October 20, 2005

SECOND Most Misleading Headline of the Week

Filed under: Business Moves,Economy,MSM Biz/Other Ignorance — Tom @ 8:09 pm

Of course, nothing tops this week’s winner (commented on here), which is still up at ABC’s web site after four days.

The Headline:

— Credit cards quitting rate-bumping game

Credit card issuers are pulling back from the controversial practice of raising customers’ interest rates because of missteps with other creditors.

Why It’s Misleading:

— Reason 1: They Haven’t Quit Rate-Bumping; They’ve Increased It–

Under so-called universal default policies, issuers can raise an interest rate if a card holder pays a mortgage or utility bill late, their credit score drops or they inquire about a car loan. Nearly 45% of credit card issuers had universal-default policies earlier this year, up from 39% two years ago, says advocacy group Consumer Action.

— Reason 2: You May Have to Close Your Account to Avoid a Hike
(and they haven’t given up the ability to change their minds)–

Some card issuers will set a deadline for customers to refuse a policy change. Miss that, and you could be stuck with the higher rate.

Issuers also can change the card terms at any time. So, even if your bank doesn’t have a universal-default policy now, that doesn’t mean it won’t adopt it in the future.

There is at best limited and mostly anecdotal evidence that Universal Default (or “UD”) is on the decline. The best that can be said is that “some” card issuers are quitting “some” aspects of the rate-bumping game.

Kelo Update: As New London Turns (102005)

Filed under: Economy,Taxes & Government — Tom @ 5:25 pm

Thursday’s Drama Unfolds:
(link requires registration immediately, and a subscription within a few days)

Governor Jodi Rell has told the New London City Council to cancel its planned divorce from the New London Development Corporation (NLDC). Council has agreed to rescind the divorce:

Hartford – Bowing to pressure from state officials, the New London City Council will rescind its motions severing ties with the New London Development Corp.

In a meeting at the headquarters of the Department of Economic and Community Development, Mayor Jane L. Glover said the council would convene a special meeting tomorrow to formally repeal its vote of Monday night, when councilors unanimously voted to terminate the NLDC’s control over the Fort Trumbull project amid discord over the agency’s failure to keep the city apprised of its actions.

State officials, taken aback by the move, immediately asked the city to reconsider, and apparently offered new assurances that the state supports the city in its effort to force a change in the NLDC’s leadership.

The council will back off its earlier motion, city law director Thomas J. Londregan said, “with the expectation that the concerns and demands and regrets of the city will be addressed.”

Concern? Demands? Regrets? NEW LEADERSHIP? Oh my.

It turns out that Governor Rell’s messengers are expecting a personality transplant at NLDC as a condition of reconciliation:

State officials have consistently declined to directly address the city’s most pointed demand – that NLDC President Michael Joplin and chief operating officer David M. Goebel must step aside.

But on Thursday, they threw themselves firmly behind the city in its dispute with the agency.

“We’re not going to say what they need to do,” said James F. Abromaitis, the DECD commissioner. “I think it was obviously clear today that they need to change the way they do business, and I think a component of that probably can and should be a leadership change.”

Meanwhile, the Grand Overseer, whose allegedly handpicked and/or influenced executives at NLDC appear to be in jeopardy, stews on the sidelines:

The redevelopment project, part of a package of improvements conceived in conjunction with Pfizer Inc., which built a research complex on an adjoining parcel, has been paid for almost entirely with $73 million in state bond funds.

Stay tuned for the next installment of “As New London Turns.”

Oct. 22 Update: On Friday, The Council rescinded its decision to sever ties with NLDC. There’s no word on whether the personality change requested at NLDC will take place.

Oct. 22 Update 2: Will Brady has more pictures of the affected area, and that, as far as “The Big Drug Lord” is concerned, “Pfizer executives and state economic development officials were discussing the company’s plans, not just for a new research facility but for the surrounding neighborhood as well” (contrary to claims of non-involvement by Pfizer representatives this year).

Selected Previous Posts:


Outside the Beltway Jammer.

American-Southwest Tensions Spill into WikiWorld, and Raise Bigger Questions

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 3:45 pm

You’d think whoever did this at American Airlines might have better things to do, but what he or she did exposes two things–the bitterness of the long-running feud between American Airlines and Southwest, and the vulnerability of Wikipedia to manipulation:

Airport Fight Extends to Wikipedia

DALLAS (AP) – An eye-gouging fight between American Airlines and Southwest Airlines over air service in northern Texas has spilled over to an online encyclopedia.
Wikipedia lets users create, change and even erase articles on any topic, regardless of their expertise.
Supporters say its open, collaborative nature leads to a more complete, bias-free reference source, though when the topic is controversial the wiki entry can resemble a battlefield.
Last week, someone using a computer with an Internet address assigned to American Airlines edited Wikipedia to describe Southwest Airlines Co. (LUV) as “a notoriously litigious company constantly seeking to change laws to gain an advantage.” For a time, the site also said Dallas-based Southwest is “known for its PR machine and litigious nature.”
Wikipedia volunteers deleted the phrases within hours.
Tim Wagner, a spokesman for AMR Corp.’s American unit, said the changes were “not something the company initiated or condone.” He had complaints of his own: One entry described American’s dominance at Dallas-Fort Worth International Airport as a “chokehold.”

Meanwhile, in what must be “completely unrelated” news:
- Southwest Profit Beats Forecasts
- American Airlines loss narrows but shares slump
- Southwest Airlines petitions senators on Love Field flights (Southest has wanted to fly out of Love Field in Dallas for years; American has lobbied Washington to prevent it)

As to Wikipedia, relying as it does on volunteers, I have to wonder:

  • Do they catch all dishonest attempts at rewriting history or mischaracterizing people?
  • Can you sneak something past the volunteers by being subtle but still dishonest?
  • Is Wikipedia exposed to “edit-bombing,” where a dedicated band of dishonest outside posters would overwhelm the volunteers’ ability to keep up with postings?

Bizzy’s Biz-Econ Briefs (102005)

Filed under: Business Moves,Economy,MSM Biz/Other Bias — Tom @ 12:39 pm

Economy Humming Despite Storms’ Impact

The proverbial Energizer Bunny Economy keeps going:

Storms Fail to Hamper Economic Activity

Oct. 19, Washington–Many parts of the country managed to log decent economic activity in September and early October even amid the soaring energy prices and other repercussions from hurricanes Katrina and Rita.

The Federal Reserve’s survey released Wednesday provided the latest snapshot of business conditions nationwide in the aftermath of Katrina, the most costly natural disaster in U.S. history, and Rita.

“Economic activity continued to expand … Most districts described the pace of activity as moderate or gradual,” according to the Fed survey.

Meanwhile, the Commerce Department reported that housing construction unexpectedly rose in September to the highest level in seven months, at least temporarily defying expectations of a slowdown in the booming housing market.

The Fed’s survey is based on information collected before Oct. 11 and supplied from its 12 regional banks.

I’ll take it.

Jobless Claims Down, Energy Costs Down

More bad news for those waiting for the economy to tank–jobless claims and energy costs are both way down:

Jobless claims plunge
Thursday October 20, 8:47 AM EDT

WASHINGTON (Reuters) – The number of unemployed U.S. workers asking for initial jobless aid fell a larger-than-expected 35,000 last week on the back of fewer hurricane-related claims, the government said on Thursday.

First-time jobless claims, a rough guide to the pace of layoffs, fell for the second straight week, dropping to 355,000 the week ended October 15 from a revised 390,000 the previous week, the Labor Department said.

Labor attributed about 40,000 of the new claims to people put out of work by hurricanes Katrina and Rita, bringing the cumulative total of claims stemming from the storms to 478,000 since September 3.

The weekly number of claims fell farther than economists’ forecast for 368,000, and was also down from the original reading of 389,000 the week ended October 8.

It would be interesting to see a scorecard during the past 5 years, and the 8 years before that, of “better than expected” vs. “worse than expected” results vs. “expert” predictions. Something tells me that “better that expected” would win hands-down during the past 5 years, and the “worse than expected” would have won in the 8 years before that. If true, why do you think would that have been the case?

More good news–In the energy sector, prices are falling (as of noon): “Natural gas drops 6%; crude near 3-month low below $60″

McDonald’s Experimenting with Outsourcing Drive-Thru Order-Taking

CBS News and AP report:

McDonald’s Corp., the world’s largest restaurant chain, is testing the use of remote call centers to handle drive-thru orders in an effort to improve service.

Company officials said the idea, being tested at a small number of restaurants in the Pacific Northwest, is aimed at reducing the number of mistakes at the drive-thru window.

“If you’re in L.A. and you hear a person … with a North Dakota accent taking your order, you’ll know what we’re up to,” McDonald’s Chief Executive Officer Jim Skinner said during a presentation to analysts Thursday in New York.

CBS News Radio Correspondent Lou Miliano reports the strategy is based on the theory that mistakes come from the order-taker, not the cook line. Sending orders directly to a call center and back to the grill could also allow McDonald’s employees to focus on delivering better customer service, the company said.

“You have a professional order taker with strong communications skills whose job is to do nothing but take down orders,” said Matthew Paull, the chief financial officer.

Paull said a “heavy percentage” of complaints the company receives are from drive-thru customers who got the wrong order.

I anticipate that this will work out very well. Even if they have to pay a higher fully-loaded (i.e., with benefits) hourly rate to the remote call-center company, they should be able to save money, because at the call center they will on average have far less than the one drive-thru order taker at each store they have now. If the accuracy goes up and the customer complaints go down, expect others in the industry to follow McDonald’s lead.

“I Do NOT Yahoo!” Update: A Chinese Dissident Speaks Out

In the process, he shreds the claim that by doing the government’s bidding in suppressing speech and hunting down dissidents, Yahoo! is nevertheless somehow helping lead the country to a freer future (HT David Kopel at Volokh; bolds are mine):

Veteran dissident Liu Xiaobo, in an open letter to Yahoo co-founder Jerry Yang, accuses the US company of betraying its customers and supporting dictatorship by providing information on journalist Shi Tao to Chinese authorities.

“Major foreign companies should not be helping the Chinese government to limit freedom of speech on the internet,” Mr Liu told the Financial Times. “This is shameless.”

….. Some commentators have defended Yahoo, saying companies doing business in China cannot defy the government, but that their operations encourage greater openness and improve the lives of ordinary Chinese.

Mr. Liu dismisses such arguments in his letter, however. The author, who has spent years in jail for his criticism of the Communist party, says Yahoo has enough market clout not to need to toady to authorities.

International companies are ignoring basic human rights in return for business opportunity, while the Communist party is offering profits in return for continued control of the internet and the ability to intimidate dissidents, Mr. Liu writes.

“The collusion of these two kinds of ugliness means that there is no way for western investment to promote freedom of speech in China, and that in fact it greatly increases the ability of the Communist party to blockade and control the internet,” he writes.

“You are helping the Communist party maintain an evil system of control over freedom of information and speech,” he writes.

Google has excluded sites blocked by the state from its Chinese news service, while MSN banned the words “freedom” and “democracy” from parts of its new Chinese website.

In his letter, Mr. Liu calls on internet users to boycott Yahoo services until the company apologises to Mr. Shi, compensates his family and “ceases close co-operation” with China’s censors.

I encourage readers to consider following Mr. Liu’s suggestion, including when possible clicking through to Yahoo! News pages, and to follow Google’s and MSN’s actions closely. Though their censorship is odious, Google’s and MSN’s actions aren’t yet rising to the level of Yahoo!’s “cooperation.”

Positivity: Cave Rescue Drama Saves Lives of Father and Daughter

Filed under: Positivity — Tom @ 6:08 am

Surfers to the rescue; read closely, and you’ll see that a total of four people were saved (HT Good News Blog):