From LiveMint.com (WSJ partner in India) Mumbai: The world’s biggest coffee chain Starbucks said it will open its first store in India by the end of 2007 in either New Delhi or Mumbai.
From The Hindu: “People want to matter. They want to be more than a wallet with legs attached. Starbucks has shown that you can turn a commodity like coffee into an uplifting and memorable experience. Once that is done, customers make an emotional bond with the Starbucks product, which in turn produces brand loyalty and international success.”
From LiveMint.com: “With Starbucks on its way in to India, can Dunkin’ Donuts be far behind? Dunkin Brands Inc., the world’s largest coffee and baked goods chain, is in discussions with potential Indian partners to roll out the brand, which sells nearly one billion cups of java each year.
“India is a huge opportunity. We want the wallets of the country’s 250 million middle-class households,” said a spokesman.
MP: Thousands of young Indians working in call centers provide customer service for millions of Americans, and they’ll now buy coffee and donuts on their breaks from American companies like Starbucks and Dunkin‘ Donuts operating in Bangalore, Chennai, New Delhi and Mumbai. Seems like a win-win deal to me, and that’s what international trade is all about. Without the call center jobs, they might not be able to afford Starbucks.
(HT: Sanil Kori)
From a previous CD post: “Over the last thirty years, there have been two approaches to saving elephants in Africa: a) a ban on commercial use of elephants and elephant products like ivory, and a ban on private ownership of elephants; or b) allow commercial use of elephants like trophy hunting licenses and the sale of ivory, and promote private property rights for elephants.
After a quarter century of both approaches operating in different African countries, the evidence is clear: elephant herds are decreasing significantly in countries like Kenya that ban private ownership and commercial use, and elephant herds are increasing significantly in countries like Zimbabwe and Botswana where elephants can be owned and where commercial uses like hunting and ivory sales are allowed (see graph above).”
From this IHT article “African states reach compromise on ivory sales,” it appears that Kenya still hasn’t learned much from its failed conservation policies that have caused its elephant herds to dwindle, and is still resisting the market-based approaches that have helped elephants in Zimbabwe and Botswana.
An agreement was reached in the Netherlands yesterday by the 171-member Convention on International Trade in Endangered Species that will allow South Africa, Namibia, Botswana and Zimbabwe to empty government inventories of ivory in a single sale to Japan, which guaranteed not to reexport the raw ivory. Revenues from the sale are earmarked for conservation programs.
Botswana, Zimbabwe, Namibia and South Africa, came to this year’s conference with a proposal to end the 1989 international ban on ivory sales and establish annual quotas, furthering the market-based approaches that have allowed them to succeed at increasing elephant herds (see graph above).
Kenya worried that the one-time sale will stimulate a demand that cannot be legally met.
“It will encourage the illegal market, and that’s what kills elephants,” said Michael Wamithi, the Kenya-based elephant expert for the International Fund for Animal Welfare. It also sends a signal to consumers “that ivory is back in style,” he said.
It’s obvious by looking at the graph above that what kills elephants is Kenya’s approach to elephants, which is to ban private ownership and ban commercial use of elephants, a tragic outcome for Kenyan elephants, and another predictable “tragedy of the commons” result. The reality is that if nobody owns elephants in Kenya, and commercial use of elephants is not allowed, then nobody cares about Keynan elephants, and they will eventually disappear.
Exhibits A and B: There are no longer any shortages of America buffaloes or American alligators now that they can be privately owned, and commercial use is allowed.
Tax rates are falling all over the globe — even in Sweden. The exception is the U.S. Congress, which is scrambling to find some way, any way, to raise them.
The proposed 44% top marginal rate would reduce U.S. competitiveness by reducing the after-tax return on investment. Less investment means fewer jobs and lower wages. A Tax Foundation analysis of tax returns finds that roughly three in every five Americans in the highest income tax bracket are small business owners, who create most new jobs.
What’s missing from this Congressional tax debate is any recognition that today’s tax rates are producing record tax receipts. If the current pace of tax collections continues amid a modicum of spending restraint, the federal budget could be balanced within 18 months. The tax share of GDP is approaching 19%, which is above its modern historical average.
It’s a sorry day when American politicians have to be instructed in the virtues of low tax rates by the Swedes.
~From today’s WSJ editorial “100% Marginal Tax Rate“
Take a 16-question quiz and find out here.
My results are “You have a Northern accent. That could either be the Chicago, Detroit, Cleveland, Buffalo accent (easily recognizable), or the Western New England accent that news networks go for.”
That seems pretty accurate, since I was born in Chicago and live now near Detroit. Comments welcome on the accuracy for others.
The Model T (pictured above) put the world on wheels during its 18-year production run. More than 15 million were made between October 1908 and May 1927. The original list price was $850, but was progressively cut until a roadster sold for as little as $260 in 1925, which is $3,070 in today’s dollars.
In January 2008, Tata Motors (TTM:NYSE), one of India’s largest automakers, will reveal the world’s cheapest car ever made, and “will earn a parking place in history alongside Ford’s Model T, Volkswagen’s Beetle and the British Motor Corp.’s Mini, all of which put a set of wheels within reach of millions of customers,” according to this report in Forbes.
Tata is currently referring to the new vehicle as the “1-lakh car.” A “lakh” is a unit of the Indian numbering system equal to 100,000, and so Rs. 1 lakh (Rs. 100,000) is equal to $2,460 at today’s exchange rate (Rs. 40.65 per USD), or 20% below the inflation-adjusted cost of a Model T in 1925!
The affordable price firmly aims to market the car to families otherwise restricted to motorcycles, like the Indian family of six pictured below, perfect customers for the new 1 lakh car, which will be available by the third quarter 2008.
(HT: Sanil Kori)
Varieties of mangoes grown in India: More than 1,000, in varying shapes, colors, and tastes.
Amount of time India has grown mangoes: 6,000 years
Percent world mango production grown in India: 50%
India’s exports as a percent of world mango trade: 1%
Price of fresh mango juice in Mumbai: Rs. 20 (50 cents)
The year India first applied to export mangoes to the U.S.: 1989 (18 years ago)
Reason for the ban on Indian mangoes until 2007 and India’s overall low export levels: Mangoes can harbor the mango seed weevil, a pest absent from North America.
First delivery of Indian mangoes to US: April 27, 2007
Reason the ban on India mangoes was lifted: The U.S. Agriculture Department decided in 2006 to allow the importation of Indian mangoes if they were treated with low doses of irradiation to kill or sterilize insects.
Number of India mango varieties available in US this season: 3 (Alphonso, Kesar and Banganpalli)
Price of Indian Mangoes compared to mangoes from Central and South America (Ataulfo variety): 3-5 times more expensive
#1 Import Country for Mangoes into the U.S.: Mexico’s mangos (Ataulfo variety), currently 60% of U.S. market share
Read more here (NY Times), here (LA Times), and here (Wash Post).
Any interference with the operation of the marketplace, however done, is analogous to an act of war. A tariff is such an act. When we are “protected” against Argentine beef, the effect (as intended) is to make beef harder to get, and that is exactly what an invading army would do. Since the duty does not diminish our desire for beef, we are compelled by the diminished supply to put out more labor to satisfy that desire; our range of possibilities is foreshortened, for we are faced with the choice of getting along with less beef or abstaining from the enjoyment of some other “good.” The absence of a plenitude of meat from the marketplace lowers the purchasing power of our labor. We are poorer, even as is a nation whose ports have been blockaded.
Moreover, since every buyer is a seller, and vice versa, the prohibition against their beef makes it difficult for Argentineans to buy our automobiles, and this expression of our skills is constricted. The effect of a tariff is to drive a potential buyer out of the marketplace. The argument that “protection” provides jobs is patently fallacious. It is the consumer who gives the worker a job, and the consumer who is prevented from consuming might as well be dead, as far as providing productive employment is concerned.
~Frank Chodorov in 1959 from Chapter 6 of his book The Rise and Fall of Society, excerpted here.
University of Rochester economist Steven Landsburg (author of Armchair Economist and More Sex is Safer Sex) poses the following question in his new Slate.com column Everyday Economics:
“How do you justify a border fence? Why is it OK to consign millions of unskilled Mexicans to lives of desperate poverty? I’m told it’s because Americans should care more about their countrymen than about a bunch of foreigners. OK, but how much more?
Surely there’s some limit; virtually nobody thinks, for example, that Americans should be allowed to hunt Mexicans for sport. So, exactly how much are you willing to hurt a foreigner to help an American? Is a foreigner’s well-being worth three-quarters as much as an American’s, or half as much, or one-quarter as much?”
Landsburg provides his usual careful economic cost-benefit analysis answering the question, and in the process makes this following point:
“On balance immigrants don’t harm Americans; virtually all economists agree that immigration makes us richer, not poorer. Every immigrant is a potential trading partner, a potential employee, and a potential customer. He bids down wages, but that’s a two-edged sword: It’s bad for his fellow workers, but it’s good for employers and good for consumers.”
1. Teaching Math in 1960: A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price. What is his profit?
2. Teaching Math in 1970: A logger sells a truckload of lumber for $100. His cost of production is 4/5 of the price, or $80. What is his profit?
3. Teaching Math in 1980: A logger sells a truckload of lumber for $100. His cost of production is $80. Did he make a profit?
4. Teaching Math in 1990: A logger sells a truckload of lumber for $100. His cost of production is $80 and his profit is $20. Your assignment: Underline the number 20.
5. Teaching Math in 2000: There are 5 baby birds in a nest. Three of the birds fly away. Question: how do the other two birds feel? (There are no wrong answers)
6. Teaching Math in 2005: A greedy, profit-seeking logger cuts down a beautiful forest because he is selfish and inconsiderate and cares nothing for the habitat of animals or the preservation of our woodlands. He does this so he can make a profit of $20. Topics for class or small group discussion: What do you think of this way of making a living? How did the birds and squirrels feel as the logger cut down their homes? (There are no wrong answers)
From the WSJ’s article (subscription required) “New Report Urges Return to Basics In Teaching Math: Critics of ‘Fuzzy’ Methods Cheer Educators’ Findings” (9/12/2006):
It took parents 17 years to overturn the tragic 1989 curriculum mistake made by the so-called education experts who demanded that schools abandon traditional mathematics in favor of unproven approaches. The National Council of Teachers of Mathematics finally reversed course and admitted that elementary schools really should teach arithmetic, after all.
Now the nation’s math teachers are getting some new marching orders: Make sure students learn the basics.
The council’s advice is striking because in 1989 it touched off the so-called math wars by promoting open-ended problem solving over drilling. Back then, it recommended that students as young as those in kindergarten use calculators in class.
Those recommendations horrified many educators, especially college math professors alarmed by a rising tide of freshmen needing remediation. The council’s 1989 report influenced textbooks and led to what are commonly called “reform math” programs, which are used in school systems across the country.
HT: J. Howe