Category Archives: Business and Economy

The gift of empathy

Posted on by

Megan McArdle of the Atlantic has a timely reminder of the dangers of schadenfreude:

I saw a fair amount of chortling this morning about this Bloomberg piece on wealthy financial-industry types who are having to cut back because of plummeting bonuses….[W]hen middle class people take out a mortgage that’s perfectly affordable on the income they’ve been enjoying for years, and then lose the house because they suddenly saw that income cut in half, we don’t feel a delicious sense of joy because they finally got what was coming to them.   We recognize that this it is really terrible to be forced out of a home where you’ve built loads of happy memories and dreams–and not incidentally, to possibly be forced to yank your kids out of the aforementioned schools.

Why are people supposed to shrug off the exact same thing because they’re rich?  It’s still really awful to lose your house.  I hardly think it’s whining to worry about this when your income drops and your fixed expenses don’t.
There are plenty of problems in this country and this world.  Rejoicing in the misery of others is just another problem that nobody needs.
The fact is that no matter how much you make, seeing your income fall below the expenses you’ve committed to is difficult.  Obviously, people whose expenses are closer to the minimum deserve more of our sympathy, and our help.  But I’m not sure that this means we’re supposed to be happy when it happens to someone richer than we are.  It’s not very attractive when conservatives rejoice to see union members thrown out of work.  I’m not sure this is much better.

New economic plan for Chicago region from Emanuel, World Business Chicago

Posted on by

Chicago Mayor Rahm Emanuel announced a new economic plan for the Chicago region earlier today:

What’s clear from the 60-page report is that the city is aiming to shake up the status quo. Too many agencies have been making uncoordinated efforts to boost economic development, the report finds, and greater collaboration is needed. Job training programs have not been well-aligned with employers’ needs and should be tailored to specific job demand. And new funding models are needed for infrastructure and transportation projects, given the economic times.

“A global city like Chicago needs a clear set of goals, a clear framework for analysis and clear strategies for economic growth and the creation of jobs,” Mayor Rahm Emanuel said in a statement…

It is one of two major regional planning endeavors that has been under way for months. Next week, the Chicagoland Chamber of Commerce will unveil the results of a study conducted by the Paris-based Organization for Economic Cooperation and Development (OECD), of how the region can better compete in the global economy.

Read the executive summary of the plan here.

A few quick thoughts on the plan:

1. I’m not particularly surprised by any of the 10 primary suggestions. What seems most pertinent here is that the plan is regional and wants to leverage the assets of the whole region for this one plan.

2. It seems to me that the trick will be uniting all of the local governments and taxing bodies in order to work on this plan. Some of the recent battles in Chicagoland indicate that this will not be easy: the battle over the expansion of O’Hare Airport and the battle over the purchase of the Elgin, Joliet, & Eastern railroad tracks by Canadian National. Perhaps this most recent economic crisis presents an opportunity – after all, Emanuel is well-known for saying, “You never want a serious crisis to go to waste” – where even the wealthier suburbs will want to tackle these issues together. Balancing all of these interests will be difficult as will having the right kinds of structures to enact change across communities.

3. This reminds me that while Mayor Emanuel may be considered liberal by some, he is pro-business in a similar way to President Clinton and other more moderate Democrats. This plan comes out of the World Business Chicago group that Emanuel has tapped to help lead Chicago forward. Emanuel’s vision may have more governmental involvement than some would like but matters like infrastructure are already government’s concerns and if managed well (which includes preparing for the future rather than simply trying to keep up today), can help everyone else succeed. If this plan is a success and the Chicago region continues to be or even builds upon its standing as a world-class city, Emanuel will be remembered fondly by many on both sides of the political aisle.

4. I would be curious to know how many plans like this have been developed in the past, how many were successfully followed, and how many were successes.

5. There are a number of groups who do regional planning in the Chicago area, such as the Chicago Metropolitan Agency for Planning which has its own Go to 2040 Plan, and I wonder how they will respond to this plan.

The battle between business and sociology majors

Posted on by

Here is one account of the divide in colleges between business and sociology majors:

I attended undergrad at one of the nation’s more so-called “liberal” schools, San Francisco State University. Some of my fondest memories center on the rivalry, for want of a better word, between the College of Business and the College of Behavioral and Social Science.

You could tell that business students hated taking general education courses in the behavioral and social sciences. That came through most clearly in philosophy, sociology, social work, urban poverty and touchy-feely psychology classes. The business students wanted no part of the “useless crap” we learned in those disciplines. They just wanted to fulfill requirements so they could get into Berkeley’s MBA program or somesuch.

Admittedly, social science geeks, serious psychology majors and even the more politically-active policy wonks dreaded business class. For them, a George Bush fundraising rally would have represented better time spent.

Many of us, particularly those headed to graduate school, considered ourselves embarked on a more righteous endeavor than business students. We were making proper use of education, broadening our minds and learning how to think out of the box. Business students were being fed laws that would bring no positive impact to the world and maybe not even apply outside of a classroom. As I have grown older, I have backed off of this rather pompous view of academia and an MBA’s place in it. Of course, it’s all about perspective. Plus, business students often turned that pompous argument around on us.

There are real differences between these disciplines in how they approach the world. Talking from the sociology end, we tend to critique capitalism (or the excesses of “market logic”), look for broad patterns across social groups, and have different aims (crassly put as helping right social wrongs vs. making money – I know these are not mutually exclusive).

But sometimes I wonder why students don’t put these two disciplines together more. Profit-making can be harnessed for good causes. Businesses can provide good jobs, create capital, and enhance a community. It is hard to run a non-profit or a social service agency without knowledge about managing finances. Both disciplines use quantitative analysis (though the variables and the outcomes we care about may differ) so some of these skills are transferable. Sociologists can use real-world training in management and setting up organizations. Doing business requires a lot of interaction with people, something that sociology can help with because you need to have an understanding of what motivates people plus how their context affects their actions (a one-size-fits-all approach is difficult to implement across different social settings). Additionally, sociology can help people in business see the the big picture beyond making money, promoting a longer-term view and more nuanced understanding about where their operation fits within society.

Are there any schools that promote a joint program or have a large number of students who tackle both of these disciplines?

Santorum claims college pushes people away from religion, experts push back

Posted on by

Republican presidential candidate Rick Santorum recently suggested that going to college pushes people away from the church and faith. Those who study the subject disagree:

Santorum told talk show host Glenn Beck on Thursday that “62% of kids who go into college with a faith commitment leave without it.”

Thom Rainer, president of LifeWay Christian Resources, a Nashville evangelical research and marketing agency, said, “There is no statistical difference in the dropout rate among those who attended college and those that did not attend college. Going to college doesn’t make you a religious drop out.”…

The real causes [of leaving the faith]: lack of “a robust faith,” strongly committed parents and an essential church connection, Rainer said.

“Higher education is not the villain,” said sociologist William D’Antonio of Catholic University of America. Since 1986, D’Antonio’s surveys of American Catholics have asked about Mass attendance, whether they rate their religion as very important in their life, and whether they have considered leaving Catholicism. The percentage of Catholics who scored low on all three points hovers between 18% in 1993 and 14% in 2011. But the percentage of people who are highly committed fell from 27% to 19%.

Recent research also disputes this: several 2011 studies found that those with education are actually more religious than those with less education.

So what was Santorum getting at with his statement? Three thoughts:

1. Conservative Christians commonly cite alarmist statistics to show that the church needs to redouble its efforts or to demonstrate that the church is under attack. See this classic article “Evangelicals Behaving Badly with Statistics,” a good article titled “Curing Christians’ Stats Abuse,” and the book Christians are Hate-Filled Hypocrites…

2. He is hitting back against “elitist academia,” responding to but also feeding the perception college classrooms are filled with atheists and agnostics who want to disabuse students of their faith. Of course, there are many people of faith in academia. This is a larger battle over a perceived liberal, atheist elite versus a faith-filled “average America.”

2a. If Santorum were correct, does this mean that people of faith should not send their kids to college? Or alternatively, do these ideas continue to boost attendance at religious colleges?

3. To compound matters, Santorum was talking to Glenn Beck and this argument was aimed at Beck’s audience. At the same time, it appears Santorum made this a more general argument on the campaign trail:

“President Obama once said he wants everybody in America to go to college. What a snob,” Santorum said Saturday at a campaign stop in Troy, Mich. “There are good, decent men and women who go out and work hard every day and put their skills to test that aren’t taught by some liberal college professor that [tries] to indoctrinate them.”

In the end, this seems like another plank in a moral argument, rather than a political or social argument, for Republicans.

Car free in DC

Posted on by

Washington, DC is seeing fewer cars these days, at least on a per-person basis:

Car registrations in the District have hovered around 275,000 over the last decade, according to D.C. Department of Motor Vehicles Director Lucinda Babers, even as the city’s population ballooned by more than 40,000 people in that time.

Experts say two forces are driving the change. There are more ways to get around the city without a car, and the down economy has everyone looking for ways to cut costs, like getting rid of that second vehicle.

As new residents of the DC area, my wife and I are part of this trend (though our location in the suburbs a few miles beyond the District’s boundary line means that we’re technically not part of this cited statistic).  There are indeed plenty of ways to get around the metro area without owning a car.  My wife’s office is a 10-minute bus ride away from our apartment (it would be 8 minutes by car), and I work mostly from home.  It’s hard to imagine that paying ~$600/month (i.e., conservatively, $200 car payment and/or maintenance, $200 insurance for two, $200 gas) vs. ~$60 for her bus fares is worth the extra 4 minutes a day.

To be sure, we are fortunate to have such great transit options available for our work (short bus ride and telecommuting, respectively).  But what really makes our situation workable is that we can (and do) still use cars quite often.  For short weekly trips (e.g., grocery shopping, doctor’s appointments, etc.), we use Zipcar (~$10/hour all inclusive, including rental, insurance, and gas).  For more special occasions (e.g., weekend getaways), we hire a vehicle from a traditional rental car company (e.g., Hertz, Budget, Enterprise).

Moreover, not owning a car has had a surprising, unforeseen side effect:  I actually like driving again.  I used to commute 1.5 hours/day through the Chicago suburbs, and I detested driving.  Now, I drive a handful of times throughout each month, and every drive feels like I’m zooming through car-commercial-world, fused with the open road.

All in all, our monthly transportation budget is considerably more than the $60 “minimum” needed for my wife’s bus commute.  It is also far less than the $600/month it would cost us to own (and use) our own car.  And there are plenty of intangible benefits of not sitting in traffic every day.  Down economy or not, it doesn’t always make sense to own a car.

“The moral self of bankers and brokers”

Posted on by

A recent article in American Sociological Review looks at how some bankers and brokers were able to help lead the country toward recession:

Those bankers, stockbrokers, and mortgage lenders whose actions helped cause the recession were able to act as they did, seemingly without shame or guilt, perhaps because their moral identity standard was set at a low level, and the behavior that followed from their personal standard went unchallenged by their colleagues, said Jan E. Stets, a sociologist with the University of California in Riverside.
“To the extent that others verify or confirm the meanings set by a person’s identity standard and expressed in a person’s behavior, the more the person will continue to engage in these behaviors,” said Stets, co-author of “A Theory of the Self for the Sociology of Morality” in the February issue of the American Sociological Review. “If others have a low moral identity and do not challenge the illicit behavior that follows from a person’s identity standard, then the person will continue to do what he or she is doing. This is how immoral practices can emerge.”
Studying the moral self is opportune given the practices of bankers, stockbrokers, and mortgage lenders whose behavior, in some cases, helped facilitate the recent recession in the United States, said Stets and fellow researcher Michael J. Carter of California State University at Northridge.
“The fact that a few greedy actors have the potential to damage the lives of many brings issues of right and wrong, good and bad, and just and unjust to public awareness,” they said. “To understand the illicit behavior of some, we need to study the moral dimension of the self and what makes some individuals more dishonest than others.”

This sounds like a good illustration of some basic sociological principles: personal aspects of the self can be heavily influenced by their context. Humans have agency but their options are constrained and influenced by the social environment in which they find themselves.

Here is what I wonder: can regulations alone successfully promote a higher personal identity standard?

Another question: are Americans angry/distraught/upset about moral lapses from individual actors within the financial industry or with the entire system? In other words, do Americans blame the context or the bad actors? In thinking about this, do most Americans even know who the main individuals involved in the economic recession are (beyond government officials)?

In defense of Portland

Posted on by

Mark Hemingway takes aim at Portland, Oregon in a long cover story in the Weekly Standard:

Unlike the New York Times, I write not to praise the place but to note the litany of things that plainly have gone wrong. Also to alert anyone else who’s listening: Right now, America’s civil and social engineers are beavering away trying to turn your city or town into the next Portlandia.

Mark’s piece is a rambling barrage that roughly summarizes as follows:

  1. Portland gets a lot of attention from the media, particularly the New York Times and via the TV show Portlandia (paragraphs 1-14).
  2. Portland is crazy-town (“quietly closing in on San Francisco as the American city that has most conspicuously taken leave of its senses”) (paragraphs 15-20)…
    1. …because of its development policies, particularly light rail (paragraphs 21-37);
    2. …because of its “generally hostile business climate” (paragraphs 38-53); and
    3. …because of its lax sexual mores (paragraphs 54-84).

A few thoughts re: development policies.  Mark suggests “[t]hings began to unravel in 1973, when the Oregon legislature required cities in the state to set development boundaries with the goal of preserving farmland.”  Portland responded by “cancel[ing] a major interstate freeway project” in order to start a light rail system.  Mark objects to this decision because (a) the light rail has low ridership (“It’s called ‘light’ rail not because the trains are less heavy, but because it’s more lightly used by the public than, say, New York’s subway or Washington, D.C.’s Metro”) and (b) it allowed “Oregon’s integrated land use and transportation planning system [to be] manipulated to award [a former-politician-turned-consultant’s] clients hundreds of millions in state and city contracts relating to light rail expansion and the accompanying high-density developments.”

While I’m certainly no expert on either Portland or light rail ridership statistics, a cursory web search turned up this Wikipedia article suggesting that Portland’s system ranks 4th in ridership among similar U.S. systems and ahead of (much larger) cities such as San Diego (5th), Philadelphia (6th), and Dallas (7th).  And as far as the revolving door between local politics, consultancies, and developers goes, it strikes me that this is a problem that has little to do with light rail as such.  The placement of new roads and highways is similarly susceptible to backroom-dealing that favors the wealthy and well-connected.  Mark makes no effort to explain why corruption (whether of the “small-c” or “big-C” variety) poses a bigger or more inherent problem with publicly funded mass transit projects (e.g., light rail) than with publicly funded car-based projects (e.g., highways), and I fail to see an argument so obvious that it needn’t be even implied (let alone spelled out).

A few thoughts re: Portland’s “generally hostile business climate.”  Mark begins by quoting extensively from a 2010 op-ed written by the chairman of Nike, a company started and headquartered in Portland, which opposed an increase being considered in the state income tax.  Whatever the merits or demerits of the tax increase or this two-year-old op-ed, it is hard to understand why Mark cites this as his leading example of Portland’s hostile business climate in particular rather than Oregon’s in general.

Worse, this op-ed is the closest Mark comes to criticizing Portland directly.  In the subsequent paragraphs, he (a) tells the story of his own grandparents as an example of the “upwardly mobile, working-class life now seems out of reach for much of the city,” (b) notes that income is unevenly distributed in Portland (“Don’t tell Portland’s scabies-infested Occupy camp, but between 1980 and 2007, the share of wealth earned by Portland’s middle quintile declined by about 20 percent, while the top 1 percent’s share doubled”), and (c) rises to defend “the traditional working class” from “the new hipsters.”

  • (A), the fact that the WWII generation could be both “upwardly mobile” and “working-class” is well documented, as is the fact that similar opportunities are vanishingly scarce for younger America today.  While I am certainly happy for Mark’s grandparents, it’s hard to imagine that today’s public school teacher and bus driver will, in 35 years, “retire to a farm…[and] rais[e] quarter horses.”  And it’s not likely that choosing to live in Peoria rather than Portland will make any difference.
  • (B), the fact that income is unevenly distributed in Portland only proves that Portland is normal relative to the rest of the U.S., not that it is a statistical outlier.  Moreover, without further explanation, it is unclear why Mark thinks uneven wealth distribution contributes to a “generally hostile business climate.”
  • (C), as his sole example of hipster-on-working-class attacks, Mark cites a five-year-old Willamette Week article which makes reference to “drunken red-neck[s].”  Apparently, Mark did not read the prologue to the article, which clarified that it was a humorous “series of bitter, petty, pessimistic rants that generally s**t on everything—and hopefully poke holes in the Portland hype” in order to “persuade prospective Portlanders not to crowd out our way of life for a little longer.”  Whatever one thinks of this brand of humor, it’s as surprising as it is clear that Mark missed this context and tone.

One final note.  Mark does begrudge respect to Portland’s small businesses, though he apparently can’t resist a few barbs:

While it’s hard not to root for entrepreneurial initiative wherever you find it, in Portland it carries a whiff of desperation. I submit that the real reason Portland has a thriving artisanal economy is that the regular economy is in the dumps. Portland’s hipsters are starting craft businesses in their garages and opening restaurants not merely because they “reject passive consumption” but because they can’t find jobs, the kind that offer upward mobility.

Perhaps Mark should re-read that 2010 op-ed he cited.  Before Phil Knight was a multi-billionaire and the chairman of a Fortune 500 corporation, he was just another small business owner with “a whiff of desperation” about him:

Forty-six years ago [as of 2010], when Mark Hatfield was governor, I started a small business in Oregon. In our first year, sales totaled $8,000. I am proud that [Nike] eventually became a major employer in the state.

It has been my hope that other entrepreneurs would similarly pursue their dreams in Oregon.

Today, across the U.S. and not just in Portland, “the regular economy is in the dumps” and people “can’t find jobs, the kind that offer upward mobility.”  If “a small city like Portland” has enough entrepreneurs to open “671 food trucks”, I say we should encourage them.  The last thing we need is for the supposedly conservative Weekly Standard to ape the Willamette Week in its quest to publish “series of bitter, petty, pessimistic rants that generally s**t on everything.”

Questioning the value of an outsider’s perspective in MoMA’s “Foreclosed”

Posted on by

MoMA’s exhibit Foreclosed certainly seems to be provoking a lot of strong reactions (see Brian’s previous commentary here).  Diana Lind, editor in chief of Next American City, questions both the motives and the practicality underlying MoMA’s re-imagining of the American suburbs:

Foreclosed seethes with disdain for the suburbs, and the lack of an empathetic understanding of how the suburbs function and are changing, ultimately makes the exhibit look less visionary than ignorant. As an urban dweller who is deeply frustrated by the social, economic and environmental consequences of sprawl and car-centered communities, I too want to see clever ways of retrofitting these parts of the country. But saying that, I wish the exhibit had improved upon the suburbs rather than suggest transforming them beyond recognition.

It was critically apparent that none of the architects participating in the exhibit actually live in the suburbs (a fact confirmed by the exhibit’s curator). To Bergdoll, the last great American architect to live and work in the burbs was Frank Lloyd Wright, who was based in the Chicago suburb of Oak Park at the turn of the 20th century. This outsider perspective on the suburbs is the exhibit’s crucial flaw and inevitably influenced the architects to propose interventions in suburbia that have all the grace of a superblock in the middle of the city grid. Despite their good intentions, their efforts at sustainability and their smart alternatives to homeownership, the architects’ wrath for the suburbs has caused them to create projects that annihilate the suburbs rather than improve them. [emphasis added]

For all their problems, suburbs clearly “work” on some levels.  (If they didn’t, suburbs would hold little attraction for to the millions happily residing in them.)  Lind’s specific examples of cultural clueless-ness on the part of the MoMA-commissioned architects are well worth pondering.  She suggests that failing to consider what aspects of suburbs work (and how) results the same sort of ham-fisted, bureaucratic approach that destroyed thriving urban neighborhoods in the mid-twentieth century:

[MoMA’s] radical visions that are so insensitive to the suburbs remind me of the Modernist public housing projects that were once foisted on inner cities. Created by well-intentioned but essentially ignorant architects and planners, those buildings made sense in theory but not in practice. They didn’t respond to the rhythms and needs of the people who would be housed there, because the architects didn’t really respect or understand the lives of poor people. MoMA should have found some architects who could love and live in the suburbs, showing us the way to make the most of suburban housing instead of wishing it didn’t exist.

Mass transit in an age of self-driving cars

Posted on by

Wired’s article about the nearing technical feasibility of self-driving cars makes several intriguing observations about the (possible) future of personal transportation:

Continue reading →

Shopping malls as glamorous places in India

Posted on by

After fifty plus years of living with the shopping mall, perhaps they have simply become second nature to Americans. But, when they are built in places like India, it is fascinating to see how the mall fits into a different context:

Continue reading →