Pancake City

It’s not too often I agree with Robert Novak. In fact, this may be the first time that I have. But this is a sound overview of the Democratic nomination race at this point.

NPR to Remain in the District - washingtonpost.com

Albert, the deputy mayor, said he understands the business owners’ concerns about escalating property taxes and encouraged them to appeal the assessments.

This quote was tucked at the end of an article on how D.C. got NPR to stay in the city after offering it huge tax breaks. Some small business owners have complained this is unfair. The quote from the deputy mayor encouraging small businesses to appeal their assessments made me wonder if the appeals process is a vehicle for variable pricing.

The general idea behind variable pricing is that the ideal situation for a business is to have each customer pay the maximum amount that he or she is willing to pay.

If a cup of coffee is $3.50 and you are secretly willing to pay $3.95 for it, then Starbucks is losing .45 in profit to you each time you buy a cup of coffee. If a cup is $3.50 and you are only willing to pay $3.00, then Starbucks is losing money by not making a sale to you (assuming the coffee costs less than $3.00 to make).

Starbucks can’t start a “pay the most you can” system though–no one would follow it. But they will lose lots of money under a flat price system, as the above example shows. So they use pricing techniques to get around it as best as possible, like selling a Tall for $3.00, a Grande for $3.50, and a Venti for 3.95. The actual extra materials cost may only be 5 cents for a larger size, but this allows them to serve both price conscious consumers and people with money to spare.

Another example would be, I don’t know, selling the IPhone  for $200 more to early adopters willing to pay a higher amount, then lowering the price for more price-sensitive people. Not that Steve Jobs would do something like that.

I wonder if the quote on the property tax appeal process reveals a similar system. Let’s say D.C. wants the most tax money business owners can afford to pay, but not so much that it hurts their business and they move away.

D.C. can’t tax people in the same neighborhood different rates based on what they are willing to pay though. So they tax businesses at a slightly higher rate than what they need, but make the appeals process lax enough that most people who make an appeal get a tax reduction. Businesses not being severely hurt by the property tax won’t go through the hassle of making an appeal. Businesses that are being hurt will go through the trouble.

The result: variable pricing in an area that doesn’t lend itself easily to variable pricing. I’m not an economist and may be completely wrong, but I thought it would be an interesting idea to throw out.

An exceedingly common refrain when criticizing the invasion of Iraq is that “we took our eye off the ball” (the Taliban in Afghanistan). A web headline on The Washington Post’s site today is “Eye On The Ball, America.” It’s about the Mideast peace process.

Are we so stupid that we are incapable of talking about foreign policy without using sports metaphors? It’s not even a smart sports metaphor. “Keep your eye on the ball” is what Little League coaches yell at eight-year-olds who are too distracted by that dog licking himself on the sideline to pay attention. It’s a miracle President Bush said “Mission Accomplished” in 2003 rather than “Touchdown!”

This isn’t an idle point. Language both reflects and influences our thought processes. Our thoughts can only be as complex as the words we use to utter them. When politicians say, “We gotta get the bad guys,” do you know what they’re thinking? It’s not, “We need to judiciously marshal our resources to target radical Islamic fundamentalists that wish to harm us without inflaming the world and creating a bigger problem than what we started with.” The thought is, “We gotta get the bad guys.” Or perhaps even “Bad guys bad” if they are getting linguistic help from a teleprompter.

A large part of the reason political discussions are so simple-minded and devoid of substance is because of the language politicians use. Is “Pullout now / We can’t surrender” any different from “Tastes great / Less filling”? By the time a complex discussion gets hacked by television media into 15 second sound bites and repeated ad nauseam on 24-hour cable networks or by ideologues on political talk shows or radio, it doesn’t resemble a discussion anymore. It’s just sloganeering, and the small percentage of people trying to think independently and evaluate the available information wonder why they have so much trouble doing so.

I don’t know how much to blame politicians for this. When they say something nuanced, their words get twisted and distorted by their opponents. If it’s not a snappy sound bite, news networks will prune qualifications and conditions from the original statement until it becomes one. And that what gets remembered. There is something about human psychology that makes us receptive to short, simple messages (see: Basis For All of Advertising). It’s a shame few politicians point this out and at least try to raise the level of discourse.