Welcome to week 357! 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.
(12 February 2019): “The Biggest Economic Divides Aren’t Regional. They’re Local. (Just Ask Parents.)” The New York Times
——–“Regional inequality is often cited to explain just about every challenge the United States faces: political conflict, joblessness, drug overdoses, even the decline of marriage.” Furthermore, “Research confirms that workers are in fact more productive in densely populated metropolitan areas. but it’s a mistake to think that regional divides are the source of the nation’s core economic problems. . . . In places other than big metropolitan areas, research shows it’s easier for parents to give children opportunities to become higher-earning adults because the cost of living in a high-quality neighborhood is usually lower.”
********This is a lengthy and involved article with many important points. But its essence is driven home in its discussion of worker productivity and family productivity, as follows:
Superstar cities are generally excellent places to achieve a satisfying and high-paying career applying specialized skills. But just as workers can be more productive at their jobs in big cities, parents can be more productive at family life in smaller places. For the parents, it’s through cheaper access to high-quality neighborhoods and social capital, the networks of trust and cooperation that often make a place work. These attributes are understandably appealing, and they help explain why everyone doesn’t simply move to the nearest major metropolitan area in search of better career prospects. . . . [Any] policymaker trying to tackle the country’s most significant problems will quickly find the biggest divides in America are not regional. They remain within metropolitan areas—across neighborhoods and local jurisdictions.”
********On one side of the economic divide one finds mobile homes, payday loans, and dollar stores. Here are three articles that say a bit about them:
- “A billion-dollar empire made of mobile homes” The Washington Post
- “Expensive Loans to Desperate People Built This $90 Billion Industry” Bloomberg.com
- “As dollar stores move into cities, residents see a steep downside” The Washington Post
The dollar store article was especially interesting, as it raises the question whether such stores are the effect or cause of economic distress. Evidently a report by the Institute for Local Self-Reliance was an essential foundation for the article. The report was done for Tulsa, Oklahoma. It would be nice to see a similar report for the Asheville area
(15 February 2019): “Fixing the Lopsided Economics of Workplace Harassment” Bloomberg.com.
——–“The economics of complaining to your employer are lopsided. That imbalance in financial power helps explain the prevalence of controversial non-disclosure agreements that critics claim keep a lid on allegations of workplace bullying, sexual harassment and racial abuse.” Although reforming non-disclosure agreements “to balance the rights of accuser and accused” has its challenges, it is worth pursuing as “investors and customers need to be empowered to make more informed decisions about where to put their money—and prospective employees about where to put . . . their labor.”
********The lopsidedness of the relationship between employer and employee in the workplace is a matter of real concern. This opinion piece presents some ideas on how to address it.
(15 February 2019): [SR] “In Roundup Case, the Science Will Go on Trial First” The Wall Street Journal
——–“In a San Francisco courtroom this month, a jury will be asked to weigh a complicated question: Did Roundup Weedkiller cause a man’s cancer? . . . But unlike in a prior trial brought against the herbicide’s maker, Bayer AG, the jurors won’t simultaneously hear allegations that the company d dangers about its product from the public. Instead, they’ll take part in an unusual split trial focused first on the science, and then, only if they find the plaintiff’s claims valid, on the question of negligence. . . . The approach is the latest attempt by courts to resolve a long-funning debate over how to ensure the fairest decisions in cases concerning complicated science. The results could influence hundreds of similar Roundup cases—and guide judges in other cases that hinge on science.”
********An informative and somewhat lengthy discussion about the assessment of scientific information in the context of trial involving product liability. How do judges, much less jurors, make reasonable scientific assessments in the context of a trial? The split trial framework described in this article is one attempt to make such assessment easier.
********The article goes on to discuss two standards used by judges to vet scientific experts: the Daubert standard, which is “employed in all federal courts and many states,” and the Frye standard, which is “still used in some states.” In the Daubert standard, judges must “consider the soundness of scientific methods employed by experts as well as whether the expert is qualified and the evidence is relevant.” The Frye standard “looks at whether the scientific evidence has gained general acceptance in its field.” Different standards that, presumably, might yield different assessments. Further discussion of the Daubert and Frye standards can be found here, as well as separately in Wikipedia.
********After having run across the Roundup article, I saw “Scientist says some pollution is good for you—a disputed claim Trump’s EPA has embraced” on the front page of The Los Angeles Times. I was drawn in immediately, learning how EPA administrator Clint Woods “reached out to a Massachusetts toxicologist best known for pushing a public health standard suggesting that low levels of toxic chemicals and radiation are good for people.” Ed Calabrese of the University of Massachusetts is that toxicologist and hormesis is “the idea that dangerous chemicals and radiation are beneficial at low doses.” Traditionally the EPA has relied upon the “linear no-threshold model” that assumes that “if a substance is dangerous at some level, it is harmful at any level. . . . the risk doesn’t entirely disappear until the substance is removed.” Replacing the linear no-threshold model with the hermetic model, therefore, would provide a non-economic rationalization for not reducing a toxic substance below a particular level. You can learn more about hormesis, including a graph of the “typical” relationship, at Wikipedia. It is frightening to contemplate what a broad embrace of the hermetic model might mean. The main consideration for me is how to proceed in the absence of knowledge. I find the conservative approach of the linear no-threshold model to be compelling. Ultimately, though, it would simply be good to find out rather than make assumptions.
(17 February 2019): “American affluence: The past isn’t prologue” The Washington Post
********This article is an appreciative rereading of John Kenneth Galbraith’s 1958 book The Affluent Society, written by Post columnist Robert J. Samuelson. Samuelson notes that the book “survives as one of the most influential books of the last half of the 20th century.” Galbraith’s main point in Society was that affluence had reached a point where “the social usefulness of private spending was reaching its limits. . . . Meanwhile, the public sector—aside from defense—was starved for funds . . . Schools, hospitals, local roads, police and other public services were all shortchanged. The solution, he said, was to expand the public sector. This would provide useful services and help stabilize the economy.”
********The Affluent Society is the second of the so-called American Capitalism trilogy. The first is the 1952 American Capitalism, which introduced the concept of countervailing power. The third book is the 1967 The New Industrial State. You can learn just a bit more about each book here. I have read two books by Galbraith—The New Industrial State and the 1973 Economics and the Public Purpose—and I watched with interest the videotapes (it has been awhile) of his 1977 tv series The Age of Uncertainty. But I’ve never read The Affluent Society and it is time to repair that omission. As I understand its argument, that the marginal social product of expenditure in the public sector is much larger than the marginal social product of expenditure in the private sector. All other things being equal, it would seem to follow that more expenditure in the public sector should take place. I think that is all I should say given that I have not read the book. I do wonder what Galbraith has to say about the sectoral production of public sector goods. Goods consumed by the public sector could be produced by the private sector.
********Galbraith had a long and eventful life, which is amply captured in the Wikipedia article on him. His work was not that of the technical economist, whose works bristle with mathematical models or statistics, but rather that of the literary economist, who works with words. In an age of technical economics, we are fortunate to have his example of what literary economics can be.
********For those wanting to learn much more about Galbraith’s life and times, the biography to turn to appears to be John Kenneth Galbraith: His Life, His Politics, His Economics, by Richard Parker. At 832 pages it is a project. However, as a reviewer notes, Parker “managed to sift through a mountain of material from Galbraith’s long and lively years to distill an engaging narrative that, like Galbraith’s own books, is easily accessible to non-economists.”
May you have a good week!