290 (9 November 2016)

Welcome to week 290!  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.

(28 October 2016): “Americans Are Dying Faster.  Millennials, Too” (http://www.bloomberg.com/news/articles/2016-10-28/americans-are-dying-faster-millennials-too)

********This is a longer version of a short article that appeared in the Bloomberg Businessweek of 7-13 November 2016.  To me, its primary interest lies in the link that it provides to a longevity illustrator: http://www.longevityillustrator.org/.  The illustrator is easy to use and has the valuable feature of considering one’s partner, too.  Given four inputs for each person, one can identify a range of probabilities for living together, as well as for each person individually.  Such knowledge is increasingly important employers shift “from traditional pensions . . . to individual 401(k) accounts” that require workers to “figure out retirement on their own.”  The Social Security Administration also provide a life expectancy calculator (https://www.ssa.gov/oact/population/longevity.html), although it yields one single number (an average) rather than a range of probabilities.

(3 November 2016): “Start-Ups for the End of Life” (http://www.nytimes.com/2016/11/03/business/start-ups-for-the-end-of-life.html)

——–“Death and dying can be costly, but they are rarely considered a business by consumers. . . . But as our population ages and the industry gets more attention, new firms—many of them technology companies—are setting out to compete on price and convenience.”  According to Dan Isard, the president of a financial management company that specializes in funeral and cemetery professionals, the “$18 billion funeral industry has long been a technology holdout.”  However, “with nearly 2.6 million people dying annually in the United States, entrepreneurs see an opportunity to innovate.”  Included in the opportunities they see are such things creating “estate planning documents” like wills, powers of attorney, and health care directives.  Eliam Medina of the startup Willing, “If you look at what TurboTax has done for tax planning, we wanted to do the same thing for estate planning.”

********The article briefly describes a few of the growing number of firms seeking to make preparation for death and dealing with death a bit easier.  As the articles notes, “Possibly the most difficult situation consumers face is to decide how to be cared for at the end of their lives, and communicating that to family members.”  ‘

******** Even those currently in the funeral industry are rethinking what they do.  Driving this is a public that is moving toward cremations and away from the traditional casket.  This is explored at some length in “Funeral Industry Seeks Ways to Stay Relevant” (http://www.wsj.com/articles/funeral-industry-seeks-ways-to-stay-relevant-1478178000).  As Thomas Ryan, the CEO of Service Corp. International, which is the largest operator of U.S. funeral homes, notes: “This [funeral] industry was really built around selling a casket . . . Now it’s really about remembering the person.”  The growth of cremation and some practices surrounding it have led the Catholic Church to provide clarification for its adherents.  This is summarized in “Vatican issues guidelines on cremation, says no to scattering ashes” (http://www.cnn.com/2016/10/25/europe/cremation-vatican-scattering/).  The two-minute video accompanying the article provides a good overview, even providing a bit of theology underpinning the guidelines.

********The WSJ article observes, “As baby boomers age, the number of deaths in the U.S. is projected to rise to about 3.6 million from 2.7 million this year.”  So, the overall demand for caskets will depend on the number of deaths each year and the percentage of people choosing caskets in contrast to cremation or alternative expressions such as green burials.  Behind those two elements lay cultural factors captured by the invisible handshake and economic factors captured by the invisible hand.  This seems like an instance where legal and political forces play a smaller role, although there may well be prohibitions against green burials in various locales.

(3 November 2016): “The Postwar Boom Isn’t Combing Back Anytime Soon” (http://www.bloomberg.com/news/articles/2016-11-03/the-postwar-boom-isn-t-coming-back-anytime-soon)

——-[A review of An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy (https://www.amazon.com/Extraordinary-Time-Postwar-Ordinary-Economy/dp/0465061982/), by Marc Levinson.]  In his latest book, “economist and journalist Marc Levinson says the good times are over for good, or at least for the foreseeable future.  The boom from 1948 to ’73 was extraordinary.  What we have now, subtitle asserts, is ‘the return of the ordinary economy.’”  Although Levinson has a doctorate in economics, “he has a journalist’s appreciation for the power of on-the-ground observation. . . . His authorial technique is to tell a big story by telling a small one.”  His previous books were “about an object (The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger) and a company (The Great A&P and the Struggle for Small Business in America); this time he’s focused on a period, and within that a year, and within that a day: Nov. 4, 1973.”

********The Box was a delightful book and I’m looking forward to reading An Extraordinary Time.  I appreciated the perspective the reviewer provided into Levinson’s authorial technique.  It is an approach I have frequently noticed in newspaper articles and often used to great effect by politicians.  I am reminded of the expression “Make big things small.”  Although I know it from large-scale projects, I suspect it is also applicable to storytelling.

(3 November 2016): “What Happens When the Most Important Pipeline in the U.S. Explodes” (http://www.bloomberg.com/news/articles/2016-11-03/what-happens-when-the-most-important-pipeline-in-the-u-s-explodes)

——–“On Monday, a construction crew in Alabama triggered a massive explosion when a track-hoe struck the biggest fuel pipeline in the U.S.  The blast killed one person, injured several, and sparked a wildfire that burned for nearly a day across 31 acres.  It also stopped the flow of millions of gallons of gasoline that move up the East Coast each day, from refineries in Houston to tanks in Linden, N.J., outside New York Harbor.  The 5,500-mile Colonial Pipeline delivers about half of the refined products used on the East Coast.  It consists of two lines—one that carries gasoline, the other that carries distillate fuels such as diesel and jet fuel.”  Although the U.S. has lots of gasoline in storage, “All that supply does you absolutely no good if you can’t move it around,” a point made by senior market analyst Phil Flynn of Chicago’s Price Futures Group.  The ability to move petroleum products at times such as this is subject to an “obscure maritime law called the Jones Act [that] requires that only U.S.-made, U.S.-flagged ships can deliver goods between ports.”

********The article provides some perspective on all of the behind-the-scenes activity that takes place during a pipeline disruption.  Since North Carolina is one of the states that has been affected by the two recent events on the Colonial Pipeline, this article seemed especially relevant.  So, although the East Coast is highly dependent on one pipeline for half of its refined products, other transportation modes would be available if necessary, albeit at higher cost.

(5 November 2016): “A Criminal Trait in the Refusal to Wait?” [SR](http://www.wsj.com/articles/a-criminal-trait-in-the-refusal-to-wait-1478107218)

——–What type of “questionable conduct early in life reliably predicts criminality?  One answer, as a recent research paper shows, is heavy ‘time discounting’—that is, the tendency to value something less if you have to wait for it.”  The paper, published in May by David Åkerlund and others looked at a 1966 survey in which “more than 13,000 13-year-olds from Stockholm answered a survey that included a question about time-discounting . . . Based on their answers, about 6% of the teenagers qualified as the steepest time discounters, with the strongest for immediate reward.  As it turned out, the individuals who found distant rewards less rewarding also seemed to find distant threats of punishment less deterring: Over the next 18 years, these youths were the subjects most likely to commit criminal acts.”  So, “Time discounting now joins another well-recognized childhood predictor of adult antisocial behavior: lack of self-control.”

********The author of this weekly column, Robert Sapolsky, is a neuroendocrinologist at Stanford University (https://en.wikipedia.org/wiki/Robert_Sapolsky).  He has packed a lot into a short column which is not readily available.  What especially caught my attention was a point he made about predicting violent crime vs. property crime.  He notes: “The literature has generally shown that poor childhood self-control is a predictor of later violent crime—when that inner voice saying, ‘You will regret this’ is swamped by an urge to strike a blow or use a gun.  In contrast, the Swedish findings show that steep time discounting is a predictor of later property crime, where the immediate enjoyment of purloined goods outweighs the delayed cost in fines or lost freedom.”  Sapolsky makes a cautionary note about this: “I should stress that these relationships are statistical, ‘on the average,’ with plenty of individual exceptions.”  Looking at the terms ‘self control’ and ‘time discounting’, I wonder how the two are differentiated.

********The Swedish article mentioned is “Time discounting and criminal behavior.”  You can read an Abstract, as well as download the full paper (with supporting information) at: http://www.pnas.org/content/113/22/6160.abstract.

(6 November 2016): “Who Wins if California Voters Tax E-Cigarettes?” (http://www.nytimes.com/2016/11/07/business/debate-over-risk-of-e-cigarettes-plays-out-on-california-ballot.html)

——–Proposition 56 in California is a “ballot measure on taxes for tobacco products.  The measure, which would add $2 to packs of cigarettes, is up for a vote on Tuesday.  In addition to placing higher taxes on cigarettes, the measure would tax electronic cigarettes just like other tobacco products for the first time.  The measure is a potential boon for state coffers but is also considered a major threat by the tobacco industry, which relies increasingly on its e-cigarette business.”  In California, unsurprisingly, the battle has been expensive: “R.J. Reynolds Tobacco and Phillip Morris, both of which have their own e-cigarette units, have spent more than $70 million collectively on ads, mailers and other efforts to defeat the ballot measure.”  The group seeking to approve 56, which includes a variety of health care organizations, “has raised more than $30 million.”  The new taxes could help make up for some of “the revenue lost as cigarette sales have fallen.”  In 2005 such revenues exceeded $1 billion but only $750 million was collected last year.

********According to Erika Sward, the assistant vice president for national advocacy at the American Lung Association, “The ‘standard mantra’ on cigarette taxes . . . is that every 10 percent increase yields a 3 to 4 percent decline in smoking among adults, and a 7 percent decline among young people.”  This is a nice application of the concept of price elasticity of demand.  Presumably young people have lower income and are likely to be less dependent upon nicotine, both of which would make for a larger response to an increase in the tax on cigarettes.  Both “elasticities” suggest that tax revenues will increase if the Proposition passes.

********Although an increase in an excise tax, even one of $2 a pack, is not prohibition, it does remind me of some statements in the history of prohibition that I am now reading: The Last Call, by Daniel Okrent.  In relation to the Hobson Amendment, a precursor of the eventual 18th (Prohibition) Amendment to the Constitution, William Howard Taft noted that its effect would be that “The business of manufacturing alcohol, liquor and beer will go out of the hands of law-abiding members of the community, and will be transferred to the quasi criminal class” (p. 108).  He made this statement while “serving as a professor of law at Yale during the interval between his presidency and his eventual appointment as Chief Justice of the Supreme Court.”  According to Wikipedia (https://en.wikipedia.org/wiki/William_Howard_Taft), Taft is the only person to have served as the President of the United States and the Chief Justice of the Supreme Court.  Surely he had a rare opportunity to see the invisible forces in action.  Regarding Taft (and Theodore Roosevelt), historian Doris Kearns Goodwin has written the well-regarded book The Bully Pulpit: Theodore Roosevelt, William Howard Taft, and the Golden Age of Journalism (https://www.amazon.com/Bully-Pulpit-Theodore-Roosevelt-Journalism/dp/1416547878/). While the story is told “through the intense friendship of Theodore Roosevelt and William Howard Taft . . . The Bully Pulpit is also the story of the muckraking press . . . The muckrakers are portrayed through the greatest group of journalists ever assembled at one magazine.”

May you have a good week!

Bruce

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