Facebook and powerful actors

The Wall Street Journal reports on the ways powerful people interact with the platform differently compared to regular users:

The program, known as “cross check” or “XCheck,” was initially intended as a quality-control measure for actions taken against high-profile accounts, including celebrities, politicians and journalists. Today, it shields millions of VIP users from the company’s normal enforcement process, the documents show. Some users are “whitelisted”—rendered immune from enforcement actions—while others are allowed to post rule-violating material pending Facebook employee reviews that often never come.

At times, the documents show, XCheck has protected public figures whose posts contain harassment or incitement to violence, violations that would typically lead to sanctions for regular users. In 2019, it allowed international soccer star Neymar to show nude photos of a woman, who had accused him of rape, to tens of millions of his fans before the content was removed by Facebook. Whitelisted accounts shared inflammatory claims that Facebook’s fact checkers deemed false, including that vaccines are deadly, that Hillary Clinton had covered up “pedophile rings,” and that then-President Donald Trump had called all refugees seeking asylum “animals,” according to the documents.

A 2019 internal review of Facebook’s whitelisting practices, marked attorney-client privileged, found favoritism to those users to be both widespread and “not publicly defensible.”

“We are not actually doing what we say we do publicly,” said the confidential review. It called the company’s actions “a breach of trust” and added: “Unlike the rest of our community, these people can violate our standards without any consequences.”

This will likely get a lot of attention for the different approach to different kinds of users. That elite members are treated differently could get interesting in an era with an increased focus on inequality and the influence of social media.

I am also interested in hearing more about how much Facebook and other social media platforms rely on powerful and influential people. Celebrities, whether in politics, entertainment, sports, the arts, or other spheres, are important figures in society. Elite figures may not be like regular users in that they attract a lot of views and promote engagement among other users. Social media platforms want users to engage with content and elites may provide just that.

Going further, social media platforms have power users. For example, a small percent of Twitter users are highly engaged. Social media use and content generation is even across different users. Should those who generate more content and engagement operate under a different set of rules? Is having provocative users or people who push the boundaries (or even get away with breaking the rules) good for business?

This makes me wonder if there would be a market for a social media platform that puts users on a more level playing field. If we know that certain resources, statuses, and social markers lead to differential treatment, might an online platform be able to even things out?

Asset income across American counties, from Teton County to South Dakota

A new report finds gaps in asset income across locations in the United States:

Photo by Andrew Jensen on Pexels.com

Wyoming’s Teton County, home to Jackson Hole, has the nation’s highest per-capita income from assets, according to a study by the Economic Innovation Group. The analysis found a sharp increase in geographic concentration of asset ownership over the past decades…

It’s soared in places like New York City and the San Francisco Bay Area. Meanwhile, across Appalachia, the Deep South and much of the Midwest, it stagnated, representing a negligible source of income…

Nationwide, the county with the lowest asset income per capita is in South Dakota, home to the Pine Ridge Indian Reservation. At $2,800 per person, it’s one-third of the national average. Among the largest U.S. counties, the ones with the five lowest incomes from assets per capita are all mostly Hispanic or Black.

Only a minority of Americans holds assets beyond homes, cars and retirement savings. About 15% of households own stocks and 13% hold business equity or other residential property, according to Fed data.

First, the emphasis here on asset income is helpful compared to the more common analysis of incomes. While income may be related to assets, assets gets more at wealth or how income is converted into more long-lasting economic resources.

Second, that assets are concentrated in particular locations is not surprising but with the relatively limited number of Americans who have certain assets, this concentration is even more notable. The truly wealthy Americans have assets and utilize them in certain places, like New York City, San Francisco/Silicon Valley, and Jackson Hole, Wyoming.

With this said, how much does increasing incomes reduce the gap in wealth and assets? Or, how might efforts at local and national levels affect this gap both locally and nationally? The most exclusive locations are going to be difficult for many Americans to afford at any point, regardless of their income. While much sociological research has studied the concentration of poverty, wealth also concentrates with positive feedback loops for those who can participate.

Chicago to test ADUs: coach houses, attic and basement apartments

With housing issues in the city and region, Chicago is testing out several ways property owners can convert parts of their property into residences:

Photo by Anna Shvets on Pexels.com

Coach houses – stand-alone housing structures sometimes built above garages and sometimes referred to as “granny flats” – were once prevalent in Chicago, but changes in zoning and parking requirements caused their construction to be banned in 1957. In December, the Chicago City Council re-legalized coach houses and apartment units in basements and attics, passing the Affordable Dwelling Units Ordinance. The ordinance took effect May 1, and the city is now accepting applications.

The five pilot areas cover much of the city, with zones in the north, northwest, west, south, and southeast areas of Chicago. After a three-year evaluation period in these pilot zones, the city will decide whether to make the ordinance citywide policy…

For properties planning to construct two or more additional dwelling units, every other unit must be affordable housing.

This opens up new opportunities both for property owners and those searching for housing. For landlords, they can gain more income, house family members, or create new space on their property that people could live in later. For those needing housing, these are likely smaller spaces that could provide dwellings in residential neighborhoods and possibly help keep such housing more affordable with more units available.

But, how many of these units will be created? Property owners might not like the idea of someone living so close to them. It takes money to create these units. The density of residential neighborhoods is important to many single-family home owners; they often want more space. Does this create more demand for parking and vehicles? Could this lead to tension on a block if some want to add units and neighbors are not as bullish on the prospects?

Furthermore, do these efforts continue to concentrate wealth and opportunities in the hands of particular land owners who can afford to create and rent units? Will this truly lead to more cheap housing or will certain neighborhoods have more of these units at higher prices?

Could housing bounce back even more unequally after COVID-19?

Even as rents dropped in some major cities during COVID-19, might increased interest now reinforce existing issues in the housing market where those with resources have options and those with fewer resources cannot easily get a foot in the door? From Chicago:

Photo by PhotoMIX Company on Pexels.com

Trisler is among the buyers showing renewed interest in the downtown housing market after attention waned during the past year, as the lure of amenities and access to offices, restaurants and bars took a back seat in many cases to space and relative quiet…

In March, more homes were sold in the Loop and the surrounding neighborhoods than during any other month in at least a year, according to data from the Chicago Association of Realtors. A total of 531 homes were sold across those neighborhoods in March, compared with 418 in March 2020…

Low mortgage interest rates are making downtown condos more affordable to first-time buyers, such as those renting in luxury apartment buildings and looking to buy in similar buildings, he said. Homeowner’s association fees tend to be higher in buildings in dense neighborhoods, but the lower monthly mortgage payments can offset that. And buyers can negotiate good deals on homes in some parts of downtown, he said…

Despite the uptick in sales, lower-priced, one-bedroom condos have been slower to sell than bigger spaces, said @properties real estate agent Chris McComas. He speculated the smaller spaces appeal more to first-time homebuyers, who might have been furloughed earlier in the pandemic.

Some people did just fine during COVID-19. They had good jobs in particular fields that weathered the storm or even thrived during the pandemic. They may have been able to work from home. They already had homes, whether they owned or had rents they could afford.

Others had a tougher time. They have been laid off or furloughed. It could have been hard to find work. They might have become sick. Their housing situation might have been more precarious going in.

Now, as COVID-19 and its effects look like they are winding down, people can think about real estate again. Those who came out relatively unscathed will be able to more easily buy and sell. Those who did not will have a tougher time. This is not solely the fault of COVID-19; this bifurcated housing market has existed for some time. Starter homes are limited in number, somebody is buying the luxury condos that have continued to go up in the biggest cities, and younger adults have several obstacles that could limit their entrance into the housing market. At the same time, this could become another legacy of COVID-19: the ongoing splitting of the housing market.

Reminder: only about one-third of American adults have a college degree

Coverage of a recent study about life expectancy and education provided this reminder about education levels in the United States:

Photo by Ekrulila on Pexels.com

About one-third of Americans have a four-year college degree, and they are living longer and more prosperous lives while the rest face rising death rates and declining prospects, said researcher Angus Deaton, a professor at the University of Southern California’s Center for Health Policy and Economics.

According to QuickFacts from the Census with July 1, 2019 estimates, 32.1% of American adults have a bachelor’s degree or higher.

For a good segment of Americans, college is the expected path that follows after high school and also leads to future opportunities, particularly regarding jobs. But, many American adults did not or do not follow that path and this has all kinds of consequences. At the least, it can provide a reminder to current college students and instructors that college is an opportunity and/or blessing, not just something to be endured for later outcomes. More broadly, that degree can separate workers in the job market, lead to subsequent educational opportunities, and, as this study suggests, interact with health.

In a land of driving, both a bifurcated housing market and car buying market

Americans like to drive and have structured much of daily life around driving. This means many people need a reliable car to get to a decent job, which then enables them to buy a decent home in a place they want to live. But, what if both the house and car buying markets do not provide a lot of good options at lower prices? From the auto industry:

Photo by Pixabay on Pexels.com

Yet that increase was nothing next to what happened in the used market. The average price of a used vehicle surged nearly 14% — roughly 10 times the rate of inflation — to over $23,000. It was among the fastest such increases in decades, said Ivan Drury, a senior manager of insights for Edmunds.com.

The main reason for the exploding prices is a simple one of economics: Too few vehicles available for sale during the pandemic and too many buyers. The price hikes come at a terrible time for buyers, many of whom are struggling financially or looking for vehicles to avoid public transit or ride hailing because the virus. And dealers and analysts say the elevated prices could endure or rise even further for months or years, with new vehicle inventories tight and fewer trade-ins coming onto dealers’ lots…

Charlie Chesbrough, senior economist for Cox Automotive, predicted a tight used-vehicle market with high prices for several more years…

In recent years, automakers had set the stage for higher prices by scrubbing many lower-priced new vehicles that had only thin profit margins. Starting five years ago, Ford, GM and Fiat Chrysler (now Stellantis) stopped selling many sedans and hatchbacks in the United States. Likewise, Honda and Toyota have canceled U.S. sales of lower-priced subcompacts. Their SUV replacements have higher sticker prices.

On the housing side, builders and developers have devoted less attention to starter homes. It can be difficult for some workers to find housing near where they work. The ideal of the suburban single-family home is not attainable for all.

On the driving side, cars are not cheap to operate and maintain. Moving to the suburbs and many American communities requires a commitment to driving to work. A reliable car at a reasonable price could go a long ways to keeping transportation costs down and freeing up household money for other items.

These issues require longer-term planning and attention: how can people with fewer resources still obtain decent housing and decent transportation options? COVID-19 may have exacerbated these issues but the article about the auto industry suggests these trends were already underway; car prices were on the upswing. Trying to tackle density issues or providing more mass transit are difficult to address in many communities and regions. A conversion to electric cars in the next decade or two sounds good but imposes new costs on drivers.

In the meantime, those with resources can likely pick up better options for both cars and homes. These choices can then have positive cascading effects on future spending and outcomes.

To get richer, get the right job and then “buy a home in a neighborhood with a lot of zoning restrictions”

David Brooks looks at which professions provide a higher likelihood of getting into the 1% and then how to get even richer once you are there:

Photo by Vincent Gerbouin on Pexels.com

Once you’ve made some money, there’s one more way to get richer. Buy a home in a neighborhood with a lot of zoning restrictions. For example, 84 percent of the land in Charlotte, N.C., and 94 percent of the land in San Jose, Calif., is zoned for detached single- family homes. These restrictions keep the supply of housing low and jack up the value of homes for people wealthy enough to already own one.

My main message is that if you want to get rich, don’t invent a new and useful product, start a company and try to sell it. That seems risky. Put the effort into entering a clubby line of work in which legislators and professional associations are working to make you rich. It’s easier!

While the majority of the argument is about particular professions, I think the connection between jobs and exclusive homes is this: in both cases, the structures are set up to enrich those that can participate. Just as regulations and structures may privilege particular careers, zoning in the United States is often meant to protect single-family homes. If a homeowner can purchase a residence with particular features and in a specific setting, the zoning helps ensure that the property will be worth more in the future. The homeowner is responsible for some upkeep and updating – and may even go so far as to pursue a teardown – but the protections for the property are almost enough in themselves to let the investment grow in worth just be sitting there.

Connected to this, the zoning for single-family homes restricts the number of residences in that immediate area. More density does not necessarily mean lower property values; numerous urban centers – such as Chicago and New York – are home to new tall buildings whose units are only available to the super-wealthy. At the same time, proximity to amenities and particular neighborhoods are desirable and fewer residences there can help drive up the value of existing properties.

To some degree, many Americans are hoping for this to work for them. Go to college and get a good degree from a good school to gain the right skills, qualifications, and access to social networks. This leads to a better job with higher pay. Then, purchase a home in a reputable community where prices will continue to rise. Wait a few decades and let the pay, home investment, and other benefits accrue. This may not lead to being rich but it reduces anxiety about later decades in life.

Of course, the system could be set up in other ways. Do Americans want homes to be investment vehicles? Should there be such differences in pay and compensation across fields or job positions? Is zoning about the good of the community as a whole or about particular land owners? Combating existing patterns is no easy task, particularly in times when any discussion of inequality can quickly get heated.

Monopoly, racism in Atlantic City, and ongoing effects

The board game Monopoly papered over racism and residential segregation in the city and its legacy in that city and in New Jersey is ongoing:

Photo by Anete Lusina on Pexels.com

For white Americans, “Atlantic City, like all mass resorts, manufactured and sold an easily consumed and widely shared fantasy,” Bryant Simon, a history professor at Temple University and the author of Boardwalk of Dreams: Atlantic City and the Fate of Urban America, told me. “Southernness is used to sell that fantasy in the North,” he explained, pointing to marketing that focused on the stereotypically white, southern luxury of hiring Black laborers to shuttle visitors around in rolling chairs, wait on their tables, or otherwise serve them. Jim Crow, Simon said, existed everywhere. Around the time that Monopoly was taking hold in Atlantic City, ballots there were marked “W” for white voters and “C” for “colored” voters, Simon said. It would take countless demonstrations and protests and a long struggle by the city’s Black residents to secure their civil rights, but the Monopoly board records a world of ubiquitous racism.

Although Black residents and tourists could work at hotels such as the Claridge, between Park Place and Indiana Avenue, they were not permitted to dine or lodge there. Some hotels even offered white guests the option of having only white workers wait on them. Black employment was largely limited to the tourist industry, as political and municipal jobs were reserved for white residents.

Atlantic City’s Boardwalk staged minstrel shows, but Black people were largely barred from attending any form of entertainment on the famed Steel Pier. Schools in the area were segregated, clerks at many hotels did not check in Black tourists, and what antidiscrimination laws were on the books were not enforced, Simon said. If Black residents were found to be on a beach that wasn’t designated for Black patrons only, “it wasn’t just like they were run off,” Simon said. “They would be arrested. The police enforced segregation in the city.”…

The impact of the decisions made during Monopoly’s heyday is still felt today. Atlantic City is a “redlined epicenter” of the state, according to the New Jersey Institute for Social Justice, and it leads the state in foreclosures. The rate of white homeownership in New Jersey stands at 77 percent, but Black homeownership is scarcely half of that, at 41 percent. A typical Black family in New Jersey has less than two cents for every dollar of wealth held by a typical white family.

Monopoly is meant to be fun. Until it is not quite the same when we know more about the city behind the game. The game ignores the racial and housing discrimination elements of real life while the winner is a good capitalist who rode real estate luck and development to the top. Few, if any, games deal with this dimension of social life even as the patterns are long-established.

Similarly, the effects of these past actions are long-reaching. The wealth gap in the United States as a whole between white and Black households is roughly 9-10 to 1 so this larger gap in New Jersey is even more troubling. The state also has a long legacy of limited affordable housing as well as racial tension, illustrated in the Mount Laurel case and ongoing clashes in suburbia (see examples here and here).

Creating the antidote to Monopoly may only be able to go so far to remedy the historical record and improve conditions in New Jersey. Yet, at least knowing that there is more behind the story of Atlantic City and those who were not intended to be included in the game can help us remember which narratives carry the day – and which others could.

The spatial impacts of Amazon

A review of a new book about Amazon highlights the geographic impact of the influential company:

Photo by Sergei Akulich on Pexels.com

In some of MacGillis’s stories, the connection to Amazon is so tenuous as to be almost indiscernible; the characters’ problems seem to arise more from larger forces, such as globalization, gentrification, and the opioid crisis, than from any one corporation’s influence. A young man from small-town Ohio—alienated by his experience in D.C., where he starts college—returns home and enters Democratic politics. After scoring a local success, he runs for Congress, determined that the party not write off his opioid-ravaged, Trump-supporting region, but he fails to drum up more than a couple of union endorsements. A gospel singer who became a cultural force in Seattle during the ’80s watches as her neighbors are pushed out of the city’s historically Black Central District one by one.

Local energies may have been sapped for many reasons, yet in the coastal cities that MacGillis visits, Amazon’s disproportionate ability to further enrich and empower already thriving places and workers is glaring. Familiar though they are, evocations of the six-figure salaries and amenities available to young Amazon programmers—a café catering to their dogs, meeting space in a giant replica of a bird’s nest—acquire new salience set against Torrez’s experience. And the sense of entitlement on display in the company’s search for a second headquarters site is breathtaking. Local officials across hard-knock America prostrate themselves for a chance to host it. In the end, Amazon chooses the suburbs of the nation’s capital—already one of the wealthiest areas in the country—and walks away having amassed a great deal of useful regional data provided by eager bidders who probably never stood a chance.

In the less glamorous pockets of the country—the rural areas and small cities where MacGillis has spent so much time as a reporter—Amazon’s role in making economic hardship more entrenched is no less stark. In El Paso, Texas, Amazon has aggressively marketed itself to the city government as a go-to source for office supplies—which has pushed local purveyors to open up online storefronts on Amazon; a large cut of their sales goes to the corporation. In York, Pennsylvania, the headquarters of the once-fashionable Bon-Ton department store has been made extinct by Amazon and the broader retail consolidation it represents. The crisis of unemployment that has ensued is one that Amazon exploits, finding able bodies for its warehouses in nearby towns.

On his home turf of Baltimore, MacGillis explores most intimately the ebbing of human fulfillment that has accompanied Amazon’s promise of high-speed customer service. He profiles Bill Bodani Jr., who spent most of his working life at Bethlehem Steel’s Sparrows Point complex, outside the city. In the early 2000s, a serious injury forced him to retire in his mid-50s, around the time that foreign competition and other factors pushed the company into bankruptcy. Eventually, the Sparrows Point plant shut down and Bodani’s monthly pension payment was cut from $3,000 to $1,600. Now 69 years old and back at work as a forklift driver in a 22-acre Amazon warehouse, he returns every day to the exact same piece of land. The peninsula has been rebranded—it’s called Tradepoint Atlantic now—and has become what MacGillis calls an “all-purpose logistics hub” that houses, among other facilities, an Amazon fulfillment center.

While Amazon is not the only major corporation that could claim to have a a large impact on so many places in the United States (think Walmart, McDonald’s, and a few others), it’s particular reach and impact might just be unique. With an ability to reach millions of customers in their homes, tech workers in a lot of locations, and fulfillment centers spread across the country, Amazon reaches across multiple sectors and job segments.

This means that its impact on particular places could be quite disparate. Take the Chicago region as an example. Like many places, Chicago wanted Amazon HQ#2. This would add to both office workers in downtown Chicago as well as many more in fulfillment centers around the region. Yet, Amazon’s locations received more money from some poorer suburbs.

Each of these Amazon locations, high-tech or not, has the potential to shape the character of communities. Consider the fate of places like Elwood, Illinois that rely on warehouses and distribution centers. Is an Amazon fulfillment center a good trade-off in the long run? Does the chase for a new headquarters or some higher-quality jobs in corporate offices encourage communities to offer tax breaks and more? What kind of local citizen is Amazon – does it participate in and contribute to local activities, do its buildings and its footprint positively contribute to civic life?

Amazon my be global but it is local for many communities. How it interacts with these numerous local contexts may help decide its long-term fate.

The current holy grail of sports: cheaper labor with stars, MVPs on rookie contracts

Sports leagues have always had a few teams with a lot of money and a willingness to pay players. See the leaked details of Lionel Messi’s contract. These teams with resources tend to do well as their resources allow them to regularly compete for titles and pay to rectify mistakes.

Photo by Fabricio Trujillo on Pexels.com

But, for the majority of teams, there is a regular pattern now: look for players on the cheap. Keep labor costs down. Do not pay too much for past performance. Sometimes this is due to limited resources, sometimes it is about ensuring profits, sometimes it has to do with salary caps or structures that try to ensure competitiveness.

This can occasionally lead to magical runs. The Leicester City title in 2015-2016 defied all odds. In baseball, teams like Tampa and Oakland regularly compete on the cheap and ship away players when they become too expensive. The Detroit Pistons could win an NBA title in 2004 without a major star. Tom Brady can be found in the sixth round.

But, these are rare. Without stars – who often are paid a lot of money – it is hard to compete year after year. Everyone hopes to strike gold now with a top pick, to find good fortune with home-grown talent, or to find diamonds in the rough missed by others. Hence, we see tanking and massive rebuilds as teams tear it all down and trust they can put together the right combination. This is the holy grail: have young players at a reasonable price and then hope it happens.

If it does not, teams often follow patterns. The Rockies pay to send the best third baseman of his generation to the Cardinals. The Lions and Rams paid big contracts to #1 overall drafted quarterbacks and now they swap them amid disappointment. The Blackhawks won multiple championships but now are burdened by big contracts paid to aging stars. Once these players command big money, it limits what else the franchise can do.

In each league, only one team can win it all each year. This would be true even if everyone spent all they could. But, when that does not happen, it is easy to see the interest in keeping labor and operational costs low as an impediment to winning. Even as the public debates inequality, the inequality in sports is real and affects outcomes and wages.