smaller rebate. Mylan listed the EpiPen as generic when it was clearly brand-name. This meant they didn’t rebate the government as much for purchases, to the tune of about $100 million. I can only guess agents in charge were bribed to ignore the listing.

How was all of this possible? I’ll tell you. Because the government is overly involved in business. If the government didn’t help Mylan get the monopoly in the first place the price issue wouldn’t exist. If the government didn’t have an insanely complex regulatory system associated with Medicare then taxpayers wouldn’t have paid Myland tens, perhaps hundreds, of millions for EpiPens. If state and local governments didn’t incentivize schools to purchase EpiPens in enormous numbers they wouldn’t have done so.

There aren’t simple answers to these problems. I don’t pretend there are. But I wouldn’t mind if people took note of the complicity of government in the EpiPen mess. In government’s integral role in the fraud. Mylan used the government but the government is designed to be used. It begs unscrupulous business owners to join the party.

Tom Liberman

Lessons from Trump Taxes

Posted on by

trump-tax-recordsThere’s an interesting story in the news about Donald Trump and his various corporations paying no taxes. Some people are outraged and others think he’s a genius. Those are not the conclusion I draw from the story.

I’ve written about this before but I’ll go over it again.

The current tax rate on corporations in the United States is 35%. Many people argue, correctly, that this is far too high but somehow nothing ever gets done. Even when Republicans are in charge of Congress and the Executive Branch the rate stays the same despite all the complaining. Why is that?

Simple. Enterprise Businesses and rich people pay comparatively very little in taxes in relation to their percentage of wealth. The actual paid rate for corporate taxes amounts to about 11%. Why is that? Because Enterprise Businesses have access to an army of tax lawyers to find shelters. They pay little or nothing in taxes for the most part. Just like Donald Trump. Trump isn’t a genius, he’s an average wealthy person with a business and good tax lawyers. None of them pay much in taxes and that’s why they love the current system. That’s why it doesn’t change. Lobbyists from Enterprise Businesses and wealthy people ensure that it won’t change.

So who is paying taxes? Small and Medium businesses, you and me. We don’t have access to high-powered tax attorneys. We don’t have access to offshore shelters. We pay the huge rate. There’s a reason why a higher and higher percentage of all business earnings and employers are from Enterprise Businesses. The system is set up to give them an advantage and they love it.

The more complex the tax code the more the person who doesn’t have access to tax lawyers pays. The more the code is designed to stop the wealthy and powerful from paying the more it actually benefits them. They find the loopholes in the increasingly complex system that the small business owners and regular people cannot.

People argue against a Flat Tax because the perception is that it will cost regular people more. On paper this is true. Paper isn’t reality. In reality if the tax code was simplified the wealthy and powerful would pay more even as their supposed tax rate goes down. It’s all a shell game of deceit. The wealthy and powerful love the tax code that supposedly has them paying high taxes.

Simplify the code. That’s the lesson to be learned.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
Next Release: For the Gray

ITT is Shutting Down because they can’t get Government Money

Posted on by

ITT-Technical-InstituteThere’s an extremely telling news item this morning about ITT Technical Institute and judging by the comments I’m reading, most people don’t understand why the news is important.

In a nutshell, ITT Tech is a For-Profit educational institution. The government has accused them of fraud and deceptive practices. The school looked into ways to defend against these charges and decided that their only choice was to shut down operations at their 130+ campuses. This after a series of lawsuits and federal raids.

What I’m seeing in the comments section is basically two ideas.

The first trend is that it’s about time the government shut down this institution that was preying on young people and giving them false hopes and a sub-par education. That this is the role of government and they should be shutting down more such schools.

The second series of threads is from those who think this is an example of overbearing government persecuting the school. These people argue students are responsible for signing up for the classes. No one forced them to take out loans, which are defaulted at an alarming rate.

Both points of view have some merit but I think miss the real problem.

The government didn’t shut down ITT for their practices. Those investigations are still ongoing. The government didn’t shut down ITT at all. What the government did was tell ITT they were no longer eligible to receive government backed loans. Once ITT could no longer get such loans, their only choice was to shut down operations.

The lesson from this? The government, essentially your tax dollars, was completely and totally supporting ITT and, in fact, almost the entire For-Profit educational system. That’s what is wrong. That’s the root of the issue.

There’s nothing wrong with For-Profit educational institutions. If the government didn’t get involved by giving out trillions in student loans then the successful schools would be those that provided their students with a quality education at a fair cost. Those would have been the schools that attracted the most students because of fair prices and good education. That’s capitalism in action.

What happened is shady institutions interested in taking government money with little or no obligation to the students became dominant in the industry. Students had, and continue to have, little choice but to attend a school that is interested mostly in gleaning profits from government loans, not providing a quality education at a reasonable price. There is far more money to be made fleecing the government.

That’s the problem. The fact that ITT Tech has to shut down in the face of the loss of government money proves the point.

It’s not the government’s job to decide which business should survive and when it does so it causes far more problems than it solves.

The problem it is trying to solve is getting young people an education and allowing them to enter the workforce. It’s a noble idea but it causes huge problems. Let financial institutions loan money to students to attend such schools. These institutions will only give loans to students attending schools that have quality programs because the financial institutions have a vested interest in getting their money paid back. Unlike the government which just collects more tax dollars and rolls right along.

Tom Liberman
Sword and Sorcery fantasy with a Libertarian Ideology
Current Release: The Gray Horn
Next Release: For the Gray