Posts tagged ‘REALLY’

Anti-Deficiency Act

You may be wondering under what authority the government is taking actions during the government shutdown.  We had a meeting with the Chief of the US Forest Service on Friday.  This is the specific text the Administration is using to justify all of its shutdown actions

(a)(1) An officer or employee of the United States Government or of the District of Columbia government may not—

(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation;

(B) involve either government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law;

(C) make or authorize an expenditure or obligation of funds required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985; or

(D) involve either government in a contract or obligation for the payment of money required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985.

I will leave it as an extra credit exercise for the reader to explain how this text justifies either a) spending extra money to barricade war memorials on the Washington Mall or b) closing privately-funded parks that take not a single dime of government money.    All these tests have everything to do with limiting government expenditures, not limiting citizen access to public lands.

We had some delays (in part because the government is taking a holiday from the shutdown today, so everything is REALLY closed) but we file our lawsuit seeking a temporary restraining order on the US Forest Service in the morning.

Fisker Chairman in 2009: Obama is Great Because He Invested in Solyndra

Ray Lane of VC Kleiner Perkins is seen in this video trumpeting how the Obama Administration is, for the first time in his memory, succesfully making investments in private companies.  His main example:  Solyndra!

The reason this is particularly timely and fascinating is that just a few weeks ago, Ray Lane took delivery of the first Fisker Karma electric car, financed with $529 million of our tax money and promoted with $7500 of our tax money on every sale,  Mr. Lane and Kleiner are investors in Fisker (and Lane is Fisker's Chairman) and therefore huge beneficiaries of Obama's largess, and Mr. Lane got the first Karma as a big thank you for his political connections that helped score the cash.

Of course Kleiner (who also hired green Crony-in-chief Al Gore) is going to be thrilled with the government money. Nothing is worse than being a VC in with a large early round position in a company and being unable to get the next stage of investment. Since it appears they could not get any private investors to fund this, the taxpayer money probably saved their investment .... at least for a while.

Update: Ray Lane is apparently ticked off by the negative publicity surrounding the Fisker Karma and the money they received from taxpayers. Tough. Surely he is used to his investors being ticked off about bad outcomes. Well, now he gets to see how REALLY ticked off his investors can be when their money was taken against their will, even without their knowledge. At least he can tell his institutional guys, when things go bad, that they came in with eyes open. What's his response to taxpayers?

For those who have not seen it, my article on how the Fisker Karma, even on all electric, uses more fossil fuels per mile than an SUV is here.

Another Private-Public Contrast

This article on the FDA's propose to regulate medical-related iPhone apps got me thinking.   These bureaucrats are really like marketers in a company.  They are constantly coming up with growth ideas, though in the case of regulators it is ideas to growth the size and scope of their power, rather than sales, but the thought process is probably about the same.

Most new product ideas that come out of these brainstorming sessions in the private industry are a failure - they die in the conference room, or later in funding, or maybe later in the marketplace.  A few survive.  But at the end of the day, what matters is not how much the person who came up with the idea wants it to happen, it is whether the idea proves to be of value to the public.

Unfortunately, there is no such check on the regulatory sphere.  They come up with an idea to expand power, and they just run with it and make it happen.  In fact, general public opposition is generally interpreted by these folks as proof of concept - ie if people are against the new regulations, they must REALLY be necessary.

We would be better off if regulatory ideas were adopted at roughly the same rate that new products ideas are successful.

Eeek! The Brits Have REALLY Lost Their Way

I am really left speechless by this.

The Children's Secretary set out £400million plans to put 20,000 problem families under 24-hour CCTV super-vision in their own homes.

They will be monitored to ensure that children attend school, go to bed on time and eat proper meals.

Private security guards will also be sent round to carry out home checks, while parents will be given help to combat drug and alcohol addiction.

Around 2,000 families have gone through these Family Intervention Projects so far.

It actually undershoots the mark to call this "Orwellian," since in "1984" the government monitoring was aimed mainly at combating subversive thought and behavior.  But the Brits are going one better, monitoring families to make sure their kids are eating their vegetables and getting to bed on time.

Incredibly, the oppositions response is that this is... not nearly enough intervention!!!

But Shadow Home Secretary Chris Grayling said: "This is all much too little, much too late.

"This Government has been in power for more than a decade during which time anti-social behaviour, family breakdown and problems like alcohol abuse and truancy have just got worse and worse."

Is there any voice left for individual liberties in England?  Am I missing something here?  This seems simply horrible.  Is there at least due process involved, such that such measures can only be imposed as a result of a criminal conviction (I don't think so, from my reading of the story and comments -- I think this is like Child Protective Services in the US, with a lot of not-subject-to-due-process intervention powers, but maybe my UK readers can fill in more detail).

I liked this from the comments:

These cameras should be in MPs homes so we can see what the scumbags are up too.

Ditto for Congress.  And how about a Lincoln Bedroom cam?

Hat Tip:  Engadget

In Case Your Are REALLY Lost

If you are so lost that you find yourself passing strange four-legged structures covered in gold foil and surrounded by scientific experiments, try this new Google mapping tool.  Oh, and make sure you don't miss the Easter egg you get from zooming all the way in to the highest zoom setting.


I REALLY Hate Public Funding of Stadiums

I have harped on the subject of public funding of stadiums a number of times.  Here we go again, though.  Our nation's capital (which means all of us, probably) is going to pony up $ for a new sports stadium.  Reason takes it on here.

Reverse Auctions - and why Priceline REALLY succeeded

Business Pundit has a post today about a new auction site named jittery

One thing BusinessPundit mentions is that the new site will have a

"Buy Offer" feature, which I believe gave him the idea in the first place. Basically, instead of buyers competing over an item and raising the price, buyers specify what they want to buy, which features are important, what prices they want to pay, and sellers compete to give them the best deal.

I am extremely skeptical that this would work.  As background, I ran the marketplace portion of Mercata, that similarly tried to bring a different, more buyer focused model to table and failed fairly spectacularly.  We found that you can be as innovative as you want, but you need a lot of traffic to your site, and building such traffic takes a lot of time or a lot of money or both.  You also need to provide a value proposition for both buyers AND sellers.

A LOT of people have tried some sort of reversal of the auction process, where buyers specify the goods they want and sellers bring them to the table, bidding against each other (ie lower and lower prices) to get the business. FreeMarkets made some hay with this in the B2B world, but from the beginning the auctions were never really the money maker, but were a Trojan horse for supply chain consulting, which helps to explain why they merged with Ariba. 

The only people to make this model work in the consumer area is Priceline.  However, what most people fail to realize about Priceline is that it fulfilled a real business need for SELLERS, even more than for buyers. 

Airlines have a classic fixed cost pricing problem.  They want to sell as many tickets at a high price as possible, but an incremental passenger costs them nothing, so if the plane is not full, getting even $50 for a passenger to fill an empty seat at the last minute is profitable to them.  The problem is somehow offering the $50 fare only to the passenger who would not fly otherwise, and not cannibalizing the customers who are willing to pay $300. 

The problem is, if they offer the $50 fare to anyone, they can't hide the fact very well.  The airline industry, as most know, have very transparent computer systems that let everyone know their prices on every route every minute of the day.  If an airline cuts prices on a route, everyone knows - so that competitors can match the cut immediately and customers can switch from the higher to lower fairs.  Airlines protect themselves somewhat with limited availability of certain fares and advanced purchase requirements - so that people, particularly business travelers, who need to maintain flexibility, have a reason to pay higher fares.

However, advanced purchase requirements were not providing enough protection.  What airlines really wanted was a way to cut fares for one person who might not have flown otherwise, and let no one else see them do it.   And Priceline was the answer.  Yes, airlines had to tell the Priceline computers what the lowest bid they would accept from a customer for a flight was, but this did not constitute an official price that went into the reservation systems.  So, the airlines could cut their price (via Priceline), but only the customer who got the price ever saw it.

In fact, the story is even better.  At the time Priceline came around, one airline had a particular problem they needed to solve.  When TWA got a loan from Carl Icahn, an almost unnoticed part of the deal was that a certain travel agency owned by Icahn, small at the time, would be guaranteed TWA tickets at a healthy discount off the lowest published fares.  This agency, with this boondoggle, grew to enormous size as  TWA, beyond the reasons listed above, therefore had a second reason for not wanting to publish their lowest possible fare.  Normal limitations that most airlines could set on how many seats would be available at their lowest fare could not be enforced by TWA.  If they offered a new $100 fare, could blow out an unlimited number of tickets at $80 or less and TWA would have to accept it.  Therefore, by offering discounts unpublished via Priceline, TWA prevented the travel agency from getting inventory even cheaper.  And so, a huge portion of the early Priceline inventory was TWA.  (ironically, after the American Airlines acquisition of TWA killed the deal, the URL was bought by ... Priceline.

Anyway, I just don't see how reverse auctions can work in the consumer world, particularly if the customers are allowed to specify price and quality and features, etc.  The transaction costs for suppliers would be just too high wading through this stuff -- in fact, many companies in the B2B world, where transaction sizes are in the millions, have come to this same conclusion - for a variety of reasons, they are choosing not to participate in reverse auctions (here too).

Marketplaces must offer value to both buyer and seller.  If you don't offer honest value to sellers, then no products appear on the site and it will fail.

Basically, there are two gorilla's in the online marketplace arena - eBay and Amazon.  eBay had the head start in building a brand and community in the marketplace space, but Amazon has brought some really nifty technology to the table.

As a user of both, I welcome a new competitor, sortof.  I hope that there will be competitors who force eBay to adopt some overdue new features (e.g. auction sniping protection and better search features on past auctions) but I don't really want any to be successful enough to create a third or fourth or fifth major platform out there, because that just increases my search costs and time when I want to buy something.


I missed pointing out one bit of irony.  The Internet is generally attractive to consumers because it increases product information, and particularly increases knowlege about market pricing.  However, in this case, Priceline's attractiveness to airlines was that it decreased pricing transparency in the market.


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