201 (25 February 2015)

Welcome to week 201!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by a title search.

You can find a pdf of this issue, a cumulative pdf for issues 1-156, and a cumulative pdf for issues 157-present at: https://sites.google.com/site/brucedeanlarson/the-invisible-forces.

(16 February 2015): “Intellectual Piecework” [SR](http://chronicle.com/article/intellectual-piecework/190039/)

——–[This appeared in paper form in The Chronicle of Higher Education on February 20th.]  “In addition to being the go-to place to have scans of receipts transcribed, or websites checked for not-safe-for-work content, [Amazon’s] Mechanical Turk has quietly become an indispensable part of how academic research in many fields is done.”  Princeton graduate student in sociology, Alfredo Garcia, has used Mechanical Turk in his research.  According to Garcia, the work he is doing is “the new norm.”  Experiment-based research designs are becoming more common is sociology, “akin to the methods in economics and psychology departments, where Mechanical Turk is even more popular.  The platform’s low cost and accessibility, however, are possible thanks to a barely regulated virtual labor market.”

********”Turkers” are people who routinely work for Mechanical Turk.  In the U.S. the majority of Turkers are women, but in India the majority of Turkers are men.  Survey completion is the most commonly performed work.  You can learn more about Amazon Mechanical Turk at: http://en.wikipedia.org/wiki/Amazon_Mechanical_Turk.  The official site for Amazon Mechanical Turk is: https://www.mturk.com/mturk/welcome.  To obtain a sense of the breadth of use of Mechanical Turk, do a search on “mechanical turk” at: https://scholar.google.com/.  Breathtaking.  The New School, as mentioned in the article, held a conference last November on “Digital Labor: Sweatshops, Picket Lines, Barricades.”  You can learn more about it at: http://digitallabor.org/.

********Coincidentally, on February 23rd the Journal had an article on Task Rabbit, the company that brings together odd jobs with those who do odd jobs.  You can read the article at: http://www.wsj.com/articles/how-to-run-a-business-in-a-freelance-economy-1424664631.  It helped me see the connection between Mechanical Turk, which brings together people for digital odd jobs, and Task Rabbit, which brings together people for physical odd jobs.  Both types of jobs, it appears, are embraced by the term freelance economy.  The article is of interest for the attention that Task Rabbit gives to vetting its workers and providing perks for them.

(19 February 2015): “Cable TV Shows Are Sped Up to Squeeze in More Ads” [SR](http”://www.wsj.com/articles/cable-tv-shows-are-sped-up-to-squeeze-in-more-ads-1424301320)

——–Cable companies like Time Warner Inc. are facing audience declines with an accompanying declines in revenue.  To make up for this shortfall, they are employing a variety of means to squeeze more ads into the hour.  Although editing programs by shortening opening and closing credits has long been done, Time Warner has “used compression technology to speed up” programs, with the result that the Munchkins of “The Wizard of Oz” have higher voices.  However, “the growing ad clutter is rubbing advertisers, content owners and Hollywood’s creative community the wrong way.”  Some worry that “an oversaturation of commercials will reduce the effectiveness of their spots and drive more viewers away from watching traditional TV to commercial-free streaming services such as Netflix and Amazon.”  Overall, “The average commercial time on cable TV per hour has increased to 15.8 minutes in 2014 from 14.5 minutes five years ago.”

********Of the 10 channels listed, BET led the way with 24.2 minutes of ads per hour, while ESPN was in final position at 12.9 minutes.  I would think that the creative community would be in an uproar over having their work manipulated in this way.  Digital works, of course, lend themselves to manipulation—if works can be manipulated, it seems, they will.

(20 February 2015): “Rest in Peace for Less With Caskets Made in China” (http://www.bloomberg.com/news/features/2015-02-20/casket-industry-fends-off-chinese-imports-favored-by-vegas-entrepreneur)

——–Jim Malamas, the owner of ACE Funeral Products based in Las Vegas, Nevada, by importing caskets form China “has followed a well-worn outsourcing playbook that’s upended markets for American-made goods from electronics to bedroom furniture.”  But his results have been different.  “Where almost every other American manufacturer has failed to keep Chinese exports at bay, the casket industry has succeeded.  Through aggressive litigation against importers, xenophobic admonitions to consumers, and good old-fashioned palm-greasing of funeral directors, Big Casket has made sure that 9 out of 10 Americans go into the ground in boxes made in the USA.”  In addition to concerns about competition from China, USA funeral homes “are contending with the increasing popularity of cremation.”  The “ripening crop of baby boomers . . . was supposed to be a windfall” for them, but “cremation is offsetting those gains.  In 1960 fewer than 4 percent of dead Americans were cremated, according to the Cremation Association of North America.  In 2012 the figure was 43 percent and is expected to continue rising.”  Cost is a factor in that change, as “Cremations cost less than a third of traditional funerals.  At most funeral homes, the priciest urn costs less than the cheapest casket.”

********Evidently the Federal Trade Commission has been interested in the funeral industry, having passed in 1984 The Funeral Rule, which ended the bundling of funerals and “forced funeral homes to provide price sheets and offer services and products a la carte.”  You can learn more about The Funeral Rule and shopping for funeral services at: http://www.consumer.ftc.gov/articles/0300-ftc-funeral-rule.  Additional information on The Funeral Rule can be found at the FTC’s Truth in Advertising page: http://www.ftc.gov/news-events/media-resources/truth-advertising.

(20 February 2015): “Land of opportunity—and fear—along route of Nicaragua’s giant new canal” (http://www.theguardian.com/world/2015/jan/20/-sp-nicaragua-canal-land-opportunity-fear-route)

——–If the plans of “Nicaraguan officials and Chinese businessmen are realized,” Nicaragua will be transformed over the next five years as a canal “Three times as long and almost twice as deep as its rival in Panama” is constructed.  This will require “the removal of more than 4.5bn cubic metres of earth—enough to buy the entire island of Manhattan up to the 21st floor of the Empire State Building.  It will also swamp the economy, society and environment of one of Latin America’s poorest and most sparsely populated countries.  Senior officials compare the scale of change to that brought by the arrival of the first colonisers.”  The Chinese company building the canal is the Hong Kong Nicaragua Canal Development Investment Company (HKND).  It is thought that the canal “should push down shipping prices and boost trade” but it may also become “a flashpoint if there were ever a conflict with the world’s other superpower, the US, which has historically viewed Central America as its own backyard.”  The groundbreaking ceremony for the canal took place on 22 December 2014.

********Environmental concerns about the project are especially prominent, as it “cuts through four nature reserves, a globally important wetland, Central America’s largest body of freshwater [Lake Nicaragua] and scenes of stunning beauty.”  Some of those scenes can be viewed in the many images accompanying the article.  You can learn more about HKND and the canal project at: http://hknd-group.com/portal.php?mod=list&catid=35.

(20 February 2015): “Chinese Dump Milk as Prices Fall” [SR](http://www.wsj.com/articles/chinese-dump-milk-as-prices-fall-1424385450)

——–Farmers in China “have been dumping milk and culling cows as a dairy boom has swung to a bust over the course of three years.  The impact is being felt beyond China, too, as farmers from the U.S. to Australia to New Zealand brace for price wars, smaller herds and cuts to income this year. . . . The industry’s troubles illustrates China’s outside sway over the world’s commodities.  About three years ago, the country’s voracious demand for milk, baby formula and cheese led everyone from New Zealand farmers to Wall Street bankers to bet big on cows.”  But with the return of domestic milk production in China, which had declined due to a scare from tainted milk that killed six children, import and domestic prices have fallen dramatically.

********The trade sanctions against Russia as a result of their activities in Ukraine are also a part of this story.  “When Russia banned imports of European food products in August in retaliation for international sanctions imposed over the Ukraine conflict, global markets were saddled with more unsold dairy products.”  So, it would seem, the slaughtering of dairy cows in China is one consequence of the events in Ukraine.

********While paging through The Economist of 21 February 2015, I ran across another article on the dairy industry, this time from the perspective of the EU.  As it turns out, “Next month the European Union is due to abolish its national quotas on milk production, allowing those big dairy producers being held back by their limits—including Germany, the Netherlands, Poland, Denmark and Ireland—to expand output and seek new export markets.”  These countries plan to expand their milk production, as does New Zealand and the U.S.  This should mean continued downward pressure on global milk prices and more slaughtered cows.  You can read the article at: http://www.economist.com/news/business/21644159-end-quotas-frees-efficient-european-dairy-farms-expand-letting-cream-rise.

(21 February 2015): “In the Sunshine State, a Power Struggle Over Solar Plays Out” [SR](http://www.wsj.com/articles/in-florida-a-power-struggle-over-solar-plays-out-1424460679)

——–“A broad political coalition, from liberal environmentalists to tea-party conservatives, has banded together in Florida to press for something that ironically is in short supply in the Sunshine State: solar power.  The group . . . launched a campaign in January to place an initiative on the state’s 2016 ballot that would eliminate restrictions it says are suppressing the solar industry and protecting utilities from competition.”  Although Florida is the third most populous state and has abundant sunshine, it is thirteenth in installed solar capacity; Pennsylvania is twelfth.  Contributing to its lack of installed capacity is that Florida “is one of only five states that prohibit so-called third-party sales from non-utility companies to install solar panels on residents’ or businesses’ rooftops and sell them power.”

********The composition of the broad coalition struck me as interesting.  The article notes: “While liberals tend to emphasize solar as a renewable-energy source that can reduce the country’s reliance on fossil fuels, conservatives often cast it in terms of freedom of choice.”

(21 February 2015): “Faeroe Islands Boom by Selling Salmon to Russia” [SR](http://www.wsj.com/articles/faeroe-islands-boom-by-selling-salmon-to-russia-1424483776)

——–“As the tit-for-tat economic confrontation between Russia and the West nears its first anniversary, there are plenty of losers” including Russia, the U.S., and most of the European Union, especially Germany.  But the Faeroe Islands between Iceland and Scotland have been big winners; the Islands are not part of the EU and are not constrained by the EU’s trade sanctions against Russia.   “The Faeroe Islands are the only major salmon producer in the world that wasn’t hit by Russia’s counter-sanctions last August and is close enough to send fresh fish to Russia by boat and truck.”  This Islands may be “more reliant on fishing than any other country.  In 2013, fish sales abroad represented 95% of exports and 40% of total economic output.”  When Russia’s sanctions against the EU were announced, Faorese leader Kaj Leo Holm Johannesen directed his staff to “get an urgent message to Moscow: ‘We are not part of EU—we are totally outside.’”  As a result, the Islands now have “a virtual monopoly in Russia for their biggest export: fresh salmon.”

********Russia is also importing some frozen salmon from Chile.  You can learn more about the Faeroe Islands and its salmon at: http://www.wsj.com/video/amid-sanctions-faeroe-islands-sell-fish-to-russia/253ADD3E-A1AA-4764-B1B7-F99F7E610C97.html.  The video is four minutes.

(23 February 2015): “Slumping Oil Prices Hit Calgary Housing” [SR](http://www.wsj.com/articles/slumping-oil-prices-hit-calgary-housing-1424650029)

——–“Calgary, Canada’s fourth-biggest city . . . is starting to feel the impact of the oil-price collapse.  Many companies, including some of the region’s largest employers, have slashed budgets, cut wages and frozen hiring, and some have started to announce layoffs.  Those jitters are starting to affect the housing market there.”  As a result, Calgary home sales were down 38.8% in January 2015 in comparison to January 2014, falling from 1,439 to 880 homes.  During the same time, new listings were up 37.2%, increasing from 2,396 homes in January 2014 to 3,288 in January 2015.  “The cooling in downtown Calgary real estate is being closely watched beyond the oil patch as an indication of how the sharp fall in oil prices is spreading to other parts of the Canadian economy.”  In recent weeks, lower oil prices have “contributed to a selloff in Canadian bank stocks.”

********The article provides a nice illustration of the “ripple effects” of falling oil prices.  What really caught my attention, however, was a comment about the sequence of the likelihood of defaults.  Here is the passage: “Since oil companies are unlikely to fold or default as quickly as consumers, the first signs of trouble for the country’s five big banks will likely appear with unsecured loans like credit cards, as hard times in the energy sector translate into slower job and wage growth and hurt consumers and homeowners.”

(25 February 2015): “Shire, Maker of Binge-Eating Drug Vyvanse, First Marketed the Disease” (http://www.nytimes.com/2015/02/25/business/shire-maker-of-binge-eating-drug-vyvanse-first-marketed-the-disease.html)

——–Drug maker Shire “late last month won [FDA] approval to market its top-selling drug, Vyvanse, to treat binge-eating disorder, a condition that once existed in the shadow of better-known disorders like anorexia and bulimia.”  Previously Shire helped put ADHD, “another once-stigmatized condition . . . on the medical map and made billions of dollars from the sale of drugs, like Vyvanse and Adderall, to treat it.”  The marketing strategy “for Vyvanse, like that of Adderall, sheds light on how pharmaceutical companies seek to influence the diagnosis and treatment of a medical condition” in order to make sales.  In addition to celebrity promotion—former tennis star Monica Seles is being paid by Shire to promote the product—a company website “provides detailed information about how to talk about the disorder with a doctor, including a printable symptom checklist and sample opening lines to start the conversation.”

********Vyvanse is a type of amphetamine and “is classified by the federal government as having a high potential for abuse.”  Dr. Lawrence H. Diller, a behavioral pediatrician, notes that Shire appears “to be following a familiar drug industry playbook by promoting awareness of a disorder, in this case binge eating, before more directly marketing its treatment.”  Producers, of course, are always interested in increasing product demand.  This case, though, is disturbing.  Presumably there are a great many case studies that could be developed if this truly is “a familiar drug industry playbook.”

May you have a good week!

Bruce

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