Welcome! 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.
(13 February 2020) “Never Mind the Internet. Here’s What’s Killing Malls” The New York Times
********This piece is by Austan Goolsbee, an economist at the University of Chicago. The decline of brick-and-mortar retail in the U.S. has been widely attributed to e-commerce, most notably Amazon. But Goolsbee indicates that there is a bigger story, pointing out that there are three “major economic forces” that have had a bigger impact than the Internet. They are big box stores, income inequality, and the move toward services instead of things. I thought his discussion about income inequality was especially interesting. He concludes by saying, “In short, the broad forces hitting retail stores are more a lesson in economics than in the power of disruptive technology. It’s a lesson all retailers will have to learn someday—even the mighty Amazon.”
(13 February 2020) “Shopping under the influence” The Washington Post
********This article connects nicely with Goolsbee’s third force—the move toward services instead of things. In Nordstrom’s new flagship store in New York City, “the most buzzed-about attraction” is a full bar, to be specific, Shoe Bar, which serves $17 cocktails, sells wine by the glass, and has a half dozen craft beers. It is packed by 4 pm most days. Customer Kathy Miller, of Carefree, Arizona, notes: “To attract shoppers these days, you have to do something different and fun . . . And, of course, the more you drink, the more you spend.” This phenomenon is not limited to NYC and seems to be growing. “Across the country, shopping centers, malls and major chains . . . are increasingly allowing—even encouraging—customers to imbibe while they browse. It’s the latest attempt by stores to offer shoppers an experience they can’t get online.” That said, the article also mentions that there is some evidence that those shopping online may be influenced by alcohol, too. Evidently, drinking and browsing can be done in-store and online.
(13 February 2020) “The Green Mile” The Washington Post Magazine
********Coal mines and their aftermath are the subject of this article, especially the coal mines of Eastern Kentucky. The central figure in the story, human-wise, is Patrick Angel, who for 25 years oversaw the reclamation efforts of lands that had been strip-mined or mountaintop-removed. “He told coal companies to do one thing when they were done with a site: pack the remaining rubble as tightly as possible, and plant grass—the only type of plant he trusted to hold the ground in place.” Eventually he “realized something was very wrong. The big, productive, life-nurturing forests of Appalachia weren’t just slow to come back; they weren’t coming back, period.” Angel “has spent the rest of his career undoing the damage.” What has proven far more effective in returning forests to barren lands are large machines that “drag two massive, fanglike shanks that . . . rip open the ground in a checkerboard pattern, loosen soil and make room for growing tree roots. Then small armies of volunteers . . descend on the site . . . [to] plant tulip trees, oaks, pines and chestnuts. What was once a forest brimming with diverse life, before becoming a denuded strip mine and then a weedy rubble pile, would be a forest again. Thanks in large part to Angel, now 70, more than 187 million trees have been planted on about 275,000 acres of former mines.” Angel provides a powerful example of looking, learning, and acting.
(13 February 2020) “Build Build Build Build Build Build Build Build Build Build Build Build Build Build” The New York Times
********Housing, especially affordable housing, is one of the major problems facing the United States, most especially in California, where homelessness in Los Angeles and San Francisco receives regular attention in local and national media. This article tells the story of one well-to-do town, Lafayette, California, east of Oakland, and its efforts to prevent the construction of a 315-unit housing development. The story will sound familiar to residents of the Asheville, North Carolina area, where each new development meets strong resistance from those who live nearby. The author of this article, Connor Dougherty, is also the author of Golden Gates: Fighting for Housing in America. You can read a review here.
The City Manager of Lafayette, Steve Falk, had a front-row seat in the negotiations, discussions, yelling, and character assassination that were all part of the consideration of the housing development. Ultimately, he would lose his job because he came to understand housing development differently because of how his involvement. In this way, he reminds me of Patrick Angel and Eastern Kentucky. The person who was instrumental in changing the mind of Falk was Sonja Trauss, an outspoken housing advocate, who was a persistent champion of housing construction. She founded a movement—“YIMBY for Yes in My Back Yard—[that] has become an international phenomenon, with supporters in dozens of housing-burdened regions including Seattle; Boulder, Colo.; Boston; Austin, Texas; London and Vancouver.” YIMBY, of course, is a play on NIMBY—Not in My Back Yard. You can learn more about the YIMBY movement here.
Trauss would later speak at a City Council meeting in Lafayette on the development. She noted that “the entire notion of public comment on new construction was inherently flawed, because the beneficiaries—the people who would eventually live in the buildings—couldn’t argue their side.” It is a good point, one that is broadly applicable to a variety of social phenomena. As the article notes near its beginning, the real solution to the housing problem is sociological. People “are going to have to change.”
(13 February 2020) “N&O Parent Company McClatchy Files for Bankruptcy” Indy Week
——–“McClatchy Co., the second-largest newspaper chain in the country, filed for bankruptcy Thursday [the 13th] . . . If a bankruptcy judge accepts McClatchy’s restructuring plan, after 163 years of family control, the company will be delisted from the New York Stock Exchange and turned over to a hedge fund. In North Carolina, McClatchy owns The News & Observer, The Charlotte Observer, and the Durham Herald-Sun.”
********This seems like old news—just another example of the hard times befalling print media. The News and Observer and The Charlotte Observer have the largest circulation of North Carolina newspapers. This development comes not long after the largest newspaper company in the nation was created when “Gannett, the parent company of USA Today and more than 100 other dailies, and New Media Investment Group, the owner of the newspaper chain GateHouse Media, announced their intention to join forces.” In November, 2019, “shareholders at the two companies voted yea. And now one in five daily papers in the United States has the same owner, under the Gannett name.” The Asheville Citizen-Times is a Gannett paper.
It is hard to imagine that the Gannett merger had much to do with the bankruptcy of McClatchy, no doubt both developments are the result of diminishing revenues from print distribution, largely driven by decreasing advertising. What is the alternative to merger? Bankruptcy. You can learn more about the McClatchy bankruptcy filing in The New York Times. As the article notes, “If the Chapter 11 plan gains court approval, McClatchy would become the latest newspaper company to fall under the control of Wall Street investors, an unlikely relationship that has become more common as the financial industry seeks to wring profits from an ailing business.”
(17 February 2020) “The Health System We’d Have if Economists Ran Things” The New York Times
********This article reports some of the results of a survey of 200 Ph.D. health economists. It is mostly descriptive, rather than analytical. The article concludes noting that “If health economists were in charge of the health system, not a lot would change, with some notable exceptions. Medicaid would not have work requirements . . . and taxes would go up for Medicare and for employer-based health insurance.”
I searched for the report that must have served as the foundation for this article but could not find it, the closest relevant site being from a 2019 conference. You can learn more about the American Society of Health Economists here.
One issue not reported on—presumably not inquired about in the survey—is the problem of “surprise” medical bills. Although “two-thirds of Americans say they are worried about being able to afford an unexpected medical bill” and “Nearly eight in 10 American say they want federal legislation to protect patients against surprise bills,” there seems to be little movement towards resolving the “three-way competition” among hospitals, doctors, and insurers that is a source of the problem.
May you have a good week!