If native advertising is so harmless, why does it rely on misleading readers?

o13-iconBob Garfield writes: The devil walks into a bar and sits at a table with eight newspaper and magazine publishers plus one strange little fellow in shabby, dated robes. The devil says, “How’d you all like to get some advertising revenue at higher rates than what you’ve been fetching for the past five or six years?”

The publishers crowd in to hear to his offer. All they need do in exchange is make the advertising look similar to the surrounding editorial matter. “Can we label it as advertising?” one publisher asks.
“You can label it ‘sponsored content,’” the devil replies.
“And it will be worthy?” chimes in another publisher.
“Oh yes,” says the devil. “My clients don’t benefit if people don’t read the stuff.”
“But won’t this confuse our readers,” ventures another publisher, “and even deceive them into reading brand propaganda when they’re expecting arms-length journalism?”

The devil has an answer for that, too. “I repeat: the rates are higher than for the regular display ads that nobody ever looks at. What say we put this to a vote?”

One by one the publishers raise their hands. The Economist. Forbes. The Atlantic. The Huffington Post. The Washington Post. Time Inc. The New York Times. And, most recently, Yahoo. Nine people sit at the table, and eight hands eventually are raised. Only one, the strange fellow with the odd garments and a thick German accent, fails to accept the devil’s offer.

“And you, sir,” says the prince of darkness. “I didn’t catch your name.”
“Faust,” answers the holdout.
“And may I ask why you did not accept my bargain, Mr Faust?”
The odd fellow nods. “Sure,” he says to the devil. “To tell you the truth, I don’t see much of an upside.” [Continue reading...]

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How people are becoming the property of technology companies

o13-iconFollowing Facebook’s $19 billion dollar acquisition of WhatsApp, Reuven Cohen writes: In November 2013, a survey of smartphone owners found that WhatsApp was the leading social messaging app in countries including Spain, Switzerland, Germany and Japan. Yet at 450 million users and growing, there is a strong likelihood that both Facebook and WhatsApp share the majority of the same user base. So what’s driving the massive valuation? One answer might be users attention. Unlike many other mobile apps, WhatsApp users actually use this service on an ongoing daily or even hourly basis.

“Attention,” write Thomas Mandel and Gerard Van der Leun in their 1996 book Rules of the Net, ”is the hard currency of cyberspace.” This has never been truer.

WhatsApp’s value may not have much to do with the disruption of the telecom world as much as a looming battle for Internet users rapidly decreasing attention spans. A study back in 2011 uncovered the reality for most mobile apps. Most people never use an app more than once. According to the study, 26% of the time customers never give the app a second try. With an ever-increasing number of apps competing for users attention, the only real metric that matters is whether or not they actual use it. Your attention may very well be the fundamental value behind Facebook’s purchase.

In a 1997 Wired article, author Michael H. Goldhaber describes the shift towards the so called Attention Economy; “Attention has its own behavior, its own dynamics, its own consequences. An economy built on it will be different than the familiar material-based one.” writes Goldhaber.

His thesis is that as the Internet becomes an increasingly strong presence in the overall economy and our daily lives, the flow of attention will not only anticipate the flow of money, but also eventually replace it altogether. Fast-forward 17 years and his thesis has never been more true.

As we become ever more bombarded with information, the value of this information decreases. Just look at the improvements made to Facebook’s news feed over the years. In an attempt to make its news feed more useful, the company has implement-advanced algorithms that attempt to tailor the flow of information to your specific interests. The better Facebook gets at keeping your attention, the more valuable you become. Yes, you are the product. [Continue reading...]

To the extent that corporations are in the business of corralling, controlling, and effectively claiming ownership of people’s attention, the only way of finding freedom in such a world will derive from each individual’s effort to cultivate their own powers of autonomous attention.

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Anatomy of the Deep State

Rome lived upon its principal till ruin stared it in the face. Industry is the only true source of wealth, and there was no industry in Rome. By day the Ostia road was crowded with carts and muleteers, carrying to the great city the silks and spices of the East, the marble of Asia Minor, the timber of the Atlas, the grain of Africa and Egypt; and the carts brought out nothing but loads of dung. That was their return cargo.

– The Martyrdom of Man by Winwood Reade (1871)

f13-iconMike Lofgren writes: There is the visible government situated around the Mall in Washington, and then there is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The former is traditional Washington partisan politics: the tip of the iceberg that a public watching C-SPAN sees daily and which is theoretically controllable via elections. The subsurface part of the iceberg I shall call the Deep State, which operates according to its own compass heading regardless of who is formally in power.

During the last five years, the news media has been flooded with pundits decrying the broken politics of Washington. The conventional wisdom has it that partisan gridlock and dysfunction have become the new normal. That is certainly the case, and I have been among the harshest critics of this development. But it is also imperative to acknowledge the limits of this critique as it applies to the American governmental system. On one level, the critique is self-evident: In the domain that the public can see, Congress is hopelessly deadlocked in the worst manner since the 1850s, the violently rancorous decade preceding the Civil War.

As I wrote in The Party is Over, the present objective of congressional Republicans is to render the executive branch powerless, at least until a Republican president is elected (a goal that voter suppression laws in GOP-controlled states are clearly intended to accomplish). President Obama cannot enact his domestic policies and budgets: Because of incessant GOP filibustering, not only could he not fill the large number of vacancies in the federal judiciary, he could not even get his most innocuous presidential appointees into office. Democrats controlling the Senate have responded by weakening the filibuster of nominations, but Republicans are sure to react with other parliamentary delaying tactics. This strategy amounts to congressional nullification of executive branch powers by a party that controls a majority in only one house of Congress.

Despite this apparent impotence, President Obama can liquidate American citizens without due processes, detain prisoners indefinitely without charge, conduct dragnet surveillance on the American people without judicial warrant and engage in unprecedented — at least since the McCarthy era — witch hunts against federal employees (the so-called “Insider Threat Program”). Within the United States, this power is characterized by massive displays of intimidating force by militarized federal, state and local law enforcement. Abroad, President Obama can start wars at will and engage in virtually any other activity whatsoever without so much as a by-your-leave from Congress, such as arranging the forced landing of a plane carrying a sovereign head of state over foreign territory. Despite the habitual cant of congressional Republicans about executive overreach by Obama, the would-be dictator, we have until recently heard very little from them about these actions — with the minor exception of comments from gadfly Senator Rand Paul of Kentucky. Democrats, save a few mavericks such as Ron Wyden of Oregon, are not unduly troubled, either — even to the extent of permitting seemingly perjured congressional testimony under oath by executive branch officials on the subject of illegal surveillance. [Continue reading...]

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It’s time to rethink our nightmares about surveillance

f13-iconThis is an excerpt from Zeynep Tufekci’s article at Matter — but don’t just read this, read her whole piece: I was in Philadelphia when the protests in Istanbul exploded, at a gathering called Data-Crunched Democracy, hosted by the Annenberg School for Communication at the University of Pennsylvania. It was supposed to be exciting, and a little contentious. But I’m also a scholar of social movements and new technologies. I’d visited Tahrir, the heart of the Egyptian uprising, and Zuccotti Square, the birthplace of the Occupy movement. And now new technology was helping to power protests in Istanbul, my hometown. The epicenter, Gezi Park, is just a few blocks from the hospital where I was born.

So there I was, at a conference I had been looking forward to for months, sitting in the back row, tweeting about tear gas in Istanbul.

A number of high-level staff from the data teams of the Obama and Romney campaigns were there, which meant that a lot of people who probably did not like me very much were in the room. A few months earlier, in an op-ed in the New York Times, I’d argued that richer data for the campaigns could mean poorer democracy for the rest of us. Political campaigns now know an awful lot about American voters, and they will use that to tailor the messages we see — to tell us the things we want to hear about their policies and politicians, while obscuring messages we may dislike.

Of course, these tactics are as old as politics. But the digital era has brought new ways of implementing them. Pointing this out had earned me little love from the campaigns. The former data director on the Obama campaign, writing later in the Times, caricatured and then dismissed my concerns. He claimed that people thought he was “sifting through their garbage for discarded pages from their diaries” — a notion he described as a “bunch of malarkey.” He’s right: Political campaigns don’t rummage through trashcans. They don’t have to. The information they want is online, and they most certainly sift through it.

What we do know about their use of “big data” — the common shorthand for the massive amounts of data now available on everyone — is worrisome. In 2012, again in the Times, reporter Charles Duhigg revealed that Target can often predict when a female customer is pregnant, often in the first 20 weeks of pregnancy, and sometimes even before she has told anyone. This is valuable information, because childbirth is a time of big change, including changes in consumption patterns. It’s an opportunity for brands to get a hook into you — a hook that may last decades, as over-worked parents tend to return to the same brands out of habit. Duhigg recounted how one outraged father, upset at the pregnancy- and baby-related coupons Target had mailed to his teenage daughter, visited his local store and demanded to see the manager. He got an apology, but later apologized himself: His daughter, it turned out, was pregnant. By analyzing changes in her shopping — which could be as subtle as changes in her choice in moisturizers, or the purchase of certain supplements — Target had learned that she was expecting before he did.

Personalized marketing is not new. But so much more can be done with the data now available to corporations and governments. In one recent study, published in the Proceedings of the National Academy of Sciences, researchers showed that mere knowledge of the things that a person has “liked” on Facebook can be used to build a highly accurate profile of the subject, including their “sexual orientation, ethnicity, religious and political views, personality traits, intelligence, happiness, use of addictive substances, parental separation, age, and gender.” In a separate study, another group of researchers were able to infer reasonably reliable scores on certain traits — psychopathy, narcissism, and Machiavellianism — from Facebook status updates. A third team showed that social media data, when analyzed the right way, contains evidence of the onset of depression.

Remember, these researchers did not ask the people they profiled a single question. It was all done by modeling. All they had to do was parse the crumbs of data that we drop during our online activities. And the studies that get published are likely the tip of the iceberg: The data is almost always proprietary, and the companies that hold it do not generally tell us what they do with it.

When the time for my panel arrived, I highlighted a recent study in Nature on voting behavior. By altering a message designed to encourage people to vote so that it came with affirmation from a person’s social network, rather than being impersonal, the researchers had shown that they could persuade more people to participate in an election. Combine such nudges with psychological profiles, drawn from our online data, and a political campaign could achieve a level of manipulation that exceeds that possible via blunt television adverts.

How might they do it in practice? Consider that some people are prone to voting conservative when confronted with fearful scenarios. If your psychological profile puts you in that group, a campaign could send you a message that ignites your fears in just the right way. And for your neighbor who gets mad at scaremongering? To her, they’ll present a commitment to a minor policy that the campaign knows she’s interested in — and make it sound like it’s a major commitment. It’s all individualized. It’s all opaque. You don’t see what she sees, and she doesn’t see what you see.

Given the small margins by which elections get decided — a fact well understood by the political operatives who filled the room — I argued that it was possible that minor adjustments to Facebook or Google’s algorithms could tilt an election. [Continue reading...]

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Half of U.S. farmland being eyed by private equity

a13-iconIPS reports: An estimated 400 million acres of farmland in the United States will likely change hands over the coming two decades as older farmers retire, even as new evidence indicates this land is being strongly pursued by private equity investors.

Mirroring a trend being experienced across the globe, this strengthening focus on agriculture-related investment by the private sector is already leading to a spike in U.S. farmland prices. Coupled with relatively weak federal policies, these rising prices are barring many young farmers from continuing or starting up small-scale agricultural operations of their own.

In the long term, critics say, this dynamic could speed up the already fast-consolidating U.S. food industry, with broad ramifications for both human and environmental health.

“When non-operators own farms, they tend to source out the oversight to management companies, leading in part to horrific conditions around labour and how we treat the land,” Anuradha Mittal, the executive director of the Oakland Institute, a U.S. watchdog group focusing on global large-scale land acquisitions, told IPS.

“They also reprioritise what commodities are grown on that land, based on what can yield the highest return. This is no longer necessarily about food at all, but rather is a way to reap financial profits. Unfortunately, that’s far removed from the central role that land ultimately plays in terms of climate change, growing hunger and the stability of the global economy.”

In a new report released Tuesday, the Oakland Institute tracks rising interest from some of the financial industry’s largest players. Citing information from Freedom of Information Act requests, the group says this includes bank subsidiaries (the Swiss UBS Agrivest), pension funds (the U.S. TIAA-CREF) and other private equity interests (such as HAIG, a subsidiary of Canada’s largest insurance group). [Continue reading...]

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The math that predicted the revolutions sweeping the globe right now

f13-iconBrian Merchant writes: It’s happening in Ukraine, Venezuela, Thailand, Bosnia, Syria, and beyond. Revolutions, unrest, and riots are sweeping the globe. The near-simultaneous eruption of violent protest can seem random and chaotic; inevitable symptoms of an unstable world. But there’s at least one common thread between the disparate nations, cultures, and people in conflict, one element that has demonstrably proven to make these uprisings more likely: high global food prices.

Just over a year ago, complex systems theorists at the New England Complex Systems Institute warned us that if food prices continued to climb, so too would the likelihood that there would be riots across the globe. Sure enough, we’re seeing them now. The paper’s author, Yaneer Bar-Yam, charted the rise in the FAO food price index — a measure the UN uses to map the cost of food over time — and found that whenever it rose above 210, riots broke out worldwide. It happened in 2008 after the economic collapse, and again in 2011, when a Tunisian street vendor who could no longer feed his family set himself on fire in protest.

Bar-Yam built a model with the data, which then predicted that something like the Arab Spring would ensue just weeks before it did. Four days before Mohammed Bouazizi’s self-immolation helped ignite the revolution that would spread across the region, NECSI submitted a government report that highlighted the risk that rising food prices posed to global stability. Now, the model has once again proven prescient — 2013 saw the third-highest food prices on record, and that’s when the seeds for the conflicts across the world were sown. [Continue reading...]

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Hoarding

David Wallis writes: Animals like to hoard. Christopher E. Overtree, director of the Psychological Services Center at the University of Massachusetts, Amherst and a specialist in treating hoarding, says that “the mechanisms triggering this kind of biological reflex are present in all of us.” A friend of his in Minnesota had an eagle’s nest on his property fall from a tree. This led to a surprising discovery: 23 dog and cat collars. “The eagle ate the animals but saved the collars,” says Overtree. His own cat, Gus, wasn’t much better. Overtree recently tailed his cat sneaking off with his wife’s costume jewelry, dragging the trinkets into the attic and stashing them in a hole in the floor. “I realized he must be saving it,” says Overtree. “I think it is interesting to see a behavior that has no practical value in an animal.”

Hoarding, some scientists suggest, is a sensible action to take in an uncertain world. “We have been shaped by evolutionary pressures in the past to deal with resource scarcity, and hoarding is one of those possible strategies,” says John L. Koprowski, professor of wildlife conservation and management at the University of Arizona and an authority on squirrels. He refutes the conventional wisdom that squirrels only gather what they need to survive winters. Studies of eastern gray squirrels, for instance, suggest that up to 74 percent of buried acorns are never recovered. They could be lost — or simply stored, just in case.

While saving up in this manner seems both sensible and prevalent among animals, it is a bona fide disease among humans. This year, for the first time, the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, or DSM — the bible of psychiatrists and insurers — listed it as a distinct disorder. It is also one with serious consequences, with the potential to ruin relationships, result in evictions, and fuel lethal fires. And according to the American Psychiatric Association, 2 to 5 percent of the United States population suffers from it. [Continue reading...]

Even though that’s a new diagnosis and its status as a disorder is no doubt subject to much debate, 2 to 5 percent sounds like a gross underestimate.

As for whether animals are hoarders too, I wonder whether a distinction needs to be made between hoarders and collectors?

Deprived of his collection of collars, would the eagle experience a sense of loss? “The eagle ate the animals but saved the collars.” Indeed. And better than eating the collars and saving the animals. But who’s to say what the collars thereafter represented? Fond memories? Nest decoration?

For human hoarders the accumulation of excess seems to be tied to a fear of insufficiency — that “de-acquisitioning” will cause a deficit rather than remove a surfeit.

In parallel or perhaps even driving this threat of insufficiency is the consumerist’s lack of resourcefulness and lack of self-sufficiency.

An inability to part with things can coincide with an inability to repair them.

For societies that produce mountains of waste, the things we call “waste” are the things in which we recognize no value. We fail to see how often that lack of value resides in the eye of the beholder, not the object.

In a consumer world where we have acquired the habit of replacing things that are in perfect working order simply because a better version is now available, the hoarder might feel less materialistic than his non-hoarding counterpart if not hoarding just means having little compunction about throwing things away.

In either case, each individual bears the same affliction: little sense of what it means to have enough.

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Google Plus works for Google

a13-iconThe New York Times reports: Google Plus, the company’s social network, is like a ghost town. Want to see your old roommate’s baby or post your vacation status? Chances are, you’ll use Facebook instead.

But Google isn’t worried. Google Plus may not be much of a competitor to Facebook as a social network, but it is central to Google’s future — a lens that allows the company to peer more broadly into people’s digital life, and to gather an ever-richer trove of the personal information that advertisers covet. Some analysts even say that Google understands more about people’s social activity than Facebook does.

The reason is that once you sign up for Plus, it becomes your account for all Google products, from Gmail to YouTube to maps, so Google sees who you are and what you do across its services, even if you never once return to the social network itself.

Before Google released Plus, the company might not have known that you were the same person when you searched, watched videos and used maps. With a single Plus account, the company can build a database of your affinities.

Google says Plus has 540 million monthly active users, but almost half do not visit the social network. [Continue reading...]

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What I saw when I crashed a Wall Street secret-society party

f13-iconKevin Roose recounts what he witnessed when he sneaked into the annual black-tie induction ceremony of a secret Wall Street fraternity called Kappa Beta Phi — and then got caught: “Who the hell are you?” [billionaire Michael] Novogratz demanded.

I felt my pulse spike. I was tempted to make a run for it, but – due to the ethics code of the New York Times, my then-employer – I had no choice but to out myself.

“I’m a reporter,” I said.

Novogratz stood up from the table.

“You’re not allowed to be here,” he said.

I, too, stood, and tried to excuse myself, but he grabbed my arm and wouldn’t let go.

“Give me that or I’ll fucking break it!” Novogratz yelled, grabbing for my phone, which was filled with damning evidence. His eyes were bloodshot, and his neck veins were bulging. The song onstage was now over, and a number of prominent Kappas had rushed over to our table. Before the situation could escalate dangerously, a bond investor and former Grand Swipe named Alexandra Lebenthal stepped in between us. Wilbur Ross quickly followed, and the two of them led me out into the lobby, past a throng of Wall Street tycoons, some of whom seemed to be hyperventilating.

Once we made it to the lobby, Ross and Lebenthal reassured me that what I’d just seen wasn’t really a group of wealthy and powerful financiers making homophobic jokes, making light of the financial crisis, and bragging about their business conquests at Main Street’s expense. No, it was just a group of friends who came together to roast each other in a benign and self-deprecating manner. Nothing to see here.

But the extent of their worry wasn’t made clear until Ross offered himself up as a source for future stories in exchange for my cooperation.

“I’ll pick up the phone anytime, get you any help you need,” he said.

“Yeah, the people in this group could be very helpful,” Lebenthal chimed in. “If you could just keep their privacy in mind.”

I wasn’t going to be bribed off my story, but I understood their panic. Here, after all, was a group that included many of the executives whose firms had collectively wrecked the global economy in 2008 and 2009. And they were laughing off the entire disaster in private, as if it were a long-forgotten lark. (Or worse, sing about it — one of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”) These were activities that amounted to a gigantic middle finger to Main Street and that, if made public, could end careers and damage very public reputations.

After several more minutes spent trying to do damage control, Ross and Lebenthal escorted me out of the St. Regis.

As I walked through the streets of midtown in my ill-fitting tuxedo, I thought about the implications of what I’d just seen.

The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. [Continue reading...]

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China pillages Africa like old colonialists says Jane Goodall

n13-iconAFP reports: China is exploiting Africa’s resources just like European colonisers did, with disastrous effects for the environment, acclaimed primatologist Jane Goodall has told AFP.

On the eve of her 80th birthday, the fiery British wildlife crusader is whizzing across the world giving a series of lectures on the threats to our planet.

And the rising world power’s involvement on the continent especially raises alarms when it comes to her beloved chimpanzees and wildlife habitats.

During the last decade China has been investing heavily in African natural resources, developing mines, oil wells and running related construction companies.

Activists accuse Chinese firms of paying little attention to the environmental impact of their race for resources.

“In Africa, China is merely doing what the colonialist did. They want raw materials for their economic growth, just as the colonialists were going into Africa and taking the natural resources, leaving people poorer,” she told AFP in an interview in Johannesburg.

The stakes for the environment may even be larger this time round, she warns.

“China is bigger, and the technology has improved… It is a disaster.”

Other than massive investment in Africa’s mines, China is also a big market for elephant tusks and rhino horn, which has driven poaching of these animals to alarming heights.

But Goodall, who rose to fame through her ground-breaking research on chimpanzees in Tanzania, is optimistic.

“I do believe China is changing,” she said, citing as one example Beijing’s recent destruction of illegal ivory stockpiles.

“I think 10 years ago, even with international pressure, we would never have had an ivory crush. But they have,” she added.

“I think 10 years ago the government would never have banned shark fin soup on official occasions. But they have.” [Continue reading...]

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Climate change is here now and may lead to global conflict

f13-iconNicholas Stern writes: The Intergovernmental Panel on Climate Change last September pointed to a changing pattern of extreme weather since 1950, with more heatwaves and downpours in many parts of the world, as the Earth has warmed by about 0.7C.

The IPCC has concluded from all of the available scientific evidence that it is 95% likely that most of the rise in global average temperature since the middle of the 20th century is due to emissions of greenhouse gases, deforestation and other human activities.

The upward trend in temperature is undeniable, despite the effects of natural variability in the climate which causes the rate of warming to temporarily accelerate or slow for short periods, as we have seen over the past 15 years.

If we do not cut emissions, we face even more devastating consequences, as unchecked they could raise global average temperature to 4C or more above pre-industrial levels by the end of the century.

This would be far above the threshold warming of 2C that countries have already agreed that it would be dangerous to breach. The average temperature has not been 2C above pre-industrial levels for about 115,000 years, when the ice-caps were smaller and global sea level was at least five metres higher than today.

The shift to such a world could cause mass migrations of hundreds of millions of people away from the worst-affected areas. That would lead to conflict and war, not peace and prosperity.

In fact, the risks are even bigger than I realised when I was working on the review of the economics of climate change for the UK government in 2006. Since then, annual greenhouse gas emissions have increased steeply and some of the impacts, such as the decline of Arctic sea ice, have started to happen much more quickly.

We also underestimated the potential importance of strong feedbacks, such as the thawing of the permafrost to release methane, a powerful greenhouse gas, as well as tipping points beyond which some changes in the climate may become effectively irreversible.

What we have experienced so far is surely small relative to what could happen in the future. We should remember that the last time global temperature was 5C different from today, the Earth was gripped by an ice age.

So the risks are immense and can only be sensibly managed by reducing greenhouse gas emissions, which will require a new low-carbon industrial revolution. [Continue reading...]

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Video: America as a horror show

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Marx was right

a13-iconSean McElwee writes: There’s a lot of talk of Karl Marx in the air these days – from Rush Limbaugh accusing Pope Francis of promoting “pure Marxism” to a Washington Times writer claiming that New York City Mayor Bill de Blasio is an “unrepentant Marxist.” But few people actually understand Marx’s trenchant critique of capitalism. Most people are vaguely aware of the radical economist’s prediction that capitalism would inevitably be replaced by communism, but they often misunderstand why he believed this to be true. And while Marx was wrong about some things, his writings (many of which pre-date the American Civil War) accurately predicted several aspects of contemporary capitalism, from the Great Recession to the iPhone 5S in your pocket.

Here are five facts of life in 2014 that Marx’s analysis of capitalism correctly predicted more than a century ago: [Continue reading...]

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Tom Perkins and ‘the creative one percent’

EditorialTom Perkins, who was one of the founders of venture capital firm Kleiner Perkins, sees himself as belonging to America’s “creative one percent” — the one percent who are “the job creators.” He takes pride in the fact that Kleiner Perkins has “created pretty close to a million jobs.” He says the rich “get richer by creating opportunity for others.”

The idea that capitalists create jobs is central to the American view of the way economies work. It’s so axiomatic, hardly anyone seems to pause to consider whether it makes any sense.

Certainly, capitalists provide investments that make the creation of jobs possible, but this isn’t fundamentally different from walking into Best Buy and buying an iPhone.

In a store, the transaction is simple: make a payment and in return receive a product. There’s nothing creative in the action of the buyer. Money is used in order to be able to make use of the creativity of others. The buyers of iPhones do not create iPhones.

Likewise, investors are buying the fruit of the labor of others. Investors have the luxury of being able to afford to wait for a return on their capital and the willingness to risk seeing no return, but the only creative element in what they do is focused on their calculations about where to place their bets. Even then, it’s creative focus, irrespective of the innovative vehicle, is on the creation of wealth.

Capitalists don’t create workers and the jobs they claim they are creating are useless if no one with the required skills is available to fill them. It is workers themselves and educators and the society that supports them, that are the real engine of job creation. All the investor does is control the flow of money and cream off a hefty portion of the profit.

As for Perkins claim that if the rich are allowed to do what the rich do, which is get richer, then everyone else will get richer too, he’s just rehashing discredited free-market economics.

Thomas Piketty’s new book, Capital in the Twenty-First Century, lays out the reasons that growing inequality is not just a problem — it’s built into the structure of capitalism.

Thomas B. Edsall writes:

There are a number of key arguments in Piketty’s book. One is that the six-decade period of growing equality in western nations – starting roughly with the onset of World War I and extending into the early 1970s – was unique and highly unlikely to be repeated. That period, Piketty suggests, represented an exception to the more deeply rooted pattern of growing inequality.

According to Piketty, those halcyon six decades were the result of two world wars and the Great Depression. The owners of capital – those at the top of the pyramid of wealth and income – absorbed a series of devastating blows. These included the loss of credibility and authority as markets crashed; physical destruction of capital throughout Europe in both World War I and World War II; the raising of tax rates, especially on high incomes, to finance the wars; high rates of inflation that eroded the assets of creditors; the nationalization of major industries in both England and France; and the appropriation of industries and property in post-colonial countries.

At the same time, the Great Depression produced the New Deal coalition in the United States, which empowered an insurgent labor movement. The postwar period saw huge gains in growth and productivity, the benefits of which were shared with workers who had strong backing from the trade union movement and from the dominant Democratic Party. Widespread support for liberal social and economic policy was so strong that even a Republican president who won easily twice, Dwight D. Eisenhower, recognized that an assault on the New Deal would be futile. In Eisenhower’s words, “Should any political party attempt to abolish Social Security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear from that party again in our political history.”

The six decades between 1914 and 1973 stand out from the past and future, according to Piketty, because the rate of economic growth exceeded the after-tax rate of return on capital. Since then, the rate of growth of the economy has declined, while the return on capital is rising to its pre-World War I levels.

“If the rate of return on capital remains permanently above the rate of growth of the economy – this is Piketty’s key inequality relationship,” [Branko] Milanovic [an economist in the World Bank’s research department] writes in his review, it “generates a changing functional distribution of income in favor of capital and, if capital incomes are more concentrated than incomes from labor (a rather uncontroversial fact), personal income distribution will also get more unequal — which indeed is what we have witnessed in the past 30 years.” [Continue reading...]

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How American doctors are giving their patients cancer

OpinionRita F. Redberg, a cardiologist and Rebecca Smith-Bindman, a radiologist, write: Despite great strides in prevention and treatment, cancer rates remain stubbornly high and may soon surpass heart disease as the leading cause of death in the United States. Increasingly, we and many other experts believe that an important culprit may be our own medical practices: We are silently irradiating ourselves to death.

The use of medical imaging with high-dose radiation — CT scans in particular — has soared in the last 20 years. Our resulting exposure to medical radiation has increased more than sixfold between the 1980s and 2006, according to the National Council on Radiation Protection & Measurements. The radiation doses of CT scans (a series of X-ray images from multiple angles) are 100 to 1,000 times higher than conventional X-rays.

Of course, early diagnosis thanks to medical imaging can be lifesaving. But there is distressingly little evidence of better health outcomes associated with the current high rate of scans. There is, however, evidence of its harms.

The relationship between radiation and the development of cancer is well understood: A single CT scan exposes a patient to the amount of radiation that epidemiologic evidence shows can be cancer-causing. The risks have been demonstrated directly in two large clinical studies in Britain and Australia. In the British study, children exposed to multiple CT scans were found to be three times more likely to develop leukemia and brain cancer. In a 2011 report sponsored by Susan G. Komen, the Institute of Medicine concluded that radiation from medical imaging, and hormone therapy, the use of which has substantially declined in the last decade, were the leading environmental causes of breast cancer, and advised that women reduce their exposure to unnecessary CT scans.

CTs, once rare, are now routine. One in 10 Americans undergo a CT scan every year, and many of them get more than one. This growth is a result of multiple factors, including a desire for early diagnoses, higher quality imaging technology, direct-to-consumer advertising and the financial interests of doctors and imaging centers. CT scanners cost millions of dollars; having made that investment, purchasers are strongly incentivized to use them.

While it is difficult to know how many cancers will result from medical imaging, a 2009 study from the National Cancer Institute estimates that CT scans conducted in 2007 will cause a projected 29,000 excess cancer cases and 14,500 excess deaths over the lifetime of those exposed. Given the many scans performed over the last several years, a reasonable estimate of excess lifetime cancers would be in the hundreds of thousands. According to our calculations, unless we change our current practices, 3 percent to 5 percent of all future cancers may result from exposure to medical imaging. [Continue reading...]

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In China, U.S. tech firms weigh ‘Snowden Effect’

Reuters reports: Battling a perfect storm of government suspicion and pricing probes in China, U.S. technology companies are having to re-think how they sell hardware and services in the world’s second-biggest economy.

U.S. multinationals, including IBM, Cisco Systems and Qualcomm, are looking to settle price-gouging investigations and restore trust with Chinese regulators in the wake of reports that U.S. government agencies directly collect data and tap networks of the biggest domestic technology companies.

All U.S. IT firms are “on the defensive” in China, said Scott Kennedy, director of the Research Center for Chinese Politics and Business at Indiana University. “They are all under suspicion as either witting or unwitting collaborators in the U.S. government’s surveillance and intelligence gathering activities.” [Continue reading...]

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