Monthly Archives: November 2012

Did all American adults shop on Thanksgiving weekend?

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The Weekly Standard takes a look at some figures on Thanksgiving weekend shopping as reported by the National Retail Federation:

“A record 247 million shoppers visited stores and websites in the post-Thanksgiving Black Friday weekend this year, up 9% from 226 million last year, according to a survey by the National Retail Federation released Sunday,” the CNN reports reads. The headline reads: “247 million shoppers visited stores and websites Black Friday weekend.”

This would seem to mean, according to these statistics, that basically all Americans over the age of 14 went shopping this past weekend…

That means, if you subtract those who are too young to shop, 0-14 year olds, from the total U.S. population, there are 247,518,325 people in this country. The number of people CNN reports who went shopping this past weekend…

CNN’s numbers, however, include those who visited “websites.” The numbers [are?] so loose it could even include news website or the same person visiting multiple shopping websites.

Even if there is some double-counting in this data (and tracking across websites is difficult to do), these figures suggest a large majority of Americans went shopping after Thanksgiving. I’ve written before about the difficulty in getting 90% of Americans to agree about something but perhaps we could add the value of Black Friday shopping to the list. These figures also may add to the idea that shopping is the favorite sport of Americans.

Mortgage interest deduction part of fiscal cliff negotiations

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The negotiations regarding the fiscal cliff include the mortgage interest deduction:

Limits on a broad array of deductions could emerge in any budget deal. It is likely that any caps would be structured to aim at high-income households, and would diminish or end the mortgage tax break for many of those taxpayers…

Such a move would be fiercely opposed by the real estate industry. The industry has played a crucial role in defending the tax break, even as other countries with high homeownership have phased it out…

One of the reasons the mortgage tax break is so vulnerable is that both Democrats and Republicans have recently favored capping deductions, including both President Obama and the recent Republican presidential nominee, Mitt Romney…

Taken on it own, the deduction limit wouldn’t make a huge difference. But it can play an important role in a broad plan to cut the deficit, and shows a willingness to tackle once sacred cows. The tax numbers suggest it may not be hard to structure deduction limits in a way that leaves most middle-income households untouched.

This is not a new idea – people have been suggesting for a few years now (see here) that the mortgage interest deduction tends to help the wealthiest the most. Capping the deduction would still provide a benefit for less wealthy homeowners and boost the housing market. Yes, homebuilders and real estate people may not be able to construct and sell as many large and expensive homes that provide higher profit margins and commissions but there are plenty of other arguments against such homes beyond the mortgage interest deduction (see the green argument and the moral argument). Wealthier Americans are probably still going to buy homes, because they have the money and there is still an American cultural push toward homeownership, whether the mortgage deduction is there for them or not.

There are other countries in the world with higher rates of homeownership even with the federal government’s decades-long support of homeownership. The data is a few years old but check out these figures reported by National Association of Home Builders: a number of European countries have higher and lower rates of homeownership. Of course, American homes tend to be larger than European homes and I’m reminded of quick suggestion in Suburban Nation that Americans may have the best private realm, referring to our homes, in the world.

I assume a capped deduction would also limit or remove the deduction for the purchase of second homes?

Perhaps the biggest thing to note here is that the mortgage interest deduction was indeed was once a “sacred cow” but tough economic times lead to new measures.

 

 

Science more about consensus than proven facts

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A new book titled The Half-Life of Facts looks at how science is more about consensus than canon. A book review in the Wall Street Journal summarizes the argument:

Knowledge, then, is less a canon than a consensus in a state of constant disruption. Part of the disruption has to do with error and its correction, but another part with simple newness—outright discoveries or new modes of classification and analysis, often enabled by technology. A single chapter in “The Half-Life of Facts” looking at the velocity of knowledge growth starts with the author’s first long computer download—a document containing Plato’s “Republic”—journeys through the rapid rise of the “@” symbol, introduces Moore’s Law describing the growth rate of computing power, and discusses the relevance of Clayton Christensen’s theory of disruptive innovation. Mr. Arbesman illustrates the speed of technological advancement with examples ranging from the magnetic properties of iron—it has become twice as magnetic every five years as purification techniques have improved—to the average distance of daily travel in France, which has exponentially increased over the past two centuries.

To cover so much ground in a scant 200 pages, Mr. Arbesman inevitably sacrifices detail and resolution. And to persuade us that facts change in mathematically predictable ways, he seems to overstate the predictive power of mathematical extrapolation. Still, he does show us convincingly that knowledge changes and that scientific facts are rarely as solid as they appear…

More commonly, however, changes in scientific facts reflect the way that science is done. Mr. Arbesman describes the “Decline Effect”—the tendency of an original scientific publication to present results that seem far more compelling than those of later studies. Such a tendency has been documented in the medical literature over the past decade by John Ioannidis, a researcher at Stanford, in areas as diverse as HIV therapy, angioplasty and stroke treatment. The cause of the decline may well be a potent combination of random chance (generating an excessively impressive result) and publication bias (leading positive results to get preferentially published)…

Science, Mr. Arbesman observes, is a “terribly human endeavor.” Knowledge grows but carries with it uncertainty and error; today’s scientific doctrine may become tomorrow’s cautionary tale. What is to be done? The right response, according to Mr. Arbesman, is to embrace change rather than fight it. “Far better than learning facts is learning how to adapt to changing facts,” he says. “Stop memorizing things . . . memories can be outsourced to the cloud.” In other words: In a world of information flux, it isn’t what you know that counts—it is how efficiently you can refresh.

To add to the conclusion of this review as cited above, it is less about the specific content of the scientific facts and more about the scientific method one uses to arrive at scientific conclusions. There is a reason the scientific process is taught starting in grade school: the process is supposed to help observers get around their own biases and truly observe reality in a reliable and valid way. Of course, whether our bias can actually be eliminated and how we go about observing both matter for our results but it is the process itself that remains intact.

This also gets to an issue some colleagues and I have noticed where college students talk about “proving” things about the world (natural or social). The language of “proof” implies that data collection and analysis can yield unchanging facts which cannot be disputed. But, as this book points out, this is not how science works. When a researcher finds something interesting, they report on their finding and then others go about retesting the findings or applying the findings to new areas. Over time, knowledge accumulates. To put it in the terms of this review, a consensus is eventually reached. But, new information can counteract this consensus and the paradigm building process starts over again (a la Thomas Kuhn in The Structure of Scientific Revolutions). This doesn’t mean science can’t tell us anything but it does mean that the theories and findings of science can change over time (and here is another interesting discussion point: what exactly is a law, theory, and a finding).

In the end, science requires a longer view. As I’ve noted before, the media tends to play up new scientific findings but we are better served looking at the big picture of scientific findings and waiting for a consensus to emerge.

Generation gap: younger Americans don’t want Baby Boomer’s heirlooms/stuff

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The Chicago Tribune profiles an interesting generation gap: Baby Boomers are worried their children and young adults in general aren’t interested in their family heirlooms and acquired stuff:

Passing down heirlooms from one generation to the next has long been tradition. But Copeland and many other baby boomers fear that their children and grandchildren will end up tossing the family treasures like a worn-out pair of gym shoes.

“A lot of young people are so transient; they don’t stay anywhere very long. They rent apartments and don’t own anything,” said Copeland, whose sons live at home. “They don’t want to be tied down to family heirlooms that don’t mean anything to them.”

Julie Hall, a North Carolina liquidation appraiser known as The Estate Lady, said this has become a dilemma for a growing number of middle-age people who are trying to come to terms with a harsh reality: Often what they consider to be jewels, their children and grandchildren see as junk.

“Though they have the best intentions, boomers have a tendency to keep too much stuff for subsequent generations, though the kids have already told them they don’t want anything,” said Hall, author of the book “The Boomer Burden: Dealing With Your Parents’ Lifetime Accumulation of Stuff.”

There are several social factors at work here which are noted in the article:

1. There are generational shifts at work from those who were alive during the Great Depression to Baby Boomers to Millennials. This affects things like consumption patterns, family patterns, and where people live.

2. We now live in a more disposable, cheaper culture. For example, the story talks about Millennials preferring IKEA furniture. Such goods are relatively cheap, come in a limited set of colors that match a number of things, and can be traded, discarded, given away, or sold fairly easily.

3. It sounds like Millennials are looking to have less stuff in general. While Baby Boomers might consider these things heirlooms, Millennials see it as clutter that must be stored somewhere and moved again in the future. Certain items may have value to a family but what good is it if it just sits there without being used much? The article suggests this may be due to younger Americans living in smaller spaces (while Baby Boomers have plenty of room in their larger homes) but it could also be tied to Millennials placing a higher value on electronics like laptops and smartphones. It has been argued Millennials are more interested in these personal electronic devices than cars and houses, traditional American consumer goods. Also, Millennials would be more interested in debating how someone’s digital files get passed down.

4. The article doesn’t mention this at all but I wonder if this reflects changing family structures. Heirlooms matter not because they are objectively valuable but because they hold sentimental value. Perhaps Millennials have less sentimental interest in objects? A positive spin on this would be that Millennials value personal relationships more but a darker interpretation could be that they simply haven’t had the same kind of deep relationships that would give objectives meaning. Plus, more Americans are living alone and this could make it harder to endow certain objects with enough meaning for a family member to feel the same way.

5. Another thing the article doesn’t suggest: perhaps Baby Boomers had too much stuff to start with. Is this the sort of problem that only arises in a culture that revolves around consumption and materialism?

90 days to the world’s tallest building

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Having the world’s tallest building is a status symbol in itself but here is another aspect of this race: how quickly can the tallest building be constructed? One Chinese company says it has it done to a 90 day process:

Broad Sustainable Building Corporation will lay the foundation for their “Sky City” project this month. The company, famous for building tall buildings in ridiculously short time spans, plans to construct a 220-story skyscraper in 90 days, with construction starting in January and finishing in March. Sky City, if successful, will be 10 meters higher than the current tallest skyscraper, the Burj Khalifa in Dubai.

How do they plan on doing it? BSB eschews architectural beauty for simplicity. Their building are tall and block-y. They essentially make buildings out of lego blocks, but in real life. The National Post has a nice graph explaining how they plan on achieving their 90 day goal. “Traditional construction is chaotic,” BSB chairman Zhang Yue recently told Wired magazine. “We took construction and moved it into the factory.” BSB prepares the pieces offsite and then brings everything together so it slides in easily when construction begins, exactly like Lego blocks. By breaking everything down into simple blocks piled on top of one another, it allows them to build at an amazing pace — their goal for Sky City is 5 stories a day.

The quick process may be more impressive than the height of the building. Constructing a skyscraper requires a large amount of workers and resources and this company has streamlined the process. I don’t know if this exactly applies to this situation but it sounds like skyscraper by assembly line.

I wonder if there are any downsides to quick construction. Less time for quality control? More work is done off-site which has a negative impact elsewhere? Based on the description above, perhaps the architecture and design suffers the most: only certain kinds of modules, shaped like “Lego blocks,” can be put together quickly.

“McMansions Gone Rogue”: critiquing McMansions on Pinterest

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For a gallery of photos that critique McMansion rooms, check out this Pinterest page. These rooms have some interesting design elements and beyond these style choices, they don’t look very liveable.

I presume the solutions for these rooms is to consult the interior designer who put together this page. Is her solution primarily about better interior design in these spaces or would she advocate for different homes, like the Not So Big House, all together?

 

How statistics “change(s) the way you see the world”

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This article suggests looking at some well-known statistics problems will “change the way you see the world.” Enjoy the Monty Hall problem, the birthday paradox, gambler’s ruin, Abraham Wald’s memo, and Simpson’s paradox.

Here is what is missing from this article: explaining how statistics is helpful beyond these five particular cases. How would statistics help in a different situation? What is the day-to-day usefulness of statistics? I would suggest several things:

1. Statistics helps move us away from individualistic or anecdotal views of reality and toward a broader view.

2. Statistics can encourage us to ask questions about “reality” and look for data and hidden patterns.

3. Knowing about statistics can help people decipher the numbers that see every day in news stories and advertisements. What do survey or poll results mean? What numbers can I trust?

Tackling these sorts of issues would be much better for the public than looking at five fun and odd applications of statistics. Of course, these three points may not be as interesting as five statistical brain teasers but these five cases should be used to point us to the larger issues at hand.

Report says green housing market expected to grow rapidly

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A recent report says the green housing market in the United States is expected to rapidly grow in the coming years:

Regardless, a new report says the value of green residential and non-residential buildings in the United States is rapidly accelerating from only $10 billion in 2005.

McGraw-Hill Construction’s 2013 Dodge Construction Green Outlook says the value could reach $106 billion next year and go as high as $248 billion by 2016.

Based on the forecast for construction of single-family homes, the residential portion of U.S. green building could reach $116 billion by 2016, the report says.

Green building is a bright spot in a still-shaky economy, added the report, which was released Nov. 15.

A green structure is defined as one built to Leadership in Energy and Environmental Design, or LEED, standards, or one that is energy- and water-efficient while improving indoor environmental quality.

So there is at least one bright spot in the housing market. The demand for green homes could grow and I suspect builders might be able to charge a premium for these homes. There could be several areas in which builders could up the price: more expensive materials, the energy efficiency and savings of the home over the years, the special design a green home might require, and the status that comes with owning a green home. The example home in the story illustrates this: it is a 3,100 square foot home that will cost around a million dollars.

And note, the opening sentence of the story notes the difference between this green home and McMansions. There seem to be both similarities and differences between this green home and McMansions: it is still expensive and in the midst of sprawl even as it is a greener home, has a modern design, and is located on a one-acre lot.

Rahm Emanuel: Chicago the model for pro-growth policies

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Chicago Mayor Rahm Emanuel had an op-ed in the Washington Post on Friday where he explained how his city could show America the way toward growth:

While infrastructure improvements have been neglected on a federal level for decades, Chicago is making one of the nation’s largest coordinated investments, putting 30,000 residents to work over the next three years improving our roads, rails and runways; repairing our aged water system; and increasing access to gigabit-speed broadband. We are paying for these critical improvements through a combination of reforms, efficiencies and direct user fees, as well as creating the nation’s first city-level public-private infrastructure bank. Democrats should champion these kinds of innovative financing tools at a national level.

If we want to build a future in which the middle class can succeed, we must continue the push for reform that the president began with Race to the Top, bringing responsibility and accountability to our teachers and principals.

Chicago has adopted its own Race to the Top for early childhood education, allowing public schools, Head Start, charters and parochial schools to compete for dollars by improving the quality of their pre-kindergarten programs. In addition, this year Chicago Public Schools put into effect a 30 percent increase in class time, which means that when today’s kindergartners graduate high school, they will have benefited from 2½ more years’ worth of education.

In partnership with leading private-sector companies, we reengineered our six community colleges to focus each on skills training for jobs in one of Chicago’s six key growth fields. Democrats can be the party that closes the nation’s skills gap by making our community colleges a vital link between people looking for jobs and companies looking for skilled workers.

The strength of these investments is proven in the number of people we’re putting back to work: Chicago is first in the nation in terms of increase in employed residents, and for several months we have led the nation in year-over-year employment increases. We added 42,500 residents to the workforce in the past year alone — 8,000 more than the next highest U.S. city…

If Democrats develop innovative policies that help Americans compete in a global economy, we will outperform Republicans on Election Day. It’s that simple.

I’ve made this argument before (see here): Rahm Emanuel is more of a pro-business Democrat. As he notes in this article, he is in the mold of Bill Clinton who was willing to do what it takes to add jobs and fuel growth (illustrated by his recent push for digital billboards on city property alongside busy highways). And thus far, Emanuel has been able to push through his agenda in Chicago.

However, two things might hold back his arguments on the national level:

1. How much do Democrats and other Americans want government  to work closely private firms and corporations? Emanuel is a fan of public-private partnerships but people on both sides may not like this idea much.

2. Critics will charge that Chicago is hardly a model for others to emulate. Crime? Residential segregation? Massive budget issues? Battles with local unions? Underperforming schools?

I imagine some other big-city mayors might argue their cities could provide better models for the whole country. It would be fascinating to see a number of them respond with different visions.

(One last question: how much of this argument is simply boosterism from the mayor of the city’s third largest city?)

An argument for Amazon’s one-star reviews reveals the role of cultural critics

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A professional critic praises Amazon’s one-star reviews:

About a year ago, while shopping online for holiday gifts, I became an unabashed connoisseur of the one-star amateur Amazon review. Here I found the barbed, unvarnished, angry and uncomfortably personal hatchet job very much alive. Indeed, I became so enamored of Amazon’s user-generated reviews of books, films and music that my interest expanded to the one-star notices on Goodreads, Yelp and Netflix, where, for instance, a “Moneyball” review notes the movie “did not make you feel warm and fuzzy at the end as a good sports film should.” How true! A rare opinion on a critical darling!…

But there is a visceral thrill to reading amateur reviewers on Amazon who, unlike professional critics, do not claim to be informed or even knowledgeable, who do not consider context or history or ambition, who do not claim any pretense at all. Their reviews, particularly of classics, often read as though these works had dropped out of space into their laps, and they were first to experience it. About “Moby-Dick,” one critic writes: “Essentially, they rip off the plot to ‘Jaws.'” About “Ulysses,” another critic writes: “I honestly cannot figure out the point, other than cleverness for cleverness’ sake.”

Likewise, to seriously dismiss “The Great Gatsby” as “‘Twilight’ without the vampires,” as an Amazon reviewer did, may be glib and reductive, but it’s also brilliantly spot on, the kind of comparison a more mannered critic might not dare. “Whoever made that ‘Twilight’ comparison, whether they know it, is showing their education, that they can connect new media with old works and draw fresh conclusions,” said David Raskin, chair of the art history, theory and criticism department at the School of the Art Institute of Chicago…

Speaking of honesty: It should be pointed out here that, in general, online amateur reviews are not mean but usually as forgiving as the professional sort. Bing Liu, a data-mining expert at the University of Illinois at Chicago who has studied online reviews — “partly because I was curious if they were real or just someone gaming the system” — told me that 60 percent of Amazon reviews are five-star reviews and another 20 percent are four-star. The information research firm Gartner released a study in September predicting that, within a couple of years, between 10 and 15 percent of online reviews will be paid for by companies — rigged.

It sounds like the argument is this: you can find the average American in the one-star Amazon reviews. Instead of getting the filtered, sophisticated review typically found in media sources, these reviewers give the unvarnished pop culture take. Discussed in this argument is the idea of social class and education. An approved reviewer or critic, the typical gatekeeper, is able to put a work in its context. The educated critic is trying to make the work understandable for others. The educated critic often has experience and education backing their opinions. In contrast, the Internet opens up spaces for individuals to post their own reactions and through aggregation, such as the Amazon five-star review system, have some say about how products and cultural works are perceived.

This new reality doesn’t render cultural gatekeepers completely irrelevant but it does do several things. One, it dilutes their influence or at least makes it possible for more critics to get involved. Second, it also makes more visible the opinions of average citizens. Instead of just theorizing about mass culture or pop culture, we can all see what the masses are thinking at the moment they are thinking it. (Think of the possibilities on Twitter!) Third, it provides space like in this article for reviewers to admit they don’t always want to write erudite pieces but want to have a “normal person reaction.”

Just one problem with this piece: the critic says he doesn’t really read the one-star Amazon reviews for information. Instead, he appreciates the “visceral thrill.” He quotes an academic who says such reviews reveal cultural gaps. Thus, celebrating the one-star reviews may be just another way to assert the traditional reviewer’s cultural capital. Read the one-star reviews for entertainment but continue to go back to the educated reviewer for the context and more valued perspective.