Why Are Hotel Rooms So Expensive?

Matthew Yglesias:

Hotel customers tolerate these marked-up amenities because they generally aren’t very interested in driving a hard bargain. The business traveler is likely to feel that he “needs” appropriately located accommodations and isn’t going to be interested in exhaustive research about the costs and benefits of staying someplace cheaper and more remote. What’s more, he’s generally not paying out of pocket. A responsible employee will of course try to be reasonably frugal, but even so frugality is benchmarked to local costs. That encourages a market that’s biased toward higher price points. The existence of premium business travelers who can fully pass on costs on to clients (think fancy lawyers and consultants) further pushes the market up. What’s more, even when people do pay for their own work travel, the cost is tax deductible. If a journalist travels for a freelance assignment or speaking engagement, it makes sense to take extra consumption in the form of staying in a nicer hotel with pre-tax dollars than to spend after-tax dollars at home.

Tourists may be more frugal. But even so, for many vacationers (especially in America) time is in shorter supply than money, so it makes sense to invest extra money in ensuring that the time is well spent.

Obama: a GOP president should have rules limiting the kill list

Glenn Greenwald:

Now that Obama rather than Romney won, such rules will be developed “at a more leisurely pace”. Despite Obama’s suggestion that it might be good if even he had some legal framework in which to operate, he’s been in no rush to subject himself to any such rules in four full years of killing thousands of people. This makes it safe to assume that by “a more leisurely pace”, this anonymous Obama official means: “never”.

There are many important points raised by this report: Kevin Gosztola and Marcy Wheeler, among others, have done their typically excellent job of discussing some of them, while this Guardian article from Sunday reports on the reaction of the ACLU and others to the typical Obama manipulation of secrecy powers on display here (as usual, these matters are too secret to permit any FOIA disclosure or judicial scrutiny, but Obama officials are free to selectively leak what they want us to know to the front page of the New York Times). I want to focus on one key point highlighted by all of this:

Democratic Party benevolence
The hubris and self-regard driving this is stunning – but also quite typical of Democratic thinking generally in the Obama era. The premise here is as self-evident as it is repellent:

Manufacturing the future: The next era of global growth and innovation

James Manyika, Jeff Sinclair, Richard Dobbs, Gernot Strube, Louis Rassey, Jan Mischke, Jaana Remes, Charles Roxburgh, Katy George, David O’Halloran and Sreenivas Ramaswamy:

The global manufacturing sector has undergone a tumultuous decade: large developing economies leaped into the first tier of manufacturing nations, a severe recession choked off demand, and manufacturing employment fell at an accelerated rate in advanced economies. Still, manufacturing remains critically important to both the developing and the advanced world. In the former, it continues to provide a pathway from subsistence agriculture to rising incomes and living standards. In the latter, it remains a vital source of innovation and competitiveness, making outsized contributions to research and development, exports, and productivity growth. But the manufacturing sector has changed—bringing both opportunities and challenges—and neither business leaders nor policy makers can rely on old responses in the new manufacturing environment.

Manufacturing the future: The next era of global growth and innovation, a major report from the McKinsey Global Institute, presents a clear view of how manufacturing contributes to the global economy today and how it will probably evolve over the coming decade. Our findings include the following points:

The lottery of life Where to be born in 2013

The Evonomist:

Warren Buffett, probably the world’s most successful investor, has said that anything good that happened to him could be traced back to the fact that he was born in the right country, the United States, at the right time (1930). A quarter of a century ago, when The World in 1988 light-heartedly ranked 50 countries according to where would be the best place to be born in 1988, America indeed came top. But which country will be the best for a baby born in 2013?

To answer this, the Economist Intelligence Unit (EIU), a sister company of The Economist, has this time turned deadly serious. It earnestly attempts to measure which country will provide the best opportunities for a healthy, safe and prosperous life in the years ahead.

Its quality-of-life index links the results of subjective life-satisfaction surveys—how happy people say they are—to objective determinants of the quality of life across countries. Being rich helps more than anything else, but it is not all that counts; things like crime, trust in public institutions and the health of family life matter too. In all, the index takes 11 statistically significant indicators into account. They are a mixed bunch: some are fixed factors, such as geography; others change only very slowly over time (demography, many social and cultural characteristics); and some factors depend on policies and the state of the world economy.

A forward-looking element comes into play, too. Although many of the drivers of the quality of life are slow-changing, for this ranking some variables, such as income per head, need to be forecast. We use the EIU’s economic forecasts to 2030, which is roughly when children born in 2013 will reach adulthood.

The High Price of Nickel-and-Diming Doctors

Shannon Pettypiece:

Dr. Thomas Lewandowski, a Wisconsin cardiologist, had a tough choice to make in 2010 after the federal government yet again reduced the payments he received for treating Medicare patients: He could fire half his staff to keep his practice open, or sell it to a local hospital. He sold, becoming one of more than 6,000 employees at ThedaCare, which runs five hospitals and numerous clinics in the northeastern part of the state. Lewandowski is among thousands of once-independent doctors who are joining with hospital chains to stay afloat, a trend that threatens to raise the price of health care even as the federal government strains to keep a lid on costs.

Under Medicare’s tangled payment system, hospitals get higher reimbursements than individual doctors for cardiology treatment and other specialty services—in some cases a lot higher. The program pays a hospital $400 for an echocardiogram, $180 for a cardiac stress test, and more than $25 for an electrocardiogram, according to data from the American College of Cardiology. At a private physician’s office, Medicare pays $150 for an echocardiogram, $60 for a cardiac stress test, and $10 for an electrocardiogram.

Looking to Industry for the Next Digital Disruption

Steve Lohr:

When Sharoda Paul finished a postdoctoral fellowship last year at the Palo Alto Research Center, she did what most of her peers do — considered a job at a big Silicon Valley company, in her case, Google. But instead, Ms. Paul, a 31-year-old expert in social computing, went to work for General Electric.

Ms. Paul is one of more than 250 engineers recruited in the last year and a half to G.E.’s new software center here, in the East Bay of San Francisco. The company plans to increase that work force of computer scientists and software developers to 400, and to invest $1 billion in the center by 2015. The buildup is part of G.E’s big bet on what it calls the “industrial Internet,” bringing digital intelligence to the physical world of industry as never before.

The concept of Internet-connected machines that collect data and communicate, often called the “Internet of Things,” has been around for years. Information technology companies, too, are pursuing this emerging field. I.B.M. has its “Smarter Planet” projects, while Cisco champions the “Internet of Everything.”

“here in the United States we don’t have problems. We have challenges. And every challenge is an opportunity.”

Jack Ewing:

MUNICH — In 1987, a recent engineering graduate named Norbert Reithofer wrote a treatise that in retrospect reads like a manifesto for the German economy. The only way manufacturers in a high-cost country with few natural resources could survive, he argued, was by becoming the most flexible and efficient in the world.

Mr. Reithofer, now 56 and chief executive of the automaker BMW, has since put that principle to work with a vengeance, delivering consistent profit through two crises and becoming something of an icon of the revival of German industry.

Though continuing to build roughly 60 percent of its vehicles in high-cost Germany, BMW reported another rise in quarterly profits this month despite the worst downturn the European car industry has had in decades.

As the auto crisis shows signs of spreading to the premium market, though, Mr. Reithofer faces a test of his management skills that will have implications for the whole nation. Cars are Germany’s largest export product. But the losses that companies like Fiat, Ford and General Motors have been piling up in the region raise fundamental doubts about the future of automobile manufacturing in Western Europe.

How a Robot Will Steal Your Job

Cord Jefferson:

On a visit to Standard Motor Products’ fuel-injector assembly line in South Carolina, Atlantic writer Adam Davidson asked why a worker there, Maddie, was welding caps onto the injectors herself. Why not use a machine? That’s how a lot of the factory’s other tasks were performed. Maddie’s supervisor, Tony, had a bracing, direct answer: “Maddie is cheaper than a machine.”

Davidson’s complex, poignant story, Making It in America, revealed some chilling data about where American manufacturing is headed. It’s a matter of simple math. Maddie makes less in two years than a $100,000 machine would cost, so her job is safe—for now.

Elsewhere in America, robots are getting cheaper and more sophisticated, and they’re landing better, more advanced jobs. They are driving cars, writing newspaper articles, and filling prescriptions, displacing people with years of schooling and training under their belts. It sounds like a classic sci-fi story, but that disconcerting future isn’t in the future. It’s here today.

US energy is changing the world again

Daniel Yergin:

American energy independence, for decades the preserve of quixotic rhetoric, has become a serious prospect thanks to the resurgence in US oil and gas output. The International Energy Agency this week projected that the US could overtake Saudi Arabia as the world’s biggest oil producer by 2020. Whether that happens or not, what is unfolding in the US will continue to change its economy and affect both international relations and the global energy outlook.

US energy independence is still far off. But a rebalancing of world oil production has already begun. The US will rapidly become much less dependent on oil imports and will soon join the ranks of exporters of liquefied natural gas. This is a dramatic change from the outlook just four years ago, when Barack Obama won his first presidential election. In 2008, the expectation was for decline in US oil production and an increase in imports. This fed a pervasive sentiment that American oil’s days were coming to an end.

The Trials of Fast Growing Greek Yogurt? Did a Traditional Yogurt Player Plant the Story?

Dan Charles:

A few months ago, I let you in on a little secret about Greek yogurt [Wikipedia]. Not all of this extra-thick, protein-rich yogurt is made the old-style way, by straining liquid out of it it. Some companies are creating that rich taste by adding thickeners, such as powdered protein and starch.

Judging by comments that I heard, a lot of people feel rather passionately that the original, strained version is morally superior. But here’s another little secret: That traditional process for making Greek yogurt is also quite wasteful.

At the Fage factory in Johnstown, N.Y., for instance, it takes 4 pounds of milk to make 1 pound of authentic Greek yogurt. What happens to the other 3 pounds? It’s strained out of the yogurt as a thin liquid called whey, and getting rid of that whey is actually a headache. Greek yogurt factories have to pay people to take it off their hands.

This may sound confusing if you heard my story about cheese-making the other week. That story described whey as a valuable source of lactose and concentrated protein that ends up in other food products (including the thickened version of Greek yogurt, in fact).

Disclosure: A former Stonyfield customer, I now enjoy fast growing Chobani yogurt, particularly the pomegranate variety.