PRICE ELASTICITY OF DEMAND FOR CRACK

Posted in Rants on June 18th, 2008 by Ed

When economists talk about elasticity and demand they are addressing a very fundamental question in a free-market system: how do changes in price affect demand? Finding the ideal point is an important component of profitability and growth for retailers and manufacturers. For example, Ford sells 100,000 pickup trucks at $25,000 (total revenue: $2.5 billion). If they increase the price to $28,000 and sell 5% fewer trucks that's a good move (total revenue: $2.66 billion) even though they sell only 95,000.** However, if the price increase reduced demand by 10 or 15 percent it would not be profitable.

This is not a revelation. You probably already know this, even if you are unaware of the fancy name. So here is a question I would like you to ponder: from the perspective of a crackhead, what is the price elasticity of demand for crack?

This is not a question that fits cleanly into the model. In a standard economic example (trucks, tennis shoes, tuition, fast food) there are a number of important assumptions being made. First, the items for sale are "wants." We can walk away. We don't really need the truck or the Big Mac. There is a price at which we will say "Screw this." Second, there is choice. If the Ford gets too pricey but we remain interested in a new truck, try the Chevy. Honda. Dodge. Whatever. In other words, the manufacturer and retailer must be wary of the strategies of other competitors in the market when developing their pricing strategy.

If the price of a Big Mac goes from $2.50 to $7.00, it is very likely that demand would fall precipitously. Consumers would choose Whoppers as an alternative or simply avoid eating out. But what happens if the price of crack goes from $25 to $50 per unit? Or $25 to $100? This is irrelevant to the demand among crackheads. If crack is $25, $50, $100, or $250, crackheads need, want, and will buy crack. They will either cut other expenses from their budget or steal more things to sell for crack. "Rational economic behavior" is not a phrase that springs to mind in the decision to purchase crack.

Why? Because crackheads are addicted to crack. Duh. The crackhead can't walk away like a car shopper or make a substitution. He or she needs crack. Not weed, not booze. Crack. So until crack gets so expensive that it is literally unaffordable (i.e., $10,000 per gram) the crackhead's demand is going to show remarkably little sensitivity to price. Sure, he or she may buy a little less, sacrificing something in the margins. But overall that person is still going to be buying crack, whether it's expensive or cheap.

Ending extended metaphor…..now.

The media and public have been harping on the same story for the last two years – what is the "breaking point" with gasoline prices? At what point will Americans stop using so much gas or snap and demand some sort of political/military/whatever resolution to the problem? First it was $3/gallon. My, when those prices hit $3.00 Americans would seriously change their driving habits. Then it was $4.00. We tolerated $3.00 but there's no way we'll maintain our lifestyles and relative calm at $4.00. Now it's $6.00. If it hits $6.00, everything's gonna change.

No, it isn't. We are completely, hopelessly addicted to oil. People who already use very little (preferring public transit, walking, or biking) will cut even deeper while most other consumers will dabble a little bit in the margins (trying to drive a little less and usually not succeeding). If you live in the suburbs, 30 traffic-clogged and train-free miles from your job, you're driving. Period. $6/gallon gas isn't going to get you to quit your job or sell your house. You're going to pay $6/gallon and compensate with sacrifices in other areas of your budget (or, in classic American style, by simply charging what you can't afford).

Everything about our way of life, including every step of the food chain, is hopelessly dependent on oil. There simply is no "magic price" that will make everything different and usher in sweeping changes. Crackheads pay whatever price is quoted for crack because they're physically addicted to it and have no alternative except quitting, which is as inconceivable as it is difficult. Americans, for all the bitching and resolutions to drive less and can't-someone-do-something-about-this water cooler talk, are ultimately going to pay whatever price is demanded for gasoline unless it simply becomes unaffordable under any reasonable circumstances (i.e., $25/gallon). So the next time you hear someone hypothesizing or making vows regarding the price of gas, remind them that our national addiction is going to preclude any response more substantive than bitching.

**This is logically assuming that it costs less than $0.16 billion, the difference in revenue, to build 5,000 extra trucks. Since most manufacturing costs are fixed (overhead, salaries/benefits, equipment) I feel safe assuming that it would not cost $160 million to build an additional 5,000 trucks.

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CULT OF THE AMATEUR

Posted in Rants on June 17th, 2008 by Ed

Andrew Keen's popular (although sometimes savagely reviewed) Cult of the Amateur is uniformly terrible. Much of his moralizing and snobbery – not the Fox News epithet kind, but real, honest-to-god snobbery – would be funny if he were not so deadly serious. For the unfamiliar, the book is a jeremiad about how the internet is killing Our Culture because it allows anyone with a computer to fill the cultural arena with pure bullshit. This is undoubtedly and obviously true. What Keen utterly fails to do, however, is defend the superiority of the "establishment" in comparison to the rank amateurism of the internet. Is Wikipedia inherently inferior to Encyclopedia Brittanica? Is Pitchfork inferior to the chatter at your local record store (pretend for a moment that most towns even still have them, aside from big box chains)? Are bloggers really providing less news than Fox and CNN? Is ginandtacos inherently inferior to Serious, Professional, Credentialed editorials in Offical News Sources? Hell, there are hundreds of people on the crude, lowbrow internet who write better critical essays on a daily basis than David Brooks and Charles Krauthammer have written in their entire lives (to say nothing of vacuous, widely-circulated ass clowns like Laura Ingraham).

Keen's irrational obsession with comparing the proliferation of DIY crap via the internet to Marxism is his Achille's Heel. The internet's power to give anyone a soapbox does not imply equality. Shit is still shit. There simply is more of it. The actual problem, which Keen misses entirely, is not that the internet is Marxism incarnate but that the internet is like the nightmare libertarian version of market forces untamed. Since nearly anyone can use it to spread whatever information he or she desires and content is completely unregulated, the internet is simply more able to respond to demand than the traditional media. A blog about celebrity gossip or fashion becomes popular because people want to read about celebrity gossip and fashion. Said blog becomes important because it becomes popular (note how often TMZ, for instance, is now cited as a source by establishment newspaper and news networks). Popularity drives demand which drives legitimacy, since the market is our sole arbiter of right and wrong.

The complete absence of overhead – starting one's own record label, magazine, or TV network versus starting a blog for $7/month – is the only difference from regular media. The internet simply allows more people to participate in the race to the cultural bottom. The market rewards stupidity and consistently punishes that which Keen would consider "good" or quality. Frontline gets worse ratings than Survivor. Wikipedia gets more readers than Brittanica. Pro Wrestling draws millions more viewers than the Olympics or World Series. The reason for all three of these examples is that the more popular item is judged to be more fun and requires less thought. The market will reward base entertainment over quality every single time.

The problem with the internet is not its cult of amateurish nonsense but the fact that, as the most perfect example of an unregulated market for information with almost no barrier to entry, it encourages amateurish nonsense to proliferate. It is full of baseless conspiracy bullshit and "news" that is flat-out wrong because people seem to enjoy reading baseless conspiracy bullshit and news that is flat-out wrong. The internet, in other words, merely flanks the costs of entry into conventional media and more efficiently gives consumers what they want. Gossip. Pop culture. Porn. Angry white backlash. Shit. Mountains and mountains of shit. Establishment media give readers/viewers mountains of shit too. The internet just does it more efficiently, for which Keen apparently cannot forgive it.

Blogging teaches one about these market forces very quickly. Things that are well thought-out, serious, and even-handed rarely attract attention or interest. Spouting off half-cocked and full of bravado generates the comments, links, and hits. After a few years I have reached the point of being able to tell how much response a post will get before it's even written. Things I consider to be "good" and involving effort = neck-breaking yawns. Things I write in 20 minutes while I'm pissed off, inevitably riddled with ad hominems and arguments unsupported by fact = hits. The internet is not a cult of amateurism as much as it is a medium that allows every shmuck with a modem to experience Mencken's truism about opinion discourse: the most popular are inevitably those who preach what they know to be false to people they know to be idiots.

ALTERNATIVES

Posted in Rants on June 16th, 2008 by Ed

One of the more interesting (if also more depressing) externalities of teaching is how obvious generational divides become as time passes. Or, as Matthew McConaughey said, “I get older, they stay the same age.” I’m 29 years old, probably one of the last cohorts to be lumped into “Generation X” before our culture became so standardized that we stopped naming generations. For Gen-X’ers and all who have come after us, I often wonder (usually while teaching) if most of us even realize that there are alternatives. I mean that in the grandest sense – that there are alternatives to the market worship that defines not only our economy but our politics and social structure as well.

It’s unsurprising that skepticism and the ability to even conceive of (let alone advocate) alternatives to our economic system died in the 90s – the decade when Bill Clinton and Tony Blair jointly declared that the era of regulation and government was over, signifying the atrophy or death of whatever tatters of liberalism the Democrats or Labour maintained. No more populism, they promised; “We too will be friends of business,” protecting the elite from the annoyances of unions, regulation, or opposition of any kind. But the decision of the political left to lie prostrate at the feet of society’s rightful elite was merely a logical extension of what was happening to America as a whole.

It was the decade of CEO worship, the decade when the stock market was going to make everyone inconceivably rich, the decade during which the equation of Deregulation + Privatization + Globalization = Eternal Happiness and Wealth For All was so often repeated and just so goddamn obviously true that no alternative could be taken seriously. Remember? It was the decade when History Ended and the free market Won. It was a decade when “class” ceased to exist because everyone could buy mutual funds and CEO’s wore jeans and long hair while tossing Frisbees around their Modernist “campuses.” Hacky rags like Wired and Fast Company sprouted to serve no apparent purpose aside from mindless, obsequious hand-jobbing for our new betters and the free-market libertarianism-as-freedom nonsense that dominated to exclusion. Suck-ups like Thomas Friedman actually said things in 1998 like “I don’t think there will be an alternative ideology this time around. There are none.” Read that again.

After a 10 year barrage of that nonsense followed by the Only Ideology’s spectacular 8-year failure, it is not remotely puzzling that so many people, especially younger ( < 40) ones, look at this colossal clusterfuck of an economy and society and can’t muster the brainpower to come up with any solution other than to do what we’ve been doing, only harder. If free market libertarianism is the Only Way, should we be surprised that failures can only be understood as our failure to be true enough to Its Rules? Our economy is a trainwreck; hmm, better cut taxes some more. I mean, that’s what we do when the economy suffers, right? What other alternatives are there? Having not been mentioned for 30-some years, it is unsurprising that we can’t remember any.

What I hear from the current presidential candidates are largely differences on “social” issues and Iraq. Yes, you can fill the comments with what you perceive to be the mountain-sized differences between Obama and McCain on economic policy. Unfortunately, I think their differences there can only seem large in the context of how thoroughly the idea of a real liberal economic worldview has been wiped clean from the political landscape. Obama, following Kerry’s footsteps, meekly asserting that he’ll raise taxes on the comically wealthy (of course, if elected even that pittance would fail to materialize from Congress) is our pitiful excuse for “choice” in the New Economy.

Market-worship is all about freedom and choice and Ron Paul's wet dreams – yet no one sees the irony in the fact that the market offers us infinite freedom except the freedom to choose not to have the market as the sole arbiter of every aspect of our society and politics. We have choice, says the market – your mall has five shoe stores. What we seem unfree to choose are solutions to our problems that involve government or the meddling, anachronistic common good. We are free to choose as long as we choose the market. Henry Ford, the ultimate caricature of old, stodgy, industrial pre-90s capitalism, famously represented the limitations of that era by saying the customer could have any color he wanted so long as it was black. Today we congratulate ourselves for having modified that equation. We have an infinite array of “choices” – colors, in Ford’s analogy – but within the confines of the universal truth that we have no alternative to buying a proverbial Ford.

WEEKEND BONUS: TWO THINGS

Posted in Uncategorized on June 15th, 2008 by Ed

1. If you ever wonder what I'm talking about when I bring up depressing, de-industrialized midwestern America, visit Rockford. It looks like it was hit by chemical weapons or the plague; all of the buildings are standing but nary a soul is to be found. The only businesses operating downtown are bars (about 30, of course), churches, and payday loan sharks. Rockford appears to be in a pitched battle with Fresno and Olathe, KS for the most depressing places I've ever seen.

2. You should pay rapt attention to this blog, Apparatchicks. You should do so because it is good, which is the best of all reasons to do anything.

NPF: LYING

Posted in No Politics Friday on June 13th, 2008 by Ed

I lied, no update for today. But please stick around, because I'll be back to regular daily updates all next week.

THE PRIEST, THE BOOK, OR THE CONGREGATION

Posted in Rants on June 12th, 2008 by Ed

Where does the power lie in organized religion? In the context of the Abrahamic faiths most familiar to westerners (Christo-juda-islamism) there are three basic components to what is broadly called "the church" or the religion as a whole. It boils down to the priest, the book, and the congregation.** That is, there are rules, an organizational hierarchy, and the masses. As scripture is considered divinely inspired or authored, its rules are not subject to debate. Interpretation is possible only in a limited number of vague or unclear areas. When this is the case, religions do not turn the matter into a plebiscite. The ordained hierarchy makes a decision, albeit one that lacks the incontrovertible nature of scripture itself, which is passed down to the congregation.

Our government doesn't work much differently, and I mean our in the American context. American government and law are rooted in the Constitution to an extent matched by no other western democracy. The Constitution functions just as scriptures do in religion. It is the foundation upon which all other laws are built and it establishes all of the basic rights and principles of our system. Like scripture, some parts of it are extremely clear while others require interpretation.

What the Vatican does for Catholicism, the courts do for the Constitution. We vest in jurists the power to interpret when necessary and make judgments by which the rest of us agree to live. We conspicuously avoid delegating the interpretation of the basic tenets of the faith to the congregation; we did not, for instance, resolve the 4th Amendment question of the admissability of illegally obtained evidence via referendum. That, as the Belgians say, would be goddamn retarded.

Amidst all of the far-right trouser soiling in the wake of the California Supreme Court's recent gay marriage ruling, a good sampling of which can be found here, one utterly illogical theme recurs. The Scanners-esque reaction from the religious right includes a lot of statements along the lines of:

"It's outrageous that the court has overturned not only the historic definition of marriage, but the clear will of the people of California, as expressed in Proposition 22." said FRC President Tony Perkins. "The California Supreme Court assumed the powers of a legislative body by imposing same-sex marriage. However, in 2000, the people of California spoke loudly and clearly on the value of marriage when 61 percent of voters approved Proposition 22."

Gay marriage is controversial and everybody has an opinion about it. Here's the rub – being a question of fundamental rights and therefore of the Constitution, our opinions are utterly irrelevant. Tony Perkins and a lot of other people seem to think that this issue should be resolved by the congregation; gay marriage is unpopular, therefore it should not be legal. This says nothing about whether or not the Constitution protects it or whether a reasonable judge might rule so. It merely says that lots of people voted against it on a ballot proposition, therefore it should not be. Do these same fundamentalists run their churches this way, with sin and morality decided by opinion poll?

What I'm getting at here is simple yet the right seem incapable of understanding it: we do not distribute fundamental rights based on a show of hands in this country. That 20 or 60 or 80 or 100 percent of the population opposes gay marriage is irrelevant to whether or not the right is protected by the Constitution. It is not relevant to the law that the public supports or opposes any particular interpretation of our basic rights. If an opinion poll or ballot proposition shows that 97% of Americans don't support the right against self-incrimination, great. Big fuckin' deal. It's enumerated in the Constitution. It exists irrespective of its popularity. Our basic rights exist to protect that which may be politically unpopular.

The democratic process allows far more room for change than my analogy to religion. California voters can put an amendment directly on the ballot or vote for legislators who will amend the law to their liking. The judges' job is to interpret the law as written. Nowhere in our civil religion does it say that the rules should be interpreted through the filter of popular demand, and in fact the Constitution is replete with features that make clear how stridently its authors sought to avoid that at all costs.

**h/t "Mic Check" by Rage Against the Machine for the title.

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APPEARANCES

Posted in Uncategorized on June 11th, 2008 by Ed

For the next 10 days I will be van-touring with Tremendous Fucking - possibly coming to a city near you. Regardless of whether or not our music appeals to you, feel free to come out and say hello if we happen to be where you live. Don't worry, this site will continue to be updated daily.

Thursday, 6/12 – Chicago – Cobra Lounge (10 PM, free)
Friday, 6/13 – Manitowoc, WI – The Attic (9 PM, w/ IfIHadaHiFi)
Saturday, 6/14 – Rockford, IL – CJ's Lounge (10 PM)
Tuesday, 6/17 – St. Paul, MN – Big V's (9 PM)
Wednesday, 6/18 – Iowa City, IA (TBD)
Thursday, 6/19 – St. Louis – FUBAR (w/ the Murder Junkies)
Friday, 6/20 – Champaign, IL (still trying to figure this one out)
Saturday, 6/21 – Indianapolis – Melody Inn (9 PM w/ IfIHadaHiFi)

TELEPROMPTING

Posted in Uncategorized on June 11th, 2008 by Ed

One of the great disillusioning moments of my young Catholic upbringing happened my senior year in high school. While performing some task (I can't remember the specifics, but it didn't involve fingering) in my high school's rectory (giggle) I discovered a binder I can only describe as the Cliff's Notes of Catholic mass homilies. For the non-Papists, homilies are sermons of 5-10 minutes that follow the reading of the Gospel. The presiding priest uses this time to relate the message of the Gospel to current events or contemporary life.

As a young person I always thought it was pretty cool that priests were such good public speakers and could so readily connect the Gospels to current events. Needless to say, it was a little soul-crushing to learn that there is a book of canned sermons the clergy presumably rely on heavily. Of course it makes sense that such a thing exists (although today I assume this has migrated online). Only a child could to have thought that the world's people of the cloth were coming up with this stuff extemporaneously every day. Still, it bothered me quite a bit to realize the extent to which my priests were phoning it in. Essentially the church could have hired a temp, slapped a cassock on him, and had him read off cue cards.

It should come as no suprise that this practice not only continues but has become the province of interest groups. While ideally these "cheat sheets" would be written by jolly, rotund, white-bearded monks in the Carpathians who seek nothing more than to spread the message of Jesus, in practice they are one step away from being written by Karl Rove. Much like interest groups write complete bills because they know Congressmen are lazy and more likely to play along if the work is done for them, Christian extremists assume that clergy will be unable to resist the temptation of a pret-a-porter sermon. They're busy people, right?

Anus-obsessed religious right activists at the Family Research Council and Alliance Defense Fund are getting serious about pre-packaging politically appropriate sermons for their churches. According to the FRC's Kenyn Cureton, they are working with the ADF on "a series of sermons this fall for pastors to preach, so that they educate their people on the issues." OK, great. Sermons are about educating people on "issues" and tenets of religious faith. That's not quite what he means, though:

"We're gonna be talking about the value of life, the value of family and the value of freedom, basically talking about abortion and stem-cell research," he continued, "and then also about the gay agenda and then finally about our Christian heritage and how it's being stripped from every corner of society. And then finally we're gonna be doing a candidate comparison message that is going to ask pastors to cross the line."

First of all, I love the construction of the first part – mentioning larger issues like life, family, and freedom followed by "basically talking about abortion and stem-cell research." So it's not really about freedom, family, or life. It's about abortion. And stem-cell research. More importantly, the "candidate comparison message" appears to be little more than an inducement for clergy to break the law.

It's no secret that much of what non-profit, tax-exempt interest groups do politicially (i.e., their hilariously one-sided, myopic, and biased "voter guides") are little more than thinly-veiled electioneering that happens to tiptoe around FEC and IRS guidelines to the satisfaction of a few attorneys. Clergy can legally talk about "the issues" until they are blue in the face and they have plenty of leeway to drop all kinds of not-so-subtle hints about what parishoners should do on Election Day. What the FRC fails to realize is that clergy also have the right to tell parishoners to vote for a specific candidate – so long as they're willing to kiss their tax exempt status goodbye.

While some groups are going out of the way to remind churches and clergy the risks they run by taking the FRC's negligent advice, some of the less intellectually gifted will no doubt take the bait. It's imperative that we allow houses of worship to act as partisan political organizations whenever they feel like that is worth relinquishing their tax exemptions. If they believe this is an unjust law, follow the example of Emerson (or the Book of Daniel) and break it – but don't forget the part in which Daniel and Emerson emphasize accepting the practical consequences of that decision. Above all, don't lightly disregard the lessons to be learned from pastors who "crossed the line" in 2004.

HARROWING DESCENT INTO SELF-PARODY

Posted in Rants on June 10th, 2008 by Ed

The final stage in any fad-driven marketing campaign is self-parody. In other words, first you sell bell bottoms to models and fashion tastemakers. Then you sell them to the masses. Then, when everyone tires of the trend and your product has become a punchline, you capitalize on its lameness. Some people like irony and will pay good money for the outdated, the corny, and the mass-consumed. You wait until everyone's laughing at you, encourage them to laugh harder, and make one last killing.

Fox News, with stagnant or declining audiences for the majority of its programming, has reached self-parody. At least that's what I think it is. It has to be. What they are doing is so many light-years away from anything remotely resembling news coverage that I must believe that they are high-minded conceptual artists doing their finest take on Dada and surrealism. Nothing could be this stupid unless it is willfully, purposefully, and intentionally stupid, a calculated effort to fill a market niche by creating the Sistene Chapel of stupidity.

Parodies of Fox are now indistinguishable from the network itself. To wit: could any combination of the world's greatest comedy writers come up with something that mocks the network more than a clip of an anchor asking if Obama's fist-bumping gesture is "a terrorist fist jab?"


Shake & Bake & Terrorism

You could not make that up. It's so stupid that it would be inconceivable ("Oh, they're not that bad!") if it hadn't actually happened.

No organization with even the remotest pretentions of being taken seriously would use baseless speculation about a common greeting (try meeting a black person once in your life, Fox) being a terrorist fist jab in the course of introducing a segment featuring a "body language analyst." Let me check if "body language analyst" is a real job.

It isn't.

Watching Fox News is like watching June of 2002 encased in amber, frozen forever in time. From the constant reminder of the current color-coded Homeland Security Advisory threat level ("Yellow – Elevated") to the stories about the booming economy to the endless editorializing about the granite-like solidity of the pre-Iraq War intelligence, everything about the network suggests that it experienced its peak six years ago and just won't let go of those halcyon days. Removed from the context of America in the immediate aftermath of 9/11, the network simply serves no purpose because it was never popular as "news." It was popular because its product – cheerleading, jingoism, and xenophobia to the sound of beating war drums – was in high demand for a moment that has come and gone. Now that its 15 minutes as the hot fad are over, there's nothing left for Fox to do except become the most outlandish possible caricature of itself in the hopes of making a last buck off of our mocking laughter.

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