Tuesday, January 27, 2015

What if Google forgot about passwords?

This was an interesting thought experiment

I thought it made a rather good point about just how interconnected everything on the web is becoming and how important large players can become to the overall ecosystem.  It's also a good engineering principle that one should avoid single points of failure when possible, because what could fail will eventually fail.   

Monday, January 26, 2015

Infrastructure maintance and suburban development

One does not normally think of suburban developments as being financially bad ideas.  I often see these building patterns as contributing to urban sprawl (wiping out wildlife habitat), congestion on roads, and inequality but being a way to make housing affordable.  But this piece has a strong opinion on even the long term financial viability of this development pattern:
In each of these mechanisms, the local unit of government benefits from the enhanced revenues associated with new growth. But it also typically assumes the long-term liability for maintaining the new infrastructure. This exchange — a near-term cash advantage for a long-term financial obligation — is one element of a Ponzi scheme.

The other is the realization that the revenue collected does not come near to covering the costs of maintaining the infrastructure. In America, we have a ticking time bomb of unfunded liability for infrastructure maintenance. The American Society of Civil Engineers (ASCE) estimates the cost at $5 trillion — but that's just for major infrastructure, not the minor streets, curbs, walks, and pipes that serve our homes.

The reason we have this gap is because the public yield from the suburban development pattern — the amount of tax revenue obtained per increment of liability assumed — is ridiculously low. Over a life cycle, a city frequently receives just a dime or two of revenue for each dollar of liability. The engineering profession will argue, as ASCE does, that we're simply not making the investments necessary to maintain this infrastructure. This is nonsense. We've simply built in a way that is not financially productive.
Interestingly, this hypothesis suggests that tax flight is more effective than one might think at protecting people from paying taxes (municipal taxes being the easiest to avoid by relocation) but that this has long term consequences in terms of infrastructure.  And, of course, this same mobility will let people leave an area after the infrastructure begins to decay and cannot easily be maintained.

While this does seem overly simplistic as a complete explanation for what is happening with US infrastructure, it certainly cannot be helping matters.  It's also pretty hard to decide what to do about.  My best bet is to make people bear more direct costs -- but congestion and mileage taxes don't strike me as especially politically palatable. 

But it does bear thinking about.

Friday, January 23, 2015

Double bonus false-equivalence points at the New York Times

Reading this David Leonhardt piece (Letter From the Editor: Marriage, and When Liberals Are Wrong) is like watching the Three Stooges working in a hardware store -- Here's where he steps on the rake. Here's where he drops the anvil on his foot. Here's where he walks into the buzz saw -- but with the crucial difference that the Stooges at least had some glimmer of awareness after the injury (even Curly would get up off of the stove when his pants started to smoke). Leonhardt doesn't seem to realize there's anything wrong.

The rake --  "[H]appiness research is a mess"

The safe thing for a journalist to say about these dueling views is that they’re both partly correct. And they are! Yet that’s also an incomplete statement. To be blunter, I’d say that family structure is an area where many liberals are putting more weight on their preconceptions (inequality is bad for society) than on the evidence (changes in family structure are both an effect and a cause of inequality).

My colleague Claire Cain Miller’s widely read piece this week on a new study of marriage is another reminder of this fact, I think. The researchers who wrote the paper set out to figure out whether marriage actually promotes happiness or whether married people are happier simply because happier people tend to get and stay married. The data point to the first conclusion: Marriage (or long-term partnership) causes a noticeable and lasting increase in life satisfaction, especially among people who consider their spouse to be their best friend.

There may be no single word in social science research that makes the statistically literate more cautious than "happiness."

It has no standard definition, let alone an operational one. It is difficult to measure, subject to all sorts of selection effects, and colored by expectations. The metrics are vulnerable to framing and other extraneous factors. The data are always confounded. Virtually all attempts at causal inference have to be buried in countless caveats and conditions.

(Dean Baker spells out some of these concerns here, particularly involving survivorship bias)

Even if everything that followed in the piece went well, any conclusions drawn from this data would still be suspect, and as mentioned earlier, what follows doesn't go well at all.

The Anvils (one for each foot)

Having started out with this questionable foundation and made some big causal leaps, Leonhardt then finds himself arguing that "liberals are wrong" on a position that no actual liberal seems to hold, at least none that the author can find. The best he can do is to argue that liberals blame many social problems on inequality and "Life satisfaction isn’t the same thing as inequality, but they’re related." Throw marriage equality into the discussion and the argument for liberals taking the marriage-does-not-lead-to-happiness position is even weaker.

Having smashed one toe, Leonhardt then goes looking for another anvil to knock over.
We should also be willing to say when we think liberals don’t have a claim on the evidence — such as when they argue that education is overrated (but still send their own children to expensive colleges)... 
Just to be clear, the links indicate that Leonhardt is talking about college education. Liberal attitudes toward the role of K through 12 education are complex and you might be able to make at least an interesting argument for some of them underrating that part of the process but with college he runs into the same problem of not being able to come up with any liberals who hold what he suggests is the typical liberal position.

To appreciate fully the journalistic slapstick here, you need to follow the links. The first goes to a piece by EPI research associate Richard Rothstein, the second to another post by Leonhardt.
There are a couple of problems here: first, with no disrespect intended for Mr. Rothstein, if you are going to argue for a liberal consensus on an issue and you are only providing one example, it needs to be someone quite a bit more prominent; second, and more serious, Rothstein's position in no way contradicts Leonhardt's.

Here's the key paragraph from the Rothstein article:
Colleges and other educational institutions can influence which students get the more highly-skilled jobs that are available. But colleges and other educational institutions cannot, to a significant extent, affect the number of jobs that are available – highly skilled or otherwise.
And here are a couple of passages from Leonhardt's article.
A new set of income statistics answers those questions quite clearly: Yes, college is worth it, and it’s not even close. For all the struggles that many young college graduates face, a four-year degree has probably never been more valuable.

The pay gap between college graduates and everyone else reached a record high last year, according to the new data, which is based on an analysis of Labor Department statistics by the Economic Policy Institute in Washington. Americans with four-year college degrees made 98 percent more an hour on average in 2013 than people without a degree. That’s up from 89 percent five years earlier, 85 percent a decade earlier and 64 percent in the early 1980s. 
I find the data from the Economic Policy Institute especially telling because the institute — a left-leaning research group — makes a point of arguing that education is not the solution to all of the economy’s problems. That is important, too. College graduates, like almost everyone else, are suffering from the economy’s weak growth and from the disproportionate share of this growth flowing to the very richest households.
Keep in mind, these aren't just some articles pulled from the archives; these are what Leonhardt himself links to as support for his contention that liberals claim that education is overrated despite the evidence.

And it gets worse. To find someone who actually espouses this "liberal" position, you need to follow through the links in Leonhardt's earlier article. Those will bring you to this:
"For an increasing number of kids, the extra time and money spent pursuing a college diploma will leave them worse off than they were before they set foot on campus," Megan McArdle concluded in a Newsweek cover story last fall. Peter Thiel, the billionaire PayPal co-founder, has been paying smart undergraduates to drop out and start working on something, anything, other than college.
At the risk of belaboring the obvious, in this chain of articles, the two people who come closest to taking the "liberal" position are McArdle and Silicon Valley's favorite pro-monopoly, anti-suffrage Galt-wannabe.

The buzz saw -- offsetting penalties

There is no better way of setting up a gag been combining smug self-congratulation and utter cluelessness.
When we started The Upshot last year, we said that one of our goals would be to avoid false equivalence. When we thought one side of a debate had more claim on the evidence — even when that side didn’t have a complete claim on the evidence — we would say so. In recent years, there have been more than a few policy debates in which liberals have had this greater claim on the evidence — climate change, tax increases on the affluent, Federal Reserve policy or health care. As journalists, we should be willing to say so. We should also be willing to say when we think liberals don’t have a claim on the evidence — such as when they argue that education is overrated (but still send their own children to expensive colleges) or when they argue that marriage isn’t very important.
You have to wonder what definition Leonhardt is using here. For most of us, the expression "false equivalency" refers to the practice of falsely equating things that are dissimilar, particularly in magnitude. The most common form of this is the offsetting penalty. This occurs when journalists weasel out of blowback from a story that is critical of one side by finding something bad to say about the other. This allows the journalist to maintain an air of moral superiority and a reputation for taking tough stances while allowing the wrongdoers to almost completely evade any responsibility for their actions.

Leonhardt's whole piece is an exercise in false equivalence. The fact that he doesn't see that indicates that a level of arrogance and obliviousness that is remarkable even for the New York Times.

And that is a high bar to clear.

Thursday, January 22, 2015

“Epidemiology and Biostatistics: competitive or complementary?”

From Andrew Gelman:
To return to epidemiology vs. biostatistics: it’s my impression that there’s a lot of forward causal inference and a lot of reverse causal inference in both fields. That is, researchers spend a lot of time trying to estimate particular causal effects (“forward causal inference”) and a lot of time trying to uncover the causes of phenomena (“reverse causal questioning”).

And, from my perspective (as elaborated in that paper with Guido), these two tasks are fundamentally different and are approached differently: forward causal inference is done via estimation within a model, whereas reverse causal questioning is an elaboration of model checking, exploring aspects of data that are not explained by existing theories.
It is an interesting question.  I have a very different opinion here (perhaps unsurprisingly) that what we really have is an emphasis on two different pieces of a hard problem.  Both disciplines are looking at the difficult problem of disease (or health) in humans -- where experiments are expensive, awkward, and often infeasible.  It is a very hard problem!

Usually, the practical difference I see is where the researchers starts with the questions.  As a generality, an epidemiologists seems to start by thinking about the disease while a biostatistician tries to think about how to do valid measures in a complex system.  Obviously, if you are ever going to solve these problems you are going to need both approaches.  The day of the very simple epidemiological intervention (John Snow) are likely long past. 

It's also the case that simple attempts to measure  interventions often fail.  Clinical trials use a placebo arm because selection into the trial makes the trial group non-comparable in exceedingly difficult to measure ways.  So you generally have to be good at both tasks for an observational study to be useful. 

But there is also a huge amount of epidemiology that is utterly non-causal.  Why?  Because you cannot come up with testable hypotheses without understanding how different elements relate to one another.  This is what we are doing with the classic case-control study, or at least where I see it as being the most useful.  If you have no idea what causes a rare cancer, looking at what makes the people with cancer different is where you start finding ideas. 

However, these descriptive analyses are not going to give great insight into the cause of the outcome.  For example, mortality has a u-shaped curve with body mass index (many wonderful papers on this phenomenon).  But it is utterly unclear that interventions would help.  Maybe the mortality with low BMI is due to wasting disease, so adding weight if you are thin (and not dying of a disease already) may have no benefit.  Similarly, we don't know what changing a BMI from 45 to 25 would do for a 35 year old.  But if we don't understand the patterns, we can't really target interventions and develop testable hypotheses that are likely to yield important answers. 

So I am often quite serious about looking for "associations" in a lot of contexts.  When we look at the correlated with cardiovascular disease (inflammation or coronary plaques), we are looking for things that you could use to develop a causal hypothesis.  In other contexts, I am interested in using the association as a proxy for a causal effect (unintended drug side effects fall in this category -- when I say warfarin is associated with bleeding, I am really thinking that warfarin causes bleeding). 

And people wonder why epidemiologists are often happy to be confused as "skin doctors".  :-) 

Wednesday, January 21, 2015

When a guy from College Humor does a TED talk... no, really

As far as I can tell, this is an actual TEDx Talk. I can understand why the compulsively trendy crowd behind these events would want to associate themselves with a hot website that's producing a steady flow of viral videos.  I can even see why they might be willing to risk being the target of the satire.

What I can't imagine is how anyone had the nerve to get up and deliver an actual TED Talk after this.

Tuesday, January 20, 2015

The War on Data Continues

Andrew Gelman and I wrote a piece for the ASA a while back called "The War on Data." It discussed what appears to be a disturbing trend of powerful interest groups trying to discredit and/or defund major sources of important, high-quality data, ranging from the Census Bureau to the National Oceanic and Atmospheric Administration.

Now we can add the CBO to the list. Jonathan Chait spells out the ugly details. You should read the whole thing but here are a few key paragraphs.

The Congressional Budget Office is a 40-year-old institution that has acquired enormous clout within Washington by virtue of its reputation for ideological neutrality. It furnishes Congress and the public with budgetary estimates that, if necessarily imperfect (as all predictions must be), are arrived at fairly. It is also a perfect modern expression of an old Progressive Era–ideal: that policymakers should be informed by the work of impartial experts. That the conservative majority has set out to corrupt this institution as one of its first major acts is, therefore, perfectly fitting.

The old methods CBO used to measure legislation would account for changes in behavior that a new law might create. (Say, higher cigarette taxes would lead to less smoking.) They did not attempt to measure legislation’s impact on the economy as a whole. This is because the two parties disagree completely over what policies make the economy grow faster. Democrats, for instance, believe that tax rates on the rich have little effect on economic growth, but that investing in public infrastructure or education has a lot. Republicans believe the opposite. Congress voted yesterday to require the CBO’s measurement of the budgetary cost of legislation to incorporate assumptions about how it will affect economic growth. Specifically, the GOP's assumptions.
The whole reason the Republican Congress is instituting dynamic scoring comes as a response to its attempt to write a tax reform bill last year. The idea was to lower tax rates while eliminating loopholes and preferences. But Republicans discovered that, while lowering rates is easy, eliminating preferences is hard. After Representative Dave Camp produced a tax reform bill that failed to cut tax rates for high-income taxpayers enough for their liking, Republicans abandoned it en masse. Paul Ryan openly declared his plan to change the forecasting rules so that Republicans could cut tax rates without having to pay for every dollar by ending preferences. The first step was kicking out Douglas Elmendorf, the CBO director widely respected by both sides. The second step was yesterday’s vote.
The new, “dynamic” CBO will be systematically biased to make conservative proposals appear misleadingly cheap and liberal proposals misleadingly costly to the public fisc. This would be true even if the Republicans were soliciting a fair range of forecasting perspectives. By its design, the dynamic scoring rule allows the party in power to game its effects. It applies “dynamic scoring” only to legislation affecting 0.25 percent of Gross Domestic Product. As Chye-Ching Huang and Paul Van de Water point out, congressional leaders can manipulate this requirement easily: They can break up large pieces of legislation into smaller bills to avoid dynamic scoring, or combine smaller pieces into a major bill, if needed to make their agenda appear more affordable. Dynamic scoring is subject to abuse by its very design.

Monday, January 19, 2015

“History of the memo”

I've been arguing for a while now that the shiny-object school of technology reporting isn't just annoying; it does real damage. We waste a tremendous amount of time talking about technology that will have a trivial impact or will probably never come to fruition at all. At the same time, genuinely important tech stories go all but unnoticed.

Shininess is a poor indicator of importance. Standardized shipping containers aren't glamorous, but you can make the case that the economic impact of containerization is greater than that of the combined output of Silicon Valley over the last decade.  

Paul Krugman has always been good at separating the real impact of technology from the gee-whiz aspect (I think he slightly overrates Paul David, but that's a small complaint and a topic for another post). Here's an excellent example.
Vox has a nice article about the origins of the business cubicle, which includes a discussion of filing cabinets – which is fine as far as it goes. But there is actually quite a lot more to say, as you’d know if you’d read a wonderful book (with a rather drab title), Control Through Communication, written by my friend JoAnne Yates of MIT’s Sloan School.

JoAnne’s book – which her husband calls “history of the memo” – is about the coevolution of information technology and the business world before the digital age. Of course, back then people didn’t talk about information technology – but IT did exist, indeed developed in fundamental ways, and changed everything. And filing cabinets are a window into those changes.
Organizations have always needed a record of their communications. No doubt ancient Roman merchants had slaves making copies of letters, the way Tom Standage (in another great book) tells us aristocrats did, turning senatorial correspondence into a form of proto-Facebook. Much later, JoAnne tells us, some businesses used a pretty amazing system: outgoing letters would be dampened, placed between the pages of a big book, and squeezed with a screw press to create a sort of reprint.

Then came a revolution: carbon paper! Or actually carbon paper plus typewriters. Suddenly, everything was in triplicate, and keeping a record of all correspondence became easy.

The next question, however, was how to find the relevant correspondence. When damp letters and screw presses were the limits of technology, there was no choice: a chronological record, to flip through when needed, was it. Carbons offered new possibilities: copies could be filed by subject instead or as well. But how should they be filed?

Boxes or drawers were one possibility, but they still involved a lot of shuffling, and relevant letters could easily be overlooked. The answer? The vertical file, with a tab indicating the contents of each folder.

To complete the revolution, however, you needed a behavioral change. Previously, businessmen wrote letters, narratives that might touch on multiple subjects. With the coming of the filing cabinet, however, they had to be disciplined to write each individual document on one and only one subject, so that it could be filed properly. The memo was born.

I love this story on multiple levels. For one thing, I always love reminders that many of the technologies that made the modern world were humble and inconspicuous – one of the great things about Daniel Boorstin’s The Americans vol. 3 is its account of things like the invention of the flat-bottomed paper bag. 

Friday, January 16, 2015

The Road to Bakersfield

A few weeks ago I drove up to Bakersfield for the day. I'd been meaning to make the trip for a while, but the immediate impetus was a series of post I'm working on about Elon Musk's less-than-credible proposal for an almost supersonic train. One of the issues that has not gotten much coverage is the terrain of the proposed route.

Press releases tend to show a the elevated track passing over small, gently rolling hills.

While the actual route often looks more like this.

Snow closures are not unusual on this stretch of I-5, nor are high winds, fires and earthquakes. With more than three-hundred miles of proposed elevated high-tech track that needs to be built to extremely tight tolerances, these factors add up.

It might be helpful if the California-based reporters covering this story would drive some of the road for themselves just to get a feel for what's being proposed. It is also a good excuse to visit Bakersfield, which, as Jonathan Gold explains, is a good way to spend an afternoon.
When I worked at the L.A. Times in the 1990s, my fondest desire was to get Bakersfield on the cover of the travel section, for just one week to replace the Rhine castles and Parisian cityscapes with a picture of the Bakersfield sign that then arched over Union Avenue, and it was a proud day when I succeeded, although I think the editors at the Bakersfield Californian thought I was making fun of them. (The unfortunate headline was "Achy Breaky Bakersfield.") I wasn't.

Bakersfield, a scant two hours away, offers the not-inconsiderable pleasure of being in a place that is neither Los Angeles nor part of greater Los Angeles, a town that is thoroughly Californian but can also feel a lot like the good parts of Oklahoma. It's the home of the Bakersfield Sound, the Merle Haggard/Buck Owen/Rose Maddox thing that brought a bit of grit back to country music, and without it the radio now would probably sound even more like Taylor Swift.

But mostly, at least for me, there is the old-fashioned cooking at one of the city's Basque dining halls, huge, multicourse feasts originally intended for the Basque shepherds staying at the local boardinghouses. They have become so popular that the few sheep men who show up are treated like local celebrities.

If you are sitting down at a long, oilcloth-covered table and there is a tin bowl of beans in front of you, a tureen of thin vegetable soup and a bowl of mild tomato salsa, you know you're at a Basque restaurant even without looking at the maps, the paintings of sheep-protecting dogs and the reservation books in which Echeverria is a more common name than Smith.

The perils of being overly tax aggressive


Just wow.

Josh Marshall:
Which brings us back to Roger Ver, variously known as a "Bitcoin entrepreneur" or the "Bitcoin Jesus." Ver is now a citizen of Federation of Saint Kitts and Nevis. He was so excited about avoiding taxes that as soon as he became a Nevisian he set up yet another start up that would allow you to use bitcoins to buy a Saint Kitts and Nevis passport so you too could avoid US taxes. Alas, it folded after a few months, apparently because the St Kitts government disavowed it.
Unlike Facebook billionaire Eduardo Saverin who renounced his citizenship to avoid US taxes back in 2012, I don't get the impression that Ver is remotely that rich. He may be worth a few or even many millions of dollars. But he does not seem remotely in the category of 100s of millions, let alone billions. In any case, now he wants a visa to return to the US to speak at a Bitcoin conference this weekend in Miami. But the US has repeatedly denied his requests. And he's extremely upset at "the tyrants [who] won't allow me to attend #CES2015, #TNABC or anything in the US."
 This is actually a limitation of trying to become an island unto yourself.  When you cut the cords with everyone else, it isn't shocking that they might actually reciprocate the feeling and cut cords with you.

Thursday, January 15, 2015

Visualizing a different kind of data

I particularly liked the way he handled the dynamics. Definitely one for the Monday videos.

First Arabesque, by Claude Debussy, performed and animated by Stephen Malinowski.

This could almost get me to start listening to the TED radio hour

Another sharp and well-observed clip from College Humor.

Wednesday, January 14, 2015

Plagiarism -- repeat offendees

Alex Toth was perhaps the artist's artist in the field of comics and animation. For decades, if you asked people in the industry to name their favorite, Toth would show up with (and sometimes above) names like Will Eisner, Jack Kirby, and Neal Adams. Jules Feiffer famously said that Eisner was the artist other artists stole from. According to this 2006 piece by comics writer and historian Mark Evanier (who worked for most of the major animation houses and comics publishers), Toth was the artist other artists traced.

After a show was sold and they began making episodes, Alex would usually do model sheets to design the characters — both the regulars and the "incidentals." Incidentals are new characters that appear in only one episode…and there would also be model sheets for vehicles, major props, key pieces of scenery, etc. He produced hundreds of these, perhaps thousands, and they are avidly collected by appreciators of fine comic-style illustration. They were a bit more controversial within the studio where some felt that Toth was the wrong guy to have setting the parameters of what everyone else would then have to draw. Everyone admired his drawing ability but there were those who argued that he was either too good or too special.

In most cases, the artists who would have to then draw the characters based on Alex's models had nowhere near his skills, or at least nowhere near the skills for that kind of illustration. H-B did adventure shows but they also continued to produce shows in what one might call the Yogi Bear style. Depending on what kinds of shows were sold each year and how many, it sometimes happened that a "Yogi Bear" artist would get assigned to an adventure show and many of these otherwise skilled artists struggled to replicate the kind of thing Toth was doing on the model sheets. Even a few artists who were solid in adventure-style art found his work too angular at times. Some Toth model sheets were worked over by others — traced and simplified (some would say, "watered-down") — before they went into production. But many artists were also stimulated by the challenge they presented and found that the designs were solid and, as is necessary with animation, designed with an absolute economy of line.

As I mentioned, animators still hoard and trade copies of them. It is not uncommon that an artist assigned to do up a model sheet of a policeman for some new show will haul out a Toth model sheet of a policeman and trace it, making just enough changes to pass it off as new…or not. I have seen Toth-designed characters appear without modification in shows he had nothing to do with, and I expect we always will. It's just part of the grand legacy that the man leaves us.

Tuesday, January 13, 2015

I'm a bit nervous about posting this at the teaching blog

As previously mentioned, I've been putting together short STEM videos for this weekly feature at You Do the Math. I've also been wasting quite a bit of time at the decidedly not-safe-for-work College Humor site. You might not expect much of an overlap between those two but this clip proved to be the exception.

I'd love to post this on the math education site, but I can't help worrying about the teacher who plays this for his or her class then after it finishes accidentally clicks on the link for... well, pretty much anything else from the site.

Monday, January 12, 2015

Crowdfunding research and the threshold of reportability

Marketplace recently ran this story

"As funding drops, scientists turn to the crowd"

Here's an excerpt:
Susan Nagel from the University of Missouri studies the health impacts of chemicals used in fracking. Last year, Nagel found remnants of fracking chemicals in Colorado streams near locations of previous fracking spills.

“This was an initial study, and we found this kind of strong association,” Nagel says. But she wanted to go farther and confirm her results with more testing.

Her grant application with the National Institutes of Health, however, sat in limbo for months, so she turned to crowdfunding. Nagel set up a project page on the site experiment.com.

“We spent a lot of time on the actual site, developing a video, developing the content to be short but explicit, to be understandable to a broad audience,” Nagel says.

It worked.

Nagel raised $25,000 for a follow-up study. Research like hers is the latest destination for online donors looking to back projects they like. Brian Meece of the crowdfunder RocketHub says science that strikes an emotional chord does better on his site. “Research for animals, research for the environment ... things that are curious, things that are quirky, things that are fun” all do well, Meece says.
There is nothing howlingly bad about this story -- no mangled explanations, no obvious factual errors -- but it's troubling nonetheless because, simply by virtue of occupying a chunk of prime journalistic real estate, it leaves readers with the impression that crowdfunding is playing a substantial part in driving research.

We are talking about a tiny number of people and, in the grand scheme, a trivial amount of money. If you are looking for a philanthropic outlet, experiment.com might be a worthwhile place to send a few dollars, but it doesn't have a place in a serious discussion of how we fund science.

There's a certain natural tension between the desire to cover the unusual and unexpected versus the desire to talk about things that are important and have a large impact (the very fact that something doesn't happen that often tends to limit the number of people it affects ). We therefore cannot expect most stories to be unusual and important, but all too often we see stories that are neither.

Crowdfunding is one of these topics that should often fall in the uninteresting middle. It has been around for years and people use it to raise money for all sorts of things. The fact that someone is using something like Kickstarter to fund a project is no longer, in and of itself, newsworthy.

Crowdfunding also fails the newsworthiness test when we approach it from the other side and look at its impact on society and the economy. With a few niche exceptions (independent filmmaking for example), the role of these sites is almost invariably minor, if not vanishingly small.

We see stories like this partially because they involve what are seen by reporters and, more to the point, editors and publishers as sexy topics that fit nicely with standard narratives. This one involves the internet, the "new economy," and it uses 'crowd' as a prefix. More importantly, it falls squarely in the ever-popular easy-solution genre. No one wants to talk about the tough choice between the nasty political fights and higher taxes needed to fund research adequately on one hand and on the other, the technological and economic stagnation that comes with neglecting the investment. Crowdfunding is a comically inadequate solution but it allows us to put off unpleasant conversations.

Friday, January 9, 2015

Why I am rooting for Netflix (no, really)

Over the past few years, Netflix has become one of this blog's go-to examples for bad business writing. This is partially because there has been a tremendous amount of coverage focused on the company and partially because so much of that coverage has been either logically or factually flawed. After cutting through all of the hype, I find it difficult to be optimistic about Netflix, but I would very much like to be.

Right now, there are three major unlimited streaming services (four if you choose to include Google's YouTube). In addition to Netflix, we have Amazon and Hulu . Amazon has what strikes me as the best business model; unfortunately they also already have a dangerous level of economic power and a history of abusing it (if we include YouTube, the same comments apply to Google). Hulu is a walking antitrust violation in an industry that is already plagued by media consolidation. With competition like this, it is difficult not to root for Netflix.

My suspicion is that CEO Reed Hastings is playing a short-term game, trying to keep all of the balls in the air until he can either find a buyer or make a sufficient killing on the stock. A number of the company's policies feed this impression: the big one is the decision not to build a content library; then there is the tremendously expensive marketing that often seems more focused on building the company's brand among journalists and investors than among  potential consumers; there is the apparent disinterest in controlling costs, something that a company without a deep-pocketed parent cannot manage for long; and there are the disturbingly opaque metrics and bookkeeping practices. These things, along with the general conditions of the market, make me fear that we will not have an independent Netflix for that many years to come.

I do hope I'm wrong though.