CES’s seamy underbelly

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Lynne Kiesling

OK, I just effused a bit over a new product introduction at the Consumer Electronics Show. Time to balance my enthusiasm with a glimpse of CES’s seamy underbelly. You’re surprised that the largest consumer electronics trade show in the world, held annually in Las Vegas (of all places), has a seamy underbelly? Want to buy my bridge?

It probably has several seamy underbellies, but the one that caught my eye this afternoon is misogyny, as recounted with some wonderful and entertaining writing by Liz Gumbinner (AKA CoolMomTech). Trade shows are infamous for such things, right? Booth babes, speaking panels where all of the speakers are men, and so on. Liz’s post recounts a few of the instances of misogyny she encountered at CES2013 this week, from almost-innocuous “oh, you must not have been able to get the phone cover off because you didn’t want to break your nails” to some truly appalling encounters. Like this:

Oh, here’s an easy one to start with: If a tech publisher tells you she has four children, the correct response is pretty much anything other than, “Wow. You must have a lot of sex.”

I mention her post here for two reasons. First, big shout out for great writing; I’m a scan-reader, and I was hanging on her every word. Almost never happens for me. Second, she highlights some important economic implications of such behavior:

Tech marketers and conference track programmers, I have some really simple advice for you: It’s time to move on from 1954. If not for feminism or for social good, you need to do it for your own business.

According to research from the very organization putting on the show, women spend more on tech than men. They’re involved in 89% of the consumer electronic purchase decisions. They own smartphones and digital cameras and laptops and tablets. They buy apps like crazy. And you know? They’re writing about technology too.

I can guarantee that if Lindsey Turrentine or Molly Wood or Xeni Jardin or Jolie O’Dell decide your product is a great one, you will sell a crapload of them. Enough even to pay for lap dances for the whole sales team.

Exactly.

Ford’s MyEnergi Lifestyle

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Lynne Kiesling

You may know that the annual Consumer Electronics Show has been going on this week in Las Vegas (CES2013). CES is the venue for displaying the latest, greatest, wonderful electronic gadgets that will enrich your life, improve your productivity, reduce your stress, and make your breath minty fresh.

And, increasingly, ways to save energy and reduce energy waste. The most ambitious proposition to come out of CES2013 is Ford’s MyEnergi Lifestyle, as described in a Wired magazine article from the show:

Here at CES 2013, the automaker announced MyEnergi Lifestyle, a sweeping collaboration with appliance giant Whirlpool, smart-meter supplier Infineon, Internet-connected thermostat company Nest Labs and, for a green-energy slant, solar-tech provider SunPower. The goal is to help people understand how the “time-flexible” EV charging model can more cheaply power home appliances, and how combining an EV, connected appliances and the data they generate can help them better manage their energy consumption and avoid paying for power at high rates. …

Appliances are getting smarter, too. Some of the most power-hungry appliances, such as a water heater and the ice maker in your freezer, can now schedule their most energy-intensive activities at night. Nest’s Internet-connected thermostat can help homeowners save energy while their [sic] away. While some of the appliances and devices within MyEnergi Lifestyle launch early this year, others are available now, Tinskey said.

One reason why I think this initiative is promising is its involvement of Whirlpool and Nest, two very different companies that are both focused on ways to combine digital technology and elegant design to make energy efficiency in the home appealing, attractive, and easy to implement.

The value proposition is largely a cloud-based data one — gather data on the electricity use in the home in real time, program in some consumer-focused triggers, such as price thresholds, and manage the electricity use in the home with the objective of minimizing cost and emissions. Gee, I think I’ve heard that one here before …

American biofuel policy increases hardship on the Guatemalan poor, and you help every time you buy gasoline

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Michael Giberson

Next time you see one of those “This product may contain up to 10 percent ethanol” stickers on a gas pump, ask yourself why federal government biofuel policies are forcing you to help increase hunger and hardship among poor Guatemalans.

Sure, politicians in their comfortable offices in Washington, DC, didn’t intend to help starve the world’s poor. But biofuel policy is requiring conversion of food to fuel and contributing to higher corn prices, so having that effect.

Looking at you, Iowa Congressional delegation.

Price gouging on guns?

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Michael Giberson

Newly showing up in the “price gouging” news searches: claims of price gouging on guns. From a news report on the Atlanta Gun Show:

“This gun show hasn’t seen this amount of people come through the door in 10 years. It’s very busy,” said [vendor Monique] Migneault.

And the number of people isn’t the only thing that increased.

“Stuff’s way up on prices. Any kind of assault rifle, they’re up there. It’s bad,” said [shopper Brandon] Jessup.

[Another shopper, Michael] Roberts noticed the same thing.

“I bought an AK-47 last year for $600 and this year it’s close to $1,200. The same exact gun,” said Roberts.

Jessup called it price gouging, but vendors said it’s not.

“We can’t get these guns for the same price we did six months ago, or even last week for that matter. They’ve actually gone up since last Wednesday, so we have to pass that on to customers, so as a business we can stay afloat and maintain our status quo,” said Migneault.

And from another gun show in North Carolina:

Organizer Joel Koehler, [said] “People keep coming and coming and coming” …

He added the only cancellations he had were vendors who were sold out and didn’t have inventory. …

Gun dealer Dean Barr said his business is booming.

“We sold in one month what we normally sell in a year. December was a record month in gun sales all time,” said Barr.

Barr said even thought prices have doubled for the most popular firearms, he is protecting his livelihood, not capitalizing on tragedy.

“People look at dealers or distributors and think they are price gouging, remember this happened before the Christmas shutdown. Nobody has been making guns for two or three weeks,” added Barr.

Price gouging also mentioned in news stories about gun shows in Oklahoma City and Forth Worth, and in gun owners online forums, and industry sites. Prices are up at Michigan gun shows too.

In my Regulation magazine article on price gouging I said price gouging claims require three factors: a price judged unfairly high, an emergency or difficult situation, and a product or service useful in responding to the emergency. According to these reports, prices for guns and high-capacity magazines are reportedly double that of a year ago. The emergency is a bit more abstract, but arises from the concern that changes in law may ban certain popular types of guns and related equipment. The easiest way to beat the possible new restrictions is to stock up now, making guns and magazines goods that are useful in responding to the emergency.

Now, I wonder if any of these sharp price increases happened during declared states of emergency in states with anti-price gouging laws, or in states with anti-price gouging laws not requiring a declaration of emergency?

What is regulatory capture?

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Lynne Kiesling

Regulatory capture is one of the defining phenomena in the political economy of regulation. What is regulatory capture, exactly? In a Tech Liberation post from 2010, Adam Thierer offers this definition:

“Regulatory capture” occurs when special interests co-opt policymakers or political bodies — regulatory agencies, in particular — to further their own ends.  Capture theory is closely related to the “rent-seeking” and “political failure” theories developed by the public choice school of economics.  Another term for regulatory capture is “client politics,” which according to James Q. Wilson, “occurs when most or all of the benefits of a program go to some single, reasonably small interest (and industry, profession, or locality) but most or all of the costs will be borne by a large number of people (for example, all taxpayers).”  (James Q. Wilson, Bureaucracy, 1989, at 76).

This short video from Susan Dudley at George Washington University provides a concise introduction to the concept:

As she points out, one of the consistent outcomes arising from regulatory capture is that the regulated industry can use regulation in ways to increase its benefits at the expense of consumers.

In the post quoted above, Adam does a great service by generating a compendium of quotes from economists and other analysts about regulatory capture and he’s added to this list since the original post. His chronological list gives you a good sense of how pervasive the phenomenon is of politically-connected interests to shape regulation to their own advantage.

Regulatory capture: putting the “crony” in crony capitalism for as long as regulations and politics have existed.

New areas for innovation push back against “the great stagnation”

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Lynne Kiesling

Happy New Year! Here’s a little dose of technology optimism to start your year off: 2012 was a good, solid year for innovation, and there’s room and opportunity for even more. This TechCrunch article describes some burgeoning innovation opportunities in health care, education, transportation, and entertainment.

Here’s one thing to bear in mind if you despair about innovation and economic growth, along the lines of Tyler Cowen’s “great stagnation” or Robert Gordon’s argument that innovation is slowing inexorably:

There was no “next big thing” to speak of, meaning there was no new big company to take attention away from Apple, Google, Facebook and Microsoft. That’s ok, though, because there were plenty of companies that looked at what we do on a daily basis, and found new and cool ways to make it more fun or less time consuming. That’s innovation, too.

That’s a crucial point. Innovation is more than just the massively disruptive, Schumpeterian discrete change that breaks us out of our existing patterns. The microinventions, the small tweaks, the ways to make the mundane less mundane or at least less costly, all add up, and over time and in aggregate they can have a substantial impact on how we live our lives, on productivity, and on economic growth. It’s just that they sneak up on you rather than bashing you over the head.