16 February 2013

The Downside of Reliability

According to a JD Power study released this week, cars (all brands) that are reaching market in the United States are getting increasingly reliable (the number of major problems is declining). 

At first glance this is clearly good news for the consumer.  Reliability has been a major point of competitive struggle throughout the history of the auto industry, in fact it was a major factor that allowed the Japanese automakers to gain such a strong foothold in the US market in the 1970s and 80s. 

A clear downside of cars not breaking as often is the lack of consumer spending that will result as less people need to fix their vehicles.  In a similar contradiction to the realization problem, no individual wants their car to break, but it benefits the rest of society economically when any given individual is forced to spend money.

 In the current economic climate of uncertainty and low consumer confidence (ever since the collapse of 2008) discretionary spending cannot be counted on to lead recovery.  Something like a broken car on the other hand, it seems a good way to force people to spend, perhaps even to go further into debt....Debt spending got us into our current mess, can it not lead the way out? People need vehicles to get to their job interviews.....or drive to the unemployment office. The less people have their cars break, the less they will be forced to spend fixing them.  Maybe reliable cars will help to make consumers more confident to spend elsewhere?  But for now,  it seems recovery will not be lead by auto mechanics becoming wealthy. 

The entire tone of this post is meant to be somewhat sarcastic.  The bigger picture point here is that historically US consumer culture has been one of "consume and discard".  Just perhaps,  quality is starting to matter as much as novelty to Americans in the automotive industry?    

12 February 2013

The Product Diversity of Modern Capitalism

Generally speaking product diversity (greater choice) is supposed to increase our total utility.  This is economics 101 correct? Greater product diversity leads to increased marginal benefit when we make choices with our limited income? 

In this case is anyone better off?  Those who choose to purchase this product?  Those who don't?  Those who took the time to even think about it (sorry).  Pizza Hut has followed the lead of the Burger King cult classic "Flame" cologne by releasing a scent of their own onto the US market.  A difficult choice, do I want to smell like a burger or a pizza this valentines day?  It seems this abomination started in Canada, just like me. 


11 February 2013

Welcome Back Boys!

Spring Training STARTED today!   No more pretending to care about football for a few months.  Praise be to whomever you send your prayers in the direction of.  

The only small down note on this otherwise great day:

A public thank you, and fond farewell (regarding the show only of course) to the hosts, and in general  ESPN's "Baseball Today" podcast. It is now "off the air".  It has been replaced by a podcast version of "Baseball Tonight" with Buster Olney.  I will miss Eric, Mark and especially the "snark" of Keith Law. 

For better or worse these gentlemen have been a major part of my daily life for quite awhile.  The "nerdish" commentary and statistical analysis will be missed.  There is always Fan Graphs, but still.....Thank you for hours of mediocre entertainment, I will miss the show!

The 3D Printer Revisited

The link below which connects to a paper by Yannick Rumpala of le Université de Nice was shared by an anonymous commenter on my recent post about the potentially economically destabilizing forces of 3D printing technology. 

Although I have a couple of methodological issues with the author's approach (especially around cause and effect in the sphere of political processes), the paper provides a solid background of what is at stake with 3D printing, as well much more detail on the technology itself than I feel is pertinent to share in the "quick-hit" realm of the blogisphere.

My original post has drawn enough interest that I would imagine there are many people out there who would like to know more about this topic.  As such, I recommend reading this to anyone who wants to dig deeper into this issue.  I especially would like to draw attention to the arguments around growing industrial autonomy in the modern economy as I feel this is potentially the greatest area of impact?

Thank you to the original commenter for sharing!