The Chinese car

The June 14 issue of The Economist has “Extinction of the Car Giants — Why America’s car industry is an endangered species” on its cover. The magazine predicts the death of GM, Ford, and Chrysler at the hands of Honda, Nissan, and Toyota. The Economist cites statistics such as the $1000 per car cost to GM of pension benefits. Perhaps if they were to look 10 years out they would see a lot more turmoil.

 

Home Depot sells window air conditioners for $80. They are made in China. When it breaks you throw it out. Twenty years ago a window air conditioner cost $1000 in today’s money. When it broke you called the repairman.

 

You can buy a 27″ TV for less than $200. It is made in China. If someone asks you what brand of TV you have, unless you’re a geek with no life, you won’t have a clue. You don’t see ads for Daewoo or Apex TVs. When it breaks you throw it out. Forty years ago the TV industry employed at least one million Americans. TVs were made here. They cost so much that they needed to be financed, thus creating jobs in banks. If they broke every neighborhood had a TV repairman to come out and service the machine. Some of the most expensive advertising campaigns of the day were for cars. Consequently, consumers were intensely brand-loyal and proud to own an RCA, a Philco or whatever.

 

Once something can be assembled in China out of 100% Chinese-made components it can sell for approximately 1/10th the previous price.

 

Let’s look at cars. According to http://www.autoalliance.org/ecofacts.htm the auto industry employs at least 5 percent of Americans. People have jobs making cars. Because cars are so expensive people have jobs financing them, repairing them, and insuring them against collision and theft. Because cars are so expensive, people have jobs marketing and advertising them (more than $1000 of the price of a normal car has gone into advertising, probably closer to $5000 for a Mercedes or BMW).

 

Within 10 to 20 years the Chinese will be able to sell a car that is very similar to today’s rental car: 4 doors, 4 seats, air conditioner, radio, new but not fancy. It will cost between $2000 and $3000 in today’s dollars. With cars that cheap it will be unthinkable to manufacture in the U.S. Consumers won’t bother to finance a $2000 purchase separately (maybe they’ll add it to their credit card debt). Drivers will still carry liability insurance but won’t bother with collision or theft coverage. With cars that cheap it won’t make sense to advertise. If Ford or Toyota tried to sell the average person a $25,000 car they would simply laugh, much as a Walmart shopper would think you’re crazy if you tried to persuade him to spend $2,000 on a TV.

 

People react with disbelief to this idea. Americans love their cars and identify with them. Consumers will pay for prestige and image. All true, of course, but think of how liberating it is to drive a rental Camry or Taurus with the Collision Damage Waiver. You don’t lock it. You don’t worry about it. You’re care-free. You don’t say “this is the greatest driving experience of my life” but the car is more than fine for sitting in traffic, which is mostly what urbanites do. After three years when it begins to require service you re-export it to Latin America and buy yourself a new one.

 

So it is true that there will probably still be a market for $50,000+ cars that say “I’m a rich bastard and can afford to squander money”, just as there are still $4000 plasma TVs in an era where most people spend $200 at Walmart. But the market share will be negligible. It is one thing to step up from a $27,000 Honda Accord to a $45,000 BMW. It is another to say “I think I’ll give up the vacation cottage and restaurant meals so that I can upgrade from my Crawling Tiger car to an American or European car of roughly the same function”.

 

Aside from vast job losses the implications of the $2,000 car are profound for the U.S. Parking and traffic jams, already hellish, will get far worse. If the U.S. ever develops an appetite for information technology again we’ll charge people for using the roads during periods of congestion (using Fast Lane/EZ-Pass style sensors). If not, the government will force people to buy a $3000 annual “right to drive” disk like they have in many European countries. The alternative will be most U.S. urban areas descending into a Bangkok-like snarl.

 

[If George W. had only declared war on urban traffic congestion instead of Iraq! We’d have sensors in the roads talking to navigation systems in the cars telling drivers which streets to avoid (London is doing this right now). We’d have computer-organized ride-sharing systems. Instead of handing out cash to people who hate the U.S. we’d hand it out to people like http://www.zipcar.com/ (I’d be a user of the service myself if not for the fact that you’re not allowed to bring a dog). We might have ended up saving enough gasoline that we wouldn’t have needed to add Iraq to our collection of overseas possessions.]

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An armed society is a polite society… (Israel and guns)

Something I learned here in Israel…  it is virtually impossible for most Israelis to own a gun.  Aside from air rifles and .22 target guns you must be either an active duty soldier in the army or meet some very stringent requirements in order to pack heat.  The average Israeli household cannot own a shotgun or hunting rifle (there is nowhere to hunt in the maze of concrete high-rises that dominates the landscape of the Mediterranean’s most densely populated country).  A fully automatic weapon is completely out of the question for civilians.


[Arabs in the West Bank and Gaza can and do own weapons, of course, and in fact most of them were supplied by the Israeli government.  Yes, that’s right.  The Labor government supplied the Palestinians with thousands of rifles and pistols so that they could set up a police force.  These weapons have now found their way into the hands of Palestinian civilians.  Thus when a Palestinian shoots an Israeli civilian or soldier it is very likely done with a gun paid for by that Israeli’s taxes.]


I used to be amazed that Israelis showed such restraint.  They are crammed in like sardines.  They have world-class traffic jams and a disregard for traffic laws (more Israelis are killed in car accidents than by terrorism or war).  Just walking around on the street you hear a lot of people shouting at each other.  I figured “it is amazing that more people don’t pull the M-16 off the top of the fridge and fill the air with lead”.  It turns out that they don’t have M-16s or any of the other toys that give meaning to life as an American.


An Israeli asked me whether it was true that Americans could own serious guns privately and expressed amazement that this was indeed possible.  He said “We read about this in the newspaper but the Americans that I’ve met seem quiet and non-aggressive.”  My reply:  “An armed society is a polite society” 🙂

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Brits want to know where are the Weapons of Mass Destruction

Folks in the UK are upset that no weapons of mass destruction have
been found in Iraq, calling for the resignation of Prime Minister Tony
Blair on the theory that he lied to Parliament about Iraqi
capabilities.  People have a difficult time believing that
intelligence reports could have been so wrong.  This is ironic because
Berlin, The Downfall 1945 is currently on the UK
bestseller charts, an authoritative work by the British historian
Antony Beevor.  Page 171 discusses the Soviet belief that the Germans
would use nerve gas to defend against the Red Army’s attack across the
river Oder.  Russian soldiers were ordered to drill and sleep with gas
masks on based on reports from multiple sources in multiple countries.
Top German leaders made grand claims about their Wunderwaffen (“Wonder Weapons”) and appeared unconcerned about the fact that their
forces were outnumbered by more than 10:1.  In the end it turned out
that the Germans hadn’t ever had a very large nerve gas supply and
apparently destroyed nearly all of their chemical weapons as the
Russians advanced.


[The historical analogy only goes so far.  Nobody back in Russia ever
called for Comrade Stalin’s resignation over his misestimation of the
German capabilities.  Nor were there mass protests against Russian
occupation following the victory.  At first a few Russian soldiers
were picked off by German die-hards (“partisans” then but today we’d
call them “illegal combatants”).  The Russians presumed that the
partisans could not operate without some support from local villagers
so they simply killed everyone in any village where one of their
soldiers had been shot.  The German resistance evaporated.]


Here’s a snapshot from York, England:


People in York, England angry that weapons of mass destruction were promised but not found in Iraq.

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Internet connectivity in the UK

After driving more than 1000 miles around the UK (supposed to be an EU country but they still use miles there, they pay with Pounds instead of Euros, they drive on the left, etc.), I figured out how to get Internet connectivity.  My 802.11 card never found any wireless networks.  Brand-new $300/night Hilton and Sheraton hotels did not have connections in their rooms.  Most Brits that I spoke with had never used the Internet and of those who had, most had done so only from work.  There are Internet cafes in the big cities but you can’t connect your own laptop.


How to connect then when in the UK?  It is as simple as getting on a plane at Heathrow Airport…  I’m in Tel Aviv now.  Expect some leftover postings about life in England, Wales, and Scotland to appear in the next few days…

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Wireless Internet in the US = Neo-Feudalism?

After two days of touring Wales, a country that apparently has yet to discover the mixing faucet, it has become apparent that there is better mobile phone coverage in the remotest sheep pasture or coastal outcrop than in downtown Boston. How can such an otherwise backward place be so far ahead of the U.S. technologically?

Most folks are familiar with the story: in Europe the governments mandated that all cell phone systems be built using the GSM standard. Thus you can make or receive a call any time that you’re within range of any antenna from any provider In practice this means nearly 100 percent coverage of the land area of Europe.

One of the advantages that the U.S. had over Europe in the days prior to European Union was an absence of trade barriers. In feudal times every local duke or prince was able to levy tariffs on goods traveling through his town. Thus it became cheaper to undertake the hazardous sea voyage round the horn of Africa rather than pay all the toll collectors on the land route. Pre-Union Europe retained some of the vestiges of that feudalism and her economic growth was inhibited.

The U.S. by contrast was a model of efficiency. The government built roads from coast to coast and you could drive a truckload of goods from Virginia to California without paying a toll. True free marketeers will argue that it is better to charge road users every time they set their tires on pavement and this may indeed be the case in our congested cities. But most of the time the cost to society of an additional car on the road is too small to bother collecting and the road generates economic growth for all, thus justifying the role of government in paying for it.

Let’s look at wireless Internet for a moment. The ability to send a few packets of information from Point A to Point B without laying expensive cables can spawn a tremendous variety of new computer applications. Using computers intelligently saves energy, cuts pollution, increases security, and generates wealth. What do we see when we open the newspaper? Our politicians trying to figure out how to ameliorate the pernicious effects of feudalism in the Arab world. Occasionally there will be an article about T-Mobile or some other company building an 802.11 network in the U.S. There are going to be lots of competing networks apparently. For any given network you’ll pay $30/month for spotty coverage. While our politicians fret about old-style feudalism in the Muslim world they ignore neo-feudalism springing up in their midst.

Per capita, American citizens pay some of the highest taxes on the planet. 802.11 infrastructure is ridiculously cheap (e.g., $50 base stations). The public is allegedly the owner of the electromagnetic spectrum. Why can’t we combine these facts to conclude that every U.S. citizen ought to be entitled to transmit and receive a certain number of bits per year? Perhaps one’s free entitlement wouldn’t be enough to watch streaming video 24/7. But it would certainly be enough that your car could receive a text message from your wife while you were halfway to the grocery store: “The smoke alarm needs a 9V battery; add it to the list.” It would be enough that your car could notify your apartment that you were on your way home and to turn the heat up. It would be enough that your car could notify your palmtop or wristtop that it was being attacked by thieves. It would be enough that a medical monitor attached to your grandparent at home could transmit measurements and alerts to a doctor.

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My cousin seems to have a blog as well (with ads)

Surfing the New York Times before departing on a trip (don’t expect too many updates until my return on June 7), this article on blogs mentioned my 2nd cousin Eric Alterman, who appears to have his own blog on MSNBC (kind of ironic because he styles himself a figure of the official counterculture yet his writings are surrounded by constant flashing ads that remind us that one can never escape the corporate voice in American media).  I haven’t seen Eric for at least 10 years but thanks to his blog I’m learning some things about him.  He seems to be an expert on contemporary music (our side of the family typically concentrates on the Bach to Bartok/Stravinsky period, which requires a lot less effort to maintain because you don’t run the risk of some punk laughing at you for having BeeGees albums; classical music nerds today listen to the same stuff that I listened to in the 1970s).  I’ve never heard of most of the people mentioned in Eric’s blog, though the implication is that they’re somehow important, which can make it tough to read for someone as ignorant as myself.  Still it is worthwhile because he finds fun links such as this BBC story.

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Saturday Night at the Movies

Today’s theme is nostalgia.  We start by renting the 1955 Picnic, starring William Holden and Kim Novak.  This provides a fascinating portrait of early 1950s small-town Midwestern life as a backdrop to some ageless tensions (rich/poor, intellectual/ignorant, natural/stuffy).  Move next to the 1996 When We Were Kings, which documents the 1974 fight between Muhammad Ali and George Foreman in the then-new nation of Zaire (now back to its old name of “Congo”).  The subjects of the documentary can’t foresee that the new leader, Mobutu, will become one of the 20th century’s most notorious kleptocrats (though as discussed in the Israel Essay, he actually did not steal as much from his countrymen as the average Fortune 500 executive team steals from its shareholders).  Nor can they foresee that many of the dancing and singing children among them will be dead of AIDS by 2003.  At some level the movie is about two guys who hit each other really hard but the innocence of the time and optimism about Africa’s future is what really touched me.  Some favorite lines:  “I’m so mean, last week I murdered a stone–I killed a rock”; “No Vietcong ever called me ‘nigger'” (Ali served a prison sentence rather than be drafted into the Vietnam War).


[Warnings  This film’s clips of Ali’s efforts to influence his fellow Americans may make you see our current crop of leaders, black and white, as intellectual and spiritual midgets.  When We Were Kings is also marred by a few minutes of interviews with Spike Lee, the movie director, who tries to sound profound while stating the obvious.]

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Should high school students design and build bicycles?

Factory schools teach science, math, and computers to students with the justification that “this stuff will help you, somehow, someday, maybe by getting you into the right college.”  Some students are happy with this amount of motivation and some students love these subjects for their very purity, their disconnection from the concrete world.  These are the students that we see at MIT and Harvard so in theory this approach is successful.


As evidenced by terrible average scores on standardized tests covering very basic material, the average high school student is not learning science, math, or computer programming to any perceptible degree.  And realistically why would we expect a kid to be motivated to learn these things?  They read newspaper articles about CEOs giving themselves $50 million/year salaries but flunking exams in basic accounting at their Stanford Business School refresher course.  They watch television broadcasts of politicians’ speeches and there is never any reference to principles or ideas taught in their science, math, or computer programming classes.


The combination of a high degree of an abstraction and the apparent ability of people to reach the highest echelons of society in perfect ignorance of these subjects makes it tough for a lot of kids to hit the books.


Why not make it all concrete?  Suppose that starting in 8th grade the kids were told “Each of you is going to design and build your own bicycle over the next 4 years.  To help you do a better job, you’re going to learn some math, some physics, and how to use computers to simulate and model.”


At least 50 percent of what is taught in high school math and science can be motivated by the engineering challenge of making a bike that functions properly and weighs less than 100 kg.  In particular one can dream that this project-based approach would rescue computer instruction from its current abyss.  Instead of teaching the kids how to use Microsoft Office and write lame little graphics programs in VB or Java, we’d show them how computers can become analytical tools.


For the hands-on oriented kids we can let them machine their own parts and maybe do some welding, thus combining math and shop in one period!  To keep the klutzes from killing themselves, though, you’d probably want a design option that included only pre-cut tubes bolted together (you could never make a commercially viable bike this way; it would be too heavy and expensive to manufacture but it would be fine to ride around flat areas and for teaching).


The actual change in the curriculum would be minimal.  It is more a question of spirit and always having a concrete answer if a kid asks “Why do I need to know this?”

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As long as we’re on the subject of Edward Tufte…

Now that Edward Tufte’s name has come up it seems natural to start thinking about information design.  A very strange set of graphics regarding media industry ownership is available at http://www.thenation.com/special/bigten.html (click on a company, e.g., AOL, after the page loads).  It is unclear why this information is presented graphically at all or what one is supposed to infer from two blobs overlapping.  Contrast with the market maps at http://www.smartmoney.com/ (click on “maps” and choose one), which make it easy to visualize how important an industry is and whether the stocks in that industry are going up or down.

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Something new from Edward Tufte

If you visit http://www.edwardtufte.com/ you’ll see a new publication from the great man:  “The Cognitive Style of PowerPoint”.  This is first notable for its format:  a 24-page essay on full-size paper with very high quality color printing.  This is not traditionally a commercially viable format.  Normally one must write short enough for a magazine or long enough for a 200-page book in order to get into the mainstream distribution systems.  High-quality printing is, of course, generally not on the menu except at some university presses.


The most topical item in the essay regards the PowerPoint slides used to guide thinking about the Columbia‘s wing while the shuttle was still up in space.  (A sad echo of the poor presentation materials used to decide whether or not to launch Challenger, a theme discussed in Tufte’s earlier book Visual Explanations: Images and Quantities, Evidence and Narrative.)


Remember how horrified you were at your first slide-based presentation?  The disaffected civil servants who stood up in front of you in public school at least tried to get you to pay attention to them, rather than darkening the room and insisting that you focus on one disembodied sentence at a time.  By now most of us are used to PowerPoint, however, and we need something like the Tufte essay to bring back the outrage.


Slides are useful when you need to show everyone in a room a graph, a photo, or some other item for discussion.  Somewhere in the 1960s and 1970s things went horribly wrong, however, as bullet points began to make their way onto the slides.


A modest step back from the PowerPoint culture is to limit one’s PowerPoint slides to charts and photos.  If you can’t resist some text, limit yourself to an opening outline slide dense with structure and a closing summary to remind everyone of what they heard.


Why not step back more dramatically, though, to an age before the computer and the overhead projector?  Color printing has never been cheaper and society has never been richer.  Why not print up materials in advance of the talk and hand them out?  If you need to refer to a chart or photo during your talk, ask people to “turn to page 3 of the handout”.  You can leave the room lights on, people will focus their attention on you, the discussion and flow need not be constrained by the tyranny of the bullet points.  The one disadvantage of the handout approach is that you can’t use a laser pointer.

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