From TechCrunch - aggregated data on some of the startups that made it to billion dollar valuations. And from VentureBeat: a compilation of post mortems of failed startups.
Related (TechCrunch): Good advice to consider when you're working to raise capital.
Not sure what it is about transportation policy and crony capitalism, but Reason gives another example of Peter Pan busing, working to put Fung Wah in NYC/Boston out of business:
Eleven years later, Peter Pan's move against Fung Wah is paying big dividends. Fung Wah has long been one of the best-operated and safest bus operators on the road, and yet two years ago it was forced to halt its operations because of an incompetent safety inspection carried out by two Massachusetts state employees. That ensnared the company in federal regulatory maze of Kafka-esque proportions. Twenty-one months later, after the company had burned through $3 million buying a new fleet of buses, paying lawyer's fees, and keeping its doors open, Fung Wah finally got the OK to reopen.
Not so fast. As the Boston Globe first reported in May, the two state agencies that run Boston's South Station are refusing to give Fung Wah a spot in the facility to resume its operations. And this week, DNA Info reported that New York City Councilwoman Margaret Chin (D-Dist. 1) was told by Fung Wah's Liang that he was throwing in the towel. If the company were permitted to operate from a street curb, like in practically every other city, this wouldn't be an issue.
While it's a neat story about my home town (Globe and Mail), it also highlights one of the dumb things about governments taking a build it, and then they'll come approach to economic development using fictitious numbers to justify infrastructure.
On one hand, community leaders complain about the lack of funding available to local businesses but somehow find a way to justify spending $800 million on a light rail transit line that runs through the city.
Mugged by reality (Cato):
ObamaCare doesn’t make health insurance more affordable. It robs Peter to pay Paul. When selling ObamaCare, supporters told everyone, 'Don’t worry, you’re Paul.' But as time goes by, more Americans are realizing they’re not Paul. They’re Peter.
I gotta say, I like how aggressive Uber is in fighting provincial politicians (TechCrunch):
Instead of calling a car, the feature prompts users to take action and send an email to Mayor de Blasio and City Council opposing the new bill. Users will of course still be able to use the other Uber features like UberX and Uber Black.
Uber told TechCrunch that the new feature will “demonstrate what life for NYC riders would be like if de Blasio’s plan to limit Uber is passed into law”.
The bill up for consideration would require the Taxi and Limousine Commission (TLC) to severely limit the issuance of new for-hire vehicle licenses. The law would last one year, during which the TLC would complete a study on the impact of for-hire vehicle services on the city.
I can't help but wonder if the coverage is just a bit too optimistic... but I hope it's right (Globe and Mail):
In September 2012, one of Toronto’s taxi licenses sold for $360,000. As it turned out, this was a peak that presaged a major slide. By 2013, the average selling price of a cab plate had fallen to $153,867. In 2014, it was $118,235.Politicians often need reminding that being pro-business and pro-markets is not the same thing.
The reason behind this plunge is Uber, the online service that lets you order a ride through your smartphone. By the looks of it, Uber may drive a stake through the heart of the cab business. It’s about time.
[...] After my investigation of the industry, my name was mud among the city’s taxi plate holders, who were worried about losing their golden goose. One woman, who inherited a pair of plates from her father, called me a “communist” for recommending that the taxi plate system be abolished. “This is free enterprise,” she declared.
In fact, Toronto’s taxi plate system is anything but free enterprise. Instead, it is based on the artificial restriction of a natural market, and the granting of licences to a fixed number of participants. Even those who paid top dollar for a plate used to enjoy an annual return of more than 12 per cent. And for those who inherited plates, the return was manna from heaven.
On the other side of the coin were drivers and customers. Passengers paid too much for rides in old junkers, and drivers found themselves trapped in a system that skimmed the lion’s share of their revenues. Many have compared the Toronto cab industry to the feudal system, which is probably not far off the mark.
To understand how the taxi plate system and the interests behind it have contorted the Toronto cab industry, imagine how other businesses would work if operated the same way.
Sign me up (Reason.com):
One of the propelling concepts behind self-driving cars isn't just innovation for the sake of innovation, leading us to our sci-fi Jetsons future. If successfully implemented, it will make ground travel safer, particularly in higher population areas, increase transportation efficiency and ultimately human productivity.
But there's one little problem, noted by the government analysts of the Brooking Institution and subsequently highlighted by Wired: Local governments have become increasingly dependent on human screw-ups as a way to raise money. Speeding tickets. DUI citations. Parking violations. Those are all big money-makers for municipalities that could very well go away under a regime of self-driving cars. That's billions of dollars of revenue across the country.
Rate Of New Business Formation On Steady Decline, Even In Tech - company size growing (FuturePundit via Instapundit)
The Obama Presidency isn't done - but I already suspect history will not be kind in remembering his impact on either race relations or advancing the economic condition of Blacks in America. Others seem to be noticing (BlackPressUSA):
Unemployment. The average Black unemployment under President Bush was 10 percent. The average under President Obama after six years is 14 percent. Black unemployment, “has always been double” [that of Whites] but it hasn’t always been 14 percent. The administration was silent when Black unemployment hit 16 percent – a 27-year high – in late 2011.Compare that to the Reagan Administration - who the previous author seems to hold in contempt (UTSanDiego). Somebody ought to tell her the issue isn't so much "trickle down" economics as well, economics.
Poverty. The percentage of Blacks in poverty in 2009 was 25 percent; it is now 27 percent. The issue of poverty is rarely mentioned by the president or any members of his cabinet. Currently, more than 45 million people – 1 in 7 Americans – live below the poverty line.
The Black/White Wealth Gap. The wealth gap between Blacks and Whites in America is at a 24-year high. A December study by PEW Research Center revealed the average White household is worth $141,900, and the average Black household is worth $11,000. From 2010 to 2013, the median income for Black households plunged 9 percent.
According to the Department of Housing and Urban Development (HUD)'s own criteria.... it's San Francisco (Cato).
A profile of the head of the American Enterprise Institute that speaks a little to the culture wars being waged (and for some, it's a war that's being lost by economic conservatives):
While the mission remains unchanged, Mr. Brooks believes his obligation goes far beyond the production of academic tomes. These have their place, but if the champions of free markets hope to sell the message to those who aren’t already sold, he says they need to speak to the heart as much as to the head.More here (Cato):
It’s what he means by “the music.” It begins by emphasizing that those who benefit most from freer markets are the have-nots: those without inherited wealth, prestigious credentials, social or class advantages—in other words, people whose only hope for a better life is a social order that will reward their hard work and enterprise.
Certainly that has been borne out by the world’s experience. In 1938 it might not have been clear that capitalism was the key to human flourishing. But no longer.
When he was a child, Mr. Brooks notes, one of four people lived on less than a dollar a day. Today, though we still have far to go, the advance of trade and a globalized economy has shrunk that figure to one of 20.
The liberation of hundreds of millions from desperate poverty ranks among the greatest success stories in history. But it’s a story that remains largely untold and mostly unheralded. In his new book, “The Conservative Heart,” Mr. Brooks puts it this way: “Capitalism has saved a couple of billion people and we have treated this miracle like a state secret.”
Stories of the struggle to reform the Greek state before it ran out of other people's money (WSJ):
Their reform proposals were fought by their colleagues in parliament and savaged by the media and labor unions. They invariably found themselves sidelined.
[...] Since the eruption of Greece’s debt crisis in 2010, successive governments have prioritized fiscal austerity—trying to raise government revenue and cut expenditure—instead of tackling deeper reforms of the system head on.
Many foreign officials involved in Greece’s ill-starred bailout efforts over the past five years say they have learned what Greece’s past would-be reformist politicians always knew: In Greece, hurting vested interests is harder than taxing citizens to death.
[...] Today, more so than in their times in government, these three politicians and a few others are coming to be seen as among the minority of officials who spotted and attempted to change early on some of the core problems that have led to Greece’s almost intractable crisis today.
“They called me ‘the Cassandra’” said Mr. Giannitsis of the headlines during his unpopular push for reforming the pension system.
Cassandra, in the Greek myth, was a clairvoyant doomed to always be right, but never believed. She went crazy.
Great (and old) news from Texas (The American Interest via Instapundit):
In a victory against crony capitalism in Texas, the state’s Supreme Court recently struck down a licensing requirement. [...]
Here’s Eugene Volokh at The Washington Post explaining the case: Here’s what happened in this case: The plaintiffs practice “eyebrow threading,” which is apparently a technique for shaping eyebrows and removing eyebrow hair using a cotton thread. Since 2011, Texas has required them to get a cosmetology license, just as it requires for other cosmetologists; and that requires 750 hours of training, of which at least 320 hours — by the state’s own concession — “are not related to activities threaders actually perform.”
In a 5-4 ruling, the court ruled against the cosmetology license requirement for eyebrow threaders on the grounds that it “is not just unreasonable or harsh, but it is so oppressive that it violates” the Texas State Constitution. [...]
Too often, licensing rules are nothing more than a mechanism for the dominant players in an industry to shield themselves from competition—suppressing jobs (especially for the poor or undercapitalized), raising prices, and stifling creativity along the way. We are glad to see this Texas regulation come down, and hope that others will follow.
Scientists are commercializing a way to use stem cell dental implants to grow new teeth directly in your mouth (PopSci via Instapundit) while others are proposing to use lasers to burn away some mental illnesses (Wired) - as others have pointed out with the latter, what could possibly go wrong?
Pretty much... after all, people - even kids, respond to incentives (Instapundit):
Yep–this is what happens when you let progressives run a country. They spend like drunken sailors, then demand a bailout from others, accusing them of bigotry and hatred if they don’t acquiesce. Most families have at least one of these types. They have the emotional and financial maturity of a two year-old (sorry, two year-old readers out there). By repeatedly caving into these childish demands, the EU acts like parents who enable their children’s prodigal habits. It never turns out well.More here (Bloomberg): "Germany deserved debt relief, Greece doesn't"
Evidence based interventions in poverty - randomized control trials (WSJ):
World-wide, in 1981, 2.6 billion people subsisted on less than $2 a day; in 2011, 2.2 billion did. Most of that progress came in China, while poverty has barely budged in large swaths of sub-Saharan Africa, South Asia and Latin America.Not surprisingly, those who have been on the edge of the status quo of the interventions and the billions of dollars spent that have done little to nothing, are skeptical:
Is it time for a new approach? Many experts who study poverty think so. They see great promise in a new generation of experimental programs focusing not on large-scale social support and development but on helping the poor and indebted to save more, live better and scramble up in their own way.
Prof. Sachs says that “many, almost surely most, of the cutting-edge breakthroughs in actual development in recent years did not result from [randomized controlled trials].” He believes that tackling problems at the level of communities or entire societies, rather than just households, is likely to be more effective—though, he adds, randomized controlled trials should be “a part of a diverse arsenal of analytical and policy tools.”
...while reducing the amount of harm to the economy - though entrenched interests will be the primary casualty (ASI): deregulating childcare and healthcare, reduce payroll taxes on low income earners and well, just giving money to them through a basic income or negative income tax.
A trend to watch: food tech used to be about scale - the next wave is about both scale and improving quality (MITTechReview):
For years, the most important food technologies were all about scale. How could we feed a fast-growing population at less expense? By doing everything bigger: food grown on bigger farms was sold by ever-merging global food giants to grocery chains of superstore proportions.More here (MITTechReview): Robots Start to Grasp Food Processing
Many of today’s food technologies seem to be moving in the opposite direction, toward methods and products that are economical for small farms as well as large corporate ones. This does not mean an end to big food: with the planet’s population projected to reach 9.6 billion by 2050, agriculture and food production will still have to achieve a massive scale, with help from technology and innovative research. Still, evolving technologies, including inexpensive sensors, mobile devices, and data analysis, have helped an increasing variety of food companies, retailers, and producers lower their costs and compete in many specialty markets.
This could be the start of a new food economy—one that reflects more competition and more innovation, provides opportunity for a broader group of investors, and is more dynamic and responsive than the industrial model that has dominated for decades.
"The law is driving people into high-deductible plans" (WSJ):
The widespread adoption of high-deductible plans does, however, face two major challenges.I think even the WSJ is underestimating the potential for concierge care.
First, advocates of consumer-directed health care suggest that much of the money saved in premiums—high deductible plans can be thousands of dollars less expensive than comprehensive plans—be put into health-savings accounts to help pay for routine care. Over time, that savings can grow into a large nest egg.
But without that backstop, Americans will face the worst of both worlds: no coverage for everyday care and no dedicated financial resources to offset new expenses. Hence, critics cry that high-deductible plans leave patients “underinsured”—and that they will avoid or delay needed care as a result. The evidence is mixed. But it seems to be a problem particularly among those who enroll in high-deductible plans on the ObamaCare exchanges; few appear to be establishing health-savings accounts. One problem is that the exchanges make it very difficult to identify HSA-eligible plans.
Second, consumer-directed health care works because it encourages competition. Unfortunately, competition in medicine seems to be falling as hospitals and insurers merge, potentially leading to higher and more opaque prices.
