Likelihood of Success

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Archive for the ‘Gelt’ Category

Failing upward

Posted by Ron Coleman on August 6, 2007

So these masters of the universe — the “private equity” boys — take over Chrysler, and what do they do? They hire the guy who blew it at Home Depot to run the company.

I find this comforting, because from time to time I am disappointed with certain aspects of my professional career.  Then I realize what a huge racket it is.  That doesn’t mean there aren’t, usually, rewards for excellence, and penalties for lackluster performance.  But at a certain point, it’s pretty clear that nothing really matters and to a large extent the goodies really are doled out — contrary to what we were taught in the Economics Department at college — arbitrarily, or worse.

So be it.  Maybe it’s not really, so much, “me” after all.  That doesn’t excuse one from making the effort, but it provides a little comfort.  Unless, that is, you own Chrysler stock.

Posted in Americana, Gelt | 1 Comment »

A little historicism there

Posted by Ron Coleman on August 2, 2007

Instapundit, again:

THE NEW YORK TIMES: “Caps on Prices Only Deepen Zimbabweans’ Misery.”Well, that’s what price controls usually do.

Price controls usually deepen Zimbabweans‘ misery? That would explain a lot. I think a lot of countries would use them if they only hurt Zimbabweans. Not that that’s right, but you know — beggar thy neighbor. But that does explain a lot about Zimbabwe.

Posted in Gelt, Jocularity | Leave a Comment »

The trouble with old lawyers

Posted by Ron Coleman on July 31, 2007

Anonymous Lawyer explains the darned good reasons why big law firms have no use for second-career types — or anyone who catches on too fast:

It’s not my fault, or the fault of any of my colleagues, that you decided to go to law school. It’s not our fault you got into debt. It’s not our fault you want a job you can’t get. Baseball players can’t get jobs after age 40 either. It’s the same thing here. Your skills may or may not deteriorate (I can argue both sides of that), but your stamina certainly does. Your energy does. Your drive does. If you’re just starting out at age 40, you know you’re never going to get to the top, so why even try. You’re complacent. Not because you’re choosing to be, but because you’re too old and experienced in life not to be. Young people don’t have perspective. They don’t understand that the kinds of things we demand from them are pointless and not worth getting all worked up about. They don’t get that we’re not going to fire them. They don’t get that most of the pressure they feel to stay here all night is pressure they’re putting on themselves and that the consequences for living a normal life are all in their head. But older associates know it’s all a bit of a game. Older associates know I don’t really have the power to behead an associate in the guillotine I stole from the Studio 60 soundstage when we took the summer associates on a tour. But the kids don’t. They think it’s going to really happen. They think we’re really going to kill them if they don’t finish the document review by 6AM tomorrow morning. And that’s why we like them.

Maybe you’re willing to work hard. But you’re probably not willing to be humiliated, and honestly it’s a lot less fun to humiliate a 40-year-old, with 2 kids and 3 ex-wives and a mortgage and a limp than it is to humiliate a 25-year-old without any responsibilities except to the firm.

Posted in Americana, Gelt | Leave a Comment »

What would we do without experts?

Posted by Ron Coleman on July 31, 2007

Instapundit links to this quote in USA Today:

Investors saw the launch of Amazon Prime as the latest manifestation of Bezos’ fixation on free shipping, a profit drainer. They hammered Amazon (AMZN) shares down to $30 two years ago after the Seattle company began offering the unlimited free two-day shipping service for a $79 yearly fee.”Wall Street hates it when we lower prices, give away free shipping, and offer Amazon Prime,” Bezos said in an e-mail interview. “But we know in our bones that siding with the customer pays off for everyone in the end.”

Now, Prime is starting to look like a linchpin to Amazon’s remarkable run of increases in quarterly sales — and investors no longer appear kerfuffled. After the online retailing giant last week reported a singularly sharp rise in sales for its second quarter, its shares shot up 25%, topping $86 — a seven-year high.

What does this say about the wisdom of “Wall Street”? Is Jeff Bezos such a visionary that he “sees” truths such as these that armies of investment house analysts — “Wall Street” — miss?

If so, well, I understand why Jeff Bezos makes a lot more than I do. But I don’t understand why Wall Street does.

UPDATE:  A lot of lessons can still be learned in The Market, it seems.

Posted in Gelt | Leave a Comment »

Microsoft not in the clouds

Posted by Ron Coleman on July 27, 2007

Microsoft doesn’t believe the world is ready for an ethereal computing environment:

“We’re not moving toward a world of thin computing,” said Steven A. Ballmer, Microsoft’s chief executive, referring to systems in which simple processing takes place on a PC, but more complex processing is moved to a centralized computer through a network connection. “We’re moving toward a world of software plus services.” . . .

He rejected the notion that in the future all software would be based in what computer industry executives refer to as “the cloud” — computer hardware and software reachable over the Internet. “People tend to get weird and extreme about this,” Mr. Ballmer said. “Does everything move to the cloud? I think that is wrong-minded.”

I guess you had to be there to see why the thinks that. Or maybe it’s just that the rest of us are “in the cloud.” As the Times article reports (yes, when not reporting on politics the Times is usually great), “The strategy did not immediately ignite enthusiasm among the more than 100 financial analysts who follow the company. Microsoft’s stock fell 73 cents Thursday, or 2.38 percent, to $29.98.”

Microsoft has a tendency to be wrong and then have to buy its way out of holes. Why is this time different?

Incidentally, here’s a tidbit to take into your weekend — a good ice-breaker:

The company expects a billion Windows-based computers — including those running pirated copies — within the next 12 months. At that point, personal computers will outnumber automobiles worldwide.

No wonder Ballmer is hoping computing stays on terra firma.

Posted in Gelt, Nuvo-Techno | Leave a Comment »

The invisible wand

Posted by Ron Coleman on July 21, 2007

Megan McArdle asks the questions that many of us — especially the economics majors among us — have been nursing for years:

The low opportunity cost attached to magic spills over into the thoroughly unbelievable wizard economy. Why are the Weasleys poor? Why would any wizard be? Anything they need, except scarce magical objects, can be obtained by ordering a house elf to do it, or casting a spell, or, in a pinch, making objects like dinner, or a house, assemble themselves. Yet the Weasleys are poor not just by wizard standards, but by ours: they lack things like new clothes and textbooks that should be easily obtainable with a few magic words. Why?The answer, as with so much of JK Rowling’s work, seems to be “she didn’t think it through”. . . .

To the extent that there is any system at all, it is the meanest sort of Victoriana, the fantasy world of a child Herbert Spencer. There is a hereditary aristocracy of talent, and I am secretly at its apex. There is an elite school almost nobody can go to, and I am one of the chosen. People fall quite neatly into the categories of good, bad, or clueless, we are the good ones who get to run things in the end. That’s powerful fantasy stuff, which is why it’s so common.

But the best children’s fantasy does something else: it gives one the illusion that the magical world is as consistent and real as one’s own world – that it exists, just barely out of reach. Even at eight, or 11, I could not have believed that of Harry Potter. The arbitrary ham fist of Ms Rowling is everywhere too evident – changing the rules, and then making the characters tap dance, like marionettes, to distract you from the enormous potholes in the plot.

(Via IP.) She’s right about this. And yet I do not think that this distracts from Rowling’s remarkable accomplishment — not only economic (but yeah, that too! yeah, remarkable!). Yes, there are holes in the plots, illogic, though to some extent these are questions you can always ask about “magic powers” fantasies. Why couldn’t Jeannie from “I Dream of Jeannie” or Samantha of “Bewitched” just solve problems they created with their magic by using magic in a more direct way than the half-hour plots allowed? These questions have been pondered in the social science departments of all the great insitutions of higher learning.

But at the end of the day, which is where we are, Rowling did create a very compelling alternate universe, even if lacking in the desired degree of internal consistency, and characters that children and many adults did manage to care about.

And, yeah, she made a boatload of money. There must be some magic to that.

UPDATE:  In the comments at Megan’s article — similarly bewitched thoughts.

Posted in Ars Longa, Gelt | 4 Comments »

Begone, Demon!

Posted by Ron Coleman on July 10, 2007

A cool blog called Brand Autopsy reports that Sprint is lopping off a thousand or so regular whiners.

You can do that? Yes. It’s a good thing to fire a customer on a regular basis. The ones you choose are inevitably the ones who are just biding their time till they put it in you, anyway.  If you’re honest with yourself, you can tell.

Nothing personal but here, take your toothbrush and hit the road, Jack!

Posted in Gelt | Leave a Comment »

Here in my car

Posted by Ron Coleman on June 27, 2007

58-olds-98.jpg“If people wanted cars with great mileage, they’d be buying them”:

Is it just Murdoc, or is energy conservation one of the most liberal of all issues? (And by liberal, I mean that proponents campaign for other people to give up things for the supposed greater good, i.e. today’s practical definition of “liberal”, not the actual definition.)Lunatics everywhere think that raising CAFE standards will somehow help gas prices or Global Warming or something. If almost everyone is so positive that higher gas mileage is a good thing, why isn’t almost everyone driving vehicles that get 35 MPG or more? There are a lot of them out there folks, and many of them aren’t too terribly expensive. . . .

Basically, Murdoc is saying that the problem isn’t car manufacturers (who have enough of their own problems these days, thankyouverymuch) but car buyers. It’s those damn people again.

And not only lunatics say it, Murdoc. The question comes down, as I mention in the article at the last link, to whether there is a rational externality-based argument — there we briefly discussed national security — for government regulation of prices, unless you are a libertarian or even a firm free-marketer and don’t believe there is ever such an argument. Murdoc mentions global warming as one “something” from which people make this case. Not only lunatic people.

But these arguments may be beside the point or, at least, may be guilty of obstructing a large part of the point, because they ignore the question of whether increased CAFE standards are a net positive for social welfare. One body of literature has argued for years that CAFE kills, because lighter cars are less safe cars, at least for the people riding in them. Another urges that they don’t even really help reduce fuel consumption. The thinking is that more efficient cars encourage more driving — it’s cheaper per mile. Now, I have argued that the cost of gasoline, at this point in history and given the overall increase in wealth, probably has very little at all to do with how much most of us drive, and indeed the Heritage data tending to prove more driving is based on decades-old data.

I don’t know. It’s complicated, isn’t it? That’s why I’m saying that pushing for increased CAFE standards as a cure-all is almost certainly simplistic, because it makes the cardinal mistake in microeconomics of not allowing for the large multiplicity of moving parts in economic policy-making. But as demagoguery, it is right on.

Posted in Gelt, Stragety | 8 Comments »

We’re all chickens now

Posted by Ron Coleman on June 18, 2007

Mickey Kaus runs the number on the wage effects, putative and otherwise, of the proposed immigration bill.

But as a sans laude economics major, I’m numerically challenged.  This formula, in contrast, works for me:  “This is indeed a struggle between the governing class and the governed.”

Posted in Gelt, Politics and Poker | 1 Comment »

The wealth of nations

Posted by Ron Coleman on May 25, 2007

Instapundit writes:

I’VE NOTED REPEATEDLY that gas prices don’t seem to be high enough to affect people’s behavior. Apparently they’d have to increase a lot more to do that:

In 1962 — a year writ large in the popular imagination as the quintessential year of muscle cars and cheap gasoline thanks to the movie American Graffiti — gasoline prices averaged 31 cents per gallon. When we factor changes in disposable income, today’s gas would have to cost $4.48 to be a comparable burden.

The public likewise thinks of 1972 as the last year of energy innocence prior to the rise of OPEC and the onset of shortage. Fuel prices in 1972 averaged 36 cents per gallon, a hefty $2.77 per gallon in today’s terms. While still high, this price is not all that different than the prices we were paying earlier in the year.

No wonder people are still driving fast and often.

Nnyess. And a lot depends on how you figure the “today’s terms” number. You can do a simple inflation-factor multiplication — how many of today’s dollars buy a widget today compared to how many did in 1962 or 1972. But that ignores the wealth effect, namely that even if today’s gas is more expensive that it was then, almost every one of us has (even in real terms) a lot more money to spend on gas than we did then. Will people who spend $20 for a music CD, $50 for ticket to the ballgame or $25 for a haircut really drive less just because a tank of gas costs $45 instead of $35 or $30?

I don’t know about you, but the thought never occurs to me.

UPDATE: My point, Glenn! (He really needs me to connect the dots…)

Posted in Americana, Gelt | 35 Comments »