A narrative about McMansions at the heart of the economic crisis

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With an ongoing economic crisis and housing slump, there are plenty of stories about who has been hit the hardest. But one writer suggests that perhaps we can’t just simply say that those who were excessive in their consumption and purchased McMansions are the only ones affected:

With an ongoing economic crisis and housing slump, one target of blame is McMansion buyers. But one writer suggests the economic crisis affects more people than just those who consumed beyond their means:

The nation’s lingering housing foreclosure mess is too often about folks with McMansion-size aspirations and duplex paychecks, granite counter appetites and laminate budgets.

And when we hear that one of the nation’s hot spots for foreclosures is Prince William County, we nod knowingly, thinking of the vast tracts of huge new homes and the dreamers who drowned in them.

But the other day, I met some of the folks who lost their homes or are fighting with banks to try to keep them. And McMansion isn’t what comes to mind.

The rest of the story goes on to describe the stories of a few people who lived more modest lifestyles and yet have still fallen into housing issues.

I would be interested in seeing some figures about what kinds of homes or types of owners are those who have experienced the most foreclosures or mortgage difficulties. Is it really McMansion owners or others? We hear quite a bit about regional differences, such as high vacancy rates in Florida and high foreclosure rates in certain states or cities, but less about other factors.

In reading this one particular story, I wonder why people might be quick to jump on people like those who live in Prince William County (a wealthy county – this Wikipedia list has it as the 14th highest county in the country in terms of median household income). How much of this is a moral judgment leveled against McMansion owners and houses more broadly? With this housing crisis, it now looks like McMansions are also a bad economic deal, adding to the other issues that critics say McMansions have.

Lessig keynote at ABA’s Techshow

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Yesterday, Larry Lessig gave the keynote at the American Bar Association’s Techshow 2011, available on YouTube here.  (ABA Journal write-up here.)

I’m watching it right now and will post additional thoughts when I’m done…

Update:  Much of Lessig’s presentation covers the same material he presented before WIPO last November.  However, the last part of his speech (direct link) talks a little bit about why Lessig thinks that IP policy in America is so wrong.  In brief, Lessig argues that special interest content providers have essentially “bought” Congress’ support of draconian enforcement.

Two steps for lower taxes

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With taxes due in less than a week, Derek Thompson over at The Atlantic has some solid advice for “beating the Tax Man at his own game”:

First, be self-employed. Second, be very rich.

Among other reasons that the article notes, “money buys access to the smartest accountants and tax attorneys, who have scoured the labyrinthine tax code for the best nooks and crannies to shelter income.”

It may not be the most efficient allocation of overall resources, but it sure does offer a compelling individual ROI.

Early signs: higher gas prices lead to less driving

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With gas prices moving upward, there are some signs that this is already changing driving behavior among Americans:

Drivers bought about 2.4 million fewer gallons for the week of April 1, a 3.6 percent drop from last year, according to MasterCard SpendingPulse, which tracks the volume of gas sold at 140,000 service stations nationwide…

Before the decline, demand was increasing for two months. Some analysts had expected the trend to continue because the economic recovery was picking up, adding 216,000 jobs in March…

Instead, about 70 percent of the nation’s major gas-station chains say sales have fallen, according to a March survey by the Oil Price Information Service. More than half reported a drop of 3 percent or more — the sharpest since the summer of 2008, when gas soared past $4 a gallon. Now it’s creeping toward $4 again…

The decline is somewhat puzzling because Americans typically curb their driving only as a last resort, after sacrificing other forms of discretionary spending, like shopping for new clothes, or going to movies, concerts and restaurants.

Economists and others have been talking about this for a while: what exactly is the price point of a gallon of gasoline where Americans might drastically change their transportation patterns? In this earlier post, I briefly discussed the claim that the Obama administration actually wants higher gas prices as this would lead to greener transportation choices such as mass transit or bicycling or car pooling (or other options).

But if gasoline prices stayed relatively high (so they don’t really go down like they have after some of the temporary spikes in recent years – see the weekly average in the US going back to 1990 here or a graph showing prices going back to the mid 1970s here), it might lead to all sorts of changes. This could include everything from buying smaller cars (as the story above suggests is happening) to more Amtrak riders to longer semi trailers to rethinking patterns of sprawl.

2010 Census figures show growing urban population

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In the last 110 years, the United States has become very urbanized: in 1900, 60.4% of the population was rural and 29.6% urban while in 1990, those numbers changed to 24.8% rural and 75.2% urban. New 2010 Census figures show that this trend has continued:

The U.S. population grew by 27 million over the decade, to 308 million. But growth was unevenly distributed. Metropolitan areas, defined as the collection of small cities and suburbs that surround an urban core with at least 50,000 people, accounted for most of the gain, growing 10.8% over the decade to 257.7 million people.

Rural areas, meanwhile, grew just 4.5% to 51 million. Many regions—from the Great Plains to the Mississippi Delta to rural New England—saw population declines. About 46% of rural counties lost population in the decade, including almost 60% of rural counties that aren’t adjacent to a metro area, according to an analysis of Census data by Kenneth Johnson, senior demographer at the Carsey Institute at the University of New Hampshire.

Based on these 2010 figures of 308 million US residents (though the population now is just over 311 million), that means 83.67% of the US lives in metropolitan areas. I still want to see the breakdown of urban areas: how much of the population now lives in suburbs (50.0% of Americans in 2000 compared to 30.3% percent in central cities – page 33 of this report) compared to cities. It is interesting to note that rural areas have still grown in population even as nearly half of rural counties lost population. Where exactly are the rural growth spots and are these exurbs that will soon become part of a metropolitan region or tourist spots?

(The rest of the article talks about how the population continues to grow more in the South and West. Read more about that here.)

Righthaven drops another case

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Righthaven comes up a lot here at Legally Sociable, and I’ve mentioned their suit against Brian Hill, a 20-year-old blogger with autism and severe diabetes, before.  In another victory for defendants in Righthaven lawsuits, Ars Technica reports that Righthaven is dropping its suit against Brian, after the judge noted that enabling a cheap, easy settlement “is not my primary concern”:

Though the case was moving forward, Righthaven made clear it wasn’t actually interested in litigating the suit; it wanted to settle. “Righthaven is no longer willing to engage in settlement discussions over trivial issues while the Defendant and his counsel seek to extend this action for publicity purposes,” said the company. With settlement not a possibility, the company now just wants the suit to go away. [emphasis added]

Indeed, Righthaven’s lawsuits are starting to drop like flies.  It was just two weeks ago that Righthaven dismissed a suit against the freelance author of another Ars Technica article that covered Righthaven’s litigation antics.  In dropping the suit against Ars’ reporter, Righthaven claimed it was all just a mistake:

“We took immediate corrective action” after learning that Righthaven had just sued a reporter, said [Righthaven lawyer Shawn] Mangano. He added that, since reporters make use of copyright and tend to know a good deal about fair use, “It’s somewhat counterintuitive to sue a reporter for copyright infringement!”

While I certainly applaud Righthaven’s decision to drop these two particularly suits, I have to wonder about the outcomes in the other 260+ lawsuits they have filed over the past year.

Dictionary.com defines “bully” as “a blustering, quarrelsome, overbearing person who habitually badgers and intimidates smaller or weaker people.”  This definition appears to describe Righthaven perfectly; indeed, it is only when a defendant proves not to be “smaller or weaker” that they tuck tail and run.  Clearly, Righthaven didn’t think it was worth fighting a reporter backed by one of the largest magazine publishers in the U.S. or a highly sympathetic blogger with a clearly competent lawyer (PDF).  However laudatory in result, its dismissals in these cases seem to confirm that Righthaven is not truly defending a principled (if overzealous) view of copyright law.  Instead, Righthaven appears to be a garden-variety bully out to shake down the small and weak for four-digit settlements.

Copyright reform, anyone?

Update 4/12/2011:  Joe Mullin at paidContent has additional information about the Hill dismissal:

In a 3-page motion, Righthaven tries to let Hill off the hook but maintains a complainy sort of tone….Judge Kane responded to that by taking another extraordinary action—he actually ordered Righthaven’s “warning” to be stricken from the record entirely, along with all the company’s complaints about Hill’s bad behavior. That part of the filing was “immaterial and impertinent,” Kane wrote. That’s a strong suggestion that Kane has become quite annoyed by Righthaven’s tone and actions in this case.

Wow.  I think I’d be quite worried about sanctions if I were representing Righthaven in this case.

Further reading (hat tip to paidContent):

  • Order Denying Righthaven Extension, April 7 [Scribd]
  • Righthaven Notice of Dismissal, April 10 [Scribd]
  • Order To Strike, April 11 [Scribd]

Sociologist looks at 80 years of love songs

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Musical styles might change a bit as time passes but an ever-present feature of rock or pop music is the love song. One sociology professor has a new book looking at such songs and they messages they send:

UC Santa Barbara professor of sociology Thomas Scheff’s new book, What’s Love Got to Do With It? Emotions and Relationships in Pop Songs, reveals why love songs may actually be negative representations of love and relationships for romantics both hopeless and otherwise.

“Music informs our ideas about emotions, and love in particular, but most love songs are terrible models. Lyrics maintain the mystery of love, but they reveal next to nothing about the look and feel of actual love,” asserts Scheff in his book.

Scheff, who studied 80 year’s worth of American song lyrics, reprimands the machine of pop love songs for setting unrealistic expectations about love for listeners. He questions the disconnect between real world expectations and actual outcomes in relationships that listeners formulate from growing up with their favorite love songs, from George and Ira Gershwin’s “They Can’t Take That Away From Me” to N’Sync and Backstreet Boy ballads. Scheff also discusses the pitfalls of pop culture influences.

On the one hand, I can imagine people suggesting that Scheff is simply writing about common sense: of course we know that love songs don’t actually reflect reality. On the other hand, I also imagine there could be some rich ground to cover here, particularly in thinking about how people readily consume such things and then go out and live more complicated relationships. How might Scheff’s thoughts about love songs fit with Ann Swidler’s look at the two dominant motifs regarding love in the United States in Talk of Love? (And in the middle, perhaps there are disc jockeys/radio hosts who will comment that this book is validation for playing love songs. This one’s for you Delilah.)

I will be interested to see if Scheff’s book looks at how love songs have changed over this 80 year period. Are the Gershwins and Adele covering the same ground?

Can Google incentivize being social?

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There is no question that Google would like to be more prominent in the social networking (SNS) phenomenon. Apparently, Google has tied an incentive for employees, a yearly bonus, to how well the employees help the company move forward in this area:

“[Your bonus] can range from 0.75 to 1.25 depending on how well we perform against our strategy to integrate relationships, sharing and identity across our products.” Social.

And yes, you read that correctly, the bonus can go up or down based upon Google’s performance in the social realm. The critics are already jumping all over this one, noting that it looks like all Google employees will be losing bonus money this year. And given the decided lack of success from products like Wave, Buzz, and to a broader extent, Orkut, who can blame them?

But on a higher level, it’s the strategy itself that may be the most interesting thing here. Mathew Ingram notes that you can’t threaten people into being social. While Mike Elgan calls this Larry Page’s first blunder (as CEO). I actually have a slightly different take on this. I think that on paper, this is actually a good idea and strategy. But in practice, I think it will ultimately be looked upon as a bad thing and may even directly backfire.

I’m not sure that I really think the headline on this story captures what is going on (“I’m Having A Party. Here’s $50. Bring Cool People — Or You Owe Me $100.”): being social online is different than incentivizing employees to walk up to people they don’t know on the street and push products. In order to be social online, one needs only to make links between people (“friends” in Facebook terms) and then provide some content (which the user gets to pick and choose). Since I would guess that many Google employees are already operating privately in these SNS realms, how hard would it be to transfer some of that activity into a Google product? While this activity is still personal and requires effort from individuals, it doesn’t seem like it would take much to be social online with a new product.

Now it is a more interesting question to ponder whether such a strategy would actually help a fledgling SNS product get off the ground. This writer suggests other SNS launches were “organic” and a push from Google’s employees would only work if the product was really good. This might be the case – but the argument here is that we know for sure how SNS products take off. Could Google do something new with this kind of incentive and with its large number of employees (and their contacts), could they get a new program/app/platform up and running? If Google employees started even a decent online party, wouldn’t some other people want to get involved?

(On a side note, it would be interesting to think more about this incentive. What do Google employees think of this? By virtue of possibly losing some of their bonus, will workers operate as homo economicus and help make something happen?)

Boost home values by leaving out distressed sales

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The Chicago Tribune looks at one way home values might stabilize: simply don’t include distressed home sales in the calculations and in appraisals.

A report from data provider CoreLogic showed that Chicago-area single-family home prices were relatively flat in February, down only 0.37 percent from a year ago. But that figure includes only traditional sales and not the impact of distressed-sales prices. Add in the sales of foreclosed, bank-owned homes and short sales, and Chicago-area home prices fell 10.4 percent in February on a year-over-year basis…

There’s one problem with Ford’s proposal, though. Appraisers are licensed by the state of Illinois but follow uniform federal guidelines that dictate that they analyze available comparable sales.

“It would lead to a misleading report,” said Chip Wagner of A.L. Wagner Appraisal Group Inc. in Naperville. “You can’t overlook any of the factors in the marketplace that are influencing factors. It sounds like a good idea in fairness to homeowners, but the appraisers that follow that would be in (danger) of losing their licenses.”

While this is being considered in a number of locations, it does seem that legislators would need to decide whether the benefits for homeowners outweigh the limitations.

Additionally, this sort of story might be good ammunition for those who are cynical about statistics: can’t you just change around a definition and say something very different (in this case, Chicago home sales have declined versus they have barely declined)? But at the same time, most statistics are dependent on their operationalization: whether home sale values should include the sales of distressed homes is more of a definitional issue and decisions about this would likely come down to vested interests and motivations.

The “reincarnated McMansion”

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I saw a couple of pieces referring to the Reincarnated McMansion project. Here is the mission of the project:

Through a media campaign, select suitable building and willing McMansion owner.

Audit, dismantle, and rebuild using existing McMansion materials to create 2 homes, applying best practice environmentally sustainable design principles.

You can read more details of the project here. And if you are a resident of Australia who lives in a McMansion, you would have to meet these guidelines to be part of the project:

  • Do you own a home that has a floor space exceeding 360sqm? (If you are not sure how big your home is, measure the outside dimensions of your home and multiply the width by the length of your building. For example, if the outside dimensions are 13 x 15 m (195sqm) and you have a second floor, your home is approximately 390sqm.
  • Does your council allow dual occupancy in your residential zone? (If you are not sure, call your council – most lot sizes greater than 700sqm allow dual occupancy)
  • Are you willing to contribute financially to the project an amount equal to the value added to the site through the Reincarnated McMansion intervention? Receive very significant service and product subsidies through project sponsorship agreements (in the order of 200K – this figure is our initial estimate)
  • Are you prepared to find alternative accommodation (or go on a holiday!) for the duration of the auditing, dismantling and rebuilding process approximately 6 months.
  • Tell us about your home, your family and why you wish to be involved in the project.
  • If you can, please attach digital images of your home.

It will be interesting to see who they sign up for this project: it would require admitting that your home is a McMansion as well as giving up your home.

If this idea catches on, perhaps we will see it imported to the United States where the housing market continues to be in the doldrums. And this is not the only team looking to reuse McMansions – perhaps these groups are forerunners of a larger trend.