Saturday, December 31, 2011

Then and now - are we better off because of innovation?

In our household each person has gravitated to certain chores.  One of mine is making the coffee in the morning.  I'm usually the first one up, so it's natural that way. I'm also responsible for buying the coffee beans.  We're Peetniks, two pounds of French Roast every other week.  I used to buy the beans at Espresso Royale, but a few years ago I thought that started to taste not as good as it used to, so I explored alternatives.  Way back when, while I was still single and living in a condo in town, I had a Toshiba coffee maker with a timer. You put in the water and the beans the night before.  At the preset time the thing would grind the beans.  You could wake up to freshly brewed coffee, a bachelors delight. Some friends of mine who went to college at Berkeley were fans of Peets back then.  They'd order a lot of coffee and I'd sometimes get my beans through them.  I remember those beans as extremely oily.  That coffee maker broke down after not too long.  I think the grinder got over worked with the Peets beans.

At that time I thought plain French Roast was a bit metallic in taste so I bought both French Roast and Mocha Java beans  (from the Art Mart or the Walnut Street Tea Company) and mixed the two.  That was before pre-bagged coffee.  The stores had a large plastic bin of each coffee variety and would make a bag for you then and there on the spot.  The result was more pleasing.  When I originally subscribed directly to Peets, I ordered that same mix.  But it seemed to me the Mocha Java was just as oily as the French Roast, so I tried a pot with just French Roast beans and enjoyed that a lot.  We've stuck with the French Roast ever since, getting other coffee beans only when we run short because of hosting guests or over a long weekend where we might make a second pot in the late morning.

When I was growing up I didn't drink coffee at all.  My parents did, however.  They bought coffee in a can, pre-ground.  Remember the coffee commercials from back then?  Savarin featured El Exiente.  Yuban's tag line was - have a cup of Yuban for dessert.  Chock full o'Nuts was the heavenly coffee.  My parents mainly had Maxwell House, where their jingle emulated the sound of coffee being made.   This was in a percolator.  We didn't know about drip brewing coffee back then.  If somebody would have mentioned a glass carafe, that would have conjured up an image of a container for inexpensive wine.  For coffee, the percolator was it.  But it was a messy process and almost surely burnt the coffee. In cleaning up the kitchen, getting rid of the coffee grinds was the least pleasant activity.

My parents put milk in their coffee (or cream when that was available).  It cut the taste and made the coffee more palatable.  When I started to drink coffee, I did likewise. Nowadays though, I drink it black.  I want the coffee to taste (and smell) great by itself.  I don't want dairy products to adulterate the taste.  With freshly brewed Peets, I get just what I want.

I started to think of other examples in a similar vein, of how things have changed in ordinary consumption experiences since I was growing up, where then it was just something part of the landscape and now it is a more intensive experience.   One of those is cooking outside.  We had a built in outside fireplace in the southwest corner of the backyard when I was a kid.  We'd have wood fires in it.  Unlike how it is now, where we get a rick of wood delivered in the fall for our inside fireplace, at my parent's house we simply gathered fallen branches and twigs to use outside.  And the fireplace was for cooking, not for decoration.  We'd have a cookout on a Saturday afternoon when it wasn't too cold outside.  My dad would do the cooking, putting hamburgers and hotdogs into a hand grill, and potatoes directly into the fire.  There was no aluminum foil.   Since the fire would flame up now and then, some hotdogs might get burnt.  The potatoes definitely did.  That added to the charm. 

Contrast this to now, where we have a Weber with a gas starter for the coals and a built in thermometer to see how hot it is under the lid and we cook by a timer, turning the food over by the clock.  The procedure is much more controlled, the flavor more uniformly guaranteed, and we grill now mostly for dinner, doing that many evenings each week in the summer, with a much greater variety of foods cooked this way.  I especially like bell peppers and asparagus cooked on the grill.

Still another example is taking public transportation.  I worked one summer during college (and then the subsequent winter break) near the Battery and took a bus and then two different trains to get to work.  Really, it was the only way to get there.  When I was in grad school I lived about four miles from campus to get an affordable apartment.  I had a car so drove to school most of the time.  When the weather was real bad, however, I rode the 'L' from Howard to Dempster and walked the rest. The same was true when I first came down to Champaign.  I lived in an apartment complex that had outdoor parking only.  I had an old car, the same one from grad school, which we called the ruster-duster.  (It was a Plymouth Duster and the exterior was pretty rusted out.)  When it got too cold, it wouldn't start.  So I took the bus into school.  When I moved to the condo, it had an indoor and heated garage, and by then I was driving a Honda Accord.  I never took the bus after that.

Standard neoclassical economics makes welfare comparisons across regimes by assuming preferences are invariant and then compares the available consumption choices.  On this basis, we're better off now.  One needs to be a little careful making this judgment, because one should account for wealth accumulation in the calculation.  My parents, one an immigrant, the other the child of an immigrant and coming of age during The Great Depression, were prodigious savers.  Without a doubt my wife and I are much more willing to spend on ourselves than my parents did and hence our saving rate is lower.  Nevertheless, we have a comfortable amount of savings.  So, I believe, the neoclassical economics conclusion still holds.

Yet I want to challenge that result, because it doesn't feel right, the economics logic notwithstanding.  I will do so by taking to task the assumption on invariant preferences.  Through habituation and also by subtle social pressures, consumption impacts preference.  And since preference also clearly impacts consumption there is the possibility of a loop in causality.  The cycle can be virtuous, or it can be neutral, or it can be vicious. If we are not better off then the reason, presumably, would be because of some vicious cycle.

Focusing on information and communications technology as the innovation and the social adaptations to those, there's been a bit of a cottage industry in identifying the vicious cycles.  Perhaps the most well known of these is the Nicholas Carr piece, Is Google Making Us Stupid?  More recently is this Timothy Egan essay about the socializing of the mundane details of our lives, Please Stop Sharing. And here is a piece I read just yesterday, The Joy of Quiet, which argues that we should carve out certain times for ourselves, the weekends perhaps, where we should return to a Thoreau-like existence to escape the vicious cycle from being always connected by technology.

In my examples, however, I deliberately avoided considering information technology, because I wanted to point out that the possibility for vicious cycles is much larger and also that the pernicious consequences may be of multiple sorts. So on the one hand there is a tendency toward fetishism or addiction, which seems fairly obvious.  Less obvious, however, is that the more of these sort of behaviors we have, the less resilient we are when the environment doesn't provide the exact fix we're looking for.   One reason I'm not a good traveler is that the coffee in the hotel room doesn't quite do it for me, but I need a cup or two before my shower. Even at the start of the day, I'm a little off kilter.  If you asked my contemporaries whether we are more or less resilient than our parents (this would be an interesting thing to survey on and I'm not aware of anyone having done this particular inquiry) I'd hazard a guess that most would say their parents were more resilient.  In that sense we're a bit spoiled.  We've had too many opportunities. attained too easily.

Then, on the other hand, there is a tendency for our choices to move from democratic to cliquish or even elitist, especially if the latter comes with trying the new.  Taking the bus is democratic.  It is a shared experience by all the riders.   Driving to work, in contrast, one doesn't have to deal with the riffraff, one gets to listen to one's preferred sounds.

Innovation can afford a choice to accept the shared experience or stray away from it.  One of my unanswered questions of childhood is why my parents chose to stay in our house in Bayside instead of move to the suburbs on Long Island.  We had a corner house.  The neighbors who lived diagonally across the street from us did move, to Manhasset, a ritzier neighborhood and a larger house.  They clearly treated the Bayside place as a starter house.  Since the father was a young doctor when they first moved there, it makes sense that as he climbed his career ladder they'd find a different place.  I think a few of my classmates in Junior High had their families move, either for that reason or because they no longer wanted the kids to attend NYC schools.  But my parents didn't make a like choice.  Having managed my mom's finances since my father died, it's less obvious to me that we didn't move because we couldn't afford it, though I really have no idea of what real estate prices were like in the late 1960s - early 1970s, during the time period I'm thinking of, nor do I have any sense of of what their financial portfolio was like then.  Maybe we couldn't have afforded it then.  But maybe it was more that my parents thought of themselves as middle class, not rich or even upper middle class, so they were more comfortable living in a middle class neighborhood, irrespective of how large their savings were at the time. 

I've written a fair amount about the ethical failings of those in the mortgage loan business, making those subprime loans with teaser interest rates at the start but that would balloon upwards thereafter.  But I've not written nearly as much about the people who got those mortgages and purchased the homes that should have been unaffordable to them.  Have such people always existed, but never had opportunities like that before that could give expression in this manner?  Or have we innovated our way into this ludicrousness, too much Lake Wobegon thinking the cause, coupled with a keeping up with the Joneses mentality? 

Based more on feelings rather than on reasoning it through, I believe we live more comfortably than my parents did then, but that they were better off because they had a decent existence and their future and the future of their family was more secure.  In considering the security of existence for my offspring, innovation seems more a wrecking ball than paving a pathway to a new land of plenty.

Now it's time to make the coffee.

Monday, December 26, 2011

The Clever Tippler

Myrna ___ (3 letters)
Nick and Nora's dog (4 letters)

It's now many years since I would do the crossword puzzle on a regular basis.  Yet I've still got recollections from when I did them.  One is about learning words that were puzzle regulars; they had no other use in the vocabulary, as far as I could tell.  Asta was one of those words.  I had never seen the movie starring William Powell and Myrna Loy nor had I read the novel by Dashiell Hammett.  But I did know Asta.  Some years later my wife and I watched one or two of The Thin Man movies on TV, though I don't recall which ones.  I remember it more for the gay repartee than for the story, a pleasing alternative to all those movies with big special effects that the kids seemed to like. This month Turner Classic Movies has been featuring William Powell and a few nights ago they aired all six of The Thin Man movies.  I recorded the first four, on the theory that eventually I would saturate watching those.  I've now watched two of the four and realize I made a mistake not recording the other two.

Robert Osborne's introductions to the films are very helpful.   The first film, The Thin Man, is from 1934.  Incidentally, the title does not refer to the William Powell character but rather to the first murder victim.   The film was intended as a minor work, something to show folks who went to the movies before the feature was shown.  But it was extremely popular in its own right and thereby became a franchise. As Nick and Nora Charles were members of the leisure class and the film debuted at the height of The Great Depression, one might reasonably ask what caused the film's great popularity.  Indeed, the question seems quite relevant today, as the super rich increasing appear as victimizers rather than heroes.  How did the super rich appear to the ordinary Joe during the Great Depression?

The story is first and foremost a whodunnit.  Nick Charles, a former gumshoe, has married Nora, a wealthy heiress.  So while Nick Charles is in a class with Sherlock Holmes, Hercule Poirot, then later Perry Mason and  after that Adrian Monk, destined to solve the mystery, there is the unique aspect in how his relationship to Nora interplays with the rest of the story.  According to Wikipedia Dashiell Hammett's fiction is hard boiled.  Certainly, one would have that impression from viewing The Maltese Falcon.  Yet Powell and Loy play Nick and Nora as light farce, with the occasional quip and more frequent childish facial expression.

When we first confront Powell on the screen he seems a bit tipsy, apparently slurring his words, drink in hand, it's not clear whether he can make out what's going on.  The drinking is a kind of virtuous vice, a fitting activity for one of his station.  His playful devotion to Nora more than makes up for it.  She is his equal in loyalty and disposition.

Nick seemingly knows everyone - the police and many former or current hoodlums.  Among that latter group, he has sent many of them or their friends or relatives up the river.  They don't begrudge Nick for this.  He was a professional doing his work.  He treated them squarely and they got what they deserved.  Nick will drink with anyone, including the hoodlums.  Nora, by association, will do likewise.   She is interested in all things Nick.  Since detective work was so much of his past, she is fascinated by that.  She seems oblivious to the potential danger.

At various times when there is real investigating to be done, he gives her the slip, whether for her own protection or because as an amateur she'll get in the way.  He then appears to be serious minded and all business, in search of essential clues.  Before that, when they are in a social setting, he seems first and foremost to be after a good time.  Yet he is able to take in evidence even then.  In order to make sense of what is really going on, he needs to know everyone's story.  A good chunk of that story he learns en passant while socializing.

The actual police seem if not entirely witless then nevertheless none to bright.  They welcome having Nick as a partner because he is much better than they are at deciphering what the clues actually mean. That intelligence earns Nick respect.  Further, he does not put on airs about the case when he has figure out an important point but says what he means.  Yet there is an easy grace about his demeanor. 

Robert Osborne says that Powell's style of acting went out at the beginning of the 1950s, to be replaced by the realism of Marlon Brando and James Dean.  Undoubtedly, he is correct in that assertion.  The time is ripe, however, for the Nick Charles approach to make a comeback, and not just in the movies.

Monday, December 19, 2011

Taxing Inequality

Of inequality laid bare,
Due to "Occupy" we're aware.

Conservatives don't seem to care.
The system works, they do declare.

The rest of us think it's unfair.
The job market needs big repair.

Our politics makes one despair.
The little guy's voice heard nowhere.

Sunday, December 18, 2011

Moms of Baby Boomers

The essay linked to below is moving and timely.  Like the author, my dad was born in 1913 and passed away quite a while ago.  My mom is still alive, at 91, a Holocaust survivor, a breast cancer survivor,  a tough old bird - as my wife once called her , a line used in this piece to describe a still alive mom of a baby boomer, a fitting classification.  The piece tells much of the story very well, so here I'll only write about the bits it didn't focus on. I base this not just on my own parents but on my wife's too.

When both parents were still alive, the rhythms of routine life became such that both father and mother were highly dependent on the other.  I don't mean this only or even primarily on an emotional level.  I mean this functionally, getting the necessary tasks of existence done - the shopping, the cooking, the balancing the checkbook, the driving to a social activity, having a coherent conversation, and so many other ordinary things.  Together the parents formed a whole.  After the dad passed away, lots of pieces were missing.  Of course there was a huge emotional void in the mom's life.  But there was also a need to fill in with the functions the dad used to provide.  Perhaps some moms who are spry enough can cope and reorient themselves to what comes next.  Neither of our moms could do that.

The other big deal is dementia, which is perhaps partly caused by these demands to cope when the capacity to do so is no longer there, though that's only a guess.  The piece talks about one of the benefits of this extension of life is that the adult children can become closer to their moms.  I can't recall whether that happened or not in the early years immediately following my father's passing.  But nothing like that happens now.  When I visit her, my mom doesn't know who I am or, at least, she can't say my name.  Once in a while I do put the back of my hand on her cheek and she smiles.  I hope this is communication of  a sort, but maybe she would smile just the same if a stranger did that.  I don't know.

My hope is that 35+ years from now when my children are in this situation, with respect to my wife (and maybe with respect to me), they will feel less empty about this than I feel now.  And by then maybe society as a whole will have a more sensible approach  on the financial piece of this.  Outliving your seemingly ample retirement savings is not a good thing.

Tuesday, December 13, 2011

Do we still need commercial publishers?

You have to love disruptive technology (and the humans who create disruption by exploiting the technology).  It really forces you to consider what things need to be maintained, the threat of the technology notwithstanding, and the reasons why that is necessary.  Others might not agree with those reasons, pointing out there may be different ways to achieve the same results.  Who knows how it will really play out?

In an Op-Ed in today's NY Times Richard Russo, an author, has an extended rag against, which is squeezing out independent booksellers, using nefarious business practices to hasten the process.  And with that Amazon is supposedly destroying a literary culture that accompanies the world of the independent bookseller.  Russo wants to hold onto this culture.  So he has cast Amazon as the villain.

I want to respond to that piece, both as occasional consumer of books and as an author of sort of economics content as well as an author wannabe of other content.

* * * * *

After my first year in grad school at Northwestern, I started to watch "serious" films on a somewhat regular basis.  Northwestern had a series in the Norris Center Union.  Facets Multimedia provided many excellent alternative films.  There were other outlets as well to indulge this interest once in a while (The Art Institute, The Biograph).  Given this interest, I became a regular reader of Dave Kehr's column in The Reader.  It seemed to me that my tastes in film were remarkably similar to his (and not that similar to Siskel and Ebert, plus I didn't get a TV till my third year in grad school).  Given that, I used Kehr's column to suggest what films I'd see. 

It is different for me with book reviews now, where I mainly read them as things unto themselves, make a little penetration into the subject matter and then move on, and I have less loyalty to any particular reviewer.  And even the reviewers I revere, I read for their writing of the review, not for their recommendation of the book.  My path into books is more eclectic.  For fiction it is sometimes the gift of a friend that determines it.  Likewise for non-fiction that might be work related, it is sometimes the recommendation of a colleague that triggers the reading.  Or, based on something I read previously, and then some serendipitous incident connecting that with a new work, I begin to read that. 

For me these pathways suffice.  I'm someone who likes to discover things by puttering with them on my own.  Even when we had an independent bookseller in Champaign, Pages for All Ages, a store I frequented with some regularity, I didn't use their expertise to identify titles I (or my children) might want to read.  I only asked for help to locate titles I already knew about in their store.

What about somebody else who would like more hand holding?  Do peer networks solve the problem?  I don't know, but just last week a friend from high school asked for book recommendations on her Facebook wall.  So it seems possible, though it could be simply the blind leading the blind, and therefore ultimately not satisfying.

The University Library here as an online chat function called, Ask A Librarian.  I believe that recent budget cuts have forced reduction in the staffing of this service, but it is still up and running.  The Champaign Public Library has a similar functionality.  In neither case do I believe there has been any analysis of whether the service is being run at the right scale.  For example, perhaps all the CIC member universities could offer a single pooled Ask A Librarian service.  Likewise, perhaps local public libraries from around the state could offered such a pooled service for their readers.  Maybe in this manner an effective service that matches the volume of use could be found.

There is a different matter apart from whether such services can be economical.  In the current conception, those who staff the services remain anonymous to the user and therefore the services are not customized to the user's tastes.  Each transaction is treated as novel, a thing unto itself.  There is no reliance on the history of previous such transactions, so no room for the Librarian to offer up recommendations in advance of the solicited request nor any way to tailor the responses to the particular user.  Russo envisions a bookseller who knows his customers.  This bookseller provides a Yente function between the customers and books yet unread by them.  Teachers, perhaps more than Librarians, might perform this Yente function for their students.  (As universities seek to find ways to be of more value to students and alumni perhaps this role will increase.)   Might there be somebody else to perform the Yente function for those who are no longer students nor alumni heavily tied to their Alma Mater?  If there is does the function need to be tied to selling books? 

Let me use those questions as a way to segue into this arena from the author perspective.  I have essentially two different sites for my economics content, even though they have much the same stuff.  One is The Economics Metaphor.  People find this site mainly by regular Google searches.  (For example, do a search on economics production table.)  The other is the ProfArvan channel in YouTube.  People find those videos (and links to related Excel files) mainly from within YouTube, either by referral or search.  I've gotten the occasional question from viewers there (invariably these are students currently taking microeconomics and not from me).  I've been pretty dutiful in responding.  So far I've not gotten multiple comments from the same person on different videos.  But that certainly seems possible.  The queries I do get refer to content I've created.  But it certainly seems possible that if my videos were reviews of other content that I could get queries of the sort meant for a Yente.

Can the author or the Yente make a living by direct marketing their work in this manner?    Note, I'm not asking if authors like Mr. Russo can make as much as they currently make from their book contracts.  I'm asking whether they can make enough to sustain themselves, and thus whether there is a viable model to do this without Amazon and without a commercial publisher as well.

There seem to me three potential models where this might be possible.
  1. Ad supported content.
  2. A "shareware" approach where users are asked for contributions, perhaps with some additional ways of limiting access to IP addresses after a certain number of page views. 
  3. A "serialization" of free content (certain chapters of the book) where the remaining content is sold in the traditional way. 
It also seems possible to mix and match these approaches.  The first two of these assume Web delivery of the content.  The third allows for the preferred format of the reader.  All three would seem to require some middle player between author and audience and thus a potential for the middle player to monopolize, in the manner that Russo takes Amazon to task.  But, for example, if Google is the provider of ads in alternative (1) and if book publishing in this way represents only a sliver of Google's market for ads in Web content more generally, then the fear of them specifically monopolizing book publishing is less.  In other words, this would be a kind of judo approach and thus might be comparatively immune from the monopolization issue.

I should mention a fourth possible model - which you might call the faculty model.  The content is given away for free, in toto.  The author is hired by an academic institution, as a writer in residence.  The writer earns a salary stream, but doesn't get royalties.  The author does other functions, like giving talks or teaching classes.  The author's reputation presumably is related to the volume of traffic that is generated, as well as by how the work is perceived by certain critical reviewers and Yentes.  I note that at places like Illinois the creation of those YouTube videos would not count as scholarly work for promotion and tenure or for salary review, at present.  So there needs to be some thought of whether it should so count. 

I do not bring up the fourth model to make the case that academia should go this route.  (Under the "textbook model" authors of textbooks don't get to count the work for P&T and salary review but do get the royalties from sales of the textbook.  Personally, I believe the academic institution should be flexible enough to reward this type of content creation, but I do recognize there are decades of tradition steeped in the textbook model to overcome in order to reach that outcome.)  Rather I do it because part of the contractual relationship between author and commercial publisher has to do with risk redistribution.  Typically, the publisher bears much if not all of the downside risk.  For doing this, the publisher receives the bulk of the upside risk.  It might seem that in a salary model the institution bears all the risk.  This is not quite right, however.   Faculty who are "hot" commodities can get hired away by other institutions, which puts pressure on the home institution to match the outside offer.  Either way, the faculty member who generates a strong reputation gets to share in the upside.  Those without tenure are all too well aware of the downside.  And even among the tenured faculty, salaries tend to vary directly with productivity.  This to say that the salary model conceivably offers an alternative approach to the traditional publishing model in the way it handles the risk shifting.  The salary model also *may* take money out of the equation for the author on a more consistent basis and thus allow the author to better focus on the creative aspects of the work.

Traditional publishing provides two other functions that I'm aware of that are not directly related to distribution.  The editing function is probably still indispensable, for any work that is apt to get a sufficiently high volume of readers.  If authors became employees, what would happen to editors?  I really don't know.  But I conjecture that function would be maintained in the way that scholarly journals and societies are currently maintained, with an emphasis on institutional membership.  In other words, the editors would be salaried employees, not of individual academic institutions but rather of consortia in which these institutions are members.

The other function is marketing.  The publishers promote their new releases in a variety of ways.  It seems to me that for established authors, much of this cost is pure dissipation.  The word can easily get around anyway.  This is an argument that if there is ever a move to these direct distribution forms of publishing, it should be the established authors who do it first.

Do up and coming authors need the commercial marketing to get over the hump?  Perhaps they do, but that doesn't mean the publishers will be able to identify an up and coming author.  Last year when I attended the Iowa Summer Writing Festival I had a lengthy but preliminary discussion about this with one of my teachers, Carol.  She said it was virtually impossible for somebody like me with no track record of a successful commercial work to get the attention of a real publisher.  I had to market myself first, in so doing prove some viability by demonstrating an audience, and only then might I get a publisher to take a look.  So there is definitely a chicken and egg problem here.  The publishers won't invest at all in the complete unknown.  That's like throwing money down a whole.  And if I'm right that they really don't need to invest in the very well known, that leaves only that gray area in the middle  - the somewhat known but still not a household name.  But there's likely not too much marketing going into that slice either, because the big bucks are in the very well known.  So do the big marketing there, though unnecessary because word of mouth via social networks are sufficient, as a way to justify getting a big cut of the revenues. 

* * * * *

The textbook market also has the peculiarity that while it is college students who purchase the textbooks, in the main they don't have a choice of which textbook to buy.  They are constrained by which textbook the instructor requires.  The choice left to the students is the outlet from which to buy the required book.  In contrast, students who do come to view my videos are treating then as ancillary content that is not tied to their textbook.  It's for this sort of content where direct marketing makes the most sense.  Further if there were revenues to be made by authors for such content, it would demonstrate a type of failure of textbooks or of the instructors that use them. Or it would show that some topics are just plain hard and implicitly students want more coverage of those particular topics.  (Supporting this view, my number one watched video is on Income and Substitution effects, a topic students traditionally find quite difficult.  In the top top 10 watched videos only the video on Isoquants has more than 50% of the views that the Income and Substitution Effects video has.)

So the demand for ancillary material is for very modular content.  Both iTunes and Amazon market modular content - if it's music.   Perhaps one or both of them will preempt the do-it-yourself market in other media.  Until then, however, maybe some do-it-yourself-ers will succeed at making some bucks off of their own created content, making enough to keep them at it for a while.  I'd like to see that happen.  It would make the entire process much more democratic.

Sunday, December 11, 2011

Would fans have been better off if they hadn't got rid of the Reserve Clause?

The immediate thought that triggered this post come from some of my Facebook friends, who are Cardinals fans.  They've been lamenting the Albert Pujols signing with the Angels.  Without explicitly saying it, they've spent much of their lifetimes being loyal to the team, so why doesn't a player like Pujols reciprocate?  By way of comparison, the Yankees resigned Derek Jeter and Mariano Rivera just a year ago.  Those two will retire in pinstripes, no doubt.  So I can empathize, though I view rooting for a National league team a kind of character flaw. 

Of course, one thing leads to another in our thinking.  Star professional athletes are in the top 0.1% in the income distribution.  I don't begrudge what these athletes make, at least not directly.  It's the indirect effects that makes me wonder.  One related thought is that free agency in the player market caused professional sports franchises to me aggressive about generating revenue, and part of that came through raising ticket prices.  When I was a grad student in the late 1970s and as a young faculty member in the early 1980s, I seem to recall that bleacher ticket prices at Wrigley Field were $3.00, sold on a first come first serve basis, and generally available for weekday games.  Take a look at what the pricing is like today.  (Click on the Bleacher Pricing tab.)  For General Admission tickets there is now priority seating.  The lowest priority seats are $17, slightly more, in my estimation, than the inflation adjusted price from 30 years ago.  The highest tier pricing is more than four times that. 

I really don't know whether at the ballpark revenues count for a significant chunk of team earnings or if it is TV commercials that do that. But I've got the feeling that pro sports ticket pricing created a kind of aura that has spilled over to the College game.  Check out Illini Men's Basketball pricing of tickets for single games.   Tomorrow night's game against Coppin State, which definitely will not sell out, has C level ticket prices at $22.  (C level is the basketball analog of the bleachers in baseball.)  For Big Ten games, that might very well sell out, the C level price is $40. 

Would ticket prices have been much more modest today had the reserve clause persisted?  The argument for is that without the pressure from paying for high profile free agents, teams wouldn't have squeezed the fans so much.  The argument against is that income inequality in the larger society and/or Baumol's Cost Disease, would have driven up the ticket prices anyway.  Look at the price of tickets for Broadway shows or for going to the symphony as away to see the argument against.  My guess is that both factors matter and the effects are about equal.

Then think of some of the madness in sports and ask whether getting rid of the reserve clause had any impact on these behaviors.  Would weight training have become as omnipresent?  Would performance enhancing drugs have so infiltrated the big times sports culture?  Today the Ryan Braun story is the lead article on the site.  Given all that has come before, one has to ask:  how can such behavior persist?  The answer, assuming rational economic actors, is that there is such a huge upside for the player if he doesn't get caught.  It's that upside which justifies taking the risk.  Would there be such an upside if we still had the Reserve Clause?

The syllogism is:  money is power;  power corrupts, so....  We are seeing some of this at root now with the absurd realignment of college sports conferences.  Would maintaining the Reserve Clause had weakened the force of this corruption by substantially lessening the money flow? 

At best one can only guess at an alternative history of sport.  So I intend this piece as enlightened speculation, nothing more.  It is an argument that fettered markets may very well be better than the alternative.  I wonder how many other fans would agree.

Friday, December 09, 2011

Blame it on Women's Lib

America spends more per child on schooling yet gets nowhere near the results of its main competitors.  One of the big reasons why is that in the U.S. teaching is a low status profession with comparatively low wages. 

I believe that my generation was the last to have gotten really excellent teachers on a consistent basis in primary and secondary education.  I went to P.S. 203, a new school at the time, starting in second grade.  I can't recall my second grade teacher (thought maybe it was Mrs. Jacobs).   From third to sixth grade my teachers were Mrs. Minsley, Miss Siepe, Mrs. Stone, and Mr. Sachar.  I recall in third grade Mrs. Minsley having to absorb additional students - our class swelled to something like 42.  While my memory (and student perspective) on this is failing me now, I believe the unusual step was taken to have those students who were skipping 3rd grade to be in that classroom for part of the year.  That year my mom (who is still alive) was recovering from breast cancer.  Somehow, that made me star in the class play as the Sheriff of Hokum County in Bandit Ben Rides Again.  Mrs. Minsley managed it all.  Mrs. Stone was a family friend.  I recall it strange when she and her husband came over to the house, being in her class.  At school she drilled us hard in the multiplication table.  I am grateful for that, even now, though I might not have been too happy about it at the time.  In case the point isn't obvious, most of the teachers were women.  It was unusual to have a male teacher in grade school.   Further, with the exception of Miss Siepe who got married sometime around then, most of them were very experienced.  Teaching was their profession, not just a stopover till they started a family. 

I haven't kept track of my contemporaries in any significant way, but I don't know anyone who became a teacher in grade school.  Several became college professors. So it's not teaching per se that was taboo.  Many of my contemporaries were encouraged to be either doctors or lawyers - enter a profession that offered a good and stable income. 

So people my age who went to public school have a form of cognitive dissonance.  Their education served them well, but they made careers for themselves elsewhere.  They can't understand.  If the system worked then, why doesn't it work now?  

When I taught an honors seminar in fall 2009 I had one student, male, who wanted to become a math teacher.  He grew up in Chicago, not the suburbs.  That was unusual in itself.  I think his dad was a policeman, but on that I'm not sure.  He was a very balanced kid, with high aspirations like the rest of them, but also quite easy going.   One or two other kids were thinking of teaching for a while a la Teach for America, but that was as a stopover, not a career.

If we are really to mend the system the way this article suggests, there are a lot of cultural changes that would need to take place.  I'm skeptical that we can do this.  But we should try.

Wednesday, December 07, 2011

Innovations and Snake Oil

The passing of Steve Jobs has occasioned a lot of reflection about innovation in America and around the globe, what it looks like when it works well, and those aspects of the environment that have made society fertile for such development.  To see where we are as part of an ongoing trajectory, it is useful to reconsider innovations from the past.

Getting on the bandwagon, I've got a bit of this in this PowerPoint Presentation uploaded to Google Docs.  (Either download the PowerPoint file at the link or go to the Actions menu at the bottom of the screen and create a copy.  Then go the View menu and click Show Speaker Notes.)  It starts on slide 15:  The Music Industry - A Selected History.  Actually, the title is something of a misomer, since the focus is not on the music itself but rather on how recorded audio content gets distributed and how people listen to that.  There is also the issue of how people become aware of new content to purchase. There was much technical innovation in the 50 years that the mini presentation covers (starting at the time of Elvis with record players and 45 rpm discs and ending with the iPod and the iTunes Music Store).  The upshot of the presentation is to show that what came next was dependent on many predecessors in conception as it improved on that legacy, enhancing the user experience, and with the iPod in particular, saving an industry that many thought was permanently disrupted.

One might hope that all sectors of the economy proceed over time in this manner, where successive innovation leads to triumph of one sort or another, even if there is disruption and substantial stress from time to time as social issues seem to swamp technical progress or entirely retard it, on the one hand, or when drastic innovation creates a new set of social issues, on the other.  The crises notwithstanding, we have faith that well thought through innovation will triumph.  For example, read Dr. Berwick's Pink Slip, a tribute about the recent head of the Centers for Medicare and Medicaid Services, a recess appointment by President Obama.  Berwick just stepped down because his 18 months were up.  He accomplished a lot in that short period, applying W. Edwards Deming techniques of continuous quality improvement and cost reduction to the delivery of health care.
Health insurers and hospitals, who had generally thought of Medicare as little more than a stodgy, bureaucratic insurer, began to see it in a different light as well, as Medicare staffers, trained as “improvement coaches,” began to share ideas and push for simple, sensible steps that would, for instance, keep people with chronic medical problems from having to be constantly readmitted to the hospital.
It makes you want to believe in the art of the possible. One wonders whether it is only a matter of the will to do so. 

And yet such belief may be our undoing.  Read this moving, full of disillusionment piece, Why School Choice Fails, written by someone from a majority-black community in Washington DC. The piece personalizes the arguments that Diane Ravitch made in The Death and Life of the Great American School System.  Then consider much of for-profit education.  It is growing rapidly, much of it online.  There appear to be the makings of a bubble.  Read this piece, Virtually Educated, about for-profit education in K12, or this longer piece on the same subject, How Online Learning Companies Bought America's Schools.  It has the feel of the subprime loan market of the early 2000s.  It seems to be a way to make a quick buck off of public funds.  Innovation here is used as a cover, while underfoot is the old shell game, peddling snake oil.

Capitalism seems capable of producing both.  There are examples of of successive innovation in a sector, seemingly as reliable as Moore's Law.  Yet there are other examples of markets that are apt to implode in the near future, as a result of all the chicanery that has occurred heretofore.  I would argue, however, that we're seeing a lot more of the snake oil selling than we used to.  Let's say for the moment that's true.  The question is why.  Is real innovation that much harder to achieve now?  Are opportunities to rip off other people increasingly present?  Have our social mores weakened? 

I am particularly interested in what seems all to common to me - selling snake oil to ourselves.  In this well worthwhile video (it is long, 90 minutes), Joe Nocera reports that he talks regularly with Jamie Dimon, Lloyd Blankfein, and other leaders of the major investment houses, and based on those conversations they are in complete denial about their culpability for the financial crisis.  Students who want good grades, irrespective of whether they've learned the subject matter, are eerily similar in their denial.  I too do something likewise - the diet will start tomorrow.

Was it always such or have things changed of late?  Perhaps we need to talk more about attempts at innovation that end up stuck in the mud, or about alpha tests that produce less than promising results.  You can't sell snake oil unless somebody else wants to buy it. 

Monday, December 05, 2011

After further review...

...the play on the field stands.

This is a sour grapes post about the Giants-Packers game.   It was entertaining and the outcome was in doubt till the end, so it was good viewing.  And this is the third week in a row where I got to watch the Giants on TV.   Before that I was complaining that they are never on in, here in the Midwest.  So I should count my lucky stars.   Of those games, this is the first one I watched in full, except for the first touchdown by the Giants.  Fox thought it necessary to show the end of the Denver game.  I suppose Tim Tebow is an interesting story line, but the schedule had the Giants game starting at 3:15.  They did show that first score on replay, somewhere during the first half.

After watching for a while, I had the feeling the refs were in the Packers pocket. It seemed as if all the calls went their way.  Tom Coughlin threw the flag twice.  Both times, the refs ruled the play stands.  Actually, on those I think Coughlin was wrong, but it set the tone for later.  It turns out that they review all scoring plays, without the coaches having to ask for that.  On one of the Packers' scores, the receiver juggled the ball the entire way through the endzone and then dropped it, without ever having possession.  That wasn't just my opinion.  The announcers said the same thing.  Then they went to commercial.  When they came back, they were saying the receiver had control of the ball for a moment with his left hand.  The play on the field stands.  But the receiver never had control.

The Giants pass rush was pretty effective.  They sacked Rodgers three times.  It really should have been four times.  The Giants got to Rodgers for a big loss on third down.  The Packers has something like 70% efficiency on third down, so this was a bid deal play.  But a penalty was called on the Giants - contact with the receiver beyond 5 yards of the scrimmage line.  This was an incredibly ticky-tack penalty, just a light bump, and entirely unrelated to the play.  The announcers noted that on the next play there was more contact, but nothing called.

The Packers are the better team.  They dropped several passes on perfectly thrown balls. That helped keep it close.  But you change the two plays I discussed and the Giants win this game.

The Giants play Dallas next week.  That game will probably determine which team makes the playoffs.  I wonder if they'll show it here.

Saturday, December 03, 2011

Observations on PowerPoint Compatible Online Presentation Software...

...and some work arounds.

I am teaching a new course this spring - the economics of organizations.  It is intended as an upper level undergraduate class.  In trying to think through what I'd do for the class and how to approach it pedagogically, I thought of the debrief I had with students at the conclusion of a behavioral economics class I taught last spring.  One comment that stuck with me, several students echoed the thought, was that they wanted me to lecture more.  In the second half of the course I had students do team presentations and that took a good chunk of time.  They wanted me to present instead.

There is a related idea that we didn't discuss in that debrief.  The issue is whether to attempt Socratic dialog with the students, with a lively audience it is a style I prefer, or if instead do straight presentation, with only a few minutes for questions at the end.  When I tried Socratic dialog in the behavioral class, I would get the following.  After I posed a question several students would raise their hand.  I'd call on one of those, then another, and another, etc.  Each student would venture their own opinion, but no student seemed to react to what other students had said previously.  The effect was not so much Socratic dialog as it was a type of on the spot polling. While once in a while I did want that, mostly I didn't.  Yet my instinct is to call on a student if their hand is raised.  But I really do want flow to the discussion and this practice wasn't promoting flow.  So this time around I'm considering straight presentation.  And if one does that, there has to be something on the screen to complement the talk, doesn't there?

I've not done a straight presentation like this for a while, and I got to thinking what I'd like to do.  It also occurred to me that last year I had a lot of churn in the class enrollment during the first two weeks of the semester.  It would be good for those who add the class in the second week to be able to catch by going through the presentation materials on their own.  So I finally settled on an approach that does PowerPoint slides in the spirit of the Lessig Method, and then uses the speaker notes part of the PowerPoint for longish text descriptions of what is going on.

In the slide area itself there would be a title - I think that is useful in navigation - but then mostly images.  Once in a while I'd write a sentence or two as summary of what was done on previous slides.  I'd take the images from the Internet and link back to the source.  This is a way to show attribution and also allows those who are curious to learn more about the particular subject with which the image is concerned. 

I wanted delivery for the face to face class session that I will lead as well as for asynchronous access by students, both those at the live session and those who missed it.  And then it occurred to me that perhaps this is not a bad way to have students make a presentation as an alternative to a term paper.  I still haven't decided whether I'll do that or not, but I do like the general idea that the instructor models for the students activities that the students ultimately perform.  So in considering tools that might be employed I opted for ones students would have ready access to as well, meaning they are freely available, other than PowerPoint itself.

Regarding logistics, I used to have a good feel for that and had ready answers for the time.  I no longer do.  But I do have the questions I believe should be addressed.  So I will list those below.
  • Does it matter if the presentation is only available for download?  Does online delivery of the document afford advantages in and of itself?
  • Do the students have PowerPoint or compatible software on their own computers?  
  • If students are taking notes on the presentation, do they care whether the notes are bundled with the presentation itself?  
  • Do the students use a Tablet as their primary mode of accessing this type of content?  
Depending upon how you answer these questions, there are either several solutions that work well or none whatsoever.   I should also note that I have an original iPad but I don't have Keynote on it.  I'm a cheapskate now so I probably won't get it.  But I'd like to know how it works as a possible solution.  Even if Tablet delivery is an issue now, we should be forward thinking about what will be possible in the near future.

With that I tried the following:
  1. SCRIBD,
  2. Converting the PowerPoint with speaker notes to Word (and then to PDF),
  3., and
  4. Google Presentation.  
I will try to briefly describe the experience with each, making judgments along the way based entirely on my goals with the presentation.  Where I'm negative, it is because my goals can't be met with the tool.  That doesn't mean the tool is not very functional in other respects.

SCRIBD - the slides come in fine and look good.  The speaker notes don't seem to come in at all or, at the least, I couldn't figure out how to do that.  It does allow download of the original PowerPoint file.  So this tool wasn't suitable for online viewing, but might be used as an archive of the file for download.

Converting PowerPoint with speaker notes to Word - The conversion makes the slide into an image, with text below the image.  The links that were in the slide are lost this way.  As a last resort a pdf version might be needed if students are to view on a Tablet, but otherwise this is not the way to go. - accepts both .ppt and .pptx formats for upload.  That's a plus.  It maintains links in images.  That's another plus.  And there is a tab for the speaker notes that are below the presentation.  That's also good.  There are ads.  That's a minus.  And though comments are allowed, those are meant for the entire presentation.  So they can't be used the way students would want, for note taking.   A peculiarity I experienced with slideshare is that while the presentation would work fine in Chrome, the navigation buttons were missing in Firefox.  A work around to this is to convert the presentation to slidecast, as is done for this presentation.  In a slidecast, an audio file is synced with the presentation.  This can be done with either voice or music files in mp3.  The former are accepted for upload into slideshare.  That latter must come from elsewhere on the Internet.  In this case I used a Chopin Mazurka in C# Minor available at  When in slidecast mode there is a play button for the entire presentation in the center and there are buttons for advancing the slide or going back.  Those buttons do show up in Firefox.  Alas, the speaker notes don't advance with the slides in slidecast mode.  The speaker notes do advance when using the slide advance button. is a flash based product.  It doesn't work on the iPad.

Google Presentation - Google didn't like the .pptx file I uploaded but it would take a .ppt version fine.  Here I'm speaking about converting the file to Google presentation.  One can upload any format and leave it that way without converting, using Google simply as an archive.  Google presentation doesn't allow links for images (why not?) so if you want those links you need to put a text box below the image and then link the text.  I found this mildly annoying but if you know you are going to use this it's not a terrible work around.   One feature of Google Docs that I really like is the ability to make the url available to all but otherwise not listed, so people won't stumble on it.  In this particular case the issue is making a Fair Use argument for utilizing the images that are in the presentation. The case is stronger if the presentation isn't generally available.   The presentation mode that users access is not good enough, in my view.  However, using the Actions menu at the bottom of the screen, users with a Google docs account of their own can create a copy of the presentation for themselves.  You can try that with this presentation. With a presentation of their own, users can access the speaker notes, via the View menu.  Speaker notes show up on the right, instead of below the presentation.  I prefer below, but what Google does is adequate, though the user cannot adjust the width of the notes window.  Users can also download the original .ppt file.  Google Presentation doesn't appear to have a comment function (though Documents and Spreadsheets do).  I don't understand this as regular PowerPoint has a comment function under the Review tab.  But students can take notes by marking up the slides themselves in the copy of the presentation, say by using a different font color.  They can also do this in the speaker notes area.

It is hard to tell the future trajectory of these products, but if I were guessing I'd expect to expire in a few years, the issue with the controls in Firefox an indicator that it is not keeping up with new versions of the browser.  I don't really understand whether Flash itself now has a limited lifetime but if so probably won't survive.  I would like to see competitors with Google, simply because I don't like the thought of being too dependent on any one company.  (This is quite distinct from the privacy concern that some have articulated about using Google products.)  So I'd like to see SCRIBD become more fully functional, closer in nature to the original PowerPoint itself.  And if there isn't the copyright concern, then I'd like to see us make content publicly available and discoverable.  The latter means search engines do need to find the content.  They clearly won't if the content is a file.  Web delivery is certainly a plus there.

Regarding this latter functionality, it would be nice if the tools gave each slide it's own url (anchor) built off the url for the entire presentation.   Then referrals could point to a particular slide.  That would be much more powerful.