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Supply Meeting Demand (Through Airbnb)

4/26/2014

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I enjoyed this New York Times article on Michael Naess, who rents out his spare bedroom to an international cast of visitors who find him through Airbnb.
The vacationing couple from Hattingen, Germany, showed up at Michael Naess’s shipshape Queens apartment at the end of February. They had never met before. Nonetheless, here they were, digging into scrambled eggs, sipping coffee and chatting companionably with him on a Saturday morning. A German radio station, plucked from the Internet, rendered a flavor of home.

The couple consisted of Dark Bontkowski, 52, a test driver for a German shock absorber maker, and his girlfriend, Martina Held, 48, a graphic designer for a financial newspaper. Mr. Bontkowski mentioned that, implausibly, he is a test driver who owns no car of his own. It was a needed expense reduction after he got divorced. He pedals to work on a bicycle, 22 miles each way.

The couple was occupying Mr. Naess’s spare bedroom for 10 days.

Awkward, but not really awkward. They were paying guests.
The producer (Mr. Naess) bends over backwards to meet the needs of consumers (the visitors):
When you rent from Michael Naess, it feels as if you are staying with your favorite uncle, the one who dotes on you.

His only rules are that you smoke only on the balcony (and deposit butts in the coffee can) and refrain from drugs and late-night parties. He tells renters to go ahead and indulge in his groceries. Make coffee. Use his milk. Eat his English muffins. (Most guests replace what they consume, though he doesn’t mandate it.) He leaves a snack basket in the spare room with granola bars, peanuts and almonds. Often, he offers his visitors complimentary concert tickets he gets at work.

Mr. Naess is doing it to earn money:
By and large, they do not accept strangers in their homes because they relish phenomenal amounts of company or washing soiled bedsheets. They do it for the money.

When he bought his two-bedroom, two-bathroom condominium in Astoria at the end of 2009, Mr. Naess found himself financially pinched. He is a senior marketing manager at Carnegie Hall, where he focuses on seat retention (“Once we get someone in a seat, we want to get them back,” he explained). His income is not nearly hedge fund large, and he shoulders more than half the mortgage payment on his mother’s home (his sister picks up the rest) in Virginia.
And his guests are doing it to save money:
The desire to save money is what puts renters in Mr. Naess’s apartment. Hotel prices in New York average about $300 a night. When Mr. Bontkowski and Ms. Held visited the city a year ago, they spent nearly double Mr. Naess’s rate on a hotel, and they didn’t even like the room. “I asked my boss where do college students stay when they go to New York, and he told me about Airbnb,” Ms. Held said.
Both sides are motivated by money. But their self-interest is directed towards socially good behaviors. People are giving strangers a place to stay and being really nice to them. That is the magic of the market.
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The Case Against Public Sector Unions

4/4/2014

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The New York Times has an article on Joseph Ponte, New York City's new Corrections Comissioner, who will try to reform Riker's Island jail. He's up against Norman Seabrook, president of New York's correction officer union and one of the most powerful union leaders in the state. If the article portrayed Mr. Seabrook fairly, Mr. Ponte will have his work cut out for him.

The Prison Reformer vs. Rikers Island

Private sector unions are bad. But public sector unions are worse because
(1) There is no competition (as between private firms) that circumscribe their power and
(2) They interfere with the ability of the citizenry to control their own public institutions--vital state institutions like police and prisons.

From the article:
Last year, some Rikers inmates who completed a lengthy therapy program were given pizza by the mental health staff. It angered correction officers, who saw it as a case of coddling criminals.

Mr. Seabrook showed up for a shift change, when guards are lined up for inspection. He led his members into a commissary and though the wardens tried to get them back in formation, they refused.

For those present, it sent a message about who controls the cellblocks.

“You want to eat pizza, stay home,” Mr. Seabrook said during an interview. “You want to have Carvel, stay home. You want to do a timeout, stay home. Corrections officers are not babysitters.

“You push me,” he said. “I push back.”
This kind of union power is an affront to democracy. Mr. Seabrook: you are an employee of the people of New York. If they want you to feed their prisoners an ice cream sundae, you ask, "vanilla or strawberry?"
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    Ben Mathew

    Author of Economics: The Remarkable Story of How the Economy Works

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