economics, law, politics

Transitioning to a Post-Westphalia World

What prevents the signatories of the TPP or TTIP, and their ilk, from just saying no when the investor-state dispute settlement provisions don’t go the way they’d want? That is, if the state still has a monopoly on the use of force, can’t they just kill the investors?

Or, to put it another way, isn’t binding arbitration only binding if one feels bound by it?

Take some time to read this overview of the system [full series] from Buzzfeed for more detail.

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economics, Place

Cul de sac

I have to say that I was way ahead of the prediction curve on this, partly through desire and partly because it’s pretty fucking obvious just from looking at commute times that the ever-expanding suburb is an evolutionary dead-end. It will become a city or the people will move out. The people moving out is happening faster.

I’d been remarking on this verbally since at least 2001, but wrote it down in 2006. Meanwhile, I listened to my wife’s heart’s desire and bought this house instead.*

However, one must note that a finer analysis of the data needs to be done to see if there’s a comparable shuffle along the suburban-exurban-rural gradient toward locally urban areas, not just the larger cities. I suspect there is.

So, you ask, where do I recommend anyone buy in Dutchess County? Well, first I recommend you buy *my* house, but if you’re not that kind of buyer, look at the following, depending on where you work.

  • Beacon, city of
  • Poughkeepsie, city of
  • Pawling, village of
  • Rhinebeck/Rhinecliff, villages of
  • Millbrook, village of
  • Millerton, village of

There are other rather compact villages, but they don’t offer the amenities of those. You’ll have to travel a bit to find some items, or have them shipped to you. But if you don’t mind, try in no particular order

  • Amenia
  • Dover Plains
  • Tivoli
  • Red Hook
  • Staatsburg
  • Hyde Park

Unfortunately, new housing stock is still being built in wide-open green spaces, and turnover in the smaller villages is slight. Best bets are Beacon and Poughkeepsie. Not only are there more properties for sale in those cities, but the prices there are lower due to racial and wealth discrimination, and “concerns” about the school systems.

Continue reading

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economics, politics, rant

Against Full-Day Kindergarten

The Common Core State Standards website asks,

Q: Why do we need educational standards?

A: We need standards to ensure that all students, no matter where they live, are prepared for success in postsecondary education and the workforce.

Let’s assume for a moment that that is the goal of primary and secondary education. (Let’s also ignore the missing hyphen between post and secondary.) Will full-day Kindergarten help in achieving this goal?

No.

Why not?

Because extreme differences in academic ability collapse by the fourth grade. All of us, including children, learn at different rates. In general, those differences disappear on average by the time we are about ten years old, or fourth grade. I understand the difficulty of scientific experiments on humans, but we do what we can; and what we can do shows that there’s no evidence that learning a subject earlier makes a difference.

So, what exactly is the point of full-day Kindergarten?

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economics, politics

On the Arlington Central School District Budget (2012-2013)

Arlington Central School District budget planning for FY 2012-2013 has resulted in a fairly good budget. I particularly like the appendices that are included for the first time in this year’s budget book.

Budget creation is a bit of a balancing act. This year our district has done well in limiting the increase in costs — unlike the adjacent Wappingers Central School District which has chosen to add a potential long-term increase in costs in order to secure a one-time grant — so I will vote to approve the spending plan.

Late last year the Poughkeepsie Journal relayed the news that the district wanted public input prior to planning the 2012-2013 budget. I e-mailed the following:

By the time the budget discussions arrive, the costs are fixed in contracts, so staff reductions are the only option. It’s during contract negotiations that the board needs to consider the effect on the budget. If the budget is capped at a 2% annual increase, then don’t agree to contracts that will result in a 4.29% increase.

I should have written the costs the district controls are fixed in contracts. There are other costs imposed by the United States and New York State which can change the budget numbers significantly. These include, among other things, required administrative reporting changes, curriculum changes, and, most predictably, contributions to the pension funds. The U.S. and New York typically pass these costs on to the localities. It is reasonable for localities to support the cost of public education, but not when they have not been party to the decisions that have increased those costs.

But, as in previous years, Arlington has not yet confronted the need to project long-term budget impacts during contract negotiations, and will, once again, need to discover $4,000,000 in reserve funds, operating cost reductions, and a tax increase to cover an increase in labor costs. The district’s costs are primarily labor-related, so any persistent reduction in cost must consider labor. And if the district cannot reduce labor costs caused by Washington and Albany, then it must address those it can.

More information on the Arlington budget can be found at the district’s web site.

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economics

Ink

I just spent $80 on ink cartridges for my printer. The lad at CVS had to get a key from a locked drawer behind the counter in order to release them for me. I’ve had an easier time purchasing cigarettes.

Theft is a risk because there is excess demand unmet at the price asked.* Counterfeit goods are a risk for the same reason, and because the cost of manufacture and distribution is so much lower than the price asked that even at cheap street prices the product is still profitable.

The same applies to Coach bags, Guggi purses, Ford auto parts, and Rihanna’s latest hit single. It might apply to the Apple iPhone, but Samsung prices the Nexus as a premium product.

* if demand exceeds supply at the price offered, then there is unmet demand, and thus lost profit. Lower the price, let the supply meet the demand, and reap the benefits.

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economics

Negative Feedback Loop?

I’m a little puzzled by one of the statements in David Hackett Fischer‘s conclusion to his The Great Wave: Price Revolutions and the Rhythm of History. On p. 249, he writes,

In a free market, individual responses to inflation commonly cause more inflation. Individual defenses against economic instability cause an economy to become more unstable.

This process might be called the irrationality of the market. It is so in the sense that it converts rational individual choices into collective results that are profoundly irrational. Far from being a benign or beneficent force, the market when left to itself is an unstable system that has repeatedly caused the disruption of social and economic systems in the past eight hundred years.

In a heavily footnoted text, this statement has no supporting citation, so it must be part of the common wisdom. But I must have missed that part of Econ 101.

Is this statement supportable? Is there evidence that this is the case? Or has every instance of “market instability” resulted in an over-correction by forces “outside” (or dominant players inside) the market?

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communication, economics

Hasta la Vista, Baby

We’re cancelling DirecTV service.

It’s been about a year since purchasing the HDTV and the associated DirecTV package. Meanwhile, our viewing of “normal” television fare has been steadily declining. We hardly ever watch anything live: we have other things to do with our time. And more often than not, the children are selecting shows from Netflix, YouTube, or the producer themselves, instead of from the previously recorded episodes of Sesame Street, Jake and the (cute little) Never Land Pirates, Little Bear, Wizards of Waverly Place, or whatnot.

In the interest of completeness, I’ve compiled a list of what we normally watch with any regularity, and where it can be found now that we’ve cut the downlink. The challenge now will be getting some of them off the Internet and on the big screen. Apple TV, perhaps? Boxee?

Did I mention it’s cheaper when you’re not paying for the umpteen channels of shit on the TV you don’t watch? People don’t care about “channels.” They care about shows.

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economics, politics, rant, transportation

Dear Amtrak: Learn How to Price Your Service

Apparently you neglected to read my last letter, but with the fast approach of National Train Day and the increase in oil prices making your services slightly more competitive, I thought it might be helpful to bring up the topic again.

Your pricing skills suck. Are you intentionally trying to lose money and ridership?

Suppose that a family of four — or six — wanted to travel to Disney World from New York. This is a not uncommon occurrence, and provides the basis for over 250 flights per day by many airlines from more than five airports in the New York metropolitan area. The cost of air travel is currently going up, up, up due to some small upset over in the oil-producing regions, so where a seat on JetBlue from JFK to MCO would once have cost $50, it’s now between $100 and $150. This is an opportunity! And you’re missing it!

And you’re missing it in a big way. Look, I understand that it takes capital to improve infrastructure, and that you’re hobbled by riding on tracks owned by others, but it’s almost like you’ve intentionally set your prices to encourage folks to drive. For me to take a family of six to Disney World by plane costs almost as much as staying in one of Disney’s “moderate” resorts and going to all of the parks every day of my visit, so I, and many others, might be looking for a slightly less wallet-reducing option. And the first thing that comes to mind is driving. But who wants to drive the first 24 hours of their vacation? Or, who wants to spend three days driving, two days there, and three days driving back? No one. But the other option is too expensive. Buses? Ha! That’s worse than driving, especially with little kids. How about the train?

This is where you’re completely missing the opportunity. The cost per seat from, for example, New York Penn Station to Orlando is $106 per person for a 21 hour trip. That’s slightly cheaper than the more expensive JetBlue seat, but you forget the time differential. Time is, after all, money, which is why travelers choose to fly on JetBlue for 2 hours for $150 instead of suffer on Amtrak for 21 hours for $106. You need to take your utter inability to get anywhere fast into account when pricing your service. And when you’re more expensive, even if only by $7, than the cheapest option, you completely lose. No one wants to pay more money for the privilege of getting somewhere slower.

Yet the cost of airfare gets worse as one moves away from hub airports. This is where you have an advantage. It costs less to feed from Poughkeepsie to New York and thence to Orlando than it does for JetBlue to fly direct from Newburgh to Orlando. In terms of convenience for me, I’d much rather leave from Poughkeepsie than from JFK. If you can get your prices down to something approaching the cost of gasoline plus a hotel room, you might have a fighting chance in earning my dollar. But then you totally destroy any opportunity you had with the sleeper options. $358 for a room for two people? $658 for a slightly larger one? What? You think you’re a hotel on Times Square? I’m just looking for a contained, flat place for my kids to lie down so that they don’t spend the night in the bar car.

You have two options: lower your prices, or build faster trains. Because we’re sure as Hell not going to pay $658 for two cots or $640 for uncomfortable seats when we could pay less than that on gas and a swank room at the Holiday Inn Express.

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economics

Whose Benefit?

The medical benefit plan I have requires payment of a certain sum before it begins paying a high percentage of the cost of prescriptions. This sum is called the deductible; it’s a sum uncovered by the insurance, deducted from the total expenses before consideration of payment. The policy term is one year, so the value resets every year.

The other day I had to purchase a prescribed drug. The pharmacy had a simple question for me: Did I want them to bill through the insurance company, or did I want to pay cash? If they billed through the insurance company, then the cost of the prescription would be applied to the deductible amount. If I paid cash, then the insurance company, not knowing of the cost, would not apply it to the deductible. One supposes that there’s a third option: to pay cash and then report the expense to the insurer.

This question came up because of a difference in the prices between the two methods: $300 more to bill the expense through the insurance company.

No, thank you. I’ll pay cash.

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drink, economics

When the Going Gets Tough, the Tough Drink Cocktails

J. T. Dobbs at American Drink asks,

Is it a coincidence that on the heels of one of the worst economic crises since The Depression, artisan cocktails began making a huge comeback?

Actually, no, it’s not. It’s typical.

In The Great Wave: Price Revolutions and the Rhythm of History, David Hackett-Fischer observes that when the going gets tough, the tough get to drinking. Figure 4.24 on page 227 shows a remarkable correspondence between the rate of inflation and consumption of distilled liquor. As Mr. Hackett-Fischer notes in the caption,

[L]iquor consumption and drug use peaked when real incomes were falling rapidly, prices were surging and unemployment was increasing. A comparable surge in drinking (to the highest recorded levels in American history) occurred in similar circumstances during the climactic years of the eighteenth century price revolution. A long decline in alcohol consumption coincided with the Victorian equilibrium.

The Bureau of Labor Statistics publishes data on expenditures on alcoholic beverages, and the Centers for Disease Control do the same for alcohol consumption. Historical data on alcohol consumption is a little harder to locate at the CDC than it is at the OECD. Both data sets lag by a few years.

Expenditures and consumption are not the same things, since price per unit of alcohol varies. Strangely, expenditures are falling, and have been. Consumption in the United States was decreasing from 1983 to 2000, but since 2001 is back on the increase. Since I’ve not noticed the prices dropping, purchasers are likely shifting consumption to cheaper products without reducing overall consumption. This could be either a switch from Dogfish Head to Budweiser, which I doubt, or from beer to distilled liquor, and, thus, cocktails.

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economics, family

Replacing the Oxygen Sensor on a 2002 Honda CR-V

In order to pass the New York State vehicle inspection, all emissions control components must work. For example, if the oxygen sensors fail, they must be replaced. If you ever need to replace an oxygen sensor, these instructions from the CR-V Owner’s Club help.

I bought the DENSO part 2349005 {#36531PLE003} OE-TYPE OXYGEN SENSOR from Rock Auto, after pricing the same part elsewhere. Denso is the original equipment manufacturer, so this is the same part you’ll get from Honda, for $150 to $300 less. The Honda dealer who read the code from the on-board computer wanted an arm and a leg for the part, $450, plus another $80 to change it.

However, the sensor was in so tight, and I was unable to get any leverage on it, that I ended up taking it to a shop just to get the old one removed. The mechanic there had it out, and replaced, in a jiffy, for only $25.

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economics

Google Travel

Apparently Google wants to purchase a travel data company, but the existing flight comparison websites don’t want them to. I can see why they wouldn’t: they’re all slow, unusable masses of advertisements for unwanted products that make it faster for me to call a travel agent when I want to plan a trip for a family of six. (And, yeah, I know the fire code says the hotel can only put four in a room. That simply means I won’t stay at that hotel.) Hell, it’s even faster for me to call an agent than it is to book directly through Disney.

Part of the problem with the current players is that their customers are the hotels, airlines and advertisers, not the purchasers of the product they’re selling. If they don’t think they can stand the competition, perhaps they should look at improving their product.

By the way, does anyone still use MapQuest?

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economics, sadness

Why I Cancelled My Newspaper Subscription

I’ve maintained a subscription to the deadtree edition of my local newspapers since I was old enough to pay my own bills. I’ve continued to subscribe even though the newspaper has grown less and less interesting, because I have found some things of value in it. But those things have steadily grown fewer and fewer, until all that is left are the comics. Oh, and newsprint does still come in handy when starting a fire.

That’s not worth the subscription price.

I’ve always read the paper for local news, not national. I don’t expect the newspaper to be broad in scope, but to focus on those things that others do not cover. It might still do this, but the news needs to be current as well as local. I have no desire to read the day after about an event that I would have attended if I had known about it the day before. I have no desire to read election results two days after the election, when the on-line edition of the same newspaper published those results the night of the election. I certainly have no desire to read last week’s baseball scores. Perhaps the newspaper is no longer printed locally and the press deadline is too early to allow printing current news. If that’s so, perhaps that was a bad decision. Perhaps one needs to abandon currency entirely and become a weekly opinion piece. Or abandon the pretense of being a news paper.

It didn’t have to be this way. But the choices y’all are making are driving your business into the ground.

Now where will my children learn to love the comics?

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economics, politics

Frak That

There’s some discussion up in Albany of permitting the use of hydraulic fracturing to remove natural gas from the Marcellus shale formation upstate. In the industry this is colloquially called “fracking” because afterward you’re pretty much fucked.

The problem with fracking, as with other environmental issues, is one of negative externalities. That is, the company extracting the resource does not bear the full costs of its operations, and certainly not the full costs of its failures. This creates a moral hazard, both at the extraction company, which cares nothing for the people who can no longer drink their water, and in the government, which aligns itself with the corporation rather than the citizens, as in Pennsylvania.

Beyond that, I fail to understand why an industry that burns off natural gas from oil wells as waste would be granted the privilege to extract natural gas in a manner that most likely has adverse effects.

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economics, politics

Comments on the Arlington Central School District Budget (2010-2011)

The Board of Education of the Arlington Central School District has made the difficult decision to close an elementary school in order to reduce the district’s budget.There are obviously consequences to this decision other than the money involved. Some are logistical, such as the effect on bus routes and the dispersion of the population to other buildings. Some are emotional; the school to be closed, Lagrange Elementary School, has been an integral part of that community since 1966.

My comments are not on those subjects, which made the decision difficult, but on the choices the Board has made in the overall budget, and particularly with regard to the closing of the school building.

A review of the school budget process in New York is in order. The Superintendent proposes a budget. The Board adopts the budget and submits it to the voters in the school district for approval. If the budget is not approved by the voters, then the Board may submit the same budget or a revised budget for a second vote, or adopt a contingency budget. If the budget is not approved in the second vote, then the Board must adopt the contingency budget. The contingency budget allows for certain expenditures, but not others, and will increase costs over last year’s budget. More details on the nature of contingency budgets are available from the New York State Department of Education.

Because of this need for voter approval, the Board finds it necessary to sell the budget to the voters, and is somewhat more circumspect than blunt when describing the decisions being made. In their brief description of the benefit of closing Lagrange Elementary School, the Board says this.

This reduces the budget by $1,109,160, bringing the budget to budget increase down to 1.7%.

That number is interesting because it comes directly from the Superintendent’s school closing report, page 5.

The elementary school model yielded the following estimates of cost savings for closing:

  1. Building not used and 0 regular teaching positions are eliminated: $1,292,160
  2. Building not used and 8 regular teaching positions are eliminated: 1,885,760
  3. Building used for other District purposes and 0 regular teaching
    positions are eliminated: 1,109,160
    [emphasis mine]
  4. Building used for other District purposes and 8 regular teaching positions are eliminated: 1,702,760

See Exhibit 3 on page 11 of the report. This shows how the cost savings is determined: by eliminating 26.8 positions associated exclusively with the school. Of particular interest is the decision not to eliminate any teaching positions as a result of closing the school. Not only are the students being re-assigned to other schools, but so are the teachers. This is perhaps kind to the students: if they are left back, then they might encounter a familiar teacher in the new school. However, if the eight average teaching positions used in the estimate were eliminated, the district would see an additional $600,000 in savings.

The Board has already made the tough decision to close a school. What happens if the voters think that small sacrifice isn’t enough, and require a contingency budget?

If the budget is defeated again, the District must adopt a “contingency budget.” This will require a further reduction of $1.6 million. In addition to the 25 positions eliminated by closing a school, the contingency budget would require that an additional 18.5 teachers lose their jobs. [emphasis mine]

But what, specifically, does the Board say would be cut?

The superintendent has recommended several cuts to core instructional programs. These include:

  • Reducing selected high school electives and AP courses
  • Eliminating fourth grade band and orchestra
  • Reducing the middle school and high school band, orchestra, and choral programs
  • Decreasing teaming for 6th grade students, which will significantly raise class size at this grade level.
  • Cutting high school sports
  • Eliminating all middle school competitive sports

This is where it gets really interesting, at least from a political or marketing perspective.

The District has been very helpful in posting which line items might be cut, and their descriptions so we can see for ourselves the numbers underlying the summary description of the cuts. Notice which of these particular line items, which I have helpfully marked in red, have been selected for inclusion in the summary.

Reference Number Item Description Est. Value Positions
58 Eliminate 0.5 credits art in either grades 7 or 8 100,170 1.5
59 Eliminate accelerated art in grade 8 29,702 0.4
60 Grade 6 teacher reconfiguration – reduce team from 5 teachers to 4 teachers 467,459 7.0
61 Increase elementary class sizes up to 29, 30 and 31 per ATA contract 1,703,060 25.5
62 Eliminate teaming Grades 7 & 8 all middle schools 534,240 8.0
64 Close one elementary school 1,109,160
65 Close one middle school 1,875,000 32.0
66 Reduce electives & advanced placement at AHS 267,120 4.0
68 This line intentionally left blank
70 Eliminate computer instruction classes in middle schools 238,000 4.6
71 Eliminate computer trainer 55,767 1.0
72 Eliminate instrumental instruction Grade 4 students or increase groups sizes 200,340 3.0
73 Reduce instrumental small group lessons in middle School to alternate weeks 267,120 4.0
74 Reduce small group instrumental lessons in high school to alternate weeks 200,340 3.0
75 Eliminate all instrumental lessons or band groups to alternate days gr. 6-8 267,120 4.0
76 Chorus to meet on alternate days in middle schools instead of daily 100,170 1.5
77 Reduce middle school hall monitors 42,745 1.5
79 Eliminate all sports program at middle schools 157,810
80 Eliminate all intramural program at middle schools 30,000
81 Reduce sports and co – curricular activities at high school 56,236
82 Reduce AHS house assistant principal work year from 12 to 10 months 65,582 partials
83 Eliminate two AHS house assistant principals 157,800 2.0
86 Eliminate one district supervisor 111,919 1.0
87 Teaching assistants Tier Three Gr. K-12 1,167,388 47.0
88 Eliminate all remaining busses after school grades 6-12 94,298 hours
New Equipment (required by State law) 107,754

This budget is being sold to the voters by targeting those items the voters actually care about: sports and music. NONE of the sports line items result in a staff reduction. These are stipends being paid to the teachers and coaches for their time. The coaches will still be employed. The music teachers on the other hand, will not be. A couple of years ago, the Mahopac School District was in a similar situation, and a second defeat at the polls resulted in cutting the sports programs. The Mahopac Sports Association picked up the cost. In the detailed description of the line item, the District notes:

The following criteria were used to establish these potential cuts …. Activities that have significant financial parental support which might be available to assist in funding recovery.

But of even more interest is that none of these cuts resulted in a reduction of administrative staff or salary.

The bulk of the cost of running a school is labor, primarily teachers but also administrative staff, cooks, mechanics, drivers, and custodians. The bulk of the cost is not textbooks. It is not sports equipment. It is not heating and cooling. It is salaries and benefits.

And the District, in comparison to others in New York, does fairly well at keeping those costs down. The challenge is in slowing or halting the rate of increase, and in doing so to find a way to avoid increasing taxes. Without understanding where the costs are, and without facing those costs head on, we will — as we have been for each year in recent memory — be faced once again with the same difficult choices year after year.

This year’s budget does not directly address these costs in a systematic fashion. It eliminates staff positions instead. That adjustment changes future budget projections, but only because those staff are no longer employed. The factors which caused this year’s budget to increase by $5 million are still there. Next year’s will as well.

To quote again from the Superintendent’s report,

The credibility and trustworthiness of the Superintendent of Schools and the Board of Education will hang in the balance and will impact the School District long into the future.


p.s. The district consistently uses the alternate spelling of buses, which drives me nuts.

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economics, politics, rant, transportation

Dear Amtrak

You disappoint me.

You don’t understand pricing. Or perhaps you simply have no experience of buying things with your own money. In any case, what are you thinking?

I know that you stop in both cities, so I was hoping to take my family from Poughkeepsie to Montreal by train instead of by car. But then I checked your prices.

According to Google Maps, the trip is 5 hours 12 minutes by car, to travel 309 miles. Our van gets 25 miles per gallon on average, or 12 1/3 gallons from here to there. Let’s call it 13 gallons for imprecision. Gasoline currently costs roughly $3.00 per gallon. One way, the trip would cost, out of pocket, $39 plus lunch and dinner for six. If we eat at a restaurant, lunch or dinner tends to run between $50 and $60. Thus far, from here to there would be $159 by car.

But you? You want $241.50 to make the trip in 9 hours 30 minutes? Taking the train might be more relaxing than driving for six hours with four kids strapped into car seats, but trying to keep them in the same train car, much less the same seats, for ten hours would be well nigh impossible. They will have gone stir crazy before we reach Albany. And you and I both know that your timetables are a rough approximation: The last time I rode Amtrak you said the trip would take 8 hours; it took 12. For this you want me to pay almost six times as much as driving?

That was weekend pricing. Let’s look at the weekdays. Apparently there’s a deal if I take The Adirondack over the weekend, but I didn’t notice that in the price. Weekday prices drop the fare considerably, once this discount takes effect: $148.

BUT, it’s TEN HOURS.

And only a snack car on the train?

No, thank you.

Suppose that I were to travel alone. For that you ask $69. I could have a full tank of gas, half a pack of cigarettes and a pair of sunglasses, and make it there by morning for less than that.

I like trains; I do. But at the rates you charge, your only customers are those with time to spare, those without travel options, the price-insensitive, or die-hard railfans such as Vice President Biden. That’s no way to make a profit.

Oh, I think I just realized how you’ve determined the prices. You’re charging by the hour. OK. Let’s see how that compares.

$148.5 divided by 9.5 hours is $15.63 per hour. That sounds cheap. How does my driving compare? $159 divided by 5.25 is $30.28 per hour. Wait, I forgot to factor in bathroom breaks and time for casual dining: $159/8.25 = $19.27/hour. Ah, I see now. That makes perfect sense. The trip length is also almost the same. Let’s stop at a park for some running around and exercise: $159/9.5 = $16.73/hour.

Are you going to throw in dinner while we’re on the train? I didn’t think so. Let’s remove that from the equation: $39/9.5 = $4.10/hour.

I suggest perusal of this article at Wikipedia. Meanwhile, I’ll enter the Toot & Puddle Read & Ride Sweepstakes.

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economics, transportation

Competitive Pricing of Substitutes in Transportation

Nate Silver has an interesting, if partial, analysis of statistics comparing modes of transportation based on the National Household Travel Survey. He wonders why Americans prefer to drive long distances than fly, and calculates the costs to be generally cheaper if one flies.

Today the Poughkeepsie Journal did the same thing for the costs of commuting by car or rail. (Unfortunately the website doesn’t include the charts.) Rail is cheaper, but the comparison leaves out the cost of time.

Both comparisons depend on a variety of factors, including, among other things, the number of passengers, the length of the trip, whether you’ll need a car to get around at your destination, the bulk and mass of your cargo, and so forth, none of which are really taken into account. For us, trips generally involve six passengers and gear. This rapidly decreases the value proposition of plane or train travel since we’re dividing the total cost by six, making our own personal mass transit more affordable.

It doesn’t help that Amtrak’s prices this year are the same as last year’s, while JetBlue’s have gone down.

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economics

Electronic Medical Records

On Marketplace this morning, they mentioned that Obama wants electronic medical records.

  1. Why is it any of Obama’s damn business?
  2. I haven’t noticed a reduction in paperwork as a result of computing.
  3. There are normal computing issues magnified by the sensitivity of the data.

Earlier some doctor interviewed on another NPR program said he would love medical records, and that they would save him money — and that the government should pay for them because the tools are too expensive.

Excuse me?

If they are too expensive for you to buy in order to reduce your costs then they are not saving you money. The only way the cost-benefit analysis comes out in your favor is if you don’t have to pay for it.

And so I view this, like many other things, as simply yet another power grab.

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communication, economics

What Benefit are Wire Services in a Well-Connected World?

As a former employee of The Associated Press, it’s been somewhat embarrassing to watch their plodding attempts to control data which has already escaped from their control. I recall some discussions with graphics and photo editors in 1996 or so about the feasibility of preventing unauthorized copying of images, while still allowing authorized copies. We were in the business of distributing the news, after all. The discussion eventually shifted to watermarking in order to identify material from the A.P.

(While you can make copies extremely expensive to produce, that itself is expensive — and thus not feasible for most. In case anyone is still wondering, not only is it not feasible to prevent copies, it’s not possible.)

The Associated Press began in the cooperation of several publishers in the task of quickly delivering news dispatches from the Mexican War:

an 1846 arrangement whereby Mexican war reports arriving at Mobile, Ala., by boat were rushed by special pony express to Montgomery, then 700 miles by U.S. mail stagecoach to the southern terminus of the telegraph near Richmond, Va. That express gave the [New York] Sun an edge of 24 hours or more on papers using the regular mail.

But Moses Yale Beach relinquished that advantage by inviting other New York publishers to join the Sun in a cooperative venture. Five papers joined in the agreement: the Sun, the Journal of Commerce, the Courier and Enquirer, the Herald and the Express.

….

Moses Yale Beach’s decision to share news with rivals was “neither altruistic nor cost-driven,” but recognized that “nothing could compete with the telegraph for speed, and all newspapers, rich or poor, would now be on a par,” historian Menahem Blondheim [author of News Over the Wires: the telegraph and the flow of public information in America, 1844-1897] said. [emphasis mine]

There are two aspects to the A.P.: gathering the news, and distributing it. The gathering of news involves the collection and analysis of data as well as the direct observation of events. For example, election returns are publicly available, but broadly distributed, disjointed, and officially slow. After the news is gathered, it is distributed. News gathering can be done by everybody, but there’s some sifting to be done to separate the wheat from the chaff. It is distributing the news that is most disrupted by the Internet.

When you can go directly to the source, what need is there for someone to bring the news to you?

The advantage of wire services has been time. The speedy delivery of information to a third-party, whether television, radio, or print, who can then bring it to you. That advantage is lost when the whole world is connected.

When you can find out now, why wait until tomorrow?

The Internet shortens time and shrinks space. And in that environment, any business that relies on the scarcity of either must find some other means to survive.

It is not that the cooperative did not recognize the threat and the promise of the Internet. Many of us there did. But like many long-lived organizations, there’s an institutional bias in favor of the status quo. How would A.P. serve its member organizations if it adapted to the changed environment?

Now it seems that the Associated Press will fill the role for newspapers that the R.I.A.A. and the M.P.A.A. have for their respective industries. I do not wish them luck.

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