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Friday, May 22, 2015

Friday Water Cooler

Global Debt Has Reached $200 trillion, or 286% of Global GDP (mckinsey.com), most of it government debt, much of it Chinese. Full report (PDF, 3Mb) here.


What's behind Saudi Arabia's new muscularity (csmonitor.com). The Kingdom's new leadership is hawkish and burning through money like crazy.

Iran now faces a water crisis (al-monitor.com). In addition to the Saudis buying nukes from Pakistan.

And yes, the Israeli defense minister really did threaten to nuke Iran (mondoweiss.net).

LA’s New Minimum Wage Isn’t Worth Anywhere Close To $15 (fivethirtyeight.com).

Five problems with self-driving cars (livescience.com). The issue with software freezing has to do with non-deterministic garbage collection, which unpredictably "stops the world" at odd times.

Google has now closed off distribution of Chrome extensions via any venue other than the Chrome Web Store, because malware (zdnet.com).

Floating capitalism zones: a no-go, says Thiel.
Peter Thiel is backing away from plans to build floating tech zones in international waters (wired.com) because, basically, state and local government subsidies and tax breaks are still so lucrative on shore. And also, an offshore campus would cost $50 billion.

The country's richest Congressman, with a net worth of nearly $500 million, says America’s poor are actually doing very well (thinkprogress.com). Except, the U.S. ranks 30th in life expectancy, 27th in "freedom over life choices," and is on a par with Pakistan for upward mobility, so maybe Mr. Issa needs to do a little more homework before saying America's poor are "the envy of the world"?

Why Are Interest Rates So Low? (libertystreeteconomics.newyorkfed.org). Wonkish piece, the thrust of which is that Fed policy is not actually all that accommodative, given prevailing ultra-low "natural" rates.

The corruption of happiness (opendemocracy.net). Superb essay. "Anger and injustice need hearing, not treating."

Why birds don't crash (news.harvard.edu).

Join us every Friday for non-mainstream news of the weird and wonkish.

 ☙ ❧

Have you checked out my free book Mental Health Myths Debunked? Tons of info, tons of live links, lots of straight talk about depression, meds, therapy, psychiatry, mental health trends, statistics, and more. And you know me, I call bullshit on bogus ideas (then give URLs to the actual data). The idea that antidepressants take weeks to do anything? Myth. Most people benefit from antidepressants? Myth. Antidepressants separate from placebo in clinical trials? Largely myth. (Half the trials show separation. Half don't.) Electroshock therapy is safe and effective? Bigtime myth. ECT is dangerous and consent forms lie. But don't take my word for it: Read the science for yourself. It's all laid out (with references) in the book. Download ePub or PDF now at NoiseTrade. Tell a friend.

☙ ❧ 
 
Have you added your name to our mailing list?

Also please visit HackYourDepression.com when you have a chance, and share that link with someone you know who might be suffering from anxiety or depression.  

Thursday, May 21, 2015

Half of All Jobs May Go Away Soon

Lately I've been reading Thomas Piketty's magnificent bestseller, Capital in the Twenty-First Century, which  is an essential work for understanding income and wealth inequality, patterns of wealth creation, the relationship of economic growth to capital growth, etc. It's clear, well written, suitably empirical, easy for the non-specialist to understand, and generally agenda-free. I have mostly (overwhelmingly, in fact) good things to say about it. But I do have a carp or two.

One minor carp I have is that Piketty consistently and repeatedly assumes and states (without providing evidence) that increases in human life expectancy stem from advances in medical science. The reality is far more nuanced. I think many scientists would, if pressed, readily admit that the advent of indoor plumbing and hot running water probably made a bigger contribution to human life expectancy than all vaccines ever invented. Certainly it's not hard to show that most vaccines came along well after the diseases in question were under control (see graphs below and more here). The idea that medical science is responsible for most of the increase in human life expectancy of the past 200 years is frankly little more than a self-serving narrative invented by the medical industry. Piketty buys into it uncritically.


A more significant shortcoming of Piketty is that he has so little to say about the transformative nature of technology in economic history. Here, I would expect Piketty to know his stuff. But he mostly sidesteps technology, leaving it the unmentioned elephant T. rex in the room.

Does anyone really doubt that technology, not politics, was what transformed Western economies in the nineteenth century (the Industrial Revolution)? Does anyone doubt that the invention of fire, the wheel, agriculture, ocean-faring ships with a magnetic compass, etc., were utterly transformative for ancient cultures, making the idea of an economy (thus an economist) possible in the first place?

Does anyone doubt that the invention of the microprocessor (followed a few years later by the worldwide networking of computers) was an epochal event? Surely all the people who are spending time and resources on bringing about an Internet of Things (or Internet of Everything; a $19 trillion global opportunity, according to Cisco) realize how transformative microprocessors will be seen, in future history books, to have been?

The impact of the transformation has yet to be fully felt. If we're to believe the widely cited study by Oxford University's Carl Benedikt Frey and Michael A. Osborne (2013), half of all jobs could go away soon, due to technology. Said Frey and Osborne:
According to our estimate, 47 percent of total US employment is in the high risk category, meaning that associated occupations are potentially automatable over some unspecified number of years, perhaps a decade or two. It shall be noted that the probability axis can be seen as a rough timeline, where high probability occupations are likely to be substituted by computer capital relatively soon. Over the next decades, the extent of computerisation will be determined by the pace at which the above described engineering bottlenecks to automation can be overcome. Seen from this perspective, our findings could be interpreted as two waves of computerisation, separated by a “technological plateau”. In the first wave, we find that most workers in transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations, are likely to be substituted by computer capital. As computerised cars are already being developed and the declining cost of sensors makes augmenting vehicles with advanced sensors increasingly cost-effective, the automation of transportation and logistics occupations is in line with the technological developments documented in the literature. Furthermore, algorithms for big data are already rapidly entering domains reliant upon storing or accessing information, making it equally intuitive that office and administrative support occupations will be subject to computerisation. The computerisation of production occupations simply suggests a continuation of a trend that has been observed over the past decades, with industrial robots taking on the routine tasks of most operatives in manufacturing. As industrial robots are becoming more advanced, with enhanced senses and dexterity, they will be able to perform a wider scope of non-routine manual tasks. From a technological capabilities point of view, the vast remainder of employment in production occupations is thus likely to diminish over the next decades.
Twenty years is an extremely short time period in which to sustain such a transformation. Common sense says there won't be time to come up with replacement jobs (by magic) for that many people. The usual Polyanna/triumphalism comeback that "new jobs will open up" rings hollow in the face of this kind of epic disruption.

Ford Model T workers weren't skilled artisans. De-skilling
was an important consequence of the Industrial Revolution.
Frey and Osborne correctly note that one of the main consequences of the introduction of technology duing the original Industrial Revolution was the de-skilling of jobs: Manufacturing operations that previously required highly skilled artisans were reduced to menial assembly-line work. The refactoring of labor that will take place in the next phase of the Technological Revolution will result in wholesale job loss, not merely de-skilling. But we do also see a new round of de-skilling happening now, as "good jobs" get replaced by crapified low-tech work. According to a recent news story,
Mid-wage and high-wage jobs accounted for 79% of jobs lost during the recession [but] as of August 2012, they represented only 42% of those created during the recovery. The gap was filled by low-wage jobs: only 21% of jobs lost during the recession were those making less than $13.83 an hour, but they make up the majority of new jobs created during the recovery.
Piketty makes no reference to any of this, which is surprising, since it's the story of the century and his book has "Twenty-First Century" in the title.

Maybe Piketty knows something we don't? If so, I wish he'd tell us about it.

☙ ❧

Tired of lies and half-truths about mental illness? Arm yourself with some facts. Check out my free book Mental Health Myths Debunked. Tons of info, tons of live links, lots of straight talk about depression, suicide, meds, therapy, psychiatry, mental health trends, statistics, and more. And you know me, I call bullshit on bogus ideas (then give URLs to the actual data, so you can weigh the evidence for yourself). The idea that antidepressants take weeks to do anything? Myth. Most people benefit from antidepressants? Myth. Antidepressants separate from placebo in clinical trials? Largely myth. (Half the trials show separation. Half don't.) Electroshock therapy is safe and effective? Bigtime myth. ECT is dangerous and consent forms are based on obsolete data. But don't take my word for it: Read the science for yourself. It's all laid out (with references) in the book. Download ePub or PDF now at NoiseTrade. Tell a friend.


☙ ❧ 
 
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Also please visit HackYourDepression.com when you have a chance, and share that link with someone you know who might be suffering from anxiety or depression.




Wednesday, May 20, 2015

Living in the Twitter End Times

Are we living in the Twitter end times?

I don't mean to imply that Twitter will cease to exist any time soon. It may well hobble on, broken and vanquished, like Yahoo or AOL, forever; and like AOL, it may well find a loving foster home (or caregiver organization that can suck the lifeblood out of its marrow before kicking it into the ditch, as the case may be).

What I mean to imply by "end times" is that Twitter has long since peaked in popularity and is now clearly on a difficult path, a trajectory of travail. Dick Costolo has had almost two years (since the IPO) to turn Twitter, the public corporation, into a money-making business. That effort has failed. The company continues to burn through $50 million a month (in net losses) while struggling to keep its user numbers above 300 million. Meanwhile, over a billion people have tried Twitter, and most of them have moved on.

Ben Thompson gives a good summary of Twitter's problems in his blog post of 29 April 2015. He points out:
Twitter’s MAU [monthly active user] numbers are not necessarily what they seem, particularly from an advertising perspective. The company disclosed last year that 14% of its MAUs never visit Twitter’s website or apps; rather, these users have connected 3rd-party applications and websites that don’t display Twitter ads; for example, you can log into Twitter from Instagram in order to post a link to a photo. Moreover, that number doubled over the previous year, a stark contrast to Facebook’s 5% figure. Worse, a sizable portion of those users may be lapsed completely; according to Twitter approximately 8.5% of MAUs are due to applications that automatically ping Twitter without any user involvement.
One example of such an application was iOS 7 Safari: in Twitter’s 2014 4Q results the company blamed its slowing user growth numbers on iOS 8, which ended Safari’s practice of pinging Twitter for its Shared Links whether or not the logged-in user ever read that section. The proper interpretation, though, was not that Twitter’s user growth numbers were accidentally and temporarily slowed, but rather that the company had been over-counting MAUs for at least a year. Add in the fact that, according to Twitter, up to 5% of MAUs are likely spam accounts, and it’s fair to wonder just how many people are actually being served ads from Twitter’s advertisers.
The real numbers are probably far worse than Ben Thompson is saying. The idea that only 5% of users are fakes, bots, or scammers is ludicrous; it's far more likely to be north of 10%. As I reported last month, 24% of CEO Dick Costolo's own Twitter followers are abandoned accounts, bots, fakes, or otherwise defective.

Also, there's the problem of duplicate accounts. Many of Twitter's most active users (including advertisers, of course; for example, Google) have multiple accounts. One spammer recently created over 700,000 individual accounts.

Twitter CEO Dick Costolo looked haggard as he tried to
explain the data leak that allowed last quarter's results
to leak to the outside world prematurely, on 28 April.
And then there's the bot problem. People buy and sell bot-created "Twitter users" by the thousands now.

And then there's the "adult content" problem. If you're an advertiser, you probably don't want your Promoted tweet to land next to a spread-eagle shemale selfie, or other explicit material.

The problems go on and on, but the main problem is: advertising on Twitter doesn't seem to be making financial sense for a lot of advertisers. This is a hard issue to dodge, because with modern analytics, it's possible for an advertiser to calculate and track, to the penny, what a customer acquisition costs. Because of the Google-inspired auction system used by Twitter, a single click on a link or Order button can cost an advertiser as much as $20. Or maybe it's "only" $2. But the point is, either way, that cost gets tracked, and ROI gets calculated, and at the end of the day there's absolutely no uncertainty around the question of whether a given Twitter ad campaign was successful or not.

If you read Ben Thompson's analysis (scroll down to his "Worrying Signs From Advertisers"), it doesn't sound like advertisers are seeing proper ROI.

And then there's TWTR, the stock.

Ryan Terpstra, founder of Selerity
Twitter's quarterly results famously leaked to the outside world shortly before the close of trading on April 28 (results were broadcast via the Twitter account of data-mining company Selerity), sending the stock down almost 20%. The stock had been trading at $51 before the leak. It was at $37 three days later and still hasn't recovered. Around $8 billion of market cap vanished. What was a $32 billion (market cap) company is now a $24 billion company.

For Twitter stock to come back, the company (barring a sudden merger, massive layoffs, or change of management) would have to do two things. At the next earnings announcement, the company would have to show evidence of a turn toward profitability; and it would have to show evidence of a pickup in user numbers. A failure on either one of those items will result in the stock going down. (A profit alone won't save the stock. A growing user base speaks to future earnings prospects. That's what Wall St. cares about; that's how the stock is valued.)

I expect to see two things happen, in the coming weeks.

First, more ads in more timelines. Costolo and his CFO, Anthony Noto (who has taken over Marketing), are probably going "off the rate card" right now with big advertisers, cutting special deals right and left. They know they have to bring more money to the bottom line. That's a no-brainer.

The second thing I expect to see is some kind of purge of the user base (maybe beginning with the much-anticipated porn purge) to remove bots, fakes, inactives, and undesirables. This will stir up a lot of dust and allow Costolo to do a reset on user numbers. "Sure our numbers are down this quarter!" he'll be able to boast. "Of course they are. We purged the list!" It will be impossible to know, meanwhile, what the true dropoff in users was, for the quarter. Attention will focus on earnings-per-share. Or so Costolo will be hoping.

I don't think these things will be enough. I've talked to operators of several mid-size Twitter accounts (50K followers) and they agree with me that engagement numbers seem to be going soft. One of them said: "Six months ago, I had 36,000 followers and could count on 3,000 impressions per tweet. Now I have over 40,000 followers and I'm lucky if a tweet gets past 2,400 impressions." Another person asked me if I thought Twitter was throttling traffic, the way Facebook now does. ("I doubt it," I said.)

Those of us who've been with Twitter a long time (since 2009, for me) know that Twitter is its own peculiar beast; it shouldn't be compared to Facebook or other social sites. And that's true, but it's also true that in any product space, there's rarely room for more than two players at the very top (Coke and Pepsi, for example), and if it comes down to Facebook being Coke, the only Pepsi that makes sense is LinkedIn, which (unlike Twitter) is all-business, with great demographics and a great story for advertisers. If advertisers decide to write only two checks a month in the social space, one will be to Facebook. The other won't be to Twitter. And to that extent, we may be living in the Twitter end times.

 ☙ ❧

Have you checked out my free book Mental Health Myths Debunked? Tons of info, tons of live links, lots of straight talk about depression, meds, therapy, psychiatry, mental health trends, statistics, and more. And you know me, I call bullshit on bogus ideas (then give URLs to the actual data). The idea that antidepressants take weeks to do anything? Myth. Most people benefit from antidepressants? Myth. Antidepressants separate from placebo in clinical trials? Largely myth. (Half the trials show separation. Half don't.) Electroshock therapy is safe and effective? Bigtime myth. ECT is dangerous and consent forms lie. But don't take my word for it: Read the science for yourself. It's all laid out (with references) in the book. Download ePub or PDF now at NoiseTrade. Tell a friend.

☙ ❧ 
 
Have you added your name to our mailing list?

Also please visit HackYourDepression.com when you have a chance, and share that link with someone you know who might be suffering from anxiety or depression.  





Monday, May 18, 2015

Height, Income, and Inequality

Can something as simple as height explain women's lower earning power?

It's funny how, in the space of 20 years or so, "height research" has gone from an oddball, poorly respected area of research to a fully legitimate, active branch of the larger field of anthropometry. People who work in this area study things like how population height varies over time, how body height varies with respect to things like income or mortality, etc. Some pretty interesting facts have come to light.

For example, there is absolutely no doubt any more that height predicts your lifetime earning potential. Dozens of studies (and meta-analyses: studies of studies) show that tall people earn more, your height at age 16 predicts future earnings, every extra inch of height means $789/yr more salary (U.S.), 90% of CEOs are above-average height, etc., and also the income of a nation predicts the height of its people:

Log income per capita versus median body height – Baten & Blum (2012).

It's also well established that Europeans are now taller than Americans, and that (in fact) Americans not only stopped growing taller 30 years ago, they've actually been shrinking, and U.S. women are shrinking faster than men.

European men have been getting taller, but American men have been shrinking since 1978.

The median Dutch woman of today is taller than the median Dutch man of 100 years ago. But the median U.S. woman is only a couple millimeters taller today than the U.S. woman of 100 years ago; women in the U.S. have come full circle.

Note: A quick back-of-the-envelope calculation shows that about 39% of the gender pay differential in the U.S. can be explained by height alone. Women in the U.S. are now about 5 inches shorter than men. The "height advantage" in pay is $789 per year per inch. That's almost $4000 less, per year, for women. The median per capita income difference between U.S. men and women is about $10K per year. QED.

A huge amount of research has been done correlating height with income (I won't repeat it here) and lately it's become fashionable to do all kinds of research on income inequality (I'm reading Piketty's Capital now; an essential book for understanding inequality), so I naturally assumed that someone, by now, has surely looked at height versus income inequality. But surprisingly, I could find nothing in the recent literature.

However, I did stumble onto a fantastic bit of citizen science on this subject. A blogger at bbninja.com has obtained height data for about 60 countries, and income inequality data for those same countries, and plotted the data. The graph for men looks like this:

Male height (y-axis) versus Gini coefficient (x-axis) for various countries. A high Gini value means high income inequality.

What we see is just what I would have predicted, which is that there is a definite inverse correlation (R=0.415) between body height and income inequality. Wherever income inequality is greater, men tend to be shorter. (The graph for females is virtually identical.) This is somewhat counterintuitive inasmuch as high-Gini countries tend, also, to be rich countries. We know that rich countries have taller people. But that only makes the above graph more believable, in my opinion. Inequality is not simply a proxy for income.

The correlation is not super-strong, because so many factors go into determining how tall you become. We wouldn't expect Gini coefficient to explain very much of a person's height, and indeed it doesn't (the R-squared value above means it explains, at most, about 17% of height differences). Still, it's a superb result and deserves to be published (or made into a dissertation).

Some enterprising grad student should seize on these results and pursue the matter further, perhaps (for example) determining, numerically, the degree to which income inequality (or other factors) account for the height difference between men and women. It's likely to be a small degree, obviously, because we "know" the gender height differential is biological. But do we know that? No specific biochemical or molecular-genetic mechanism has ever been offered for the height difference between males and females. We know of one gene on the X chromosome that (when overexpressed, in females) accounts for 1% of the height difference between the sexes, in humans. Aside from that, it's not known how women end up shorter (since they have essentially the same genes as men, differing only in having two copies of the X chromosome). Tip: It's not a simple matter of hormones. Women actually make several times more pituitary growth hormone than men.

So if you're a grad student in biology, please work on explaining in detailed molecular terms how women end up shorter (this is still very much an open question); and if you're a grad student in sociology, please work on explaining the degree to which sociological factors (access to health care, access to nutrition, access to wealth, exposure to poverty, etc.) make women end up shorter.

Let me know when you're done, so I can blog the results here.

 ☙ ❧

Tired of lies and half-truths about mental illness? Arm yourself with some facts. Check out my free book Mental Health Myths Debunked. Tons of info, tons of live links, lots of straight talk about depression, suicide, meds, therapy, psychiatry, mental health trends, statistics, and more. And you know me, I call bullshit on bogus ideas (then give URLs to the actual data, so you can weigh the evidence for yourself). The idea that antidepressants take weeks to do anything? Myth. Most people benefit from antidepressants? Myth. Antidepressants separate from placebo in clinical trials? Largely myth. (Half the trials show separation. Half don't.) Electroshock therapy is safe and effective? Bigtime myth. ECT is dangerous and consent forms are based on obsolete data. But don't take my word for it: Read the science for yourself. It's all laid out (with references) in the book. Download ePub or PDF now at NoiseTrade. Tell a friend.

☙ ❧ 
 
I want to thank the following great folks who retweeted me yesterday on Twitter. My advice? Follow these guys. They retweet!





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Also please visit HackYourDepression.com when you have a chance, and share that link with someone you know who might be suffering from anxiety or depression.