June 23, 2018

"Some Things Are True Even if Donald Trump Believes Them!"



(p. B1) One of the hardest things to accept for all of us who want Donald Trump to be a one-term president is the fact that some things are true even if Donald Trump believes them! And one of those things is that we have a real trade problem with China. Imports of Chinese goods alone equal two-thirds of the global U.S. trade deficit today.


. . .


. . . , I sat down with David Autor, the M.I.T. economist who's done some of the most compelling research on the impacts of China trade. The first problem he raised has to do with the "shock" that China delivered to U.S. lower-tech manufacturers in the years right after Beijing joined the World Trade Organization in 2001, when it gained more open access to the U.S. and other world markets.


. . .


Autor and his colleagues David Dorn and Gordon Hanson found in a 2016 study that roughly 40 percent of the decline in U.S. manufacturing between 2000 and 2007 was due to a surge in imports from China primarily after it joined the W.T.O. And it led to the sudden loss of about one million factory jobs in Ohio, Michigan, Wisconsin and Pennsylvania. Trump won all of those states.

This "China shock," said Autor, led not only to mass unemployment but also to social disintegration, less marriage, more opioid abuse and more people dropping out of the labor market and requiring government aid. "International trade creates diffuse benefits and concentrated costs," he added. "China's rapid rise, while enormously positive for world welfare, has created identifiable losers in trade-impacted industries and the labor markets in which they are located."

The second problem has to do with access to China's market for the goods U.S. companies sell. There, noted Autor, "China has not only taken our lunch, they've opened a restaurant that's serving it to their citizens."

. . . China kept a 25 percent tariff on new cars imported from the U.S. (our tariff is 2.5 percent) and similarly steep tariffs on imported auto parts.



For the full commentary, see:


Friedman, Thomas L.. "THE SHIFT; Silicon Valley Toured the Heartland and Fell in Love." The New York Times (Wednesday, March 14, 2018): A21.

(Note: ellipses added; italics in original.)

(Note: the online version of the commentary has the date March 13, 2018, and has the title "Some Things Are True Even if Trump Believes Them." My print edition is in this case, and is almost always, the National Edition. I have discovered that sometimes the page number, and even the title and date, differ between the National and the New York print editions.)


The Autor co-authored paper mentioned above, is:


Autor, David H., David Dorn, and Gordon H. Hanson. "The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade." Annual Review of Economics (2016): 205-40.







June 22, 2018

Wages Rise as Fast-Food Jobs Go Unfilled



(p. A10) . . . in an industry where cheap labor is an essential component in providing inexpensive food, a shortage of workers is changing the equation upon which fast-food places have long relied. This can be seen in rising wages, in a growth of incentives, and in the sometimes odd situations that business owners find themselves in.

This is why Jeffrey Kaplow, for example, spends a lot of time working behind the counter in his Subway restaurant in Lower Manhattan. It's not what he pictured himself doing, but he simply doesn't have enough employees.

Mr. Kaplow has tried everything he can think of to find workers, placing Craigslist ads, asking other franchisees for referrals, seeking to hire people from Subways that have closed.



For the full story, see:

Rachel Abrams and Robert Gebeloff. "A Fast-Food Problem: Where Have All The Teenagers Gone?" The New York Times (Friday, May 4, 2018): B1 & B5.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 3, 2018.)






June 21, 2018

Silicon Valley Venture Capitalists "Fantasize about Relocating" to "Detroit and South Bend"



(p. B1) It was pitched as a kind of Rust Belt safari -- a chance for Silicon Valley investors to meet local officials and look for promising start-ups in overlooked areas of the country.

But a funny thing happened: By the end of the tour, the coastal elites had caught the heartland bug. Several used Zillow, the real estate app, to gawk at the availability of cheap homes in cities like Detroit and South Bend and fantasize about relocating there. They marveled at how even old-line manufacturing cities now offer a convincing simulacrum of coastal life, complete with artisanal soap stores and farm-to-table restaurants.


. . .


(p. B4) Mr. McKenna, who owns a house in Miami in addition to his home in San Francisco, told me that his travels outside the Bay Area had opened his eyes to a world beyond the tech bubble.

"Every single person in San Francisco is talking about the same things, whether it's 'I hate Trump' or 'I'm going to do blockchain and Bitcoin,'" he said. "It's the worst part of the social network."


. . .


Recently, Peter Thiel, the President Trump-supporting billionaire investor and Facebook board member, became Silicon Valley's highest-profile defector when he reportedly told people close to him that he was moving to Los Angeles full-time, and relocating his personal investment funds there. (Founders Fund and Mithril Capital, two other firms started by Mr. Thiel, will remain in the Bay Area.) Mr. Thiel reportedly considered San Francisco's progressive culture "toxic," and sought out a city with more intellectual diversity.

Mr. Thiel's criticisms were echoed by Michael Moritz, the billionaire founder of Sequoia Capital. In a recent Financial Times op-ed, Mr. Moritz argued that Silicon Valley had become slow and spoiled by its success, and that "soul-sapping discussions" about politics and social injustice had distracted tech companies from the work of innovation.

Complaints about Silicon Valley insularity are as old as the Valley itself. Jim Clark, the co-founder of Netscape, famously decamped for Florida during the first dot-com era, complaining about high taxes and expensive real estate. Steve Case, the founder of AOL, has pledged to invest mostly in start-ups outside the Bay Area, saying that "we've probably hit peak Silicon Valley."


. . .


This isn't a full-blown exodus yet. But in the last three months of 2017, San Francisco lost more residents to outward migration than any other city in the country, according to data from Redfin, the real estate website. A recent survey by Edelman, the public relations firm, found that 49 percent of Bay Area residents, and 58 percent of Bay Area millennials, were considering moving away. And a sharp increase in people moving out of the Bay Area has led to a shortage of moving vans. (According to local news reports, renting a U-Haul for a one-way trip from San Jose to Las Vegas now costs roughly $2,000, compared with just $100 for a truck going the other direction.)



For the full commentary, see:

Kevin Roose. "THE SHIFT; Silicon Valley Toured the Heartland and Fell in Love." The New York Times (Monday, March 5, 2018): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date March 4, 2018, and has the title "THE SHIFT; Silicon Valley Is Over, Says Silicon Valley.")






June 20, 2018

"The Future Is Rich in Opportunity"



(p. A13) Ken Langone, 82, investor, philanthropist and founder of Home Depot, has written an autobiography that actually conveys the excitement of business--of starting an enterprise that creates a job that creates a family, of the joy of the deal and the place of imagination in the making of a career. Its hokey and ebullient name is "I Love Capitalism" which I think makes his stand clear.


. . .


Can capitalism win the future? "Yes, but we have to be more emphatic and forthright about what it is and its benefits. A rising tide does lift boats."

Home Depot has changed lives. "We have 400,000 people who work there, and we've never once paid anybody minimum wage." Three thousand employees "came to work for us fresh out of high school, didn't go to college, pushing carts in the parking lot. All 3,000 are multimillionaires. Salary, stock, a stock savings plan."

Mr. Langone came up in the middle of the 20th century--the golden age of American capitalism. Does his example still pertain to the 21st? Yes, he says emphatically: "The future is rich in opportunity." To see it, look for it. For instance: "Look, people are living longer. They're living more vibrant lives, more productive. This is an opportunity to accommodate the needs of older people. Better products, cheaper prices--help them get what they need!"

Mr. Langone grew up in blue-collar Long Island, N.Y. Neither parent finished high school. His father was a plumber who was poor at business; his mother worked in the school cafeteria. They lived paycheck to paycheck. He was a lousy student but he had one big thing going for him: "I loved making money." He got his first job at 11 and often worked two at a time--paperboy, butcher-shop boy, caddie, lawn work, Bohack grocery clerk. He didn't mind: "I wanted to be rich."



For the full commentary, see:

Peggy Noonan. "DECLARATIONS; Wisdom of a Non-Idiot Billionaire." The Wall Street Journal (Saturday, May 12, 2018): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 10, 2018.)


The book mentioned in the commentary, is:

Langone, Ken. I Love Capitalism!: An American Story. New York: Portfolio, 2018.






June 19, 2018

Blockchain May Enable "Consent-Based Ad Models"



(p. A13) Internet advertising started simply, but over time organically evolved a mess of middle players and congealed into a surveillance economy. Today, between end users, publishers and advertisers stand a throng of agencies, trading desks, demand side platforms, network exchanges and yield optimizers. Intermediaries track users in an attempt to improve revenue.

It's an inevitable consequence of such a system that users end up treated as a resource to be exploited. When you visit the celebrity website TMZ, for instance, you face as many as 124 trackers, according to a Crownpeak test. Your data is stored and profiled to retarget promotions that shadow you around the Internet. You become the product. Some claim your data is not "sold," but access is certainly rented out.


. . .


For a solution, look to blockchain technology. More than a word peppering earnings calls, it can deliver the change brands, publishers and users need. Put simply, it's an immutable database that records transactions and produces trustworthy data.

In advertising, blockchain's reliable data can radically shrink the ad-tech blob and provide the foundation for consent-based ad models. Improved blockchain reporting and transparency would obviate much of the need for companies focused on measurement, verification and even some data suppliers. Companies like Brave are using blockchain to build software that allows for more-direct relationships between advertisers and publishers, as it was before the blob. (Earlier this month Brave announced a partnership with Dow Jones Media Group, a division of this newspaper's parent company.) Anonymous data on the blockchain or on a device can even replace the need for the mining of individual user data. Users should be compensated for their attention and seen as customers again.

The internet need not be characterized by predation and parasitism. It can once again be a place of infinite possibility. Innovation got us into this situation; it can get us out.



For the full commentary, see:

Brendan Eichand and Brian Brown. "The Internet's 'Original Sin' Endangers More Than Privacy." The Wall Street Journal (Saturday, April 28, 2018): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date April 27, 2018.)






June 18, 2018

Lack of "Air-Conditioning Can Be Deadly"



(p. A10) The number of air-conditioners worldwide is predicted to soar from 1.6 billion units today to 5.6 billion units by midcentury, according to a report issued Tuesday by the International Energy Agency.


. . .


While 90 percent of American households have air-conditioning, "When we look in fact at the hot countries in the world, in Africa, Asia, Latin America and the Middle East, where about 2.8 billion people live, only about 8 percent of the population owns an air-conditioner," said Fatih Birol, executive director of the energy agency.

As incomes in those countries rise, however, more people are installing air-conditioners in their homes. The energy agency predicts much of the growth in air-conditioning will occur in India, China and Indonesia.

Some of the spread is simply being driven by a desire for comfort in parts of the world that have always been hot.


. . .


And when it gets hot, forgoing air-conditioning can be deadly. The heat wave that plagued Chicago in 1995 killed more than 700 people, while the 2003 European heat wave and 2010 Russian heat wave killed tens of thousands each.



For the full story, see:

Kendra Pierre-Louis. "World Tries to Stay Cool, but It Could Warm Earth." The New York Times (Friday, May 18, 2018): A10.

(Note: ellipses added.)

(Note: the online version of the story has the date May 15, 2018, and has the title "The World Wants Air-Conditioning. That Could Warm the World.")






June 17, 2018

Jeff Bezos Is "Exploring Strange New Worlds"



(p. A15) Jeff Bezos is the world's richest person. Amazon is on a tear--sales grew 43% last quarter--and may soon pass Apple as the world's most valuable company. Amazon has ruptured retail, floated in the cloud, and even made superhero TV shows like "The Tick." But what makes Mr. Bezos tick?


. . .


. . . , Mr. Bezos is now channeling pioneers, be they Columbus or James T. Kirk, exploring strange new worlds. His strategy is that he doesn't let business models get in his way while exploring on the edge.


. . .


I'm convinced the real secret to Mr. Bezos's success is that he hates PowerPoint slides. He insists instead on six-page narratives at meetings. Stories codify exploration. Here's one: Put Alexa in every doctor's office to listen and correctly fill in medical records automatically from the transcripts, freeing doctors to actually care for patients! Business model to come (but pretty obvious).



For the full commentary, see:

Andy Kessler. " INSIDE VIEW; Columbus Discovers the Amazon." The Wall Street Journal (Monday, May 7, 2018): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 6, 2018.)






June 16, 2018

"Politicians Use Economics the Way a Drunk Uses a Lamppost"



(p. A13) Mr. Blinder cites what he calls the Lamppost Theory: "Politicians use economics the way a drunk uses a lamppost--for support, not for illumination."


For the full review, see:

Matthew Rees. "BOOKSHELF; What They Don't Teach in Econ 101." The Wall Street Journal (Wednesday, April 17, 2018): A13.

(Note: italics in original.)

(Note: the online version of the review has the date April 18, 2018, and has the title "BOOKSHELF; 'Advice and Dissent' Review: What They Don't Teach in Econ 101.")


The book under review, is:

Blinder, Alan S. Advice and Dissent: Why America Suffers When Economics and Politics Collide. New York: Basic Books, 2018.






June 15, 2018

Paying Consumers for Their Data



(p. B4) WASHINGTON--For every link you click, every photo you post, every word you search, somebody markets the data to advertisers seeking to target you. Consumer data is a valuable commodity, and that is one reason Google, Facebook and others let you use their platforms at no cost.

An Australian app maker called Unlockd thinks it has a better idea: The consumer should get a cut of this mobile-data business, in the form of rewards or other incentives. Other newcomers and smaller firms are taking a similar tack. Should this approach take off, some see it becoming a viable alternative to the ad model driving big platforms like Alphabet Inc.'s Google.



For the full story, see:

McKinnon, John D. "Startup Wants to Reward Your Clicking." The Wall Street Journal (Thursday, May 10, 2018): B4.

(Note: the online version of the story has the date May 9, 2018, and has the title "Startup Takes on Google With a New Approach: Rewards for Users.")






June 14, 2018

Government Uses Cruel Painful Snare Traps to Kill Gorgeous Respectful Foxes



(p. A18) BRIGANTINE, N.J. -- Red foxes can be found all over New Jersey, wandering out of the woods and poking through garbage at dusk in search of a meal. In many places, they might be overlooked, if not seen as a disease-carrying nuisance. But not in Brigantine, an island community where the fox has become an unofficial ambassador.

Many residents warmly share stories of their encounters, like the fox that would routinely come up to a back door or the time a children's soccer game had to pause so one could cross the field. A fox makes an appearance on the cover of the city's tourism guide, as much of an attraction as its golf course and pristine beaches. A real estate company regularly sends its mascot, Briggy the Fox, to community events.

Yet the island is also the seasonal home to piping plovers, a small bird that returns every year to dig its nests on the beach. The bird is an endangered species in New Jersey that state wildlife officials closely watch and fiercely protect, including from foxes, creating a bitter conflict that has caused an uproar as residents protest the trapping and killing of the animals.

Some are challenging the use of snare traps, a contraption that they describe as cruel and painful. The contretemps has also stirred a wider debate: Is it fair to kill one animal for the sake of protecting another?

"It disgusts me," said Donna Vanzant, who owns a marina. "Why go after these gorgeous animals? Just let nature take its course."

State lawmakers recently wrote a letter to wildlife officials expressing their "deep concern," and the City Council passed a resolution condemning the "inhumane and indiscriminate killing of red foxes." Briggy the Fox attended the meeting and held a sign: "Please stop killing my friends."

"Everyone on the island cherishes the foxes and does not want them killed," said Donna Grazioli DeAngelis, a retired teacher who started a petition online, which about 90,000 people have signed. "They have been so respectful, so perfect in every way," she said of the foxes. "People paint them, photograph them. They haven't been a nuisance in any way."


. . .


"It's an overreach and overreaction," Philip J. Guenther, Brigantine's longtime mayor, said of the fox trapping. "It just doesn't seem to make any sense from a protection standpoint."



For the full story, see:

Rick Rojas. "To Save One Precious Animal, a Town Must Sacrifice Another." The New York Times (Monday, May 7, 2018: A18.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 6, 2018, and has the title "Trapping Foxes to Save Plovers Sets Off Showdown at Jersey Shore." The online version says the print version appeared on May 6 on p. A17 of the New York Edition. My print version, as usual, was the National Edition.)









Eight Most Recent Comments:



PaulS said:

Wonderful. Let's go for strict temporal gating as well as spatial gating. Exile everyone not made of money to the anti-social hours of the clock as well as the monster commutes of the far reaches of Queens and Staten Island. How about fixing the subways, and abolishing the nonsense that makes it take 90 years to build one small 2nd Ave line? How about dispersing the overconcentration of people a bit? It's a huge country and modern communication exists. How about paying for same by taxing the living daylights out of the billionaire rentier class who create the problem by forcing ever more people to cram into highly dysfunctional megacities as the price of having any income at all? You gotta love the nexus between airheaded liberals who want to pile everyone on Earth with a sob story into a few US-ian megacities (rather than fix their own governments and problems), and economics types who then want to punish the very same folks by blocking off absolutely everything with an extortionate toll gate. Not.



PaulS said:

"when the alternative is to have $10 and go thirsty"

In the real world, the politics will get "interesting" with respect to folks who *don't* have $10 to pay for what normally costs $1 or $0.10, and will therefore go thirsty, or be stranded, or worse. Then, also be aware of simple resentment. Then, aggravate the anger with runaway inequality so extreme that the elites running the show will not be inconvenienced in the slightest by any likely level of 'gouging'. Then brace for a social explosion.

All told, it seems fatuous to expect very many people to be happy about being charged, say, an entire car payment just to get home across town from the holiday party. (It seems even more fatuous to expect happiness when the 'gouging' comes as an ongoing life-upending surprise, as with I-66 in Virginia.)

It helps to instead ground oneself in reality. After doing so, it's ridiculously easy to imagine the relevant government and/or employer simply declaring, for example: "If you wish to be allowed to drive a taxi at all, then you will make yourself available, to some specified extent, even at times that may be inconvenient for you."

Indeed, such rules and regulations are utterly banal and commonplace. Nary a soul would weep for Uber if it and its drivers were regulated - even rather harshly - in such a manner. Of course, some souls would become exercised over the minor economic inefficiency of such regulation, but they would number far too few to matter.



PaulS said:

"Dr. Gray was skeptical about the causes of climate change, prompting vitriolic exchanges with other scientists. Judith A. Curry, who was chairwoman of the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology, accused him of 'brain fossilization.'"

I had no idea. These days, after all, Curry is very much in the doghouse as a "climate denier". Wow. What, then, can we deduce about the typical (or merely politically-correct?) level of hysteria in the "climate community"? Of course, many in said "community" would force most of us back into the Stone Age while they themselves continue to jet across the world at whim to attend "conventions" in order to signal virtue by delivering half-hour diatribes on saving the "planet" from impending doom.

Maybe, then, The Donald is right (???!) that it is fairly safe to behave just as the doomers do, and ignore the threat - and their own diatribes - as a practical matter? Wouldn't that be weird?



PaulS said:

Another case in point: between them, Google, Tesla, and others have spent countless billions on mapping the USA, enough for at least $1000/mile including every last obscure Forest Service track. That should be more than enough to catalog everything down to the embossing style on every manhole cover. And yet a person can find their way to Grandma's new house with vague turn-by-turn directions or a vague line-sketch that shows no details whatsoever about the road surface or the sidewalks or the crosswalks. And a person will manage the task without needing, in advance, a finely detailed map of the current construction projects, including lane changes etc. But that severe incompleteness won't stop morally-posturing politicians from forcing autonomous cars onto the populace years or even decades before they are actually ready for unsupervised consumer use. That is the essentially only kind of use they will get in the real world. After all, politicians love to posture, they love to toady up to rent-seeking billionaires, and they love photo-ops of themselves gawking at shiny new tech gadgets. Note that when signals were first installed on the Chicago El, the accident rate went up for a time, as trained motormen became careless about watching where they were going. Not-so-trained consumers will be far too busy fiddling with their phones to be ready to take over on a split-second's notice.



PaulS said:

And there will be unicorns. So we'll have some remote working, but we'll be jailing ever more techies in a few obscenely overcrowded, otherworldly-expensive megacities. Just as Microsofties once told us wasting two days on the now-infamously godawful airlines just to physically attend an hour meeting was going away, but both the meetings and the airlines only got worse and worse.

So not really a big deal, just another stylistic business fad. Those come and go like mayflies - while being crammed, confined, and nailed down, remains eternally.



rjs said:

there's a lot GDP doesnt capture, but i'm not sure where Feldstein is coming from about statins...the consumption of drugs is included in the non-durable goods component of PCE, consumption of health care services by themselves account for 12% of GDP, and R & D would be included in investment in intellectual property products.. the problem is that everyone is trying to make GDP into something it's not...it's a measure of goods and services produced by the economy, full stop. it's not intended to measure increases in life expectancy or well being, or any other intangibles..



rjs said:

actually, if every adult spent the $10,000 that was given to them, it would add about 13% to GDP (less any inflation adjustment) furthermore, as the US is the creator of its own currency, there would be no need to "pay for" such a citizen bonus...we certainly managed to conjure up trillions of dollars to bail out the banks a few years back without "paying for it"; we could just as easily do the same for this case..



Aaron said:

An appropriately sweet topic this Valentine's day, though this may make you this holiday's Scrooge.





HP3D5006CropSmall.jpg






Archives















The StatCounter number above reports the number of "page loads" since the counter was installed late on 2/26/08. Page loads are defined on the site as "The number of times your page has been visited."


View My Stats