Archive for the ‘economics’ Category

The refurb economy

Friday, February 19th, 2010

Now mister the day my number comes in I ain’t ever gonna ride in no used car again. Bruce Springsteen, “Used Cars”

The MacBook Pro on which I’m composing this post was bought from the Apple online store two and a half years ago, a refurbished model. After our coffeemaker died, rather than buy a new one we sent the old one back to be remanufactured for $75, shipping included.

And, of course, our “new” car is now eight years old.

If one thing has happened to us and people we know in the recent, long recession, it’s this: we no longer fetishize new things. In the 1980s, when Springsteen wrote the lyrics excerpted above, and earlier, the purchase of a new anything, but especially a new car, was a symbol of affluence, of making it. The hunger for the new led to planned obsolescence and a throwaway society.

It’s a bit of return to older values, I think, that more business will be associated with repair, refurbishment and other services intended to keep our things working longer, as opposed to stamping out millions of shiny new thingies that won’t last.

If that’s an outcome of the recent crisis, that’s OK with me.

Our old car

Our "old car"

Related post:
Midlife crisis, 21st century style

A brief explication of the problem of rising US college tuition

Wednesday, September 9th, 2009

(UPDATE: a significant error has been fixed in the below chart. Thanks to Felix Salmon’s readers for pointing out the error.)

The ever-rising cost of US college tuition is a constant news theme this time of year, including recent views by the Wall Street Journal (”Students Borrow More Than Ever For College“) and the always-provocative Felix Salmon. A discussion with my father-in-law, who mentioned that he used to earn enough to pay his private-college tuition in the 1950s while working in the Poconos each summer, spurred me to look at how tuition has risen from 1950 till now. (I was a freshman in college in 1980.) I looked at Rensselaer Polytechnic Institute, my alma mater, to make a constant comparison, but I could have used any 4-year college. Here’s what I found:


1950 1980 2009
RPI tuition (then-current dollars) 700 4500 38100
Tuition (2009 dollars) 6255 11718 38100
US median income (2009 dollars) 29658 54744 61808

This is what happens when prices increase above the rate of inflation for decades. Here’s another way of viewing the same information:

I’m not sure how much more prices can rise before the entire system collapses, or at least radically rearranges. My son is 8 years old. Will we have $100,000 yearly expenses by the time he goes to school? Will anyone be able to afford that? Will it be worth it?

(Spreadsheet with sources referenced can be found here: college-tuition-trends1)

Creative Destruction? #3

Friday, February 6th, 2009

This series of posts began in September when I photographed a couple of recently-vacated retail spaces. I’ve returned a couple of times since, most recently this week, to see how/if reuse of the sites is progressing. As you’ll see, not much change yet. Here’s Joseph Schumpeter’s famous “creative destruction” quote from Capitalism, Socialism and Democracy:

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory to such concerns as U.S. Steel illustrate the same process of industrial mutation–if I may use that biological term–that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in. . . .

32nd and Market Streets, Camp Hill, PA, 3 Feb 2009

There have been recent newspaper reports that there will be a Rite Aid drugstore built on the above site. And there is a construction sign posted out front (not pictured).

Carlisle Pike, Silver Spring Township, PA, 3 Feb 2009

The lease sign is the biggest change here. Otherwise, no activity.

The era of cheap s–t is over

Monday, October 20th, 2008

Our kids’ piano teacher lets our kids choose a little prize after their lessons, if they’ve tried hard and been attentive. The other day, my wife said, after tripping over one of these dollar toys for the millionth time, “I may have to tell her to start bringing candy, instead of these little toys. I can’t keep up with all the crap.”

Help is on the way. Last Thursday, on NPR’s All Things Considered, reporter Louisa Lim tells us that many Chinese factories who supplied the world with cheap trinkets are going out of business, victims of rising commodity prices and slack demand from the West. Chinese government action may also be a cause, according to the ATC story:

Harley Seyedin, the president of the American Chamber of Commerce in South China, says this slowdown was the result of deliberate action by the government.

“The majority of this happened because of changes in regulations last year deliberately decided by the Chinese government in order to slow down the economy and to move away from reprocessing [and those] labor intensive, environmentally unfriendly and energy-intensive kind of companies,” Seyedin says. “And certainly some companies have suffered as a result of that. Those types of companies needed to go anyway.”

Hallelujah. One of the byproducts of the economic slowdown will be a ratcheting down in our acquisitiveness, and a reduction in the easy credit that’s allowed us to buy more crap, cheap or otherwise. To me, there’s good news in that.

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Favorite non-business business blogs

Thursday, March 15th, 2007

Can blogs that aren’t about business shed light on problems we businesspeople face every day? James March, the professor who taught us about foolishness, might say yes. Here are my favorites:

  1. Hobby Princess – all about handicrafts, yet sprinkling in lessons for those of us in business. Check out this post about how small can be better than big. Or this one about the conflicts between copyrights and open source.

  2. Greg Mankiw’s Blog – economics brought to ground level by a Harvard professor. Ostensibly a tool for his introductory econ students, the blog takes on questions of government policies and looks at them with an economist’s eye. Want to learn what Pigovian taxes are? Check here.

  3. David Report blog – on design of architecture, furniture, clothing. Beautiful pictures and some thought-provoking commentary about how design can improve or degrade our lives.
  4. Bill Walsh’s Blogslot – the author, a copy editor for the Washington Post, regularly points out poor grammar and word choice in the nation’s newspapers. The lessons for anyone who writes (i.e., all of us) are invaluable. Here’s a simple take on an emerging problem in blog grammar.

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