NewPage's Miscalculation affects us all

When it comes to economics and trade, no one knows it better than American companies. If costs can be cut down, they will make sure that it is done either by moving off-shore or outsourcing its labor. No one can beat American companies when it comes to efficiency and innovation in business. Efficiency and Innovation. These two have always been the strongest traits of American businesses and helped them become multinational companies with presence felt all over the world.

And American companies should never give up these two traits. Not even in difficult economic times such as present. Free trade and capitalism has helped the US become the global superpower and proved that is the only viable method that promotes good of all. Globalization empowered with free trade is flattening the world and levelling the playing field for everyone as Thomas Friedman writes in his best selling novel "The World is Flat". And it is a good thing, for US consumers and the world market and for everyone. When rules of the game are fair, everyone can compete on equal ground, that is the essence of free trade. In free trade, everyone gains because of comparative cost advantage.

Newpage, a US company that produces coated paper for brochures, magazines and other publications seems to be defying laws of free trade to further its own interests. It has attempted to restrict foreign competition in paper industry to increase its profits. Capitalism does not restrict anyone from making profits but rules of the game have to be followed. No one can be allowed to act as robber barons of the past anymore. Lobbyists of Newpape have successfully won the battle for the company but whom has it benefitted? According to Paramendra Bhagat, this move has decreased Newpage's revenue and decreased availability of paper in domestic market. He writes,

The NewPage prices have gone up - as predicted - and NewPage revenues have gone down. That is a double whammy.

Now, this is a no-brainer. One wonders how can a company in the US be able to get a move as this one approved that increases price of the good for US consumer without any increase in quality. The argument used must have been about the need for protecting jobs for Americans. Without artificial restriction and keeping out foreign competition, Newpage could not compete in the market. But should US consumers suffer for their incompetency to compete? Protectionism does not work well in a globalized economy such as ours. Market should decide the fate of companies.

Newpage as a company has violated terms of free trade by lobbying against foreign competition. It has also done disservice to other companies that are following free trade principles and making best use of scarce resources. Newpage's website reads,

And our business decisions are made with the utmost care for the world around us.

Their business decision to restrict foreign competition in domestic market so that they can create artificial scarcities and then jack up prices and make enormous profits is unlawful. It certainly is not consistent with their principle of "taking care of the world around NewPage". When foreign competition is restricted, foreign companies would have to decrease their production and shed off workers. At the same time, US consumers would have to pay more to NewPage for printing. Paramendra has also noted that the decision to restrict foreign competition and pamper its domestic paper industry, NewPage in the name of foreign competition has negatively affected whole publishing industry as a whole. He writes,

NewPage has scored a temporary victory by curbing free trade in international paper, but NewPage has been one of the earliest victims, and it has brought down the publishing industry along with itself.

 In another article, he has also shown empirically how the decision to restrict foreign competition was bad not only for the NewPage company but also for other publishing industries and US consumers as a whole. His facts speak a story. They can be accessed from Coated Paper Stock.

Facts

• NewPage overall revenue was better in 2009 than 2010. Foreign coated paper left the US market in 2010.
• NewPage Core Paper Prices have increased $50 per ton.
• Paper supplies are now at an all time low.
• Even though they had better sales in 2010, their debt increased to a whopping $697 million.
  As NewPage net income increased foreign paper (specifically coated stock) was present in the market place. When NewPage net income went down foreign coated paper was no longer being imported. NewPage had better earnings and market share when there was foreign coated paper was present. It is better for NewPage if foreign coated is present in the US market.
• As the ability for printers to buy coated paper has decreased, NewPage raises their price when they have no competition.
• With NewPage’s anti-competitive tactics, they have removed much needed paper from the market leaving printers hurting from higher prices.
• As a result of greed, mismanagement and Cerberus’ business model of running up debt and shutting down mills. This is what happened to the NP Plant in Kimberly, WI.

To show your support and learn more, visit Facebook Page for International Paper Coalition.

Galileo Humor

I liked this humor. This shows how scientists were treated in the time when churches had absolute power.

This was originally taken from History of Astronomy

What's up with the Pope?

When you realize no one is really paying attention to you or commenting on your Facebook status even though you change it more often than you change your underwear then, you act out of desperation and write something really stupid. Don’t tell me you have not seen people writing controversial statements on their Facebook statuses expecting tonnes of comments.

It seems Pope has been using a lot of Facebook these days, with high privacy settings, of course. What should I make of his Facebook status message which says that the use of condoms would make the ailing situation of AIDS in Africa even worse? Of course, he fulfilled his purpose by drawing out thousands of comments. Did he act out of desperation because for Christians, religion was starting to get limited to Sundays? He caused a stir and uproar among the large population. Even many Catholics must have felt really let down and misrepresented. I mean what is his basis? A person with his authority is in no position to make value judgments. It would be stupid to think he had not foreseen that this mass uproar would be created. Pope must have been watching a lot of Britney and must have learnt from her on how to stage a publicity stunt. Well done the Great Pope, you are a quick learner.

Abstinence? Why should anyone abstain from sex? Sex is a physiological need. Humans are unusual in that they have too less sex. I’m not kidding. If you were to look at scientific evidence of primates and compare bonobos, chimpanzees, gorillas and humans, there is a solid link between the size of testicles and frequency of sex per day. The analysis predicts that on average, humans would have sex at least once a day and that is a natural rate, chimps mate several times a day. Again, these rates are normal and early humans might have followed this trend until this notion of abstinence was imposed by religion. Osho and Freud, all they were proposing were what was in nature. And religion boycotted them. Pope is against contraceptives because it is against natural law of sex for reproduction and advocates abstinence. But how the hell is abstinence any more natural? What hypocrisy? The only reason the Pope is against the use of condoms is because of his reluctance to budge against his dogmatic beliefs. Please correct me. It’s not his. The unwillingness to change and upgrade and keep on using Pentium I even though Pentium IV has arrived in the market has been trademark of all religions; this deep conservatism seems to be the common ground of all religions. It is fine with me, if they don’t want to change, they will be left behind.

A Death in the Family

Lightning didn’t strike me but I know even if it would have, it could not have been worse. I guess I will start rambling on after few sentences so, I am warning you ahead. I received a call from my home and the news delivered was distressing. I do not call home often, usually they call me. I am trying to live in this little isolated world of my own, divorced from all worldly bonds and emotional attachments. Every call from home creates a little hole to peek in my little isolated world. It’s not that I hate my parents or family. They are the only people I love and they mean to me more than anyone else. This is a normal behavior of an adolescent I guess, normal since I am growing amid an American society.

Life and death are the two biggest mysteries that haunt every human minds, even more so thinking, active and intelligent minds. The only death that I have seen closely is the death of my grandfather. It was an unusual death in many ways, ways that I do not intend to mention here. I was only 14 years old then and the concept of death was alien to me even though I knew that being dead means not being able to find that person on this Earth or in this universe. I was very close to my grandfather and I was his favorite among all cousins that I grew up with, in my large family in my village. It has hardly been 6 years since I lost my grandfather and the pain has not healed yet and it seems I am going to lose my grandmother now. It’s unfair.

Can’t they wait? Death should give me sometime so that I can overcome the pain of losing my grandfather and those childhood days that I spent in his arms listening to folklores. It should give my grandmother sometime so that I can finish my college degree and go back home to see her. The tears in her eyes when I left for the United States have stamped an indelible image in my mind. I vividly remember her words, “You are going so far from me. I do not know if I will ever see you again before I die.” Even though she said these words in a serious tone, I knew this was just an intended humor. Her words have turned true, what an irony. I wish they had not.

My father did not hide anything; he explicitly said, “She is in her last stages. She is confined to bed now and cannot move at all. It seems she will not live for long. Do you have any of her photos?” As a grown-up adolescent, I know about this process of life and death, unlike Siddartha Gautam(Lord Buddha). But my incomprehensibility and inability to understand this process or to reason why this is inevitable is no different than Siddartha Gautam. When someone dies in one’s family, all the knowledge, understanding, rationality and pragmatism goes on a holiday trip to Bahamas, all it matters is that the person, whom they loved so much and who loved them so much would be no more in this world. No one can do without shedding tears.

Jaundice. That is what put her into this situation. This word will become associated with fear and hatred for me throughout my life. I know throughout my college degree and beyond, whenever I will come across this word, I will wage a war against it. I will try to learn everything about it with every opportunity, all its weakness and I will humiliate it. I might not be able to kill it but I will defeat it and will make sure it never invades me or my family in the future. Jaundice is a curable disease if treated properly and in a timely manner, if not, it brings death. Her jaundice was not caused due to contaminated fluid or food; it was due to degeneration of her liver aggravated by her diabetes. Diabetes runs in my family and so does high blood pressure. She was further afflicted by gastrointestinal complications. She moved with a diseased body afflicted by diabetes, high blood pressure and gastrointestinal diseases. Such a lethal combination will bring any mortal down sooner than one can imagine. She battled successfully these years, thanks to her healthy diet and traditional lifestyle in a serene, natural and rural environment.

Living amid strangers, all I can do now is reminisce my childhood days spent with my grandmother and wait for the final call from home. With every trrriinnnnggg now, my heart will skip a beat. The tears have started welling, it’s such a pain I have no one to share my grief with.