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Tuesday, Jun 6, 2006

In the “couldn’t have said it better myself” department comes this article by Simon Dumenco for Advertising Age: The FCC Thinks You Would Look Totally Hot in a Diaper.

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Tuesday, Jun 6, 2006

In the perfect world of econometric models, everyone would be forced to pay as much as they were willing to in every exchange, bringing about what economists would deem perfect efficiency—maximizing not the usefulness of the world’s resources but the accuracy of economists’ supply and demand curves. Economists like Tim Harford in The Undercover Economist assume that since we are willing to pay a certain price, we consider that price fair, even if, say, the person sitting beside us on a plane paid half as much for his ticket. This seems strange to me—it seems patently unfair. If democracy now finds primary expression not in the voting booth but in the marketplace (if historian William Leach’s notion of the “democratization of desire” is accurate; if the way we feel equal in America derives from the fact we can all shop in the same stores and dream about owning the same things; if purchasing power means more than the franchise; if we vote with our dollars) then this kind of pricing is a subversion of democracy. My votes in the marketplace are beign devalued if I am induced to may more for a good than some other American. I suppose it would be wrong to go around holding a grudge about every time I was duped into paying more than somebody else; the reason I’ve paid more is that generally, ultimately (hopefully) I have benefited from other past privileges that gave me more purchasing power in the first place than the people who paid less, and my overspending eventually will help level that playing field, distributing the privilege that accrued to me around to the underprivileged people out there catching discounts. (This is the paradigm that makes drugs cheaper for Africans than they are for my insurance company.) But a look at the way money tends to be accumulating at the top of the income pyramid suggests this is too hopeful. Often benefits, discounts, privileges beget further privilege, and disadvantaged people in the economy are merely more vulnerable to exploitation, both in their jobs and in their consuming—just pop in to a grocery store in a rundown area and see what deals are to be had on the stripped-down, limited supply of goods there.

And if we always paid what we were willing, we would experience not perfection but some sort of dystopic misery, as one of the main pleasures of shopping (and shopping is itself our main pleasure) would be robbed from us—the feeling of getting a deal. When we pay just what we’re willing, we are never getting to enjoy the experience of knowing we would have paid more but didn’t have to. That difference between what we would have spent and what we did is a kind of happiness dividend that comes to us at serendipidous times and may just have the kind of slot-machine like randomness to it to help keep us addicted to consumerism.

Also, more important, when I receive attentive service at a coffee shop, where the leverage of my upcoming tip has no business attracting it, I end up feeling a warm glow of gratitude for the human race, a sense that people are willing to be polite and friendly not because economics compels them but because their humanity does. It’s irrational and unpredictable, but it seems perfectly natural when I am enjoying my lunch because of it, and makes me want to do some irrational things myself, like write a long encomium to such behavior in a blog that no one pays me to write. It’s a beautiful thing when sheer sociability trumps the logic of price targeting and positional-good selling, creating an environment wherein people seem to be enjoying their work for the sake of preofessionalism, for the sake of the comfortable interaction it brings. I know that is a bit utopian. But it’s a scenario that for better or worse can’t ever be modeled, predicted. You can’t script unmotivated “random acts of kindness” (the best you can do is promote them with glib bumperstickers). If economists had their perfectly efficient world, I’d never get that service in low-priced establishments, just the surly indifferent service that admittedly I typically get. Perfect pricing, perfect efficiency, presumes nothing can be given, but thankfully the world isn’t that perfect and people make the error of generosity every now and then.

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Monday, Jun 5, 2006

Financial Times columnist Tim Harford in his recent book The Undercover Economist spends a lot of time discussing the retailers’ practice of price targeting, by which they inflate their profits by duping customers to paying what they can afford for something rather than what it actually costs to make. Generally speaking, he argues, everything at Starbucks costs the company the same amount to make, they just dress their base product (espresso) with a bunch of inconsequential options that permit them to charge a bunch of different prices for the same thing and allow customers to self-select their price range, (dumb or dumber or venti dumb)—if you mistake those little differences for significant identity-defining decisions, you’re just that much more suceptible. Much of the economy in fact sems predicated on our finding mammoth significance in these inconsequential differences; advertisements systematically instruct us to take great pleasure in determining the difference between someone who drives a VW and someone who drives a Ford truck. 

Harford focuses on customers’ insoucient shopping. “Starbucks isn’t merely seeking to offer a variety of alternatives to customers. It’s also trying to give the customer every opportunity to signal that they’ve not been looking at the price.” Part of that indifference would likely be Veblenesque conspicuous hauteur, but part of it is a consequence of deliberate deception, inculcated shopper ignorance abetted by such tactics as random pricing, illogical sales, exaggerated differences between similar products (if not the same product), misleading labels, sabotaging already finished goods to price them cheaper and so on. All these things are designed to confuse, to create situations of imperfect information which can then be exploited. Like a true economist, Harford sheds no tears for customers who are duped into paying more than other customers for the same product; he figures that they know better what they can afford (though the mountains of American debt and the existence of paycheck-loan kiosks and rent-to-own predators and installment-plan scams often makes me wonder, personally) and sees nothing unjust in a little enterprising duplicity.

Customers tend to feel differently. Some, when they discover these practices, perhaps engage in some guerilla consumerism, turning bloated corporate policies against chain stores, capitalizing on slipshod return policies, buying sale items in absurd bulk, exercising iron discipline with price comparisons, and speading the news of these counterinsurgent tactics to anyone who will listen and who has the nerve to execute them. As Harford notes, price targeters must plug leaks—must stop goods targeted for one group from selling to another. In other words, they have to stop middle class people from shopping at Dee & Dee or Dollar General. And retailers must stop people from reselling goods they’ve acquired at a discount—this is why these strategies are mainly applied to services and perishables. Price targeting typically takes advantage of our willingness to pay for an experiential goods (rather than tangible ones) like first-class seating or to get competent attentive service from clerks. The hierarchy of customers that results makes custoemrs think their opponents are other customers (who they need to best by being in a higher class, by being waited on first) rather than the retailers themselves who are gouging and duping htem whenever possible.

Part of the way price targeting works is to have a sheeplike shopping populace to embarrassed to protest it, or to incovenience themselves, the clerks, and other shoppers by insisting on refunds or price matches or spontaneously-negotiated bargains. Of course, even if you are aggressive in taking advantage of shopping loopholes, you are still shopping, which probably keeps retailers happy, no matter how much you shave their margins. Perhaps the best way to fight price targeting is to buy as little as possible, or at least spend as little time as possible thinking about acquiring stuff.

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Friday, Jun 2, 2006
by PopMatters Staff

The Dr. Octagon Chronicles

Cassettes Won’t Listen “Aliens” -  Hearing Aid Remix [MP3]

Chapter 5: Cassettes Won’t Listen “Aliens” -  Hearing Aid Remix

OCD International HQ

A red light blinks on the machine. As play is pressed, a frantic message comes over sound system.

"I just got chased by a freakin’ gorilla in a pick up truck. What’s going on? Doesn’t feel right. I’m coming to L.A. to get to the bottom of this. Sonic out.”

The staff at OCD Headquarters had heard rumors that something was happening on the east coast and they had sent out a crack team of experts to investigate. Entrusted with the cure provided by The Money Fight, they knew they could be of great assistance. Gray Kid and Mike Relm were all but recovered and ready to get back to deciphering the strange messages received from Dr. Octagon.

There had been some changes to the original package they received. It had begun to blink "06272006" repeatedly and to the dismay of their hackers, they had not been able to figure out this new level to the mystery. Things were stable, yet not moving forward. Frustrated, the lead hacker sat down over the monitors to give it one more try.

While working through algorithms, polyrhythms and audiological historical charts, the monitor began to shimmy, shake and worm out of focus. The screen flashed "Cassettes Won’t Listen" over and over till it went blank. When it came back, a bearded man in glasses had replaced the charts in front of him.  As the man began to speak, it seemed like the voice was coming from inside the hacker’s head.

I am Cassettes Won’t Listen. I have hacked into your system and have been following your progress on The Return Dr. Octagon.  I waited to reveal myself until I knew you were good people and could be trusted. I know you are trying to decipher what he sent you and I think I may be of some assistance.

About 8 years ago, along with 5 friends, I was abducted. We were tortured, cloned and kept in isolation. Of the 6 of us, two survived. The other survivor, Travis Walten, was killed by one of the clones because of what we knew. I have since gone underground as a One Man Army to fight these imposters. The fact that I survived is not important. What is important is who I found on that ship.

Dr. Octagon was kept in the cell next to me. The aliens had abducted him as a prime candidate to study all things regarding grills, pills and bills. He had been cloned, and his clones had been sent out to destroy the universe. That’s who visited the planet of The Money Fight people. That’s who have been causing havoc all over the universe.

What I am trying to say is that Dr. Octagon is alive.

I was able to record a conversation with him before we were released using a makeshift recording device of duct tape and space age technology, which I am uploading now. You know everything I know. I will rendezvous with your team when they get to New York City and explain the situation. We will fight the good fight and continue to search out these clones and destroy them. These imitators must be stopped at all costs. Cassettes Won’t Listen ...out.

As the bearded man faded from the screen, a green button appeared. The hacker hesitated, shook his head and pressed the flashing icon. The hacker listened in awe as the history of Dr. Octagon began to reveal itself. As he ran to inform his superiors, a van screeched to a halt outside hq…

Cassettes Won’t Listen “Aliens” -  Hearing Aid Remix [MP3]

Previous Chapters:
A Gorilla Driving a Pick-Up Truck -  Rob Sonic Road Rage Remix [MP3]
The Gray Kid Al Greezy remix [MP3]
Al Green: The Gray Kid Al Greezy remix [MP3]
Mike Relm 20-minute Return of Dr Octagon megamix [MP3]

The Return of Dr Octagon hits stores June 27th.

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Friday, Jun 2, 2006

Anya Kamenetz, author of Generation Debt, had a ludicrous editorial in The New York Times the other day about the pernicious growth of internships, which has already prompted these takedowns from economists and policy analysts. Kamenetz worries that interns are exploited on the one hand, because they are often unpaid, and that they distort the job market by taking away paying jobs from other qualified college graduates. She even compares them to illegal immigrants, which doesn’t really make any sense. Interns aren’t stupid, and they know the value of what they are doing. No one points a bayonet at them and forces them to open mail for a Conde Nast deputy editor or a state senator or whatever. The point is that interns can volunteer to work gratis because they have parents who can support them while they extend the lucrative network that got them the internship in the first place. Internships are actually well paid in social capital; the contacts you get more often than not launch you in your career (or get you out of it before it is too late). As Will Wilkinson points out in one of the takedowns linked above, Kasenetz herself profited immensely from the network her internship at the Village Voice procured for her. He writes, “I think that perhaps one thing that Kamenetz may have in common with me, and many others, is that her success shakes all our faith in the meritocracy.”

Kasenetz is right that internships “fly in the face of meritocracy — you must be rich enough to work without pay to get your foot in the door. And they enhance the power of social connections over ability to match people with desirable careers.” What’s scandalous about internships, if anything, is the nepotistic way they are usually distributed, to someone’s niece or nephew, or to the last intern’s roommate, or to the students of a college professor who has a buddy in a corporation. These sorts of internships entrench networking as basically more valuable than actual work skills, which leads people to naturally conclude that the only work skills our postindustrial economy needs are people skills, the ability to not piss people off and ingratiate oneself in the elevator. (Of course, America’s most famous recent intern found other ways to extend her people-pleasing skills.) And because the networks are nepotistic, they seal off the upper eschelons to outsiders, who have to work their way up the old-fashioned way, which is not at all, usually. That seems to me what internships are all about; they are like Ivy League admissions. Corporations get the “right” people in whlie extorting something from them (free labor, onerous application fees, etc.) to make it look less egregious. Economists tend to reject these sorts of complaints about meritocracy’s failure with the tough-shit apothegm: the upper class always has the advantage in every situation (not just internships), so that inherent fact becomes an externality. As Andrew Samwick puts it in his takedown: “No one would deny the simple fact that students who come from well off families have more opportunities than those who come from less well off families.” Yes, it is a simple fact, but it is still lamentable, and democracies, if they are to mean anything other than laissez-faire economics, should address it and work to correct it. Internships do the opposite; they preserve the advantage and mystify it so it doesn’t seem so outrageously unfair.

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