“Some Things Are True Even if Donald Trump Believes Them!”

(p. A21) 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.. “Trump’s Right About China, To a Point.” 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.

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.)

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.”)

“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.

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.)

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.”)

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.)