Well, they could - but look why the deal fell apart in the first place. Disney was leaning on Starz to crank up the price for Netflix. You are just going futher up the ladder.
If Disney offer's it's movies on DVD then anybody can buy and rent them. Disney can't discriminate [i.e. charge a higher price] against Netflix.
Streaming is a different matter. Disney can, and does, charge different prices to different companies. See the forced content licenses discussions floating around this thread about alternatives to current practices. And the ablity to price discrimination is one of those classic monopoly characteristics. Which why Netflix is in a bind.
In all of the articles that I have read, it has always been referred to as the deepest operational sub. Key word being operational. Trieste’s bathyscaphe did go deeper – but it’s not operational any more. The China’s sub should be able to dive deeper then Alvin – which is currently the deepest diving sub that is operational. I think Alvin II is coming out in a few years – but even that one is not designed to go as deep.
Ford does have a monopoly - on Ford Focus – nobody else can make them. But you are right – Toyota makes the Corolla which is a close substitute for a Focus – both are small cars that will get to where you need to go. If you go to a rental agency hoping to rent a Focus and all they have are Corollas - most people would not complain too hard and would rent the Corolla instead. I know few people who pine for a Focus. Bently is another matter.
Starz’s has a monopoly on streaming Pixar’s Nemo. Netflix could go and steam Dreamwork’s Shark Tale – another children’s animated movie. Is this a close substitute? I think not. If I want to watch Nemo and they offer me Shark Tale I would decline.
Is Starz a monopoly? For our perspective - the consumer - no. We have choices – other steaming services, a new DVD, a used DVD, etc. Or, heck, different entertainment options.
From Netflix? Yes – it is. They can’t buy used DVDs of Nemo and steam them. They can negotiate a deal with Starz or try to convince their customer’s that Nemo is just not that important.
Which takes me back to my original point. Is Netflix / Starz a monopoly / monopsony? No – but their relationship share characteristics of one.
It’s not Netflix fault or Starz – because – gosh – it sounds one of them is doing something sinful or illegal Think about it this way
Starz is a monopoly – in so far that that they are the only people selling first run streaming Disney movies.
Netflix is a quasi-monopsony [Technically not, but it’s the largest streaming video company, and if Starz want’s Netflix consumers they have to go through them]
What is the “fair” price that Netflix should pay Starz? There is $X of profit for 1 year for steaming videos that needs to be split between these two. [I am not ignoring that there are substitute products (DVDs, ITunes, Bit Torrent’s, etc – it just limits the profit to $X – not $X + more)
I don’t think there is one in the sense that there is a moral division of profits in this case, nor does game theory help much.
Protracted negations often happen when you have a Monopoly/Monopsony dynamic going. As a comparison, look at the negations that occur between Somali pirates and ship-owners. Everybody knows that in the end the ship-owners will pay the pirates. The pirates can’t sell their stolen ship to anybody else and it is the ship-owners best interest to get there ship and crew back as fast as possible. On the other hand, neither has much leverage over the other to force negations forward – other than brute force. . Thus the negations can last for months over a few million dollars.
I use VPN and encrypted connections almost daily and I don't work for a criminale enterprise [unless you consider corporate America a criminal enterprise – but that is a different question.]. Do you really want your personal and private data exposed as I deal with the outside world?
Or there is just the simpler question of personal privacy. If you have reasonable suspicion, get a warrant. [And yes I know that the Pakistan court system is not very independent – but I am stating a principal here. And yes, I know encryption makes life harder for the cops – but I would rather have the cops work a little harder than sacrifice privacy.]
According to Benjamin Graham [Warren Buffet's proffesor] In the short term the stock market behaves like a voting machine, but in the long term it acts like a weighing machine. While short term supply and demand may be driven by public opinion, the long term trends tend to be determined by fundementals.
And for another note, o.k. - they beat the stock market - but at what level of statistical significance? In June the stock market fell by 1.67%. I don't have the internal variance of the S&P, but if they lost less then 1% they might have found some short term quirk that hedge funds could exploite.
Of course, there is a high coloration between building bib buildings and economic crash. Think of it as the last gasp of optimism. Think Empire State building, World Trade Center, Malaysia 10 years ago, Dubai a few years ago
So, you can be Hispanic if you have lived in southern California for the past 10 generations or if you Nazi grandparents had fled to Argentina. Which can lead to some interesting situations. For example, my mom was classified as by her employer as Hispanic when there was a democratic was president and not when a republican was president. And while Mexicans and Peruvians think of themselves different, I would be most would think of themselves as hispanic - just like English and Germans would thenk of themselves as different and yet both as European.
Currently there is a min scandal running in China where officials sized “illegal” children and put them in an orphanage. Western couples would then adopt the kids, paying a lawyer to handle the paperwork – because in an opaque legal system like China you can’t do it yourself. And you can’t tell the difference between a legitimate fee and one that is not. The lawyer would kickback a portion of their fees, and the orphanage would kickback funds to the official who sized the ‘illegal” child.
So the kids tend to wind up in fairly good shape – if you discount the fact they are ripped away from their original families.
There is a subtle, but importance difference. It is a point of ethos.
A top tiered not-for-profit is very aware that it has a valuable product – a limited supply of top tier degrees. They will limit those degrees, making them rare. They will carefully screen incoming candidates and will help the faltering ones.
A for-profit college wants to maximize its production of degrees, so it screening standards are low. For faltering students they will cash there checks and let them fail.
Risk Aversion is a personality trait. How does one react to loss/reward situations. Would you enter into a fair coin toss that costs $1 and winners get $2 – or average payout of $1? In theory people should be indifferent – but they are not. They will tend to decline because the loss of the $1 tends to be greater than the gain of an extra $1. Would you enter into a fair coin toss that costs $1 and winners get $2=3 – or average payout of $1.50? Logic dictates yes – but still many people decline.
Risk Reduction is a technical process. How can I make X safer? How much will to cost? Etc.
In the business world synergy is always a good thing. Here is the big idea behind a merger: 1 + 1 = 3. That is, by combining 2 companies value is created.
Let me state the 70% a bit more exactly. In mergers, from the acquires viewpoint, mergers fail to generate value either because the merger destroys value or the acquired company bids up there stock. That is, if the fair market value of the acquired company alone is 1, but in a combined company is 2, the “1” value create is not evenly shared – it falls mostly the acquired company.
I am completely missing the point on buying back shares or day traders. In a cash merger the acquired shareholders are forced to sell their stock for cash – i.e. sell– taxable event. In a stock merger they exchange the old stock for the new stock – a non-taxable event. [Normally – there are some nuanced considerations – please consult a tax advisor]. In neither even does the acquiring company buy stock in the public market – that’s a stock buy back program. Sometimes a company will do both at the same time because the acquiring company wants to readjusted it debt to equity ratio – but that does not have anything to do with taxes.
I am also confused when you write “AT&T buying T-mobile isn't the first large monopolistic merger. Ain't such a rosy history for stockholders there.” What am I missing? Why not? Monopolies tend to be very good for the shareholder. Maybe not for society, but that would be different.
Yes, 70% of the mergers tend to destroy value. On the other hand, about 30% do create real synergies.[how I hate that word.]. Basically what happens is that the managers of the acquired company have a better inside view of the company and will try to extract the highest price possible.
I am a bit more optimistic about this merger for 2 reasons. AT&T is less interested in acquiring T-Mobil business then in its spectrum. AT&T needs more spectrum so it drops fewer IPhone calls. Second, this will basically make a duopoly of Verizon / AT&T. I expect they can squeeze the customers. Sigh.
By the way, I think the difference between cash and stock mergers are very different. In both cash and stock mergers the acquired company has every incentive to get the highest prices. So I don’t see the difference. Most of the time the acquiring company does not have the cash – they go to Wall Street and issue bonds to get the cash. The expectation is when a large company is buying a small company – normally the case where an establish company is buying a startup for their technology – See Cisco. You almost never see a cash merger because the owners of the acquired company “sells” there stock – thus triggering capital gains taxes. In stock mergers they “exchange” stock – which does not.
End re-election concerns by going to single terms, and I bet most political posturing and useless activities like this would end (or at least become significantly less).
Sadly no. Just look at California that have relative strict limits. The first term legislators are all high and mighty – and get nothing done. The second term they figure out how things work – but they don’t.
Some are too busy trying to figure out how to run for the next office. Nobody is willing to make long term compromises [i.e. the hard choices] because there is no long term pay off. And there is no leadership to steer the whole thing.
No, what you want is a nice mixture of new and old. You want old because they can provided the long term leadership needed. You need to new to make sure the old don’t become complacent.
Iris scan works at 6 inches and requires corporation. Face scan works at 6 feet and does not require corporation. They are being treated differently.
The Chief of Police in Boston [I think - WSJ had an article on this last week] said that he was instructing his police officers to use the face scan whenever. That is was just like taking a picture or other observation techniques that the police use. I think this has been tested in court. Iris scans were only to be administered when there was probably cause. I think on the street Iris scans have not been tested.
And as anybody who has grown up in a small town knows, there is a difference between anonymity vs. privacy.
There is a difference between stability and growth.
So, yes, rebuilding Europe was a driver for growth in the U.S. in the 1950s. IT was a driver for growth during the 1990s. Both were periods of high growth – but not of stability.
There were structural factors in the 1950s that favored stability. The U.S. economy was more skewed towards manufacturing and agriculture. Both were capital intensive, had long product cycles and had efficiencies of scale. Here are 3 examples.
Back in the 50s U.S. Steel were running massive blast furnaces which required a continues supply of ore, coke, employed thousands, took years to plan and build, etc. This was a huge commitment and U.S. Steel would run these things at a loss because these things were so massive they lacked the flexibility to turn them off. Now they run electric min-mills. Want to step into a market? You can do it in months, not years. Want to turn it off? Sure.
Back in the 50s the U.S. had dozens of car companies. Remember Studebaker and the others? Why did they disappear? G.M., Ford, & Chrysler had economies of scale. At some point a company will hit diseconomies of scale but the big 3 never did. As the big 3 got larger they got more efficient, and could squeeze there competitors harder. The “natural market” was to have 3 companies due to structural issues. And having only 3 companies lead to a “stable” economy. And then they became complacent, the market changed, and they suffered – but that is a another story.
Lastly, we come to today. Airbus vs. Boeing – one of the last stable markets. Once again, at the current time it looks like the natural number of companies is 2. Even though Boeing is struggling with the Dreamliner they are “stable”. Long lead times, heavy up front capital costs, etc. precluded any other companies jumping in (and yes, that is slowly changing). Can you think of any other industries like that today? They are few.
Computers (CAD, computerized machine tools, etc.), outsourcings, etc. have generated huge productive gains. But they have also squeezed the inefficacies like long lead times and capital requirements that gave the 50s it’s stability.
Point 1: Research drives knowledge and innovation. Knowledge and innovation drives productive.
Increased productive equals more cash in your pocket. The Market generates signals on how to allocates resources
Markets are driven by expected future earnings. Future earnings are determined by future productive. The future is hard to predict. So yeah, sometimes the market gets out of kilter. Sometimes it because of technology - sometimes tulips, but at the base it is irrational exuberance.
Point 2: The 50s are dead. If you want to bring back the 50’s you had better start unplugging all of the computers. Yeah, the 50s were stable. They were dominated by slow moving oligarchs. The reason why corporations were massive was because there were economies of scale from vertical integration. You wanted something new? You needed a lead time of years to line up engineering, manufacturing and suppliers. Before the Mac if you wanted to launch a newspaper / newsletter you needed dozens of people and a lead time in months. After the Mac you need about 50% and a lead time in weeks – if not days. Sorry, the stability of the 50’s was a product of its time. Can’t turn back the clock.
If not money, then how would you allocate resources to “productive” uses? Have you read any recent communist economic publications? They basic admit that Hayek was right when it came to price signals. If the hard left is giving up on a command and control economy you know that money is important.
While most basic R&D is done within Universities, it is mostly funded by grants – mostly Federal in nature (NIH, NSF, etc.) Sometimes a interested party will throw money at basic research [non-profits researching a specific illness, Industry groups, etc.]. So if Federal research dollars dry up I suspect we will see a lot of unemployed post-docs and graduate students.
Exactly. How does it work again? 1.) Get lowest bid proposal from committee insider..
The issue is with #1, the “bid proposal”. We are talking about a risk adverse customer that is staffed by lawyers. Bureaucracies are punished when the fail but are not rewarded when they take risks that succeeded. So you get overlong contracts that contain highly technical requirements [from a legal, not technical viewpoint.]. Can you certify that all of your chips are from a approved foundry? That your employees are paid at the prevailing wage? [And it’s not the fact that you are paying the “prevailing wage” which is the union wage – it’s the additional paperwork that one has to file.]
One can’t even file a “bid proposal” without having specialized people on the payroll – that is why it is a cartel. In theory anybody can bid, but in reality you need specialized knowledge in the bureaucracies– which is only held by the insiders.
First you have to understand that there is no national ID card. Passports kind of fit the bill but you are not required to have one. Social Security numbers are getting close to mandatory but are not – and lack almost any personal detail information [Picture, etc.]. Partly this is due to the legacy that this was a state’s reasonability, not Federal. Partly this is due to the historical opposition of a centralized database from the individualist types.
Second, just consider the phrase: “state issued picture ID.” Yes, it start our as a driver’s license, but now it just a plain old ID card. Sure, some have a “Automobile”, “Motorcycle”, or “Commercial Driver” stamp on it – but view those as extras that get tossed on top of the basic ID card. I have never heard anybody having an issue getting a state ID card because of driving ability.
In this case the person’s driver license was being revoked because the state asserted [incorrectly] that he was a crappy driver and that he was driving under a false ID. The ID portion was not suspended – just the driving privilege.
I understand and approve where the state is coming from. It looks like this is a combination of a false positive [I wonder how many false negatives there are???] and a 2nd rate notification process.
Depends. It's hard to measure. When the contracts are struck they make certain assumptions of how and when efficiencies will be realized and are priced into the contract. That being said, what happens when efficiencies do happen? That is a dark and murky story. Some contracts are cost plus. The government has been known to change specs in mid process. Sometimes they will cut and/or lengthen a project in mid stream Cost overruns tend to distort. I have rarely heard about a clean accounting of a program. So it does happen, but it hard to tell where the spit goes.
Nope. The current state for most banks run process on a overnight cycle.
So if you transfer $1 from checking to savings it will happen overnight.
If you buy something at a retail store with a check, what normally happens is that
1. the retail store closes it's book at the end of the day and sends the data to their bank.
2. The retailer's bank sends the data to your bank overnight.
3. Your bank processes the data on their overnight cycle.
So the next time you buy something with your check card see how long it takes to show up in your account. (Mind you, most of the time a provisonal transaction will be entered reducing the amount of cash in your checking account to make sure you don't overdraw - but that is just provisional). Normally 2, 3 days. In "real time" you would see the debit right away.
So, this is not so much to combat hyperinflation, it is to squeeze "float" out of the system. If you are old enough you can remember writting a check and waiting days for the check to clear. Durrning that time one could earn intrest [remeber those days?], or heck, not even have the money. [It's illegal to do so, but a lot of people did it to get a short term intrest free loan until there next pay check.
Well, for subs you want to build at least 3. That way you can always have 1 out to sea. Anything less and you will have times when all of your subs are in dock. Just look at the aguish the British are having with their subs. And that assumes the only thing the sub is being a nuclear deterrent and that no backup is needed. If you are planning to do anything else with your sub [Recon, special unit warfare, launching cruise missiles close the enemy cost, etc.] you had better hope that you are operating in a single theater a time.
Planes are kind of the same thing. If they have a single task [such as a B1-B] you can get away with fewer. If they can do multiple things then you are going to want more.
Lastly, if you build 12 subs, the 12th sub is going to be about ½ the cost of the first. The first subs are going to be more expensive until the workers figure out the best way to put things together better. And I am not talking about spreading R&D costs over multiple units [which is also true]. We are talking about assembling a highly complex machine. Planes tend to be the same.
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Well, they could - but look why the deal fell apart in the first place. Disney was leaning on Starz to crank up the price for Netflix. You are just going futher up the ladder.
If Disney offer's it's movies on DVD then anybody can buy and rent them. Disney can't discriminate [i.e. charge a higher price] against Netflix.
Streaming is a different matter. Disney can, and does, charge different prices to different companies. See the forced content licenses discussions floating around this thread about alternatives to current practices. And the ablity to price discrimination is one of those classic monopoly characteristics. Which why Netflix is in a bind.
In all of the articles that I have read, it has always been referred to as the deepest operational sub. Key word being operational.
Trieste’s bathyscaphe did go deeper – but it’s not operational any more.
The China’s sub should be able to dive deeper then Alvin – which is currently the deepest diving sub that is operational. I think Alvin II is coming out in a few years – but even that one is not designed to go as deep.
Talk about sitting on one’s laurels.
Ford does have a monopoly - on Ford Focus – nobody else can make them. But you are right – Toyota makes the Corolla which is a close substitute for a Focus – both are small cars that will get to where you need to go. If you go to a rental agency hoping to rent a Focus and all they have are Corollas - most people would not complain too hard and would rent the Corolla instead. I know few people who pine for a Focus. Bently is another matter.
Starz’s has a monopoly on streaming Pixar’s Nemo. Netflix could go and steam Dreamwork’s Shark Tale – another children’s animated movie. Is this a close substitute? I think not. If I want to watch Nemo and they offer me Shark Tale I would decline.
Is Starz a monopoly? For our perspective - the consumer - no. We have choices – other steaming services, a new DVD, a used DVD, etc. Or, heck, different entertainment options.
From Netflix? Yes – it is. They can’t buy used DVDs of Nemo and steam them. They can negotiate a deal with Starz or try to convince their customer’s that Nemo is just not that important.
Which takes me back to my original point. Is Netflix / Starz a monopoly / monopsony? No – but their relationship share characteristics of one.
It’s not Netflix fault or Starz – because – gosh – it sounds one of them is doing something sinful or illegal Think about it this way
Starz is a monopoly – in so far that that they are the only people selling first run streaming Disney movies.
Netflix is a quasi-monopsony [Technically not, but it’s the largest streaming video company, and if Starz want’s Netflix consumers they have to go through them]
What is the “fair” price that Netflix should pay Starz? There is $X of profit for 1 year for steaming videos that needs to be split between these two. [I am not ignoring that there are substitute products (DVDs, ITunes, Bit Torrent’s, etc – it just limits the profit to $X – not $X + more)
I don’t think there is one in the sense that there is a moral division of profits in this case, nor does game theory help much.
Protracted negations often happen when you have a Monopoly/Monopsony dynamic going. As a comparison, look at the negations that occur between Somali pirates and ship-owners. Everybody knows that in the end the ship-owners will pay the pirates. The pirates can’t sell their stolen ship to anybody else and it is the ship-owners best interest to get there ship and crew back as fast as possible. On the other hand, neither has much leverage over the other to force negations forward – other than brute force. . Thus the negations can last for months over a few million dollars.
I use VPN and encrypted connections almost daily and I don't work for a criminale enterprise [unless you consider corporate America a criminal enterprise – but that is a different question.]. Do you really want your personal and private data exposed as I deal with the outside world?
Or there is just the simpler question of personal privacy. If you have reasonable suspicion, get a warrant. [And yes I know that the Pakistan court system is not very independent – but I am stating a principal here. And yes, I know encryption makes life harder for the cops – but I would rather have the cops work a little harder than sacrifice privacy.]
According to Benjamin Graham [Warren Buffet's proffesor] In the short term the stock market behaves like a voting machine, but in the long term it acts like a weighing machine. While short term supply and demand may be driven by public opinion, the long term trends tend to be determined by fundementals.
And for another note, o.k. - they beat the stock market - but at what level of statistical significance? In June the stock market fell by 1.67%. I don't have the internal variance of the S&P, but if they lost less then 1% they might have found some short term quirk that hedge funds could exploite.
Of course, there is a high coloration between building bib buildings and economic crash. Think of it as the last gasp of optimism. Think Empire State building, World Trade Center, Malaysia 10 years ago, Dubai a few years ago
So, you can be Hispanic if you have lived in southern California for the past 10 generations or if you Nazi grandparents had fled to Argentina. Which can lead to some interesting situations. For example, my mom was classified as by her employer as Hispanic when there was a democratic was president and not when a republican was president. And while Mexicans and Peruvians think of themselves different, I would be most would think of themselves as hispanic - just like English and Germans would thenk of themselves as different and yet both as European.
Currently there is a min scandal running in China where officials sized “illegal” children and put them in an orphanage. Western couples would then adopt the kids, paying a lawyer to handle the paperwork – because in an opaque legal system like China you can’t do it yourself. And you can’t tell the difference between a legitimate fee and one that is not. The lawyer would kickback a portion of their fees, and the orphanage would kickback funds to the official who sized the ‘illegal” child.
So the kids tend to wind up in fairly good shape – if you discount the fact they are ripped away from their original families.
There is a subtle, but importance difference. It is a point of ethos.
A top tiered not-for-profit is very aware that it has a valuable product – a limited supply of top tier degrees. They will limit those degrees, making them rare. They will carefully screen incoming candidates and will help the faltering ones.
A for-profit college wants to maximize its production of degrees, so it screening standards are low. For faltering students they will cash there checks and let them fail.
Risk Aversion is a personality trait. How does one react to loss/reward situations.
Would you enter into a fair coin toss that costs $1 and winners get $2 – or average payout of $1? In theory people should be indifferent – but they are not. They will tend to decline because the loss of the $1 tends to be greater than the gain of an extra $1.
Would you enter into a fair coin toss that costs $1 and winners get $2=3 – or average payout of $1.50? Logic dictates yes – but still many people decline.
Risk Reduction is a technical process. How can I make X safer? How much will to cost? Etc.
So, let me clarify so points.
In the business world synergy is always a good thing. Here is the big idea behind a merger: 1 + 1 = 3. That is, by combining 2 companies value is created.
Let me state the 70% a bit more exactly. In mergers, from the acquires viewpoint, mergers fail to generate value either because the merger destroys value or the acquired company bids up there stock. That is, if the fair market value of the acquired company alone is 1, but in a combined company is 2, the “1” value create is not evenly shared – it falls mostly the acquired company.
I am completely missing the point on buying back shares or day traders. In a cash merger the acquired shareholders are forced to sell their stock for cash – i.e. sell– taxable event. In a stock merger they exchange the old stock for the new stock – a non-taxable event. [Normally – there are some nuanced considerations – please consult a tax advisor]. In neither even does the acquiring company buy stock in the public market – that’s a stock buy back program. Sometimes a company will do both at the same time because the acquiring company wants to readjusted it debt to equity ratio – but that does not have anything to do with taxes.
I am also confused when you write “AT&T buying T-mobile isn't the first large monopolistic merger. Ain't such a rosy history for stockholders there.” What am I missing? Why not? Monopolies tend to be very good for the shareholder. Maybe not for society, but that would be different.
Yes, 70% of the mergers tend to destroy value. On the other hand, about 30% do create real synergies.[how I hate that word.]. Basically what happens is that the managers of the acquired company have a better inside view of the company and will try to extract the highest price possible.
I am a bit more optimistic about this merger for 2 reasons. AT&T is less interested in acquiring T-Mobil business then in its spectrum. AT&T needs more spectrum so it drops fewer IPhone calls. Second, this will basically make a duopoly of Verizon / AT&T. I expect they can squeeze the customers. Sigh.
By the way, I think the difference between cash and stock mergers are very different. In both cash and stock mergers the acquired company has every incentive to get the highest prices. So I don’t see the difference. Most of the time the acquiring company does not have the cash – they go to Wall Street and issue bonds to get the cash. The expectation is when a large company is buying a small company – normally the case where an establish company is buying a startup for their technology – See Cisco. You almost never see a cash merger because the owners of the acquired company “sells” there stock – thus triggering capital gains taxes. In stock mergers they “exchange” stock – which does not.
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End re-election concerns by going to single terms, and I bet most political posturing and useless activities like this would end (or at least become significantly less).
Sadly no. Just look at California that have relative strict limits. The first term legislators are all high and mighty – and get nothing done. The second term they figure out how things work – but they don’t.
Some are too busy trying to figure out how to run for the next office.
Nobody is willing to make long term compromises [i.e. the hard choices] because there is no long term pay off.
And there is no leadership to steer the whole thing.
No, what you want is a nice mixture of new and old. You want old because they can provided the long term leadership needed. You need to new to make sure the old don’t become complacent.
Iris scan works at 6 inches and requires corporation.
Face scan works at 6 feet and does not require corporation.
They are being treated differently.
The Chief of Police in Boston [I think - WSJ had an article on this last week] said that he was instructing his police officers to use the face scan whenever. That is was just like taking a picture or other observation techniques that the police use. I think this has been tested in court. Iris scans were only to be administered when there was probably cause. I think on the street Iris scans have not been tested.
And as anybody who has grown up in a small town knows, there is a difference between anonymity vs. privacy.
There is a difference between stability and growth.
So, yes, rebuilding Europe was a driver for growth in the U.S. in the 1950s. IT was a driver for growth during the 1990s. Both were periods of high growth – but not of stability.
There were structural factors in the 1950s that favored stability. The U.S. economy was more skewed towards manufacturing and agriculture. Both were capital intensive, had long product cycles and had efficiencies of scale. Here are 3 examples.
Back in the 50s U.S. Steel were running massive blast furnaces which required a continues supply of ore, coke, employed thousands, took years to plan and build, etc. This was a huge commitment and U.S. Steel would run these things at a loss because these things were so massive they lacked the flexibility to turn them off. Now they run electric min-mills. Want to step into a market? You can do it in months, not years. Want to turn it off? Sure.
Back in the 50s the U.S. had dozens of car companies. Remember Studebaker and the others? Why did they disappear? G.M., Ford, & Chrysler had economies of scale. At some point a company will hit diseconomies of scale but the big 3 never did. As the big 3 got larger they got more efficient, and could squeeze there competitors harder. The “natural market” was to have 3 companies due to structural issues. And having only 3 companies lead to a “stable” economy. And then they became complacent, the market changed, and they suffered – but that is a another story.
Lastly, we come to today. Airbus vs. Boeing – one of the last stable markets. Once again, at the current time it looks like the natural number of companies is 2. Even though Boeing is struggling with the Dreamliner they are “stable”. Long lead times, heavy up front capital costs, etc. precluded any other companies jumping in (and yes, that is slowly changing). Can you think of any other industries like that today? They are few.
Computers (CAD, computerized machine tools, etc.), outsourcings, etc. have generated huge productive gains. But they have also squeezed the inefficacies like long lead times and capital requirements that gave the 50s it’s stability.
Point 1:
Research drives knowledge and innovation.
Knowledge and innovation drives productive.
Increased productive equals more cash in your pocket.
The Market generates signals on how to allocates resources
Markets are driven by expected future earnings.
Future earnings are determined by future productive.
The future is hard to predict.
So yeah, sometimes the market gets out of kilter. Sometimes it because of technology - sometimes tulips, but at the base it is irrational exuberance.
Point 2: The 50s are dead.
If you want to bring back the 50’s you had better start unplugging all of the computers. Yeah, the 50s were stable. They were dominated by slow moving oligarchs. The reason why corporations were massive was because there were economies of scale from vertical integration. You wanted something new? You needed a lead time of years to line up engineering, manufacturing and suppliers. Before the Mac if you wanted to launch a newspaper / newsletter you needed dozens of people and a lead time in months. After the Mac you need about 50% and a lead time in weeks – if not days. Sorry, the stability of the 50’s was a product of its time. Can’t turn back the clock.
If not money, then how would you allocate resources to “productive” uses? Have you read any recent communist economic publications? They basic admit that Hayek was right when it came to price signals. If the hard left is giving up on a command and control economy you know that money is important.
While most basic R&D is done within Universities, it is mostly funded by grants – mostly Federal in nature (NIH, NSF, etc.) Sometimes a interested party will throw money at basic research [non-profits researching a specific illness, Industry groups, etc.]. So if Federal research dollars dry up I suspect we will see a lot of unemployed post-docs and graduate students.
United States Public Health Service Commissioned Corps
National Oceanic and Atmospheric Administration Commissioned Corps
Shouldn’t all uniformed branches get their own data center? ;-)
Exactly. How does it work again? .
1.) Get lowest bid proposal from committee insider.
The issue is with #1, the “bid proposal”. We are talking about a risk adverse customer that is staffed by lawyers. Bureaucracies are punished when the fail but are not rewarded when they take risks that succeeded. So you get overlong contracts that contain highly technical requirements [from a legal, not technical viewpoint.]. Can you certify that all of your chips are from a approved foundry? That your employees are paid at the prevailing wage? [And it’s not the fact that you are paying the “prevailing wage” which is the union wage – it’s the additional paperwork that one has to file.]
One can’t even file a “bid proposal” without having specialized people on the payroll – that is why it is a cartel. In theory anybody can bid, but in reality you need specialized knowledge in the bureaucracies– which is only held by the insiders.
First you have to understand that there is no national ID card. Passports kind of fit the bill but you are not required to have one. Social Security numbers are getting close to mandatory but are not – and lack almost any personal detail information [Picture, etc.]. Partly this is due to the legacy that this was a state’s reasonability, not Federal. Partly this is due to the historical opposition of a centralized database from the individualist types.
Second, just consider the phrase: “state issued picture ID.” Yes, it start our as a driver’s license, but now it just a plain old ID card. Sure, some have a “Automobile”, “Motorcycle”, or “Commercial Driver” stamp on it – but view those as extras that get tossed on top of the basic ID card. I have never heard anybody having an issue getting a state ID card because of driving ability.
In this case the person’s driver license was being revoked because the state asserted [incorrectly] that he was a crappy driver and that he was driving under a false ID. The ID portion was not suspended – just the driving privilege.
I understand and approve where the state is coming from. It looks like this is a combination of a false positive [I wonder how many false negatives there are???] and a 2nd rate notification process.
Depends. It's hard to measure. When the contracts are struck they make certain assumptions of how and when efficiencies will be realized and are priced into the contract. That being said, what happens when efficiencies do happen? That is a dark and murky story. Some contracts are cost plus. The government has been known to change specs in mid process. Sometimes they will cut and/or lengthen a project in mid stream Cost overruns tend to distort. I have rarely heard about a clean accounting of a program. So it does happen, but it hard to tell where the spit goes.
Nope. The current state for most banks run process on a overnight cycle.
So if you transfer $1 from checking to savings it will happen overnight.
If you buy something at a retail store with a check, what normally happens is that
1. the retail store closes it's book at the end of the day and sends the data to their bank.
2. The retailer's bank sends the data to your bank overnight.
3. Your bank processes the data on their overnight cycle.
So the next time you buy something with your check card see how long it takes to show up in your account. (Mind you, most of the time a provisonal transaction will be entered reducing the amount of cash in your checking account to make sure you don't overdraw - but that is just provisional). Normally 2, 3 days. In "real time" you would see the debit right away.
So, this is not so much to combat hyperinflation, it is to squeeze "float" out of the system. If you are old enough you can remember writting a check and waiting days for the check to clear. Durrning that time one could earn intrest [remeber those days?], or heck, not even have the money. [It's illegal to do so, but a lot of people did it to get a short term intrest free loan until there next pay check.
Well, for subs you want to build at least 3. That way you can always have 1 out to sea. Anything less and you will have times when all of your subs are in dock. Just look at the aguish the British are having with their subs. And that assumes the only thing the sub is being a nuclear deterrent and that no backup is needed.
If you are planning to do anything else with your sub [Recon, special unit warfare, launching cruise missiles close the enemy cost, etc.] you had better hope that you are operating in a single theater a time.
Planes are kind of the same thing. If they have a single task [such as a B1-B] you can get away with fewer. If they can do multiple things then you are going to want more.
Lastly, if you build 12 subs, the 12th sub is going to be about ½ the cost of the first. The first subs are going to be more expensive until the workers figure out the best way to put things together better. And I am not talking about spreading R&D costs over multiple units [which is also true]. We are talking about assembling a highly complex machine. Planes tend to be the same.