dougweltman's comments

or that! the policy for decades. I'm continuing with the thread's premise that USPS needs to break even at minimum on its activities.

Solution is either to discriminate against individual shippers (can't imagine how that might be abused!), or to charge based on destination / cost of route.

The answer is just so elusive!

These points, where true, have no bearing on the issue being raised in the thread: immediate-term measures to cripple the USPS as a critical piece of election infrastructure.

Your points speak instead to a longer-term question of whether the constitution should be amended to privatize the USPS, or to change its mandate.

These are distinct questions, the latter we've struggled with for decades and does not explain recent measures.

UK asks automakers to join efforts to scale up ventilator production: https://uk.reuters.com/article/uk-health-coronavirus-britain...

On 2 & 4, we seem to disagree on the central claim that new airlines can be spun up quickly in time for their liquidation not to jeopardize the travel sector in the future once this outbreak abates.

This requires two conditions, neither of which hold: a) properly functioning capital markets to launch these assets and build the operations around them (not the case -- asset prices are falling across the board and there's tons of forced selling), and b) the ability to spin up an airline quickly from a cold start.

And if we apply the thinking you've offered around (1), it might be just a tad more to the public benefit to have the government step in and buy on the cheap a majority of the business (massively diluting existing shareholders), keep the engine warm, and not have to deal with a cold start in 6, 9, 12 months. Then, just as with the banks, they'll unload the stock as the price recovers and the crisis has passed. Those gains go straight back to the treasury, as they did following the recaps in 2010.

What would less reckless behavior look like? How much money should the airlines hold on their balance sheets in order to cover catastrophic losses due to a pandemic (derided as "hoarding money" in some circles). Many businesses are a few bad weeks away from bankruptcy, and the airline industry, while indispensable, is famously brutal.

1) Where will the money come from to buy the aircraft? Are you saying this with any sense of how long it will take to start a new airline like AA or Delta or whatever? Agency costs under a liquidation are absolutely massive.

2) Nobody is suggesting that protecting shareholders be a policy consideration, and that was true in '08 as well when the banks effectively went bankrupt (well, 90% of the way at least). The shareholders got wiped out when banks had to hand over 90% of their shares to the government in return for equity. When before you might have owned 10%, you then own 1%. That's the point of being a shareholder: you're last in line and take on that risk.

3. Instead, the concern is over the broader economic disruption of airlines suddenly no longer operating when other businesses rely on travellers: hotels, restaurants, stores, etc.

4. I get your point that it might be better to wipe the slate clean: iirc, some airlines are running software that's 40+ years old. Under normal circumstances, if that's a real problem, those airlines will have a disadvantage against newcomers, of which there are many. The difference here is when these businesses are failing not to an operational shortcoming, but something much larger.

You're talking about Chapter 11 liquidation as if it's nothing. There are massive agency costs there and assets stop operating until they can be sold. Chapter 9 is less disruptive (owners get wiped out, creditors own the business and the business finds new creditors to put in some money), and if there's a risk of wide-scale economic disruption, better still is something a little short of Ch. 9: a "bailout" where the government basically wipes out most of the equity and can put in some capital in return.

When they get bailed out, what do you think happens to the shares they hold?

Company is worth $100, has 100 shares. You own 1 share, worth $1.

Company takes $100 from Gov't, not a handout but rather in exchange for stock. Now it's worth $200, there are 200 shares, 100 owned by the government, 99 by other shareholders and 1 by you.

In this situation, you're back where you started.

FCF is supposed to go to shareholders: it's what's left over after spending money running and growing the business. And this problem (and related solutions) will probably apply not just to airlines but also restaurants, retailers, etc.

In normal circumstances, chewz is right and they should either call up more capital from existing shareholders or go under. But these are not normal circumstances. 1) Everyone is capital constrained, and 2) airlines collectively are extremely important to the economy. This isn't a handful of one-off bankruptcies of a few laggards.

Investors are capital constrained and would need to sell off their other holdings at the very moment everybody else is trying to unload those same assets at depressed prices, risking a broader liquidity crunch that goes well beyond airlines, as other sectors are also in trouble.

So the next best solution is for governments to lend them cheap money to hold them over, or to recap with equity (diluting current shareholders, possibly by a lot) and gradually sell off that equity after conditions return to normal. That's what happened to the banks: in a sense, they went 90% bankrupt with existing shareholders getting massively diluted, but the companies were able to continue without the massive disruptions caused by them all going belly-up.

When it's a normal economic cycle, even most recessions, the right approach is to let the laggards die and let the shareholders get wiped out. When there's lots of volatility, it's better to let the shareholders get 60%, 80%, 90% wiped out but keep the companies alive.

The proposition that ethical sourcing is the differentiator in an otherwise undifferentiated market seems incoherent.

If Barry is able to communicate to the market that his honey operation is more ethical, then he can communicate other things to the market as well, irrespective of whether they have any substance or basis in product. Lots of brands of water out there, many different shapes and sizes of bottles. Barry's honey is differentiated, just not in terms of product.

Mark can continue treating his bees badly, or he can try to discredit Barry, or he can try to differentiate his product in some way (planting health-giving plants whose pollen they can deposit into their honey).

The post imagines only one assumption being relaxed: that of ethical sourcing and the ability to communicate that fact. But in relaxing those assumptions, it is natural to relax others: the power of marketing being foremost. This is a complex system and you cannot change a single variable, or imagine that Mark simply takes Barry's moralistic grandstanding lying down.

What's nifty about Google's business rationale here is how tight and elegant it is.

The strategic case needs to clear a very low "knowability" threshold in order to justify their conclusion. Great example of contingency-based strategy.

Google didn't need to waste a ton of cycles on the counterfactuals (would RIM/Nokia/others be a threat? Would Apple really box us out if they win? etc.).

Android was simply a way to de-risk a potentially catastrophic scenario and give them some optionality.

This does not address a larger question: how much does a mile of road cost to keep? This is the installed base question.

Consider the amount of road that has been built out in the US relative to the populations that road is serving. Maintenance and expansion is paid out mainly from state and local taxes. That's an enormous civilizational overhead the US contends with, not to mention the economic cost of a large portion of household capital being tied up in rapidly depreciating assets: cars.

I'm looking at you, suburbia.

There's a gap, between admitting to downing a plane and "admitting liability" for it, in which the US places its downing of Flight 655.

But the parallel you would need to draw here is of the former: admitting to downing the plane.

Micromobility like scooters are a "first look" experience. The use case is getting from point A to point B: who is first in line in terms of showing the user options to do that?

The first app to be checked for transportation options to point B has a tremendously valuable asset -- it's not just the scooter, but the fact that it's first in line for the demand.

Useful in a world where ridesharing companies and others are duking it out over users. Less so after the dust has settled.

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It's not clear to me where we net out on nuclear.

On the one hand, you get much higher energy density. Earth has 2-3 billion people coming online with higher standards of living, greater needs for (desalinated) fresh water, etc. Do we have enough space for large-scale wind and solar to address this? And do we truly understand the local effects of wind farms, like less surface wind?

Against nuclear, when we see statistics like "nuclear has fewer deaths" I sense that there's a snow job taking place. How do you measure the public health effects of radiation? Do these really account for that?

When there's an accident, clean up costs are socialized but when things are going well, profits are private. Maybe that's worth it for carbon-free energy, but if the costs of a single accident annihilate the entire economic value of the industry, I scratch my head.

The silver bullet would be if there were truly economically viable and safe reactor designs. How scalable are the former, and how confident we can be of the latter?

Another likely explanation: Instagram now represents a very significant amount of the company's revenue and most of its future value. The new logo is designed to capture that, rather than reinforcing the association with its legacy business.

I agree with your general point, but it's worth mentioning 2 points on the Empire State Building example: 1) Depending on where you draw the line for starting the ESB, it was 16 months. 2) Look at building sites in NYC today (which can still build skyscrapers effectively), and compare them with pictures from the 30s. MUCH better health and safety, both for workers and nearby pedestrians. At least 5, and as many as 14, people died during construction.

Some of the reasons things take longer today are actually good!

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