July 2019 – Page 3 – artdiamondblog.com

Astros Got Scouting and Analytics to Work Together

(p. A15) Mr. Reiter . . . has written a full account of the remarkable story of how one of the greatest turnarounds in modern baseball history was engineered. As he tells us in “Astroball: The New Way to Win It All,” Houston had looked at the processes that Oakland A’s general manager Billy Beane had used early in the 21st century. That team’s methods—sophisticated statistical analyses and attention to “undervalued” measuring sticks (like on-base percentage)—were detailed in Michael Lewis’s “Moneyball” (2003), and they changed the way baseball front offices operated. But Mr. Lewis’s book also portrayed a somewhat fraught internal organization, with old-fashioned scouts in one corner and the analytic nerds in the other, often disagreeing about players and prospects and resenting one another as well.

Astros general manager Jeff Luhnow wanted to figure out how to get scouting and analytics to work together and eventually produce an internal metric that would render a decision on a player as simple as the one in blackjack: hit or stay, keep or trade, play or bench.

. . .

Under Mr. Luhnow, scouts not only made subjective judgments about a prospect’s talent but also collected unique data that they fed to the folks in the Nerd Cave. And the nerds began listening to the scouts. All of this was easier said than done, but it was done, and the team made a series of sound, even brilliant, choices as it drafted, traded and signed players.

For the full review, see:

Paul Dickson. “BOOKSHELF; Lone Star Turnaround; How the Houston Astros used a combination of data-driven analytics and team-building to go from last place to World Series champions.” The Wall Street Journal (Tuesday, July 17, 2018): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date July 16, 2018, and has the title “BOOKSHELF; ‘Astroball’ Review: Lone Star Turnaround
How the Houston Astros used a combination of data-driven analytics and team-building to go from last place to World Series champions.”)

The book under review is:

Reiter, Ben. Astroball: The New Way to Win It All. New York: Crown Archetype, 2018.

Economists Surprised by Inflation-Less Boom

(p. A13) The labor market the United States is experiencing right now wasn’t supposed to be possible.

Not that long ago, the overwhelming consensus among economists would have been that you couldn’t have a 3.6 percent unemployment rate without also seeing the rate of job creation slowing (where are new workers going to come from with so few out of work, after all?) and having an inflation surge (a worker shortage should mean employers bidding up wages, right?).

And yet that is what has happened, with the April employment numbers putting an exclamation point on the trend. The jobless rate receded to its lowest level in five decades. Employers also added 263,000 jobs; the job creation estimates of previous months were revised up; and average hourly earnings continued to rise at a steady rate — up 3.2 percent over the last year.

. . .

. . . beyond the assigning of credit or blame, there’s a bigger lesson in the job market’s remarkably strong performance: about the limits of knowledge when it comes to something as complex as the $20 trillion U.S. economy.

. . .

The results of the last few years make you wonder whether we’ve been too pessimistic about just how hot the United States economy can run without inflation or other negative effects.

There are even early signs that the tight labor market may be contributing to, or at least coinciding with, a surge in worker productivity, which if sustained would fuel higher wages and living standards over time. That further supports the case for the Fed and other policymakers to let the expansion rip rather than trying to hold it back.

For the full commentary, see:

Neil Irwin. “An Economic Boom That Might Be Changing the Rules.” The New York Times (Saturday, May 4, 2019): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 3, 2019, and has the title “The Economy That Wasn’t Supposed to Happen: Booming Jobs, Low Inflation.”)

“The Grapes Are Beautiful, the Heat’s Good for Them”

(p. A4) A 2016 study by NASA and Harvard of grape harvest dates going back to the 1600s found that climate change pushed harvests forward drastically in France and Switzerland in the second half of the 20th century.

. . .

(p. B5) Claudio Roggero, who as enologist at the Castello di Neive, decides, among other things, when to pick the grapes, strolled with satisfaction through the corridors of vines, saying the grapes looked perfect.

“If I left these grapes another week they could have been like this,” he said stopping in front of a rare sunburned bunch. “It’s very dangerous.”

In the middle of August, a thermometer planted in one of their vineyards showed heat in excess of 104 degrees Fahrenheit. “It went off the charts,” the wine estate’s owner, Italo Stupino, 81, said as he looked over the hills.

Mr. Stupino also pointed at vineyards destroyed by a hailstorm in April, and yet he expressed doubt that global warming drove the change.

“I believe it up to a certain point,” he said with a shrug. “The temperature goes up and down. We had hail in April, and I remember some hot, hot Augusts as a boy.”

That sentiment ran through the hills.

In Monforte d’Alba, just outside the town square, Giovanni Rocca stepped out onto his hills and happily chewed a grape he picked from his vineyard.

“The grapes are beautiful, the heat’s good for them,” he said, arguing that the vintage, which he said would probably come 10 or 15 days earlier than usual, was likely to yield a lower-quantity but higher-quality Barolo.

His son, Maurizio, 37, also spoke of the benefits of the sunshine. But he added that temperatures above 100 degrees “are not good for the wine; the berries become unbalanced and too fat, with too high an alcohol content.”

He said that they knew how to deal with anomalies, but that if intense heat waves became permanent, “We’ll have to plant bananas and pineapples.”

. . .

An enclosed observation deck hangs like a giant helicopter cockpit over the hills of Alba at the headquarters of the Ceretto family, which produces nearly a million bottles a year.

The company’s employees will be out in the fields a week earlier than usual to pick arneis grapes for its wildly popular Blangé white wine, said Roberta Ceretto, 44.

But she was mostly unbothered by the heat, saying that while her employees might not be able to go on vacation in August in the future, the quality and culture of the area’s wines would survive.

“The dinosaurs didn’t go extinct in 20 years,” she said with a smile.

For the full story, see:

Jason Horowitz. “LA MORRA JOURNAL; The Harvest of a Changing Climate.” The New York Times (Wednesday, Aug. 23, 2017): A4.

(Note: ellipses added.)

(Note: the online version of the story has the date Aug. 22, 2017, and has the title “LA MORRA JOURNAL; In Italy’s Drought-Hit Vineyards, the Harvest of a Changing Climate.”)

$15 Minimum Wage Equals Income About Twice Federal Poverty Level for Household of Two

(p. B1) The legal minimum wage in the United States is $7.25 per hour, . . .

The minimum wage roughly meshes with federal poverty guidelines. According to the guidelines, a two-person household with a total annual income below $16,910 is considered to be living in poverty. To clear the poverty line, one of those two people would have to make $8.13 an hour or more. At least 17 states have minimum wages higher than that. The $15-per-hour minimum wage in New York City, for example, translates to an annual income of $31,200, which is almost twice the federal poverty level for a household of two.

For the full story, see:

Eric Ravenscraft. “Do You Earn a ‘Living Wage’? Cut Through the Confusion.” The New York Times (Saturday, June 8, 2019): B1 & B5.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 5, 2019, and has the title “What a ‘Living Wage’ Actually Means.”)

Reason Magazine Runs Excerpt from “Openness to Creative Destruction”

A three-page, edited excerpt from Openness to Creative Destruction appears in the Aug./Sept. issue of Reason magazine.

Innovative dynamism creates more jobs than it destroys and the new jobs created are usually better jobs than the old jobs destroyed. The Aug./Sept. issue of Reason includes an edited excerpt of this positive account of the labor market from Openness to Creative Destruction. The online version of the article is available now. The print version of the article either is on newsstands now, or will be soon. The citation for the article is:

Diamond, Arthur M., Jr. “How Work Got Good.” Reason (Aug./Sept. 2019): 22-24.

“Longest Streak of Job Creation in Modern Times”

(p. A1) The unemployment rate fell to its lowest level in half a century last month, capping the longest streak of job creation in modern times and dispelling recession fears that haunted Wall Street at the start of the year.

The Labor Department reported Friday [May 3, 2019] that employers added 263,000 jobs in April, well above what analysts had forecast. The unemployment rate sank to 3.6 percent.

Employment has grown for more than 100 months in a row, and the economy has created more than 20 million jobs since the Great Recession ended in 2009. Much of that upturn occurred before President Trump was elected, but the obvious strength of the economy now enables him and fellow Republicans to make it their central argument in the 2020 campaign.

For the full story, see:

Nelson D. Schwartz. “U.S. Jobless Rate Hits 50-Year Low As Wages Expand.” The New York Times (Saturday, May 4, 2019): A1 & A13.

(Note: bracketed date added.)

(Note: the online version of the story has the date May 3, 2019, and has the title “Job Growth Underscores Economy’s Vigor; Unemployment at Half-Century Low.”)

Cost of Housing Is Main Driver of Migration from Superstar Cities

(p. B1) Last month the Census Bureau confirmed a confounding dynamic taking hold across the American landscape: Superstar cities, the nation’s economic powerhouses, hotbeds of opportunity at the cutting edge of technological progress, are losing people to other parts of the country.

For the first time in at least a decade, 4,868 more people left King County, Wash. — Amazon’s home — than arrived from elsewhere in the country.

Santa Clara County, Calif., home to most of Silicon Valley, lost 24,645 people to domestic migration, its ninth consecutive annual loss.

The trend is becoming widespread. Eight of the 10 largest metropolitan areas in the country, including those around New York, San Francisco, Los Angeles and Miami, lost people to other places in 2018. That was up from seven in 2016, five in 2013 and four in 2010. Migration out of the New York area has gotten so intense that its total population shrank in 2018 for the second year in a row.

. . .

(p. B5) Research by Peter Ganong from the University of Chicago and Daniel Shoag of Harvard suggests that housing costs are a principal driver of the change in migration decisions: As the highly educated have flocked to superstar cities, they have pushed housing prices way beyond the reach of people earning less. Continue reading “Cost of Housing Is Main Driver of Migration from Superstar Cities”

Apart from R&D, Scientists and Engineers May Improve Firm Processes

(p. B5) Companies with a higher proportion of scientists and engineers are more productive than their peers, even when those workers aren’t directly involved in the research-and-development tasks that drive the most obvious forms of innovation, a new paper from the National Bureau of Economic Research suggests.

. . .

Some 80% of industrial scientists and engineers work in roles outside of formal R&D, such as information technology and operations. Their knowledge and training is critical to firms’ ability to improve processes, fix broken systems and implement new technologies, says Richard Freeman, a Harvard University economist and co-author of the paper.

For the full story, see:

Lauren Weber. “Scientists Are Useful Beyond R&D Work.” The New York Times (Wednesday, June 28, 2017): B5.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 27, 2017, and has the title “For a More Productive Workforce, Scientific Know-How Helps.”)

The published version of the Freeman co-authored paper mentioned above, is:

Barth, Erling, James C. Davis, Richard B. Freeman, and Andrew J. Wang. “The Effects of Scientists and Engineers on Productivity and Earnings at the Establishment Where They Work.” In U.S. Engineering in a Global Economy, edited by Richard B. Freeman and Hal Salzman. Chicago: University of Chicago Press, 2018, pp. 167 – 91.