Category Archives: Business

Econ 101: Let's Watch Star Wars!

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Overthinking It: The Economics of Death Star Planet Destruction

War in general makes poor economic sense. Thousands of lives are lost and millions of man-hours are spent producing things that will break, explode or be exploded. Even the shittiest factory in the world at least produces crappy T-shirts. It may produce them at a higher cost than would justify the operation of the factory, but at least at the end of the day there’s some shirts.

The strategic calculus of the Death Star, on the other hand, may be more rewarding.

One of the more effective negotiation tactics, from a game theory perspective, is to convince your opponent that you’re crazy enough to do something stupid.

Milo Minderbinder Would Be Proud

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The Real Housewives of Wall Street

Even cleverer than buying eggs at seven cents a piece in Malta and selling them to the mess for five cents and making a profit.

During the financial crisis, the Fed routinely made billions of dollars in “emergency” loans to big banks at near-zero interest. Many of the banks then turned around and used the money to buy Treasury bonds at higher interest rates — essentially loaning the money back to the government at an inflated rate. “People talk about how these were loans that were paid back,” says a congressional aide who has studied the transactions. “But when the state is lending money at zero percent and the banks are turning around and lending that money back to the state at three percent, how is that different from just handing rich people money?”

And that’s not even the worst of it…

Run For it, Marty!

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Oh, my God, they found me, I don’t know how, but they found me

I must have zigged when I should have zagged, for I was tagged to do another iteration of the business-y survey that led to my rant-o-rama some time ago. The unholy marriage of business and military jargon. Damn Libyans. Why couldn’t they have been happy with the shoddy bomb casing full of old used pinball machine parts I gave them?

So don’t ask me how we monitor and continuously improve the agility of our key processes for supporting our value creation processes, for I am liable to snap.

The irony is that we’ve been getting more “one size fits all” protocols handed down to us that make us less “agile.” The assessment was a bad fit to begin with (it seems geared toward an assembly line type of business), and my grades went down because of inflexibility that was thrust upon us.

It's Like Those Miserable Psalms

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… they’re soooo depressing.

This story about a bank getting off light, Wachovia Paid Trivial Fine for Nearly $400 Billion of Drug Related Money Laundering, made me flash back to two recent stories: Why Isn’t Wall Street in Jail? and another article (whose title or link I can’t recall) pointing out the ridiculousness of fining a company trivial amounts for large illegal profits. If the penalty is less than the profit, that’s not a deterrent — it’s a business plan.

Tough Love

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American workers got what they deserved

To make matters worse, you’re again being played for a chump. The same puppets who did nothing while your standard of living decreased are now using the oldest gimmick in the book — jealousy — to continue their assault on American workers. Rather than protect Americans’ jobs, they deflect your attention through jealousy.

“Cut the pay of government workers,” they cry. “Increase their health premiums. Decrease their pensions. Break their unions. After all, you’ve suffered so they should suffer too.” And in your misery, you buy their argument while more jobs head oversees. Pretty stupid, eh?

Geekherding

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rands in repose: Managing Nerds

Another default opening position for the nerd is bitterness — the curmudgeon. Your triage: Why can’t he be a team player? There are chronically negative nerds out there, but in my experience with nerd management, it’s more often the case the nerd is bitter because they’ve seen this situation before four times and it’s played out exactly the same way. Each time:

Whenever management feels they’re out of touch, we all get shuttled off to an offsite where we spend two days talking too much and not acting enough.

Nerds aren’t typically bitter; they’re just well informed. Snark from nerds is a leading indicator that I’m wasting their time and when I find it, I ask questions until I understand the inefficiency so I can change it or explain it.

Nothing Stops

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Greed is good in NFL labor talks

Remember the scene in “Shawshank” when Andy tells the warden that he’s done with laundering money for him? The warden’s eyes narrow. He shakes his head. He looks at Andy as dismissively as one human being can regard another.

“Nothing stops,” he says. “Nothing.”

That’s me. I’m the warden. Nothing stops. I will make more money than I did last year, and I will continue to regard employees and readers as disposable pawns. This isn’t about common sense, dignity, relationships, long-term plans, or even preserving the fragile relationship between a customer and a provider. It’s about generating more money in Years 5 through 8 than I made in Years 1 through 4. That’s it. Oh, and steamrolling anyone who gets in my way. I forgot that part.

The Non-Physics of Rockets

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Space Stasis: What the strange persistence of rockets can teach us about innovation.

The development of rockets — driven by war and the invention of nuclear weapons, and the relationship the story has with recent economics and innovation.

The above circumstances provide a remarkable example of path dependency. Had these contingencies not obtained, rockets with orbital capability would not have been developed so soon, and when modern societies became interested in launching things into space they might have looked for completely different ways of doing so.

Before dismissing the above story as an aberration, consider that the modern petroleum industry is a direct outgrowth of the practice of going out in wooden, wind-driven ships to hunt sperm whales with hand-hurled spears and then boiling their heads to make lamp fuel.

Making It Sound Worse Than it Really Is

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Chevy Volt, Nissan Leaf post small December sales

This was the year General Motors Co. and Nissan made good on their promise to bring mass-produced electric cars to the market. But don’t count on seeing one in traffic soon. Sales so far have been microscopic and they’re likely to stay that way for some time because of limited supplies.

GM sold between 250 and 350 Chevy Volts this month and Nissan’s sales totaled less than 10 Leaf sedans in the past two weeks. Production for both is slowly ramping up.

It will be well into 2012 before both the Volt and Leaf are available nationwide. And if you’re interested in buying one, you’ll need to get behind the 50,000 people already on waiting lists.

One might argue that extremely limited availability doesn’t count as “bring(ing) mass-produced electric cars to the market.” It’s bringing a small amount of cars to market. The headline makes it seem like there isn’t much demand, rather than the companies selling every electric car they’ve made.