Scott Grannis’ Calafia Beach Pundit has become daily reading for me  – primarily because I’m a sucker for the charts he shares.
Take a minute to look at this one. (no worries, I’ll still be here when you get back).
Good stuff. It’s rare to see a single chart summarize our own confidence over time, let alone over my lifetime.
Yes, it was the Gay Nineties.
Yes, we did fall off a cliff in 2007 – wasn’t the first time, just the biggest.
Some of you may know you were when John Lennon was shot. Or JFK. Or when we landed on the moon.
1. Other daily reading includes:
There’s a pragmatic optimism across these 4 sites that I find both challenging and refreshing. Plus – they’re not afraid to go deep.
Some ridiculous NPR story yesterday complained that the crowded nature of metropolitan airwaves prevent this from being useful to the vast majority of Americans.
The point isn’t urban America – the benefit is to rural America.
My earlier posts on the topic of opening up white spaces:
Out of context, the specific significance of this post’s title is entertainingly vague.
“Citizens who wish to make a general donation to the U.S. government may send contributions to a specific account called ‘Gifts to the United States.’ This account was established in 1843 to accept gifts, such as bequests, from individuals wishing to express their patriotism to the United States. Money deposited into this account is for general use by the federal government and can be available for budget needs. These contributions are considered an unconditional gift to the government. Financial gifts can be made by check or money order payable to the United States Treasury and mailed to the address below.”
Thanks to Mark Perry for the pointer.
In continuing my mental exercise on replacing the USPS I was stuck with solving the problem of delivery and drop-off for rural America.
Especially deep rural America – where the roads are still gravel.
A I commented on earlier – Wal-Mart’s based its success on serving rural America remarkably well.1
With more than 4000 stores nationally, 3000 stores worldwide, and a highly efficient network of distribution centers – there are few organizations with the presence, passionate customer base, and logistics experience capable of competing with the USPS.
Even half a mile down a dirt road in rural Wisconsin – a Wal-Mart is still a quick 15 minute drive away. And has been for 15 years.
Let’s say Wal-Mart returned to the days of small town packaged good store.
As part of your weekly drive into town for clothes and groceries, you drop your outgoing mail – bills, personal correspondence, everything – off at the customer service desk.
For the personal correspondence – you provide an email address or phone number of the recipient and you go about your shopping.
Wal-Mart – in their characteristic price cutting manner – charges nothing for this service2.
The outgoing mail is picked up by the existing incoming delivery trucks and their first stop is the nearest Wal-Mart distribution center. Where the mail is sorted for delivery to next closest Wal-Mart distribution center to the final destination2. And so on, and so on, until it’s delivered to the Wal-Mart closest to the intended recipient.
Once at this last Wal-Mart – a email (or voicemail) is sent to the intended recipient notifying them that an item is ready for pick-up during regular business hours.
What else would that quote at the top of the post be about?
Oh, how Wal-Mart is transforming the prescription drugs market.
1. Yes, I’m aware my original question was about a competitive non-profit. I do think that’s an more interesting idea – but I landed on Wal-Mart. So let’s explore this for a moment.
2. Just like email.
Yesterday, NPR discussed the challenges of the US Postal Service after reporting a $3.8 billion revenue loss for the fiscal year ending September 30, 2009.
The revenue loss corresponded to a reported 13% decline in mail volume.
I’ve noticed a significant decrease on my end since Dec 2007 as well. For the 2008 and 2009 – the number of credit card offers and direct mail catalogs arriving daily was 0. This number is only now picking back up – maybe one per week. Nowhere near the multiple items per day we received in 2006 and 2007.
We’re even transporting Netflix DVDs less.
I have a hard-time imaging the USPS returning to profitability with first class stamps less than 50 cents a piece. Then again, none of the bulk mailings I mentioned above had first class stamps on them. So, either first class stamps are the USPS’s only profit – or they’re a loss leader.
My bet is the latter.
This puts the Postal Service in a tough spot. FedEx and UPS are taking the high end of their business. Email, Facebook, and 37Signals are taking the low end.
There are a few things we send via the USPS – things that aren’t easily digitized and not urgent enough to send via a private carrier:
- ‘Thank you’ notes from the kids.
- Holiday cards.
Leads me to some interesting questions:
Who else could handle that exchange?
Or, restating the questions -
What would US Postal Service look like if it started today – with FedEx and the internet already well-established ?
Three ideas that immediately come to mind:
- More sub-stations within other existing businesses.
- Email/IM/voice mail notification of letter/package arrival.
- Scheduled home pick-up.
- Co-op business structure.
How would you change the USPS?
I could stare at this image all day. Continually riding its roller coaster in my head – watching geo-political events, holidays, elections, and family gatherings, all unfold.
A couple recent graphs I’m using as the basis for this prediction:
Dow Jones Industrial Average Nov. 2008 – Nov. 2009
My interest in economics was sparked by Black Monday, 1987. Back when the Dow shed 800 points in 2 days – falling below 1800.
The 20 years since have brought some of the most significant advances in technology, communications, and overall quality of life (yes, pat yourself on the back). I fully expect the same looking forward.
1. Thanks to Alex Tabarrok @ Marginal Revolution for the tip.
Almost 15 years ago now, a fellow student at the German design school I was attending, purchased a run-down flat. When he wasn’t focused his design degree – he was renovating the flat. With school Monday through Friday – his core renovation days were the weekend.
The neighbors would complain if he used power tools on Sunday.
At the time, I was also surprised by the number of unfamiliar public holidays
German shopkeepers observed. Their frequency caught me unprepared more than a couple of times. While closed can be a cultural benefit – having the option to be open for business is a competitive advantage.
Here in the States, 12.4% of the workforce – 16.1 million people – belong to a union.
Over the past 24 years as union membership has dropped by a 1/3, real compensation has risen by 1/3.
“The problem with unions is not all that dissimilar to that posed by entrenched management: Once they win comfortable contracts, they often become impediments to the kind of innovation and flexibility essential to success in today’s economy.” – Wall Street Journal, Opinion, Sept 29, 2007
This Labor Day – as an entire family – we headed to the mall to purchase some new school shoes for the kids. On the way home we grabbed a soup and some sandwiches. The stores were open and the shopkeepers were as eager to help as any other Monday. If I understand U.S. labor laws correctly – everyone working today did so – by choice. Their employer provided them the opportunity and they took advantage of it.
Maybe their politics don’t mesh with organized labor. Maybe they were still protesting the outcome of the Pullman Strike. Maybe they find it ironic. I suspect for the vast majority of them – the additional dollars were more valuable than non-work-related plans.
Yes, I did some client work while the kids were napping, and will continue after I finish this post and clean up the dinner dishes.
The ability for a single individual to make the decision to work on Labor Day is why the U.S. is still the land of opportunity.
I’m proposing today as new American holiday.
A day of deliberate action.
A day of buckled-down confidence.
A day of bootstrap-up-pulling.
A day of To-Done-ed-ness.
A day of recovery.
Let’s go, there’s work to do.
“This country will be rescued by each of us doing what we can do in our own individual sphere of action as government works in its sphere of action. There are roughly 142 million men and women in the labor force. Their ingenuity, flexibility, energy, and confidence will make more difference than anything government does on an individual basis…In the free society, we rescue ourselves.” – Ben Stein
Quick context setting:
“Every dollar decline in household net worth reduces consumer spending by 5 cents over the next two years. If sustained, the wealth lost over the past year could thus cut $300 billion from consumer spending in 2009 and a like amount in 2010.” – Mark Zandi [pdf]
According to the NBER, I’ve lived through
Seems like a fortunate amount of time.
Also fortunate, Zandi continues,
“Assuming gas remains below $2 per gallon through the coming year, Americans will save well more than $100 billion in 2009 compared with fuel costs in 2008.”
“Boosting food stamp payments by $1 increases GDP by $1.73…”
Overall, Zandi is for the House stimulus plan – if only to stop the bleeding (something he argues could/should have been done years ago).
“The House stimulus plan would not forestall a sizable decline of 2.3% in real GDP in 2009, but it would ensure that real GDP returns to its previous peak by the end of 2010″
Overall if he’s in, I’m in.
The problem I have is the principle of the thing.
For individuals and businesses that have behaved fiscally responsibly over the long run, any stimulus package unnecessary. In the exact same way it’s a life saver to those that have behave irresponsibly. This is why Detroit’s auto makers want to get in on the TARP funds – why Circuit City2 didn’t lobby congress the same way, I don’t know.
Additionally, what if the stimulus works?
Doesn’t saying the overall economy requires government intervention to recover set a bad precedent?
Primarily because Congress is structured to move much, much more slowing than the economy overall. Secondarily, because – unlike healthcare – there are so few comparable economic situations.
Zandi reminds us:
“A long history of public policy mistakes has contributed to the financial and economic crisis.”
Same with the auto makers and Circuit City. Their problems were not sudden or surprising. It just looks so, because declines (like ascents) are cumulative.
1. My daughter’s only known recession. And based on the business cycles dates, I too was a recession baby. Also, I have a very distinct memory of PBS’s Nightly Business Report playing in my house around and following the 1987 crash.
I’m reading The Forgotten Man: A New History of the Great Depression. While parallels with pre-1950s America are always tenuious, here’s a synopsis
A popular Democrat becomes President during one of the worst economic downturns in our nation’s history. He drives through some of the most dramatic legislation ever seen and creating departments compensating farmers to not bring food to market. US economy sputters throughout his term, waiting until the end of a yet to be fought war to recover.
Let’s hope tomorrows inauguration marks the beginning of America 3.0, not New Deal 2.0.
I was always baffled by Apple exclusively giving the iPhone to AT&T. It’s not in Apple’s DNA to tie the customer experience of their products to someone else. Exclusively or otherwise. Multi-year or otherwise. Apple’s built their reputation on owning and controlling the entire stack; OS, applications, hardware. Hell, Apple’s never been crazy about having a development community either.
With the FCC’s move to open up the unused television spectrum for unlicensed use (think WiFi on a nationwide scale), the Apple + AT&T partnership feels more like a hedge on Apple’s part. A way to get the product out ahead of the curve.
In a couple years, the technology to use this new spectrum will be on the market and stable.
By that time, Apple’s agreement with AT&T will be expiring. Think Apple will be selling the iPhone with any carrier when nationwide spectrum is available ‘for free’?
Think they’re be any difference between the iPhone and the iPod Touch at that point?
Also, I see this as another point confirming my prediction that the move to digital broadcast in Feb 09 will wipe out the broadcast television viewing audience.
This is as historic a moment for our country as electing the first African-American POTUS.
Not because of how it impacts something as luxurious as Apple products, but because it wipes out the need for telco carriers, opens up the municipal broadband market, and with a ‘flip of a switch’ internet-ifies rural America.
1776. America is born.
1945. America claims the leadership of the developed world.
2008. America reclaims its position.
Presidential & Vice Presidential:
Barak Obama & Joe Biden
U.S. Representative District 5:
U.S. State Representative District 54a:
Constitutional Amendment: Clean Water, Wildlife, Cultural Heritage and Natural Area: Yes.
Overall, the decisions were easy. Either the incumbents are doing a great job, or their competitors irked and frustrated me multiple times.
First off, a caveat: Basing a vote on potential personal financial changes is as one-sided as basing a vote on gender, skin pigment, or hair color. It’s one factor and one that I hope to argue it is a wash to vast majority of Americans. For both plans call for significant cuts for the vast majority of Americans – households making less than $603k/yr (99% of Americans). For those remaining 1%, taxes will either go up or down. I’m part of the 99%, and I suspect you are as well1.
|Income (% of Taxpayers)||Plan Difference in $||Plan Difference
as % of Income
|< $603k (10)||7,869||1.3||McCain|
|< $227k (10)||1,591||0.7||McCain|
|< $161k (10)||410||0.25||McCain|
|< $111k (10)||281||0.25||Obama|
|< $ 66k (20)||723||1.1||Obama|
|< $ 38k (20)||779||2.0||Obama|
|< $ 19k (20)||548||2.9||Obama|
While much attention has been made to how different these plans are at the poles, it surprises me how close the two plans are for the middle 60% of tax payers (<2% delta).
I’m assuming both plans are drafts and would have to pass Congress to be enacted 2. If so, then I assume getting them passed through Congress would change the plans – perhaps even making them more similar.
Does this betray how similar their policies are/will be for the majority of Americans?
1. If you’re not, can I has monie? kthxbye.
2. Confirming we shouldn’t be investing too much in the candidates plans:
One of my biggest pet peeves is comparisons of the U.S to other countries – especially European countries – to show how the U.S. is “behind” in some nationwide attribute like healthcare, broadband speeds/adoption, public transit.
My first issue with these comparisons is one of scale. The United States is closer to the European Union in structure than any individual European country and multiple times larger in geographic area than either. We should be comparing individual states against individual states by GDP.
- Minnesota ~= Norway
- California ~= France
- New York ~= Brazil
- Illinois ~= Mexico
My second issue is one of population density. Lots of people in a small space increases the demand and makes it logistically easier to deliver public transit and high-speed internet access to more people faster. If nearest neighbors are 40 acres and a mule away, connecting them is far more expensive than if they live on top each other.
Ranking countries by their population density puts the US 180th (31 people/km2).
- Netherlands: #25 – 395 people/km2
- Belgium: #31 – 341 people/km2
- Japan: #32 – 339 people/km2
- United Kingdom: #51 – 246 people/km2
- Germany: #53 – 232 people/km2
- France: #95 – 110 people/km2
Imagine seeing 10x the number people around you everyday. Our towns, cities, and attitudes would have to dramatically change to support that. Just as they have to support their current densities (e.g. Minneapolis got a light rail train).
The US is closer by comparison to Madagascar (32 people/km2) and Estonia (29 people/km2).
I don’t remember the last time I’ve heard the US compared to those developing countries. Though from what I’ve heard about Estonia’s electronic government, there’s some interesting stuff going on there.
Again, individual state level comparisons are more appropriate here as well.
- Minnesota ~= Somalia
- California ~= Greece
- New York ~= Kuwait
- Illinois ~= Spain
For the densities greater than 100 people / km2 we need to move to New England:
- South Korea ~= New Jersey
- Netherlands ~= Rhode Island
- Belgium or Japan ~= Massachusetts
- United Kingdom ~= Connecticut
- Germany ~= Maryland
- France ~= Ohio or Florida
Looking at these numbers it’s clear why Thomas P. M. Barnett says the U.S. has more in common with emerging markets like Brazil and Russia than Western Europe and Japan.
We’re definitely behind Brazil in open source software adoption.
1. Interesting considering the recent influx of immigrants from that country into Minnesota
2. Yes, I know Ohio and Florida aren’t in New England. I found the comparison of France with Ohio & Florida entertaining so I wanted to keep it in.
The 2 parties have a 6-month opportunity to show the American public how serious they are about solving this country’s problems.
“…Spend 1/4 of the money [raised by the campaign] telling everyone how you’re using 1/2 of the money to help people. This proves that your Presidency will be about solving problems, because you’re not waiting to get elected to solve problems.”- Dave Winer
I have a hard time imagining people are waffling between the Obama or McCain. I have an even harder time imagining anything either of these campaigns do will pull people from the other camp (negative advertising, etc). Hell, I doubt there’s anything the RNC or DNC could do that would cause Bob Barr supporters to defect.
If there was. Anything. That could cause someone to switch affiliations between now and Nov. It would be using campaign dollars to solve problems today. Instead of betting that they won’t actually need to.
Within 6 months, we will know which of the following three insecurities we, as a country, have less of; ageism, racism, sexism.
While it’ll be nice to know the answer, it’s unfortunate we have to ask.
Thanks to Mungowitz for the video.
For a few weeks in the early 80′s the town 30 miles down the road had a broadcast TV station. The only TV broadcaster in the county.
In the 20 years that follow, it’s only been Eau Claire, LaCrosse, or Minneapolis TV. Communities at least another hour away (if not 2) with no incentive to regularly report on far more rural areas aside from the occasional tornado, hunting, or farm accident.
Nothing banal. Nothing important.
So, what happens to the analog TV spectrum when all over-the-air television goes digital in two years?
This means, if you’re out in rural American and can pick up a network affiliate, that’s now an internet connection.
While it does raise the question of how the broadcast towers would be supported with broadcast TV’s ad dollars, it sounds like a much needed Rural Internet-ification program.
The thought of rural America getting reliable high-speed internet excites me. The thought of kids living out on our dirt roads blogging, podcasting, and videoblogging, publishing brings me to tears.
“The church I focus on in my article attracts 10,000 West Michigan suburbanites each Sunday. It meets in what used to be shopping mall. They’ve converted over the WHOLE MALL–with shops now serving as Sunday school classrooms and meeting spaces for events throughout the week.” – Zack Exley
Deserted shopping malls and Super Wal-Marts are the scourge of our time. The great thing about yesteryear’s warehouses were the huge windows and the convenient locations. Big boxes are an altogether different animal.
Giant parking lots. No windows. Hundreds of thousands of depressingly, lonely square feet.
It’s great to hear about community-focused organizations trying to solve this problem.
Every wonder why there aren’t as many open-face sandwiches for sale in your local supermarket. No?…..well, it’s political:
“USDA inspects manufacturers of packaged open-face meat or poultry sandwiches (e.g., those with one slice of bread), but FDA inspects manufacturers of packaged closed-face meat or poultry sandwiches (e.g., those with two slices of bread).” – U.S. Government Accountability
Office, High Risk Series: An Update
The upshot is – by adding one more piece of bread, sandwich manufacturers can sell their product without explicit approval from a government acronym and get inspected every 5 years – rather than daily.
- For being really attractive, an expected move forward, and making it fun to improve ourselves
John Edwards = Nintendo Wii
- For being a really good solution with enthusiastic support, but never quite feels right
Dennis Kucinich = RIM Blackberry
- For showing us what we all know the future looks like but still making us wonder if now is the time
Barak Obama = Apple iPhone
- For being expected and reliable
Hillary Clinton = Tivo
Keep the comparisons are rolling into the comments…Al Gore = Ubuntu = awesome.
“The armed forces, already struggling to meet recruiting goals, are considering expanding the number of noncitizens in the ranks — including disputed proposals to open recruiting stations overseas and putting more immigrants on a faster track to US citizenship if they volunteer…” – Bryan Bender, Boston Globe
The 2007 political races have already begun:
- John Edwards announces his candidacy for POTUS on YouTube.
- Meanwhile, on the opposite side of politics, my dad announced he’s running for 3rd Ward Alderman up northern Wisconsin over a phone call with me.
While the former was hinted at and could have been guessed. The latter came completely out of nowhere and showed me a whole new side of my dad. I’m excited for him.
Happy birthday to me – and good luck Dad.
Oh, and John Edwards too.
If a month-old baby going through an x-ray machine can’t bring a heavy dose of common sense to the TSA, what will?
“Nico Melendez, a spokesman for the Transportation Security Administration, which manages LAX screeners, said the agency doesn’t have enough workers to constantly stand at tables in front of the screeners to coach passengers on what should or should not be sent through X-ray machines.” – Jennifer Oldham, Los Angeles Times