Hard life

One of the things that has struck me, as we cruise by in luxury, is just hard life is out here for the people who live in the small towns and remote areas of Alaska.  Skagway is mainly a cruise ship town in the summer, with an influx of businesses that descend on the place for a few months to sell jewelry and cheap souvenirs to us tourists, but some 800 people live there year-round.  Our tour guide was telling us about how the winter brings 15 feet of snow accumulation, winds that routinely reach 50 mph, temperatures that average between zero and 10 below—sometimes dropping to -30 with -100 windchills, and, what is even worse than that, darkness that lasts all day.   The sun is over the horizon for about  28 minutes with only 4 hours of daylight.  In Skagway barges come in once a week with supplies for the grocery stores and such, and the pickings can get pretty bare by the end of the week.  (Forget about fresh vegetables.)   Skagway was the model for the town in Northern Exposure.  (Indeed, there is no doctor.  There is a nursing station, but if you need a doctor you have to travel six hours on the ferry or fly out to Juneau.)  But the people are still happy, right?  Well, the rate for alcoholism and suicide is many times what it is in the lower 48 states.

I could appreciate living in a place like Anchorage (pop. 300,000), which has the diversions of civilizations and economic activity.  But in the remote towns people make their living mainly by fishing (think The Most Dangerous Catch, which is about fishing in Alaska) or by doing other kinds of physical labor that is much more difficult due to the challenging conditions (think Ice Road Truckers, which is about driving a truck in Alaska).

But surely living out here must have its compensations.  The Northern lights.  The frontier spirit.   None of our tour guides, after all, have been full-time residents, just followers of the tourist trade who go back to California when it gets cold.  I’d like to hear from some real Alaskans!  Please comment, telling us how things really are where you live.  What are the joys that keep you there?

In the meantime, I salute the hardy souls who live through the Alaskan winters, the remnants of those pioneers and frontiersmen who made our country great.   Most of us Americans have grown soft, unable to endure even the most minor hardships, so no wonder we are in decline.   I honor you Alaskans, even as I myself am thinking, I don’t think I want to retire here.

Barackalypse Now

As the stock market dives 634 more points over the United States government getting downgraded by Standard & Poors, President Obama is looking more vulnerable than ever.  Even some of his African American supporters—who are suffering most from unemployment—are getting disillusioned with him.  In addition to our economic woes are our foreign policy failures, including setbacks in the continuing wars in Afghanistan and Libya.  People are speaking of Barackalypse or Obamageddon.

I thought he was a shoo-in for re-election, but now I’m thinking he is assuming the mantle of Jimmy Carter.  And yet this time there is no Ronald Reagan in the wings.  I’m still not confident that any of the current candidates come across as presidential enough to beat him.

It looks like Texas governor Rick Perry is going to get in the race.  He has scheduled a big speech this weekend and then he is booked to go to New Hampshire and Iowa.  (Why else would he go to New Hampshire and Iowa unless he is going to run?)  He seems to come across well in the presidential gravitas department and could probably unite both tea party activists and establishment Republicans.

Both Republicans and Democrats need to remember that it is not enough to vote for a candidate just on the basis of his or her ideology.   Another consideration is, can this person govern?  If Republicans select a light-weight ideologue who is incapable of effectively addressing the nation’s problems, they will face their own Armageddon.  They will also drag the country down with them.

America’s credit score

Standard & Poor’s downrated US bonds from AAA to AA+, the first time we have been rated so low. That is a purely financial assessment. But factors include our impotent government, our inability to raise revenue, and our vast and increasing national debt. How humiliating. Just how doomed are we? How can we become a first world nation again?

At sea

On the cruise just entering Glacier Bay.  We just saw some whales.  What luxury this ship offers.  I’m sure my ancestors never got above the orlop deck with the bilge water and the ballast.   But this is a dream.    Internet connection is very slow and–as one of you commenters helpfully and correctly informed us–VERY EXPENSIVE  (75 cents a minute!).   Plus, the carefree existence here keeps us insulated from all the bad news of the outside world.  So I don’t have much to say.   (I did catch a stock feed that informed me of how the economy is collapsing.)   Anyway, my posting might be irregular but I’ll do the best I can.  We disembark in Vancouver, Canada, the middle of next week.

Another economic collapse?

The stock market has nosedived 500 points and the economic indicators appear to be disastrous.

This, right after the debt ceiling agreement that supposedly allows the government to stay solvent by borrowing money while also cutting more than $2 trillion in government spending.

Could it be that Keynesian economics is right, that the government keeps the economy going through its spending and that cutting expenditures during a recession is exactly the wrong way to produce economic growth?  Or are the free marketers right and that the trillions in new debt will mean less money for productive investment?  Or, in the worst of all possible worlds, are both right?

Are there any policies the government should take that would actually help?  Or do we just need to let the cycle play out, even at the cost of another recession, or worse?

Marketing & consumer tastes

Economics columnist Steven Pearlstein goes off on how super-thick clam chowder has replaced the thinner, more authentic version that is much tastier.  In doing so, he makes some point about how markets actually work:  not so much by fulfilling a consumer preference but by getting consumers to change their preferences.  As when research showed that Americans like weak coffee, whereupon Starbucks–going in the opposite direction–taught Americans to like strong coffee.

My search for a decent bowl of clam chowder got me thinking about consumer preferences — how they are established, how they are reinforced by market competition and how they change over time.

One of my first calls was to Greg Carpenter, a marketing professor at Northwestern University’s Kellogg School of Management. Carpenter explained that the way most of us think and talk about market competition is based on something of a mythical model in which consumers know what they want in a product and companies engage in a continuous battle to satisfy those preferences with better and better offerings.

In fact, Carpenter says, most of our preferences are learned and largely formed by social norms and expectations that producers have a strong hand in shaping. Moreover, such preferences are anything but fixed, susceptible to changes in technology, culture, fads and the business strategies of companies competing in the marketplace.

Our notion of what a “family car” ought to be used to be a station wagon. Then it was the family van. Now it is an SUV.Or take coffee. For a long time, the market and all the consumer research suggested that Americans preferred weak coffee, and there were basically a handful of coffee companies, led by Folgers and Maxwell House, that offered products within a narrow range to provide it. Of course, that was until Starbucks came along and demonstrated that maybe our preference for weak coffee wasn’t as fixed as everyone thought.

Our wine preferences have also developed along lines that have caught the industry by surprise. According to Alexander Chernev, another Kellogg marketing professor, the conventional wisdom was that wine was an “aspirational” product that allowed people to see themselves as worldly and sophisticated. In that context, people tended to prefer wines produced in good years from small vineyards in France or the Napa Valley, where everyone knew the best wines were made.

At some point, however, Yellowtail and a few other Australian wines entered the market not only with new products but with a new social context for thinking about wine. Their idea was to relieve consumers of what for many was really the burden of having to know more about vintages and vineyards and grapes than they really did, or really wanted to, and then going through the hassle of wrestling the cork out of the bottle. Instead, they offered a standard chardonnay or pinot in screw-top bottles. What was once a wine negative — commonness, ubiquity — suddenly became a positive.

via Consumer conformity: Why we like thick clam chowder (and other inferior products) – The Washington Post.

What lesson could the church growth movement–which uses marketing research and marketing techniques to try to appeal to more religious consumers and to get them to come to a particular church–learn from this principle?


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