Category: Uncategorized

I routinely use three different computers, and so any web-based tool is a natural for me. I don’t want to move stuff around from place to place, and I don’t really want to store home things on a work computer. So I find myself – although not without misgivings – keeping more stuff on the web all the time.

I’ve used Gmail as e-mail interface for some time, and I keep photos on Flickr, and now I keep appointments on Google Calendar.  I’ve just discovered LibraryThing (hi piefuchs) and am working out what to do with it, but I expect I’ll keep some kind of catalogue of my books there. There’s no doubt these new applications are changing how useful the web is. I recently started using Zoho Writer to write longer weblog posts, and the thing is, I could imagine using it as my main word processing program. It’s nowhere near as feature-rich as MS Word, of course – but being free, web-based, and reasonably usable, are three big things in its favour, and that’s something I didn’t expect a year ago. Zoho Sheet is pretty cool too.

One big question is whether Google’s forthcoming web-based word processing and spreadsheet programs will be any good. Their spreadsheet is now in Beta, and I’d say it’s not quite as good as Zoho Sheet (no graphs, for example). Their word processor is probably not too far off, as they bought Writely a few months ago. While Google Earth is one of the coolest programs ever, some other things they have done seem half-finished, so I don’t think it is a foregone conclusion that Google will win this particular battle.

I can really see a time, not too far off, when many people will use web-based applications for most of their word processing and spreadsheet programs. Microsoft Office is overdue for some competition from some kind of disruptive technology, and in a couple of years MS could have some real problems.

Starling Hunter at The Business of America is Business puts together collections of weblog posts on a couple of topics on a regular basis. One of those is Wal-Mart, and he included one of my posts in his latest collection:  Carnival of Wal-Mart III.

Among the others, there are posts about Chicago and Maryland’s new employment laws that affect (or, in Maryland’s case, would have affected) Wal-Mart employees, Wal-Mart’s failure in Germany, the Walton family’s shrinking tax bill,  and Wal-Mart’s new shoplifting policy.

Starling Hunter has worked at Boeing as an Electrical Engineer, at Exxon, at MIT’s Sloan School of
Management, and now at American University of
Sharjah, "just outside of Dubai, United Arab Emirates". His perspective on Wal-Mart is, unsurprisingly, definitely different from mine — but I do like his take on Rockonomics.

I watch The Daily Show pretty much every night, but somehow I missed this one, which is brilliant.

Saturday’s Grope & Flail has a fine article by architect Jack Diamond on the whole suburbia and sprawl thing. It’s behind the subscription wall, but here are a few excerpts:

   
       
       
      
 
 
   
   
   

Most new urban growth occurs on the perimeter of urban centres, and
does so at densities that render residents of those areas
automobile-dependent — such low densities make public transit
uneconomic. Paradoxically, this also means that significant sectors of
the population are rendered immobile. Those who don’t own cars, or who
are too young or old to drive, have no alternative means of
transportation. Automobile dependency also acts as a social centrifuge,
segregating land use and socio-economic groupings into discernibly
distinct areas. Indeed, urban poverty is now centred in suburban
growth, where it is largely invisible, distant from inaccessible, but
desperately needed jobs, social services and retail facilities. The
rioting in Paris suburbs is an instance of the results of this
festering, but unrecognized, problem.

      
 
 
 
 
 
   
   

… Retail concentration in shopping
malls does little to encourage small, start-up enterprises that the
more mixed and individually owned Main Streets foster.

Most significantly, the cost of providing services to such areas
exceeds the tax revenue derived from low-density development. In an
analysis of one such area in Southwestern Ontario, it was found that
for every dollar received in real-estate tax, $1.40 was needed to
service such low-density development.

This form of urban development has been made possible, and indeed encouraged, by … what amounts to subsidies that land speculators and
low-density developers receive from provincial and federal governments
in the form of highway construction, and the provision of trunk-line
sewers, water supply and other services. The burden of this cost is not
borne by the beneficiaries, but by all taxpayers.

So, what can be done to change current development trends? And will
those who have the power to initiate such change do so before it is too
late?

The means to make these changes is first to institute full-cost
pricing. Let the market forces exert their logic: If each increment of
suburban growth were to bear the full unit-cost of expressways, trunk
water supply and other services, the market would adjust to more
appropriate urban forms. That this would create densities capable of
supporting public transit, creating a richer mix of land uses, would be
an added benefit to affordable development.

Nowadays, development occurs at the extremes of density — either
vast expanses of single or semi-detached housing (and low-density
commercial uses), or high rise/high density condominiums. There is a
wide variety of satisfying housing in between these two extremes, from
town houses and duplex dwelling to low-rise apartment buildings of
about six to eight storeys. Ingenuity, when confronted with necessity,
will out.

A.J. Diamond is a principal of Diamond and Schmitt Architects
Inc. He was a commissioner of the Greater Toronto Task Force that made
recommendations on governance, taxation, land use and transportation
for the GTA.
 

From the recently-discovered weblog of Michael Perelman, an uplifting story about a civic-minded news service in Monrovia, Liberia.

Perelman says:

I don’t really have a good foundation in this
technology. I realize that it doesn’t take much to sit at a keyboard
and make grant pronouncements about the way the world should be.

Today I read in the New York Times about the
“blogger” using centuries-old technology in a way that puts the modern
media to shame.

The article describes Alfred Sirleaf, the
33-year-old managing editor of The Daily Talk, a white plywood shed
trumpeting the latest headlines along Tubman Boulevard, one of the
capital’s main thoroughfares.

He writes his stories very carefully on large
blackboards and even makes accommodations to help communicate the
material to illiterates. He had to struggle to get a high school
education. He has been arrested. And yet he continues to persevere.

And most of all the displays a spirit that puts the the corporate media to shame.

From the New York Times article:

The shoestring operation brings him no income.

“I just manage along with whatever money I can
find,” he said. Occasional gifts of cash and pre-paid cellphone cards
keep him in business.

Go read it.

Following on from the previous post, here are two other places where they talk about the consequences of inequality:

Mark Thoma, yet again, brings us a piece from the New York Times which discusses what can happen in a city when the middle ranges of income leaves, so that only the rich and poor are left. Basically, the two become separate cultures.

With a dwindling middle class, rich and poor become more separate. Alan
Berube, an author of the Brookings study, said a two-tiered marketplace can
develop: Whole Foods for the upper classes, bodegas for the lower, with no
competition from stores courting the middle…

“This trend toward living and interacting with people who are like you is
intensifying a lot,” said Professor Gyourko, who lives in the affluent suburb of
Swarthmore, Pa. “I do not meet the full range of incomes and social classes
within my neighborhood. Well, think about what happens if metropolitan areas
like New York, San Francisco and the like turn into my suburb. You’ll have even
less interaction. The most interesting and potentially foreboding implication of
this sorting is that it changes the way we view life.”

And Matthew Kahn asks When the rich get richer, what happens to the poor? and answers

It depends. If the super-rich use some of their $ to finance nice
musuems and art galleries and Buffett-Gates their money to solve public
health challenges then society could be improved along some dimensions.

Alternatively
if this crew uses their money to purchase 100,000 square foot homes in
desirable areas then the price of land will skyrocket and the middle
class will be squeezed out.

The studies of Piketty and Saez seem to be becoming the standard for the description of inequality within the USA. Every now and then they update their figures, and recently they published an updated set that described what happened to American Inequality in 2004. There has been a rush of comments about the numbers on some economic weblogs. So I’ll collect them together here – I don’t have anything to add myself: it’s fascinating to see this kind of real-world issue being debated among experts in public.

First, the update itself is in an Excel spreadsheet here, at the web site of Emmanual Saez.

Paul Krugman (in the New York Times, but reposted in part by Mark Thoma here) describes the main feature as follows:

Thomas Piketty and Emmanuel Saez, whose
long-term estimates of income equality have become the gold standard for
research on this topic … show that even if you exclude capital gains from
a rising stock market, in 2004 the real income of the richest 1 percent of
Americans surged by almost 12.5 percent. Meanwhile, the average real income of
the bottom 99 percent of the population rose only 1.5 percent. In other words, a
relative handful of people received most of the benefits of growth.

There are a couple of additional revelations in the 2004 data. One is that
growth didn’t just bypass the poor and the lower middle class, it bypassed the
upper middle class too. Even people at the 95th percentile of the income
distribution — that is, people richer than 19 out of 20 Americans — gained only
modestly. …

The other revelation is that being highly educated was no guarantee of
sharing in the benefits of economic growth. There’s a persistent myth,
perpetuated by economists who should know better … that rising inequality …
is mainly a matter of a rising gap between those with a lot of education and
those without. But census data show that the real earnings of the typical
college graduate actually fell in 2004.

Greg Mankiw, another prominent economist who was also high up in the Bush administration until recently, saw things differently here:

Here is what I see: After rising substantially from 1986 to 2000,
income inequality is essentially the same in 2004 (the most recent year
of data) as it was in 2000.

In a separate post, Mankiw also challenges Krugman’s sentence about "a persistent myth, perpetuated by eonomists who should know better…that rising inequality…is mainly a matter of a rising gap between those with a lof of education and those without". While Krugman claims that the big story is the growth of income at the very top of the scale, Mankiw reasserts the role of a more broadly based change:

My
understanding is that there is a widespread consensus that the returns
to education have risen substantially over the past few decades. But
the education wage premium is not the whole story, as wage inequality
within education categories has also increased substantially.

…part
of the increase in inequality is measurement error, and part of the
increase is attributable to the fact that the labor force is older and
more educated–characteristics that are associated with higher residual
variance.

Brad DeLong takes up the thread, weighing in on Krugman’s side:

The big rise in inequality in the U.S. since 1980 has been
overwhelmingly concentrated among the top 1% of income earners: their
share has risen from 8% in 1980 to 16% in 2004. By contrast, the share
of the next 4% of income earners has only risen from 13% to 15%, and
the share of the next 5% of income earners has stuck at 12%. The top 1%
have gone from 8 to 16 times average income, the next 4% have gone from
3.2 to 3.7 times average income, and the next 5% have been stuck at 3
times average income.

It’s hard to attribute this pattern to a rise in the premium salary
earned by the well-educated by virtue of the skills their formal
education taught them.

But Greg Mankiw is not convinced:

I would guess that the top 1 percent of income earners (those earning
more than $276,945) are disproportionately very well educated–doctors,
lawyers, MBAs, etc. So the rise in the income of the top 1 percent
could well represent in large part a higher education premium.

What
might well be true is that the returns to education have become
increasingly non-linear: The most educated are now getting a bigger
return from a marginal year of education than those with moderate
amounts of education. In other words, two years getting an MBA from
Harvard Business School may increase a person’s income more in
percentage terms than does two years getting an Associate Degree from
Mass Bay Community College. My understanding from my labor economist
friends is that some evidence favors this hypothesis of increasing
nonlinearity.

And Mark Thoma adds his two cents:

We can debate what has happened the last few years and whether this year or
that year had special circumstances such as the problems Brad notes with using
2000 as a base year. But in doing so, we shouldn’t lose sight of the overall
upward trend in inequality.

Top Decile Income Share

Top 0.01% Income Share

Average Real Income of bottom 99% and top 1%

The little dip at the end is what the fuss is all about. But even if Greg’s claim holds up to the types of qualifications Brad talks about, and there are good reasons to worry about using 2000 as a base year, the upward trend in income inequality since the 1970s is undeniable. And in any case, as the last graph shows, real income for the bottom 99% of the distribution has been flat since the early 1970s despite large gains in productivity.

Meanwhile, in keeping with Thoma’s theme of focusing on the bigger picture, Brad Delong reminds us that

Real wages for low-paid workers aren’t rising at all. It’s not the
well-paid benefit "most." It’s that only the well-paid are, as a group,
benefitting at all.