economics

Nature does not work with an end in view

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[A]verage quality-adjusted single-family house prices, corrected for overall inflation, have risen a paltry 1.1% at a compound annual rate since 1972. […] Since 1972, 30-year fixed-rate mortgage rates in real terms have averaged 4.1%, meaning it has cost the homeowner 3% per year to own a house before taxes, maintenance, utilities and insurance. That’s a real negative return.

{ Bloomberg | Continue reading }

photo { Frank Lloyd Wright at the Guggenheim Museum during construction, photographed by Sam Falk, 1957 | NY Times }

How do we make use of this life that we still have?

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Several weeks ago, I met up with a friend in New York who suggested we grab a bite at a Scottish bar in the West Village. He had booked the table through something called Seated, a restaurant app that pays users who make reservations on the platform. We ordered two cocktails each, along with some food. And in exchange for the hard labor of drinking whiskey, the app awarded us $30 in credits redeemable at a variety of retailers. […]

To throw cash at people every time they walk into a restaurant does not sound like a business. It sounds like a plot to lose money as fast as possible. […]

If you wake up on a Casper mattress, work out with a Peloton before breakfast, Uber to your desk at a WeWork, order DoorDash for lunch, take a Lyft home, and get dinner through Postmates, you’ve interacted with seven companies that will collectively lose nearly $14 billion this year. […]

The meal-kit company Blue Apron revealed before its public offering that the company was spending about $460 to recruit each new member, despite making less than $400 per customer. […] since Blue Apron went public, the firm’s valuation has crashed by more than 95 percent. […]

{ The Atlantic | Continue reading }

photo { Detroit Science Center, 1979 }

unrelated { Apple announces $2.5 billion plan to ease California housing crisis }

Why, why, tell ‘em that it’s human nature

Neumann created a company that destroyed value at a blistering pace and nonetheless extracted a billion dollars for himself. He lit $10 billion of SoftBank’s money on fire and then went back to them and demanded a 10% commission. What an absolute legend.

{ Matt Levine / Bloomberg | Continue reading }

Dave, although you took very thorough precautions in the pod against my hearing you, I could see your lips move

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An artificial intelligence hiring system has become a powerful gatekeeper for some of America’s most prominent employers […]

Designed by the recruiting-technology firm HireVue, the system uses candidates’ computer or cellphone cameras to analyze their facial movements, word choice and speaking voice before ranking them against other applicants based on an automatically generated “employability” score. HireVue’s “AI-driven assessments” have become so pervasive in some industries, including hospitality and finance, that universities make special efforts to train students on how to look and speak for best results. More than 100 employers now use the system, including Hilton, Unilever and Goldman Sachs, and more than a million job seekers have been analyzed.

But some AI researchers argue the system is digital snake oil — an unfounded blend of superficial measurements and arbitrary number-crunching, unrooted in scientific fact.

{ Washington Post | Continue reading }

‘Just be true to yourself.’ –Anna Wintour

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Last year the blogger Venkatesh Rao coined the term “premium mediocre.” He was referring to a segment of economic activity largely dreamed up by marketers to give the masses the illusion that they are consuming luxury […]

from Uniqlo cashmere (that doesn’t feel like cashmere at all) to Balenciaga baseball hats and Gucci headbands…

{ The Business of Fashion | Continue reading }

image { The natives of East Africa and the Congo Forest fashion trumpets from tusks. Man and Beast in Eastern Ethiopia. J. Bland-Sutton. London, Macmillan & Co., 1911. }

Holihowlsballs and bloody acres!

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Do a country’s inhabitants get happier as it gets richer? […]

In Britain, for example, happiness fell sharply during the two world wars. It began to rise again after 1945, peaked in 1950, and then fell gradually, including through the so-called Swinging Sixties, until it reached a nadir around 1980.

America’s national happiness, too, fell during the world wars. It also fell in the 1860s, during and after the country’s civil war. The lowest point of all came in 1975, at the end of a long decline during the Vietnam war, with the fall of Saigon and America’s humiliating defeat.

In Germany and Italy the first world war also caused dips in happiness. By contrast, during the second world war these countries both got happier as the war continued. […]

A one-year increase in longevity has the same effect on national happiness as a 4.3% increase in gdp. […]

it is warfare that causes the biggest drops in happiness. On average it takes a 30% increase in gdp to raise happiness by the amount that a year of war causes it to fall. The upshot appears to be that, while increasing national income is important to happiness, it is not as important as ensuring the population is healthy and avoiding conflict.

{ The Economist | Continue reading }

the noxiousness of its effluvia in lacustrine marshes, pestilential fens, faded flowerwater, stagnant pools in the waning moon

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Whatever goes down the sink, shower, washing machine and toilet is transferred to one of about 14,000 U.S. wastewater treatment plants. While those plants are good at neutralizing sewage microorganisms that can make people sick or pollute waterways, they can miss chemicals that are linked with our changing lifestyles.

The biggest change since most treatment plants were designed? The explosion of pharmaceutical use by Americans. […] About 60% of American adults take at least one prescription pill every day. Residue from those pills travels to treatment plants and waterways.

{ Axios | Continue reading }

cabinet, wood, glass, metal, paint assorted marine debris, plastic, rope { Mark Dion, Cabinet of Marine Debris, 2014 }

I am dying, Egypt, dying

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A new drug, created to treat just one patient, has pushed the bounds of personalized medicine and has raised unexplored regulatory and ethical questions.

The drug, described in The New England Journal of Medicine, is believed to be the first “custom” treatment for a genetic disease. It is called milasen, named after the only patient who will ever take it: Mila (mee-lah) Makovec, who lives with her mother, Julia Vitarello, in Longmont, Colo. […]

Milasen is believed to be the first drug developed for a single patient (CAR-T cancer therapies, while individualized, are not drugs). But the path forward is not clear, Dr. Yu and his colleagues acknowledged. There are over 7,000 rare diseases, and over 90 percent have no F.D.A.-approved treatment […]

Tens of thousands of patients could be in Mila’s situation in the United States alone. But there are nowhere near enough researchers to make custom drugs for all who might want them.

And even if there were, who would pay? Not the federal government, not drug companies and not insurers, said Dr. Steven Joffe, professor of medical ethics and health policy at the University of Pennsylvania.

“Unfortunately, that leaves it to families,” he added. “It feels awfully uncomfortable, but that is the reality.”

That means custom drugs would be an option only for the very wealthy, those with the skills to raise large sums of money, or those who gain the support of foundations.

Mila’s drug development was mostly paid for by the foundation run by her mother, but she and Dr. Yu declined to say how much was spent.

{ NY Times | Continue reading }

screenprint on Perspex { Bridget Riley, Untitled [Fragment 3/11], 1965 }

And every dam had her seven crutches. And every crutch had its seven hues. And each hue had a differing cry.

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[S]ociologist Eva Illouz, in her 1997 book Consuming the Romantic Utopia, analyzes the trope of “the deserted beach”:

While the beach is primarily a construct of the tourist industry, in advertising it is detached from the crowded and highly commercialized vacation resorts. In fact, in advertisements beaches are invariably deserted.

Without the advertising clichés and conventions to frame our expectations, love itself would be incomprehensible. Illouz quotes an epigram of La Rochefoucauld’s: “There are some people who would never have fallen in love if they had not heard there was such a thing.” Presumably the problem with this is that such love that mimics the conventions is somehow inauthentic, or that we force what might have been an idiosyncratic and true love into false shapes that spoil it. Illouz suggests that modern romantic experience has a lot in common with tourist experiences: They are systematized in advance so that they may be readily desired, accessed, understood, consumed, disavowed.

{ Rob Horning/Real Life | Continue reading }

mirror and mdf { Monica Bonvicini, Same Old Shit, 2018 }

a jungle of love and debts and jangled through a jumble of life in doubts

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{ Overnight, Gem Spa was transformed into SchitiBank | more | ThanksTim }

‘They muddy the water, to make it seem deep.’ –Nietzsche

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We are connecting everything to everything.

[…]

In the network economy the winner-take-all behavior of Hollywood hit movies will become the norm for most products—even bulky manufactured items. Oil wells are financed this way now; a few big gushers pay for the many dry wells. You try a whole bunch of ideas with no foreknowledge of which ones will work. Your only certainty is that each idea will either soar or flop, with little in between. A few high-scoring hits have to pay for all the many flops. This lotterylike economic model is an anathema to industrialists, but that’s how network economies work. There is much to learn from long-term survivors in existing hits-oriented business (such as music and books). They know you need to keep trying lots of things and that you don’t try to predict the hits, because you can’t.

Two economists proved that hits—at least in show biz—were unpredictable. They plotted sales of first-run movies between May 1985 and January 1986 and discovered that “the only reliable predictor of a film’s box office was its performance the previous week. Nothing else seemed to matter—not the genre of the film, not its cast, not its budget.” The higher it was last week, the more likely it will be high this week— an increasing returns loop fed by word of mouth recommendations. The economists, Art De Vany and David Walls, claim these results mirror a heavy duty physics equation known as the Bose-Einstein distribution. The fact that the only variable that influenced the result was the result from the week before, means, they say, that “the film industry is a complex adaptive system poised between order and chaos.” In other words, it follows the logic of the net: increasing returns and persistent disequilibrium.

[…]

Because prices move inexorably toward the free, the best move in the network economy is to anticipate this cheapness.

{ Kevin Kelly, New Rules for the New Economy, 1998 | PDF | More: Wired }

meep meep

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More than a million customers signed up for Prime memberships in just the third week of December 2013. Sales hit a record high. But UPS couldn’t keep up.

Analysts and companies in the logistics industry think Amazon eventually will become a formidable competitor to UPS and to FedEx. […] The next spring, Amazon was testing contract couriers in San Francisco, Los Angeles and New York. And in 2015, Amazon introduced Flex, an app that allows people to sign up for delivery shifts using their own vehicles. (Amazon considers Flex drivers independent contractors, too.)

Amazon is only getting faster in delivering orders, and its competitors are racing to catch up. Last April, after reporting a record $3.6 billion quarterly profit, Amazon’s chief financial officer, Brian Olsavsky, told Wall Street analysts that the company was investing $800 million to make free overnight delivery the default for Prime members in the United States.

The next day, Walmart teased on Twitter: “One-day free shipping … without a membership fee. Now THAT would be groundbreaking. Stay tuned.” Walmart began offering free overnight delivery of 220,000 popular items in a few American cities, with a goal of expanding to 40 major metropolitan areas. […]

In its relentless push for e-commerce dominance, Amazon has built a huge logistics operation in recent years to get more goods to customers’ homes in less and less time. […] The retailer has created a network of contractors across the country that allows the company to expand and shrink the delivery force as needed, while avoiding the costs of taking on permanent employees. […]

Amazon requires that 999 out of 1,000 deliveries arrive on time, according to work orders obtained from contractors with drivers in eight states.

Amazon has repeatedly said in court that it is not responsible for the actions of its contractors, citing agreements that require them, as one puts it, to “defend, indemnify and hold harmless Amazon.” Just last week, an operations manager for Amazon testified in Chicago that it signs such agreements with all its “delivery service partners,” who assume the liability and the responsibility for legal costs. The agreements cover “all loss or damage to personal property or bodily harm including death.” […]

“I think anyone who thinks about Amazon has very conflicted feelings,” said Tim Hauck, whose sister, Stacey Hayes Curry, was killed last year by a driver delivering Amazon packages in a San Diego office park. “It’s sure nice to get something in two days for free. You’re always impressed with that side of it. But this idea that they’ve walled themselves off from responsibility is disturbing.”

{ ProRepublica | Continue reading }