Randoms From The Past Week

Herewith a few things this week which made me scratch my head or just sigh.

Car Dealerships

Tesla has famously attempted to end run the traditional automobile sales channel by selling its cars directly to the public via the Internet and local showrooms as opposed to utilizing car dealerships. Given Tesla’s current pop culture status it’s received a lot of support as it fights against state laws mandating sales through dealers while the dealer business model has been held up as an example of outdated regulation and business practice. Frankly, my libertarian leanings pushed me towards Tesla’s corner though I’m not sure I really want to buy my next car from someone I can’t at fairly easily when things go wrong.

In an article in Popular Mechanics  Diarmuid O’Connell, Tesla’s vice president of business and corporate development, lays out the reasons that a franchise dealer network is not in Tesla’s best interests and notes as well that system’s propensity to increase the cost to the consumer. Then he destroys his credibility.

However, despite Tesla’s current combative nature toward the established dealership system—and in what might be a disappointment to those hoping Tesla will disrupt the current car-buying experience—O’Connell tells PopMech that the EV-maker is not ruling out the possibility of establishing its own dealer network once the company grows large enough. “Elon and I have both said that there is a time when we will also want to sell our cars through franchise dealers,” O’Connell says. “When we’re selling a high-volume vehicle, hundreds of thousands a year, it’s going to make a lot more sense to place 100 cars at once with a franchise dealer than to sell them one by one as we do right now.”

So are franchised automobile dealers an anachronism worthy of creative destruction at the hands of Tesla or are they an efficient distribution channel. I don’t know the answer, but I don’t think we can look to Tesla for objective insight.


It seems like the new budget balancing tool for strapped cities is to drop their health care responsibilities on ObamaCare. Bloomberg highlights the trend of places like Detroit and Chicago eliminating swaths of their health care plans and directing their employees to the exchanges. It’s a trend that is likely to spread.

Essentially the cities are transferring their liabilities to their employees and the federal government. The employee may have to pay more out of pocket for his insurance and many will be eligible for subsidies. So, here’s the question. Why does a private company with 50 or more employees have to pay a fine of $2000 per employee if they don’t offer qualifying health insurance plans while a public company (government entity) can eliminate their coverage at no cost? We’re talking about lots of money here for a program whose finances are looking shakier as the days roll on. Federalizing the unfunded liabilities of municipalities might be the only way around a disastrous round of defaults but a well-considered plan might be preferable to this sort of backdoor maneuver.

PC Speech 

Apropos the financial plight of the cities mentioned above, perhaps a pruning of the bureaucracy might provide for increased fiscal soundness. They clearly don’t have either enough to do or their mandates are excessively broad. From Seattle:

Government workers in the city of Seattle have been advised that the terms “citizen” and “brown bag” are potentially offensive and may no longer be used in official documents and discussions.

Let’s not dump only on Seattle. The article points out this silliness knows no geographic bounds.

The New York Post reported in March 2012 that the city’s Department of Education avoids references to words like “dinosaurs,” “birthdays,” “Halloween” and dozens of other topics on city-issued tests because they could evoke “unpleasant emotions” among the students.

Dinosaurs, for example, conjures the topic of evolution, which could rile fundamentalists and birthdays are not celebrated by Jehovah’s Witnesses. Halloween, meanwhile, suggests an affiliation to Paganism.

Would language even have been invented if our ancestors had invested members of the tribe with the authority to rule on the probity of words?

Bogus Blog Posts

This week the rage was a study by a University of Kansas researcher which purported to show that you could double the wages of every single McDonald’s employee -from CEO to burger flipper – and only have to increase the price of a Big Mac by 68 cents. The Huff Po got it going and it spread like wildfire. Not just blogs but into the MSM as well. Unfortunately, the study was actually something produced by a KU undergrad and didn’t stand up to any rigorous or even semi-rigorous examination. So, anyone can make a mistake, right, particularly when you’re trying to crank out content as fast as possible to keep up page views. But when you do step in it this bad a correction is really not that much to ask for. Sadly, as the Columbia Journalism Review details not everyone bothered to advise their readers that they had written nonsense (the review also has one of the analyses which debunked the whole myth, here).

Forbes, which was a key vector in the story’s spread, has updated its post with a note at the top that says, “Questions have been raised about the study at the center of this post, and the post has been changed accordingly.” MSN also put a big correction at the top ofits story, as did David Atkins at Digby’s Hullabaloo.

ABC News had even less excuse to write about this “research” since by the time it published its story, it knew that it was some undergrad’s work. It did some actual reporting that introduces some skepticism and context, but the headline still says, “Price of Big Mac Could Rise by 68 Cents If Minimum Wage Doubles.”

Reading through the hits on this is an appalling tour of click-whoring aggregation at its worst. A site called Opposing View calls it “a new study conducted by a University of Kansas scholar” and rewrites Think Progress and the Huffington Post, burying links to the sources at the bottom. Fox News Radio ran it through the talk-radio wringer, unchecked.

The Houston Chronicle aggregated the HuffPost, didn’t namecheck HP till after the end of the post, and then aggregated the HuffPost’s retraction. The coup de grace, though, is that the Chron also reprinted an erroneous Business Insider aggregation. It’s uncorrected. Great work, Hearst! Business Insider itself put a three-paragraph correction atop its post. Henry Blodget also updated his post.

Gawker aggregated and its errors are uncorrected. Also uncorrected: The Washington PostThe Franchise HeraldKIRO radio in Seattle, NewserThe Week, The SpokaneSpokesman-ReviewPJ MediaTruthdig, the Albany Times-Union, LiveLeakThe Daily MealAMNewYork, Moyers & Company’s blog, HuffPostLive’s video, and ABC Action News in Tampa.

I guess this gives revived meaning to the “I read it on the Internet” fallacy.


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