GM’s Greatest Failure

Prior to the bankruptcy, I had never heard of GM. I mean, sure, I know they’re a big company and the #1 seller of automobiles for quite some time. But I had never actually seen any car under the GM brand, so I could never go out and buy a GM car, had I the desire. It’s only recently that I found out that GM’s branding method is different from any other company. Instead of using the company brand or company+subsidiary brands, GM doesn’t use its own name as an umbrella for product names. Instead, they spam brands (Dodge, GMC, Pontiac, Chevy, Saab, and who knows what else).

I can understand the rationale behind this. GM probably figured that in a competitive market, having more brands will allow them to satisfy different niches more effectively, thus gaining market share. Also, relatively independent departments responsible for brands allows executive training and easy termination of unprofitable brands.

The end result may not have been what GM wanted. Their many different cars often overlapped in terms of features and market segment. Consumers became confused over which car to buy. Perhaps most importantly, valuable marketing dollars were diluted by unprofitable brands instead of being focused on selling the GM name.

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Populist Anger

Is this the early 1900s again? If so, who would be this era’s William Jennings Bryan? Regardless, class relations have worsened since Reagan took the throne. The financial crisis just showed that the rich get bailed out by their connections in the government while the “common man” can barely afford to buy food. All that rage (partially their own fault for overconsumption and leverage) has to be channeled somewhere. We’ve seen it directed at AIG executives, congressional Republicans, and now Democrats. The only surprise is the resiliency of the American Myth (formerly American Dream) of upward mobility. People still cling to that antiquated romantic notion and steadfastly avoid uprisings and revolutions. Right now, soak the rich is as far as they’re willing to go, perhaps because most people still entertain absurd notions that they’ll ever be rich.

On a similar note, the same disenchantment can be found in the former Soviet bloc, where the market has failed to deliver on improvements in standard of living. Already there are yearnings for the “good old days”. How long there before blood spills?

The Future of Polisci

Perhaps some of the distrust of politicians has spilled over into political science as a field, even though most politicians are lawyers by trade, not political theorists or professors. As a result, people (Tom Coburn et al) are asking whether political science is even relevant as a field of study. They have the academics scrambling to justify their department’s existence. Having taken a single class in the field during my undergraduate years, I have fond memories of abstract discussions on power, systems, and gatekeeper institutions as well as more applicable overviews of industrialization, the Soviet Union, and South Africa.

My personal take on the future of political science is that it is best served by delving into modern affairs and proposing policy. Leave the models and theorizing about resource distribution to economics, a more suitable field for the arcane and theoretical.

The TFA Controversy

When I was in Berkeley, Teach For America was quite a big recruiter on campus, and I got to know (and almost signed up for) the program. Ostensibly, it is a social work group targeting low-income kids in need of a quality education. In practice, it is a resume building experience for privileged kids, most of whom will step into the corporate life at some point. I have no doubts that the teachers are motivated, bright, and effective in teaching. The only issue I have is that the participants are not career teachers, so most of them will only teach for 2 years.

As for the unions’ argument that TFA teachers are underpaid scab workers, I have to disagree. Obviously there are people willing to do the work for less pay than what unions currently pay. Many of them achieve good results in standardized tests. I pose the question to unions: why are your teachers not meeting the same standards as a bunch of scabs?

Failing Our Youth

I’m not usually a big fan of Paul Krugman when he mouths off about political economics (too much Greg Mankiw influence), but he’s usually sound when highlighting social failings and doing technical work on macroeconomics. He is mostly spot on by sounding the alarms on education, as many education secretaries have done so before. Having spent many years in academia, I have witnessed firsthand that most of the US’s top tier talent is imported. That source, while welcomed, can be volatile. If the US falls behind in research output, new discoveries, availability of funds, or quality of life, students will go elsewhere. A particular concern is that the underclass does not seem interested in advancing through education. I’ve got no ideas of what incentive program can be devised to help them realize that education is their best shot at social mobility.

How Business Supplanted the Humanities

Most undergraduates today in public schools choose some form of business/economics as a major for good reason. The expected return in terms of income is much greater than if the student had chosen a more academic discipline such as English or history. One can make the argument that engineering offers on average higher returns than business, but when you weigh the expended effort, the potential for professional degrees, the higher social status, and a vastly higher earning ceiling, business still wins out.

Where do I see the English and history departments headed? Obscurity. It’s up to them to reinvent themselves as applicable to attract more students. Until then, they can at least take comfort in the fact that they’re being subsidized by larger departments within a college. I don’t mind that subsidy since any well-rounded individual will take at least one course in those disciplines, and that requires faculty and an accompanying department.

Who Are the Most Racist People?

In my experience, it is East and South Asians (not South-East Asians, mind you) in a tie for the title of most racist. Those groups have large populations, relatively homogeneous populations but with a significant ethnic presence that discrimination becomes habitual. Though whites in the US get the most press for hating on blacks and Hispanics, they’re actually pretty tame in their outward interactions (discrimination tends to be subtle and based on avoidance rather than confrontation). In Asia, racism manifests itself as verbal slurs, hate crimes, and sometimes enforced policy. In the article linked, there is a NYT piece on race relations in South Korea. Notice the amount of flak received by the woman for consorting with a foreign man.

Oh My, What a Big Beard You Have

In a twist, operatives in Afghanistan who grew long beards to blend in and to be socially accepted are now stigmatized b/c of their aggressive behaviour. Their characteristic beards are now ways for the local population to identify and avoid these rough sorts. I think most people knew from Iraq that using independent contractors as security detail did not turn out well. Using them in Afghanistan as infiltrators is not going to work any better. There may be more culturally sensitive ways to carry out investigations, but some of what these special ops do is unavoidable.

China’s “Little Emperors”

It’s a good position in China to be an only son. Parents spoil the child and cater to his every whim. It’s much better, however, to be born to a rich family as well. The divide between rich and poor has been steadily accelerating since market reforms began, but unlike the West, poor Chinese families do not have the social safety net to care adequately for their children. Corrupt officials and the high-rolling lifestyles of the rich has led to nationwide resentment and social unrest, not a good situation for the ruling party.

The Need For a Human Rights Watch

According to Nickelback, Amnesty International was founded by a British lawyer who was shocked to read that two Portuguese students had been imprisoned for toasting freedom. It turns out that societies like AI are as needed today as ever. One criticism though is that they don’t focus enough attention on western countries, such as the US, when they commit human rights violations. Guantanamo is a sore thumb in that as long as it exists, people will wonder what sort of violations take place there because of its reputation. The only reasonable course of action is to return to Geneva Convention accords with respect to treatment of prisoners of war. Otherwise, I would happily endorse sanctions against the US in violation of human rights.

Research Summary – Telomeres

Not much to comment about here other than to say: “click through to the article”. Kathy Collins is an outstanding professor and researcher at Berkeley, and her work on telomeres will be critical to controlling the aging process down the road.

At Least I’ve Got a Story No One’s Told

Note: The article title is taken from “Whatever Will Be” by Tammin, quite an underrated singer.

After going to a PNC (Philips Neighbourhood Clinic) volunteer orientation session, I stopped at Hiawatha Mall for some grocery shopping. I also got some food at New French Bakery and Hiawatha Pizza. When I first entered the pizzeria, it was around 10. The shop was closed, but the owner came out to kindly tell me that it would take 10 minutes. I took this time to do my shopping at Cubs Foods.

When I returned, I struck up a conversation with the proprietor, a 55 year-old man called Hassan Abdulle, a Somali immigrant. He told me that he worked for 20 years in NYC under a Greek guy before moving to the Twin Cities to start up a New York pizzeria. I had a slice of his pepperoni pizza. It was decently priced and slightly above average for a pizza (much better than the Dominoes crap that gets served at lunch lectures). It’s comparable to the quality of Papa John’s Pizza with better cheese but worse meat.

More interesting than the food was the conversation we had over the counter. I asked him about his experiences with and thoughts on Somalia, Hajj, shisha, and halal food. We also got to talking about my background as a med student. Upon hearing this, he volunteered some symptoms for me to diagnose. Later, the conversation drifted to China’s economic development and the presence of minority groups in the PRC, especially Chinese Muslims. It seems that this guy is already quite famous in the community, having interacted with many shoppers in this manner.

It’s experiences like these that light up my day. No matter where I go, I always make an effort to strike up conversations with people. Discovering each person’s unique story is personally rewarding.

Hot Diggity Dream

I’m attending a hockey camp/amusement park. There are two nets side by side with Evgeni Malkin and Sidney Crosby tending one each (wtf?). I start by ripping a shot into the net. Next, I skate up and poke a puck that’s laying by one of their legs past them into the net. Finally, I drop a puck from my glove to the ice (legal) and fire it home. Maybe I’ve been watching too much hockey.

Socialism Beats Capitalism; Dictatorships beat Democracies

A well-run central planning system that can make the optimal and most efficient decision every time (arguably the same results as a pure market system) is superior to the market system because it can arrive at its decisions quicker and without the overhead of competition. Likewise, an enlightened dictatorship is more decisive than a democracy in implementing policy. I doubt that anyone will argue against this.

Now the question is that how do we ensure that these plutocrats make the best decisions every time without mistakes of succumbing to self-interest?

For the record, if anyone’s wondering, there is no country that has a perfect democracy or a pure market economic system. There is always some layer of indirection, corruption, or inefficiency involved.

Spanish or Spanish

So, I’ve basically decided to dedicate this summer to studying Spanish and touring a foreign country. Looking around, there are two programs that I’m wavering between. The first is Celas Maya, a host-family + intensive Spanish immersion program in Guatemala. The second is GeoVisions’s Conversation Corps program. I’d have to work 15 hours a week as an English teacher for a host family. In return, I can take classes in my spare time and wander the country. Both cost around the same.

Does anyone have experience in these programs? Are there other ones out there that are any good? My focus is on quality and the experience, rather than cost.

Lobbing Mortars from Hell

Was reading Phoronix today when I encountered this great quote about S3 graphics:

Personally, S3’s biggest recognition in my life was playing Heavy Gear 2 at a LAN. Some putz was putting mortars on us from way the Hell at the far end of the map with impunity. After allegations of cheating and threats of beating, we all found out his Savage4 didn’t support pretty much any way of rendering distance fog. He had an infinite viewline.

After further allegations of cheating and rigging, we found out that not only did he not intentionally arrange a corner case to get this screwup, there were no drivers from S3 that could fix it, and S3 had stopped making drivers for his card.

Maybe that’s why no one uses S3 video cards.

The Last Word on Health Reform

This will be my last post on the subject, I swear, due to two articles so compelling that they prompted my linking.

First, Electoral-vote.com has an overview of the political dimensions that the bill going through the Senate right now addresses. The biggest problem I’ve had with entitlement programs is that there’s a phase out point for subsidies. Why not be comprehensive and provide the same baseline for everyone? Britain gives health insurance to everyone regardless of income. Then there is the issue of how did health insurance ever become the province of the employer? Most companies don’t have expertise on selecting health plans and don’t spend the money any wiser than the employee if he had gotten extra income instead.

Next, T. R. Reid has a good article dispelling myths about the health systems abroad. The US has the “luxury” of being a late adopter in that it can see what worked elsewhere. So, why not just import elements of one of these systems? Politics. The American people take pride in being innovators in everything and turn up their noses at anything “not invented here”.

Good Governance Ideas

As a political moderate (that’s the term I use to describe a “classical liberal” who is, in terms of today’s political spectrum, socially liberal and economically conservative), I’ve often disagreed with both parties on their approaches to policy. This is still true for the health care bills floating through Congress. Ostensibly, the Democrats want to address rising costs and uninsured people, but the Baucus bill focuses heavily on the latter. The CBO projects that costs will rise compared to the current plan. I recently listened to a podcast on why costs are high, and agree for the most part with the argument that none of the stakeholders have any incentive to hold costs down. Patients don’t foot the bill, doctors will be sued unless they order tests for every remote possibility, and insurance companies are too cowardly to confront the other two.

How do we turn back the tide? One idea is to expose patients directly to the cost of treatment and to force care providers to compete on cost. The insurance companies can function as it does with respect to car insurance. For a premium, the insurance company will pony up to a certain amount per year in treatment. Patients will be required to put their own money into health savings accounts, which will function much like IRAs and be subject to a government match up to a certain amount. Note that there is no adjustment or subsidy depending on income level. It’s really the individual’s responsibility how much value they place on their care and how much they expect they will need. So, if you start saving when you’re young, you’ll have a nice nest egg when you’re older and more susceptible to needing care. Having this system of patients paying out of pocket will make them more price-sensitive, acting as a market-driven deterrent against excessive treatment and rising cost.

The second component of my plan is to have hospitals and clinics compete in terms of pricing. All other businesses except for utilities and monopolies compete. The end result is reduced prices and increased choice. What if hospitals offered patients treatment options and an accompanying price, leaving the choice of which one to pursue in the patient’s hands? It just seems ridiculous to me that consumers are so insulated from the cost of procedures. Do you know how much that MRI you just got costs? Exactly!

Thinking along these lines, I come up against my basic opposition to entitlement programs. The two issues I have is that they’re inefficient and unfair. The first is obvious. There’s a problem when a person receives more benefits (food stamps, unemployment insurance, welfare, medicaid) when poor, so much that it pays more to earn less (when the difference is relatively small). Note my earlier reference to a 70% marginal tax when benefits are factored in. This is inefficient because it prevents the economy from operating at peak efficiency. Individuals have reduced incentives to work and to contribute to the overall welfare of the country.

The second problem of fairness is that a wealth transfer program run by the more numerous poor will always seek to take more and more from the rich. We’ve seen taxes go up and entitlement programs expand. Where is the limit? There’s nothing putting checks and balances on the growth of handouts. A person, once accustomed to a certain level of comfort, will seek to improve that level, and for the poor, nothing is more convenient than Robin Hood politics. The issue of fairness also ties back to the problem of inefficiency. For a rich person, what is the incentive to work more and create more jobs when most of the extra money earned will go to subsidizing a poor person?

With that said, I’m not against some kind of social safety net. After all, circumstances change, disaster can strike, and the rich can suddenly become poor. A safety net is also in society’s best interests, reducing drug use and crime, which are common results of poverty. Therefore, I propose scrapping all entitlement programs and tax breaks, shifting them into a flat rate handout to every taxpayer (including foreign full-time workers who pay taxes) and citizen (including unemployed ones). A single cheque every year for say $8,000 adjusted for inflation would be less than the per capita expenditure of current entitlement programs plus the overhead in administering them. This plan is neutral in terms of income level. An added bonus is that the money is more tuned to individual needs (individuals can allocate spending in different ways) rather than to whatever limits the legislators deemed appropriate. Finally, $8,000 is more than enough for subsistence (I’ve lived on less) and a few creature comforts. If individuals want to better their material existence or find fulfillment in some endeavour, they can work and earn money on top of that basic guarantee. That is a positive and powerful incentive.

I’m also in favour of an overhaul of the current tax system. First to go is the income tax. It is one of the worst taxes out there because it counters productivity and reduces incentives to work. Next are taxes associated with investment, such as dividends and capital gains taxes. Again, investment is a net positive for society, so why should we put roadblocks against it? What kind of tax would I replace them with? A single VAT tax levied federally. VAT is done for efficiency reasons; it’s harder to dodge a tax collected at each stage of the product lifecycle. It also discourages consumption, which Americans do far too much of. Finally, it’s just more convenient when the sticker price is the price individuals actually pay.