351 (9 January 2019)


Welcome to week 351!  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.

(19 December 2018):Surprise DNA Results Are Turning Customer-Service Reps Into TherapistsBloomberg.com

——–“In the business of consumer DNA testing, customer service is sometimes a lot more like emotional support.  Though genetic tests are frequently marketed as family-friendly entertainment, they sometimes wind up surfacing life-altering surprises.  And when those surprises show up in someone’s test results, the first move is often a call to customer service.”  Especially challenging are tests that reveal parents who aren’t parents and siblings who aren’t siblings.  According to Kent Hillyer, the head of customer care of 23andMe, “We don’t really play the role of therapist, but rather listen and try to be sympathetic and empathetic, getting them to process things.”  23andMe receives so many of these challenging calls “that preparing for them is integrated into the company’s months-long training program.”

********An interesting example of one new job that the decreased cost of genetic testing has brought into existence.  Clearly the people who answer these calls are doing emotional labor, a concept that gained currency through the work of sociologist Arlie Hochschild in her 1983 book The Managed Heart: Commercialization of Human Feeling.  In 2012 the book became available in an updated edition with a new preface.  More recently, Hochschild’s book Strangers In Their Own Land has drawn interest for its contribution to better understanding the 2016 presidential election.

(27 December 2018):Two Towns Forged an Unlikely Bond.  Now, ICE Is Severing the ConnectionBloomberg Businessweek

********A lengthy article that explores the connections between Mount Pleasant, Iowa and Chocox, Guatemala.  It puts many human faces on the social and economic disruption—the human costs—of the enforcement of current immigration and employment laws by Immigration and Customs Enforcement.

(2 January 2019):Now for the Hard Part: Getting Californians to Buy Legal WeedThe New York Times

——–“A billion dollars of tax revenue, the taming of the black market, the convenience or retail cannabis stores throughout the state—these were some of the promises made by proponents of marijuana legalization in California.  One year after the start of recreational sales, they are still just promises.  California’s experiment in legalization is mired by debates over regulation and hamstrung by cities and towns that do not want cannabis businesses on their streets.”  Instead of increased sales from legalization, they have fallen.  “Around $2.5 billion of legal cannabis was sold in California in 2018, half a billion dollars less than in 2017 when only medical marijuana was legal, according to GreenEdge, a sales tracking company.”  Analysts say that “The easy part of legalization was persuading people to vote for it . . . The hard part, now that it’s legal, is persuading people to stop buying from the black market.” 

——–As it turns out, California “produces far more pot than it can consume.  The tons of extra cannabis continue to leach out across the country into states where it is legal.”

Recent official estimates of cannabis production in California report “the state producing as much as 15.5 million pounds of cannabis and consuming just 2.5 million pounds.  California’s surplus—equal to 13 times Colorado’s total annual production—is smuggled eastward, especially across the Rockies and Mississippi where the wholesale price is as much as three times as high.”

********There is much of interest in this article.  The revenue response in California seems consistent with an “inelastic” demand marijuana.  In short, the legalization of marijuana brought forth such a strong increase in market supply that price fell, and total revenue fell, too.  Have to check the data to see if this is what happened.  Second, the article points to the coexistence and omnipresence of legal and illegal markets.  Changes in the law simply tend to change their relative sizes.

(5 January 2019):Water in Asia: After the FloodsThe Economist

********This is a review of Unruly Waters: How Rains, Rivers, Coasts, and Seas Have Shaped Asia’s History, by Sunil Amrith, a professor of history at Harvard University.  He notes that nowhere “has the search for water shaped or sustained as much human life as in India and China.”  They have, between them, “perhaps 36% of the world’s population, but just 11% of its freshwater—and, in both countries it is distributed hugely unevenly.”  Although the hydraulic priorities of the countries have differed, “their approaches have had much in common: the massive investment of labour, capital and technology in a drive to contain and control the forces of nature.”  Thousands of dams built in both countries are only part of the story.  Another part is the massive program of “linking and diverting rivers to mitigate the inequity of nature’s distribution.  Thanks to the most expensive infrastructure project the world has ever seen, two-thirds of Beijing’s tap-water now comes from a reservoir in central China, nearly 1,500km (930 miles) away.  India has dreams of ‘interlinking’ 37 rivers through 14,000km of canals.”  A third part is the enormous volume of water removed from underground.  As the reviewer notes, there are both inspiring and alarming aspects of the attempts of India and China to control their unruly waters, but it is especially disconcerting to consider that “these strategies have run their course, and indeed are now causing new problems.”

********This looks like a fascinating book, with much to reflect upon.  It makes me think about the classic Cadillac Desert: The American West and Its Disappearing Water, by Marc Reisner, and two more recent books: The Death and Life of the Great Lakes, by Dan Egan, and The Great Lakes Water Wars, by Peter Annin.  What libraries of books could be written about the situation described in India and China.  One further book to mention, which was mentioned in the book review [SR] “’Unruly Waters’ and ‘Ganges’ Review: In India, Water Is Politics” The Wall Street Journal.  The book is Ganges: The Many Pasts of an Indian River, by Sudipta Sen.  “Mr. Sen goes to great lengths to show that the Ganges, with its ‘rich and boisterous mythology,’ is a river like no other in the world. . . . The only other ‘venerated body of water with similar universal salience and mythic geography,’ he notes, is the River Jordan.  And yet the scale of the veneration of the Ganges makes the Jordan seem trivial by comparison.”  But Mr. Sen laments, “that India’s great river is in trouble, suffocated by dams, overcrowded, and polluted.”  In ending, he asks “Will the Ganges survive its burdens of human and industrial contaminants?”  The future of the Ganges is in the hands of “Mother India.”

(8 January 2019):Flipping the Economics of Paying for Education, Because They’re Upside DownThe New York Times

——–“Student debt reached a new height last year—a whopping $1.5 trillion.  A typical student borrower will have $22,000 in debt by graduation, according to the National Center for Education Statistics.  Now, Silicon Valley is backing a novel idea that proposes to rewrite the economics of getting an education.  The concept is deceptively simple: Instead of charging students tuition—which often requires them to take out thousands of dollars in loans—students go to school for free and are required to pay back a percentage of their income after graduation, but only if they get a job with a good salary.”  Such Income Share Agreements (ISAs) have “been experimented with and talked about for years.  But what’s happening at Lambda School, an online learning start-up founded in 2017 with the backing of Y Combinator, has captivated venture capitalists.”  Purdue University has also developed “a version of an Income Share Agreement.  The ISA approach treats “students as investments rather than cash cows—a fundamental shift that could finally lift the crippling debt load we routinely push onto students.  But it also comes with a peculiar kind of danger: By seeking safe investments, programs like this could cast aside the strides made to expand educational opportunities to higher-risk students and reduce the appeal of educations that focus on noble, but lower compensated, professions.”

********As one would expect, there is a growing literature on Income Share Agreements.  The article “How Loan-Averse Young Adults View Income Share AgreementsAmerican Institutes for Research seems like a good entry into learning more.  Among other things, it has an extensive set of references.  It strikes me that educational institutions that move toward ISAs are trading a relatively certain cash flow—tuition while students are enrolled—for a relatively uncertain cash flow—a share of earnings after the end of the program.  I suspect this would lead such institutions to choose students differently in order to reduce the risk of their student investments.  You can learn more about the American Institutes for Research here

(8 January 2019):You Know Your Diamond’s Cut and Carat.  But Does It Have Ethical Origins?The New York Times

——–“Consumers want to know the origin of the things they buy, like the name of the farm that supplied their milk or the source of the feathers in a down jacket.  But when it comes to a diamond—quite likely one of the most expensive and emotional purchases a jewelry buyer will ever make—most know next to nothing about the source of the stone.  Tiffany & Company, which sold more than $500 million worth of diamond engagement rings in 2017, is hoping to change that.  Beginning Wednesday, it will start a program that will identify for customers the country where their diamond was mined, and, eventually, information on where it was cut, polished and set.”

********Knowledge of the production supply chain, it seems, will be increasingly bundled with the product itself for some goods and services.  I suppose that is already true of most professions—one sees the degrees of one’s doctor, dentist, or lawyer on their walls.  But goods seem later to the party.  What sort of factors of the good will affect the extent to which supply chain information is provided?  No doubt the price of the good will matter, as will the complexity of the supply chain.  Will there penalties for falsifying—or simply making a mistake—about the nature of the supply chain?  That will matter, too.

(9 January 2019):As Big Retailers Seek to Cut Their Tax Bills, Towns Bear the BruntThe New York Times

********The centerpiece of this story is the “dark-store theory” of property valuation that is increasingly being used in legal arguments against municipalities by big-box stores to lower their property taxes.  In brief, stores are arguing that the proper comparison for determining their property value for tax assessment purposes are vacant stores.  Usually these stores are in other locations than the specific location of the store being assessed.  The states of Michigan and Wisconsin have figured prominently in the legal arguments but there are many other states where dark-store theory is at work.  CityLab has a map of those states as well as much additional and accessible information.  If you look at the map, you will see that North Carolina has had tax appeals based on dark-store theory.  A review of recent court decisions, including North Carolina, is provided by the UNC School of Government, which cites a case in Forsyth County. 

********One longs for a systematic examination of these assessment matters.  The International Association of Assessing Officers (IAAO), which is the membership organization for assessment professionals, provides one.  Here is an overview of the matters and here is the lengthier—30 pages—examination.  I first became aware of this issued from a December 2016 article in Bloomberg.com.

May you have a good week!

Bruce

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