Saturday, July 16, 2016

Food Waste: Deregulate Food & End Subsidies

15 And the Lord God took the man, and put him into the garden of Eden to dress it and to keep it.
Exodus 2 15
I've been sent a link to food waste in USA, something with which I have been long familiar. Kudos to Suzanne Goldenberg for an exceptionally thorough and balanced article.  The Guardian is a most admirable paper, but there is this odd side note about how the Rockefeller Foundation picks up the tab for the article.  The camel's nose is in the tent. Discombobulating.

Anyway, one note she makes is 50% thrown away means we divert twice as much water, use up twice the land, lay down twice the pesticides etc, use far more energy, need maybe twice the illegal aliens, and so on for pour food in USA.

Produce is highly regulated under PACA and the solution to this is to get rid of PACA and government marketing orders that tell farmers what they can sell.  American food is also highly subsidized.

You want to solve the problem?  Get rid of the subsidies and regulations.  Then you'll see noting wasted as people learn how to make money from produce, not gaming the subsidies and regulations.

By the way, here is a fun international trade scam, a fraud that would be a crime under any circumstances.  You take an order for a straight load of 88s US Extra Fancy Red Delicious at $14 a box, 1000 box load.  You buy a straight load of 88s Utility at $7 and have them shipped to a warehouse on the way to the port.  At the warehouse you pull off the lids marked utility and relid with box tops marked US Extra Fancy.  Reload the container.  And ship to the customer.  Assuming they prepaid, you just scammed them for $7000.  In the reverse, you can relid US Extra Fancy as US Utility, declare the price 1/2 of what the shipment is worth, and avoid 50% of the inbound duty as an importer overseas.

The world can be a wicked place, and that is good to know.

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Friday, July 15, 2016

It Does Not Take Much To Compete On Design: Dr Dre Beats

Here an expert disassembled a pair of Dr. Dre Beats headphones to figure out how they are made and what they cost.    Two non-surprises:

1. The $199 retail headphones cost about $17 to make.

2.  The core offer, better sound, comes from off-the-shelf headphone speakers.

Read the article, several more interesting points, such as the psychology of weight in design.  When he says "COGS" that means cost of goods sold.  He is an engineer, so an error on his part is understandable. I understand COGS to be synonymous with landed cost, that is all costs in to arrive at your warehouse ready to ship to customers.  I think he means 'first cost" when he says COGS.

At any rate, my riff is if they cost $17, and land at $20, and wholesale for $50 - $100, and retail for $200, again, that is competing on design.  But here is the thing, Dr Dre has dozens of designs, all at different price points.  Assuming the same guts, each item needs its own marketing campaign.  Selling a low cost one through Walmart ($109.00) can cost more to promote than the $400 "studio set."  But far fewer $400 studio sets are sold, meaning a big portion of the mark-up goes to marketing.

Whatever the markup from cost to wholesale, each item has costs associated unique to the market of that version.  Whole lotta managing going on too. If anything, these margins strike me a tight.

There will be plenty of people who will try to copy Dr. Dre's success.  It's simple: he has added extra weight to fool people into thinking the quality is superior.  Dr. Dre's success is valid, but not reliable.  Even though everyone can know how he did it, no one else can repeat it.  Such is competing on design.

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Got Integrity?

At a meeting where democrats worry about losing to Trump, Hillary assured the huddled masses
“She said there are other issues. People are unhappy and they don’t trust institutions,” the senator explained.
So.  Some of us lost confidence in the hegemon 50 years ago, some 40, some 30, some 20, some 10, some 5, some recently, but by now certainly a tipping point.  A lack of confidence in the integrity of the  presidency, the judiciary, congress, the military, police, medicine, education, religion, and so on.

And the democrats answer to this lack of confidence is to run Hillary Clinton as president.

Wow.

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Thursday, July 14, 2016

Why Terror Cannot Be Stopped

Every blog item I post, every phone call I make every email I send, every Skype session I attend is monitored and recorded by USA intelligence agencies.  I am searched every time I board a plane.  You too.

I am zero threat.

The FBI specializes in entrapment, forcing people who would otherwise not commit terror to encourage others to do so.  Sometimes these get out of hand, like the case of the Boston Marathon bombing.

Intel agencies spot crime and watch it to see where it will lead.  Police agencies are supposed to arrest crime when they see it.  The two are at odds.

In USA, the police are paramilitarized, and now work with intel ethics.  So the conflict is now less.

The reason terror cannot be stopped is massive resources are misallocated to monitoring someone who is no threat.  Me and you.  They are wasting resources watching the wrong people.

When there is a terror attack, all of this spy superstructure is awarded more money and power. Qui bono?

Eliminate the spy and intel agencies.  Return cops to police work.  Every successful terror attacker in USA was well know to police beforehand.  They we not allowed to stop them.  Security is simple if you handle it right.

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Internet Delusions Exploded

"3500 digital media firms fighting over 10 cent on the dollar of online marketing growth."

If your income or future is in any way WWW-dependent, escape now.  It is hyper-delusionary.

This is a pretty goods, but potty-mouthed, presentation.



The internet has replaced the messenger boy, DHL, the yellow pages, and to an insignificant degree, the paper catalog of offerings and largely the telex and telephone. Know that and you'll deploy it well. It is a waste of time and money as far as a marketing venue.  Know that and you will not waste money. Go get a real job, start your own company.

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Peace Rocks!

Economic conditions such as we have usually lead to wars, and one silly reason is a good as another.  The USA is keeping its hand in conflicts everywhere in order to be there when it starts.

The Hague just ruled for the Philippines regarding China claims on some rocks down there. Japan has a beef with China regarding some rocks off Taiwan.
China, which boycotted the entire proceedings, reiterated that it does not accept the panel's jurisdiction. China "solemnly declares that the award is null and void and has no binding force. China neither accepts nor recognizes it," a statement from the foreign ministry said.
Not much room for negotiation there.

I wrote a solution to this problem in a post a couple of years ago, Peace Rocks.

At the same time the USA continues its provocation of Russia on all of its borders, but the world has adult supervision with Putin in charge in Russia.  Let's hope this new round of elections gives us adults everywhere.

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Wednesday, July 13, 2016

Italy: 20 More Years of Misery

Assuming Italy stays on its current path, which it need not, but there are no politicians who represent effective change, so it will, Italy is in for at least another 20 years of misery.  
There is no shortage of explanations for Italy’s slump in productivity. Thanks to punitive regulation of labour and product markets, it is one of the most expensive places in the rich world to start a new business. Taxes and red tape strongly discourage productive firms from growing very large. Nearly 70% of Italian workers labour in firms with fewer than 50 employees, compared with about a third in America. The government taxes income from labour far more heavily than consumption, discouraging work (and encouraging evasion). Perhaps most worrying, the share of young Italian workers with a university degree is among the lowest in the rich world. At just under 10%, the share of highly educated Italians living abroad is also among the highest in the rich world.
The slowdown in productivity occurred just as Italy joined the single currency. Some economists see this as coincidental. The euro was born just as the global economy was undergoing a rapid bout of globalisation. Italy’s small firms did not scale up to capitalise on emerging-market demand, as Germany’s did. By the same token, its under-skilled population could not take advantage of the rising return to trade in professional services, as firms in America and Britain did.
Yes, the rules and regs are killers of small biz worldwide, but that 70% working is businesses smaller than 50 people is wonderful.  You see the Italian version of the IRS, armed and in uniform, driving around to bust tax-evaders.  Tax noncompliance is what keeps the Italian economy going, plus not makes work for 68,000 Italians busy pretending to force compliance.

There is no mere coincidence Italy "slowed down" as it joined the Euro.  The acceleration of "globalization" was one of the reasons for the EU project.  Yes, Germany's companies "capitalized" and scaled up for "emerging market demand" but for what?  Germany simply lent mal-credit to people who could not pay it back to buy German products.  Now Germany is in a terrible bind.  Italy might simply do what Iceland did, and say "sorry, you lent too much, we default" and then move back to the Lira, and proceed to a recovering economy (and roll back those goofy rules and regs.)

Germany goes down in flames again, but they took the risks, and they bear the burden.

As to Italians being "under-skilled" regarding financial services, ahem…  they invented financial services (FIRE finance, investment, real estate.)  Been there, done that… Italians know where that ends up.  No hurry to go there again.  But their crown jewel banks got caught up in it, and they now need more bailouts, so maintain the Hegemon's system.  With 70% of Italian biz under 50 people, it lay is poised for a renaissance when the hegemony goes bankrupt for massive cascading cross-defaults of the globalization house of cards.

USA and the UK will pay heavily for their specialization in FIRE when all that financial engineering construct comes tumbling down.

USA needs 70% of its businesses less than 50 people, and a massive rollback of rules and regs. it won't happen until the Hegemon fails, but starting your own business is to part of the solution.

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Tuesday, July 12, 2016

Belt and Road: Duisberg Connects to Chongqing

As we fight over scraps at the trough, the rest of the world is busy developing a new and alternative economy.  That Duisberg and Chongqing should link up is big news, but not something we'd pay attention to.
The German city of Duisburg, the world’s largest inland container port, has become a logistics hotspot for Eurasian traders and logistic players thanks to its location. Being at the west end of the Yuxinou Railway, Duisburg links the southwestern Chinese city of Chongqing to Europe.
The rule of thumb is rail costs 14 times ocean transport.  When they eliminate the crews on vessels, that rate will actually improve.  On the other hand, rail can take a lot of people, and most of the work can be eliminated by robotics as well.

But still a maximum train load would be about 600 TEUs, and any decent ocean going vessel can haul 3000 TEUs, dirt cheap and without traffic and derailment problems.

China must know this, since it is asserting its claim to the ocean trade lanes, to the chagrin of Vietnam, Philippines, and other South Sea claimants (as well as claims off Taiwan).

Rail has not been a big center of innovation, but it may now become so if it is to be expanded anew in search of new markets.

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Monday, July 11, 2016

Reviving Hawaladars?

Islam features an ancient money-transfer system called the hawala, and those who engage in this work are called hawaladars.  No doubt the practice predates Islam, but it is alive and well today.  It moves money far less costly than banks or Western Union.

There were hawaladars operating in the USA, but since they were not regulated, and they were largely Islamic, they were raided in USA after 9-11.  They are few and far between in USA.

Now comes a pair who plan to start-up a money transfer business based on the hawaladar:
While chatting one day, the two discovered that they were each about to send equivalent amounts in opposite directions. It occurred to them that, rather than make two international transfers and lose all that money on bad rates and fees, Käärmann should simply move pounds from his British bank account to Hinrikus’s British bank account, while Hinrikus moved euros from his Estonian bank to Käärmann’s. “Local transfers are free and fast, and we saved a bunch of money on the exchange rate,” Hinrikus says. “It was cool.” Soon, the two started “the money chat,” a Skype forum for other London-based Estonians, where members could arrange similar matching transactions.
OK, so essentially a hawaladar.  "Giving people access to a better deal" than banks or Western Union was once available from any hawaladar, and this start-up relies on banks, whereas a hawaladar never involved banks.

I am always bemused when i meet some do-gooder who is "digging wells" to help out destitute people in some far off land.  how long have they been without wells.  What did their people do the last 5000 years for water?  O, you mean 20 years ago USA made war on their country, destabilized it, and now water is scarce?  So you get a halo for digging a well?  How about we stop making war everywhere?  You want a halo?  Stop the wars.

Instead of making doubtful start-ups with a bad imitation of a hawaladar, how about stop destroying hawaladars?

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Sunday, July 10, 2016

Black Swan, Military Coup, Part Two

In my previous post on a black swan event in USA politics, we saw how the generals had already begun to disobeying orders from the commander in chief, in a word mutiny.  I noted two instances. I would too, but that is not the point.  And now comes a new book advocating more mutiny. "Twice deployed to Iraq" means never in any danger.  Here a self-described "infantry veteran" claims the military will not obey a President Trump:
Scott Beauchamp is a writer and infantry veteran who twice deployed to Iraq. He's currently at work on a book about military virtue as an alternative to marketplace ethics.
"Military virtue" as an alternative to marketplace ethics?  What is military virtue?  Unthinking obedience? Armed welfare queenism?   And what is marketplace ethics?  You mean capitalism?  Or free markets?  what is it about free markets that warrants an alternative?

On 9-11 the military, as well as all law enforcement and intelligence agencies, failed.  Under the Hegemon, failure means more power, which they received.  In just over a decade, the hyper-inflated military is talking coup.  This is because our generals are political appointees.  it is how our system works, so we usually end up with the worst people in command, like General Petreaus, who, like a Clinton, ought to be in prison, but like a Clinton, is not for political connections.

The objection du jour is that Donald Trump, of you listen to his quote, is saying that the Saudi Arabians on the front lines of effecting the 9-11 attack were spirited out of USA back to Saudi Arabia.  Their families were well involved and knowledgeable.  Trump says simply said he'd kill the families of the perpetrators, people who have benefitted tremendously by the crimes.  How is that a change in present policy?

Now, I would not do it that way, but this is very USA.  We kill all sorts of people on far flimsier grounds.  And the people quoted as objecting are prime perpetrators in their own capacity.  The problem is Trump would be killing guilty people, but OUR guilty people.

Now the idea of a military takeover, that i mentioned last is now getting a step closer.  Trump is considering a general as his running mate:
“I like the generals. I like the concept of the generals. We’re thinking about — actually there are two of them that are under consideration,” Trump said Wednesday on Fox News. He then acknowledged that for months he has been “really looking to go more the political route.”
The political generals have in three explicit ways put USA on notice, if Trump happens, a coup.  So it makes perfect sense for Trump top select an honest general (one who was fired) as a running mate.  Who better to crack down on mutinous policy-wonk generals than a real general?

The problem is a real general as vice-president can easily become president.  A gneral and commander in chief.   And as social unrest widens, eventually come military take-over, something the masses very might demand.

A black swan event?

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