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January 2005

Carnival of the Capitalists

Welcome to this week's edition of the Carnival of the Capitalists.

Abnu feels that

It's a sign of the times that Brett Yormark's responsiblities as the chief executive officer are based on a track record in sports marketing.

Rob Thrasher has a interesting post on how he reverse engineered their new brand, New Millennium Minds, using Google and a series of blog tools.

Enviropundit discusses two recent reports on costs of sustainable buildings and summarizes that Green buildings costs only 0-2% more and the additional costs can be easily recovered through lower utility costs.

Barry Welford discusses how two important Associations are being formed on key aspects of the Internet world.

In Part II of the series on Misunderstanding the Trade Deficit, Darrell Vaughn contends that numbers used for Balance of Trade position are seriously flawed and even if they weren't, may not really tell us what we think they do.

At The Electric Commentary, Paul Noonan has a post on the FCC, detailing the problems of having a license granting body tied up with a censorship body.

Ankesh Kothari, at Marketing eYe, wonders why the yellow Live Strong Bands so successful and how the idea can be adapted by companies for promotion.

Talking Story have explored the theme of Community the entire month of January, encouraging both individuals and businesses to create their own community connections. In this final post for the month, Rosa Say explores how community involvement makes good business sense.

Since, interactivity and inter-linking of posts are the important qualities of blogs, I would like to thank Adam Shostack for submitting a three-way conversation about the market valuation impact of security breaches started by Nick Owen. Adam Shostack and Ian Grigg respond and follow up again at http://www.emergentchaos.com/archives/000852.html and http://www.financialcryptography.com/mt/archives/000315.html.

Cary Duke writes on how the lessons of the insurance broker investigation can be put to use by small and medium size business owners.

Tim Worstall tries to tell Polly Toynbee that excessive profits are a good thing, they are a price signal. I always wanted to make the same point but couldn't have done any better than Tim. I would like to add that in a free market, any opportunity, however juicy, can only be temporary. Unless, ofcourse, Govt. steps in and protects the incubents.

Wayne Hurlbert, of Blog Business World, educates on advanced DMOZ submission techniques.

Ironman, of Political Calculations, writes that:

Blogs are beginning to show up in the corporate world - but they're capable of doing much more than marketing.

Arnold Kling explains the decline in unionism as resulting from the shift in human capital from firm-specific capital to generic capital, reducing the need for workers to use bargaining power.

At Capital Chronicle, Rawdon Adams presents the case for studying prevailing macro-economic conditions prior to purchasing even the most fantastic-looking equity investment opportunity.

Jeff Cornwall writes that

There is a growing trend among young women to pursue entrepreneurship as a career path. They believe that it allows for them to create a more flexible combination of a business career and motherhood.

David Tufte's post looks at how public health officials express surprise that the flu vaccine shortage has turned into a flu vaccine surplus. He feels their views shows gross ignorance of basic microeconomics.

Last week, Josh Cohen did a brief overview of the sex tapes (Paris Hilton, Severina Vukovic and Cameron Diaz). In this installment, he gives us a fictional but conceivable situation.

Every business needs capital of some amount just to exist, whether it be start-up money or on-going funding to expand and grow, finding the capital needed can be challenging. Steve Rucinski has a broadcast with Peter Ireland, author of the Anti-Venture Capital Start-Up Guide, answering questions on how to start and run a business the old fashioned way.

Evelyn Rodriguez writes:

It may go unsaid but people prefer to do business with people they know and like. Master salespeople leverage this concept. Instead of taking your chances with a stranger, a weblog provides a scalable means to virtually sit down, have a cup of coffee and create a lasting bond with new and existing customers, partners, employees and other stakeholders.

After a month of blogging Haitus, Rob Sama has returned with a story of the sleazy business practices of his hosting provider. It's a lesson in how NOT to treat your customers.

"Don't Just Do Something - Sit there!". How's that for an advice? Taking an example of CNBC, Barry L. Ritholtz points out that all too frequently, decisions are made -- when none need to be.

A new study says that taxpayers overstating their purchase price for assets may be costing the Treasury $29 billion annually. This post from Joe Kristan discusses some proposed solutions and some upcoming tax law changes that could worsen the problem.

Frank Scavo at the Enterprise System Spectator analyzes the IT vendor push toward on demand computing and finds that it is essentially a return to the 1950s concept of service bureau time-sharing. He also points out the situations that are best and worst for on demand computing.

Warren Meyer writes on the benefits and dangers of the increasing trend to outsource parts of the production process to your customers (e.g. customers filling their own drinks at McDonalds)

Steve Conover have two brief and closely-related articles on National Debt that have attracted much attention since PowerLine linked to it.

Lawmakers in several states are considering imposing a “vanity tax” on cosmetic surgery and botox injections. Different River would like to remind them about what happened when Congress imposed the "luxury tax" on yachts back in 1990: People stopped buying yachts, and workers who built yachts -- 90% of them -- lost their jobs, forcing Congress to repeal the tax.

Red Envelope is generating far higher gross margins than most other e-tailers. This post outlines the key metrics from its recent earnings conference call, and discusses the lessons e-commerce companies can learn from Red Envelope's business. This remined of my very successful but small investment in Sportsman's Guide (SGDE) few years back.

Don Lloyd attempts to determine the effect of social security privatization on stock market returns via an analogy.

The post addresses the fact that $125 million was embezzled from the Bank of China and there's been little mentioned in the press although the amount taken is sufficient to finance a revolution.

Anita Campbell writes:

At a recent blogging conference, an executive from Sun Microsystems talks about how blogs are changing the way companies communicate. PR Departments won't be able to control communications the way they used to -- they have to learn how to monitor blogs and contribute to the blogosphere instead.

It’s A Great Time to Sell a Business” and “We invest in people” were the two themes that emerged from recently held 11th Annual Conference of the Pittsburgh Chapter of the Association for Corporate Growth.

The Supreme Court has just upheld an IRS interpretation of the tax law that lets winninng lawsuit plaintiffs lose more to the IRS than they win from the defendants. This can affect *a lot* of people -- in fact, almost everybody who pays a lawyer by contingency fee or wins an award of legal fees from the other side. This post includes real-life examples, including "celebirty tax law victim" Paula Jones, who in winning $850,000 from Bill Clinton apparently lost to the IRS $38,000 more than she won on net.

Joshua Sharf writes:

The Federal Government is instituting management practices based on something called the Balanced Scorecard. The Balanced Scorecard approach has gained credibility and broad application in business in the last decade. While the federal employees' unions call it 'not modern management,' it in fact replaces a clock-punching, time-marking system in place for almost 120 years.

Robert May's post deals with management, and analyzes the question "is it better to be decisive, or be right?"

Christine Hurt writes that this week, Procter and Gamble announced its acquisition of Gillette, merging the two consumer goods conglomerates. In addition to synergies that could be created by bundling consumer goods to retailers, the companies also argued that the combined company would be better equipped to negotiate with the mega-retailer, Wal-Mart.

A blog review of a non-profit blog and website. Are they "female-friendly"-- an important quality to have, since many women professionals give large donations to non-profits.

Brian Gongol feels that it is the obligation of economists, both professional and amateur, to advance the boundaries of knowledge within the field and to spread that knowledge as far as possible into the realm of policy. While economic abstractions may seem pie-in-the-sky to many, it is clear that some of the worst failures of economic understanding have led to some of the worst human disasters in recent history.

Democracy is being born in the Middle East, and traditional marketing is dead. Michael D. Pollock feels that they're related.

Michael Cage takes a look at how focusing on the wrong things can stall small business growth, and how being a great entrepreneur is more about allocating resources purposefully than doing more, better, faster.

Is George Bush a Socialist? Jody Neel fees that through social security private accounts US workers would own stock and thus own a piece of the companies that corporate America. He thinks that this ownership of means of production by workers meets the definition of economic socialism.


Impact of Iraqi elections on the Middle East

Power Line notes that Iraqis living in Syria can vote in Iraqi elections. This will definitely influence Syrians who do not have the same priviledge. Now that the Iraqi elections are a success (72% voter turnout), pressure will be on despots in the Middle East to explain to their people why the same cannot happen in their countries. In fact, President Bush has turned the table by forcing Middle Eastern despots to be on the defensive. They can no longer deflect the simmering discontent among their populace onto the US and the Israel. For the first time in the history there is a real chance of peace in the Middle East.

Now that Iraq and Afghanistan are doing okay I hope US can turn their attention to other countries like Pakistan.


Self-ownership and poverty

AnarCapLib has a very good post on Libertarian belief of total self-ownership. The post points out potential of allowing unrestricted sale of body organs for eradicating the poverty:
The collateral one – any reader of economics knows that the presence of collateral reduces interest rates for everyone. The legalization of sale of body organs provides every human being an instant collateral worth (at the very least) around Rs. 50,000. (1 kidney + 1 eye + a sliver of the liver + some blood). Women would be valued more because of the possibility of usage as surrogate mothers.

Not only that. What about allowing unrestricted sale of body parts after the death? This will help poor people to raise loans against an agreement to give body parts after their death. Imagine the potential of this to eradicate the poverty. Poor people will be able to enjoy their life while they are alive in return for almost no cost to them. It will also increase the availability of organs like eyes to those in the need.


My India Visit

I recently visited India after a gap of 2 1/2 years. Even though I have been hearing from friends and relatives about changes in India, I have to admit changes in India took me by surprise, albeit a pleasant one. Mumbai airport was much better than last time. Immigration counters were especially improved and officers were polite. Travel on the Mumbai-Pune Expressway was very delightful and comfortable.

Much more surprising were the changes in Akola, my hometown. Many of the roads were broadened and re-tarred. For the first time I enjoyed driving in Akola. Railway station was clean with lots of informative displays giving reservation charts, positions of train compartments on the platform and so on. Big Volvo buses and Sleeper coaches were in common use for long-distance travel.

Mobile phones were ubiquotous. I also liked the creative use of SMS. For example, I was able to get status of my rail reservation using SMS. Even the district hospital was rebuilt and expanded. Instead of wasting an hour in a special SBI branch for forex, I was able to withdraw money directly from my US account from SBI and HDFC ATMs in Akola.

I also saw a marked increase in consumer spending. Marriage halls had grown spacious with people spending very lavishing on weddings. Digital appliances like HandyCams, DVD players, VCRs, bigger TVs are now very common. All this was reflected clearly in the advertisements, especially in the local vernacular dailies. Broadband Internet connectivity had started to arrive.

Heck, even poets were taking potshots at consumerism! Earlier targets of ridicule, especially poverty, were noticeable by their absense at the Akhil Bharateeya Hasya Kavi Sammelan. What better evidence of change does one need?

If you have a little money to spend, medical facilities are great in India. I went to see our family doctor complaining for an infection. I was dispatched to a specialist, who recommended a Sonography exam. The equipment quality was on par with what I had seen in US. The diagnosis was thus immediate and clear. The whole thing took less than a day. In US, I would have been made to wait 2/3 days to get an appointment with my PCP and another week to see a specialist.

Ofcourse, if everything were well, I wouldn't be here. Water and electric supply were intermittent at best. And if this is the case in the winter season, God knows what will happen during summer!

Overall though, my visit was reasonably comfortable and hassle free. Atleast, there was a marked improvement compared to the last time. I can't wait to see much better India in my next visit.