Bring red flags, lots of red flags – Part III: burying the lede

[This buzzword-filled and often somewhat patronizing (particularly at the beginning) New York Times Magazine account of entrepreneurs and Ivy League grads from the USA rescuing the poor children of Africa from poverty and ignorance is so filled with disturbing details, portents of disaster, and indications of general bullshit that we will need to take more than one pass at this. You can find part one here and part two here.]

NYT Magazine pieces tend to be heavily formulaic. The second act often introduces the complications and reveals the flaws. It's the journalism school equivalent of something from the Save the Cat beat sheet. It makes a certain amount of sense in terms of story structure, but it means that really, really important stuff (like the hero's a fraud and the miracle cure will actually kill you) doesn't show up until the middle of a very long piece.

In this case, author Peg Tyre waits till about a third of the way through before making her way to the feet of clay.

At the start, the Bridge founders quickly learned that Kenyan parents did not necessarily see Bridge schools as a better option. ‘‘When the first academies opened, our mentality was a bit like, ‘If we build it, they will come,’ ’’ said Marie Leznicki, then Bridge’s vice president of brand strategy, in the Stanford case study. The case study authors explain that one challenge for the company was that parents were largely illiterate and therefore saw little difference among schools. But some academics who have studied the for-profit, low-fee chain say that some poor Kenyan parents were wary of the model. Sending a child to Bridge was more expensive than the village public school, though less expensive than some informal schools. The poorest families simply couldn’t afford the tuition and additional payments that Bridge required. ‘‘They have to pay enrollment fees, they have to pay for uniforms, they have to pay for lunch,’’ says Christopher Kirchgasler, a former charter-school teacher in the United States who spent 10 months studying Bridge schools in Nairobi and Nyeri County, north of Nairobi, for his doctoral dissertation. ‘‘For us, a matter of a few dollars is nothing, but for these very poor families, it can be a monumental obstacle.’’

For many who did enroll, Bridge’s strict payment system quickly became onerous. Bridge’s business in Kenya depends on most parents making routine electronic payments by mobile phone. But slum-dwelling parents in Kenya are mostly occasional workers who rarely have a predictable income. In informal settlements around Nairobi, I visited 10 or so parents in their homes who explained the fragile finances of their lives. A sick child, an uptick in the price of corn meal or even a prolonged rainstorm can throw a family on the margins into an economic crisis. In most informal and public schools, payment terms are flexible, and the subject of protracted negotiation. Bridge says that it works with families to meet their needs. But many people told me that the school sends children home if fees are not paid.

‘‘They tell you, ‘Sit at home with your child until you get the money,’ ’’ says one parent, a vegetable seller married to an unemployed welder who has two children enrolled at a Bridge school in Nairobi’s Mathare slum. Another mother with a 9-year-old child says she found it difficult to make Bridge payments: ‘‘At times I’ve gone without eating so I can pay school fees.’’

Bridge executives say their schools depend on paying customers. ‘‘We get criticized for being bloodless capitalists,’’ Michael Conway, Bridge’s East Africa director of operations, told me when I met him in Nairobi last September, ‘‘but we know families make choices about who gets paid first. We don’t want to be the last vendor paid. If we become that, then our financial model would be difficult to sustain.’’

 At the risk of spelling out what can probably stand on its own, the whole  raison d'être of this company was supposed to be doing well by doing good. If you can't sustain your model without putting the screws to the very people you're supposed to be helping...

Bridge does not comment on the details of its financial performance, so neither May nor Kimmelman would say how many of Bridge’s Kenyan schools maintain enough enrollment to sustain their model. May says that Bridge currently has 80,000 students enrolled, down 10,000 from last year. ‘‘Before the campaign to attack Bridge began, the academies across Kenya were financially sustainable,’’ she says. Conway acknowledged that the situation on the ground made things complicated. ‘‘It is difficult to keep up enrollment and make the schools break even,’’ Conway said, ‘‘because the churn is so high.’’ He explained that in 2017, thousands of enrolled children were not paid up.

We need to stop and mention that the notably bloodless term "churn," which us corporate types generally use to discuss credit cards and gym memberships, in this case refers to major, possibly traumatic disruptions in children's schooling.

Some education experts say that Bridge’s plans for an international chain of low-fee, for-profit private schools rests on a flawed assumption. While such schools can work well for the relatively small number of families in poor communities who have salaries, says Keith Lewin, a professor emeritus of development and international education at the University of Sussex in Britain who has opposed the model, it is unrealistic to expect the most impoverished families to be able to pay. ‘‘People who engage in a discourse around making a vast number of the poorest people in Africa pay $6 every month for school tuition are people who have no idea what the lives of people living at or below the poverty line are actually like.’’

Keep in mind this article started with the familiar disruption narrative: tech entrepreneurs jump into a field with no real background or experience, shake things up with their fresh ideas and radical approaches and blow through problems that had left the established "experts"" befuddled for decades. If it turns out that the disruptors didn't know what they were talking about, their solutions didn't work, and the "experts" were pretty damned expert all along, that probably should have made it into the first few paragraphs.

Haggling for medical services

This is Joseph

Lawyers, guns, and Money had an excellent pair of articles on shopping for health care, here and here.  I especially liked this example in the comments of the second article from @randomworker:

I've tried this. My deductible is $7200. First, if you want any amount you pay to go against the deductible you have to confine your shopping to the network.
Ok so you priced out your "initial consultation" with your ENT specialist. In the middle of it she suggests a minor procedure to get a better look. Oops. Now what? Do you say no, and then start the shopping process all over again? But now you have to include another office visit in your calculations. Wait! No ENT specialist is just going to sit you down and poke that thing up your nose without the "initial consultation."
So I just asked her "how much?"
"$200"
"Ok"
She performs 30 second procedure.
The bill comes. $425. I call. "She doesn't know, don't listen to her. If you need to know, the prices are on the website."
"Oh, yes, here they are. It says $375."
"Those are last year's prices, you dummy. See, it says 2016 right there, at the top!"
"Where are this year's prices?"
"We don't have them yet."
"It's May."

It seems like a parody, but it is exactly the sort of way that a modern medical office is set up to handle costs and billing.  Nothing is set up to handle quotes or prices.  The idea that you would have a transparent price list is an odd one and only really exists in niche areas of medicine where free market assumptions are plausible: think vision correction or laser hair removal.  Nobody's life is at stake fro these procedures but notice that they set up a completely different pricing set-up than most medical offices based on trying to make sure that the customer is able to puzzle out a price.

In particular, like in this example, medical stuff is very susceptible to "creep" in a way that a lot of other fields are not.  In the areas that are, think car repairs, we have had to create a world in which shops are held to binding quotes.  And, even then, who hasn't heard horror stories about new problems showing up in the process of a repair job, leading to unexpected expenses (it's hard to abandon a disassembled car, even harder to abandon a disassembled body).

It is not impossible to imagine ways to make medicine work a lot more like auto shops, but there is a ton of work that needs to be started first to change the whole way medicine currently works.  I am not sure it is a good idea, at all, but if we want to try and make it act more like a market for non-emergency services I see a ton of regulatory issues that need to be addressed.

Bring red flags, lots of red flags – Part II: Maybe too-good-to-be-true claims might be too good to be true

[This buzzword-filled and often somewhat patronizing (particularly at the beginning) New York Times Magazine account of entrepreneurs and Ivy League grads from the USA rescuing the poor children of Africa from poverty and ignorance is so filled with disturbing details, portents of disaster, and indications of general bullshit that we will need to take more than one pass at this. You can find part one here.]

If you take down a few pages, there is some good, substantial reporting by Peg Tyre on this story. Unfortunately, as is all too often the case with New York Times Magazine articles, the first act is almost entirely credulous and laudatory. For example:

By 2015, Bridge was educating 100,000 students, and the founders claimed that they were providing a ‘‘world-class education’’ at ‘‘less than 30 percent’’ of what ‘‘the average developing country spends per child on primary education.’’ This would represent a remarkable achievement. None of the founders had traditional teaching experience. May had been an unpaid teacher at a school in China; Kimmelman worked with teachers and administrators developing an ed-tech company. How had they pulled it off? In interviews and speeches, they credited cutting-edge education technology and business strategies — the company monitors and stores a wide range of data on subjects including teacher absenteeism, student payment history and academic achievement — along with their concern for the well-being of the world’s poorest children. That potent mixture, they said, had allowed them to begin solving a complex and intractable problem: how to provide cheap, scalable, high-quality schooling for the most vulnerable, disadvantaged children on earth. Their achievement, they believed, could change the world — the subject line of a 2014 Bridge company email read, ‘‘What do Bill Gates, Steve Jobs, Jay Kimmelman and Shannon May have in common?’’ The next year, the venture capitalist Greg Mauro, who is a Bridge board member, told The Wall Street Journal that if all went as planned, the company would seek an initial public stock offering in 2017.

The following needs to be an immutable law of journalism: when someone with no track record comes into a field claiming to be able to do a job many times better for a fraction of the cost, the burden of proof needs to shift quickly and decisively onto the one making the claim. The reporter simply has to assume the claim is false until substantial evidence is presented to the contrary. Put another way, the appropriate response is not "How had they pulled it off?"

In addition, the journalist cannot allow those making the claims to frame the argument or decide what qualifies as satisfactory or innovative. In this case,  Kimmelman and May should never have been allowed to label their own tech and strategies as "cutting-edge," particularly since the examples they give appear to be fairly standard and not merely powerful enough to support their highly implausible assertions.

Later on in the piece, Tyre actually does start digging into the business model, where the key drivers seem to be using cheap, substandard buildings, hiring undertrained and unqualified instructors, employing strong-arm collection tactics, and doing lots of marketing. There is nothing especially groundbreaking about this approach and it is unlikely to "change the world," at least not in a good way.

Copland and Bernstein, plus Cohan rebutted

Some music for the holiday.



































Listening to Cohan, it's easy to forget how controversial going to war in Europe was.

Bring red flags, lots of red flags – part I: "the Tesla of education companies"

[This buzzword-filled and often somewhat patronizing (particularly at the beginning) New York Times Magazine account of entrepreneurs and Ivy League grads from the USA rescuing the poor children of Africa from poverty and ignorance is so filled with disturbing details, portents of disaster, and indications of general bullshit that we will need to take more than one pass at this.]

Occasionally in one of these hype-tastic articles, you get a moment of apparently unintentional truth so startling that you wonder if the author is winking at you. This piece has a number of these moments, but perhaps the most striking comes near the beginning:

Bridge operates 405 schools in Kenya, educating children from preschool through eighth grade, for a fee of between $54 and $126 per year, depending on the location of the school. It was founded in 2007 by May and her husband, Jay Kimmelman, along with a friend, Phil Frei. From early on, the founders’ plans for the world’s poor were audacious. ‘‘An aggressive start-up company that could figure out how to profitably deliver education at a high quality for less than $5 a month could radically disrupt the status quo in education for these 700 million children and ultimately create what could be a billion-dollar new global education company,’’ Kimmelman said in 2014. Just as titans in Silicon Valley were remaking communication and commerce, Bridge founders promised to revolutionize primary-school education. ‘‘It’s the Tesla of education companies,’’ says Whitney Tilson, a Bridge investor and hedge-fund manager in New York who helped found Teach for America and is a vocal supporter of charter schools.

In some ways, the analogy could hardly be further off. Tesla makes a product; Bridge provides a service. Tesla is a luxury brand; Bridge is supposed to serve the extremely poor. Tesla's strategy has been to establish a foothold by targeting a very small niche market; Bridge has always been broad-based. Tesla was notable for competing directly with huge, well established companies; Bridge is targeting an underserved market (and doing so with the cooperation of huge, well-established companies).

In another ways though, the comparison could not be more apt. With the possible exception of Uber, there is no company that has made more out of hype, buzzwords, and modern myths as has Tesla. [From the essential  Brent Goldfarb analysis]:

Silicon Valley investors love to talk about “disruption” — they are besotted with the storyline of small, scrappy, high-tech underdogs upending boring “legacy” corporations. And nowhere is this disruption fetish more evident than in the valuation of Tesla, maker of expensive, well-reviewed electric cars that bestow status on their owners.

Recently, Tesla’s valuation surpassed both Ford’s and General Motors’. BMW is among the other major carmakers in the rearview mirror. The logic of this is intriguing, given that Ford, for example, is coming off its second-best year in its 112-year history, earning $4.6 billion while selling more than 5.5 million cars worldwide. General Motors earned $9.4 billion selling 9.8 million vehicles.

Tesla, meanwhile, sold 76,000 cars while losing near $1 billion. Judged by the valuation, anyway, Tesla appears to be the first successful American entrant into the automobile industry since Chrysler in 1922.

Tesla's paths to profitability are murky. Its chances of justifying its valuation are virtually nonexistent. For all the fanfare, it doesn't even dominate the electric vehicle market. When you strip away all the smoke and mirrors, perhaps the most notable thing about the company is the $99 million in compensation it provides for its CEO.

Mr. Tilson is almost certainly trying to invoke the myth of Tesla, but I'm not sure the real Tesla won't turn out to be a better fit.

Murphy Apartments

[Actually, the bathroom analogy does a much better job making a similar point. Damn you, Joseph!]

The following is some combination of actual ideas, satiric commentary, and just me yanking people's
I was thinking about writing a post with the title "why aren't we seeing Murphy beds?" when I actually saw a store selling upscale, urban-chic Murphy beds.Rather than let events get a jump on me again, this time I'm going to throw deep and talk about applying the Murphy bed principle on a much larger scale.

I've noticed that a lot of advocates for things like zip car and rideshare services like to point out how little time per day the average car owner actually spends behind the wheel. Putting aside concerns with the hours-per-week metric, what's strange about this argument is the implication that it particularly applies to automobiles. With a handful of exceptions, how many things do you own that are actively in use more than a few hours a week?

One obvious exception is your residence, but what if we think in terms of individual rooms? Even the non-claustrophobic need a certain amount of space. Maybe in the near future, we can get around this with virtual-reality, but, for now, I don't think it's realistic to convince people to spend time in much smaller rooms than they currently find acceptable.

We do, however, have the technology to change the dimensions of rooms while they are not being occupied. Obviously, there would be some details to work out but Broadway set designers have been doing this sort of thing for years. With a combination of moving walls and furniture that collapses or moves out of the way like a Murphy bed, you could have an apartment where the space allotted to each room changes depending on the situation. For instance you could have a bedroom that goes from spacious to cramped to wall against wall.

Of course, this would allow you to get by with roughly the same lifestyle in a much smaller place, but the more interesting application lets us bring a market-based solution into the picture. What if you could set a price on how much space was worth to you on a day by day basis? When you need more space, pay the neighbors to let you move the walls out a few feet. When money is tight, squeeze in a bit. And when you're away for the weekend, reduce your floorspace to the absolute minimum.

I can't see any way around the monopoly/monopsony problem and clearly, there would be loads of other issues to work out with this but, it can't be any less practical than some of the other solutions we've been hearing.

chains. If some of these ideas actually pan out (stranger things have happened), I plan to claim that I knew it all along.]

With all the talk of insanely expensive housing prices in places like San Francisco and New York, I've been wondering when we would see an upscale, urban-chic version of the Murphy bed.




.

An analogy for self-driving cars

This is Joseph

I see this sentiment a lot with self-driving cars:

Many industry observers, yours truly included, believe autonomous vehicles have the potential to be far more disruptive than EVs, because they upend the logic of automobile ownership. Most cars sit idle at least 20 hours a day, which is incredible wasteful. But if you could simply summon a private, robot car at will, utilization would increase. This, in turn, has the potential to make mobility much cheaper — it’s public transportation on steroids!

I am not going to say that this idea is wrong.   But let's consider something else that is idle 20 hours per day, has both public and private versions, and there could be efficiencies in reducing duplication of facilities.  I speak of the restroom.

It is immediately obvious that we could make plumbing a lot more efficient if we had a public restroom building on each block and no restrooms in houses.  Or shared restrooms for hotels and apartments.  Restrooms spend a lot of time empty and we could make houses smaller/cheaper if we did not include them.

Why don't we do this?

1. Queuing -- people often want to use the shower or toilet at similar times of the day (say the morning before work)
2. Convenience -- even if the walk is short, it's shorter to have the toilet inside your own house
3. Upkeep -- who is responsible for cleaning and repairing the facilities, especially at 2 am when somebody gets sick
4. Privacy -- people like private spaces
5. Customization -- maybe you want a handicapped shower or a bigger mirror

This doesn't mean we don't have public restrooms.  We do.  But we are also in no danger of replacing the personally owned restroom with the public version.  And I think a lot of the same objection apply to this transition.  

Now this is an analogy -- it's not exact.  But I think we can immediately see that there are reasons that the robot car model might have issues with implementation.  Now, this doesn't mean people won't own their own robot cars -- they sure will.  But the public transportation fleet of robot cars is going to either be a company or the government (today's options).  

So maybe this innovation will happen.  But it would be most successful among income constrained urban dwellers.  These are also people most likely to share other things.  But the road to instantly summoned robot cars is not absolutely clear without a lot more coordination than I expect to see.  

A hump-day post from Charles Mackay

I'm rereading Extraordinary Popular Delusions and the Madness of Crowds and I am struck once again by what a fine novelist's eye Mackay had. As he himself puts it "Many other anecdotes are related, which even, though they may be a little exaggerated, are nevertheless worth preserving, as showing the spirit of that singular period.":

Law was now at the zenith of his prosperity, and the people were rapidly approaching the zenith of their infatuation. The highest and the lowest classes were alike filled with a vision of boundless wealth. There was not a person of note among the aristocracy, with the exception of the Duke of St. Simon and Marshal Villars, who was not engaged in buying or selling stock. People of every age and sex, and condition in life, speculated in the rise and fall of the Mississippi bonds. The Rue de Quincampoix was the grand resort of the jobbers, and it being a narrow, inconvenient street, accidents continually occurred in it, from the tremendous pressure of the crowd. Houses in it, worth, in ordinary times, a thousand livres of yearly rent, yielded as much as twelve or sixteen thousand. A cobbler, who had a stall in it, gained about two hundred livres a day by letting it out, and furnishing writing materials to brokers and their clients. The story goes, that a hump-backed man who stood in the street gained considerable sums by lending his hump as a writing-desk to the eager speculators! The great concourse of persons who assembled to do business brought a still greater concourse of spectators. These again drew all the thieves and immoral characters of Paris to the spot, and constant riots and disturbances took place. At nightfall, it was often found necessary to send a troop of soldiers to clear the street.

 Law, finding the inconvenience of his residence, removed to the Place Vendome, whither the crowd of agioteurs followed him. That spacious square soon became as thronged as the Rue de Quincampoix: from morning to night it presented the appearance of a fair. Booths and tents were erected for the transaction of business and the sale of refreshments, and gamblers with their roulette tables stationed themselves in the very middle of the place, and reaped a golden, or rather a paper, harvest from the throng. The Boulevards and public gardens were forsaken; parties of pleasure took their walks in preference in the Place Vendome, which became the fashionable lounge of the idle, as well as the general rendezvous of the busy. The noise was so great all day, that the Chancellor, whose court was situated in the square, complained to the Regent and the municipality, that he could not hear the advocates. Law, when applied to, expressed his willingness to aid in the removal of the nuisance, and for this purpose entered into a treaty with the Prince de Carignan for the Hotel de Soissons, which had a garden of several acres in the rear. A bargain was concluded, by which Law became the purchaser of the hotel, at an enormous price, the Prince reserving to himself the magnificent gardens as a new source of profit. They contained some fine statues and several fountains, and were altogether laid out with much taste. As soon as Law was installed in his new abode, an edict was published, forbidding all persons to buy or sell stock anywhere but in the gardens of the Hotel de Soissons. In the midst among the trees, about five hundred small tents and pavilions were erected, for the convenience of the stock-jobbers. Their various colours, the gay ribands and banners which floated from them, the busy crowds which passed continually in and out—the incessant hum of voices, the noise, the music, and the strange mixture of business and pleasure on the countenances of the throng, all combined to give the place an air of enchantment that quite enraptured the Parisians. The Prince de Carignan made enormous profits while the delusion lasted. Each tent was let at the rate of five hundred livres a month; and, as there were at least five hundred of them, his monthly revenue from this source alone must have amounted to 250,000 livres, or upwards of 10,000 pounds sterling.

 The honest old soldier, Marshal Villars, was so vexed to see the folly which had smitten his countrymen, that he never could speak with temper on the subject. Passing one day through the Place Vendome in his carriage, the choleric gentleman was so annoyed at the infatuation of the people, that he abruptly ordered his coachman to stop, and, putting his head out of the carriage window, harangued them for full half an hour on their "disgusting avarice." This was not a very wise proceeding on his part. Hisses and shouts of laughter resounded from every side, and jokes without number were aimed at him. There being at last strong symptoms that something more tangible was flying through the air in the direction of his head, Marshal was glad to drive on. He never again repeated the experiment.

 Two sober, quiet, and philosophic men of letters, M. de la Motte and the Abbe Terrason, congratulated each other, that they, at least, were free from this strange infatuation. A few days afterwards, as the worthy Abbe was coming out of the Hotel de Soissons, whither he had gone to buy shares in the Mississippi, whom should he see but his friend La Motte entering for the same purpose. "Ha!" said the Abbe, smiling, "is that you?" "Yes," said La Motte, pushing past him as fast as he was able; "and can that be you?" The next time the two scholars met, they talked of philosophy, of science, and of religion, but neither had courage for a long time to breathe one syllable about the Mississippi. At last, when it was mentioned, they agreed that a man ought never to swear against his doing any one thing, and that there was no sort of extravagance of which even a wise man was not capable.

Asking me not to overbill you means you hate children

I always like to preface these stories of education reform abuse with a reminder that the vast majority of people on both sides of this issue are motivated by a sincere desire to improve the lives of children. Unfortunately, this assumption of goodwill is often very much lacking in the reform movement. Instead, movement reformers all too often assume that people who oppose them are motivated by self-interest, fear of change, etc., while (and this is the really dangerous part) their allies are as dedicated and sincere as they are.

As a result, the movement has been defenseless against truly sleazy operators. In this recent case from Ohio, a major political donor set up an enterprise that allowed him to divert tens of millions of dollars to his side businesses. Then, when caught overbilling the state, he fell back on the human shield defense, running ads that suggested that attempts to make him pay back the money he owes are somehow attacks on Ohio's children (with added chutzpah points for doing it with taxpayer money).

From a report in the Columbus Dispatch by Bill Bush.

Even after ECOT announced that it will lay off 350 workers within weeks, the internet charter school continues to use taxpayer dollars for a barrage of television ads attacking the Ohio Department of Education’s decision to claw back $60.4 million because of the charter’s poor attendance records.

“The Ohio Department of Education wants to end school choice and stop parents from deciding what’s best for their children,” says a former student identified in the ECOT ad as Lionel Morales, a 2017 graduate, in an ad airing in Columbus. The end of the ad is signed “Ohio’s children.”

“That’s why I and the over 36,000 students and alumni of ECOT are hoping our elected leaders fix what’s broken and save our school.”

“Sadly, the Ohio Department of Education says many of us don’t count,” Morales says.

The department said it is ECOT that wasn’t counting how many kids actually participated in classwork after logging in. The department found that ECOT had overbilled the state, invoicing for more than double the number of students it could document.

...

Even before ECOT turned to the airwaves to fight the state over its funding, the school was a big advertiser. The Dispatch reported in 2015 that ECOT spent $2.27 million on advertising to attract students, about 2 percent of its state tax receipts.

But it is unclear whether a school district can legally spend tax money on political ads to urge the legislature to take action.

In the case of ECOT, if the ad campaign succeeds, the tax revenue spent on it could help protect the profit of ECOT founder William Lager via two for-profit companies, IQ Innovations and Altair Learning Management. According to ECOT’s latest audit, for the 2015-16 school year, the school paid the two firms almost $22 million, or about one-fifth of all the tax revenue the school received. Altair is paid to manage the school, while IQ Innovations provides curriculum software.

By comparison, it spent about $47.2 million on salaries, 43 percent of revenue, the audit states.

Lager is one of Ohio’s largest political donors to the GOP, having rained millions of dollars on Ohio politicians.

By the way, this is not our first post on the good people at ECOT or on Ohio's charter school issues.

The Goop criteria

There's a lot of good reporting by Beth Skwarecki in this long but never boring expose of the Gwyneth Paltrow pseudoscience empire (which is still respectable enough for New York Magazine). Difficult to single out the best part, but this exchange struck me as especially pertinent to some of our previous discussions of science journalism.

When Goop publishes something weird or, worse, harmful, I often find myself wondering what are they thinking? Recently, on Jimmy Kimmel, Gwyneth laughed at some of the newsletter’s weirder recommendations and said “I don’t know what the fuck we talk about.” I know Goop is Gwyneth’s brainchild, but I also know a woman of her status does not write a weekly newsletter by herself.

Luckily, there is an “Ask Me Anything” stop staffed with Goop editors. They lounge on white-cushioned chairs, under umbrellas for shade, and are dressed in light blue button-down shirts. The editors are mobbed all day. Whenever I stop by to eavesdrop, it sounds like attendees are pitching them products to feature.

I find the station quiet during one of the more popular talks, and end up speaking with editorial director Nandita Khanna. “You publish a lot of things that are outside of the mainstream. What are your criteria for determining that something is safe and ethical to recommend?”

Khanna starts by pointing out that they include a disclaimer at the bottom of health articles. This is true. It reads:

    The views expressed in this article intend to highlight alternative studies and induce conversation. They are the views of the author and do not necessarily represent the views of goop, and are for informational purposes only, even if and to the extent that this article features the advice of physicians and medical practitioners. This article is not, nor is it intended to be, a substitute for professional medical advice, diagnosis, or treatment, and should never be relied upon for specific medical advice.

Okay, but how do you decide that something is worth including in Goop to begin with? “We definitely do our homework,” she says, and insists that the team extensively discusses and researches the things that end up in the pages of Goop. She won’t go into detail about the process, but she points out that some of their sources are doctors. Do you ever ask the doctors to vet new ideas? I ask. Yes, she says, often.

But she says they don’t have any specific guidelines. Sometimes Gwyneth will say she doesn’t think this or that story is the right one to tell, or maybe it’s not the right time to tell it.

So I ask: “What responsibility do you believe you have to your readers?” Here at Lifehacker, I recently killed a post I was excited about—a trick for stopping kids from unbuckling and escaping from their car seat—after a car seat expert nixed it. I feel like if I’m providing information people might act on, I have a responsibility to make sure that information is reasonably accurate and that people won’t hurt themselves (or their children) if they take me at my word.

Goop’s editors don’t see it that way. “Our responsibility is to ask questions, to start the conversation,” Khanna says. Even if the product or advice doesn’t work? “I think it’s up to each person to decide what works for them,” says another editor sitting nearby. Khanna agrees. “Medicine is so subjective.”

(Medicine, actually, is not subjective in this way. The point of randomized controlled trials, a key concept in medical research, is to set aside subjectivity and figure out what’s useful and what’s a waste of time. Nobody here, staff or attendees, seems even the least bit interested in separating the worthwhile stuff from the garbage.) [I'm not crazy about Skwarecki's phrasing here (I would have mentioned double blinding, placebo effects and the need for well defined objective metrics), but the basic point is important -- MP]

I turn the conversation to Goop’s infamous jade eggs. They are for sale that day in the pharmacy shop, and I got to hold one in my hand. It was smaller than I expected, not the size of a chicken egg but more like a grape tomato. Both the jade and rose quartz eggs have a hole drilled through the smaller end, and at first I imagined a Goop acolyte taking the egg out of her vagina, rinsing it off, and hanging it around her neck. I learned later that the hole is the answer to the question in the jar: you can attach dental floss to give it a removal string, like a tampon.

The idea of the jade egg, or its prettier rose quartz companion, is to “cultivate sexual energy, increase orgasm, balance the cycle, stimulate key reflexology around vaginal walls.” The grain of truth here is that using a small weight for vaginal exercises can help strengthen the muscles in that area. You can do this without a weight, too.

But Jen Gunter, a practicing gynecologist who is one of Gwyneth’s most vocal critics, has explained that jade eggs are a terrible idea. Stones can be porous enough to grow bacteria, and she says the instructions for using the egg are incorrect and could harm people. For example, a Goop article suggests walking around with the egg inside of you. Gunter counters that overworking your vaginal muscles this way can result in pelvic pain.

The Goop editors remember the jade egg backlash, and they are unfazed. “Did you read the letter from Layla?” Khanna asks. Layla Martin, who sells jade eggs and a seven-week course on how to use them, wrote a 2,000-word “letter to the editors” defending the eggs. Goop published it in their newsletter, and underneath it, their disclaimer, and underneath that, a link to their shop.

Khanna says they “never considered backing down.” She points out, as if it were a defense, that the eggs were very popular and sold out right away. I ask her: Has there ever been a health article in Goop that you thought afterward, maybe we shouldn’t have run that?

No, she says, never.

The sad part is that New York Magazine would probably write a puff piece for it

Assuming Colbert could line up a celebrity business partner. [If you want actual journalism on Paltrow's pseudoscience, check out this excellent piece by Beth Skwarecki.]

An evergreen quote

This is Joseph.

I juts ran across this quote by Matt Yglesias while reading another article:

But it is entirely emblematic of America’s post-Reagan treatment of business regulation. What a wealthy and powerful person faced with a legal impediment to moneymaking is supposed to do is work with a lawyer to devise clever means of subverting the purpose of the law. If you end up getting caught, the attempted subversion will be construed as a mitigating (it’s a gray area!) rather than aggravating factor. Your punishment will probably be light and will certainly not involve anything more than money. You already have plenty of money, and your plan is to get even more. So why not?

And if  you think that this isn't the case, consider Wells Fargo:

These payouts are on top of the $3.2 million Wells Fargo has paid to customers over 130,000 accounts over potentially unauthorized accounts. That works out to a refund of roughly $25 per account.

Now any one case can be pretty nuanced.  Maybe this settlement is fine.  But does this really look like the sort of penalty that would really discourage any sort of future wrong doing?

There are several reasons to punish bad behavior in a white collar context -- mostly to make it possible to have a fair and free market.  But the punishments need to be at least severe enough that bad actions are discouraged.  Responsibility should not be only for the powerless and the middle class.  I am all for being compassionate about mistakes, but I would like to see compassion across the spectrum, and not isolated to large corporate actors.

This 2016 post on journalistic homogeneity has just gotten relevant again

[When reading the overheated coverage of the Whole Foods acquisition, remember that the chain's relatively few locations are heavily concentrated in the same areas where journalists are over-represented. And yes, Terre Haute is out of luck.]

Location continued

Dean Dad points us to something I wish I had seen before writing the other location, location, location posts.

But with the shift in production has come a shift in geography.  As Joshua Benton’s recent piece notes, jobs in the new journalism are much more concentrated on the coasts than jobs in the old journalism are.  In a recent survey, almost 40 percent of the digital journalism jobs in America were physically based in the New York City and D.C. metros.  That’s compared to less than 10 percent of the jobs in television journalism.  Terre Haute may have a local news team, but it probably doesn’t have a freestanding digital news provider of any size.

I can't really recommend the rest of the Benton piece (too much conventional wisdom for my taste), but he deserves credit for digging up that remarkably telling statistic.

Pretty much all of us news-junkies consume the product on at least two levels: local and national. Ideally, the second should reflect a broad awareness and understanding of the parts that make up the first, not to mention the social and economic strata that make up the parts. This is extremely difficult when the people covering national stories tend to be geographically concentrated, particularly when they also tend to be economically and culturally homogeneous.

Of course,  we have to be careful about overgeneralizing -- there are, for example, food bloggers who just write about local scenes – but digital journalists play a big role in the discussion of national topics like transportation, and those journalists are disproportionately located in those two cities, as are the major print publications that dominate the national discourse. All of this is contributing to debates where not only do all of the participants have the same frame of reference; they are increasingly unable to imagine anyone having a different one.

If I lived in NYC or DC or San Francisco, I could imagine giving up my car and relying on Uber and public transportation. And if I and everyone I associated with lived in NYC or DC or San Francisco, some of the more optimistic Uber business scenarios might strike me as credible.

Aspect dominance, competitive landscapes, and other reasons why the Amazon acquisition of whole foods may not be that big of a deal.

Also ran this one in the food blog.

First off, let's look at some numbers.
[From Wikipedia]

National chains
    Albertsons LLC - 2,400 stores; besides the parent company, some stores are operated under the banners: Acme Markets, Carrs, Jewel-Osco, Lucky, Pavilions, Randalls and Tom Thumb, Safeway Inc., Shaw's and Star Market, United Supermarkets and Market Street, and Vons
    Aldi - 1,401 stores;
    Costco - approximately 500 warehouse stores in the USA, plus 200 elsewhere
    Ahold Delhaize - 2265 stores under the following brands.
        Food Lion (1098 stores in Delaware, Georgia, Maryland, Pennsylvania, Tennessee, West Virginia, Kentucky, North Carolina, South Carolina, Virginia)
        Hannaford (188 stores in Maine, Massachusetts, New Hampshire, New York and Vermont)
        Giant-Carlisle (197 stores in Pennsylvania, Maryland, Virginia and West Virginia)
        Giant-Landover (169 stores in Delaware, District of Columbia, Maryland and Virginia)
        Stop & Shop (416 stores in New York Metro: Connecticut, New Jersey, New York, New England: Connecticut, Massachusetts and Rhode Island)
        Martin's Food Markets (197 stores in Pennsylvania, Virginia, Maryland, and West Virginia)
    Kmart Super Center - 624 stores
    Kroger - 2,460 stores; besides the parent company, stores operate under Baker's Supermarkets, City Market, Dillons Supermarkets, Food 4 Less, Foods Co., Fred Meyer (technically a hypermarket), Fry's Food & Drug, Gerbes Super Markets, Harris Teeter, Jay C, King Soopers, Owen's, Pay Less Super Markets, QFC, Ralphs, Roundy's, Ruler Foods, Scott's, and Smith's
    Schnucks - 100+ Stores
    SpartanNash - operates 167 retail stores in 44 states, Europe, Latin America, and the Middle East
    SuperValu Inc. - 1,582 stores (691 corporate and 891 franchised stores); the Save-A-Lot name is its most common banner; others are Cub, Farm Fresh, Hornbacher's, Shop 'n Save and Shoppers
    SuperTarget - 251 stores
    Trader Joe's - 457 stores (as of April 22, 2015)
    Walmart - 3522 stores + 699 Neighborhood Markets + 660 Sam's Clubs (as of January 31, 2017)
    Whole Foods - 430 stores (as of June 14, 2016)

Add in a ton of local and regional players and it becomes evident that Whole Foods is not that big of a slice. 



The distorting effects of aspect dominance
.
Whole foods is not just small in absolute terms; it is almost exclusively focused on a very narrow target market. Upscale, price insensitive, urban foodies credulously immersed in the world of health and culinary trends. By coincidence, this profile matches almost perfectly with the journalists currently reporting the story.

Whole Foods looms large in the lives of the kind of people who write for New York magazine or produced segments for CNN. This inclines them to lend this story an air of importance it does not merit. For example check out Matt Yglesias.


The post-peak problem

Even with its targeted demographic, there is considerable evidence that Whole Foods was already in danger of losing its dominant position. A decade ago, the chain largely had a lock on the organic and exotic market. If you wanted heirloom tomatoes and cage free eggs and pink Himalayan salt and those big bottles of Dr. Bonner's soap that your stoner friends used to read in the bathtub in college, you could either drive around various health-food shops and co-ops or you could go to Whole Foods.

Recently, though, the company has found its one time monopoly under assault from all sides. Old-fashioned retailers like Kroger's and Walmart have greatly expanded their organic and exotic selections. On the opposite front, small, nimble players like Trader Joe's and Sprouts have gone directly after the target market and have done so with far better prices and superior branding. This latter threat has gotten so bad that Whole Foods was forced to launch the Trader Joe's clone 365.

Before Amazon swooped in, the company had been facing one of the ugliest competitive landscapes in the industry.



"But we'll make it up with volume"

I know it seems a mundane point in this age of disruptors and economages, but Wal-Mart (and Krogers and Costco and ...) have mastered the art of selling groceries at a profit. Amazon appears to have gone into the business largely as a kind of loss leader and it's not clear they have any real plans to move beyond that model.

Wal-Mart, on the other hand, just might

This is an interesting idea, with some potentially big implications.



And finally, Jim Cramer predicts the possibility of great things.

There are few things scarier in the world of finance.

The scariest quote you'll see on antitrust this week

 For reasons I'll try to go into later, I'm not all that worried about the antitrust issues with the Amazon-Whole Foods merger, though that might change with new developments. The sale of a Kroger or a Safeway would certainly make me rethink this, as would a real (rather than all-hype) advance in food delivery systems. For now, though, I'm going to be more concerned by pretty much anything that comes out of Comcast, for example.

But when we do hit the next big antitrust case, this story by Gizmodo's Rhett Jones will worry me deeply. [emphasis added]

Makan Delrahim is Trump’s nominee to handle antitrust cases at the Justice Department. He made it through Senate Judiciary Committee hearings this month and should be starting work soon.
 

According to The Intercept, Delrahim has spent the last decade working in the private sector on merger deals and is considered to be very corporate friendly in such matters. As The New York Times puts it, he flippantly believes that “a monopoly is perfectly legal until it abuses its monopoly power.” For about 12 years, he has worked for the law firm Brownstein Hyatt Farber Schreck, which just happens to be registered to lobby on Amazon’s behalf.

Over at the FTC, Abbott Lipsky is the acting Director of the Bureau of Competition. Whole Foods has hired Lipsky’s former law firm, Latham & Watkins, to manage the proceedings with Amazon.