Posts by matt

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.

During my year of shuttling back and forth between Missouri and Minnesota, I honed my travel regimen down to a precise science. I’ve got my High Sierra Wheeled Backpack, my Monster Outlets-to-Go travel power strip, spare contacts, spare eyeglasses and two zippered bags for liquid and dry toiletries, all ready to go whenever I need them. Most of my liquids — lotion, shaving oil, hand sanitizer, eyedropper (for contact solution) — are either refillable or are normally sold in TSA-acceptable containers, like deodorant and roll-on styptic pens.

What’s always bedeviled me, though, is the toothpaste. Travel-size toothpaste can be surprisingly elusive, and the container isn’t refillable. Or so I thought. I mean, it’s not like you could just put the nozzle of your regular toothpaste tube up against the nozzle of the travel tube and squeeze, right?

Right?

Wrong. It totally works. And just you watch, I will still be using the same grody .75-oz tube of Crest in 2011.

Ezra Klein recently moved from the American Prospect to the [depending on your perspective] loftier perch of the Washington Post. I’m guessing this has also gotten him better access to the halls of power; he seems to be snagging higher-profile interviews more often (e.g. Atul Gawande, Ron Wyden, Tom Daschle, Bernie Sanders).

But his heightened proximity to the legislative sausage factory might be having a depressing effect. Lately, he’s gotten more and more negative about the deficiencies of our government structure. Most of our biggest problems, he’s been saying, can’t really be pinned on individual actors like Obama or, say, Tom Harkin. They’re systemic.

To illustrate, he offers a nice fable:

Imagine a group of men sitting in a dim prison cell. One of the walls has a window. Beyond that wall, they know they’ll find freedom. One of the men spends years picking away at it with a small knife. The others eventually tire of him. That’s an idiotic approach, they say. You need more force. So one of the other men spends his days ramming the bed frame into the wall. Eventually, he exhausts himself. The others mock his hubris. Another tries to light the wall on fire. That fails as well. The assembled prisoners laugh at the attempt. And so it goes. But the problem is that there is no answer to their dilemma. The problem is not their strategy. It’s the wall.

Tim and I had a fun Google Chat back in March about a concept for a book called “Too Big to Succeed.” The window for a book on this theme to become a blockbuster is almost closed, so I figure it’s time to stop hoarding the idea and make it a blog post.

The phrase “too big to succeed” has already infected the cultural lexicon this year. A quick sweep of Google shows it being applied to the banking industry, the auto industry, Twitter, big Pharma, China, and Washington, among other things.

It’s a good phrase, springing up (as best as I can tell) in response to an even-more-popular recent construct: “too big to fail.”

The concept of an entity or industry being “too big to succeed” deserves an extended riff. Do industries just have to congeal into tiny networks of giant institutions over time? And if so, does that tendency pretty much force the massive flameouts and market inefficiencies we’ve seen all over the economy recently?

I don’t think this does have to happen, and therein lies the thesis of the book.

I think the era where every industry has to become an oligopoly is nearing an end. I don’t think the shift towards mass institutions was a natural, inexorable network characteristic. If we look at the tape, I think we’ll see that the oligopoly era was a network distortion produced by our industrial-age regulatory framework. And it’s time to leave these things to a quiet rest.

In industry after industry, I think we’ve got an opportunity to shift our policies towards supporting nimble, durable markets that mimic real networks: diverse collections of nodes with a few particularly well-connected hubs. Let’s look at a few examples:

The news industry

Over the past century, the news business went right past oligopoly into monopoly and got stuck there. Today, most of the journalism produced in every American city is an accidental byproduct of a giant, dying media conglomerate. As with all these other oligopolistic industries, the news titans are clamoring for a bailout, asking the government to prop them up and regulate away their competition.

But we can imagine a system of better, more sustainable journalism built on a robust network of independent newsrooms threaded throughout every neighborhood. Networks of editors could package this work for diverse sets of overlapping communities. In places like the Bay Area and Seattle, we’re seeing the beginnings of this new model, but to thrive, it will require at least as much regulatory support as the big dogs got when they were buying their presses back in the day.

The medical industry

This was what got Tim and I started. Today, most health care is provided by big, unwieldy hospitals. They tend to cluster in these giant office parks, often far away from the inner city, where they’re needed most. You walk in and have to navigate a maze of rooms, bouncing back and forth between receptionists and nurses and physician’s assistants and doctors.

But the vast majority of medical care people need on a daily basis doesn’t require a hospital to provide. As Tim said in our chat (punctuation mine), “There should be as many clinics as there are coffee shops, pharmacies, or copy stores. Universities do this (at least Penn does). We have a student health center; they have walk-in and appt hours, you pay a fee and it’s free. They see you and administer standard care, run tests, give physicals and vaccines and such, and then refer you to the hospital or a specialist if it’s more serious. You HAVE to go to the clinic if you’re in Philly and it’s not an emergency. And in part b/c it’s a tailored operation, geared towards younger people, it’s tremendously efficient.”

The food industry

I just saw Food, Inc., yesterday, which might be what got me off on this riff again. If you read Fast Food Nation or The Omnivore’s Dilemma, you know that Eric Schlosser and Michael Pollan both identify monoculture (i.e. oligopoly and monopoly) as the primary villain in our awful global food situation. The last century saw food production shift from the local farmer to the multinational factory conglomerate. That shift is ruining our health, our environment, international diplomacy, and perhaps worst of all, our food. Meanwhile, the unbelievably obese food lobby has taken control of our government, writing intrusive laws to ensure its survival even as it crumbles under its own weight.

The movie industry

At this point, Hollywood basically exists to churn out quarterly blockbusters that each aim to repeat the formula for one blunt, universal emotion: love (“The Proposal”!), fear (“Saw XI”!), excitement (“Transformers!”), humor (“17 Again”!), etc. Nuance is lost, and art suffers. Like the food titans, the news kingpins, the health care lobbyists and others before them, the movie moguls are descending on Washington to seek protection as the twin forces of distribution implosion and supply explosion shred their profits.

But when my nephew is cooking up mindboggling special effects on his laptop, who needs Hollywood? The industry’s product is unsustainable. You can’t flog the formula forever. Let a universe of independent artists flourish, and overhaul the laws to help them make their magic.

Etc.

We can lay this pattern onto the energy industry, the publishing industry, banking (of course), transportation, post-secondary education, you name it. If I were editing this book, I’d make that the first third, in fact: spend the preface and first chapter making the overall argument, then spend a few chapters exploring how it plays out in all these different industries. Follow up this part with a chapter laying out the history — how this screwed-up oligopoly system took root in the first place. Trace it back to the industrial age and beyond.

The middle third of the book (I’m taking this straight from the gChat) could be about the rules of a new, more natural network system. The role of big companies in this ecosystem, what differentiates successful lean businesses from unsustainable niche businesses, how a network of microbusinesses can collaborate and compete effectively.

The last third might address how society generally would benefit, and how it would have to evolve to support this. This is where you explore the policy piece — how our laws have to change. It’s also where you talk about the Richard Florida stuff — our evolving understanding of how properly organized urban environments should function — and how this shift facilitates that.

Of course, as I said, I think the moment for this book is almost gone. From last September to this past January, we had a brief interlude of just transcendent possibility. Monumental shifts in our society seemed graspable. People talked about spending a trillion dollars over just a few years to fundamentally remake our economy, and we actually passed a stimulus package that got closer than anybody imagined.

But we’re seeing that ambition melt quickly. We’re on the verge of historic health reform legislation, sure, but now we’re choking on a price tag of $1 trillion over 10 years, regardless of how much it saves us over the long term. Our chance to achieve forceful climate change legislation is dimming by the day. And our September lust to reform the banking industry has molded over into a desire to, er, re-form the banking industry, in much the same shape as it was in 2001 or so.

There was a window where a big, Gladwellian book selling this notion of industrial transformation — not as some sort of hippie anti-corporatism but as a breakthrough business idea — might have made some traction. But I think that window’s almost shut. So this book is, for now, a blog post.

Or maybe the next Snarkmarket collaboration?

For my family, the death of Michael Jackson was one of those call-your-people-and-make-sure-everyone’s-okay moments. I was checking the New York Times on my cell on the way to Tampa International Airport when the story was still that he’d been rushed to the hospital, reportedly for cardiac arrest. The way they’d written the story, though, with eulogistic snippets of bio fleshing out the news report, it felt as though the writers had pasted in text from Jackson’s canned obit, which I interpreted as a bad sign. I kept saying to the folks in the Super Shuttle that I had a bad feeling about it. As I handed my boarding pass and license to the TSA inspector, she passed it back slowly, looked me in the eyes, and said, “Michael Jackson is dead.”

So. Muse upon a problematic and epic life with me, Snarketeers. What have you seen that lives up to the moment? I’ll kick us off with this reminiscence, by Minneapolis writer Max “Bunny” Sparber. And the MetaFilter obit thread is always a propos.

And, for the road, from Tim:

Today Lifehacker brings us a ridiculously good idea. You make and refrigerate a week-or-two supply of no-knead bread dough. When you’re ready for a fresh loaf, you pull off a chunk and stick it in the oven for half an hour. Voila! Cheap, convenient, delicious, homemade bread! These folks turned this idea into a cookbook.

This io9 essay on Dollhouse reminded me of something I bet a lot of slightly-less-hardcore Joss Whedon fans didn’t know: Years ago, Whedon wrote a couple of action movie screenplays that got reviewed at Screenwriter’s Utopia. The review includes a summary of one of the movies (called “Afterlife”) that clearly prefigured the ideas Whedon’s exploring in Dollhouse. The premise changed a lot in the intervening years, but it’s somewhat fascinating to look at the progression.

To me, the thing that’s striking about these national security briefings isn’t the hokey combo of Bible verses and combat pics, it’s the amateurish design. Something tells me whoever creates Obama’s briefing papers has to consult a 133-page stylebook.

Reading through this month’s Communication Arts, I encountered an article on the High Line, an abandoned elevated rail platform in NYC. After the line went fallow in 1980, Nature reclaimed it. Trees, grasses and wildflowers overgrew the tracks, turning it into an urban wonder — a wild garden in the sky. Due to years of legal wrangling, the line somehow never got demolished. So a group of dreamers calling themselves Friends of the High Line assembled a coalition of influential hipster sympathizers to turn it into a park. Back in 2007, New York Magazine chronicled the rail line’s evolution from urban ruin to civic treasure. Kottke’s been blogging it since 2004, so I may be the last nerd-hipster to hear about it. If I’m not, photos of the thing abound, so do spend some time enjoying them.

Photo from Flickr user cdstar, licensed under Creative Commons. Feel free to make derivative works off this post, if you’d like.

Been recently fascinated with learning more about health care, reading a lot of Ezra Klein and Jonathan Cohn, catching up on essays by the likes of Paul Krugman and Atul Gawande. And the best thing I’ve read so far is this wonkish-but-accessible interview with health care policy super-couple Uwe Reinhardt and Tsung-mei Cheng. The interview teases out a number of distinctive policy critiques and ideas that aren’t surfaced in most of the layperson-friendly health policy lit I’ve come across, like this point about the oft-derided drug company profiteers:

If you look at total drug company profits in a given year, of every retail dollar sale, drug companies who manufacture the stuff get 75 cents. And of that, they make 16, 15 percent profit. So if you multiply that out, we have about $220 billion in drug sales; that’s about, say, $25 billion in profits. Now, that is a lot; you can buy two Princetons for that. However, if you then divide $25 billion through $2.2 trillion in national health spending, you get 1.2 percent; that is, drug company profits are 1.2 percent of total national health spending.

This was from Frontline’s excellent “Sick Around the World” documentary, where they profiled the health care systems of five developed countries and compared them to the US system. See also: Frontline’s follow-up, “Sick Around America.” (Note: T.R. Reid, the correspondent on “Sick Around the World,” refused to participate in “Sick Around America” after he found that the producers shafted the option of single-payer health care in the final edit.)