This tweet from Joe Weisenthal:

Reminds me of a thought I had the other day.

I had this thought when driving from DC to northern Florida, which Mrs. Rooted and I do in a single day when we visit the in-laws, partially because it means we can bring this guy:

i'm sunning

But also because it’s cheaper. And when you’re chugging along 95’s least-compelling stretch for hours on end you think a lot, especially about cars, and especially about how much longer we have to wait until our promised jetpacks arrive. A good amount of attention has been focused on the long-term consequences of self-driving cars for intra-metropolitan transportation, but less has been focused on inter-metropolitan travel. But this is at least equally fertile ground for a major shake-up.

Speed limits are fairly high along southern 95, mostly 65 or 70 mph. It gets even higher out west where things are flat and straight, and there’s a patch of Texas where you can legally go 85 mph. But that’s still pretty slow – less than a fifth the speed of an airplane. But self-driving cars will likely be able to (barring congestion or poor conditions) go much, much, faster. And that can make a huge difference.

When we drive to my in-laws, we drive 774 miles, mostly along 95, which at an average speed of 70 mpb plus just an hour for various breaks is still a 12-hour door-to-door journey. When we fly, the flight is only 2.5 hours to the nearest large airports (Orlando or Jacksonville – they’re much closer to Daytona but flights to that airport are fewer and often more expensive in our experience). But the trip, as Joe points out, is actually a lot longer. If we want to get to the airport with at least 45 minutes to spare before takeoff, we have to leave at least that long before the flight, and that’s if we’re leaving from the closest airport to our home (DCA). Once we land, it takes roughly half-an-hour before we’re in the car heading to our destination, and then it’s at least another hour before we arrive. Adding it all together, the trip is more like six hours, not two-and-a-half. And that’s assuming the plane leaves on time.

To go 774 miles in six hours you’d have to go 130 mph. That’s really fast. But in a world where cars are doing the driving along highways especially designed for that purpose, it’s totally plausible. And what that means is that once self-driving cars are universal they will demolish short-haul flights. So long as road capacity accommodates, flights under two hours in length will likely vanish, and flights under four hours will decline markedly. Shoot, at 200 mph, if no driver needed to be conscious you could leave DC at 8PM EST and sleep most of the way across the continent, arriving in San Francisco at 7AM Pacific. Even at 15 mph and $5/gallon, that’s a < $1,000 trip, which if you’ve got more than two people in the car, is quite competitive; if you imagine that self-driving cars will be much more efficient than that, it’s a almost a no-brainer for personal travel.

This gets us back to the promise in the title of the post. If self-driving cars really do displace short- and even medium-haul domestic flights, a once-scarce resource becomes suddenly plentiful – airport capacity. Assuming energy scarcity is not a crippling obstacle (and if it is we have bigger problems), this should mean a much greater volume of international flights, especially flights across the ocean. If our cars can drive us from New York to New Orleans, then we have more planes, pilots, runways, and fuel to take us to New Delhi.

 

If you haven’t already, Ben Wallace’s profile of Kara Swisher is very good reading. To me, this was the most interesting passage:

Just how hostile should the technology press be? This question, which Swisher has circled for most of her career, came into sharp focus at SXSW, where she was on a panel addressing the responsibilities of tech media in the surveillance era and titled “Why Didn’t a Tech Journalist Break PRISM?” A co-panelist from the Guardian and the moderator both wore tiny plastic life-logging cameras around their necks that snap 120 images per hour. So, the moderator asked, why didn’t you? “We’re terrible,” Swisher said, to laughter, though “we did tell you about the Lyft funding today.”

Self-flagellation was a recurring theme, even though it would be silly to expect the national-security story of the decade to break in a California business publication. Swisher and fellow panelist Alexia Tsotsis, the co-editor of TechCrunch, spoke of the non-investigative nature of the bulk of their coverage—fundings, job changes, new product features. Tsotsis was especially abject, suggesting that even if she’d received the Edward Snowden documents, she probably “would have succumbed to the pressure of the Obama administration now”; TechCrunch “is just a cheerleader,” she said, and “a lot of tech media is sort of in the pockets of the people we cover … We’re inviting them to our parties. We might be dating some of them. We are right in the middle, in the thick, of the tech industry.” (Tsotsis dates a partner at General Catalyst, a venture-capital firm.) She noted that TechCrunch was entrepreneur-friendly from its inception and said she stays up nights worrying about sources getting fired: “There’s a part of me that’s like: No, don’t leak this to us!

“I never say that,” Swisher said.

“That’s why you’re better than us,” Tsotsis said sweetly.

Spencer Ackerman, a writer with the Guardian, stood up and said: “It sounds like you’ve just gotten used to not having an oppositional journalistic culture.”

“I don’t think we’re completely non-oppositional,” Swisher said. “I don’t think you can look at my history and say they love me to death in Silicon Valley.”

“A smart young person in the Valley thinks being a reporter is basically being a PR person,” says one tech journalist. “Like, We have news to share, we’d like to come and tell you about it.” Reporters who write favorably about companies receive invitations to things; critics don’t. “They’re very thin-skinned,” says another reporter. “On Wall Street, if you call them a douchebag, they’ve already heard 17 worse things in the last hour. Here, if you criticize a company, you’re criticizing the spirit of innovation.”

I quoted at length because I think it really digs to the heart of what’s wrong with with “tech” journalism – which is to say, it’s pro-tech. That matters because “tech” is something much more specific than the “A” in the Cobb-Douglas function. Tech is a network of very specific institutions, values, cultures, geographies, and peoples, that construct a relatively narrow and very linear narrative of the world. It is a narrative where progress, also called innovation, is defined almost axiomatically by markets and is inherently and inviolably good, and those persons, places, and institutions that perpetuate that progress are on The Side of Good, and all else is on The Side of Bad. If something new is popular or profitable, it must be a Good Thing, and the people and companies responsible for it are Innovators. Those who are skeptical of or, for whatever reason, impede the Innovation – often some blend of regulators, entrenched interests, and luddites – are anti-Innovation and must be disrupted.

The thing about Tech Journalism is that, in general, it is not just credulous of or invested in this narrative but unaware that other narratives can even exist. It views itself as an invaluable participant in that narrative, doing journalisty things as part of the collective effort to further innovation. That’s where the miscommunication between Ackerman and Swisher comes in. A true ‘oppositional journalistic culture’ isn’t just one where CEOs and VCs are snippy towards the top gossip; its one where journalism is and can be fundamentally skeptical of their subject’s mission, values, and methods. Snowden would never have gone to tech journalists for the same reason that he went to highly-reputed but notably skeptical and independent investigative journalists – tech journalism wouldn’t know what to even do about Snowden, and to a great extent they still don’t. The idea that Google, Facebook, Apple, and all these other firms could be bad, just don’t compute.

This is not to say how much of the Tech narrative I buy into or dispute – I’m on the record as an Airbnb booster, among other things, and in general I think technological progress has redounded to the net benefit of humanity – but that there’s room for complexity and ambiguity in every story, triumph and tragic, and that even progress has costs. When tech journalism can internalize that, then it’ll be, you know, journalism.

Tyler Cowen muses about algorithmic curation in Twitter, and he’s wrong, but he’s wrong for an interesting reason. Even more interestingly, while I was musing on it, that interesting reason was recently stated curiously but quite nicely by James Pethokoukisregarding a totally different topic – climate change:
“…humans have a poor record of understanding risk in complex systems, full of interdependencies, feedback loops, and nonlinear responses. Perhaps humility and caution and consideration are warranted.”
What’s curious about Pethokoukis’ take is that he frames it in the headline of his post as “[]a] conservative way to think about climate change.” And depending on your definition of conservatism, this may be so. But it is decidedly not an economist‘s way of thinking about anything.
The economic way of thinking is deeply rooted in margins. This is, in many instances, very useful, and has a lot of explanatory power in dealing with a diverse set of market outcomes. Tyler Cowen is very much an economist rooted in this way of thinking (I mean, look at the title of his blog), and thus applies this general way of thinking to Twitter. How does this change impact behavior at the margins? How does that partial equilibrium translate to general equilibirum?
The problem, however, that this mode of thinking runs into is that it’s very poor at understanding ecosystems, and therefore poor at detecting the boundaries between changes that do and don’t disturb that ecosystem. Ecosystems, as Pethokoukis writes about, you know, The Ecosystem, is characterized by ‘complexity, interdependency, feedback loops, and nonlinear functional forms.’ But ecosystemic characteristics apply in a lot of intra-human activity as well.
Twitter is a good example of this. As it stands right now, there are many marginal changes one could make in Twitter’s operation – a few more promoted tweets here, a change to profile structure there. But some changes risk affecting the Twitter ecosystem, which risks destabilizing what makes Twitter work on a more fundamental level. Involuntarily excising tweets from feeds, even on a very small scale, risks destroying broad trust in some of the core principles and benefits – sponteneity, discovery, democracy, meritocracy, platform autonomy – that have made Twitter so useful and appealing to so many. A seemingly marginal change could actually collapse the ecoystem.
The lesson here is generalizeable – where economists and that mode of understanding and problem solving tend to go wrong are those places where ecosystemic factors and risks go undetected by a mindset not trained to see them. The result is one where marginal changes – or, more insidiously, a collection of marginal changes – causes an ecosystem to malfunction. That doesn’t mean chaos; a new ecosystem fills the vaccum. But that ecosystem may be substantially different than the previous one, and not always, or even often, for the better.

My new job is in a building with a revolving door, and spinning that thing around a few times a day will get you thinking. We already know that revolving doors have the potential to save a not-insignificant amount of energy through climate control efficiency. But I wanted to know the answer to a more ambitious question – if we made every door in the United States a revolving door, and attached a turbine to them, how much energy could we generate?

I’m not such a science whiz, but fortunately I had a little bit of help – the inestimable Randall Munroe had already tacked a similar question, and his calculations were a good guide to the information I needed to know.

Fortunately, the MIT study cited in both the above links had already done a decent chunk of work, calculating that an average revolving door requires, in foot-pounds, fourteen times the length of the door, which is also the radius of the circle which incloses it. Browsing this brochure, a decent estimate for the average diameter of a revolving door is 2700mm, and from there we can do a little simple math and deduce that on average it takes 0.023 watt hours to open a revolving door (and let’s assume the turbine can perfectly convert work to electricity for now).

Next, I had to guesstimate how many times Americans would enter or egress through revolving doors, assuming revolving doors were the only ways in and out of all buildings except single-family houses. Using some data from the BLS time use survey (augmented by NMHC data) I came up with a few coefficients using the venerable technique of “meh that seems rightish” and came up with a daily aggregate average of 5,221,919,613.23. This works out to about 21 spins per person per day, which seems more than close enough to estimate. Then you just need to do some multiplication and then attach a price to electricity (Randall used $0.15, but I’m going to go with a dime based on this EIA data). Once you’ve done that, you get a grand total of….$4,451,115.65.

If this sounds underwhelming, it is. Revolving doors start at $2,500, and therefore the Fermiest of estimates suggests that retrofitting every building in America with one might be a $20 billion job, meaning your ROI here is, generously, two-and-a-half basis points.

The reasons for this, fundamentally, is that it just doesn’t take very much work to push a revolving door relative to the energy needed to power modern society. A kilowatt hour is enough energy that, if you hit a golf ball with that much force at St. Andrews, you could sink a hole-in-one at Pebble Beach. Going through a revolving door only generates one fifty-thousandth or so of that much energy; but your average American house uses thirty times that much energy every day.

What does this all add up to? Our whole social, economic, and political order is built, on a very fundamental level, on massive production and consumption of energy beyond that humans and animals could supply directly with their body. Finding sources for that energy is hard, and even if you could capture all the adult humans in the United States exert, you’d probably only be generating at most $20 billion a year, which is still not even 10% of the energy residences alone consume annually. This, semi-coincidentally, is also why The Matrix was pretty dumb.

Anyway, to really meet our energy needs as we wonder whether fossil fuels will run out before or after we’ve trashed the planet beyond the point of no return, we need to turn to much vaster sources of energy. You know, like the sun.

Oh, and:

 

Cross-posted with Medium.

On Monday, Ray Rice was fired. After an initial decision to suspend the Baltimore Ravens’ running back for two games earlier in the summer, the National Football League revised its decision to indefinite suspension after TMZ published a video leaked to them showing, not merely its aftermath, but the actual moments of horrible violence Rice committed against his now-wife Janay. Today, the Associated Press disclosed that, contrary to their claims, the NFL had this video in their possession since April. The NFL, for the moment, denies this is so.

Maybe it’s true. But either way this video clearly existed, and if the NFL didn’t have it, it was not out of an inability to procure it but an affirmative desire not to possess it, to see what it contained, to be forced to expel an exceptional talent from a team that won the Super Bowl just the year before last. This incident is horrifying, despicable, and dispiriting for a tangled myriad of reasons; but one thing it clarifies is that there is a rot in the heart of American professional sports, and it is a rot with only one solution – full and complete public ownership.

The reasons such a nationalization (for lack of a better term) of American sports – centrally, the big four sports leagues, the NFL, NBA, NHL, and MLB, as well as all their teams and other properties – is not just desirable but necessary are manifold and interweaving. They are economic, political, social, and even spiritual. I will attempt to tackle them in as organized a fashion as possible, but especially since I already do not believe in clear or obvious delineations between these various spheres of human life, I will move in an order that may be primarily guided by emotional sense.

I will begin, though, with cold hard economics. Sports leagues are natural monopolies. Barriers to entry are extremely high, and like other natural monopolies such as utilities, increased competition often means doubling or tripling investment to chase roughly the same quantity of revenue. The XFL cost at least $50 million ($67 million adjusted for inflation) to start up and likely much more, and its failure was instructive. Fundamentally, it was competing against a well-resourced, deeply-entrenched incumbent, and could not offer top-tier talent. That so few competitors of any substance have broached taking on the major leagues in the decades they have been dominant economic, social, and political institutions is in-and-of-itself evidence that competing against these leagues is inherently all-but-doomed. Admissions to spectator sports in the United States alone totalled $22.3 billion in 2013, which doesn’t include the additional billions from television rights and merchandise. Even excepting the MLB’s exemption from certain antitrust laws, one has to imagine that, were it possible for a competitor to profitably challenge the dominant leagues for a slice of that fortune, they would. But alternative leagues would offer poorer players, poorer officiating, and a lack of the earned history that builds the kind of devotion that keeps fans returning year after year – not to mention a concerted effort by the existing leagues to destroy them wholesale.

In other realms of life, natural monopolies are regulated, or at the very least the topic is up for discussion. In sports, however, not only are leagues not regulated, they are bathed with public subsidy of all kinds. The most obvious and widely condemned are the vast giveaways to support ever larger and grander stadia, not merely at staggering opportunity costs but at the cost of the neighborhoods which house the facilities themselves, which in all but the rarest and most careful cases tend to laughably contradict the eager promises of economic development by politicians and team flakes, instead leaving hollow neighborhoods in their wake. But these modern monuments are just the tip of a much larger iceberg of public funds vacuumed by the oligarchs atop the rapidly-narrowing hierarchy of professional sports. Municipal resources and cooperation devoted to propping up teams add up rapidly, everything from crooked land deals to arrange for stadia to police officers managing traffic in and out of games or inevitably dealing with rowdy fans. Broadcasting is another – the various waves and tubes that bring sports into the homes of millions are either public property or implicitly or explicitly supported by regulation (or lack thereof). Taxation is another – the NFL and NBA are, hideously, non-profit trade associations and thus exempt from taxes; the MLB was until 2007, when it decided it preferred opacity to filing an increasingly-embarrassing 990.

In each of these cases sports leagues are able to use the unique nature of their monopoly power, just as real yet much more flexible than laying miles of underground pipes, to create a network of dependencies, each one reliant for funds and support of leagues and teams to justify their positions – networks, mayors, and secondary and tertiary business owners increasingly need the continued patronage of national leagues or local teams to stay afloat, and each is helpless before threats to vacate existing obligations should a new stadium not be built, or a more favorable broadcast contract be signed. In each case that public or semi-public moneys and resources flows into these leagues, there is a corresponding relationship of peonage on which the pyramid of professional sports relies. Watch local officials, egged on by local media and local businesses, flail in panic every time a team threatens to vacate for more lucrative waters – if you can stand to.

By far the largest and most corrosive of these dependencies is our university system. Almost always exempt from taxation when not themselves public entities, our nation’s colleges and universities function in all but name as subordinate leagues to the professionals atop the pyramid. These leagues are in many ways even grander exploitations of public trust, and of socioeconomically vulnerable populations, than the professional leagues themselves, but they are also fiercely codependent with those same leagues. Public resources in monumental quantity are shoveled into the zero-sum activity of talent discovery, for which the schools and their administrators and faculty are handsomely compensated and increasingly dependent, but for which the laborers themselves are paid with nothing but an education in-kind – an education that is more often than not a perfunctory justification for their presence on campus, providing no skills or knowledge to equip athletes in the overwhelming probability that their collegiate athletic career will fail to lead them to a career in the big leagues.

Athletics are an unusual case in our society because they are one of the few fields in which almost all observers would agree that success truly is overwhelmingly driven by merit; and further that a necessary-if-not-sufficient condition of that merit is natural talent, for which no amount of training or socialization can substitute. Nevertheless, the cost of identifying and training this talent to perform at a level competitive with other professional athletes is enormous and entials, frankly, an enormous amount of waste – the opportunity costs of the time and resources spent discovering which few dozen of the tens or hundreds of thousands of youth who this year have put on their first helmet or glove, skates or high-tops, are staggering, and despite frequent protestations to the contrary, the skills, knowledge, and socialization gained through extended participation in sport in school, from elementary to university, are often useless in modern society, or at the very least somewhere between equally and vastly less useful than the skills, knowledge, and socialization gained through other extracurricular activities, activities with essentially no meaningful financial or institutional support compared to sports. The athletic experience, especially as one gets older and moved into more competitive spheres, may even be counterproductive. Locker rooms, especially but not only male locker rooms, are potent incubators of some of the worst in society and humanity – homophobia, xenophobia, racism, exclusivity, aggression, militarism, unthinking hierarchicalism, and of course, misogyny. For every athlete who comes away from a locker room with positive memories of camaraderie and cooperation, many more likely come away bullied and scarred, damaged and ready to inflict damage on others.

The NFL is an extreme but clarifying case. Approximately 60,000 students at any given time are playing NCAA football. These individuals, disproportionately drawn from the most disadvantaged corners of our society, are immersed in the toxic environment of the university-athletic complex – a hierarchy of corruption and blind fealty that is precisely the type prone to the sort of scandal witnessed at Penn State – and sent out to collide their bodies against others, day after day, perhaps for years. They will receive not a dollar in fungible wealth to their name for doing so, and fewer than one in fifty will play a single day in the NFL – yet how many will find themselves with lifelong damage to mind, body, or soul from the experience?

In the greatest irony, the very rarity and irreproducibility of athletic talent makes players zero-sum resources that, as they emerge from the vast many as one of the elite few, causes them to be lavishly pampered and zealously protected, living lives without reproach or accountability. Your average NFL player is more likely to be penalized for harmless antics on the field than actual violence off the field. This lasts as long as a player is productive, after which they are effectively discarded. A few end up on television, the rest are trotted out occasionally for interviews, signings, local events – presuming they can still walk and speak.

The sum effect of all of this is to create a vast and complex network of corruption, venal dependency, and exploitation, in which the labor of hundreds of thousands of athletes and the funds of millions of fans, and beyond that every American citizen, is sucked away as efficiently as possible to be divvied up among a handful of oligarchs – the purest of rentiers who simply collect tremendous rents and produce no new innovation or value – whose pyramid of wealth resembles nothing more than Bronze Age temple economies, in which public power, private industry, and religious authority were fused into monumental institutions which touched, if not dominated, almost all of society. Our systems of public finance, public justice, and public management of public or quasi-public resources are all compromised by these leagues and their enmeshing into the fabric of American life.

This all works because sports play a vital social function. Beyond the genuine value they do provide to participants, at least before those participants become nearer to the toxic core of the industrial sports complex, they play a key role in modern social cohesion that should not be underestimated or dismissed by intellectuals who puzzle over why Americans can memorize batting averages yet know so little about geopolitics. Sports are our common denominator, the thing so many of us might have in common with so many others with whom we might share so little. In almost every conversation I’ve witnessed or participated in between American males from vastly different socioeconomic backgrounds, sports inevitably arises as a topic into which all can join, a lingua franca in which all knowledge and opinion is equally privileged and in which all have an equal emotional and spiritual stake. The rise of city-branded teams alongside the increasing urbanization of America is not a coincidence – as we found ourselves in strange new metropoli surrounded by strangers with different histories, religions, and even languages, we all latched on to what we could share. No matter what else, if you and I are from the same city, we likely root for the same team (or share a passionate but collegial rivalry between neighboring teams). As traditional social bonds dissolved or decayed, sports were there; as American cities evolve, often towards homogeneity, teams are repositories of distinct identities, not just in their names but often in their mascots, merchandise, and arena traditions and concessions. As Americans go to college, move from one city to another, and increasingly meet people from different backgrounds, sports is something that can break ice, forge bonds, and power not just pairings but repeated larger groupings of people essential to human societies. This is the element that makes professional sports teams so anticompetitive above-and-beyond those found in an economics textbook. You could find any forty good baseball players and bring them to Boston and call them Boston’s team, but only the Red Sox are the Red Sox and only Fenway is Fenway. If you don’t have that, you have nothing; if you have that, you have everything.

Yet it is this precise confusion between public identity and private gain that makes our social and spiritual reliance on sports so dangerous. There is an irreconcilable contradiction between our love of, and need for, sports, and the fact that the overwhelming share of the material wealth poured dollar-by-dollar by fans of every class and creed finds its way into the pockets of fewer men – and they are almost always men, rich, white, and old – then could fill even the bleachers at your average Little League game. It is the central and perhaps even vital role that sports plays in our social fabric that allows for the popular defense of these leagues and teams even as they inevitably corrode everything that comes too close – the neighborhoods bulldozed, the public channels of information corrupted, the education system rendered helplessly dependent, and the minds and bodies of players – and, most tragically, often those closest to them as well.

Fortunately, the solution to all this is obvious; unfortunately, it is unlikely to transpire, at least not without both major blows to the leagues specifically and a broader transformation in American values and attitudes more generally. The irony of this is that there is, of course, living proof that nationalization of professional sports can not only work but flourish; it sits in Green Bay, Wisconsin, a city of scarcely a hundred thousand, yet home to one of professional sports’ most successful franchises. The Green Bay Packers are profitable; they win (two of the 28 Super Bowls in my lifetime); and they are ‘owned’ by 360,584 fans who receive no pecuniary consideration, nor the possibility of such consideration, from their shares – only the right to hold the team accountable and have direct input into its fate.

Municipal or cross-municipal corporations exist across America and, though not without their problems, they generally work, certainly well enough to dispel any reason to think they are inherently doomed to failure. Whether structured as a metropolitan authority or placed directly in the hands of citizen shareholders, for professional sports teams to be essentially public property easily passes any potential test of feasibility one could imagine. It is also the only way to permanently bring sports teams and leagues – which are today essentially public institutions being operated purely for private benefit – into alignment with the interests of the public who fund them, support them, and should have every right to hold them accountable directly. Until then, expect the endless litany of scandals to continue unabated – doping, abuse of players, abuse by players, abuse by coaches and other officials, racism, exploitation of public funds, the cover-up and the protection and the facilitation of criminal and vile behaviors of all kind, and any more you care to imagine. The only way to fix sports is to make sports work for the fans and for the people – and the only way to do that is to make them truly ours.

 

PS: I am well aware that the NHL, NBA, and MLB have teams in Canada. This is a purely logistical obstacle, and one that, in the event broad ‘nationalization’ occurred, would be easily rectified. There’s no reason Toronto can’t own its teams, too.

 

This is the dumbest post I have ever written. You have been warned.

 

I found that last bit…intriguing. Backing our currency with cat videos would, of course, be very difficult to work (backing a currency with something whose marginal cost of replication of zero is probably not a recipe for stability)…but what if we backed our currency with actual cats?

i can haz currency stability

The biggest question to answer is ‘how many cats would the government need to hold in reserve to make the standard work?’ So I went back to look at how much gold the government had when it had a gold standard, and then, in need of a denominator, indexed it as a ratio to national income (using Piketty & Zucman’s data).

look this all made sense at the time

 

 

Rather than over-analyze the data, I just took the average value of all the individual year values, came up with 1.98%, and multiplied that by national income today (just over $14.5 trillion) to estimate that the government would need to hold in reserve $288.7 billion in cats to maintain a cat standard.

This means we have a problem. The Humane Society estimates that there are 95.6 million owned cats in America, and that there are another 30-40 million stray or feral cats. That means an outside estimate of ~135 million cats in the United States. Which means even if the government eminently domained every living cat in America, that would still imply a valuation of over $2,000 per cat, which is an order of magnitude more than the current market price. This would, among other things, be highly disruptive to the cat market. It would also be hard to sustain, since rescue cats are largely sold by non-profits at the marginal cost of vaccinations, microchipping, etc.

So what the government needs to do is breed cats. Lots of cats.

MOAR MOAR MOAR

Assuming we’re not talking about a purebred standard, the kind of cats the government might be keeping in reserve would probably have a market value of around $100/each, which means we would need the government to hold, in reserve, twenty times as many cats as exists in the United States today – 2.7 billion cats. Firstly, that could take a little time – depending on how large a cat base the government started with (presumably they wouldn’t catnap every cat in America), as long as a decade. This is not the insurmountable obstacle, though.

Land is.

Cats, by nature, are kind of territorial.

all mine

One study, in fact, shows a leading cause of death for outdoor cats is…other cats. Meouch.

That same study showed that outdoor cats have quite a substantial home range – as large as 1351 acres, though the average is just 4.9 acres. Even applying that average across the board, to 2.7 billion cats that gets you to 20.7 billion square miles – over a third of all the land area on Earth.

So let’s assume substantial overlap – even if you assume 100 cats per home range, that still gets you to 200 million square miles, 5-6 times the size of the United States. To get all those cats into, say, Wyoming, you’d have a density of 27,602 cats/square mile – which is shockingly close to the human density, 27,779 people/square mile, of New York City.

Wyoming, in other words, would look like this:

everybody! everybody! everybody wants to be a cat!

And it turns out Wyoming land isn’t cheap –  if you apply  the $450/acre for ranch land quoted in this article, over $28 billion.

Of course, total land value in the United States is probably over $15 trillion at this point so we could just have a land standard. That would be a lot easier. A whole lot easier…

 

 

 

Than herding cats.

damn right i went there

 

Dylan Matthews brings our attention to this map from the Tax Foudation:

all about the variable purchasing power of a benjamin

Basically, they inverted the BEA’s Regional Price Parities and mapped it – cool!

It needs a bit of context, though. Specifically, there’s something very clearly driving this outcome. Fortunately for us, BEA subdivides the RPPs into Goods, Rents, and Other Services, and provides us with a good-enough guide to how it weights them that we can create a parallel “non-housing cost” index and see what happens. And what do you know?

histograms ftw

Once you exclude housing, the distribution of outcomes is much narrower and much more clustered around its central tendency. Or more bluntly – everywhere costs a lot more like everywhere else when you don’t consider housing.

Of course we should consider housing! It’s really important! But we should also be clear what expensive housing means – lots of people want to live somewhere. Often because wages are high. And guess what? If we graph the state rent index against state per capita income:

mo money mo housing demand

It becomes pretty clear that higher wages (or at least higher average incomes) are likely the reason housing prices are high.

So if you live in DC, you’re probably not paying that much more for most things than an Alabaman is; you’re just paying a premium to live in a high-wage area that can’t – or won’t – build enough housing to keep up with the demand to live somewhere wages are high.

Tyler Cowen posted this the other day:

A typical cow in the European Union [in 2002] receives a government subsidy of $2.20 a day.

And if your next thought isn’t “of course he’s going to reconstruct this figure” then you haven’t read this blog before, have you?

Turns out, though, that doing so was surprisingly challenging, in part because it meant recreating all the assumptions behind that figure and in part because European agricultural policy is an epic rabbit hole (cow hole?). But, after some slogging and some tweaking, I was able to recreate the methodology that produced the original $2.20/day (and subsequent $2.60/day) figure, but it came with a wallop of a surprise:

the cow jumped over the moon but didn't exactly stick the landing

I didn’t adjust the currency because that’s it’s own field of cow holes, but yes, those 2002 and 2003 numbers basically check out. But look what’s happened since then!

Before you get too excited about the EU attempting a radical break with subsidizing agriculture, it turns out that this is a consequence of the ‘decoupling’ – the shift in EU ag policy from subsidizing specific commodities to subsidizing practices and benchmarks that cut across commodities, which has lead the OECD to basically throw up its hands in terms of trying to derive consistent commodity series. Don’t worry, though, I used a rough previous average of milk as a share of total ag subsidies to impute the recent numbers:

ma he's imputing cows!

And given the wealth of data and anecdotal evidence that dairy farmers in Europe are still getting plenty of government (don’t say cheese don’t say cheese)…tofu?…anyway, there’s no reason to think European cows are getting too shafted, even though it does seem like 2002-03 was perhaps peak season for cow bucks.

But this doesn’t get into the larger issue with this number – that the vast majority of the total subsidy to dairy as computed by the OECD doesn’t come in direct government-to-producer payments but in implicit support, for example through tariffs, whose impact is much harder to quantify – they impute it through trying to measure negative consumer surplus. As Jacques Berthelot wrote at the time, their methods are far from bulletproof. Either way, the figure gives the at least somewhat-misleading impression that the $2.20/cow/day is received entirely in the form of cash transfers, which I suppose is misleading to the extent that you draw a distinction between the two.

Anyway, in conclusion – we no longer know how much subsidy European cows get, and maybe we didn’t really know at the time.

A final thought – a dairy cow in Great Britain will put you back, roughly on average, $2,500 (or just under 1500 GBP, or just over 1,850 EUR). So you could always try this yourself.

Here’s two humans:

fav men rt women

Remember them for later.

So UBI (a universal basic income) has been out and about on the tubes lately – here’s Dylan Matthews, pro, PEG, anti, Jeff Spross, pro, Stephanie Slade, anti, Max Ehrenfreund, pro. One of the key questions that has become perhaps the crux of this most recent debate has been labor force drop-out, both its magnitude and its meaning. I thought I’d try to clarify this debate, though, by trying to dig a little deeper into exactly who we think might withdraw some or all of their labor if a UBI were made available.

I’ll propose three theses:

  • Labor force withdrawal is likely to come from the low end of the income spectrum
  • Labor force withdrawal is likely to come from occupations that are unpleasant, difficult, unrewarding, and/or low in advancement potential
  • Labor force withdrawal is likely to come from occupations that are less central to the core functioning of the economy (and therefore less likely to see wage increases correspond strongly with diminished labor supply

So let’s step back and take a look at the workforce.

Firstly, let’s take stock of the major trend of the American workforce – the changing balance between goods and services.

America has been shifting strongly towards producing services over goods…

you got served

…and employing people in service over goods production as well.

you served

These charts, though, mask an interesting trend – the differing productivity in those two sectors. What happens if we take a very raw measure of productivity (output/employment)?

you got gooder at gooding

Whoa. Sadly, the necessary data only goes back to ‘November Rain,’ but even since then output/employment in goods has increased 75% whereas in services it has only increased 28% – the relative CAGRs are 2.7% and 1.2%.

So first broad conclusion – most Americans are in service industries, and goods employment is likely to increase in productivity and therefore decline unless demand for domestically-produced goods relative to services (or government) increases sharply.

But that’s not really a good enough answer to the question of ‘how will UBI affect the workforce?’ I mean, what are services, as experiences on the ground by American workers? So let’s dig a little deeper into the BLS’s occupational wage data to see if we can pinpoint where labor force exit might be most pronounced.

The BLS uses 820 detailed occupational categories, grouped into 23 top-level major occupational groups. Below is a chart showing the average annual wage in each of those 23 groups; the area of the circle is proportional to the total employment level in that sector.

not lovin' it

That big bubble at the bottom? The one with nearly 12 million workers making an average wage of just $21,582.50? That’s “Food Preparation and Serving Related Occupations.” If you break it down to the detailed occupation level, six of the seven lowest-paying occupational categories are in food service. The second-worst paying occupation in America is “Combined Food Preparation and Serving Workers, Including Fast Food,” which pays just $18,880 and yet employes over 3 million Americans, more than any other detailed occupation group except ‘Cashiers’ and ‘Retail Salespersons.’ After the bottom seven, another eight of the next 36 lowest-paying occupations are in Food. Of the 18 different occupations within Food, only two – ‘Chefs and Head Cooks’ and ‘First-Line Supervisors of Food Preparation and Serving Workers’ make over $30,000 annually on average.*

If you, like me, are completely insane, you may enjoy scrolling through this chart, which is structured similarly to the above chart except it has all 820 detailed occupations. Enjoy, you crazy person.

aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa

The other really-poor-paying major occupational groups in America are ‘Farming, Fishing, and Forestry Occupations’ – which, as we have recently learned, is a pretty awful job – and ‘Personal Care and Service Occupations,’ which is anchored on the lower end by over 1.1 million ‘Personal Care Aides’ making less than $21,000/year, on average.

So who were those two women above? The one on the right was Deb Perelman. Perelman has a really awesome website named ‘Smitten Kitchen‘ where she shares her favorite recipes along with tips, personal stories, and awesome pictures of her food, like these cookies I’m going to make tonight:

nom

Yum. She has a cookbook, too.

The woman on the left is Julia Stewart. Stewart is the CEO of DineEquity, which owns both IHOP and Applebee’s. Applebee’s serves food that looks like this (according to their promotional materials):

nom [cardiac event]

You can find which of the 2000+ Applebee’s locations is nearest you here and which of the 1500+ IHOP locations is nearest you here. The company is currently worth $1.65 billion.

Without putting political positions into either of these persons’ mouths, from a purely material standpoint Perelman should be rooting for UBI and Stewart rooting against it. I’d be willing to bet dollars over donuts that the biggest direct impact of a UBI would be an exodus from the food service industry, especially from the mid-range to the lower end where wages are lowest and customers are most price sensitive. An increase in the price of, and decline in the availability of, cheaper restaurant meals will mean more meals cooked at home, and less work means more time to cook meals. That likely means more sales for groceries and farmers’ markets, but also more clicks for recipe sites and more purchases of cookbooks.

This should be unsurprising to anyone who follows fights for increased minimum wage or universal worker benefits and protections at the state and local level – the leaders of those fights are never the factory owners, but the big restauranteurs. A UBI will empower people to opt out of serving others cheap food, and empower them to take the time to prepare their own food, cutting out the purveyors of cheap (and often very unhealthy) food in the middle.

Wonkblog’s Matt O’Brien had a great reminder last week that Eurozone policymakers’ obsession with low inflation is fueling a monetary policy that is extremely damaging to the broader European economy and the lives of millions of Europeans. A recent paper, though, suggests the problem may be even worse then we thought.

Jessie Handburt, Tsutomu Watanabe, and David E. Weinstein recently published a paper that purports to have assembled “the largest price and quantity dataset ever employed in economics” to assess how well the official Japanese CPI is measuring inflation. The answer is ‘not so good’ – but the reason for that answer is scary. To wit:

We show that when the Japanese CPI measures inflation as low (below 2.4 percent in our baseline estimates) there is little relation between measured inflation and actual inflation. Outside of this range, measured inflation understates actual inflation changes. In other words, one can infer inflation changes from CPI changes when the CPI is high, but not when the CPI close to zero.

What does that mean? They draw two clear conclusions. Firstly, that national CPIs routinely overstate inflation – here is their (better) measure stacked against the official measure:

the decline and fall of the nippon yenmpire

Since 1993, the official Japanese statistics show a net decline in prices of just a few percent, whereas the authors’ numbers show a decline close to 15%.

The other conclusion is that, even though over the long term the CPI overstates inflation, when inflation is low, the CPI is basically no better than a random guess as regards any particular measurement.

find the pattern [hint you can't]

This means that while, on average, the CPI inflation rate is biased upwards by 0.6 percentage points per year, one can only say with 95 percent confidence that this bias lies between -1.5 and 2.8 percentage points. In other words, if the official inflation rate is one percent per year and aggregate CPI errors are the same as those for grocery items, one can only infer that the true is inflation rate is between -1.5 and 2.8 percentage points. Thus, a one percent measured inflation rate would not be sufficient information for a central bank to know if the economy is in inflation or deflation.

you say toe-mae-tos (are more expensive) i say toe-mah-tos (aren't) let's call the whole thing off

In case it wasn’t clear enough, Europe is definitely in the ‘flying blind’ zone:

#winning

As is more and more of the developed world in general:

if all the other countries were blowing up their economies to satisfy a bizarre price stability fetish would you do it too?

This is, errr, kind of terrifying. Because what it all adds up to is the conclusion that monetary policy makers are throttling growth because they’re relying on data that is both inaccurate and imprecise. The inflation fears that have crippled Western recoveries for half-a-decade and running are based purely on phantoms.

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