In his article Saving Yourself [Note: article is now behind a paywall] Daniel Akst buries at the end a particularly good statement of the central point I try to make in my personal finance writing:
Thrift is thus a way to redeem yourself not just from the unsexy bondage of indebtedness but also from subjugation to people and efforts that are meaningless to you, or worse. Debt means staying in a pointless job, failing to support needy people or worthwhile causes, accepting the strings that come with dependence, and gritting your teeth when your boss asks you to do something unethical instead of saying “drop dead”. Ultimately, thrift delivers not just freedom but salvation—which makes it a bargain even Jack Benny could love.
To get there, though, he takes you on a wonderful journey through the American history of thrift, from Jack Benny to the Puritans and back again, with a couple of side trips to Sexyland.
My Wise Bread post Buy Your Groceries European-Style picked up mentions at both the Discovery Channel’s Planet Green and Lifehacker.
Jason Fitzpatrick had kind words for my post in his piece Shop European-Style for Fresher, Cheaper Food.
Lloyd Alter was especially generous, saying (in a green-living piece subtitled “I thought I was a lonely failure as a frugalista, but I am not“):
I thought we were pretty much along among the frugal living types to do this. However, one of my favourite writers on frugal living, Philip Brewer at Wisebread, agrees…
Two of my Wise Bread posts, The Ethics of Hoarding and Healthy, Frugal Eating, got very kind mentions in the Doctor Oz blog:
Wow. Just a stellar post… Philip Brewer strikes again with a straightforward, no-bull piece on why we gotta suck it up and stop eating expensive crap. Stern, but informative!
I find it surprisingly difficult to extract quotes like that—it seems too much like bragging. I guess that’s why it’s useful to have a publicist.
This is exactly right:
Subjecting children to daily unpleasantness – in the form of arbitrary rules, dysfunctional socialization, scholastic regimentation, age-segregation, teasing, bullying, verbal abuse, or what have you – in the name of acclimatization to the “real world” simply lowers their standards for the life they will accept.
via The Lazy Faire » Blog Archive » It’s OK to give your kids high standards
The idea that parents should stand aside from protecting their kids—or even go so far as to deliberately do things that are cruel or capricious—to make sure that children learn the various lessons that add up to understanding that “life is tough” or “life isn’t fair” is an insane one. No child, no matter how coddled or protected, is going to fail to confront the sorts of problems that drive those lessons home.
I’ve written on the same topic. In particular, in Find Work Worth Doing, where I criticize mock work (such as most school work) and go on to say:
I think parents also do their kids no favors when they encourage them to take low-skill, part-time jobs to earn pocket money. (Sometimes they do so with the explicit motivation that it will teach their kids the value of work!) Kids will be far ahead of the game if they’re taught how to identify work that’s worth doing, and how to find a job doing that work.
Protecting a child from the hard knocks of life will not prevent your child from learning the truth about the real world. Nothing can.
Jay Lake gently suggests that just waving your hands and saying “Cross-subsidy” is not a complete answer to the notion of what Amazon thinks its doing, and that’s a fair point. I think Amazon’s real objectives have a lot to do with controlling the marketplace. By selling ebooks below cost they do several things at once; in particular, they make it expensive for anyone else to enter the ebook market for new bestsellers.
If they can establish the one true price for the ebook edition of a new hardback, and keep other booksellers out of the market by selling the books at a loss, they’ll soon be in a position to dictate terms to the publishers in the same way that big-box retailers dictate terms to their suppliers in other markets. (Clearly they were supposing that they were already in that position, else I don’t think the “disappearing buy button” fiasco would have happened. Fortunately, it looks like Amazon pushed too hard too early.)
I think the result of an Amazon victory would have been very similar to what we have seen in the big-box stores over the past few years: Consumers would enjoy low(ish) prices while suppliers would see ever-increasing pressures on their profits. (I’m seeing the publishers as suppliers here, although the profit pressure would pretty quickly flow on to authors as well.) Choice would decline as profit pressures forced all but the lowest-cost suppliers out of business.
So, I’m glad that seems to have been headed off, at last for the moment.
Having said all that, though, I think the cross-subsidy analysis is also correct. I think Gillette made its own razors to give away, but it wouldn’t have needed to. Nowadays it would surely outsource razor manufacture, but that wouldn’t be necessary either. It could just as easily announce that it would sell any razor that matched the specs for its blades, and then sell them for less than it paid its suppliers. (In fact, that might be a perfectly viable business model. Surely some shavers would go for a cool-looking limited-edition art razor and accept the resulting lock-in to Gillette blades, as long as the razor wasn’t too expensive.)
Toby has a good take on ebook pricing issues.
Very briefly, mainline publishing houses would prefer to go with a pricing model similar to the model for physical books, where books start at a premium price when they’re new and then are sold at gradually cheaper prices. Amazon, on the other hand, wants to sell a cheap(ish) $10 ebook edition of new hardbacks, because that’s a price point and market segment that drives sales of the kindle, but shows no sign of further lowering the price as cheaper editions of the physical book come out. (One supposes Amazon’s theory is that there are a lot of people will pay $300 for a kindle to read the latest bestsellers for $10, but many fewer who will pay that much to be able to read last year’s bestseller for $4.)
The whole issue (Amazon taking down the Buy button for most books sold by Macmillan imprints, etc.) has produced a lot of talk by non-authors about how publishers are obsolete anyway and authors should just produce and market their own ebooks. But that sort of talk just goes to show that they don’t understand that publishers are specialized venture capital firms (as opposed to specialized manufacturing companies).
Ron has kindly let me host his fascinating peak debt paper on my site.
I take a quick look at the paper in my Wise Bread post on Peak Debt:
Is there a limit to how much Americans can spend? Clearly there is: All they earn, minus savings and service on their existing debt, plus new borrowing. Since the Bureau of Economic Analysis puts numbers on those very items, it’s possible to see just how close we are to the edge. In a fascinating paper, Ron Laszewski does exactly that. The results are rather depressing.
Whether you read my Wise Bread piece or not, if you can follow the math, I urge you to read Ron’s paper itself: peak-debt-pd-020708.