350 (2 January 2019)


Welcome to week 350!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription.

(14 December 2018):The Farm Bill, hemp legalization and the status of CBD: An explainerBrookings

********The recently passed, and signed, 2018 Farm Bill has been touted as a new day for hemp production and hemp-derived products in the United States.  One of those products cannabidiol (CBD) seems to be showing up everywhere.  A little country store not far from where I live sells it and driving home from Asheville recently, I noticed a prominently-signed building that will be featuring CBD.  In light of all this, this post by Brookings writer John Hudak, is essential reading; Hudak is the author of Marijuana: A Short History

********Perhaps the most important thing to note is this: “One big myth that exists about the Farm Bill is that . . . CBD . . . is legalized.  It is true that section 12619 of the Farm Bill removes hemp-derived products from its Schedule I status under the Controlled Substances ACT, but the legislation does not legalize CBD generally. . . . The Farm Bill ensures that any cannabinoid . . . that is derived from hemp will be legal, if and only if that hemp is produced in a manner consistent with the Farm Bill, associated federal regulations, . . . [associated] state regulations, and by a licensed grower.  All other cannabinoids, produced in any other setting, remain a Schedule I substance under federal law and are thus illegal.”  Although there is one minor exception, there are a lot of conditions to be met to ensure federal legality.  The article illustrates well the complex web of relationships between state and federal law, as well as the challenges in moving across the ever-shifting boundary between illegal and legal products.

(27 December 2018):Huge laundry detergent bottles were designed for store shelves.  For Amazon, they’re shrinkingThe Los Angeles Times

——–“Amazon’s rise is making laundry detergents shrink.  Tide and Seventh Generation have introduced redesigned laundry detergents that are several pounds lighter by cutting down on plastic in their packaging and using less water in their formulas.  They’re making the changes to please Amazon.com Inc. and other online stores: Lighter packaging means retailers pay less to ship the detergent to shoppers’ doorsteps, making each sale more profitable.  For consumers, the new packaging has been designed to better survive shipping without leaking.  The challenge, however, is getting online shoppers to buy detergent that looks nothing like the heavy bottles they are used to.”

********This indicates that Amazon now has sufficient market power to bring about changes in its supply chain, something that many firms have and do.  This brings to mind the 2006 book The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—and How It’s Transforming the American Economy, which I got a lot from when I read it not long after its release.  What this article points toward is a book that does for Amazon what The Wal-Mart Effect did for Wal-Mart.  The closest I was able to find is the well-regarded 2013 book The Everything Store: Jeff Bezos and the Age of Amazon, by Brad Stone, which was The Financial Times Best Business Book for 2013.  You can read more about it here.  Steve Wasserman’s article “The Amazon EffectThe Nation, provides a glimpse of what a book-length work on Amazon’s effect on the world might contain.

(28 December 2018):A call to save democracy by battling monopoliesThe Washington Post

********This is a review of The Curse of Bigness: Antitrust in the New Gilded Age, by Tim Wu, a policy advocate and law professor at Columbia University.  The reviewer is Benjamin C. Waterhouse, an associate profess of history at UNC Chapel Hill.  Wu argues that “global concentration is now at levels unseen in more than a century . . . . [and] offers a vital diagnosis: American has abandoned its rich tradition of anti-monopoly, or antitrust, law.  And while the very term ‘antitrust’ may strike many as dreadfully dry, Wu manages to make this brisk and impressively readable overview of the subject (the entire text runs abut 140 pages) vivid and compelling.”  The review includes many names that will be familiar to those, like me, who have only a cursory knowledge of the field.

(28 December 2018):Twelve leading economists on the research that shaped our world in 2018Quartz

********The 12 leading economists mentioned 11 articles that stood out for them and provided some notes about why they did.  In some cases pdfs of the articles are available.  What stands out is the breadth of the articles and the extent to which they relate to contemporary social problems.  Quartz compiled a similar list in in 2017—13 economists noted 13 articles.  Here is the link.  I have spent much time comparing the two lists, but I did notice that the Moving to Opportunity study was addressed in each year.  You can learn more about MTO here.  No doubt this caught my eye because I am just a few minutes away from completing Matthew Desmond’s impressive book Evicted: Poverty and Profit in the American City.  Milwaukee, Wisconsin is that American city.

********I do hope you will take a look at the articles.  One from 2018 struck me: “Ban the Box, Criminal Records, and Racial Discrimination: A Field Experiment,” by Amanda Aga and Sonja Starr.  Here is its Abstract.  Their work confirmed “that criminal records are a major barrier to employment: employers that asked about criminal records were 63% more likely to call applicants with no record.  However, our results support the concern that BTB [Ban the Box] policies encourage racial discrimination: the black-white gap in callbacks grew dramatically at companies that removed the box after the policy went into effect.  Before BTB, white applicants to employers with the box received 7% more callbacks than similar black applicants, but BTB increased this gap to 43%.”  Asheville, North Carolina adopted BTB in early 2016

(28 December 2018):Four questions for the Year AheadThe New York Times

********N. Gregory Mankiw asks, “What’s in store for the year ahead?  Like all economists, I really don’t know. . . . [But here] are four questions we may learn the answers to in the months to come.”  (Read the brief article for elaboration.)  When will the Fed stop?  At some point Fed policymakers will need to put the brakes on the federal funds rate.  How will the trade shenanigans end?  The belligerent approach of the current administration is worrying to the trading partners of the United States.  Will someone pay attention to festering problems?  “Tw such problems are global climate change from human carbon emissions and the looming fiscal imbalance as more baby boomers retire and start collecting Social Security and Medicare.”  Which economic advisers will have the president’s ear?  Kevin Hassett of the Council of Economic Advisers and Larry Kudlow of the National Economic Council are knowledgeable (Hassett) and have good instincts (Kudlow).  “But it is unclear how much the president listens to them. . . . Making matters worse is the role of Peter Navarro, a relatively unknown economist who became a presidential adviser because his idiosyncratic views on trade are consistent with Mr. Trump’s isolationist leanings.”

********In relation to the “festering problems” question, here are two related articles.  First there is, “Forget the Carbon Tax for Now,” The New York Times, which notes that although a carbon tax is arguably the economically efficient approach to moderating climate change, it is politically untenable.  Second, there is “Why the World Needs to Rethink Retirement,” The New York Times, the short answer for which is global population is aging and people are living longer on average.  The article provides a look at retirement provisions in nine prominent countries.

(1 January 2019):A 6-Pack of Beer for $26?  Qatar Doubles the Price of AlcoholThe New York Times

——–“Getting a beer has never been easy in Qatar.  But buying a six-pack will now set you back at least $26, thanks to an alcohol tax that went into effect on Tuesday. . . . A 100 percent tax, calculated on the previous sales price, has been imposed on all alcohol imports,” according to a letter to customers from “the country’s sole liquor retailer, the Qatar Distribution Company.”  The tax increase seems “to be part of a push to clamp down n ‘health-damaging goods,’ according to a statement released last month by the Ministry of Finance that did not mention alcohol.  The new tax will increase the price of sugary drinks by half, while the price of tobacco, alcohol, energy drinks and pork will double,” according to a phone call with Walid Zidani, who is employed by the ministry.

********A glimpse of how alcohol is managed and taxed in an Islamic country with a “unitary constitutional monarchy” with a 2017 population of 2.6 million, which is not quite the population of Chicago.  The article notes that the 2022 men’s soccer World Cup will be hosted by Qatar and many are wondering “how much Qatari society might bend to accommodate guests who view drinking as a central part of the World Cup experience.”  As with all sumptuary laws, this is tax increase on alcohol is a constellation of the invisible forces.

(1 January 2019):Women’s magazines are dying.  Will we miss them when they’re gone?The Washington Post

********An examination of the so-called “pivot to digital” for women’s magazines, the most recent casualty being Glamour, which decided in late November to “stop publishing its glossy monthly.”  Although some of the pivot is being driven by the relative cost of digital vs. print, as well as the movement of advertising from print to digital, it seems like larger cultural trends are at work. 

May you have a good week!

Bruce

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