Monday, November 26, 2007

Coke World - Part 1

While I was in Atlanta, GA over Thanksgiving, I visited the "NEW World of Coca-Cola" facility. Tens of thousands of visitors are herded through this place every day. Here is how the facility is described on the Coke World website:


How will the NEW World of Coca­Cola be different? Approximately twice the size of the previous World of Coca­Cola, the facility will feature more than 1,200 artifacts from around the world that have never been displayed to the public before. In fact, only about 50 artifacts from the previous World of Coca­Cola will be showcased at the NEW World of Coca­Cola. You can also expect to see great new interactive exhibits such as a thrilling 4-D movie and a gallery dedicated to Coke and pop culture. And of course, a World of Coca­Cola favorite—the tasting experience—will provide visitors with a refreshing opportunity to sample up to 70 different products from around the world. All this and much more make the NEW World of Coca­Cola a unique and must-see Atlanta experience!


Exhibits. Artifacts. Sounds like a museum. On one display in the "Milestones of Refreshment" gallery, it actually says that the advertisements are for "historical and educational purposes." Bah! Coke World is not a museum--it's a big advertisement for Coke. Despite the claim of Coke world to bring the history of Coca-Cola to life through displays of artifacts (mostly old advertisements), visitors learn virtually nothing about the history of Coke.

Instead, one learns about Coke's self-image and the image they want to sell to the world. The main message of the entire experience is that Coke tastes great, and it is the taste that has made the company such a global success. If you want to learn about the process by which Coke grew from a small experiment to a global icon, don't go to Coke World. There, Coke's history is construed as a natural, almost magical process: the formula for Coke was concocted, the name invented, and the famous Coca-Cola script put down on paper, and voila! the great taste of Coke naturally conquered the world. No mention of the use of cocaine in the early days. No mention of the failed attempt to sell New Coke. No mention of Pepsi. And so on. This is not history. It's propaganda.

The real story behind the Real Thing does not lie in its taste--after all, New Coke tasted better than original Coke in blind taste tests. No, the real story is about advertising and marketing, a story which I'll write about in Part 2.

Monday, November 19, 2007

Washington D.C.

Craig Newmark of Newmark's Door comments that "Washington is for people who can't let go of high school." Unfortunately there is a lot of truth to this.

Thursday, November 15, 2007

How to Reduce Carbon Emissions: EuroStyle

"The cost of the average used car in Europe is now cheaper than the cost of gasoline to drive it for a year."

The carbon taxes in Europe are vastly higher than they are here.

hat tip: Tim Harford

BMW

BMW is introducing the 1 series here in the States. The bizarre thing is, if this report is accurate, they will be slotting it above the 3 series which is a larger (and more attractive) car. The base price will be north of $35k and it is not being billed as a roadster but rather a plain old compact car. I think BMW's have gotten to be hideously ugly.

Wednesday, November 14, 2007

The War on Christmas

I think the whole thing is without any basis. I could care less if department stores put up kwanzaa trees (fake holiday created by a FBI snitch by the way) or opts to say Happy Holidays instead of Merry Christmas. What I find patently absurd is this business of putting up Christmas decorations so damn early. The mall by my work had a massive tree up the first week of November. When I was a kid (some would argue I still qualify as such) trees and decorations didn't go up till the first day of advent (after Thanksgiving). It just makes the holiday that much more crass. If I have to hear John Gibson or Bill O'Reilly harrumphing about the secular Nazis among us trying to subvert Christians in their celebrations of Christmas, ostensibly by using the wrong greeting, I will vomit. If those mental pygmies would like to do some good they would be well advised to go to their local macy's and browbeat them into taking down their decorations and not replacing them till advent. Curmudgeonly rant over!

Edwards Ad: Bursting the Beltway Bubble

Howard Kurtz and other beltway buffoons are bitching and moaning about John Edwards new ad. John Edwards campaign schtick is one part sacharine vomit coupled with about three parts dimwitted populism. Though, I find him utterly noxious and pray that he does not get the nomination I think his most recent political stunt is quite shrewd. If elected, he is threatening to take away Congress members' health care if they are unable to pass universal health care legislation. Pundits scoff at this tactic as the President can't actually take away Congress members' health care, the best he or probably she can do is submit legislation to the Congress for them to enact which would have such an effect. So this is a bit of political theatre. Inside the beltway people are likely to know this, but inside the beltway is not real America. Most real folks eat this type of populism up with a spoon. The notion of stripping Congress of some of its perks is quite appealing to the average voter. It doesn't matter if such a proposal doesn't make the light of day.

Tuesday, November 13, 2007

Muji

Muji is like a Japanese Ikea (a little more upscale). I think it will spawn yuppygasms galore, if not at the same level as the iPhone.

Hillary Hijinx

Apparently Hillary has been planting questioners at her events. Of course we are assured that this is an isolated incident. Sort of sounds like something the President would do.

The Utah Voucher Vote

VoluntaryXchange has a really interesting post on some of the dynamics behind the Utah voucher vote (which failed).

Morbidity at The Margins

Tyler Cowen has a morbid post on political assasinations in general and muses on Garry Kasparov in particular.

Disaster Response

The Freakanomics Blog hosted a "Disaster Response Quorom" and I found this bit from Lee Parrow particularly trenchant:

"What we need to do is reduce our vulnerabilities by downsizing the targets that have catastrophic potential. At one third of its pre-Katrina size, New Orleans could be protected from hurricanes and still serve its vital economic functions as a major port and oil and gas facility. By removing federal subsidies for wind and water insurance, and insisting upon appropriate building standards and land use policies (for example, those as good as Holland’s, which is mostly below sea level), huge cities in vulnerable areas such as Miami, Tampa, or Galveston would slowly shrink to manageable sizes. If we don’t limit their size, hurricanes such as Katrina will do it for us, and at enormous costs to human lives and property."

I think this is spot on. The FEMA flood insurance is a complete racket from a distributional sense but it also creates some horrible incentives. You have to step back and actually think of what it means to qualify for FEMA flood insurance. You are moving into an area that a private insurer has decided is uninsurable or to the extent that they offer an insurance policy, it is obscenely expensive. Are these folks really strong claimants for federal assistance? But beyond the merits of their claim, there is the question of incentives. To the extent you provide subsidized insurance you incentivize a tremendous exposure to risk, one that compounds as you are also incentivizing further development which is likely to harm the natural resources in place to mitigate the impact of a natural disaster (think of the wetlands surrounding New Orleans).

From a political perspective, my preferred policy is entirely unpalatable. I think it is morally unconscionable to build up this type of dependence, but once it's there, what do you do? We find the same situation with regards to our farm policy which harvests dependence at home and poverty abroad all the while making us fatter and spoiling nature. The best you can hope for is to slowly ease people off the dependence. But the question is how, I think in the case of people living in Disaster areas you could start to means test flood and wind insurance and then freeze reimbursement levels but index premiums.

Monday, November 12, 2007

Grammar: The economy may increase or grow down, but you don't "grow the economy"

I'm not usually a traditionalist when it comes to grammar, but I've had enough with the expression "to grow the economy." It doesn't signal the end of the world, but it's bad.
Take note of this passage in Paul Brians' Common Errors in English Usage:

We used to grow our hair long or grow tomatoes in the yard, but now we are being urged to "grow the economy" or "grow your investments." Business and government speakers have extended this usage widely, but it irritates traditionalists. Use "build," "increase," "expand," "develop," or "cause to grow" instead in formal writing.

Comments On Hillary and Obama's Energy Plans

First off I must give credit where it is due. I was surprised to see both Hillary and Obama propose a cap and trade whereby permits are auctioned off instead of allocated. As such they have both offered substantive climate change proposals. Frankly, I am surprised the press hasn't given this part of their proposals more publicity.

Now, on to my disappointment. Both Hillary and Obama have already gestured towards having one massive pork orgy with the proceeds from permit auction. It seems biofuels and liquified coal will be getting lots of handouts, not to mention other various and sundry renewable energies. I would have much preferred a revenue neutral proposal which dedicated revenues towards relieving lower income folks of their payroll tax burden (thus mitigating the impact of higher energy prices caused by a cap and trade and taxing something bad-consumption- instead of something-good- work). Further, once you have priced in the externalities caused by carbon emissions, whether by cap and trade or a carbon tax, the claim for subsidizing other energy forms is not compelling. In a sense other forms of energy are already receiving a subsidy in the form of not being subject to the carbon tax or cap on emissions.

Sunday, November 11, 2007

Greg Mankiw's Blog: Where would you rather be sick?


Mankiw shows a table courtesy of the Carpe Diem blog that adjusts life expectancy for things like homicide and automobile accidents. He goes on to speculate what the chart would look like if one normalized for Body Mass Index. All of this may be true but it does not function as an endorsement of the US health care system but rather reinforces the fact that health care has only so much of an impact in influencing health outcomes.

Wednesday, November 07, 2007

How to Square the Robertson-Giuliani Circle

As I mentioned earlier today, Super Duper Uber-Wingnut Pat Robertson has endorsed Rudy Giuliani. This unfortunately is something of a coup in Republican primary politicking and I found it to be a surprise. Giuliani's biggest liability, besides being a megalomaniac (great mayor though), was his social liberalism. Thus, it was surprising when a man that attributed 9/11 to America's sins (I forget whether it was homosexuality or abortion or both). But James Joyner has figured it all out.

"God ordered the 9/11 attacks.
The 9/11 attacks helped revive Rudy Guilani’s stalled political career. _________________________________________________________

∴ God wants Rudy Guiliani to be president."


hat tip: Stephen Bainbridge

Taxation of Carried Interest Again

I posted awhile back on this subject. Hedge Fund managers earn a commission as part of their compensation, astronomical compensation. This income is treated as a capital gain instead of income, thus, their considerable earnings are taxed at 15% instead of 35%. There was talk about closing this loophole but Sen. Charles Schumer (D-NY and chair of the Finance committee and Democratic Senate Campaign Committee) has nixed such legislation. Professor Bainbridge has a very astute observation about the politics of this situation:

"I continue to predict that the Democrats will not pass hedge fund tax increases this term. It’s not just that the hedge fund industry has bought off key players. Instead, as I explained the other day: We normally think of interest group politics in terms of the interest group using campaign contributions to purchase some result. Where the interest group is fixed on avoiding a change in the status quo, however, the balance of power shifts to the politicos who can use threats to the status quo as a way of extracting funds from the threatened group on an ongoing basis. You don’t let the goose that gives golden eggs go after just it gives you just one egg, after all. Instead you turn it into, so to speak, the gift that keeps on giving."

No to Mukasey

Michael Mukasey, Bush's nominee to replace Fredo, er, Alberto Gonzales, has been fairly weasely with regards to torture. He has stated that he does not believe that the US should conduct torture as a policy but at the same time there should be no formal prohibition from the President issuing such direction. Additionally, he was evasive on the issue of whether waterboarding constitutes torture. Initially he responded that he does not know what waterboarding is, hardly a responsible answer for somebody that is about to serve as Attorney General. Since he has refused to declare it illegal. I think it is clear that he should not be confirmed.

MAJOR DEVELOPMENT

Pat Robertson is endorsing Giuliani. He also remains insistent that hurricane katrina was God's wrath for our condoning of homosexuality.

At Least We're Better than Powerline

Powerline's John Hinderaker, aka Hinderocket, has won the Golden Wingnut Award for this post, here is a brief excerpt:

"It must be very strange to be President Bush. A man of extraordinary vision and brilliance approaching to genius, he can't get anyone to notice. He is like a great painter or musician who is ahead of his time, and who unveils one masterpiece after another to a reception that, when not bored, is hostile."

Note: I hasten to add while as an intern at the Center of the American Experiment I did actually meet Mr. Hinderaker and he was eminently personable and quite nice. He even seemed rather intelligent, I just think that he drank too much of the kool-aid, as the above illustrates.

Bernie, We Hardly Knew Ya

Bernie Kerik, briefly the nominee to serve as DHS Secretary, is about to be indicted for tax evasion and bribery. Classy Guy.

Tuesday, November 06, 2007

Coolest Thing EVER!

I don't know how this got past my attention because it is the most important development since the printing press or velcro: a unrinal based video game. In the game, it's a driving game, there is a tv above the urinal and you direct the car with your pee. That is simply brilliant. I am inspired.

Monday, November 05, 2007

Moment of Sadness

Stephen Colbert has dropped his bid to run for president.

Greg Mankiw on Health Care

Greg Mankiw has an Op-Ed on health care over at the NY Times. The thrust of his piece is that we need to take a breath before we rush into health care reform because things aren't as bad as they seem. I disagree with the general thrust of the piece if not the particulars. He takes issue with three different aspects of the health care debate.

The first issue is the tendency of health care wonks to point out the higher life expectancy of other OECD countries and attribute this to health care delivery. Mankiw says that this is actually explained by higher automobile and crime fatalities.

The second issue Mankiw addresses is the number of Americans that are uninsured. The number that is constantly cited is 47 million. Now, he complains that this is misleading, which it is, for a variety of reasons. This includes folks that are eligible for medicaid (for whom enrollment is retroactive from an injury or illness), illegal immigrants, and those who make over $50,000 (i.e. who are in the top half of income distribution). Again, all of this is correct and if we look at those that are chronically uninsured, it is a significantly smaller number. I guess the bigger issue is to analyze why this group is chronically insured, my guess is they make enough not to be eligible for medicaid but have pre-existing conditions which make them unisurable risks. The liberal solution is to impose community ratings, I would much prefer federal catastrophic re-insurance program which would make this group insurable.

The third issue Mankiw addresses is the complaint that health care is consuming and will consume an ever greater portion of GDP. He rightly says that as we are more prosperous the consumption of health as opposed to things will increase. I agree with this but he is a bit glib in his dismissal of this criticism. It is one thing to accept that health care will and should rise as a percentage of GDP, but another to fail to recognize the inherent waste in the modern system of health care finance and delivery. Our system encourages the consumption of care regardless of its effectiveness (both in terms of cost and health outcome). This is where other countries exceed us. They exceed us because they have a mechanism to say no to the patient- the government. I am extremely doubtful that our government would be able to similarly serve this function, and thus far insurers have failed in this capacity as well. I think the only way to do this is to push more responsibility on the consumer himself by treating employer provided health care as income.

Sunday, November 04, 2007

Saturday, November 03, 2007

Bill Clinton: Most Influential Person of the Left

Anyhow, the Telegraph seems to think so. I disagree. Right now, I think Al Gore is. He is the preferred candidate of the grassroots. He essentially engineered two of the major policy positions for the Democratic Party, two that really seem to motivate the party: the Iraq War and Climate Change. He has won the Nobel Peace Prize, an Oscar, and an Emmy in the last year making him a bonafide celebrity. At this point he has captured the Democratic Party's Mind and Soul, all he is lacking is its purse and that is because he has not entered the ring.

I’m Not Quite Lost Yet

Thank you for your concern Xtra, you will be glad to know that I am still around. I did however very recently spend four days in the lovely state of North Carolina. Here are a few observations that I found to be interesting.
  • Driving in North Carolina is TERRIBLE. No one seems to understand what the little thing on the left side of your steering wheel is for and thus no one signals their turns. I don’t know if I can count how many times I was stuck behind someone at a stoplight or stop sign thinking there was something in front of them that was impeding their ability to go straight…frustrating to say the least.
  • Nothing and I mean nothing in North Carolina moves quickly. People walk slow, people talk slow, people drive slow, basically if something can be done slowly in North Carolina it is. I was in a Subway getting a late dinner at 9:30 pm on a Thursday, the only two people in the place were me and the guy behind the counter, yet it still took the guy about 5 minutes to make my one six inch sandwich.
  • I am not to sure if this next observation is indicative of the entire state or just the area I was in, but in Durham, NC I am pretty sure that the panhandlers are required to register with the city. While driving down the street in Durham I noticed that all of the guys standing on the corners with signs asking for money were wearing neon construction vests with picture ID cards on the front of them. This just struck me as odd.
So there you go some random observations from my trip well below the Mason-Dixon Line.

Thursday, November 01, 2007

The Silence is Deafening

Anti, have we lost you?

Archduke Comments, Xtra Offers Tepid Response

Archduke has engaged in a long and thoughtful comment on why he thinks vouchers are crap. I disagree with him that they are crap but thus far I don’t think the evidence bears out that vouchers are a silver bullet. So let me go ahead and address some of his points (he was commenting on a post by Megan McArdle that I linked to).

"First, she doesn't give, nor does she link to, any conclusive study that says that vouchers work. She gives no evidence other than that she says that they do, so we should believe her."

I guess this goes with the medium which is informal and immediate but here is one study from GAO on the Cleveland and Milwaukee programs (which I believe are the longest running publicly funded programs). Their finding are that the difference of achievement of students who take the vouchers is from negligible to a modest improvement. Not much there and to the extent that I have looked at other studies, consistent with the literature. That said, this finding should be put in context, the vouchers provided are always less than the per capita expenditure per student and often significantly less. Thus, less money= same result. I would say this is a good alternative to more money= same result. But maybe that’s just me.


"Second, and this may just be from my own experience, but the reason that private school costs less per student than public school has a lot to do with the fact that, unless it's an elite private school, the teachers don't make jack shit. My college roommate went to a private school where two different pairs of married teachers were living in the same house, sharing the same car, because they couldn't afford their own."

This is interesting point, not so much as it is an effective rebuttal, which it is not, but it does present a question of scalability. The reason that I am glib on its merits is that it doesn’t address the central question, which is how to educate our kids? (really, the lower income kids that are trapped in crappy urban school districts). If teacher A is willing to teach for 25k at a private school and ends up achieving the same outcome as teacher B who gets 10k more, is that bad? Well, for teacher A but not for the taxpayer. I think where it is problematic is the question of scale, can vouchers scale to a massive program. Maybe, maybe not. I have my doubts, but the status quo is certainly not tenable.

"Why do these teachers do it, if it's so crappy financially? I'm playing a guessing game here, but I think it's the quality of the students. Private schools are allowed to select whoever they want and deny whoever they want. Public schools, of course, are forced to take anyone within their district, no matter how much trouble they cause or how far behind their grade level they are."

Ah, the creaming theory. This one has always seemed so counterintuitive to me and I would refer you to the GAO study because it is also untrue. Just think of it in real terms. What does a parent say when their child is excelling in school, probably one of two things : "Johnny is a fricking genius, I need to send him to Brainiac and World Beaters Prep." or "Johnny is doing really well at School, we are happy with the status quo". I think most parents opt for the latter. I have always thought the more plausible scenario is “Johnny is failing, he needs a different school”.

"If vouchers become commonplace, either the public schools will become even worse--since only the unacceptable students will go there--or the private schools will start taking crappy students. Teachers, of course, will hate this and start demanding more money, which will lead to a raise in teachers' salaries, which will in turn cause a rise in tuition, which will price out the smart, good, poor kids whose parents can't afford to go above and beyone the vouchers, which will lead us back to where we were in the first place."

First, let’s restate where we are in the first place. Lower income inner city kids are receiving absolutely piss poor educations and can’t exit the system except for on the heroic efforts on the parts of parents and the community and charity from private schools. So where we are now sucks. The question is, will public schools become worse necessarily because students exit the system. Possibly, but they could also improve, by actually being, what’s the word I am looking for…Competitive. As it stands now, public schools have a monopoly and they deliver piss poor service. I do however think you could have a good deal of screening for students occur if it were a full blown program and this has in fact occurred in Chile where they do have a full blown voucher program.

"Another problem, irrespective of the ones I've outlined above, is that unless the vouchers are for full tuition price, there's no way lower middle-class parents could afford them. Even if my parents wanted my siblings and I to go to private school, they wouldn't have been able to afford even 1000/year per student. When you're running a deficit and only catch up in the summer, it's pretty unlikely that you'll be able to afford to apportion enough money for kids to go to school. Living paycheck-to-paycheck (which a significant portion of the middle-class does, even though their income is in the 40-50 K range) isn't conducive to paying school tuition when your kids can get educated for free at the public school."

This seems like a self-defeating argument as to the extent that vouchers have been implemented they have been means-tested (typically between 175-200% of the poverty line and below). Somehow people are doing it. And we have to remember, not every private school is an Exeter or Andover. Most private schools are parochial schools that do a pretty good job on a shoestring budget.

I don’t think Vouchers are the solution, but I think they are part of the solution, along with Charters, and decentralizing school administrations, accountability that makes sense unlike NCLB, and paying teachers more so that eventually teaching becomes a prestigious profession and attracts brighter bulbs (there are some really good teachers and their efforts are heroic but we can’t build a system on the basis of the expectation of heroism).

Random Question

Are there any Democrats (or for that matter Republicans) who have spoken out in favor of means testing Medicare and Social Security?

Larry Summers

Has an interesting interview over at International Economy.