Monday, February 28, 2005

Prison segregation


Saturday, February 26, 2005

The real problem with Walmart

Max comments on some republican who is disturbed by the power of The Wôl-Märt entity.

Let’s ignore for now the fact that the beast bearing the name Wôl-Märt practices a form of modern slavery by locking their sub-contracted serfs inside their stores at night¹ among other crimes against humanity. For now, I want to focus on the Wôl-Märt entity’s inherently socially inefficient characteristics and not those simply acquired through mortal incarnation inside inbred hicks.

The Wôl-Märt is a natural monopoly. Their business model is being the one shop in a middle of no-where county in Dixie with 95% of the stuff people will want to buy on any given day. 5% of the time people may have to mail order or go into a big city a few counties over, but most of the time they can make just one trip to The Wôl-Märt. So if they need a garden hose, a notepad, and a toaster they don’t have to visit two or three towns to go to a garden shop, office supply store, and an appliance store, they can just make one stop. A large part of the entity’s fast proliferation was fueled by leveraging information technology to find out which products are in that 95% and making sure they have it in stock (again, minimizing transaction time costs for remote consumers). Their business is knowing what you’ll want and then putting it all in one place to save you time. This is largely information based and generally homogenous across populations (remember, they only supply the 95% most common items, so discerning taste in jazz fusion doesn’t fit the model) leading to economies of scale. This is in addition to the usual economies of scale that come from being a distributional system very similar in many ways to the post office or UPS.

So, assuming that monopoly pricing is sufficiently guarded against (though it would be ideally suited to isolated rural areas), there exists another problem of market power. The Wôl-Märt has what is called monopsony power. Monopsony power is the inverse of monopoly power in that there are few or only one purchaser to many suppliers. As many have noted, the monopsony power of The Wôl-Märt allows it to push down wages and force suppliers to move to outsource their slavery to China, but I am not talking about that (even though slavery is a, y’ know, crime against humanity). What is another relevant problem is that this monopsony power may force down the rate of innovation.

The Wôl-Märt entity has grown to a point that it may begin to force down the profits of new entrepreneurs entering the market, capturing additional economic rents for themselves. While it is true that inventions are an inherently diversified market and that price discrimination between inventions is possible, that may not enter strongly into the decision process of a new possible inventor. After all, if The Wôl-Märt entity was not satisfied by devouring the souls and profits of X entrepreneurs before me (through seemingly endless and sadistic price haggling), why should I be any different? The monopsonistic suppression of rewards from innovation will slow the pace of innovation, conceptually equivalent to lowering the quantity of the good “innovation” produced. This creates deadweight loss in a similar way to the deadweight loss created by a monopolist (‘poly pushes up prices to reduce quantity, ‘psony pushes down prices to reduce quantity). Who knows, there might be some guy sitting around working in an office who could invent the next Post-it Notes™ but won’t because he thinks dealing with The Wôl-Märt is too much of a hassle.

¹ Key quote:"Ms. Williams said Wal-Mart, with 1.2 million employees in its 3,500 stores nationwide, had recently altered its policy to ensure that every overnight shift at every store has a night manager with a key to let workers out in emergencies." 1-18-04 that's 2004, not 1904 or 1804.

Sunday, February 20, 2005

So I flip from Booktv to CNN Late Edition, little do I expect...


Seriously, um, I thought that's what CNNSI is for.

Friday, February 18, 2005

All jews think alike (maybe)

I don't know if this is an actual case of parallel thought or if Dr. Baker simply saw my earlier comment.

Tuesday, February 15, 2005

Welcome Skippers!

Now that I have attracted the attention of the Skippers, I feel obligated to use it to some positive purpose.

I have been meaning to comment on fellow jew Al Franken's attempts at launching a phalanx of fighting keyboarders against Brit Hume. Franken is right. What Brit and Fox are doing (present tense) is incomparably worse then what Rather did. Fox has distorted a quote to the point of false attribution. This is worse then simply making a mistake in reporting since in the case of a mistake, only the reputation of the news agency suffers. In the case of false attribution, Fox has potentially damaged the reputation of one of the most effective US Presidents in history.

The damage caused by this offense is exacerbated by the refusal of Fox to issue a retraction of any sort, let alone an admission of wrong doing. Tell Fox how you feel.

Sharansky's appeasement

Did you know that there were elections in Nazi Germany?

I didn’t, and apparently neither does Sharansky. Even after much of the consolidation of Nazi power after the Reichstag fire and passage of the Enabling act in March 1933, Nazis still held elections to validate their power. Specifically, the position of Reichspräsident was elected to seven year terms (plus sixty days transition time) according to the Weimar constitution article 43, and was replaced by the Chancellor in the case of sudden vacancy. Given that the bastard assumed power after Hindenburg died August 2nd, and held an election on August 19th 1934, by Sharansky’s democracy criteria, Nazis could have made a plausible appeasement argument until Oct. 18, 1941.

Nazis themselves draw parallels between the changes in their own country and the changes of the New Deal:

By assuming the Presidency and Chancellorship Adolf Hitler has merely followed the example of the United States, the Presidents of which are also their own Prime Ministers, according to Baron von Freitag-Loringhoven, former Nationalist member of the Reichstag, Professor of International Law at the University of Breslau and member of the Permanent Court of International Justice.

The same situation, he says, exists in several other States created after the World War, so the charges that the union of the offices of President and Chancellor is contrary to the conception of a modern State are unjustified.
New York Times 8-19-1934 pg.8*

The point of all of this is that the Nazis didn't need to get rid of the facade of democracy in order to completely dominate the country and cause belligerence. Sharansky is not entirely wrong. We have an interest in the internal workings of our planetary neighbor’s societies, however that interest is not simply elections. Our interest is in preserving freedom of expression as measured by Sharansky’s public square test: if I can express my political views in the public square without fear of reprisal, the country has freedom of expression. This can happen because of the will of the demos or in spite of the will of the demos.

Somewhat more amazing to me is the cold professionalism exhibited by the WSJ in covering the bastard's plebiscite (8-21-1934 pg. 2 “Warning seen in hitler vote”). They remark analytically “German economy is more and more taking on a war-time shape, with all the inconveniences resulting from various control and prohibition measures,” noting that the possible solutions to the economic woes are inflation or lower salaries. Again with the exception of euphemistic quotation marks, no hint of humanity is given when introducing “Dr. Hjaimar Schnacht, the president of the Reichsbank, who recently was appointed Economic Dictator to replace Dr. Schmidt who is on six months ‘sick leave,’ is as staunchly as ever opposed to inflation, in contrast to his predecessor who was understood to have favored it.” The WSJ then ends their coverage with some warm fuzzy direct quotes from the bastard himself about how he plans to win over the twelve percent opposition, while in its coverage the NYT compares him to Genghis Khan.

*Yes, if you look at the article you notice that the German claims the plebiscite is not an election, but a referendum. This claim could easily have been converted if election rhetoric were more palatable then reform rhetoric.

Sunday, February 13, 2005

Note to Pumkinhead

I am watching Sharansky argue with Buchanan on MTP when the irony dawns on me that if Sharansky is in fact correct, Buchanan will win the argument, and that the only hope Sharansky has of convincing the audience that he is correct is if Buchanan is correct in asserting that it may be against our interests to encourage democracy.

This is because Sharansky is attempting to incite a democracy to belligerence (effectively if not explicitly) for the idealistic belief that other democracies will not launch wars based on ideology.

I believe the word is absurd.

Note to Pumkinhead: This is not what democracy is all about. This is what democracy is all about.

Monday, February 07, 2005

Becker: To reduce government spending, increase the deficit.

Becker plan for privatization:

1: Borrow benefits for retirees and current payees older than, say, 55 from source X.

2: Attach contributions from current payees younger then 55 to each such payee’s individual future benefits.

3: Allow each individual to choose how much they will diversify away from T-bills into equity assets.

Why not just borrow from source X and have some bureaucrat (as opposed to individuals) choose the aggregate amount of diversification? This eliminates all sorts of administration and transaction costs. After all, some government bureaucrat is either implicitly or explicitly charged with “regulating” these equities funds (if Uncle Sam says to only invest in S&P 500 index funds, this implicitly makes S&P employees government bureaucrats), and that is much more open to political corruption then simply the level of diversification. (As an aside, you could just make a law saying that the GAO cannot report the Social Security system as part of the general budget.)

But then again, all that would be happening in that case is the government would be issuing additional debt to invest in equities. According to Becker this is beneficial because:

Both theory and evidence indicates that a good fraction of the additional revenue would indeed be spent. “Putting aside” assets for the future is very difficult for all governments, subject as they are to immense demands for spending now from various interest groups.
Well, the answer seems obvious now. Clearly, the implication is that we must borrow huge sums of money to increase the apparent size of the deficit, investing these sums in equities whose value will be kept off the books (I’ll let the accountants and lawyers worry about how). The then apparent explosion of deficits will force spending restraint in our politicians. It’s so perfect only a Nobel laureate could have come up with it!

In all seriousness, I fail to see how a “sudden” increase in taxes would be significantly more disruptive then borrowing from source X the massive amount that would be required to finance current retirees’ benefits.