What Are the Odds?

As power outages strike San Francisco, Los Angeles, and New York City, I’m struck with a question. On any given day how many of the 50 major metropolitan areas experience major power outages?

I think a major update of our power grid is long overdue, is unlikely to be undertaken by the private sector, and is one of the highest priority items in any infrastructure spending plan, but I’m not convinced that it’s time to panic over some unseen foe hacking into the grid quite yet.

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The Billionaire Vote

Here’s a list of billionaires and where they stand on Donald Trump.

Oprah Winfrey Con
T. Boone Pickens Pro
Joe Ricketts Pro
Steven Spielberg Con
Sheldon Adelson Pro
Tom Barrack Pro
Michael Bloomberg Con
Meg Whitman Con
Carl Icahn Pro
Warren Buffett Con
Mark Cuban Con
Jeff Bezos Con
Mark Zuckerberg Con
Bill Gates Con
Peter Thiel Pro
Charles Koch Con
David Koch Con
Robert Mercer Pro
Elon Musk Con
Paul Singer Con
George Soros Con

If there’s some sort of class-consciousness, partisan, or even new economy vs. old economy pattern to Trump support in that group, I’m not seeing it.

I welcome additional contributions to this list. Please leave your suggestions, preferably with citations, in comments.

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Context

This morning on one of the talking heads programs there was a brief feature on Jane Goodall and interview with her. The interviewer characterized her as “one of my heroines” but I was shocked at how little context was given to her and her work.

In the 1950s and 1960s Louis Leakey recruited a number of young women to go out into the bush and observe primates in their natural habitats. They were of a type: young, attractive, photogenic, shy, liked animals, possibly somewhat socially anxious. The three who stuck with the work were Jane Goodall who observed chimpanzees, Dian Fossey who observed mountain gorillas, and Birutė Galdikas who observed orangutans in Borneo. Leakey called them “the Trimates” which I find somewhat demeaning and they were also called “Leakey’s Angels” which is even more so. Of the three it is a matter of record that he propositioned Jane Goodall who turned him down and Dian Fossey who didn’t.

They weren’t scientists. They were dispatched to the bush without the physical or educational equipment to do the work they were supposed to do, without staff, and with minimal funding. Dian Fossey was murdered by rebels.

I’m not a professional in the field so I’m in no position to assess the work they did but that’s simply not how good science is done or, perhaps more precisely, it reflects a 19th century idea of how science is done.

I’m not criticizing Mss. Goodall, Fossey, or Galdikas. Quite the contrary. I think they were courageous and determined. More than anything else I think their experiences highlight what an arse Louis Leakey was.

There isn’t an infinite amount of money available for the sort of research they did and we can only speculate on what might have happened without a self-aggrandizing publicity hound like Leakey sucking all of the air out of the room. Maybe it takes a Leakey to get this sort of work done but that doesn’t make him any more admirable.

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The Plot Is Foiled

At the Wall Street Journal Christopher Caldwell presents some sketches of the candidates running for France’s president this weekend.

Le Pen

Ms. Le Pen promises a referendum within six months on taking back sovereignty from the EU. “Our battle for sovereignty is primary,” she said in Lyon in February. “Essential. Cardinal…Without sovereignty, all projects are broken promises. My opponents claim they can control the border, revoke birthright citizenship, slow immigration, fight unfair trade…They are lying to you. As long as they do not break the shackles of the European Union, which holds the authority on these matters, they are ruling out any change, even minor.”

Macron

People hear what they want to hear. In recent days, the onetime Le Monde editor Luc Rosenzweig announced that he would vote for Mr. Macron because the candidate believes in nuclear power and thus in the future. Meanwhile, Daniel Cohn-Bendit, who represents the Green Party in the European Parliament, said that he is backing Mr. Macron in part because of his promise to cut nuclear power.

The most unusual thing about Mr. Macron is his marriage. He is not yet 40, while his wife is in her 60s. (He met her at age 15, when she was running the drama club at his high school.) In ordinary times, this might strike voters as weird; in today’s troubled climate, it seems to strike them as bracingly transgressive.

Fillon

The satirical weekly Le Canard Enchaîné alleged that Mr. Fillon had used taxpayer funds meant for running his office to employ his Welsh wife Penelope and their children and that Mrs. Fillon had briefly received monthly payments from a literary magazine. Almost immediately, an anticorruption arm of the government newly established by Mr. Hollande opened an investigation.

Mr. Fillon’s actions may not have been illegal, but the scandal has handicapped his campaign. The press exulted. Mr. Fillon couldn’t attend campaign rallies without being greeted with calls of “Escroc!” (“Crook!”). His poll numbers plummeted. But Mr. Fillon claimed that he had been set up by a cabinet noir (what we might call the “deep state”) in Mr. Hollande’s government and refused to step aside.

Mr. Fillon has another problem: He is a conventional candidate. His conservative cultural values are tied to a business-friendly agenda not so different from Mr. Macron’s. He supports the EU. Against Marine Le Pen and her National Front, he will never appear as the candidate of real change.

Mélenchon

The 65-year-old EU deputy Jean-Luc Mélenchon offers a version of Ms. Le Pen’s position that is more eloquent, if less logical. The best-selling economist Thomas Piketty said he would back him in the second round if the Socialist Hamon were eliminated (a virtual certainty). Mr. Mélenchon also has a new-media adviser who worked for Bernie Sanders.

Mr. Mélenchon argues that France can drive a harder bargain with the EU since its departure would doom the project altogether. (This is true of a half-dozen other countries too.) Though he hasn’t called for a referendum on EU membership, he might break up the EU more indirectly: His plans for €270 billion in stimulus spending by the government and for a 100% income tax on those earning more than €400,000 a year would rupture the voluntary fiscal and legal synchrony on which the EU rests.

As I’ve been saying for decades the European Union is essentially a plot to subsidize French farmers and German manufacturers. As long as those two things held good it maintained its support. Now that it has become rule by bureaucrats in Brussels and a pact to accept Middle Eastern and North African refugees to the degree that it is perceived that France could cease to be France the support has become shakier. This election may decide not just the presidency but the direction of France or even of Europe.

Update

It will be Le Pen vs. Macron in the run-off election. From France 24:

French centrist Emmanuel Macron and far-right candidate Marine Le Pen have qualified for the second round in the French presidential election with 23.7 percent and 21.7 percent of the vote respectively. Follow our live coverage below.

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The Social Implications of Outsourcing

Before I get into the meat of my post I need to define my terms. “Outsourcing” doesn’t mean a helpdesk in Bangalore or importing foreign workers to do the same jobs as were done by Americans at a lower wage. It just means hiring people who aren’t company employees to do something. For example, none but the very largest companies have had legal departments for generations. They outsource their legal services to law firms.

It’s a widespread misconception people are paid commensurately with what they bring to their jobs, with their efforts, and to what they produce. That Horatio Alger narrative is nice to imagine but it’s just not the way things work in practice. In practice the very best, hardest working janitor for Goldman-Sachs makes about the same as the worst, laziest janitor there. Pay is proportionate to the pay of other workers you resemble superficially. There may be some pressure at Goldman-Sachs to pay their janitors more (or less) than the janitors at smaller, poorer companies.

At Quartz Allison Schrager considers that social influence on wages and the implications that widespread outsourcing has on that. She calls it “workplace fissure”. What if all of the workers at the company for which you work have low pay?

Research by economists Larry Katz and Alan Krueger has explored the trends in alternative work arrangements like these (pdf). They estimate that non-standard employment (gig work, temp work, contractors) accounted for a around 10% of American workers between 1995 and 2005, but grew to some 16% of American employment in 2015. Much of the increase is attributable to “workers provided by contract firms.”

Fissure can explain many of the things that people worry about when it comes to the economy. In the past, companies couldn’t get away with paying a janitor that much less than the CEO. A janitor employed by a big bank might make $60,000 a year. Now, if the bank hires cleaners through a contractor, those people work for a firm full of other cleaners, not one that’s a mix of bankers, traders, coders, and the like. As a result, there is less pressure to drive up their earnings, so they might make $30,000 instead.

As she notes this “fissure” is just the workings of a competitive economy. As Adam Smith noted 300 years ago specialization is the key to efficiency. But it does have social and economic implications.

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What If Bigness Is Evil?

At the New York Times Jonathan Taplin muses over the possibilities of breaking up today’s monopolies the way Standard Oil or belatedly Ma Bell were broken up:

We are going to have to decide fairly soon whether Google, Facebook and Amazon are the kinds of natural monopolies that need to be regulated, or whether we allow the status quo to continue, pretending that unfettered monoliths don’t inflict damage on our privacy and democracy.

It is impossible to deny that Facebook, Google and Amazon have stymied innovation on a broad scale. To begin with, the platforms of Google and Facebook are the point of access to all media for the majority of Americans. While profits at Google, Facebook and Amazon have soared, revenues in media businesses like newspaper publishing or the music business have, since 2001, fallen by 70 percent.

Their impact on small Internet content publishers is even more dramatic. A dozen years ago sole proprietors could earn a modest living online. Now it’s practically impossible and that’s almost entirely due to Facebook.

The question is less whether the Internet giants are monopolies but whether they’re abusing their monopoly power to gain dominance in other markets.

And there’s another question we need to confront. Google’s company motto used to be “Don’t Be Evil”. That was dropped a few years ago when the irony became just too great. Now it’s “Do the Right Thing”.

What if bigness itself and the power that bigness brings with it promotes evil? Continually paring institutions down to human size takes a lot of courage and commitment.

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The Retail Bubble

The editors of the New York Times are alarmed at the rate of closing of retail stores and the attendant loss of jobs among retail sales clerks:

A recent report in The Times documented the decline of suburban malls as online shopping advances. The e-commerce share of total retail sales has doubled roughly every six years since 2004, reaching 8.3 percent at the end of 2016. One result is that employment at retail outlets has fallen. Department stores and other general merchandise stores, like supercenters and warehouse clubs, have been hit especially hard, shedding 89,000 jobs from November through March.

However, the rise of eCommerce can’t possibly explain that. Retails sales have risen sharply:

That’s a lot more than the 8.3% by which online has risen. And retail employment continues to rise as well:

The editors of the Wall Street Journal have a better explanation. There has been a retail bubble for years:

Through April 6, closings have been announced for 2,880 retail locations this year, including hundreds of locations being shut by national chains such as Payless ShoeSource Inc. and RadioShack Corp. That is more than twice as many closings as announced during the same period last year, according to Credit Suisse.

Based on the pace so far, the brokerage estimates retailers will close more than 8,600 locations this year, which would eclipse the number of closings during the 2008 recession.

At least 10 retailers, including apparel seller Limited Stores Co., electronics chain Hhgregg Inc. and sporting-goods chain Gander Mountain Co., have filed for bankruptcy protection so far this year. That compares with nine retailers that declared bankruptcy, with at least $50 million liabilities, for all of 2016.

The seeds of the industry’s current turmoil date back nearly three decades, when retailers, in the throes of a consumer-buying spree and flush with easy money, rushed to open new stores. The land grab wasn’t unlike the housing boom that was also under way at that time.

“Thousands of new doors opened and rents soared,” Richard Hayne, chief executive of Urban Outfitters Inc., told analysts last month. “This created a bubble, and like housing, that bubble has now burst.”

Even the editors of the Times are forced to admit that there’s little reason to worry about a surge in unemployment due to the collapse of the bubble. While the rise of online retail reduces the demand for sales clerks, it has resulted in an increase in employment in transportation and warehousing and, importantly, sales of warehousing systems and equipment:

In the past year, about the same number of people who recently lost jobs in those large retail outlets got jobs in transportation and warehousing, an indication that online shopping created jobs even as the decline in suburban retailers eliminated them. In addition, as The Times report noted, upscale malls are thriving, and some online retailers are opening brick-and-mortar stores.

Yet while blaming technology is misdirected, this shift in employment raises important challenges and implications for public policy. People who are laid off need help, and newly created jobs are not necessarily perfect substitutes for lost jobs. The government needs to effectively manage inevitable change for the greater good.

And the new jobs pay better than the old ones did.

So what’s behind the NYT’s concern trolling? It’s not technological employment but a shift in where jobs are being created. They’re moving from big cities like New York to suburbs and exurbs as this map of Amazon’s fulfillment centers illustrates:

Temporary localized unemployment sounds to me like a call to action for state and local governments. Unfortunately, they’re so busy paying for health care and the pensions of former state and local employees they don’t have time for much of anything else.

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What Should Be Considered in Issuing H-1B Visas?

This article at Bloomberg View highlights the ironic contrast between Silicon Valley’s support for bringing more workers into the country from overseas and its opposition to the zoning reforms necessary for providing places for those foreign workers to live within a reasonable proximity to their work:

A recent Guardian article describes the plight of Silicon Valley software engineers who struggle to get by on six-figure incomes. It’s hard to feel sympathy for these guys, I know. But this isn’t a woeful tale of rich people living beyond their means, it’s a sad observation that no matter how high employee wages go, the limited housing supply leaves the region unaffordable for a large number of workers.

For whatever inexplicable reason, big technology companies insist on building their offices in areas with tight zoning restrictions. Mountain View, hometown to Alphabet Inc.’s Google, gained 17,921 jobs between 2012 and 2015, but added only 779 units of housing over the same period. San Francisco added a bit more than 9,000 housing units while gaining half a million jobs. Given the scarcity of housing, many new incoming residents have to outbid a current resident to move in. Palo Alto’s city planning commissioner recently resigned because she and her husband could not afford to raise a family in Palo Alto — even though both had jobs at leading tech companies.

It seems to me that the article highlights an important point. There are many more considerations that the law should take into account beyond those it already does. Accommodations, travel conditions, distances, and modes of travel are among them.

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Let the Punishment Fit the Crime

Okay, I know I’m late commenting on this. You’ve probably already heard about the attack by an AK-47-wielding gunman in Paris that left a policeman dead. The perpetrator has been identified as Karim Cheurfi, a French citizen born in Department 93, basically the Paris suburbs. Judging from his looks and other published information he appears to be Algerian.

There’s an enormous amount of confusion not just here in the States where we expect there to be confusion about the goings-on in other countries but even in France.

He was a French citizen. From birth. Algeria was part of metropolitan France so in all likelihood his parents were French citizens from birth. He wasn’t a foreigner. He was French. Not français de souche but French nonetheless.

Consequently, all the talk of amending immigration law or ejecting foreigners has nothing to do with this particular case. Unless they’re talking about rewriting all of the French law of nationality of the last 150 years.

I agree with those who suggest that the awful incident is likely to have an effect on the French presidential election this weekend. It will probably give Marine Le Pen a boost. But thinking that you can solve France’s problems just by ejecting a few foreigners is deeply mistaken.

I can’t comment on what the French should do about the refugees and other migrants from Africa and the Middle East streaming into the country. But the French need to come to terms with France’s colonial past and just closing France’s door to foreigners won’t do that.

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The Art of Polemic

Heather MacDonald’s rejoinder at City Journal to an open letter from students at Pomona and nearby colleges illustrates pretty conclusively that jargon and slogans do not improve polemics. So, for example this

Moreover, “We, few of the Black students” only pretend to be postmodern relativists. They are fully confident that they possess the truth about me and about their oppressed plight at the Claremont schools. An alternative construction of their reality—one, say, that pointed out that as members of fantastically rich, tolerant, and welcoming American colleges, they are among the most privileged human beings in history—would be immediately rejected as contrary to the truth and not worth debating. “We, few” would also reject the alternative truth that far from devaluing Black students, the administrations of the Claremont colleges have undoubtedly admitted many with levels of academic preparation far below that of their white and Asian peers, simply to fulfill the administrators’ own self-righteous desire for “diversity.”

is much better than this

Though this institution as well as many others including this entire country, have been founded upon the oppression and degradation of marginalized bodies, it has a liability to protect the students that it serves

I think it does tell us what kids are learning in schools these days, though.

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