Welcome to week 253! 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 an Internet title search.
(17 February 2016): “Is Margarine Dead?” (http://daily.jstor.org/is-margarine-dead/)
——–“The reign of margarine is almost over. Sales of margarine—a plant-based spread that was once immensely popular because of its purported health benefits—have been rapidly declining and is now a cause of huge concern for Unilever, the world’s largest margarine producer . . . Unilever last year created a separate business unit for its margarine operations, a move that its chief executive compared to ‘putting a sick child in a separate room from siblings, and showering extra care on them.’” The fall of margarine has coincided with the rise of butter as new reports have argued that “it’s not as unhealthy and artery-clogging as once thought.”
********In economic terms, butter and margarine are substitutes, i.e., can be used to satisfy the same want. So, an increase in the demand for one (butter) will result in a decrease in the demand for the other (margarine), all other things being equal. Of course, once “the shoe was on the other foot,” and it was the demand for margarine that was increasing. The linked background article “Trends in State Margarine Legislation” shows the invisible foot in action. It was interesting to read that “margarine is still prohibited in restaurants in Wisconsin unless specifically requested by a patron.”
(17 February 2016): “Before Flint: How Americans Chose Lead Poisoning” (http://daily.jstor.org/how-americans-chose-lead-poisoning/)
——–The water crisis in Flint, Michigan has sparked “national discussion on lead poisoning among children across the nation, but this issue isn’t new. Much [of] the United States’ poisoning cases can be attributed to the various lead-based products that were being used for many years.” Lead-based paint is a case to consider. “The value of paints and varnishes produced in the U.S. rose 80 percent from 1899 to 1909.” At that time, “lead was widely believed to produce the highest quality paint. . . . The long-term risks of lead exposure on children were not clearly understood in those years, but it was no secret that lead was highly poisonous for workers. Workers at every stage of the supply chain that came in contact with lead died from the exposure. The most dangerous jobs were done by immigrants and young painters’ assistants, while skilled painters tried to work outdoors as much as possible to avoid contracting ‘painters’ colic.’” By 1910, legislation had been passed in France and Germany regulating the use of lead, but similar legislation failed a bill “died without a vote.” Contributing to the lack of interest was “that painters themselves generally supported the use of lead paint, which was closely associated with the professional craft of painting.”
********Lead paint, of course, is still part of the home and business environments. According the Centers for Disease Control and Prevention, “at least 4 million households have children living in the that are being exposed to high levels of lead. . . . No safe blood lead level in children has been identified” (http://www.cdc.gov/nceh/lead/). In the background article for this piece, “Toxic Purity: The Progressive Era Origins of America’s Lead Paint Poisoning Epidemic,” it is noted that “between 1925 and 1926, more than half of the 421 Americans who died from lead poisoning were painters.”
(18 February 2016): “Should Your Blended Whisky Say Where (and When) It Came From?” (http://www.bloomberg.com/news/articles/2016-02-18/should-your-blended-whisky-say-where-and-when-it-came-from)
——–“Late last year, John Glaser, the owner of Compass Box Whisky Co., decided to break the law. More precisely, Glaser decide to continue breaking the law—and, this time, to send out a press release about it. . . . for the 15th anniversary of his whisky company, which had become a cult favorite among in-the-know- Scotch drinkers and a regular presence on top shelves, he had concocted a spirit he was quite proud of. He wanted to show off its ingredients. As it happens, showing off a blended whisky’s constituent parts—the barrels that comprise the blend—is illegal under both European Union and U.K. law.” Changing the law will likely require the support of the Scotch Whisky Association, which is “lobbying advocate for distilleries and blenders. And the group is not on board.”
********Is the practice of making it illegal to disclose ingredients more general that blended whisky in the EU and UK?
(20 February 2016): “How Economists Would Wage the War on Drugs” (http://www.wsj.com/articles/how-economists-would-wage-the-war-on-drugs-1455895053)
——–“In April, the world’s governments will meet in New York for a special assembly at the United Nations to discuss how to solve the drug problem. Don’t hold your breath: Since the previous such gathering nearly two decades ago, the narcotics industry has done better than ever. The number of people using cannabis and cocaine has risen by half since 1998, while the number taking heroin and other opiates has tripled. Illegal drugs are now a $300 billion world-wide business, and the diplomats of the U.N. aren’t any closer to finding a way to stamp them out. This failure has a simple reason: Governments continue to treat the drug problem as a battle to be fought, not a market to be tamed. The cartels that run the narcotics business are monstrous, but they face the same dilemmas as ordinary firms—and have the same weaknesses.”
********This is an author-bylined article by Tom Wainwright, whose book Narconomics: How to Run a Drug Cartel (http://www.amazon.com/Narconomics-How-Run-Drug-Cartel/dp/1610395832/) will be released soon. Wainwright is currently the Britain editor for The Economist but was based in Mexico for a few years, where his coverage of both business and the drug wars led him to write on the business of drugs. You can access and listen to a 36-minute interview between him and Terry Gross on NPR’s “Fresh Air” at: http://www.npr.org/books/titles/466496177/narconomics-how-to-run-a-drug-cartel. His device of treating drug cartels as businesses allows him to bring economic terminology and thinking directly into his analysis.
(20 February 2016): “The gig economy: Smooth operators” (http://www.economist.com/news/finance-and-economics/21693261-new-report-reveals-scale-and-purpose-app-based-earnings-smooth-operators)
——–A new report by researchers for the JP Morgan Chase Institute “studied the incomes of 1m of their customers with active current accounts of three years. They found that, in September 2015, 1% of the earned income through an (identifiable) on-demand platform. Of these, just over half used ‘capital’ platforms, such as Airbnb, to lease stuff they own. The rest—about 0.4%—used labour platforms like Uber. Though small, the supply of ondemand labour and capital has grown rapidly.” As it turns out, “Earnings from Uber and the like are strongly correlated with negative shocks to incomes from other sources (capital platforms are used much more consistently). That suggest people use apps to smooth bumps in their earnings, which are frequent . . . Perhaps conventional jobs are not so great after all.”
********I thought the distinction between capital platforms and labour platforms was useful. You can learn more about the report mentioned at: https://www.jpmorganchase.com/corporate/institute/report-paychecks-paydays-and-the-online-platform-economy.htm. Alternatively, you can see the full report at: https://www.jpmorganchase.com/corporate/institute/document/jpmc-institute-volatility-2-report.pdf.
(22 February 2016): “Review: In ‘Evicted,’ Home Is an Elusive Goal for America’s Poor” (http://www.nytimes.com/2016/02/22/books/evicted-book-review-matthew-desmond.html)
——–“Living in extreme poverty in the United States means waging an almost gladiatorial battle for creature comforts that luckier people take for granted. And of all those comforts, perhaps the most important is a stable, dignified home. Yet as a culture, notes Mr. Desmond, [the author of Evicted,] we have somehow failed to commit ourselves to providing this most fundamental and obvious necessity.” Desmond, “a sociologist and a co-director of the Justice and Poverty Project at Harvard,” has produced “an exhaustively researched, vividly realized and, above all, unignorable book—after ‘Evicted,’ it will no longer be possible to have a serious discussion about housing.” Evicted “is a regal hybrid of ethnography and policy reporting. It follows the lives of eight families in Milwaukee, some black and some white, all several leagues below the poverty line.” As a basis for his work, Desmond lived among the families “in 2008 and 2009—first in the poor, white College Mobile Home Park . . . and then in a rooming house.”
********The article goes on to point out that “What makes ‘Evicted’ so eye-opening and original is its emphasis. Most examinations of the poorest poor look at those in public housing, not those who’ve been brutally cast into the private rental market. Yet this is precisely where most of the impoverished must live.” It is this focus that makes Evicted seem so relevant for the invisible forces. Part of the private rental market for the poor involves trailers, a topic that was covered in TIF Weekly 213 (20 May 2015). The article was “America’s trailer parks: the residents may be poor but the owners are getting rich” (http://www.theguardian.com/lifeandstyle/2015/may/03/owning-trailer-parks-mobile-home-university-investment).
********You can learn more about Matthew Desmond in “The Great Expectations of Matthew Desmond” (http://chronicle.com/article/The-Great-Expectations-of/235413). There seem to be so many connections to this article but what first came to mind was the movie “99 Homes,” a film set in Florida that follows the life of a single father who is evicted from his home then ends up working for the man who evicted him (https://en.wikipedia.org/wiki/99_Homes). More well known is the Oscar nominated film “The Big Short” and the book by the same name, both of which relate to the “build-up off the housing market and the credit bubble.” You can learn more at: (https://en.wikipedia.org/wiki/The_Big_Short_(film). Milwaukee seems to be a “place apart” in relation to the experience of black people, so it might well be a conditioning element in Desmond’s book. You can learn more from “Why is Milwaukee so bad for black people?” (http://www.pbs.org/newshour/rundown/why-is-milwaukee-so-bad-for-black-people/).
********The final immediate connection is “How Making Eviction Easier Became a Hot New Industry” (http://www.bloomberg.com/news/articles/2016-02-23/how-making-eviction-easier-became-a-hot-new-industry). Click Notices Inc., of Annapolis, Maryland, is a startup that helps initiate eviction proceedings: “The company integrates its product with property management software, letting landlords set rules for when to begin evictions.” Closer to home, Nationwide Eviction is “a Charlotte, N.C.-based company that competes with Click Notices.” Eric Sigler, the CEO of Click Notices, says that his business might yield unexpected benefits for cities with apartment shortages, noting “How do you build more affordable housing? You could start by making the sector more efficient . . . Capital won’t flow into the sector when 40 percent of tenants won’t pay on time.” Here are the links for Click Notices (https://www.clicknotices.com/) and Nationwide Eviction (http://www.nationwideeviction.com/). Just another dimension of “The Internet of Things” (https://en.wikipedia.org/wiki/Internet_of_Things).
May you have a good week!