Category Archives: Business

The Latest Lurio Report

…is out. Clark Lindsey has a summary of it. If you’re a subscriber (and if you’re not, you should be) you can read it here.

Charles seems quite encouraged by recent events. I’m a little less sanguine, because I’ve seen too many times how Washington can really screw things up, even when the people attempting to execute a good policy are acting in good faith.

Uh Oh

Walmart’s customers are running out of money.

That’s both a symptom of and a bad portent for the economy.

[Update a few minutes later]

Somehow, I can’t help but think that this is related: consumer confidence in the economy’s future is at the lowest point yet in the Obama presidency. And it wasn’t high when it started.

I suspect that won’t change before November. And even then, we’ll be stuck with him for another two years, though at least he’ll be defanged. As Glenn often says, another Jimmy Carter is a best-case scenario.

[Update a couple minutes later]

This was particularly disturbing:

Forty-six percent (46%) of all adults now say it is at least somewhat likely the United States will enter an economic depression similar to the 1930s within the next few years, showing little change in this view over the past two months. That number includes 21% who say it’s very likely. Another 46% see a 1930s-like Depression as not likely, but just nine percent (9%) say it’s not at all likely.

I think that the probability of that depends on the voters, this cycle and next. If they keep reelecting people who enact policies that, for whatever reasons, continue to sicken the economy, as they did in the thirties, it could get really bad. I hope that the voters are smarter this time around. It’s possible to learn from history, at least in theory.

An Open Letter To Two NPR Reporters

Worth reposting here:

Ms. Chana Joffe-Walt and Mr. David Kestenbaum
All Things Considered
National Public Radio

Dear Ms. Joffe-Walt and Mr. Kestenbaum:

Your excellent February 26, 2010, report on the history of how government officials chose the different methods that Medicare has used over the years to determine doctors’ pay is frightening because…

… in your report, Joe Califano, a chief architect of Medicare, admits that the first method of determining doctors’ pay was chosen for political reasons, namely, to buy doctors’ support for Medicare.

… you report that Mr. Califano, LBJ, and Congress were genuinely surprised by the rapid cost increases sparked by this first method.

… you reveal that much of the treatment that Medicare paid for was previously provided free by physicians; that is, Medicare crowded out a sizable chunk of private-sector philanthropy.

… you tell how attempts to change this first method of paying doctors were deeply influenced by skilled lobbyists working on behalf of doctors.

… in describing the development of the method currently used for determining doctors’ pay, you (perhaps without realizing it) reveal that this current method is the product of a comically childish labor-theory-of-value analysis – the same sort of analysis that is at the foundation of Marxian economics.

… your report ends with the admission that, because the current method isn’t working so well, Uncle Sam – 45 years after Medicare was launched – is still searching for a sound method for determining physicians’ pay.

Given this history, what reason is there to suppose that Obamacare is a good idea?

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

Because this time, it will be different.

This Won’t End Well

The brutal truth about Californians.

When I first moved out there thirty years ago, it was unusual to run into a native Californian — most people you met were immigrants from other states (or countries). I suspect that’s less true today, but modern native Californians are a different breed from those of an earlier era, and they’re running their own state into the ground. They don’t appreciate the natural bounty of the place, and seem to have an entitlement mentality.

Thoughts On Optional And Extortional Compensation

Let me preface this post with the point that I despise the general notion of tipping service people. This is partly because I dislike the notion of service people, period. That is, I don’t like people “serving” me (which may partly explain my antipathy to nanny government). Whether it’s the Jew, or Scotch in my ancestry, unless I can’t, I’d rather do it myself, if I have to pay for it. I hate to pay people to do something that I can perfectly well do myself (when loading luggage into a courtesy van, or checking into a hotel, I feel like a driver being extorted by a squeejee guy, being expected to provide a gratuity for a service that I hadn’t requested).

Now, having said that, I understand the economic model behind restaurants. The waitpeople are underpaid as a base salary, and expected to supplement their meager income via tips performed for better service. I get that.

What I also get is that it is a subtle implied form of extortion. If you’re a regular, if you’re a lousy tipper, don’t be shocked if over time your food becomes adulterated with the bodily fluids of the staff, and takes forever to get to you, and is cold when it arrives, and may not even be what you ordered. On the other hand, if you tip great, you’ll be treated like royalty from the planet Krypton.

But let’s talk about a different form of service. I’ve been on the road a lot lately, and not just for a night or two in a given place, but for days and weeks at a time. I’ve never (OK, not never, but rarely) done this, but my understanding from reading travel mags and such, is that it is also de rigeur to tip the people who clean your hotel room. On one of our many trips to Golden, CO over the past three months, we stayed at a Marriot Residence Inn, at which on Valentine’s Day, the maid left a chocolate with a note wishing us a good one. It seemed an obvious plea for a tip.

But here’s the thing. There is a difference, and a crucial one, between serving you food, and changing your sheets.

In one case, there is an ongoing personal interaction, and in the other case, there is…not.

When you go out to eat, the waitperson is your personal interface to the establishment. The establishment recognizes this when it encourages said waitperson to be chipper and cheery and say, “Hi, I’m Lance (or Kristi!), and I’ll be your waiter/(waitress) this evening.” There is a personal relationship, perhaps more so than you want, but it’s there regardless. And you know and they know, that if your order is taken, or dinner delivered, too late, it will be reflected in the additional compensation on the bill.

But cleaning a room is different. It generally happens when you’re not present, and you don’t even know the gender of the person doing it (though there’s generally a good guess), let alone their name or what they look like, or how chipper and perky they are. There is no personal relationship.

But isn’t there the same extortionate potential?

I suppose. They could fill your little shampoo bottles with hydrofluoric acid (though the containers would be unlikely to survive until you get back to the room and can pour it onto your noggin). They can short-sheet the bed (which I find that lot of them do as a matter of policy…).

But basically, there’s not a lot of variation in the possibilities of what they can do for your room, other than giving you little gifts (like chocolates) in the hope that they will be more than sufficiently compensated via your gratuity.

It seems to me that there is a basic service (like cable), that shouldn’t require bribes to get. In my ideal world, you should expect to get such service without having to a) pay more than is on the menu or room rate and b) try to figure out just how much more you should pay. Tipping waitpeople should occur only if the service is really great, not just adequate (and they should hope for some adverse event that they can overcome to really earn their additional pay). And this really makes it hard for hotel servicefolk, because there is so little opportunity for the personal interaction that can really provide opportunities to earn tips. I’d really rather live in a society in which basic service was included in the bill, the prices on the menu (or hotel rack rate) reflected the full cost of hiring people to provide the services being paid for, and any additional compensation was a result only of extraordinary (break that word down, folks) service.

But apparently I’m in a minority. Or else, this is one of those perverse situations in which everyone hates the system, but doesn’t see any good or safe way to transition to one better.

CRuSR

Charles Miller, Senior Advisor on Commercialization at NASA HQ, is leading a panel talking about applications for not only the suborbitals but also things like weightless aircraft. Purpose of panel is to discuss program and identify issues. Makes the point that the fifteen-million bucks in the budget is going to be leveraged to the hilt, and they also want to use it to maximize “disruption.” Turning it over now to Doug Comstock (his boss) to talk about parabolic flight.

Doing things because NASA needs the services. Larger budget for technology within the agency means that NASA will need more technology testbed flights in the environments, so greater need for programs like this. FAST was set up to do this for parabolic flights, and CRuSR (suborbital flights) grew out of it. Idea was for NASA to provide ride for free, but source of technology would pay for experiment. Flew nineteen last year, third from industry, third from government (mostly NASA), third from academia. Call will go out next week for technologies to fly this year. Looking for portfolio of demo capabilities to get technologies out of the lab and into missions. Will also include things like drop towers and thermal-vacuum chambers.

Next up Marine Colonel Paul Damphousse, from National Space Security Organization (NSSO). Currently detailed away from NSSO, but speaking for that office and not current job. Has three customers/partners — DoD, DCI, and NASA. Do architecting and studies, including things over the horizon. Some of this interest grew out of SUSTAIN back in 2002, in which it was conceptually proposed to put Marines on the ground anywhere quickly. Doesn’t expect it to come any time soon. They recognize it as a future need, that needs enabling technologies to provide spiraling path to that capability. Saw a lot of interesting potential in the private sector, and held series of workshops and technology fora to see how people would meet missions. Immediate application of vehicles being discussed here are to have one in a forward area, lob it up and take pictures. Other apps, high-speed logistics supploy, delivery of unmanned reconaissance, etc. Goal is to leverage capabilities coming on line, and figure out how to catalyze useful things. Sees a whole host of synergies with what’s happening today.

Michelle Brekke (sp?) from JSC. She is here to ask what industry needs to be innovative and successful. Already partnering with several companies along these lines, but unrelated to CRuSR. “Making space for business.” Leverage example: loaned an ISS payload rack that wanted to build its own interfaces and be compatible. Another: providing S-Band frequency that they don’t need right now for their comm needs. Could provide real-time telemetry for these new vehicles. Her experience is payload integration for Shuttle/ISS. Interested not just in low-cost access to space, but low-cost utilization. Five discussion points: 1) Suborbital is potential quality assurance and risk mitigation for orbital 2) Low-cost utilization needs KISS for integration process, better is the enemy of the good 3) Provide a payload integration service, don’t make experimenters learn all of that — payload integrator becomes advocate for the user 4) Industry should establish common form and interfaces — need USB-like standards for standard services 5) Readily-available integration hardware –keeps users from having to build or procure it themselves.

Head of CRuSR (didn’t catch name) talking now. Team consists of Bruce Pittman, Richard Mains (from Ames), Yvonne Cagle and a couple other names I didn’t catch. Need to be responsive to STEM/education. Concerned with safety, which is in no way associated with COTS, ISS or orbital human safety standards. CRuSR safety will be overseen by Dryden, and it will be a while before they will be flying NASA-sponsored humans. In the past NASA owned all responsibility/liability for safety. In the new environment, they are going to buy space for payloads. If they’re sharing a ride with ESA, Malaysia, a university payload, they’ll have to be assured that not just the vehicle, but the accompanying payloads are safe for their own. Need for organizations that can support not just safety, but FAA regulations and licensing (which NASA has no role in), including payloads. Need to be able to provide customer not only with environment, but the process of getting a ride. Repeating need for standardized interfaces. Most launch providers would prefer that payloads not be integrated in any way other than structurally (less services the better). Wants to stimulate discussion about all these issues. Putting up a long chart of them.

The discussion kicks off with a long discussion of payload integration issues. I point out something that I realized tonight, and had never thought about before. The FAA is responsible for third-party safety, but not second-party. In other words, the launch licensing process not only doesn’t address passenger safety currently, but it also doesn’t address payload safety. As long as the payload doesn’t blow up the vehicle, and squash an endangered species or foreign national on the ground, they don’t care whether it works or not. So payload integrators are going to have to worry about interactions with other payloads, because no one else will.

[Update a while later]

I got caught in a side discussion outside, and now my battery is dying, so probably no more blogging until I get back to my room (twenty miles away in snow) or in the morning.