Pensions and the government

Yet again, we're discussing bailing out deficient pension plans.

Someone's missing the fundamentals here. If a company can
make labor peace today by committing the government to
spend money down the line, we can bet they'll do that in
spades.

The idea of a guaranteed pension funded by ongoing business
activity is flawed from the start. It's a pyramid scheme which
cannot hold together, despite abstract potential to be a
counter-example.

Check history. Companies have a cycle. They rise, and eventually
they fall. Common sense dictates that pension promises must
be funded now, not later.

The solution is not to make unsustainable pension promises
illegal, despite their scam nature. The solution is to stop
backing them up with taxpayer money.

Making money from blogs

From a blog which might average one hit per day, how might I know anything at all about the economics of blogging?

Start here: the Wall St. Journal has a piece suggesting that blogging is more economically tempting than some of us might understand.

The problem with this story is that it imagines that advertising is something one sells simply on traffic alone. The idea of "$10/RPM", or $10 per 1000 pages viewed on your blog, is simply bogus. It's bogus because no one is going to pay for it.

There are two important aspects to advertising:

• Name Recognition
• Immediate sales

If you're selling high margin products, such as beer, you're willing to buy a lot of advertising to establish your brand. You're creating an image, and you're buying brand loyalty by keeping your brand in front of people who consume your beer.

But the internet in general, and blogs in particular, are bad vehicles for carrying brand advertising. Television, with its claim to all of your attention for at least a few moments, works far better.

Give it to Google for sorting out what internet advertising, blogs in particular, is all about. Immediate sales. Customer clicks on ad, goes to advertiser's store, and buys something.

One thing we can observe about such advertising immediately is that it is trackable. The clickthru is tracked, and sales from that clickthru are tracked. The merchant can do the arithmetic, did the ad make money?

Ah, but there's repeat sales. Customers who come back with no advertising. Yes there are, but typically this is a minor subsidy to the immediate affect of the ad. Brand loyalty on the internet is weak indeed.

So if blog ads are to make money, they have to move product.

One more thing about moving product on the internet by advertising. You can't just raise the price to cover the advertising. With regular advertising, you can flood the market with ads offering 40% off on immediate purchases without explaining that you increased the price 60% to cover the program. On the internet, whatever it is you're selling, there are ten more people selling it too, and price comparison is easy.

What really got me about the WSJ article was the detached nature of the analysis. The idea that one could create a blog purely with the goal of generating traffic, and expect to generate advertising revenue without giving a moment's thought to whether your blog would actually move product is just bogus.

Places like Dpreview.com have it right. Provide high value content on making decisions regarding which digital camera to buy, and you might move some digital cameras.

Instapundit also has it a bit right. Check out his ads, and you'll typically observe Glenn to be moving tee shirts with right wing sayings. And a few paintings which appeal to the boomers who read Instapundit (both of those being higher margin products, even on the internet). And of course, Glenn sells his book, An Army of Davids, which has its own cozy economics with respect to Instapundit.com.

But your basic blog, even if it were to somehow by magic go to tens of thousands of page hits per day, wouldn't move enough tee shirts to generate enough revenue for a good dinner, let along a living. If that's what someone might want from blogging, that's what to aim for, rather than aiming for a place to offer personal comment and solicit reaction.

Gay Rights

I'm a libertarian.

What that means is that I seldom see a need for the government to be involved.

It was easy to sort out the gay rights issue when gay rights meant "get the government out of the bedroom". Sign me up.

But as time passed, the government did get out of the bedroom. And we progressed to an era where "gay rights" meant "get the government to suppress anti-gay activity".

Count me out.

For sure, violence should be punished, and severely. There should be no quarter for thuggery of any kind, and it's the government's job to protect citizens from thuggery.

The essence of anti-gay thought is a claim that "homosexual activity is sinful".

A religious statement. A religious belief. Can't be proven or disproven.

I don't believe that for a moment, but I don't really have any beef with people who do. Any more than I have a beef with someone who disagrees with the rest of my religious analysis. It's a personal thing. Make up your own mind. I don't expect you to take to my religious beliefs seriously, and so long as you don't expect me to take yours seriously, we'll get along just fine.

But I'm not sympathetic to a request that the government force you to not speak your religious mind. If you want to declare homsexuality immoral from the sidewalk, fine by me.

Overpaying for low skilled jobs is not the solution.

P6 today has a blog regarding today's immigration discussion.

Here's a quote:

I sense your cynicism. "This Black partisan," you say to yourself, "is trying to foment internecine strife in the White Race." Nope. As I said, this is me anticipating your anger and making clear Black people are not the legitimate target of your anger. You see, just like you are getting set up, so are Black folks...but I don't like the contours of the plan so far. You see, now that your income and employment levels approach the level you associate with Black folks, others are already lobbying on your behalf. And their suggestions look remarkably like those Black folks have said were needed for decades.

The essence of P6's case seems to be that the various races and immigrants are in competition with each other over jobs. That hard working Mexicans will diminsh wages for white people the same way that wages have earlier been diminished for black people.

The problem is, you can't find where this has happened.

Oh, you can find where international competition has reduced pay for native born Americans of all races; don't look any further than the auto industry.

And you can find individual counter cases, like with any generalization. Some white guy who used to make $20/hr as a drywaller now can only make $15.

But what you can't find is that working white people or working black people are worse off than they were 25 years ago. It's just not true. Need proof? Home ownership is at an all time high despite the fact that real estate prices are also at an all time high, and construction codes are far more stringent than they historically were. Now could that have occurred while working people were becoming worse off? Not a chance.

So on the whole, we find that people working in America are not directly competitive with one another. Every instance of a person working and receiving a paycheck creates wealth in America, and the more wealth there is in America the better off Americans are. It does spread around. No, not equally, nor always fairly, but it spreads around in a way which results in working people buying their own house.

The '50s was an era when the US had a commanding portion of the world's manufacturing capacity. Manufacturing jobs paid extraordinarily well. Semi-skilled people did extraordinarily well. Some people came to believe that this mode was normal, and deviation was going in the wrong direction. They see foreign competition as eroding that vision. And they see Mexicans as being foreign competition.

But check out what has really occurred. Again, we are more wealthy in the 00's than they were in the '50s. Not only can we not go back there, we wouldn't want to if we could. So what happened to that semiskilled workforce? Not really a shocker, they became more highly skilled. And they make more money. Check out daily life as it intersects your path, and see what people do, people who, if they had been born 50 years earlier, might have built cars.

In short, overpaying for a low skilled job is not the solution, period. Creation of high paid, high skill jobs works, and working people of all skills being fully employed maximizes such job creation. The more Mexicans operating shovels and hammers in America, the more highly paid jobs will exist for people who can speak English well and are willing to develop the necessary skill.

Monster & recruiters

You're a professional, looking for a job. You post your resume on Monster.

You're going to get some calls, and right away.

They'll be recruiters. Not company recruiters, but people who work for recruiting firms. They'll all say pretty much the same thing. They have jobs available for people with your qualifications, could you send them your resume?

First, how recruiters work. Companies looking to hire give job descriptions to recruiting firms. Sometimes exclusively (only one firm is working for the company at the time), sometimes promiscuously (they give listings to all recruiting firms who call up saying they have available applicants). The recruiting firm sends screened candidates by. If the company hires the candidate, the recruiting firm is paid a commission, typically 20% of the annual pay of the new employee.

There's nothing really wrong with that story, but there's a lot of grey area, none of it favorable to the candidate.

(If and) when the recruiter receives the resume, the recruiter will ask "what jobs have you applied for on your own?". What is going on here is that the recruiter is limiting the scope where no commission will be possible.

This is the primary game which must be played with recruiters. It's in your interest to limit the scope where the commission will be possible, and limit it to jobs which you would not otherwise have applied for.

Observe the aggression analysis in the story. You're willing to have the recruiter compensated for services rendered. You're unwilling to support a demand for compensation because you replied to some other solicitation by the hiring company. The recruiter is aggressively seeking to muddy the water, to establish a claim on a commission when you send your resume in response to some solicitation. This is not in your best interest, to say the least.

The first rule:

You'll send your resume to the recruiter when the recruiter can describe a job opening which you find attractive.

Now there are some real sleazebag recruiters who will lie at this point, but most won't. They'll either tell you about a real opening, or they'll rely on badgering you to send the resume anyway. Don't do it. Unless the recruiter has a job you're interested in, there is nothing good which can come from that recruiter having your resume.

The second rule:

The recruiter must agree not to send your resume to anyone except in response to a particular, described job opening which you approved of in advance.

Keep good track of that list, it won't be long.

What this accomplishes is pretty clear. If you reply to some solicitation, the recruiter has no chance to muddy the water by suggesting that he had sent your resume to that company, and the company was replying to you because of his contact. Believe me, hiring companies do prefer to hire candidates which don't require a commission to be paid. If you have been working with a recruiter who has sent your resume to this company in response to a different job opening, make it clear to the hiring manager that you have responded to the solicitation, and that the recruiter is not involved.

The third "rule" is derived from all that:

You will apply for other jobs without notifying the recruiter.

There's no reason why you should tell the recruiter, since the recruiter has agreed not to send your resume except to a particular job with your permission. In the unlikely, but possible case that the recruiter comes up with a job you have already applied for, you simply explain the situation. Do not come to believe that the recruiter has an important influence which can be used to get you hired, so long as you let the recruiter represent you. The cost of the commission is negative beyond any affect the recruiter might theoretically have.

Lastly, you can negotiate with the recruiter for a split of the commission if you're deciding to take a job where they will be paid a commission. You can probably pull this off if you're taking a salary cut, or if you're passing by a higher paid offer. For one, it can really make the difference in your decision. The other job might not be higher paid if you're getting back 25% of the commission. Don't accept a recruiter compensated job before you explore this negotiation.