The Disservice Economy – Life in our service economy inevitably carries a risk of occasional disservice. And what a fascinating variety of forms disservice can take.I inhabit a world of relatively good standard services, facilitated by new information technologies. But non-standard services are another matter. Big differences between routine and non-routine quality may be consistent with profit maximization. Companies that care about customer loyalty want to minimize the probability that a customer gets aggravated. But it may not be cost-effective to provide high-quality services for low-probability events. And once a customer passes a threshold of aggravation, the intensity of further aggravation probably has few ramifications. Individual rants generally have less impact on company reputation than reports of average quality, which are largely dominated by the quality of routine transactions.
The Root of the Housing Bubble Remains Unchanged – The fundamental root of the housing bubble–the collusion of the Central State and banks to extend home ownership to millions of citizens who did not qualify for that burden– remains firmly in place. The Federal government continues to pour tens of billions of dollars into this "home ownership should be for everyone" project via subsidies to Fannie Mae, Freddie Mac and FHA. Mortgage lenders have been delighted to write mortgages in our completely nationalized market in which the government backs literally 99% of all mortgages and the Federal Reserve bought $1.2 trillion in mortgages that no sane private investor would touch. Fannie Mae seeks $8.4 billion from government after loss: Fannie Mae, the largest U.S. residential mortgage funds provider, on Monday asked the government for an additional $8.4 billion after the company lost $13.1 billion in the first quarter. The government has relied heavily on both companies, which buy mortgages from lenders to stimulate more lending, to stabilize the housing market. In other words, the housing market would collapse without this massive Federal support, and there is no end to the losses this subsidy will require.