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September 1, 2009

The Working Poor In America

Tim says,

... get stolen from, retaliated against, hurt at work and convinced not to complain, and paid less than the minimum wage, not just sometimes, but most of the time:

The study, the most comprehensive examination of wage-law violations in a decade, also found that 68 percent of the workers interviewed had experienced at least one pay-related violation in the previous work week...

In surveying 4,387 workers in various low-wage industries, including apparel manufacturing, child care and discount retailing, the researchers found that the typical worker had lost $51 the previous week through wage violations, out of average weekly earnings of $339. That translates into a 15 percent loss in pay...

According to the study, 39 percent of those surveyed were illegal immigrants, 31 percent legal immigrants and 30 percent native-born Americans... [W]omen were far more likely to suffer minimum wage violations than men, with the highest prevalence among women who were illegal immigrants. Among American-born workers, African-Americans had a violation rate nearly triple that for whites.

Excuse me; I need to go punch something. And then maybe throw up. Then punch something else.

Comments (5) | Permasnark | Posted: 8:03 PM

August 4, 2009

How We Spend Our Days

Matt says,

Now I don't remember who pointed me to this; it's been abandoned in a tab all day. Best NYT infographic I've seen in many a day: a visualization of how Americans spend their time, hour by hour.

Update: Just looked at my RSS reader, and now I remember who pointed me to this ... everybody in the world. Geez.

Comments (1) | Permasnark | Posted: 10:50 PM
Saheli's thoughts: I wants my pants to have an API. Coder Girls (all): [Sighs] I sudde... >>

The Starbucks API

Lots of people seem to think Starbucks' new "stealth stores" are creepy

A Seattle outlet of the 16,000-store coffee behemoth is being rebranded without visible Starbucks identifiers, as 15th Avenue Coffee and Tea.

Two other stores in Starbucks' native Seattle will follow suit, each getting its own name to make it sound more like a neighborhood hangout, less like Big Coffee, a Starbucks official told The Seattle Times on Thursday.

…but imagine that this was playing out differently:

What if Starbucks was offering up a Starbucks API—a set of hooks into a vast, efficient coffee shop support system with incredible economies of scale? You, the local coffee shop owner, simply plug in, and wham, your costs drop by thirty percent because you're leveraging Starbucks' insanely optimized supply chain. You can use as much or as little as you want.

The NYT cites the Huffington Post

You can imagine where this un-branding campaign could lead. A little neighborhood burger place run by McDonald's? A little neighborhood hardware store owned by Home Depot? A little neighborhood five-and-dime operated by Wal-Mart?

…and I find myself thinking, uh, yeah, wouldn't that be cool? Swap out "run" and "owned," and put in "powered" and "supported." Wal-Mart's back-end is as innovative and important as its front-end. Why not offer it up to indie retailers?

I know it's a stretch, but consider the analogy: Amazon's web services have been absolutely transformative in the startup world. You can store files and spin up servers without buying, or committing to, anything. It's easy to try things and cheap to fail. The notion of plug-in infrastructures just as flexible for other businesses—real-world businesses—run by other goliaths isn't unsettling. It's exciting.

And yes, I realize that's not what Starbucks is doing here. But it's what they should be doing!

Posted August 4, 2009 at 11:16 | Comments (22) | Permasnark
File under: Snarkonomics

August 1, 2009

Link Love and the Viral Spike

Robin says,

Worlds collide! Both Current's Sarah Haskins and Snarkmarket's guest-blogger Matt Penniman are mentioned approvingly in this BBC Web Monitor post. (Via Tim.)

The BBC also points to an op-ed by Bill Wasik in the NYT, which I am drafting into service in our Snarkmarket Forum on Free (Related Topics Division). It's about the new "big break"—the viral spike!—which is made possible, after all, by the friction-less power of free.

Well, that and the internet.

Comments (2) | Permasnark | Posted: 7:37 PM

July 30, 2009

Robin's thoughts: Chris Anderson says the boundary between $0.01 and free is so magical b/c of the change in purcha... >>

It Feels A Little Like Free

I had a stray thought the other day, related to Chris Anderson's observation that what's really radical about the idea of "free" isn't its economic reality but economic psychology. Free things freak us out; either we think they're worthless or scammy or we love them so much that sometimes they actually make us economically stupid. (I once stood in line for an hour for a free burrito when I was paying a babysitter $10/hour at the same time. Say what you will about whatever I was "buying" with my money, I wasn't maximizing my utility.)

Anyways, here's the idea:

If what matters about "free" is the psychology, then the solution is to make paying something feel like paying nothing.

Think about it! When the idea of free really works, it makes us forget that it ever even cost anything at all. Reading web pages is free - once you count the money you pay for internet access. Between my phone and my house, I pay more for internet access per month than I do books - and I read a lot. Add on to that all of the ways my free behavior is paid for with information from or attention paid by me, and a ruthless calculus would determine that the internet is expensive as hell.

Almost all free things are cross-subsidized in some ways. But if the cross-subsidy is obvious - "Free phone with a two-year plan worth at least..." - then free fails. If your website suddenly has a glaring and obnoxious banner ad, then it doesn't matter if it is as free today as it was yesterday. It doesn't feel free anymore.

On the other hand, you can actually make getting something you've paid for feel like something free. Casinos are terrific at this. Everything's free, and you still spend money everywhere. Sometimes, governments are good at this too - although they sometimes create benefits that are so invisible that we don't even think about them at all, except when they fail. (Free can't work too well! Or people will still feel cheated!)

A classic example might be buying something - let's say, groceries - with a credit card. I used to pay for all of my groceries with cash or check, so I always had to be aware of exactly how much I was spending and whether I either physically had enough money on me or at least had enough in the account (and enough to still pay rent, etc.). Then I got a credit card that gave me rewards at gas stations and grocery stores - the money is like invisible bullets. I don't worry about each individual trip, I just pay the lot at the end of the month. This ramped up until I looked at a breakdown of my finances, and realized I was paying twice as much for food each month as I was a few years before. It felt more like free.

Digital media is catching on. I hardly ever used to buy anything in iTunes, because it was a total hassle. The terms of service had always changed, I had to log-in, add something to my cart, and then check-out. It was worse than going to a record-store! And a lot worse than Amazon, where I had one-click, free shipping... Anyways, I recently disabled all of the nag screens, and suddenly, I'm buying stuff on iTunes left and right. People talk about this with their Kindles, too - the fact that you can browse for, buy, and begin reading books so smoothly reduces the friction of every purchase, so you read one after another. It all goes through Amazon and you get billed at the end of the month. You know you bought something... but you kind of didn't. To quote Flanders, "it feels like you're wearing nothing at all."

Software sort of works like this too. It's easy to buy applications for the iPhone or iPod touch, because you do it all right through Apple - it syncs to your iPod and you're ready to go. It's much harder, psychologically, to go to a developer's website, fill out all of your information, decide whether or not to use PayPal or your credit card, download the application, open it up, enter your serial (which went to your old email address), register the software again, etc... At every moment, it screams, "you're paying something! You're paying something! Are you sure there isn't free software that could do the same thing?"

The real trouble, however, is advertising. If you have an ad-supported application or website, it's going to feel the most free and probably be the most popular if the ads are so discreet as to be practically invisible - you don't even realize that someone paid for you to see what you're seeing. But advertising HAS to be attention-grabbing if it's going to work.

Newspapers actually came up with a genius solution to this problem years ago - the classified ad. It's an advertisement that feels like a service. In most cases, when you were reading classifieds, you actually PAID to see them (although each ad - for the reader - was free). Now, of course, classifieds are (almost) actually free (to place and read). But you still see things like job advertisements, etc., which play out to readers more like services than ads. And because they feel like services, they feel like free.

So here's the (provisional) lesson. There is no such thing as a free lunch. But some lunches feel freer than others.

Posted July 30, 2009 at 7:22 | Comments (2) | Permasnark
File under: Snarkonomics

July 13, 2009

Ferguson/Fallows on China

Robin says,

This 75-minute dialogue between Niall Ferguson and James Fallows, about China and its relationship with the U.S., is nuanced, detailed, and thought-provoking.

(My view here is colored by the facts that a) James Fallows has been my favorite journalist since I started reading his Atlantic articles back in college and b) I want to somehow, somehow, learn to speak like Niall Ferguson. Scottish accent and all? I think so.)

Anyway, Ferguson and Fallows really argue here—in the way two smart people argue over dinner, not in the way that people argue ("argue") on cable news. It's always surprisingly thrilling to see people actually think on camera.

To set it up, the point they don't dispute is that, right now, the world's most important entity is "Chimerica"—the blended economies of China and America. At this point, even after the economic shocks of 2008 and 2009, they are still inseperable, and incoherent without each other.

Ferguson and Fallows disagree on what happens next. Ferguson says Chimerica is doomed, and get ready for a painful disruption. Fallows, fresh off of three years living in China, is more optimistic—he thinks the relationship is flexible, durable, and many-faceted.

I saw Niall Ferguson debate Peter Schwartz here in San Francisco, and all I gotta say is: I wouldn't want to face off with this guy across a stage. He is erudite, to be sure; but he also carries and deploys his erudition in a particularly cutting way—like an Oxford don James Bond.

Anyway, I emerged from the 75 minutes mostly on the side of Fallows—but I always appreciate Ferguson's gloomy, ultra-realist point of view. Also, Fallows follows up here.

Comments (11) | Permasnark | Posted: 11:10 PM
Tim's thoughts: This post is rife with typos! Yuck. I just wanna read Jakob Burckhardt's book on the Rena... >>

Giving Things Away Is A New Liberal Art

The title is half a joke, but half true. Part of navigating the logic, grammar, and rhetoric of this century of scarcity and abundance is going to involve not just working and understanding flows of goods and money, growing and eating things, understanding marketing or images, or managing your attention and identity (or identities), but also trying to figure out what you give away and what you charge for, what you take and what you pay for, and why and how you do all of these things.

Many, many people have been at least as interested in how and why we printed only 200 copies of New Liberal Arts and then gave digital copies away as they've been interested in any or all of the entries. And you know what? I'm kind of more interested in that too -- at least for the past thirty minutes or so.

Kevin Kelly's formulation of what we did is worth repeating: "The scarce limited edition of the physical subsidizes the distribution of the unlimited free intangible." We knew that we wanted to make an honest-to-goodness well-made book*, AND that we wanted everything to be freely available on the web. I don't think there was ever a conversation about doing it any other way.

But I think there's a difference between just selling a physical thing and giving it away for free. One of the things that I think was clever was the "ransom" model that Robin came up with, whereby the free copies were only released after the print run was sold. I think it was the motive of patronage, the aligning of the interests of the purchasers with the freeriders, that made it work.

(Aside: When I was a kid, I remember how the Detroit Lions' football games on TV used to be blacked-out in Detroit whenever the Silverdome didn't sell out. Since the Lions stunk, this happened a lot, and CBS wouldn't even show you another football game, you'd just be stuck watching reruns or infomercials instead of football, which made you hate the Lions even more.)

Janneke Adema keys in on this:

Actually this is just a variant of the delayed Open Access model, in which after a certain embargo time the books or journals are made Open Access. What I like however about the example Kelly mentions of the New Liberal Arts book, a Snarkmarket/Revelator Press collaboration, is how they combine this delayed Open Access model with a community support or maecenas model.

In another, earlier entry, she elaborates:

It looks like we might be slowly returning to the old Maecenas system, or Maecenate, when it comes to culture, flourishing as it did in the old Rome of Virgil and Horace, and still visible today in many a countries’ subsidy system, stimulating (historically) mostly the so called ‘high arts’ which in some cases and some countries have known some kind of patronage or state subsidy for ages (the Dutch system is a good example in this respect).

What seems clear however is that this new digital Maecenic culture will be quite different in many respects from so called subsidy systems. It will be way more ‘democratic’ for one, no longer favoring art picked out by committees of wise experts but directly benefiting those chosen by the public to merit their money. It will also not be a ‘traditional’ Maecenic culture in which a few rich people out of philanthropy and the goodness of their hearth give their money to the arts or the projects they endorse. This new Maecenic culture will probably be upheld by large communities of people of all income classes, all offering a little money to support their favorite band, artist or cultural entrepreneur (think of those small labels again).

The new digital Macenate! Just typing it gives me shivers of delight.

Until I read Adema's post, though, the way I'd been thinking about it was less classical, and maybe less flattering. I was thinking about Polish farmers in Prussia.

Okay, I'll explain. Max Weber's The Protestant Ethic and the Spirit of Capitalism begins with a weird and probably a little racist anecdote about Catholic farmers in the Eastern province of Germany. The farmers, and young people from the farms who'd emigrated to the cities, didn't seem to respond to economic incentives. They were traditionalists: if you showed them a new way to farm that yielded more crops, unless the difference was overwhelming, they didn't care; they'd just do it the way they always did it. If you paid them more for their crops to try to get them to produce more, they'd work less, because they could live off of the same amount of money they'd always had.

Actually Weber very smartly avoided the racist conclusion - that the Polish farmers were congenitally lazy -- that most of the Prussian farmowners who employed these Polish workers had made. Instead, he concluded that to work your butt off to make more money than you could most likely spend was actually a very strange way to live - that it wasn't, as some of the early economists and social engineers thought, a natural and universal response to maximize utility, but a historically contingent phenomenon.

He spends the rest of his startlingly brilliant book trying to trace the conditions under which that phenomenon could have emerged based on the startling economic success made by Protestant sects in Western Europe and the United States, all of which hinged on new notions of work and personal austerity that turned out to be, quite accidentally, a primary engine in the development of modern capitalism as it emerged in the West.

So, where am I going with this?

Well, the NLA model is like a color negative of the noncapitalist peasant. I say a color negative because the economic conditions have actually reversed. The peasant could earn more, but he didn't really have any place to put it. Once his physical needs were met, he had no reason to keep working. He would curtail the potential abundance of nature when the scarce physical resources were purchased.

What can do is the opposite - to unlock the potential abundance of the artificial once the scarce physical resources have been paid for. Instead of stopping work - stopping the flow of goods and closing the circuit of circulation - this opens it up. This is only natural.

... Read more ....
Posted July 13, 2009 at 5:53 | Comments (3) | Permasnark
File under: About Snarkmarket, New Liberal Arts, Self-Disclosure, Snarkonomics

Ordinary Everyday Crisis vs. Cartoonish Super-Crisis

Tim says,

California, strapped by an insane budget crisis, is issuing IOUs to its employees and creditors, and will soon likely be willing to accept these IOUs as payment for taxes and other state obligations. Nothing like a little extra-constitutional currency creation to spice up the economic picture of the U.S.A!

The Economist's Free Exchange offers this take on the consequences:

The highly uncertain long-term value of the IOUs may make anyone reluctant to accept them, preventing them from rising to de facto currency status. On the other hand, if enough people and institutions begin accepting them, Gresham's law may apply. Consumers may be anxious to hold on to dollars and spend their funny money wherever they can, until circulation is dominated by the IOUs.

But then, of course, economies that do business with California would have a demand for the IOUs, and other states—Nevada, and Oregon, say—or countries might begin accepting them. A constitutional challenge likely wipes all this out, but it is interesting to consider.

Another question—what to call them? I nominate the term "props", in honour of the ballot initiatives which landed California in this mess in the first place.

Comments (0) | Permasnark | Posted: 9:38 AM

July 11, 2009

Tim's thoughts: I remember thinking the same thing reading Paul Krugman during that time, especially his column w... >>

In the Eye of the Bubble

Among the people I knew who started worrying about the housing bubble in the early 2000s, Dan Gillmor's warnings were the loudest. On his blog, he frequently and publicly fretted about what he saw as a disaster in the making, especially acute in California, where he lived. For whatever reason, I got the urge today to go back and look up some of Dan's old posts warning about the bubble.

This thread in particular is a doozy. In it, Dan criticizes this Orange County Register story as irresponsible for containing no skeptical or cautionary notes and featuring a nut graf like this:

Martin Fonseca, a high-school dropout, can spoil his kid and not because he climbed the professional ladder. The sole source for the dramatic difference in this immigrant family's lifestyle is the riches they amassed owning a Santa Ana home.

It's a story of wealth creation played out countless times across a county where the local median home price doubled in a mere four years to more than half-a-million bucks.

It's like watching the Titanic depart. The most striking thing about the thread is the comments, like this one from Charlie Prael:

Y'know, I'd be more concerned if this wasn't the (third? fourth?) time that the Collapse of the Great California Housing Bubble had been predicted. Remember the late 70s? Price CAN'T go any higher. They did. 1988? Nope, nobody will pay THOSE prices. 1999? Samesame. ...

Now, why am I cynical about this? Because the imminent collapse of housing prices in California has been predicted routinely for the last three years - always right around the corner, within the next six months. And it hasn't happened. Nor will it, for the structural reasons above.

Of course, Mr. Prael's memory was faulty. California's housing prices had gone through significant bubble-and-bust swings in the '90s, as you can see here.

What scares me most is the stuff like this: "Dan, please STOP advocating a real estate crash here in Northern California. It's not befitting someone of your position in the journalistic community to be arguing in favor of depression and despair."

Our ability to close our eyes and stick our fingers in our ears in moments of impending crisis is truly remarkable.

Posted July 11, 2009 at 12:42 | Comments (1) | Permasnark
File under: Snarkonomics

June 24, 2009

A Living Wage for Living Literature

Tim says,

If you hang around with me long enough that we get a chance to go to a fancy restaurant together, you might get to hear this parable. It used to be possible to be a professional waiter - one who thought of service as a career. And the service you received was service from a career professional. But as wages declined, so did service. A rotating cast of college students and twentysomethings can sometimes surprise you with their talent or enthusiasm, but they can't make a career of it. You come in, you do your best, and you rotate out, and what you end up with are a lot of chain restaurants where it's good to be a college student or twenty-something, good to drink a lot and eat a lot, but comparatively few places were you can feel like a gourmand.

The New Yorker's The Book Bench tells a similar story about wage cuts among younger workers in the publishing industry. The impetus to the post are cuts at William Morris, where entry-level workers saw their pay cut from 13.50/hour to 9.50/hour.

Tiny salaries in the low ranks of publishing are miserable for the young workers, but they’re probably worse for literature (You can insert “movies” for “literature,” if that’s the prism through which you want to read this.) It’s a truism of the industry that most of these jobs are held by people who can afford them—people with some parental support and no student loans. Often they’ve had unpaid internships, that most pernicious example of class privilege. Their superiors are the same people, ten years later. They—we!—are smart, cultured people with good intentions, but it’s easy to see how this narrow range could lead to a blinkered view of literature.

So, if you’re sick of coming-of-age novels about comfortable young men, a little solidarity with the lowly assistants might help.

Although now I'm scratching my head: the privilege thing I get, but are publishing companies and talent agencies overrun by dudes? I've never gotten that vibe.

Comments (0) | Permasnark | Posted: 7:36 AM

June 8, 2009

Tim's thoughts: I am a simple man, and easy to please. All I want is a highly realistic and nuanced firs... >>

SimCity... Actually a Terrible Simulation

The blog Human Transit outlines the ways in which the original SimCity -- the one I spent the most time playing -- codified a now-outmoded planning orthodoxy:

In short, Sim City could be hailed as a triumph of reactionary brainwashing -- in that it instilled in a generation of 1990s teen geeks all the worst assumptions of 1960s city planning.

But, let's not not pick on a decades-old video game. Let's imagine a new Sim-something instead -- one that codifies the values we thing are important today, in 2009.

How about SimRegion? It would be all about region-wide transportation infrastructure, water management, food production (big emphasis on that), migration, and more. Hmm. That sounds educational. And boring.

Maybe SimSocialNetwork. Forget geography. This one's all about tending an online garden of weak ties and attention-feeds. (I'm not being sarcastic. I think, abstracted in the right way, this could actually be fun and instructive.)

Or how about some kind of bifurcated simulation: SimHealthCareSystemAndIndividual. One side's macro, the other's micro. You play both, and see how decisions on one side affect the other. I like the sound of that, actually. The trick with any social simulation is that, inevitably, the way you design it says a lot about how you view the world. So the micro/macro sim would play up that tension; the models might even be designed to sort of "fight" each other. SimBourgeoisAndProletariat.

(Via Noah Brier.)

Posted June 8, 2009 at 4:29 | Comments (6) | Permasnark
File under: Snarkonomics, Snarkpolicy, Society/Culture, Video Games

June 4, 2009

John's thoughts: If Dave Eggers' solution to declining newspaper circulation is improve the product and lower the ... >>

Luxuriating In Print

We slapped Dave Eggers around a little bit for his "nothing has changed" speech to the Authors' Guild, but his mass email for lovers of print is way more nuanced and inspiring in a constructive, non-cheerleaderish way:

Publishing has, for most of its life, been a place of small but somewhat profit margins, and the people involved in publishing were happy to be doing what they loved. It's only recently, when large conglomerates bought so many publishing companies and newspapers, that demands for certain margins squeezed some of the joy out of the business.

Pretty soon, on the McSweeney's website—— we'll be showing some of our work on this upcoming issue, which will be in newspaper form. The hope is that we can demonstrate that if you rework the newspaper model a bit, it can not only survive, but actually thrive. We're convinced that the best way to ensure the future of journalism is to create a workable model where journalists are paid well for reporting here and abroad. And that starts with paying for the physical paper. And paying for the physical paper begins with creating a physical object that doesn't retreat, but instead luxuriates in the beauties of print. We believe that if you use the hell out of the medium, if you give investigative journalism space, if you give photojournalists space, if you give graphic artists and cartoonists space — if you really truly give readers an experience that can't be duplicated on the web — then they will spend $1 for a copy. And that $1 per copy, plus the revenue from some (but not all that many) ads, will keep the enterprise afloat.

As long as newspapers offer less each day— less news, less great writing, less graphic innovation, fewer photos— then they're giving readers few reasons to pay for the paper itself. With our prototype, we aim to make the physical object so beautiful and luxurious that it will seem a bargain at $1. The web obviously presents all kinds of advantages for breaking news, but the printed newspaper does and will always have a slew of advantages, too. It's our admittedly unorthodox opinion that the two can coexist, and in fact should coexist. But they need to do different things. To survive, the newspaper, and the physical book, needs to set itself apart from the web. Physical forms of the written word need to offer a clear and different experience. And if they do, we believe, they will survive. Again, this is a time to roar back and assert and celebrate the beauty of the printed page. Give people something to fight for, and they will fight for it. Give something to pay for, and they'll pay for it.

Eggers is basically now saying not that nothing has changed, but that EVERYTHING has to change. But it needs to change not because we've just progressed forward from print to digital, but that by first betting on the infinitely expanding profit potential of mass publishing and then paring the experience back to try to meet that bet, we've made a huge mistake.

So, in some sense, we need to go back to basics; but in another, we need to rethink our direction forward based on what's best for the people and the product, not the margins. We were pushing so hard for so long in one direction that we capsized the boat.

It's still a conservative vision, but it's a David Simon/Michael Moore kind of conservative -- i.e., a nostalgic but critical liberalism, in the tradition of John Ruskin. And that's a good mood to strike, if not for everybody -- not least because it's not at all intended to be a model for everybody.


June 2, 2009

Talismanic Economics

Robin says,

Ezra Klein and Matt Yglesias are talking about "prestige cross-pollination" in economics:

"...the habit of distinguished economists using prestige acquired within their field to pass off sloppy work in other fields."

Klein backs it up:'s not just about commentary. Take the Obama administration. Brian Deese, the guy quarterbacking the auto restructuring, is a 31-year-old members of the economics team. Peter Orszag is probably the most powerful voice on health-care policy. Larry Summers, by most accounts, has a hand in literally everything. Economists, in other words, are the prime movers on not only the economy, but health care, climate change, housing policy and much else.

Klein finished with: "I'm not saying whether this is good or bad."

I think it's probably bad. Economics has been afforded a strange, special status in our society. It's become the master science of large-scale planning. It's become psychohistory.

Except it's not cut out to be either of those things. There are simply too many important values in the world that we can't tally in monetary terms. (And when we try, it's a hack -- better than nothing, but still a hack.)

Well, one caveat: To the degree it's been able to absorb social insights from other fields -- sociology, cognitive psychology, math, law, even some biology -- sometimes "economics" is just a convenient umbrella for a lot of very different tools.

But that integrative role needn't belong to economics alone. I think certain kinds of social scientists, and certain kinds of historians, could frame big policy decisions just as well -- or better -- than economists.

"Now do it bigger! And more humble."

Comments (7) | Permasnark | Posted: 4:53 PM

April 19, 2009


Tim says,

Do you know what was great? The Hanseatic League. Do you think we could bring that back, twenty-first century style?:

This diffuse, fractured world will be run more by cities and city-states than countries. Once, Venice and Bruges formed an axis that spurred commercial expansion across Eurasia. Today, just 40 city-regions account for two thirds of the world economy and 90 percent of its innovation. The mighty Hanseatic League, a constellation of well-armed North and Baltic Sea trading hubs in the late Middle Ages, will be reborn as cities such as Hamburg and Dubai form commercial alliances and operate "free zones" across Africa like the ones Dubai Ports World is building. Add in sovereign wealth funds and private military contractors, and you have the agile geopolitical units of a neomedieval world. Even during this global financial crisis, multinational corporations heavily populate the list of the world's largest economic entities; the commercial diplomacy of emerging-market firms such as China's Haier and Mexico's Cemex has already turned North-South relations inside out faster than the nonaligned movement ever did.

Wait -- ninety percent of what, exactly? Innovation units?

Comments (1) | Permasnark | Posted: 7:57 PM

March 30, 2009

Grade Distortion

Tim says,

Tim Harford at the Financial Times finds le mot juste -- not grade inflation, but grade distortion:

Grade distortion is a serious affair. Students and their teachers are forced to switch to grey market transactions denominated in alternative currencies: the letter of recommendation, for example. Like most alternative currencies, these are a hassle.

Grade distortions, like price distortions, destroy information and oblige people to look in strange places for some signal amid the noise. Students are judged not on their strongest subjects – A grade, of course – but on whether they also picked up A grades in their weakest. When excellence cannot be displayed, plaudits go instead to those who deliver pat answers without stumbling – politicians in training, presumably.

Via Lone Gunman.

Comments (1) | Permasnark | Posted: 3:24 PM

March 29, 2009

Tim's thoughts: Speaking of delayed significance -- <a href=" >>

Civ, Counterfactual Progress, and the Rolling Katamari Ball of Science

This post is hard to sum up because it's sort of about everything.

Why did science and history unfold the way they did?

Why didn't somebody in China invent the electric light bulb? In an alternate reality with no Edison and, let's say, no America, does anybody invent an electric light bulb?

Is the video game Civilization's "technology tree" a good model for technology and history -- or just a dorky game mechanic? Rob MacDougall had his students think about alternative models. One of his favorites invoked the imagery of Katamari Damacy:

The student's idea was a rolling tech wheel. The spokes of the wheel represented paths of technological development you could pursue -- navigation, metalworking, what have you -- but you also had to adapt to technological contingencies in the form of the various things you rolled over. I'm not sure how this would actually work as a game, but as a crazy Katamari bricolage view of human history, it's fun to wrap your head around.

It all springs forth from a class called Science, Technology, and Global History. There is nothing not to like here. (Thanks for the link, Dan!)

Posted March 29, 2009 at 3:32 | Comments (1) | Permasnark
File under: Snarkonomics, Society/Culture, Technosnark, Video Games, Worldsnark

March 28, 2009

Paging Nate Silver

Paul Krugman on "the magazine cover effect":

[W]hen you see a corporate chieftain on the cover of a glossy magazine, short the stock. Or as I once put it (I’d actually forgotten I’d said that), “Whom the Gods would destroy, they first put on the cover of Business Week.”

Apparently the numbers back it up when it comes to CEOs. Krugman wryly states, "[p]resumably the same effect applies to, say, economists. You have been warned."

But Dr Krugman, you presume too much! We need data, not just for CEOs, but academics, journalists, athletes, actors... Maybe being on the cover of Sports Illustrated is good index of future success (IFS) for pitchers, but a negative one for boxers. (This in fact seems likely.) Maybe it's better for athletes than managers. It might be great for actors -- given that increased visibility generally leads to better pay, more awareness, more awards... or else the whole celebrity publicity industry is just terribly misguided.

We need serious, highly-differentiated regressions on this one. Otherwise, this might just be some full-moon positive confirmation thing for everything BUT CEOs.

Posted March 28, 2009 at 2:30 | Comments (0) | Permasnark
File under: Marketing, Movies, Snarkonomics, Sports, Television

Change Comes To Manhattan (Brooklyn, Too)

Tim says,

Rents in New York are falling, and credit and other requirements are becoming less strict, even for desirable neighborhoods in Manhattan. The Times even uses the word "bubble" to describe the old world order, which suggests that it's not just the economic downturn but a realistic reevaluation of inflated prices. We've noticed something similar in Philadelphia; people are offering more for less. We might even be able to live somewhere where cabs come, and good restaurants will deliver! Yay.

The story about NYC also includes what I'm pegging as a very artful non-description of a Manhattan brothel: "an acupuncture parlor down the hall that stayed open very, very late and served a male clientele."

Comments (0) | Permasnark | Posted: 11:21 AM

March 26, 2009

Death Is Elastic

Tim says,

All you need are signficant differentials in the estate tax.

Comments (0) | Permasnark | Posted: 11:06 PM

The World Has A New Hegemon

Tim says,

Guess who it is! (And who it isn't, anymore. Maybe.)

Comments (0) | Permasnark | Posted: 5:22 AM

Paul Krugman Channels Woody Allen

Tim says,

Blogging for the NYT is a little like writing/directing your own movie:

Via Mark Thoma, Anatole Kaletsky writes:

Smith, Ricardo and Keynes produced no mathematical models.

Now, I have Marshall McLuhan John Maynard Keynes right here. Let’s ask him:

Let Z be the aggregate supply price of the output from employing N men, the relationship between Z and N being written Z = φ(N), which can be called the aggregate supply function. Similarly, let D be the proceeds which entrepreneurs expect to receive from the employment of N men, the relationship between D and N being written D = f(N), which can be called the aggregate demand function...

Comments (0) | Permasnark | Posted: 4:12 AM

March 18, 2009

Tim's thoughts: Is this boring? Could I punch this up a little or a lot more? Because I think this story ... >>

Blood and Treasure: Genealogy and Contexts

About three years ago, Robin noticed a strange phrase making the rounds in political talk about the costs of the Iraq war: "blood and treasure." I'd noticed it too, and when he posted about it, I started to do some digging into its origins. I thought that it would be a nice tidy little search, make for a fun thread and discussion, and we'd figure out that it came from Washington, maybe, or Lincoln, or Clausewitz.

As it turned out, I spent the better part of a year trying to find out where "blood and treasure" came from. I exhausted databases. I learned languages. I asked everyone I knew about it. I gave lectures on it. I contemplated scrapping my planned dissertation to write about it instead, and when that seemed like a bad idea, I contemplated leaving graduate school to write a book about it instead.

"Blood and treasure" is in its own way the key to all mythologies. Tracing the phrase traces the history of human thought about violence, whether in politics, history, religion, philosophy, or literature. I wanted to share here a fraction of what I have found so far.

... Read more ....

Is This What They Call Cosmic Irony?

Tim says,

You Know It's Bad When ...:

Insurance companies say they have no choice but to honor contracts, and banks are pleading that their assets will be worth more if you just give them a little time.

For anyone, especially in business, who has tried to make those same arguments to insurers and bankers, to no avail, it's painfully rich.

Comments (0) | Permasnark | Posted: 8:15 AM

March 17, 2009

The Age of Bespoke Everything

Tim says,

Clive Thompson on Etsy, microbusiness, and personalized aesthetics.

Comments (2) | Permasnark | Posted: 11:18 AM

March 13, 2009

This Is Not A Game

Jon Stewart's The Daily Show has never, in my memory, turned its entire half hour into an interview of a single guest -- and they get huge guests. But that's what they did yesterday for CNBC's Jim Cramer. And it's a doozy.

Last week, as part of its Santelli-inspired critique of CNBC, Stewart ran two series of clips of Cramer offering pretty terrible financial advice, first with a bunch of other CNBC pundits, and then (after Cramer loudly and publicly complained) of Cramer by himself. In this interview, Stewart shows unaired clips of Cramer (who used to run a hedge fund) from 2006:

  1. talking about how easy it is to manipulate the markets through the media;
  2. admitting that he used to do it, particularly to make money on a short sell;
  3. suggesting that other hedge fund managers do the same, as it's a fast and satisfying way to make money;
  4. offering specific advice on how to do this right then with a particular stock (Apple Computer).

As Stewart says, we want Jim Cramer the journalist to protect us from Jim Cramer the financial schemer. Instead of being a watchdog, CNBC became a cheerleader.

The entire interview is amazing. I've got the clips (including those from previous shows that lead to this) embedded after the jump, but let me also quote James Fallows and Sean Quinn on what went down.

Fallows, "It's true: Jon Stewart has become Edward R. Murrow":

Yes, it is cliched to praise Stewart as the "true" voice of news; and, yes, it is too pinata-like to join the smacking of CNBC.... But I found this -- the Stewart/Cramer slaughter -- incredible...

Just before leaving China -- ie, two days ago -- I saw with my wife the pirate-video version of Frost/Nixon, showing how difficult it is in real time to ask the kind of questions Stewart did. I know, Frost was dealing with a former president. Still, it couldn't have been easy to do what Stewart just did. Seeing this interview justified the three-day trip in itself.

Sean Quinn, "Stewart Destroys CNBC, Cramer, Disses 'Doucheborough'":

On the day in October 2004 that Jon Stewart made up his mind to end CNN’s Crossfire, viewers didn’t have advance warning. By contrast, last night’s epic takedown of CNBC and Fast Money Mad Money host Jim Cramer that built over an eight-day period, including the advance hype of a Thursday morning front-page, above-the-fold story on America’s most widely-circulated newspaper, USA Today.

It did not disappoint. In addition to an extensive confrontation that included footage of Cramer admitting to the ease of manipulating markets, Stewart indicted CNBC’s “sins of commission” in fueling hype that led to the economic crisis.

Quinn also pulls the money quote from Stewart:

I understand you want to make finance entertaining, but it’s not a (bleeping) game. And when I watch that, I get, I can’t tell you how angry that makes me. Because what it says to me is: you all know. You all know what’s going on. You know, you can draw a straight line from those shenanigans to the stuff that was being pulled at Bear, and AIG, and all this derivative market stuff that is this weird Wall Street side bet.

Watch it, it's worth it.

... Read more ....
Posted March 13, 2009 at 6:28 | Comments (0) | Permasnark
File under: Media Galaxy, Recommended, Snarkonomics

March 8, 2009

The Uncertain and the Genuinely Bad

There are two reasons why people lose economic confidence. In the first case, there's enough instability that you just don't know what's going to happen. In the second case, you have a pretty good idea about tomorrow, but you know that things are going to be genuinely bad.

If you know things are going to be genuinely bad, then given sufficient resources, you can prepare for them: save money, make a budget, gather information and make plans. In particularly, if you know (for example) that your income is going to drop or your rent is going to go up by a preset amount, you can budget accordingly. But if you really have no idea about tomorrow -- whether you could get your pay cut, or get outright fired, whether gasoline prices could halve or double -- then you just lurch from day to day, not knowing quite what to do, afraid to spend, afraid to save, generally, afraid.

This is where colleges and universities are now:

Colleges — facing a financial landscape they have never seen before — are trying to figure out how many students to accept, and how many students will accept them.

Typically, they rely on statistical models to predict which students will take them up on their offers to attend. But this year, with the economy turning parents and students into bargain hunters, demographics changing and unexpected jolts in the price of gas and the number of applications, they have little faith on those models.

“Trying to hit those numbers is like trying to hit a hot tub when you’re skydiving from 30,000 feet,” said Jennifer Delahunty, dean of admissions and financial aid at Kenyon College in Ohio. “I’m going to go to church every day in April.”

As the article points out, this uncertainty generally favors students -- colleges are throwing the kitchen sink at applicants, throwing aid packages, higher admit rates, etc. -- except in those cases where universities (like in California) don't know whether they can seat everyone they admit in the event of a budget failure.

It's also pretty hellish on teaching applicants, too. I'm on the academic job market this year, and as the first wave of the economic catastrophe hit endowments and state budgets in October and November, schools cancelled tenure-track searches, suddenly uncertain about whether they could invest in long-term positions. Don't worry, everyone said. There will be plenty of visiting and term-limited positions -- after all, the schools still need someone to teach the courses, right? Then, the enrollment projections got all screwy. Before, schools weren't sure whether they could take a chance on hiring you for a lifetime. Now they don't know whether they can hire you for a year, or if there will be one or ten dozen students when you get there.

On the other hand, both of the two schools where I already work are unusually aggressive in getting me to stick around for next year. I'd like to think it's just because I am so awesome, but I know that economic catastrophe puts the entire already-migratory part-time teaching corps in flux: folks content to work for not a lot of money suddenly find their spouses out of work or forced to move. Some places know that they're going to have way more students and less time and money to devote to them -- so any teacher they can count on to reliably fill a classroom for adjunct money is like a U.S. treasury note: sure, it's not ideal, but where else are you going to put your cash?

It's all gone screwy, and nobody seems to know what's going to happen -- in the one industry where we still enjoy a competitive advantage with the rest of the world. And it's made an already weird job process a hundred times weirder.

How is it affecting your industry?

Posted March 8, 2009 at 6:41 | Comments (0) | Permasnark
File under: Snarkonomics, Society/Culture
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