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You Will Be Assimilated

Monday, 18 September 2017 12:58


This guy has an interesting dealership.  But notice it's his pre-owned store. Heaven forbid his franchise store should have any kind of personality. This guy gave up his Chevy franchise to keep his lodge-theme. Now, not all owners have good ideas. But within reason, isn't individuality preferable to sterility? Not according to the manufacturers. They use all the means at their disposal to cajole their dealers into making the stores as bland as the products they sell. This is one of the main reasons franchise dealers are fighting so hard against Tesla. They want to keep what little they still have.

Let's Keep This Private

Friday, 15 September 2017 12:35

It just keeps getting worse with Equifax. According to today's WSJ, the breach might have occurred via the firm's credit-monitoring services. This mess could lead to the CFPB's arbitration ban surviving a Congressional challenge. And one has to ask why this happened?

The news about the credit monitoring aspect supports a theory of mine, which is that the breach happened because companies like Equifax are trying to expand their services too much. We seem to receive releases on a regular basis about a new product or partnership.  I'm sure most of these are worthwhile initiatives. But one has to wonder how far a company can expand without what the military calls "mission creep" taking effect. Adn sometimes you may not look hard enough at an acquisition because of the need to grow.

The Equifax breach has consumer advocates renewing their calls for the nationalization of the credit bureaus. I'm against that idea. But what I do support is the opposite: make them all go private. Equifax was the first of three to go public in 1978. TransUnion didn't have its IPO until two years ago. There is no guarantee this would solve all the problems. After all, Equifax's privately held predecessor, Retail Credit Co., drew so much criticism for its selling of data that the government passed the Fair Credit Reporting Act. Still, it seems the finance industry has become more volatile as more of it goes public. And the shenanigans become more visible. 


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That's Reality

Wednesday, 13 September 2017 13:03

For people who cover stories on business, finance and economics, the folks at NPR’s Planet Money podcast project considerable naivety. This works well when they gush childlike enthusiasm about one man’s quest to restore Hyrdrox cookies to store shelves. But it work s against them and their listeners at other times.

An example is their recent description of President Obama’s DACA decision. The coverage includes a lot of favorable bias, but the most distortive is portraying it as a profile in courage. Julia Dewitt said the president “said screw it, this might cost me the election” and did it any way. That’s depiction is absurd. It was a calculated risk to spur action among voters. The gamble was that DACA would bring more people to the polls that support open immigration than people who oppose it. And in 2012, that gamble paid off.

This is an indictment of neither Pres. Obama nor DACA, but rather the way in which politics are covered in this country. There is often a moral aspect depicted rather than the more cynical but also likely more honest portrayal. Take the current debate on arbitration. In a letter to the editor in yesterday’s WSJ, the executive director of Public Justice says the arbitration ban is for “consumers who have been bilked again and again by big banks and predatory payday lenders.” And that’s the way many in the press cover the issue.

The reality is this is a struggle between two groups of businessmen – creditors and attorneys. The creditors want to protect themselves against losses due to class-action lawsuits and the attorneys want to increase their ability to make money through those same suits. That’s reality.

Labor Pains

Tuesday, 12 September 2017 12:37

Franchise dealers in the Chicago area have been involved in a dispute with their mechanics for several weeks now. It has gotten ugly, with no end in sight, although some stores have made a separate peace, as it were. In cities in which mechanics are unionized, they often strike. That's true of any organized labor. It's why Elon Musk fears the UAW so much. Yet, he also wants company-owned stores. What if the UAW organized the workers at these stores? Not just the mechanics, but all sorts of workers? In some countries. the salesmen are unionized. Could that happen here?