Month: August 2018

Even the FDA Thinks California’s Cancer Warnings on Coffee Are Unnecessary

|||Dave Bredeson/Dreamstime.comThe U.S. Food and Drug Administration (FDA) is coming out against a California ruling that requires coffee sellers to place cancer warnings on their products.

California’s Proposition 65 requires businesses to display explicit warnings if cancer-causing agents are present in their products. Acrylamide, which is a byproduct of roasting coffee beans, is on the list of Proposition 65 carcinogens. Research found that lab rats were at a greater risk of developing cancer after consuming the chemical in high doses. But a human would need to consume 35,000 cups of coffee each day to face the same risk. A Los Angeles County Superior Court judge nevertheless ruled in March that coffee shops, including major chains such as Starbucks, would need to display the warning.

The FDA released a statement on Wednesday decrying the ruling. “Although acrylamide at high doses has been linked to cancer in animals, and coffee contains acrylamide, current science indicates that consuming coffee poses no significant risk of cancer,” the statement says. The FDA has put its support behind an appeal of the decision.

California’s Office of Environmental Health Hazard Assessment made a similar call earlier in the month, saying “exposures to Proposition 65 listed chemicals in coffee that are produced as part of and inherent in the processes of roasting coffee beans and brewing coffee pose no significant risk of cancer.” That conclusion jibes with the findings of the American Institute for Cancer Research, which in February said “no links have been established between acrylamide in food and cancer risk for humans as research is inconclusive.” It added that the topic of possible cancer-causing agents in coffee “is a well-studied one.”

from Hit & Run https://ift.tt/2N0wZow
via IFTTT

Rosenberg: This Bull Market Is Many Things, But “Unloved” Is Not One Of Them

Authored by David Rosenberg via Financial Post,

In the AAII survey of retail investors, only 29 per cent are bearish — 36 per cent are bullish and the remaining 35 per cent are neutral. Where’s the hate?

Maybe it’s apropos that just as investors celebrate the longest bull market on record (actually debatable since this is a spurious and subjective definition of 3,354 calendar days without a 20 per cent correction), we had the party interrupted by the latest drama unfolding at the White House. Though as Wall Street legend Bob Farrell always said, it is the market that makes the news, the news does not make the market.

A guest on CNBC on Wednesday morning said this is an “unloved market” when discussing equities, and I hear that refrain often. So it’s funny then, that as I opened up my morning papers, I saw this on B1 of the USA Today — Bull Market Soon to be Longest, Has Room to Run with the subheading “Despite Numerous Scares, No Sign of Bears.” So tell me, how exactly is this an “unloved market” if there is “no sign of bears”? The USA Today article actually cites a Gallup poll showing that 45 per cent of households have sat out this bull market, which means the majority did participate — yet this is somehow labelled a stock market that is “unloved.” Never mind that equity exposure today on U.S. personal balance sheets has only been exceeded once before and that was in the late-1990s tech craze. I just don’t get it. But if you’re still long U.S. equities, please have a different reason than this drivel about this being a hated and under-owned asset class.

Let’s now assess the market as the bulls celebrate the alleged longest bull market on record. Breadth is a really big issue. On Tuesday, we saw four Dow components account for all of the 63 point gain in the blue-chip composite. And this followed, as we highlighted, five companies being responsible for more than 100 per cent of Monday’s 89 point advance. For the year as a whole, four flashy companies – Amazon, Netflix, Microsoft and Apple – have accounted for 40 per cent of the overall 7 per cent increase in the S&P 500.

As per Bob Farrell’s Rule #7: “Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names.”

Here are the facts.

This is a very narrow move to the highs. Only 2 of the 11 S&P 500 sectors are at new highs! At the prior January high, 8 of the 11 sectors were at new highs. What does that tell you? It means a much lower level of participation and this is what happens at a double top historically. Back on Jan. 26, the share of stocks hitting a new 52-week high that very same day was 25 per cent. On Tuesday, as we hit that intra-day peak that could not hold in the end, the share of stocks achieving that pinnacle of also testing a 52-week high was down to 8.5 per cent. Back on Jan. 26, the share of stocks down 10 per cent or more from their individual 52-week highs was 22 per cent; Tuesday, at that failed test of the highs, we saw 43 per cent of the market still off 10 per cent from their 52-week peaks. Another sign of poorer participation, at those Jan. 26 highs, 83 per cent of the S&P 500 was trading above the 200-day moving average, and on Tuesday that number was below 68 per cent.

History may end up proving that just as investors celebrated the longest bull market ever, defined as the length of time without a 20 per cent drawdown, the very same day we saw a classic double-top that defined the end of the bull market. How ironic if this proves to be the case. But the second failed attempt on weaker internals, as we saw on Tuesday, is highly reminiscent of the topping process we saw in 1990 (June 4 peak followed by a failed retest on July 16), 2000 (the March 24 peak followed by the ensuing failed attempt on Sept. 1), and 2007 (July 19 followed by Oct. 9). Additionally, volumes Tuesday were more than 10 per cent lower than the last time we hit the peak in late January — a sign that institutional investors are just a tad more wide-eyed than the typical pundit being interviewed on bubblevision. Even when it comes to technicals, ignore history at your peril.

I should also add that the U.S. joined India and Norway as the only countries achieving “record” status when it comes to stock market prices (though time will tell if what we saw Tuesday was just another failed test). Keep in mind that, when it comes to the entire world, 28 per cent of the companies that make up the global index are still in an official bear market (as in, down 20 per cent or more from their highs). Yet another sign of a lack of broad participation — not everyone received an invitation to this party.

Now, as for this widely used assertion that this is the “most hated” bull market ever, let’s just look at the facts. Unlike opinions, they can’t simply be made up out of thin air:

1. The household asset share that is in the equity market, at over 32 per cent, has already taken out the 29 per cent bubble peak in 2007, and has only been exceeded once before and that was in the dotcom mania of the late 1990s. Only 3 per cent of the time in the past six decades has the equity exposure been this high.

2. The liquid asset ratio for U.S. equity portfolio managers is all the way down to historic lows of 2.7 per cent. They certainly aren’t bearish.

3. Net inflows to equity funds at the peak of the last two bull markets were $1.6 trillion, and it is true that net inflows this time since the cycle began have totalled $250 billion. Maybe this is what the so-called pundits are talking about. But then they fail to take into account all the ETF activity, which has totalled $2.4 trillion in the past nine years-plus. This then brings the cumulative participation by the retail investing public to a record $2.7 trillion. How can anyone forget ETFs??

4. Market Vane bullish sentiment is 61 per cent, and this is a ‘hated market rally’? You can’t be serious. In the AAII survey of retail investors, only 29 per cent are bearish — 36 per cent are bullish and the remaining 35 per cent are neutral. Where’s the hate?

5. In the just-released University of Michigan index, the mean expected probability of higher stock prices a year out came to 63 per cent. Only 3 per cent of the time in the past have households felt this good about the equity market outlook. No hate; love only.

6. If there is a hate on, it is on the bond market, where speculators have never before strapped on such a one-sided negative bet on prices. And in the August consumer sentiment survey published by the University of Michigan, 75 per cent said they are bearish on rates while a mere 4 per cent said they were bullish.

7. Gallup just did a poll of households and found that 55 per cent of them are participating in the stock market. So a slight majority certainly do not have anything close to a “hate” on for this rally.

via RSS https://ift.tt/2N0tyy8 Tyler Durden

Betsy DeVos’ Critics Botch Basic Facts About New Title IX Rules

DeVosNews leaked Wednesday that the Education Department plans to bring campus sexual misconduct policies in line with basic principles of fairness and due process, and many progressive feminists are fuming.

But these criticisms of Education Secretary Betsy DeVos are hard to take seriously, since so many of them contain very basic errors about the administration’s revised guidance relating to Title IX, the federal statute that mandates sex and gender equality in education.

As reported earlier by The New York Times, and confirmed independently by Reason, the Education Department plans to abandon several controversial Obama-era policies that deprived accused students of the ability to meaningfully defend themselves in sexual misconduct disputes. DeVos would no longer force colleges to adjudicate all accusations of which they become aware, permit more flexibility, mandate cross-examination during hearings, and adopt a definition of sexual harassment in line with Supreme Court precedent.

The new guidance is still in draft mode, and will have to undergo a period of public notice and comment before it takes effect. If adopted, the proposals “will go a long way towards restoring meaningful due process protections to the campus justice system, to the ultimate benefit of students—both accuser and accused,” according to the Foundation for Individual Rights in Education’s Robert Shibley.

The Mary Sue‘s Chelsea Steiner disagrees:

DeVos’s proposed plan involves a new Supreme Court definition of sexual misconduct, which the Obama administration defined as “unwelcome conduct of a sexual nature,” as well as “unwelcome sexual advances, requests for sexual favors, and other verbal, nonverbal, or physical conduct of a sexual nature.” DeVos’s proposal defines sexual harassment as “unwelcome conduct on the basis of sex that is so severe, pervasive and objectively offensive that it denies a person access to the school’s education program or activity.” So don’t worry, students; unless a lecherous professor is literally blocking the door of his classroom with his boner, you’ve got nothing to complain about.

Of course, conduct that falls well short of what Steiner describes above could still violate Title IX under DeVos’s new rules. The previous definition, however—”unwelcome conduct of a sexual nature”—was simply too broad, and imperiled speech that is obviously protected under the First Amendment, like giving a wrong answer on a quiz, or making a joke, or using a gendered salutation.

Yahoo‘s Elise Sole claims that the new rules force schools to adopt a higher burden of proof than “more likely than not,” which was the Obama-era standard. But schools will actually be able to choose between the preponderance-of-the-evidence standard and the clear-and-convincing standard, an Education Department official with knowledge of the proposal told me.

DeVos is restoring a measure of flexibility to aspects of the process that could benefit from diversity of approaches. One of those approaches is informal mediation, something Sole implies—and Steiner explicitly asserts—is bad. “The Obama administration strongly discouraged private mediation and personal questioning, calling it ‘traumatic or intimidating, thereby possibly escalating or perpetuating a hostile environment,'” wrote Steiner.

But if all parties to a dispute—the accuser, the accused, and school officials—would rather handle the matter internally and find a mutually-agreed-upon solution that side-steps an adversarial adjudication process, what’s so wrong with that? Schools shouldn’t be forbidden from exploring restorative justice options in cases where the relevant students or professors would prefer to do so.

The Cut‘s Lisa Ryan complains that “schools will also only be responsible for investigating alleged misconduct that has been reported to have taken place on their campuses or in their programs—and not incidents that occurred off-campus (such as the case of former Stanford student Brock Turner, who was convicted of raping a woman off-campus).” But the outcome of the Turner case—jail time for a guilty perpetrator—demonstrates precisely why it’s generally better to leave serious accusations of sexual assault to the plain-old criminal justice system. In any case, universities will still be responsible for adjudicating sexual misconduct at official university events.

This is an important step in the right direction, because Title IX has occasionally been used to bring sexual misconduct charges against students who were involved in disputes that really didn’t concern the school at all, like this University of Southern California case involving a male student found responsible for violating Title IX because he didn’t intervene when another male—a non-student—slapped a girl’s butt.

These and other critics of the new rules seem upset that campuses will no longer be required to initiate Title IX proceedings unless a complaint is filed. But I’ve seen too many examples of universities initiating Title IX investigations even when the purported victim of sexual misconduct had not complained and was on perfectly good terms with the alleged accuser to think this is anything other than common sense.

And then there’s Jess Davidson, executive director of End Rape on Campus, who told the Today Show‘s Kate Snow that the new rules “will absolutely prevent survivors from coming forward.” Of course, nothing in the proposed rules prevents alleged victims from coming forward. The guidance would simply obligates colleges to make resources available to the accused so that they can defend themselves in accordance with principles of basic fairness.

None of this is to suggest that the new policies are perfect. I have some questions about how cross-examination, an important component of the revisions, will work in practice. But the idea that a person accused of sexual misconduct deserves some opportunity to scrutinize his accuser’s claims, or at the very least compel an administrator to do so, shouldn’t be seen as wildly controversial.

If universities are going to be in the business of policing sexual assault—and there’s still good reason to ask whether they should be, regardless of whether the Education Department levels the playing field—then they have to follow a process that works for the accusers and the accused. Believe the victims may be a fine answer to the cultural problems highlighted by the #MeToo movement, but it’s not a standard of justice.

from Hit & Run https://ift.tt/2C29Q0r
via IFTTT

Trump Threatens To Pull Out Of WTO, Praises Powell, Says Sessions Safe For Now

During a wide-ranging interview with Bloomberg in The Oval Office, President Trump covered everything from AG Jeff Sessions’ job stability to tax cuts for investors and his view on The Fed.

Via Bloomberg,

President Donald Trump said he doesn’t regret appointing Jerome Powell as Federal Reserve chairman, even after criticizing interest rate increases by the central bank.

“I put a man in there who I like and respect,” Trump said Thursday in an interview with Bloomberg News in the Oval Office.

Trump also says the Fed should help him in his trade disputes with China, the EU and other nations, asserting that other central banks are assisting their countries.

“We are not being accommodated,” he said Thursday. “I don’t like that.”

“That being said,” he continued, “I’m not sure the currency should be controlled by a politician.”

No indeed Mr. President (ask Mugabe and Maduro how that worked out).

President Trump also added that he would pull out of the World Trade Organization if it doesn’t treat the U.S. better, continuing his criticism of a cornerstone of the international trading system.

“If they don’t shape up, I would withdraw from the WTO,” Trump said Thursday in an interview with Bloomberg News at the White House.

A U.S. withdrawal from the WTO would severely undermine the post-World War II multilateral trading system that the U.S. helped build. Trump said last month that the U.S. is at a big disadvantage from being treated “very badly” by the WTO for many years and that the Geneva-based body needs to “change their ways.” U.S. Trade Representative Robert Lighthizer has said allowing China into the WTO in 2001 was a mistake.

Perhaps most notably, however, President Trump said he’s considering indexing capital gains to inflation, a change that would amount to a tax cut for investors.

“I’m thinking about it,” Trump said Thursday in an Oval Office interview with Bloomberg News.

The change would slash tax bills for investors when selling assets they have capital gains on — such as stock or real estate — by adjusting the original purchase price for inflation. The change has been a longtime goal of Trump’s top economic adviser, Larry Kudlow, who says the policy would spur job creation and economic growth because people wouldn’t be taxed on phantom income.

And finally, President Trump said Attorney General Jeff Sessions’s job is safe at least until the midterm elections in November.

“I just would love to have him do a great job,” Trump said Thursday in an Oval Office interview with Bloomberg News.

Asked if he’d keep Sessions beyond November, he declined to comment.

via RSS https://ift.tt/2PU3ROv Tyler Durden

Colorado’s Redistricting Reforms Exclude Third Parties

Voters in Colorado will have an opportunity in November to give themselves a greater say in the state’s redistricting process. But two ballot initiatives that would create “independent commissions” to redraw legislative districts seem deliberately crafted to exclude Coloradans who are members of third parties.

Amendments Y and Z will ask voters if they want to create 12-member commissions for the purpose of redrawing congressional and state legislative districts, respectively, after the next national census. Redistricting in Colorado is currently handled by the state legislature. If voters approve the creation of those redistricting commissions, half of the members would be selected by a panel of state Supreme Court justices, and half would be selected by the majority and minority leaders of the state legislature. Under the ballot initiatives, the commissions would each include four registered Republicans, four registered Democrats, and four people who “will not be affiliated with any political party.”

The one-third/one-third/one-third split is meant to prevent either major party from hijacking the process, as has happened with similar, supposedly apolitical redistricting commissions elsewhere. But the initiatives effectively ban registered members of the Libertarian Party, Green Party, or other third parties from participating in the commissions.

The propositions are “leaving out those who have different ideas of what government of the people should look like,” says Michael Stapleton, legislative director for the Libertarian Party of Colorado. “While they may include ‘unaffiliated’ voters, they are leaving out a good portion of those who don’t want to have to choose between the Republican and Democratic [parties].”

The redistricting proposal sailed though both chambers of the state legislature with bipartisan support. Fair Maps Colorado, the nonpartisan organization that has pushed for the reforms, says independent commissions will produce districts that are fairer and more competitive. The group’s website notes that Colorado has more unaffiliated voters than either Republicans or Democrats.

Neither of Colorado’s two major parties has taken an official stance on the ballot initiatives yet, but it seems they are already trying to tilt the new commissions in their favor. An earlier version of Amendments Y and Z would have allowed members of third parties to serve on the commissions.

“What is clear is that the duopoly parties will employ any electoral device possible to win, short of genuine outreach to their bases and bringing legislative relief for Colorado’s economic woes that impact working families,” says Andrea Mérida, co-chair of the Green Party of Colorado. Mérida says Amendments Y and Z “represent a desperate attempt for the status quo for relevance in Colorado’s political landscape.” Stapleton calls the initiatives “just another example of the exclusionary tactics demonstrated by the Republicans and Democrats.”

The amendments “were crafted to release the stranglehold that the politicians and the two major parties had on the process,” says Curtis Hubbard, a spokesman for Fair Maps Colorado. Hubbard says third-party voters, who account for about 2 percent of the state’s population, will benefit from the increased transparency offered by the new process, which “includes numerous opportunities for public comment, review and engagement.”

Fights over redistricting are often portrayed as purely partisan affairs in which Republicans try to screw over Democrats, or vice versa. But redistricting is also about protecting incumbents of both parties.

Third-party voters are used to seeing electoral and political systems stacked against them. Just this week, New Mexico announced that it will implement party-line voting options for the 2018 elections—a change that seems suspiciously timed to coincide with a viable third-party challenge from Libertarian Gary Johnson, who is polling ahead of the Republican candidate in this year’s U.S. Senate race.

Involving the public in the redistricting process is a good way to increase transparency and accountability—and a good way for pols to avoid the criticism that they are choosing their voters, instead of the other way around. But in some cases, redistricting commissions have drawn maps that favor incumbents to roughly the same degree as maps produced by state lawmakers. A 2017 paper from researchers at UCLA found that state legislatures’ maps turned out to be safer for incumbents than 77 percent of a set of possible alternatives created by computer simulations. Maps produced by independent commissions were only marginally less favorable for incumbent lawmakers.

A statistical analysis of congressional district maps produced by Azavea, a geospacial mapping firm in Philadelphia, found that independent redistricting commissions do a better job at crafting geographically compact districts, which can be measured by a variety of metrics.

Colorado’s redistricting commission proposal is likely to be a modest step toward reforming how legislative districts are drawn. It is one of several states with such proposals headed for the ballot this year. But excluding third-party voters from serving on the commissions is a troubling sign for a proposal that is supposed to make redistricting more inclusive.

from Hit & Run https://ift.tt/2C1QsAL
via IFTTT

CBOE Close To Launching Ethereum Futures: Report

First came bitcoin futures. Now it’s ethereum’s turn.

Cboe Global Markets, the exchange behind the first market for bitcoin futures, has telling market makers it is close to rolling out futures for ether, the second-largest cryptocurrency by market capitalization, and may launch the product by the end of 2018, Business Insider reports citing people familiar with the situation.

Despite expectations that bitcoin futures, which were launched last December, would propel the cryptocurrency even higher, trading in bitcoin future markets, which are hosted by the Cboe and CME in the US, has been relatively muted since their launch in December and, more ominously, marked the peak of the cryptocurrency which has seen a dramatic collapse ever since.

Nonetheless, the launch of ether futures would “mark a significant step in ether’s maturation as it could open the door to wider trading in the crypto and possibly an ETF.”

Cboe will be basing its futures on Gemini’s underlying market, people familiar with the situation said. Cboe also based its bitcoin futures on the New York-based crypto exchange run by the Winklevoss twins. The futures and options exchange is waiting on the Commodities Futures Trading Commission to get comfortable with the product before its official launch, a person with knowledge of the matter said.

Despite ether getting special treatment by the SEC, which said in June that the agency didn’t view the trading of ether as violating securities law which could bode well for Cboe, the price of the cryptocurrency has plunged this year, and was trading at $276 most recently, an 80% drop from its all time highs.

The Cboe had previously hinted that the ether future may be coming, most notably in December 2017, when its president Chris Concannon said that a family of cryptocurrency products, including futures for ether and bitcoin cash, could come to fruition as the market continues to mature.

“We started down this road in the form of an ETF,” he said. “A healthy market is a healthy underlying market, derivatives markets, and an ETF. That will take time.”

Meanwhile, rival CME Group’s CEO Terry Duffy has said ether futures won’t go live on his venue any time soon. “I will take a wait and see approach with Bitcoin for now,” Duffy told Bloomberg in July.

Judging by recent collapse in ethereum, bulls will be happy with any news, even if ultimately the availability of futures provides institutions an easy way to short the second biggest cryptocurrency, pushing it even lower.

The market reaction to the report has so far been favorable, but a far cry from the furious buying observed last year on similar news.

 

via RSS https://ift.tt/2LIYXAB Tyler Durden

Stocks Stall On Trump Tariff Turmoil, Emerging Market Massacre

Seemed appropriate as the liquidity linkages all start to drag each other down…

China stocks have almost erased The National Team’s work from Monday…

 

After overnight weakness, US Stocks drifted higher as always to start the day, then faded around the time Warren Buffett was interviewed on CNBC (offering little to stoke the bull’s argument), then rebounded after Europe closed, then tumbled on China tariffs headlines (which were 100% known to everyone already)…

 

VIX and stocks have notably decoupled…

 

S&P Industrials took the brunt of the tariff headlines…

 

But do not fear ‘Murica – Amazon surpassed $2000…

“not a bubble”

 

 

While the China Tariff headlines prompted selling in stocks, there was blood on the streets all day in Emerging Markets…

Offshore Yuan tanked after Tariff headlines…

 

The Indian Rupee crashed to a new record low…

 

The Brazilian Real was battered non-stop until BCB intervened for the first time in over 3 months…

 

The Turkish Lira tanked as the central bank deputy governor quit…

 

But the Argentine Peso was the day’s biggest loser – crashing 10% at the close (though notably worse intraday), crossing 41/USD at its worst…

The South African Rand and Mexican and Chilean Peso also plummeted on the day.

The Argentine Peso is now the worst-performer YTD – down over 50% against the Dollar…

 

Cryptocurrencies also took a hit with only Litecoin and Bitcoin holding the week’s gains…

 

Treasury yields dropped 2-3bps on the day…

 

With 30Y back at 3.00%…

 

And the decoupling between stocks and bonds in the last two weeks has been ridiculous…

 

In commodities, crude continued its rise, everything else not so much…

 

Copper was utterly chaotic today…

 

Gold was also clubbed around the open…but futures held above $1200…

 

Finally, just a little note of interest, US economic data has been more disappointing than Emerging Markets recently relative to expectations…

 

via RSS https://ift.tt/2wuy3HF Tyler Durden

California Liberals Boycott In-N-Out After Burger Chain Donates To Republican Party

California liberals have flipped their patties over a government filing showing that fast food chain In-N-Out Burger donated $25,000 to the California Republican Party. 

Journalist Gabe Schneider tweeted that the burger chain had added “a new item to their secret menu,” referring to their “secret” off-menu items. 

After that, California Democratic Party chairman Eric Bauman called for a boycott. Apparently anyone with divergent opinions should be financially punished.

The burger chain’s late CEO, Rich Snyder, was an evangelical Christian and heavy supporter of GOP candidates. His daughter and current President, Lynsi Snyder, is also devout according to Fortune. 

Like cult chain Chick-fil-A, In-N-Out doesn’t make its founders’ Christian values a secret, per se. Customers just might be so focused on their Animal Style burgers that they don’t notice the references to Bible quotes printed on the wrappers. –Fortune

That said, In-N-Out Burger also donated $80,000 over the last two years to Californians for Jobs and a Strong Economy – a liberal Political Action Committee which supports business-friendly Democratic candidates. 

Founded in 1948, In-N-Out is known for excellent food, employee benefits, and of course their secret menu. Employees start around $13 an hour (vs. the current California minimum wage of $11 an hour), while managers make as much as $160,000 per year, no college degree required. 

To put this into perspective, tech workers in Silicon Valley earn on average $114,654 for the year, according to a survey from hiring platform Dice. –Business Insider

The burger chain also offers a 401(k) plan, paid vacation, and dental and vision for both part and full-time employees. Because of this, In-N-Out earned Glassdoor’s #4 rank for best places to work in 2018. 

Maybe not so much now that hoards of leftists have been encouraged to boycott the chain. 

via RSS https://ift.tt/2wveDCq Tyler Durden

Why Is Productivity Dead In The Water?

Authored by Charles Hugh Smith via OfTwoMinds blog,

The only possible output of this system is extortion as a way of life.

As the accompanying chart shows, productivity in the U.S. has been declining since the early 2000s. This trend mystifies economists, as the tremendous investments in software, robotics, networks and mobile computing would be expected to boost productivity, as these tools enable every individual who knows how to use them to produce more value.

One theory holds that the workforce has not yet learned how to use these tools, an idea that arose in the 1980s to explain the decline in productivity even as personal computers, desktop publishing, etc. entered the mainstream.

A related explanation holds that institutions and corporations are not deploying the new technologies very effectively for a variety of reasons: the cost of integrating legacy systems, insufficient training of their workforce, and hasty, ill-planned investments in mobile platforms that don’t actually yield higher productivity.

Productivity matters because producing more value with every unit of energy, every tool and every hour of labor is the foundation of higher wages, profits, taxes and general prosperity.

I have four theories about the secular decline in productivity, and all are difficult to model and back up with data, as they are inherently ambiguous and hard to quantify.

1. Mobile telephony and social media distract workers so significantly and ubiquitously that the work being produced has declined per worker/per hour of paid labor.

2. Public and private institutions have become grossly inefficient and ineffective, soaking up any gains in productivity via their wasteful processes and institutionalized incompetence.

3. Our institutions have substituted signaling and compliance for productivity.

4. The financial elites at the top of our neofeudal economy have optimized protecting their skims and scams above all else; their focus is rigging the system in their favor and so productivity is of no concern to them.

Other commentators have noted the drain on productivity as workers constantly check their mobile phones and social media accounts–up to 400 times a day is average for many people.

“Addicted” is a loaded word, so let’s simply note the enormous “able-to-focus-without-interruptions” gap between those who only answer phone calls and limit social media to a few minutes per day in the evening during off-work time, and those who are distracted hundreds of times throughout the day.

Some tasks can be interrupted without much loss of productivity, but most knowledge-worker type tasks are decimated by this sort of constant distraction–even though the distracted worker will naturally claim that their productivity is unharmed.

The list of public institutions that now demand absurd wait times for minimal or even defective service keeps growing. The California Dept. of Motor Vehicles (DMV) now soaks up to eight hours of waiting to complete mundane tasks. Employees have been caught napping for hours, and customers waiting for service note the lines finally start moving in the last half-hour of the day when the employees are motivated to process the people in line so they can go home.

The other public-sector systems are equally Kafkaesque; building permits that once took hours to process now take months, and so on. In the private sector, it’s becoming increasingly difficult to fix problems created by the corporations themselves: multiple phone calls, long wait times, etc.

The core dynamic is that public institutions and corporate cartels lack any mechanisms to enforce transparency and accountability; there is no competitive pressure on the DMV or courts, and essentially zero competitive pressure on monopolies such as Facebook and Google and cartels such as the big healthcare insurers.

The only possible output of this system is extortion as a way of life: we make you wait, we make you pay more for a poor quality service, we make you comply with useless regulations, we make you use buggy, bloated software, and so on.

Quasi-monopolies like Microsoft and Apple force tens of millions of users to re-learn new versions of software, detracting from productivity rather than enhancing it, despite their claims. Other types of planned obsolescence are equally destructive.

With no mechanisms in place to enforce accountability and efficiency, there is no accountability or efficiency. And so these monopolies and cartels can be as wasteful, inefficient and unaccountable as they want.

Compliance is a productivity killer. Doctors and nurses no longer have enough time to serve patients because compliance now soaks up so much of their time.

Signaling, like compliance, is a productivity killer. The entire trillion-dollar system of higher education doesn’t measure or reward learning or the acquisition of knowledge; the diploma / credential signals that the student dutifully navigated the bureaucracy and thus is signaling their readiness to be a corporate/government drone in another bureaucracy. That they learned next to nothing is of no concern to the system. (If learning was the goal, we’d accredit the student, not the institution.)

If we look at the economy as a whole, we find it is dominated by monopolies and cartels, public and private. No wonder overall productivity is declining: there are no feedback loops or mechanisms to enforce transparency, accountability or pressures to improve efficiency and productivity gains on these neofeudal, extortionist structures.

*  *  *

Back to School Book Sale: 57% off the Kindle edition and 25% off the print edition of The Nearly Free University and the Emerging Economy ($2.99 Kindle, $15 print).

My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

via RSS https://ift.tt/2N4GXVP Tyler Durden

Orrin Hatch Wants the FTC to Investigate Google

Sen. Orrin Hatch said today he wants the Federal Trade Commission (FTC) to investigate possible antitrust violations by Google. In a letter addressed to FTC Commissioner Joseph Simons, the Utah Republican, who is retiring at the end of the year, expresses “concern” regarding “Google’s search and digital advertising practices.”

Hatch cites a 60 Minutes report from May highlighting Google’s promotion of its own services in search results. He also says he is worried by allegations that Android, which is owned by Google, collects Gmail users’ data and provides “third-party app developers access to the actual content of emails.”

The FTC has previously investigated Google on multiple occasions. In 2010, the commission looked into whether Google’s acquisition of the mobile advertising network company AdMob would hurt competition. The FTC ended up closing that investigation after concluding that Apple was “poised to become a strong competitor in the mobile advertising market.”

According to Hatch, “that belief never became a reality.” Instead, his letter says, “Google’s position throughout the ad market…has become more dominant.” In addition to dominating the ad market, Hatch claims, Google “accumulates data at essentially every step.”

In January 2013, the FTC closed another investigation into Google, focusing on how it promotes its own services, rather than third-party information, in search results. The FTC said Google’s practices improved its users’ experiences. “Any negative impact on actual or perceived competitors was incidental to that purpose,” the commision said.

As Hatch notes, however, Google promised in December 2012 that “it would take certain actions for five years to address” concerns related to its search result practices. Since 2013, Hatch says, Google has instead changed its search page in a way that’s “harmed consumers.” He also notes that the search engine market has changed a lot in recent years, particularly as more people use their phones to surf the web. “In light of all of these changes,” he writes, “I respectfully request that the FTC consider the competitive effects of Google’s conduct in search and digital advertising.”

Hatch’s letter comes as Google has caught the ire of President Donald Trump, who on Tuesday accused the company of doctoring its search results so people see only negative news about him. Trump called it a “very serious situation” that “will be addressed,” although it’s not clear how. When asked about possible regulation of Google’s search results, Trump’s top economic adviser, Larry Kudlow, responded, “We’re taking a look at it.”

from Hit & Run https://ift.tt/2wt7cMd
via IFTTT