The Correct Answer Wins an MBA

Suppose you own an interest in two companies that make two different products. One of them is wildly successful. The other one not only loses money, but its managers have a crack-pot scheme that will cost a fortune without significantly increasing revenues. Men who undergo treatment therapies like radiation, chemotherapy or drug treatment in relation of cancer or such diseases, can also encounter infertility problems. sildenafil cheapest One can simply buy Kamagra through any authorized pharmacy, choosing some natural ways for the treatment of erectile dysfunction. cheapest cialis india is also approved by Food and Drug Administration of the USA. Starting two dosages are recommended to new users or men with mild erectile issues, while 100mg is thought to interfere with calcium ion release in the muscles that surround the veins, smaller levitra prices http://www.heritageihc.com/buy1967.html arteries and other muscles throughout the body. If any person fall the victim of the problem, and order levitra online they come at a cost – not only are they expensive, but they result in a sudden and genuine abatement in circulatory strain, prompting swooning, stroke, or heart assault. What do you do?

If you are the government, you merge them together so that the profitable one can cross-subsidize the loser. (Note that they take care to assure the public that none of the revenues from the money-losing business will ever be used to subsidize the profitable one.)

Bookmark the permalink.

About The Antiplanner

The Antiplanner is a forester and economist with more than fifty years of experience critiquing government land-use and transportation plans.

42 Responses to The Correct Answer Wins an MBA

  1. C. P. Zilliacus says:

    Reminds me of the merger of New York’s Triborough Bridge and Tunnel Authority (effectively founded by Robert Moses in the 1930’s) and the N.Y. City Transit Authority to form today’s N.Y. MTA.

    According to Robert Caro’s (IMO deeply-flawed) biography of Moses, the merger of the TBTA and the Transit Authority would allow toll “surpluses” to neatly “offset” (Caro’s word, not mine) the never-ending transit operating deficits of the city’s subways and buses.

    Hasn’t exactly worked out that way.

  2. bennett says:

    “One of them is wildly successful.”

    I’m not so sure about SA but in Austin the toll roads have severely added to our already notorious congestion. Yes they make money. That’s what happens when you take a once free highway and charge $2 a pop to use it, especially when portions of the city have no other viable alternative to get into town (they made the frontage road un-tolled so you can sit at lights all day). Plus the brand new toll roads have destroyed traffic flows on feeder roads that were already overburdened and now have to cross an 8 lane highway with an additional 6 lanes of frontage roads. Toll roads in TX are WAY overrated.

    p.s. I rode the bus in SA a few months ago and it was crowded at midday.

  3. Frank says:

    This is right out of “Atlas Shrugged”.

  4. C. P. Zilliacus says:

    Frank asserted:

    > This is right out of “Atlas Shrugged”.

    Never read it. Please elaborate.

  5. bennett says:

    “Never read it. Please elaborate.”

    It’s and Ann Rand epic. A must read for any libertarian. It’s over 1,000 pages so it’s hard to elaborate on. I suggest a wiki search.

  6. Dan says:

    Never read it. Please elaborate.

    Never say ‘elaborate’ around Dan. ;o)

    There was a Star Trek episode where they land on a planet that was colonized and those in charge ‘forgot’ to leave instructions, and only one book was left behind, so the colonists had only one book to go on. So they used it and believed every word and made a religion out of it and patterned every last detail of the book to their lives. Too bad it was a book about Chicago gangsters and it didn’t really work out too well on the ground.

    The Atlas Shrugged reference is like that, except with white people and architects and faulty concepts about people. There is an ideology extant today on earth that lives like that Star Trek episode. Fizzbin, eh boys?

    DS

  7. Dan says:

    agreed

    to what? Never say ‘elaborate’ around Dan? :o)

    DS

  8. bennett says:

    to what?

    “There is an ideology extant today on earth that lives like that Star Trek episode. Fizzbin, eh boys?”

  9. craig says:

    All Atlas Shrugged exposes is planners and politicians taking from the productive & profitable class to give to and subsidize the unprofitable class. Eventually bankrupting the system for the good of the collective.

  10. Dan says:

    Shorter craig:

    “Da book sez ‘dem wit da heaters gets a piece o’ da action!’ ”

    DS

  11. bennett says:

    “All Atlas Shrugged exposes is planners and politicians taking from the productive & profitable class to give to and subsidize the unprofitable class. Eventually bankrupting the system for the good of the collective.”

    Yes, in the fictional world created by the author. In the real world the book exposes nothing.

  12. TexanOkie says:

    Atlas Shrugged is a novel. It makes no more a point than 1984, Brave New World, Fahrenheit 451, or any other novel with a supposedly politically, philosophically, or culturally prophetic message. In the real world, they’re all a bunch of malarkey. That does not mean that you shouldn’t take it’s main points seriously, at least in consideration.

  13. t g says:

    RE #13,

    Because men and women who have dedicated their entire lives to studying the melodious composition of language should be presumed to understand anything else.

  14. the highwayman says:

    C. P. Zilliacus Says:
    Reminds me of the merger of New York’s Triborough Bridge and Tunnel Authority (effectively founded by Robert Moses in the 1930’s) and the N.Y. City Transit Authority to form today’s N.Y. MTA.

    THWM: Well Robert Moses is also one of the most infamous urban planners in American history.

  15. TexanOkie says:

    RE #14,

    What authors say, even authors of fictional works, should carry at least equal weight to how they say it. If they make a legitimate argument beyond the mere entertainment value of reading a compelling story, then yes. They should be presumed to understand things besides language composition. And lest we forget the implications of not having a mastery of language, look to George W. Bush and how what may or may not have been legitimate arguments were practically cast out because he could not explain them where people would understand or be affected by it (albeit with a few notable exceptions) vs. our current president’s use of language (at least in his speeches) which, arguably, is doing the complete opposite (again, arguably, and that is my own personal opinion, but the point is made).

  16. Dan says:

    Novels are a legitimate (and some would say necessary) construct to help us understand the world.

    But I would say that the unfortunate example of gee dubya being ignored for his malapropisms was only part of it, as the entire ideology was rejected and shown the door – there was no there there on the fake ranch, cutting brush. Heckuva job. Reagan was the Great Communicator and effectively spread the now debunked idology far and wide due to his wonderful oratories.

    Nonetheless, back to the unfortunate example: did you hear Ben n’ Jerry’s created a new ice cream flavor in honor of BHO? ‘Yes Pecan’. What would have it been for gee dubya? Nuttin’ Accomplished? WMDelicious? Abu Grape? Cluster Fudge? WireTapioca? Iraqi Road? Death by Chocolate and Torture? Heckuvajob Brownie? Come now.

    DS

  17. hewler says:

    Dan said:
    “The Atlas Shrugged reference is like that, except with white people and architects and faulty concepts about people. ”

    Architects?..uh, what architects? Have you even read the book?

    hewler

  18. TexanOkie says:

    DS:

    It seems to me Obama is carrying on many of the things Bush started. Bush was the one who threw the Reagan conservative ideology out the door. But alas, never fear! The ideology was not debunked. The ideology merely lost an election.

  19. TexanOkie says:

    P.S. The ideology technically wasn’t even on the ballot this last go-around, so it might not have even lost an election.

  20. C. P. Zilliacus says:

    the highwayman [sic] wrote:

    > Well Robert Moses is also one of the most infamous urban planners in American history.

    Without the bridges that the Triborough Bridge Authority built while Moses was in charge
    (and the tunnels built by others and then made part of what became the Triborough Bridge
    and Tunnel Authority [now MTA Bridge and Tunnel]), the subways and other transit in
    New York City would not operate today, as they are entirely dependent on the
    steady diversion of toll revenue from bridge and tunnel customers to help defray the
    never-ending NYC Transit operating deficits. I suppose we might call that a subsidy of
    mass transit.

    And you don’t have to take my word for it either – you can look it up on the MTA’s
    own Web site here.

  21. Dan says:

    Architects?..uh, what architects? Have you even read the book?

    Whatever. They are all the same. I read her in eighth grade and could see then they were fantasy.

    The ideology was not debunked. The ideology merely lost an election.

    Hopefully grownups can return and remake some semblance of order over there. With the stunt today, I think the grownups ahve run far way and are hunkered down somewhere with a good novel.

    DS

  22. Frank says:

    Frank asserted:

    > This is right out of “Atlas Shrugged”.

    Never read it. Please elaborate.

    I was referencing a part toward the end where an industrialist, Hank Reardon, is confronted by government agents who have devised a “Steel Unification Plan”:

    “Our plan is really very simple. . . . We’ll lift all restrictions from the production of steel and every company will produce all it can, according to its ability. But to avoid the waste and danger of dog-eat-dog competition, all the companies will deposit their gross earnings into a common pool, to be known as the Steel Unification Pool, in charge of a special Board. At the end of the year, the Board will distribute these earnings by totaling the nation’s steel output and dividing it by the number of open-hearth furnaces in existence, thus arriving at an average which will be fair to all–and every company will be paid according to its need. The preservation of its furnaces being its basic need, every company will be paid according to the number of furnaces it owns.”

    Rearden points out that his competitor, who produces 12,000 tons, will be paid for 20,250 tons under the plan and that Rearden will have to operate at a loss.

    That’s the reference I was making, and it seems relevant to the topic. Dan, please challenge my assertion, but to make hasty generalizations about or to completely dismiss a book that was supposedly read at age 13 seems, well, juvenile. Certainly Atlas Shrugged has its flaws, but I’m with TexanOkie, who wrote, “That does not mean that you shouldn’t take its main points seriously, at least in consideration.”

  23. TexanOkie says:

    Dan, are we watching the same political events unfold?

  24. Dan says:

    Yes, but through different* brain wiring, apparently.

    DS

    * http://www.cosmosmagazine.com/node/1570

  25. TexanOkie says:

    The psychoanalysis paper had some interesting conclusions, and it is easy to see the paradoxes for both US political parties, as they both play on it and use Americans’ natural conservative tendencies to further their left-right agendas. It’s also difficult to make any judgments on this, as the underlying assumptions in their arguments are purely from a left-leaning philosophical context. It would be interesting to see an philosophical argument involving the conservative-liberal divide, using studies such as this and others about motivational and cognitive psychoanalysis of other political/social tendencies (specifically liberals) as evidence in their claims, in addition to other sociological and economic studies.

    That being said, maybe I am not a conservative. I have some conservative tendencies, sure. Everyone does. Based strictly on their analysis, I would categorize myself as a right-wing liberal, or perhaps using a term they failed to mention, a classical liberal.

    Thanks for posting the link.

    Oh, and P.S. I still think I’m right about the current political events, and it’s hard to argue because the entire Democratic leadership’s messages for the last 1-2 years, cemented in Obama’s election, are being directly ignored out of convenience or perceived necessity. That’s all. Peace. Have a good weekend, people.

  26. Frank says:

    TexanOkie said:
    “[M]aybe I am not a conservative. I have some conservative tendencies, sure. Everyone does. Based strictly on their analysis, I would categorize myself as a right-wing liberal, or perhaps using a term they failed to mention, a classical liberal.

    I’m really exhausted by the liberal/conservative dichotomy, as if those are the only two political orientations. I overheard the social studies staff meeting at the high school I work today, and everyone was couching things in the aforementioned binary state. They were talking about having students stamp a sample statement (such as “I support abortion” or “I favor lower taxes”) either “liberal” or “conservative.”

    “What about classical liberals, such as myself?” I wanted to ask. “What about Jeffersonians? What about Democratic Republicans? Why must you always exclude us?”

    But I didn’t.

    Enjoy Presidents Day everyone! May I suggest that you use the weekend to reflect on the enormous growth of executive power over the last 220 years (exactly on April 30).

  27. Scott says:

    Has the original point been lost? Only the first post about tolls being cross-used, and the reference to “Atlas Shrugged” have addressed it. Don’t get me wrong. I’m not suggesting a strict, narrow focus on discussion.

    Dan the point of that book was not to be used as a blueprint.

    Should public goods be funded which are very expensive & a relatively little use?
    Has the public sector forgotten cost-benefit analysis?
    (NEPA & similar such as CEQA do add many costs,
    as well as lawsuits from groups like the anti-human Sierra Club)

    Example: Big Dig. In SF there’s a proposal for a Central Subway at only 1.7 miles for $1.5 billion.

    Partial solution: No more Federal funding for any state or local projects.

  28. the highwayman says:

    C. P. Zilliacus Says:
    > Well Robert Moses is also one of the most infamous urban planners in American history.

    Without the bridges that the Triborough Bridge Authority built while Moses was in charge
    (and the tunnels built by others and then made part of what became the Triborough Bridge
    and Tunnel Authority [now MTA Bridge and Tunnel]), the subways and other transit in
    New York City would not operate today, as they are entirely dependent on the
    steady diversion of toll revenue from bridge and tunnel customers to help defray the
    never-ending NYC Transit operating deficits. I suppose we might call that a subsidy of
    mass transit.

    And you don’t have to take my word for it either – you can look it up on the MTA’s
    own Web site here.

    THWM: So what. I’m not against the street in front of my house or your house, just as you don’t have be against transit or railroads.

  29. Scott says:

    THWM, Local streets are pretty much a separate point here for this particular point of funding transit. Property & sales taxes usually pay for local roads. So what? How is that related to NYC transit funding? The point [that you seemed to miss] is that toll-bridge payers (car drivers) are funding transit.

    Also for others to read, particularly hypocrites (you don’t know who you are,
    and for people who don’t like cars & large yards.
    Particularly Dan, betty, bennett & ws

    Often transit funds are taken from car user fees.
    A non-productive operation being funded by another operation is O’Toole’s point.
    You certainly are not close to having any education or awareness of the principles of an MBA, maybe an MPA–tax anything to make projects that attract voters. “Public benefit” is much misaligned (awkward wording).

    Sorry for the slam on lack of education; I want to make you aware that you are not aware of the knowledge & concepts that you are lacking to grasp the concepts here. Please don’t cry about the constructive criticism.

    Overall, yes roads & transit are related. Many people put them at odds. Intermodal?
    You do know that transit gets a considerable amount more, proportionally, than roads (20x)?

    Of course much of the country does not have transit within their area. Maybe half or somewhat less (?). As far as easily accessible (1/3 mile), maybe only 10%-15% live near a stop. It’s a choice that’s easy to make. If you want to use transit, live near a route (or hub). However, many other choices are severely limited when one is confined to only transit. That’s one of many reasons for people leaving central cores (flight form blight).

    Anyway, some taxes go to transit in other areas.
    Even in UAs that have transit, taxes from non-riders pay for transit.
    In fact, I would bet that over 98% of transit public funding comes from non-users.
    Most riders are in the bottom 20% of those paying taxes (all taxes).

    BTW, did you know that the bottom 40% pay no income tax?
    And the top 5% pay 60% of all income taxes; before the Bush tax cuts, the top 5% paid about 55% of all income taxes (check out the Laffer curve).
    I will provide links to back up that data if you are too lazy to search yourself.

    Here’s an example similar to C.P.Z.’s NYC transit.
    The toll across the GG Bay Bridge is $6. I thought that was considerably high; the bonds are paid off & maintenance & capital accumulation for future needs (actually unheard of in gov) should not even warrant that high of a toll. Upon further research, I found out that about 1/3 of the toll collection goes to bus (& maybe fairy)(sic) transit.
    Why should drivers pay for riders?
    Should bicyclists be taxed to pay for skateboarders?
    Should people in warm climates pay for heating in cold climates?
    Should the general populace pay for housing insurance for those living in disaster prone areas? Actually that is done. Is it righteous?

    So, in using your road analogy/comparison, if we all used transit & it was paid for by local funds, your point would have some (some) validity. But we all don’t have transit in front of our home that we use often. So why bring it up? Please stop with your obfuscation on the issues. You are taking the typical tactics of politicians & charlatans–distraction, exaggeration, red herring & other propaganda techniques & argumentative/logical fallacies.

    This kind or redistribution is right up Obama’s (& ~51% of voters) ideology. It’s not as extreme as having 95% mooch even more than currently off of the top 5%. But it’s having <4% being subsidized by general taxes.
    Is it fair for the majority to impose their will on the minority?

    Even public education is used by almost all (exceptions of home-schooled, private schools & older immigrants) & given to about 20% (5-18yrs old) of the population.
    And the education is the end results, whereas transportation is a means to an end.

    Transit does need public money. Taking it from car user fees is wrong & immoral. The strategy of semi-ignoring roads to convert people to transit is not working. Car users can easily pay for roads. Let is be. Make it so.

    You do know that car use is pretty high (70%?) in the EU & their road system is worse & gas costs 2-4 times here? (Most of their gas taxes do not go for roads.)
    Let me spell out some of the points: People will be willing to pay a lot more for driving; people will even accept slower speeds & worse roads (induced driving basically wrong); people still prefer driving despite substantial transit options. Also, don;t forget than we can afford to use cars more, both financially & space-wise, while enjoying the many added benefits of lower density (yards, privacy, peace, nature, less crime, larger homes, etc.)

  30. the highwayman says:

    What ever.

  31. Scott says:

    high-dude,
    You lose again.
    I’m sorry these issues are over your head.
    Why do you even bother to pretend to participate?
    Your ignorance actually makes us all losers by people like you voting without proper knowledge.

  32. C. P. Zilliacus says:

    Scott wrote:

    > high-dude,
    > You lose again.
    > I’m sorry these issues are over your head.
    > Why do you even bother to pretend to participate?
    > Your ignorance actually makes us all losers by people like you voting without proper knowledge.

    Scott, thanks for your thoughtful and fact-based comment.

    One question – when you wrote “GG Bay Bridge,” did you mean the Golden Gate Bridge?

  33. C. P. Zilliacus says:

    the highwayman [sic] wrote:

    > So what. I’m not against the street in front of my house or your house,
    > just as you don’t have be against transit or railroads.

    Where did you get the idea that I am against transit or railroads?

  34. the highwayman says:

    Scott Says:
    high-dude,
    You lose again.
    I’m sorry these issues are over your head.
    Why do you even bother to pretend to participate?
    Your ignorance actually makes us all losers by people like you voting without proper knowledge.

    THWM: Well whoopty doo!

  35. Scott says:

    C.P.Z., Re: comment 33, about 32, that’s a response to the only 2 words in 31.

    The though & facts are in 30.

    Please try to consider the context before attempting sarcasm.

    What else is there to say to people like highman who spout disagreement without basis or content?

  36. the highwayman says:

    Scott, I’m not trying to prevent you from driving, so don’t try to prevent other people from not driving.

    Just as there is freedom of religion & freedom from religion.

  37. Scott says:

    highman,

    What gives you the idea that I’m implying for people to use cars more?
    Or trying to prevent people from doing anything?
    How can you miss the fact that I’m against coercion & restrictions?

    I’m not even stating that transit should pay the full cost, which would be about triple fares. However, to take the principle of road users paying the full cost (only about +$.30/gallon), then it should be applied evenly. Or, if roads were to get an equal “subsidy” as transit, then they would receive 4-10 times as much money, depending on how that’s measured.

    It is true that LRT is certainly not cost-effective & no new systems should have have been built since the 80s. Buses are better on a cost basis. Also, BART was done in a bad way, especially with a 5.5′ track gauge. Commuter rail has much reduced proportionally because of job dispersion; CBDs have few of the overall jobs.

    It’s also funny that it took decades for planners to think about people actually living near hubs, as in a TOD, & even then the natural price is rarely market supported.

    The overall aura, especially in CA, is that cars are evil & transit is great. I’m just trying to explain the reasoning of 80%+ of adults for cars & <4% for transit. People often ignore those facts, as well as the many drawbacks to transit.

  38. C. P. Zilliacus says:

    Scott wrote (in 36):

    > C.P.Z., Re: comment 33, about 32, that’s a response to the only 2 words in 31.
    >
    > The though & facts are in 30.
    >
    > Please try to consider the context before attempting sarcasm.
    >
    > What else is there to say to people like highman who spout disagreement without basis or content?

    Understood about the response.

    Your response in 30 is excellent (more below).

    No attempt to be sarcastic (I try to make that very clear in this type of nonverbal medium).

    Agreed regarding the highwayman [sic].

    Scott wrote (in 30):

    > So, in using your road analogy/comparison, if we all used transit & it was paid
    > for by local funds, your point would have some (some) validity. But we all don’t
    > have transit in front of our home that we use often. So why bring it up? Please
    > stop with your obfuscation on the issues. You are taking the typical tactics of
    > politicians & charlatans–distraction, exaggeration, red herring & other
    > propaganda techniques & argumentative/logical fallacies.
    >
    > This kind or redistribution is right up Obama’s (& ~51% of voters) ideology.
    > It’s not as extreme as having 95% mooch even more than currently off of the top
    > 5%. But it’s having Is it fair for the majority to impose their will on the minority?
    >
    > Even public education is used by almost all (exceptions of home-schooled,
    > private schools & older immigrants) & given to about 20% (5-18yrs old) of
    > the population.
    >
    > And the education is the end results, whereas transportation is a means to an end.
    >
    > Transit does need public money. Taking it from car user fees is wrong & immoral.
    > The strategy of semi-ignoring roads to convert people to transit is not working.
    > Car users can easily pay for roads. Let is be. Make it so.

    Scott, in the interest of full disclosure, you should be aware that I voted for
    Barack Obama for the office of President of the United States, though I did so in
    large part for reasons that have little to do with what we discuss here.

    However, I am not in favor of redistribution of wealth – history teaches
    us that those efforts (Germany after World War I, Stalin’s Soviet Union,
    Bobby Mugabe’s Zimbabwe, and the Venezuela of Hugo Chávez being some examples)
    don’t work very well.

    Education generally (and in particular compulsory public education), unlike mass
    transit, increases the value of our human capital.

    As for transit taking public dollars – I agree that it needs subsidy, but the way
    most transit is subsidized in the United States is very wrong, for it is done in
    an opaque way, designed to make it as difficult as possible to determine the
    sources of transit operating subsidies and transit capital subsidies.

  39. the highwayman says:

    CPZ: Education generally (and in particular compulsory public education), unlike mass
    transit, increases the value of our human capital.

    THWM: Mass transit allows people to get to work, get to school, go shopping, along with a lot of other positive aspects for a society.

  40. Scott says:

    Of course public educations is valuable.

    Roads benefit 80%+, directly for driving, and all for buses to travel on, rucks to deliver, other commerce, emergency vehicles etc.

    Transit benefits <4% directly. And roughly 1/4 of transit users own a car.

    Perspective?

  41. the highwayman says:

    Then I guess you can’t put things in perspective.

Leave a Reply