Why Coke Cost a Nickel for 60 Years

 

The excerpt below is from a WSJ summary of a May 11, 2007 Slate article.

 

A serving of Coca-Cola cost a nickel for 60 years — an example that illustrates the disadvantages of price stability, Tim Harford writes. 

. . .   Prices won’t accurately reflect a product’s demand and the cost of producing it.  If, for example, the relative price of a car "can’t fall when demand does, sales will collapse."  If wages can’t fall in a recession, unemployment will rise.

The case of Coke, Mr. Harford says, is an example of the main reason companies choose to keep prices constant in the face of dramatic rises and falls in costs: the hassle of changing a product’s price can be very high.  Coke kept its price constant from 1886 through the mid-1940s, even as the price of sugar tripled after World War I and then fell slightly, and after the product went from being taxed as a medicine to taxed as a soft drink.  Part of Coke’s problem was that it sold many of its bottles in vending machines that accepted only nickels.  A price increase would have meant either building new vending machines or doubling the price of Coke, neither of which made financial sense.

 

For the full summary, see: 

"Informed Reader; ECONOMICS; The Cost of Raising Prices Can Prove Too High to Pay."  The Wall Street Journal  (Mon., May 14, 2007):  B7.

 

“I Fly with Leslie”

 

FlyWithLesliePoster.jpg  A poster that is displayed in some Wall Street Journal offices in solidarity with a Bancroft family member who has openly expressed doubts about Rupert Murdoch’s proposed purchase of the Journal.  Source of the image:  online version of the NYT article cited below.

 

A lot of the news media imitate each other in viewpoint and content.  The Wall Street Journal is fresh and innovative, and frequently gives us important news that is new.

And there have been times throughout recent decades when the editorial page of the Journal was one of the few voices for truth, justice and freedom.  It would be a great loss for that voice to be silenced.

On the other hand, I have noted in an earlier entry, that the business side of the Journal is in need of improvement. 

I do not know if in the end, the Murdoch bid is the best chance for the long-run survival of what is good about the Journal.  But I do wish the Journal, and the Journal‘s journalists, well. 

 

(p. C1)  On May 14, more than 100 reporters, editors and executives clustered in The Wall Street Journal’s main newsroom to mark the retirement of Peter R. Kann, the longtime leader of their corporate parent, Dow Jones & Company.

Mr. Kann, in rolled-up shirtsleeves, was typically self-effacing about his own contributions to the company. But the celebration of the past was muted by worry about The Journal’s future. A few weeks earlier, Rupert Murdoch’s News Corporation had offered $5 billion to buy Dow Jones. The Bancroft family, owners of a controlling stake in the company, rebuffed the offer at first, but there were signs that some of them were wavering.

Mr. Kann, who had been advising the family against selling, expressed hope that Mr. Murdoch would not prevail, using an image of The Journal as a citadel trying to repel an invasion by tabloid barbarians.

“The drawbridge is up,” Mr. Kann told the group. “So far, so good.”

For employees at Dow Jones, the 11 weeks since they learned of the Murdoch offer have been a wrenching time, raising the prospect of fundamental changes at an organization that had already had its fill of big changes in the last couple of years — with Mr. Kann being replaced by Richard F. Zannino as chief executive, with Marcus W. Brauchli taking over from Paul E. Steiger as top editor; and with a shift of its mission, by adding a Saturday paper and more lifestyle articles to appeal to new advertisers, and investing heavily in its digital properties.

. . .  

(p. C12)  The anti-Murdoch forces enjoyed one of their brief lifts on June 29 when The Journal reported that Leslie Hill, a Bancroft family member, had grave reservations about selling to Mr. Murdoch. Someone enlarged The Journal’s dot drawing of Ms. Hill, a retired airline pilot, adding the words “I Fly with Leslie” above her face. Copies of the makeshift poster appeared in Journal offices around the country.

. . .  

As the chances of an alternative have appeared to wane, more reporters and editors have polished their résumés and approached rival publications about jobs. Some have even talked of starting their own business news Web site.

Many voiced disappointment in the Bancrofts, the family that has owned the company for more than a century and taken great pride in it, for not playing a leading role in running it for more than 70 years.

“We understand that for the Bancrofts this is a choice between getting much richer, and holding onto something because they believe in it,” a reporter said. “What they may not realize is that many of us in the newsroom have made the same choice. There are a lot of people here who could be traders or lawyers, people with M.B.A.’s, who could be making a lot more money. To us, this is not an abstract choice.” 

 

For the full story, see: 

RICHARD PÉREZ-PEÑA. "At The Gates; Murdoch’s Arrival Worries Journal Employees." The New York Times  (Thurs., July 19, 2007):  C1 & C12. 

 

MurdochRupert.jpg Rupert Murdoch.  Note that the image is a tribute, or humorous small jab at, the hallmark image style of the Wall Street Journal, in which photographs are re-done by artists into an example of something like pointillism.  (True also of the poster image above.)  Source of the image:  online version of the NYT article cited above.

 

A Public Choice Theory of “Taxonomic Inflation”

 

The excerpt below is from a WSJ summary of an article that appeared in The Economist on May 19, 2007.

 

Scientists have taken to upgrading animals once thought to be subspecies into full-fledged species, in what the Economist says is an overzealous attempt to boost conservation of seemingly rare animals.

Sometimes, the reclassification of animals into their own species category is warranted, as new research reveals once-obscured markers that differentiate certain beasts. But lately, the weekly says, primatologists have been suffering from "taxonomic inflation."

. . .

. . .   One reason is that by fragmenting animal groups, the number of rare species increases, boosting animal-conservation claims.  At the same time, having a greater number of species boosts the chances that a habitat can pursue a legal designation as a protected area.

 

For the full summary, see: 

"Informed Reader; NATURE; Species Inflation May Infect Over-Eager Conservationists."  The Wall Street Journal  (Sat., May 19, 2007):  A6.

(Note:  ellipsis added.)

 

We Should Not Be Forced to Fluoresce

 

Source of lighting table:  online version of the WSJ article cited below.

 

I’ve been using some of the compact fluorescent light bulbs for a few years.  They’re very slightly slower to turn on, and I don’t like the quality of light quite as well, but the money I figure I save is enough, for me, to outweigh the minor disadvantages.  But I can easily imagine a rational person viewing the trade-offs differently.  So it galls me that some environmentalists want to force us to fluoresce. 

If enough people are willing to pay the higher energy costs of incandescent light, then we should let private enterprise build more nuclear power plants to provide consumers what they should be free to buy.

 

(p. A1)  WASHINGTON — Manufacturers and environmentalists are hammering out a nationwide energy-saving lighting standard that, if enacted by Congress, would effectively phase out the common household light bulb in about 10 years. That in turn could produce major cuts in the nation’s electricity costs and greenhouse-gas emissions.

The new standard is expected to compel a huge shift by American consumers and businesses away from incandescent bulbs to more efficient — but also more expensive — fluorescent models, by requiring more light per energy unit than is yielded by most incandescents in use. The winner, at least in the near term, likely would be the compact fluorescent light bulb, or CFL.

 

For the full story, see:

JOHN J. FIALKA and KATHRYN KRANHOLD.  "Households Would Need New Bulbs To Meet Lighting-Efficiency Rule."  The Wall Street Journal  (Sat., May 5, 2007):  A1 & A5. 

 

 FluorescentBulb.gif   The bulb I like, but don’t want to be forced to use.  Source of image:  online version of the WSJ article cited above.

 

A Salute to Underappreciated Amateur Historians

 

On a bright Saturday afternoon earlier this month, 30 or so of us gathered to give James O. Hall the send-off he deserved. Appropriately enough, the memorial service was held in the James O. Hall Research Center of the Surratt House museum, in Clinton, Md., 12 miles south of Washington. Mr. Hall died in February at the age of 95, leaving no immediate survivors. The 30 who showed up were instead neighbors, friends, a pair of nieces and random hangers-on who, like me, had known him only slightly but who honored him as a giant in a long and noble and underappreciated line.

I don’t think there’s a good word for what Mr. Hall did: "researcher" is too dry, "historical investigator" carries hints of melodrama, and "archivist" suggests a dutiful drudge, which Mr. Hall was not. "Amateur historian" probably fits best, though it sounds vaguely derivative and second-tier. Following a career with the Labor Department — he retired in the early 1970s — Mr. Hall turned himself into the world’s foremost authority on the assassination of Abraham Lincoln. Historians, pros and amateurs alike, sought him out for his knowledge and access to his exhaustive files. As one of them put it, James O. Hall knew more about Lincoln’s murder than anyone who ever lived, including John Wilkes Booth.

. . .

"I had to teach myself genealogy," he said. "Not because I liked genealogy, but because it’s how you find things that have been lost." Over the years, he tried to trace the descendants of everyone even remotely tied to the assassination. When he found a new great-granddaughter or the grandson of a nephew, he politely peppered that person with letters and phone calls, asking the descendant to rummage through attics — or offering, even better, to do it himself. His industry never flagged, and it led him to some of his greatest discoveries. In a dusty cubby in a forgotten archive, Mr. Hall made one of the major Lincoln finds of the past 50 years: a letter of self-justification Booth wrote the morning of the murder.

Typically, in 1977, Mr. Hall chose to publish this astonishing find in the Lincoln Log, a newsletter for buffs. Its circulation was minuscule compared with the slick magazines — National Geographic or American Heritage — that would have loved to showcase such a find and maybe make its discoverer famous. But Mr. Hall was without professional vanity; that’s what it means to be an amateur, after all.

At the end of his life, Mr. Hall treated his vast archives with the same modesty and discretion. At least two well-endowed universities made a play for the contents of his file cabinets. Instead, he gave them to the small, homespun Surratt House museum, once the country home of the Lincoln conspirator Mary Surratt and a favorite gathering place for buffs. With a single stroke, he transformed the museum into the Alexandrian library of assassination studies. It was a gesture of confidence and fellow feeling, made to all amateur historians from the best of their kind.

 

For the full commentary, see: 

ANDREW FERGUSON.  "TASTE; A History Hobby."  The Wall Street Journal  (Fri., May 25, 2007):  W13.

(Note:  ellipsis added.)

 

Hispanic Immigrants May Help Rejuvinate Aging Workforce

 

   Source of graphic:  online version of the WSJ article cited below. 

 

The article excerpted below sketches one solution to the "problem" of the aging boomer workforce.  Michael Milken has suggested that the problem itself may be bogus, because aging, healthy, boomers will just keep on trucking a lot longer and stronger than is usually believed. 

 

The quality of life for some 80 million graying baby boomers in the U.S. may depend in large part on the fortunes of another high-profile demographic group: millions of mostly Hispanic immigrants and their children.

With a major part of the nation’s population entering its retirement years and birth rates falling domestically, the shortfall in the work force will be filled by immigrants and their offspring, experts say. How that group fares economically in the years ahead could have a big impact on everything from the kind of medical services baby boomers receive to the prices they can get for their homes.

Immigrants and baby boomers are two groups whose destinies are converging in the next 20 years," says Dowell Myers, a demographer at the University of Southern California. "Baby boomers will surrender their economic role to this generation of immigrants and their children," who will evolve into a critical pool of laborers and taxpayers, he says.

Prof. Myers, author of the recent book "Immigrants and Boomers: Forging a New Social Contract for the Future of America," is among a crop of academics studying the link between the giant generation born between 1946 and 1964 and newcomers to the U.S., mainly Latin American immigrants.

 

For the full commentary, see: 

MIRIAM JORDAN. "Boomers’ Good Life Tied To Better Life for Immigrants." The Wall Street Journal (Mon., May 7, 2007):  A2.

 

FDA Rejects Long-Lasting Disappearance of Disease as a “Theoretical Construct”

 

Consider the FDA’s handling of Genasense, a new drug for melanoma and chronic lymphocytic leukemia (CLL), two often terminal forms of cancer. The drug is being developed by Genta, a small, innovative company with only one approved drug and limited financial resources. Despite compelling evidence that Genasense is making progress in fighting both diseases, the FDA appears determined to kill the drug.

In the case of the melanoma application, instead of reviewing the clinical-trial data in accordance with usual methods (which showed positive results), the FDA chose a nonstandard statistical approach aimed at discrediting the results. The agency used this analysis in its briefing to its advisory committee, claiming that the drug might not be effective. The committee then relied on that information to vote against approval.

. . .

The FDA’s inane answer to the CLL experts was that the long-lasting disappearance of disease in patients taking Genasense was a "theoretical construct" and not grounds for approval.

The experts explained to the FDA that complete responses in advanced CLL patients are the medical equivalent of the Holy Grail. The FDA finally agreed, but was unimpressed with emerging data showing responders to Genasense living longer than responders in the control group.

The experts were unanimous in advising that Genasense should be approved, but the FDA was unmoved. The agency’s Dr. Pazdur suggested that Genta could make the drug available as an unapproved treatment through an expanded access program — this from a regulator fond of stating that the best way to get a drug to patients in need is through approval! In this case the agency was saying to Genta: We are not going to approve your drug, but any patient who needs it can have it so long as you give it away.

. . .

The FDA’s handling of Genasense lays bare the all too common, aggressive incompetence of the FDA’s cancer-drug division and should lead to an immediate examination of its policies and leadership, followed by swift corrective action.

As for the FDA’s belief that their power to control us and even deny us the pursuit of life itself is unlimited under the Constitution, we can only hope the appeals court disagrees. An agency that blocks progress against deadly diseases — while arguing that its power to do so is above challenge — is in dire need of a court supervised review.

 

For the full commentary, see: 

STEVEN WALKER.  "Drug Czars."  The Wall Street Journal  (Fri., May 4, 2007):  A15.

(Note:  ellipses added.)