Category: Business

Tomorrow, I’m Going to Write About ……… School Board Elections?!?!!? In Bridgeport F%$#ing Connecticut?!?!?

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Why yes, I will be writing about the returns in Bridgeport, because it is ground zero of attempts by the Education-Industrial complex to turn our school children into profit centers for Wall Street:

Education reform lightning rod Paul Vallas – who courted controversy helming school districts in Philadelphia, New Orleans and Chicago — isn’t on the ballot tomorrow. But a school board election in Bridgeport, Conn. – the latest district to tap Vallas to oversee reforms — could effectively spell his fate. Tomorrow’s vote will offer the latest referendum on the bipartisan, billionaire-backed mainstream education reform movement, and on a multi-year effort by local Democrats – aided by the likes of Michael Bloomberg and Michelle Rhee — to defeat or disempower labor-backed dissenters.

 “As I’ve gone around the country, I always point to Bridgeport as one of the signs that the people can beat the power,” former U.S. Assistant Secretary of Education and high-profile reform critic Diane Ravitch told activists on a conference call last month. Tuesday’s election is the latest round in a long-running war over ed reform, and who should shape it, in the largest city in one of the country’s most unequal states.

 For the sake of shielding Vallas and his agenda, activists allege that the city’s Democratic machine has acted indifferent or even hostile to defeating Republicans tomorrow.

 “What’s at stake is the future direction of Bridgeport schools,” said Connecticut Working Families Party executive director Lindsay Farrell, citing issues including testing and class size. “And I think, in a broader sense, the direction of public education in this country.”

As I’ve reported, Bridgeport’s school board became a battleground in 2009, when two of its Republican members were ousted in an election by candidates from the labor-backed Working Families Party. While Bridgeport is overwhelmingly Democratic, by law no more than two-thirds of its nine school board seats can be held by the same party. While the board’s Democrats and Republicans had often seen eye to eye on education, the WFP didn’t. “They were very effective at questioning the status quo,” Bridgeport Education Association vice president Rob Traber told Salon last year, and when Mayor Bill Finch’s superintendent pushed unpopular cuts in 2011, the Democratic machine and its business allies got “afraid that they might lose control of the board.”

Vallas has been failing down for years, practicing pump and dump, where focuses on standardized tests to the exclusion of real educations, eats his seed corn, and is forced out when it all implodes, when he blames the teachers.

All the while, he sells gives the schools to the hedge fund managers to that they can loot the public school systems.

His tenure in Connecticut it gets even worse, because he did not meet the legal requirements to be CEO, so they set up a no-show phony class for him to check off the necessary boxes.

Interestingly enough, following the WFP victory in the Democratic primaries, the Democratic Party establishment appears to be pulling strings for the Republicans:

The WFP notes a sharp contrast between the Democratic Party’s efforts on behalf of its pro-Vallas candidates in the primary, and its approach to tomorrow’s showdown with the GOP. “The Democratic Party put a lot of resources into the mayor’s slate in the primary, and a lot of money,” said Farrell. “We haven’t really seen them doing anything to help the challengers who won in the primary in the general election.” She told Salon that “education budgets are large chunks of money, and you know, we’ve been really stunned by the lengths to which Mayor Bill Finch, and the Democratic Chair Mario Testa, and Paul Vallas will go to maintain power over those budgets.”

 Some Bridgeport progressives take their allegations another step. Retired Judge Carmen Lopez, the local activist who filed the lawsuit against Vallas, told Salon she believes the mayor and his allies were “working to make sure that the Republicans win” because “that’s the only way that Finch could get what he wants, which is for Vallas to stay in power.” Voter Jessica Allen told Salon that City Council president Thomas McCarthy visited her house and, when she asked about education, told her that while “under normal circumstances I would never tell anybody to vote Republican,” in this case “you should be voting for [GOP contender] Larcheveque.” Allen said McCarthy told her the mayor “tried to make these fantastic changes, but everything that we try to do keeps getting blocked …” (Allen, a registered independent, told Salon she thinks “the schools are really screwed up” and “I don’t know what the right answer is.”) But Council member McCarthy told Salon in an email that he was “encouraging my constituents to vote all of Row B, the Democratic line.”

When you consider the proportion of a typical municipal budget that goes to education, it’s clear that there are a whole bunch of politicians in Bridgeport who are siding with the folks dedicated to ripping off the taxpayers.

Yes, I’m also wondering if the Republicans’ attempt to vote Ken Cuccinelli into the Governor’s office, but I really think that Bridgeport is a bigger deal.

Economists are Douchebags

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A business school professor at Wharton has found that not only are economists more selfish and more likely to cheat, but that even just the study of economics and business has a criminogenic effect.

The quick bullet points are:

  • Less charitable giving
  • More deception for personal gain
  • Greater acceptance of greed
  • Less concern for fairness

He wonders if there is a problem with how we teach economics.

Gee,  you think?

Go read the rest.

H/t Salon.

Why the US Healthcare System Sucks Wet Farts from Dead Pigeons,

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How many of you have an Albuterol inhaler for Asthma?

It’s great, isn’t it?

The drug is out of patent, so it’s cheap, and it works.

It’s not like a big pharma would lobby to get the FDA to ban the cheap inhalers because of their miniscule use of CFCs, and then wrap new propellants in a patent web and jack up the price, right?

Oh, silly me, that IS what they did:

The arsenal of medicines in the Hayeses’ kitchen helps explain why. Pulmicort, a steroid inhaler, generally retails for over $175 in the United States, while pharmacists in Britain buy the identical product for about $20 and dispense it free of charge to asthma patients. Albuterol, one of the oldest asthma medicines, typically costs $50 to $100 per inhaler in the United States, but it was less than $15 a decade ago, before it was repatented.

 “The one that really blew my mind was the nasal spray,” said Robin Levi, Hannah and Abby’s mother, referring to her $80 co-payment for Rhinocort Aqua, a prescription drug that was selling for more than $250 a month in Oakland pharmacies last year but costs under $7 in Europe, where it is available over the counter.

………

 Unlike other countries, where the government directly or indirectly sets an allowed national wholesale price for each drug, the United States leaves prices to market competition among pharmaceutical companies, including generic drug makers. But competition is often a mirage in today’s health care arena — a surprising number of lifesaving drugs are made by only one manufacturer — and businesses often successfully blunt market forces.

 Asthma inhalers, for example, are protected by strings of patents — for pumps, delivery systems and production processes — that are hard to skirt to make generic alternatives, even when the medicines they contain are old, as they almost all are.

………

 But in the United States, even people with insurance coverage struggle. Lisa Solod, 57, a freelance writer in Georgia, uses her inhaler once a day, instead of twice, as usually prescribed, since her insurance does not cover her asthma medicines. John Aravosis, 49, a political blogger in Washington, buys a few Advair inhalers at $45 each during vacations in Paris, since his insurance caps prescription coverage at $1,500 per year. Sharon Bondroff, 68, an antiques dealer in Maine on Medicare, scrounges samples of Advair from local doctors. Ms. Bondroff remembers a time, not so long ago, when inhalers “were really cheap.” The sticker shock for asthma patients began several years back when the federal government announced that it would require manufacturers of spray products to remove chlorofluorocarbon propellants because they harmed the environment. That meant new inhaler designs. And new patents. And skyrocketing prices.

 “That decision bumped out the generics,” said Dr. Peter Norman, a pharmaceutical consultant based in Britain who specializes in respiratory drugs. “Suddenly sales of the branded products went right back up, and since then it has not been a very competitive market.”

 The chlorofluorocarbon ban even eliminated Primatene Mist inhalers, a cheap over-the-counter spray of epinephrine that had many unpleasant side effects but was at least an effective remedy for those who could not afford prescription treatments.

………

 A result is that there are no generic asthma inhalers available in the United States. But they are available in Europe, where health regulators have been more flexible about mixing drugs and devices and where courts have been quicker to overturn drug patent protection.

 “The high prices in the U.S. are because the F.D.A. has set the bar so high that there is no clear pathway for generics,” said Lisa Urquhart of EvaluatePharma, a consulting firm based in London that provides drug and biotech analysis. “I’m sure the brands are thrilled.”

………

And here is the money quote:

This year the price of Advair dropped 10 percent in France, but in pharmacies in the Bronx, it has doubled in the last two years.

For what it is worth this is not technically a failure of the free market.

These companies’ profit margins are being directly supported by the state. That is the nature of patents and other exclusive licenses that we grant, particularly in the drug industry.

Then we allow for these exclusive licenses to be extended ad infinitum through evergreening.

The problem is that we as a society allow people to patent nothing at all, and sometimes we grant exclusive right to people who didn’t invent anything at all, as in the case of colchicine, where exclusivity was granted for a study of the drug which consisted primarily of a survey of the historical literature.

The price of colcicine went from $0.09 a pill to $5.00 a pill.

Mark Zuckerberg is Making Larry Ellison Look Like a Mindful Human Being

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Because only a few percent of users are availing themselves of the feature, Facebook has dropped a feature that allowed users to exempt themselves from search, because, I guess, they need to sell ads to stalkers:

Facebook is getting rid of a privacy feature that let users limit who can find them on the social network.

 Facebook Inc. said Thursday that it is removing a setting that controls whether users could be found when people type their name into the website’s search bar.

Yes, I do Facebook, because, there is no viable alternative.

Google Plus?  Surely you jest?

An Important Lesson About How to Reduce Piracy

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Interesting. It appears that the expansion of Netflix into Canada had reduced piracy by ½:

Netflix CEO Reed Hastings dropped a surprising statistic during an interview with Dutch website Tweakers last week, as he made the rounds promoting the launch of Netflix Netherlands.

When asked if Dutch viewers would switch from piracy to Netflix, Hastings said sure, some will switch, and that piracy helps “create the demand” for easier, legitimate ways to watch video through the Internet. Pressed for examples of markets where Netflix has actually brought about a decrease in piracy, Hastings pointed to Canada. Here, he claims, “Bittorrent traffic’s down by about 50 per cent since Netflix launched three years ago.”

There are some facts in the entire copyright debate, particularly as applies to entertainment:

  • It’s inconvenient for people to pirate things.
  • They are willing to pay when the institutions who control the content aren’t dicks who make “legal” use of the products even more inconvenient because they want to wring every possible penny from their users.

Of course, it’s rather unlikely that the the powers that be are going to stop acting like a dicks, seeing as how they have the political pull to turn what should be civil infractions into felonies though their pet congresscritters.

H/t PP at the Stellar Parthenon BBS.

Someone Else Calling for a Postal Savings Bank

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Just like I did a few months ago.

It’s Senator Bernie Sanders and Represantative of Pete Defazio:

The Postal Service Modernization Bills brought by Peter DeFazio and Bernie Sanders, on the other hand, would allow the post office to recapitalize itself by diversifying its range of services to meet unmet public needs.

 Needs that the post office might diversify into include (1) funding the rebuilding of our crumbling national infrastructure; (2) servicing the massive market of the “unbanked” and “underbanked” who lack access to basic banking services; and (3) providing a safe place to save our money, in the face of Wall Street’s new “bail in” policies for confiscating depositor funds. All these needs could be met at a stroke by some simple legislation authorizing the post office to revive the banking services it efficiently performed in the past.

I don’t think that it’s going to happen.

Wall Street owns Congress, and Wall Street does not want an alternative.

This is Called Catch 22

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The FISA court has said that since none of the telcos have ever challenged the collections orders, and that they are the only ones with standing to challenge these orders.

I guess that it might have something to do with the fact that the only time that a phone company resisted their demands, the government retaliated against them and threw their CEO in jail.

So, no harm, no foul, I guess:

No telecommunications company has ever challenged the secretive Foreign Intelligence Surveillance court’s orders for bulk phone records under the Patriot Act, the court revealed on Tuesday.

The secretive Fisa court’s disclosure came inside a declassification of its legal reasoning justifying the National Security Agency’s ongoing bulk collection of Americans’ phone records.

Citing the “unprecedented disclosures” and the “ongoing public interest in this program”, Judge Claire V Eagan on 29 August not only approved the Obama administration’s request for the bulk collection of data from an unidentified telecommunications firm, but ordered it declassified. Eagan wrote that despite the “lower threshold” for government bulk surveillance under Section 215 of the Patriot Act compared to other laws, the telephone companies who have received Fisa court orders for mass customer data have not challenged the law.

“To date, no holder of records who has received an Order to produce bulk telephony metadata has challenged the legality of such an Order,” Eagan wrote. “Indeed, no recipient of any Section 215 Order has challenged the legality of such an order, despite the mechanism for doing so.”

That complicity has not been total. Before the Bush administration moved the bulk phone records collection under the authority of the Fisa court, around 2006, Qwest Communications refused to participate in the effort.

If you know what happened to Qwest, and you might understand why the telcos have never challenged the order.

Qwest lost numerous government contracts after refusing to collaborate in the Bush administration’s illegal data collection, and missed its numbers, which caused the stock to tank, and then they went after the CEO, Joe Nacchio. who was then prosecuted for insider trading on the basis of his rosy projections for the company.

See Nacchio’s allegations here: (from 2007)

Nacchio was convicted for selling shares of Qwest stock in early 2001, just before financial problems caused the company’s share price to tumble. He has claimed in court papers that he had been optimistic that Qwest would overcome weak sales because of the expected top-secret contract with the government. Nacchio said he was forbidden to mention the specifics during the trial because of secrecy restrictions, but the judge ruled that the issue was irrelevant to the charges against him.

Nacchio’s account, which places the NSA proposal at a meeting on Feb. 27, 2001, suggests that the Bush administration was seeking to enlist telecommunications firms in programs without court oversight before the terrorist attacks on New York and the Pentagon. The Sept. 11 attacks have been cited by the government as the main impetus for its warrantless surveillance efforts.

They sent him to jail for 6 years. (He actually is coming out after a bit less than 5)

Is there any wonder that none of the telcos have challenged such an order?

Even if they don’t send you to jail, supplying secure connectivity to government agencies is a particularly lucrative part of the business, and if they took the NSA to court, it would all end, and they would lose their, “Phoney Baloney Jobs,” to quote Mel Brooks.

Harrumph, indeed.

Motherf%$#er

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DC Mayor Vincent Gray just vetoed the living wage bill:

Mayor Vincent C. Gray vetoed legislation Thursday that would force the District’s largest retailers to pay their workers significantly more, choosing the potential for jobs and development at home over joining a national fight against low-wage work.

 Gray’s quandary is playing out in many U.S. cities, where local leaders who generally sympathize with worker causes are also eager to lure jobs and commerce for their constituents. Retailers, most notably Wal-Mart, have placed an increasing focus on urban expansion, while unions and advocates for workers have pushed measures like the District’s “living wage” bill as a valuable hedge against the proliferation of low-paying jobs.

 The veto, which is unlikely to be overridden by the D.C. Council, clears the way for Wal-Mart to continue its entry into the District — plans years in the making that were thrown into question after lawmakers embraced the wage proposal this year.

 Gray (D) announced his veto in a letter delivered to Council Chairman Phil Mendelson on Thursday morning. It explained his opposition to the bill and tried to soften the political consequences by disclosing his intention to seek a minimum-wage increase from all employers, not just large retailers.

 In the letter, Gray said the measure was “not a true living-wage bill,” because its effect would be limited to “a small fraction of the District’s workforce.” He called the bill a “job-killer,” citing threats from Wal-Mart and other retailers that they would not locate in the city if the bill becomes law.

 “If I were to sign this bill into law, it would do nothing but hinder our ability to create jobs, drive away retailers, and set us back on the path to prosperity for all,” he said.

 In an interview, Gray did not say what minimum wage he would seek, except that any increase would be “reasonable” and would come after consultation with lawmakers and interested parties.

The whole “job killer” argument is bullsh%$.

The studies are fairly clear here.  Walmart does not create jobs, it takes jobs from smaller retailers, aggressively puts those workers on the public dole, and underpays them:

Earlier studies did not adequately deal with selection bias: i.e., the problem that when and where Walmart chooses to open new stores is not random, but tends to be correlated with other variables. Those confounding variables make it difficult to determine whether local employment outcomes are causally related to Walmart‘s entry, or to something else. I’ll skip the technical details, but suffice it to say Neumark and his co-authors devised a sophisticated methodology that accounts for the selection bias. Using data from over 3,000 counties, their results show that when a Walmart store opens, it kills an average 150 retail jobs at the county level, with each Walmart worker replacing about 1.4 retail workers. These results are robust under a variety of models and tests.

This sucks, and it likely that the override will fail.

What the F%$#?

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Google went down yesterday:

You can all relax now. The near-unprecedented outage that seemingly affected all of Google’s services for a brief time on Friday is over.

The event began at approximately 4:37pm Pacific Time and lasted between one and five minutes, according to the Google Apps Dashboard. All of the Google Apps services reported being back online by 4:48pm.

The incident apparently blacked out every service Mountain View has to offer simultaneously, from Google Search to Gmail, YouTube, Google Drive, and beyond.

Big deal, right? Everyone has technical difficulties every once in a while. It goes with the territory.

But then, not everyone is Google. According to web analytics firm GoSquared, worldwide internet traffic dipped by a stunning 40 per cent during the brief minutes that the Chocolate Factory’s services were offline. Here’s the graph of what that looked like:

I’m wondering if maybe there was an issue with the latest brand of sniffer software from the NSA.

Still, this is weird.

Healthcare Quote of the Day

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In this New York Times article, they discuss the consequences of the increasingly frenetic pace of mergers among hospitals.

One line of the story is particularly important:

“The rhetoric is all about efficiency,” said Karen Ignagni, the chief executive of America’s Health Insurance Plans, a trade group that represents insurers. “The reality is all about higher prices.”

Notwithstanding any “efficiencies”, the price hikes come from the fact larger chains have more pricing power when negotiating with insurance companies and the government.

It serves to illustrate a point: We do not have a healthcare cost problem in the United States, we have a healthcare price problem in the United States.

This is a classic case of a market failure.

The FCC Gets one Right, Big

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The FCC has issued a temporary rule forbidding the extortionist phone rates charged to prisoners and their families:

Today was an extremely emotional meeting at the Federal Communications Commission (FCC). After ten years of fighting, the FCC resolved the Petition filed by Martha Wright and concluded that the rates charged for prisoners to make and receive phone calls are “unjust and unreasonable” and therefore violate Section 201 of the Communications Act. The FCC imposed interim rates and issued a further Notice of Proposed Rulemaking to ensure that rates going forward are based on actual cost to provide service, not jacked up outrageously because prisoners and their families have no choice. Importantly, the FCC ruled that the “commissions” (aka kickbacks) paid to jails for the right to exploit the helpless and profit from the misery of their families are not a “cost” that can be recovered. (FCC press release here.)

This is a repulsive practice.

Not only was it creating a literally captive customer base for these obscene rates, it also had the effect of increasing recidivism, and impoverishing the families of prisoners.

Mexico’s President Drinks the Free Market Mousketeer Koolaid

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It’s not a surprise, the energy companies have been trying to get ownership stakes in the state owned Mexican oil company, Pemex, for years, so it was only matter of time before a useful idiot was elected to the Mexican presidency, the useful idiot in this case being Enrique Peña Nieto:

If Mexico had a crown jewel, it would be the giant state oil monopoly Petroleos Mexicanos, or Pemex. Year after year, it has poured billions of dollars into the state treasury, historically paying for schools, hospitals, dams, highways, ports and more.

The seizure of foreign oil companies 75 years ago that created the company is a cause for annual celebrations affirming Mexico’s fierce sense of independence from outside interference.

Yet even as the country’s new president, Enrique Peña Nieto, credits Pemex with building the nation, his administration acknowledges that the notoriously inefficient conglomerate is in trouble: If it is not opened to private and foreign investment, Mexico, the world’s ninth-largest oil producer, will become a net energy importer by 2020, officials say.

As Peña Nieto moves ahead with a plan to overhaul Pemex, he is navigating the most perilous political minefield of his young presidency. He is toying with taboos and challenging revered perceptions surrounding the nation’s top revenue earner. And he is meeting with impassioned opposition.

At the back of a recent rally for Pemex, Jesus Castillo Sanchez, a 46-year-old handyman, waved a giant Mexican flag as if he’d just taken a hill in battle. Booting the foreign oil companies in 1938 “gave Mexico its true independence from the great powers,” Castillo said. “After [the foreigners] bring their oil platforms, they will bring their armies and their troops.”

The president is expected to introduce landmark energy reform legislation, including proposals addressing Pemex, as early as this week.

………

The government and industry experts contend that Mexico needs advanced technical expertise from outside companies to find and retrieve oil and gas from deep water and shale-rock formations that are believed to hold more than half the country’s estimated 14 billion barrels of reserves.

But “Pemex is not allowed … to choose associations … to reduce the level of risk that you run” in deep-water exploration, Carlos Morales Gil, Pemex director of exploration and production, said in an interview. “What Pemex needs is budget autonomy and flexibility” to form joint ventures, he said.

If you look at the Deepwater Horizon case, you will notice that BP doesn’t know much of anything about oil drilling.

They hire Halliburton and Slumberger (who took one look at the well, and left) for their drilling expertise, and Transocean to operate the rig.

Oil companies no longer have much in the way of technical expertise, they outsourced those during the oil downturn in the late 1980s.

As to the money to go after harder to reach oil, Pemex clearly needs some reforms, it is a wasteful and bloated bureaucracy.

As to the fixes, the first one comes to mind would be an expansion of their refining facilities, so that Pemex would not have to import (and subsidize) fuel for internal consumption.

But one need only look at the disastrous privatization of British rail to understand that this is a solution that has everyone losing but the foreign firms.

If you bring in foreign investors, oil and gas drilling in Mexico is going to end up looking like Nigeria.

Schadenfreude on 401(k) Plans

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Ian Ayres, a professor at Yale, has been reviewing 401(k) programs, and will publicize the really sucky plans that charge excessive fees:

A Yale Law School professor is causing a ruckus among U.S. corporations with plans to publicize a study of employers’ 401(k) plan costs.

 The professor, Ian Ayres, has sent about 6,000 letters to companies, saying he would disseminate the results of his study using Twitter, with separate hashtags for each company.

 Prof. Ayres has mailed out several different versions of the letter since June, and at least one said that he had identified an employer’s 401(k) specifically “as a potential high-cost plan.” He said that he and his research partner planned to publicize the results in spring 2014.

 Tri-City Electrical Contractors Inc., in Altamonte Springs, Fla., received one such letter on July 5. It said that the company’s plan ranked worse than 77% of plans of comparable size based on total plan cost.

 “As a reminder, fiduciary duties are the most stringent imposed by the law, and require administrators to act solely in the interests of plan participants,” continued the letter, which was reviewed by The Wall Street Journal.

 The letters come as administrators of 401(k) plans have been under fire for what some workers and retirees say are excessive fees. Federal fee-disclosure rules went into effect last year requiring 401(k) administrators to better spell out the fees being charged to plan sponsors and participants.

The problem is that there are a lot of 401(k) administrators who over-promise returns to justify inflated fees.

Call me old fashioned, but I think that there should be (low) statutory limits on 401(k) and IRA because otherwise, the tax breaks are simply going straight into Wall Street’s pockets (expense ratio is largely unrelated to plan returns).

If you want to blow your money on a mutual fund manager who charges high fees, it’s your business, until Uncle Sam starts supplying tax benefits, at which point, it becomes a matter for the public to discuss.

Gee, What Could Possibly Go Wrong?

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After all, the market solves everything, so the sale of the UK’s primary blood plasma supplier to Bain Capital should work out just fine:

The Government was tonight accused of gambling with the UK’s blood supply by selling the state-owned NHS plasma supplier to a US private equity firm.

The Department of Health overlooked several healthcare or pharmaceutical firms and at least one blood plasma specialist before choosing to sell an 80 per cent stake in Plasma Resources UK to Bain Capital, the company co-founded by Republican presidential candidate Mitt Romney, in a £230m deal. The Government will retain a 20 per stake and a share of potential future profits.

PRUK has annual sales of around £110m and consists of two companies: it employs 200 people at Bio Products Laboratory (BPL) in Elstree, Hertfordshire, and more than 1,000 at DCI Biologicals Inc in the US. DCI collects plasma from American donors and sends it to BPL where it is separated into blood proteins, clotting factors and albumin for supply to NHS hospitals in the treatment of immune deficiencies, neurological diseases, and haemophilia.

Considering the damage caused in the US because the American Red Cross (under the direction of Liddy Dole) and big pharma, both of whom resisted 100% testing for years,and  killed tens of thousands of hemophiliacs in the United States, and many times that world wide, this does not fill em with confidence about the UK blood supply.

Bummer of a Birthmark, Boeing

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A Boeing 787 caught fire at Heathrow, though there are no indications that batteries are involved:

Investigators classified the fire that broke out on a Boeing 787 Dreamliner parked at London’s Heathrow airport as a “serious incident” but have found no evidence it was caused by the plane’s batteries, Britain’s Air Accidents Investigation Branch (AAIB) said on Saturday.

 The question of whether the fire was connected to the batteries is crucial because the entire global fleet of Dreamliners, Boeing’s groundbreaking new flagship jet, was grounded for three months this year due to battery-related problems.

 The AAIB designation fell just short of a full-blown “accident” on the scale it uses to describe investigations. The agency’s preliminary probe is expected to take several days, opening up Boeing to more questions about its top-selling plane.

When Boeing decided that it would be a good idea to outsource most of its expertise to “risk sharing partners”, it was pretty much inevitable.

As I noted 2 years ago in the case of Dell Computer, this is penny wise and pound foolish:

So the decline of manufacturing in a region sets off a chain reaction. Once manufacturing is outsourced, process-engineering expertise can’t be maintained, since it depends on daily interactions with manufacturing. Without process-engineering capabilities, companies find it increasingly difficult to conduct advanced research on next-generation process technologies. Without the ability to develop such new processes, they find they can no longer develop new products. In the long term, then, an economy that lacks an infrastructure for advanced process engineering and manufacturing will lose its ability to innovate.

Boeing’s problems are further complicated by the fact that its partners did not have the time to develop the expertise to do the job right, so now we have a troubled airliner where the sum of the parts is less than the whole.

An Old Idea Whose Time Has Come Again

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The idea that, in addition to having the US Post Office serve our letter carrier needs, that we have them supply basic retail banking services again:

On July 27, 2012, the National Association of Letter Carriers adopted a resolution at their National Convention in Minneapolis to investigate establishing a postal banking system. The resolution noted that expanding postal services and developing new sources of revenue are important to the effort to save the public Post Office and preserve living-wage jobs; that many countries have a successful history of postal banking, including the U.S. itself; and that postal banks could serve the 9 million people who don’t have bank accounts and the 21 million who use usurious check cashers.

 The USPS has been self-funded throughout its history, but it has been recently driven to insolvency because in 2006, Congress required it to prefund postal retiree health benefits [3] for 75 years into the future, an onerous burden no other public or private company is required to carry. The USPS has evidently been targeted by a plutocratic Congress bent on destroying the most powerful unions and privatizing all public services, including education. Britain’s 150-year-old postal service is also on the privatization chopping block, and its postal workers have also vowed to fight. Adding banking services is an internationally proven way to maintain post office profitability.

Not only has it been done before, it was done in the United States in my lifetime:

The now-defunct U.S. Postal Savings System was also quite successful in its day. It was set up in 1911 to get money out of hiding, attract the savings of immigrants, provide safe depositories for people who had lost confidence in private banks, and furnish depositories with convenient hours. Deposits ranged from $1 to $2,500, and the postal system paid 2% interest on them. It issued U.S. Postal Savings Bonds that paid annual interest, as well as Postal Savings Certificates and domestic money orders. Postal savings peaked in 1947 at almost $3.4 billion.

 The U.S. Postal Savings System was shut down in 1967, not because it was inefficient but because it became unnecessary after its profitability became apparent. Private banks then captured the market, raising their interest rates and offering the same governmental guarantees that the postal savings system had.

This is a good idea for a number of reasons

  • It would allow for an alternative to hit the ground running when (not if) the next time that the big banksters crash and burn.
  • It would allow for small depositors, who routinely take it up the ass from commercial banks, to have an alternative that is also national in scope.
  • It would help the Post Office out of its current Congressionaly generated financial crisis.

In order to take down the banksters, you have to do more than just regulate them: You need to create an effective state owned and operated alternative.

MicroFlaccid Folds Like a Bunch of Overcooked Broccoli

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Still not a gamer, but I love this animated GIF

They have reversed themselves on their restrictive XBox One content policies:

YET ANOTHER UPDATE (5:24 Eastern): Microsoft has confirmed to Kotaku that the “family sharing” and digital cloud library access features that were planned to be in the Xbox One are indeed gone thanks to today’s policy reversal. Xbox one users will also apparently have to download a “Day One” patch to enable the offline mode.

 FURTHER UPDATE:

 “You can play, share, lend, and resell your games exactly as you do today on Xbox 360.” That is now the official word from Microsoft.

 Microsoft says it “imagined a new set of benefits such as easier roaming, family sharing, and new ways to try and buy games,” but that it also realized that “the ability to lend, share, and resell these games at your discretion is of incredible importance to you.”

 No Internet connection will be required to play offline Xbox One games; the Internet will only be required for a one-time initial system setup. There will be no limitations on sharing or selling game discs. Downloaded games will be playable offline, and there will be no regional restrictions on those games.

 On the downside, there will be no digital “family” sharing as was previously announced, and disc-based games will require the disc to be in the tray to be played.

Not surprising that they are killing “Family Sharing”. It was only in there as an excuse to kill the resale market.

I am a bit surprised that Microsoft came to its senses before it experiences months of disappointing sales.