Book sellers are unhappy with Amazon’s growing domination of the publishing industry:
“Amazon is holding the entire book industry hostage,” says Oren Teicher, CEO of the American Booksellers Association. “First they disintermediated retailers, and now it’s publishers and authors.”
Not to poke fun at a man who’ll be unemployed in 5 years, but if you’re in the business of selling books and you think disintermediate is an acceptable word, you deserve to lose your job.
Sylvia and I dragged a handful of ImprovBoston folks out to the Cantab Lounge on Friday to dance to The Fatback Band playing some old funk, soul and R&B classics. You can see these gents any given Friday. You’ll have seen them there at least once on any weekend for the last decade or more. I call them “my three chemistry professors,” and if you saw them on the street without instruments you would know what I meant, but get them on stage and they put it on the plate just for you.
“How’s everyone doing in the historic Cantab Lounge tonight?” the lead singer asked at one point. And we all cheered. Why wouldn’t we? We were here to see them, or at least here to listen to the music they provided. I don’t really perform these days, but I know the high you get from lights in your face and an audience who paid for your product.
I wonder about that life. Is it all the same: one weekend flowing into the next, anonymous crowds sweating inches from your elbow as you lay into the bass riff for the bridge for Harold Melvin and the Blue Notes’ “The Love I Lost”? Or is every crowd and set list different: a new opportunity to make a couple’s night memorable? We like to think of art as magical, the product of inspiration, but pros know how much of art is work. You show up every day, put in your hours and master the chords. Audiences react to a spectacle, but they follow reliability. Hey, let’s go see these guys; they’re always fun.
So I saw this snippet of text about a squillion times last week, either in writing or in a video or in the image below:
click for larger version
You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory—and hire someone to protect against this—because of the work the rest of us did.
Now look, you built a factory and it turned into something terrific, or a great idea. God bless—keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.
I don’t want to unpack everything that goes into that sentiment. I’m not going to take sides on its accuracy or its implications. Right now, I just need to raise my hand from the back of the classroom and ask: this transactional theory of government? This notion that people get something out of the State and therefore they have to pay something back? You know that’s not how it actually works, right?
Yes, I know what social contract theory is, and I sat through civics class like the rest of you. I mean how the actual process works. The actual payment of taxes and the production of infrastructure.
Look: if I want to talk about how the Gap does business, I can do it a couple different ways. I can talk about the microeconomics of supply and demand. I can talk about the effect of advertising and marketing on stimulating demand for a product. I could talk about the macroeconomics of managing inventory at walk-in locations, or about the cost of domestic labor vs. sweatshop labor, or about the Fisher family’s strategy of maximizing market coverage by selling clothing under multiple retail brands (Gap, Old Navy, Banana Republic, etc).
But if I say the Gap is undermining the quality of American clothing, I’m no longer talking about the economic process of how shirts get onto shelves. I’m advancing a theory. Different people can interpret the same set of facts (the Gap company’s cost of labor, target audiences, profit margins) and come up with different conclusions. Maybe the Gap is undermining the quality of American clothing. Or maybe they’re liberating the casual “boater” style of the country club set of the 50s and 60s by disseminating it to the masses! Either works! If this were hard science, we could test whose theory were truer by making predictions and seeing which came to pass. Since retail is a soft science, and poly/cotton blends a softer science yet, all we can really do is yell at each other in academic quarterlies and obscure blogs.
(TL;DR: positive vs. normative analysis; for more, see my friend Jodi B.)
Elizabeth Warren, in the above quote, is making a normative statement. She’s saying, “People who benefit from infrastructure ought to pay to support it in a level commensurate to their benefits.” This is a great theory! I don’t object to it, stated that far and no farther*. But I worry that several of the people who’ve quoted her so enthusiastically do so not because she’s stating a great theory but because they think she’s stating some obvious fact.
Because she’s not. And I think we all know she’s not. You do not pay a tax bill itemized for services rendered. Citizens pay taxes, yes, and the revenues from those taxes (as well as capital on bonds) pay for infrastructure. But to suggest that one causes the other simply because one came before the other is bad science. Anyone who follows the statutory process with cursory interest knows that big projects are often – one might cynically say usually – agreed to before the revenue is obtained to pay for them. Anyone who follows the electoral cycle knows that rarely – one might cynically say never – are the regulators, government employees and contractors who lay out infrastructure the ones to get fired if it fails, barring some tragedy (the Ted Williams Tunnel collapsing on a commuter, etc). And a true crank might say that it’s not infrastructure that demands taxes, but in fact the other way around – that taxes demand infrastructure, that the machinery of taxation looks for ways to justify its existence, that the urge is to collect revenue first and then plan massive projects to validate the need for their revenues, thus proving to the constituency how great a representative you are (“Three new schools and two hundred new cops under my first term, and with YOUR help …”) by laying out ever more glorious projects that need ever more exorbitant levies to support them, to which no one dare object since the results can be documented in black and white numbers (“whaddaya, against schools or something?”), in an ever-increasing cycle of taxes and projects until we’re voting for Two Vast and Trunkless Legs of Stone for state Senate.
Of course, now I’m theorizing myself. You see how tempting it is! So let me limit it to what can be said for certain: taxes come in, capital flows out, but any accounting link between the two is spurious.
“The law isn’t justice,” wrote Raymond Chandler in The Long Goodbye. “It’s a very imperfect mechanism. If you press exactly the right buttons and are also lucky, justice may show up in the answer. A mechanism is all the law was ever intended to be.” The relationship between tax revenue and infrastructure should be taken with similar skepticism. I know we all want a government process that’s equitable and fair and transparent, but we should never let that distract us from the convoluted, brittle and wheezing mechanism that governs us already.
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* Though even if we stay within the garden of classical microeconomics 101, there are problems with this theory, first among them: in no other transaction is a person asked to pay exactly according to their benefit. Traditional price theory holds that, in a free exchange, I’m going to pay less than the benefit I expect to receive. I pay the orange farmer a quarter because I want the orange more than I want the quarter: I’ve got lots of money that I can’t eat. He sells me the orange because he wants the quarter more than he wants the orange: he’s got lots of oranges but he needs mortgage money. Both of us profit because we’ve made an exchange that benefits us both.
If the farmer were to track me down later, discover that I’d derived a dollar’s worth of satisfaction from his juicy orange and then demand another seventy-five cents, I’d slap him on the ear. And yet the social contract theory Professor Warren espouses suggests that, if I benefit more from a piece of infrastructure than I paid for it, I haven’t paid nearly enough.
Of course, marginal utility theory has Warren’s back on this, because if I get a dollar’s worth of satisfaction out of an orange and I only paid a quarter, that’s a lot of consumer surplus going uncaptured. In an evenly rotating economy, supply and demand should even out such that prices will reach an equilibrium where the benefit of an exchange is minimal. So maybe I’m not paying enough.
Of course of course, textbook economics is bullshit anyway. But it’s a useful bullshit. We are at least speaking a common jargon to each other.
Scattershot links today in lieu of content:
Via my friend Tom D., the observation that Back in Black is the second best-selling album of all time, after Thriller. I grow more suspicious each time I see Thriller in the #1 slot. Yes, it’s Thriller, but hasn’t time marched on? Haven’t new acts produced better pop albums? (No) Hasn’t the world gained something like a billion people since its release? (Yes, and one in a hundred of them bought Thriller) Taking nothing away from Thriller‘s importance – two centuries from now, it’ll be taught as part of the Western canon – it stuns me that a record should remain untoppled for that long.
Via my other friend Marie, the Emotional Bag Check, where you can leave your emotional baggage via an anonymous form. You can also, if you’re in a good mood, “pick up” someone else’s baggage, sending them a song to lift their mood (via the streaming technology of Grooveshark) and even an anonymous message. I spent an easy half hour here yesterday and could have gone longer. 80% of the baggage consists of “my boyfriend is a dick” or “why won’t any girls like me?”, so the responses are all pretty easy. And I get to improve people’s moods by sending them kickass songs! “Boots of Chinese Plastic” got a lot of use.
(Yes, it’s possible for anonymous assholes to give bad advice via the baggage claim: “blow him until he says he loves you,” etc. But it’s possible for assholes to use any part of the Internet to be a jerk.)
I rocked until late at night at TT The Bear’s to Karaoke Underground, a traveling roadshow that turns indie rock darlings into karaoke staples. And by indie, I mean they go pretty deep. Hold Steady, Pixies, Pavement, Murder City Devils, Ted Leo and the Pharmacists. I got to live out a fantasy of several years by screaming myself hoarse to “Ballad of the Sin Eaters” to an appreciative crowd. They’re coming to a city near you, if you live in a city they’re near. Check them out.
Via Futility Closet, an inspirational quote from Albert Einstein, struck from an essay he wrote for the Berlin Goethe Journal in 1915:
“When I look into the home of a good, normal citizen I see a softly lighted room. In one corner stands a well-cared-for shrine, of which the man of the house is very proud and to which the attention of every visitor is drawn in a loud voice. On it, in large letters, the word ‘Patriotism’ is inscribed.
“However, opening this shrine is normally forbidden. Yes, even the man of the house knows hardly, or not at all, that this shrine holds the moral requisites of animal hatred and mass murder that, in case of war, he obediently takes out for his service.
“This shrine, dear reader, you will not find in my room, and I would rejoice if you came to the viewpoint that in that corner of your room a piano or a small bookcase would be more appropriate than such a piece of furniture which you find tolerable because, from your youth, you have become used to it.”
[...]
The state, he wrote, “does not play the least role in my spiritual life; I regard allegiance to a government as a business matter, somewhat like the relationship with a life insurance company.”
Finally, Adam B. asked me for my list of five things to do instead of going to grad school yesterday so that he could pass it on to some friends. That’s a valid excuse to indulge my vanity link to it again, so there.
Sylvia and I were in Wexford, PA, half an hour north of Pittsburgh, for a wedding this past weekend. We had some time to kill before we could start getting fancy, so I took her to lunch at Perkins’ Family Style Restaurant. It was her first time eating at a family-style restaurant that didn’t also feature a prominent bar, so she was a little out of place. “It’s like someone’s grandmother was given free reign over the design choices,” she said.
Conscious of the Five Guys burgers we had swallowed last night, our bellies still disgorged like sluggish anacondas, we both got side salads with our entrees. They arrived drenched in salad dressing, at least two ladles’ worth. We crunched through them while the dad next to us explained baseball signals to his wife and stepson.
Wexford is familiar turf: the same rolling suburban hills I grew up in. Sprawling development tracts ringed with trees, linked by four-lane blacktops and strip malls. It could pass for Hunt Valley, MD to a casual viewer. But despite being “mid Atlantic” it really is a whole different slice of country. Even though it shares a governor with Philadelphia, Pittsburgh is actually closer, in geography and culture, to Cleveland and the American Midwest. The food’s all starches and red protein, the people are friendly to strangers and you drive everywhere.
I had an exchange with Tom yesterday that reminded me how close I came to flunking macroeconomics.
You might not believe it, given my understated brilliance, but I really struggled with advanced macro. I was never great at studying: I lacked the diligence it required and attending college at the dawn of the era of streaming digital video didn’t help. But I had no problem with microeconomics because it made sense. Marginal utility, demand elasticity, interest rates: once the right people explained it to me, I understood it. I reasoned my way through problem sets, rather than spitting out stock answers, and did fine. (I still would have done better if I studied)
But macroeconomics resists that kind of intuition. Take the following quiz question, for instance:
All other things being equal, raising interest leads to _____ in aggregate demand.
(A) A rise
(B) A fall
(C) No change
So I think:
Well, raising interest rates encourages more people to save, which increases the funds available for borrowing, which means banks have more money to lend out. It would also draw more banks into the credit card market, since payoff terms become more favorable for the lender, thus increasing the sources of available credit. Of course, there would also be a decrease in borrowing, as fewer people would want to take out loans. It’s tough to tell which effect would outweigh the other, so I’ll presume they cancel.
At which time I put (C) and am told I’m incorrect. The correct answer is (B).
As it turns out, my answer is also correct depending on when you stop counting. Raising interest rates does (or should) encourage people to save and invest. Raising interest rates also does (or should) increase the profits of credit card companies, and the more profitable a field the more competitors enter it. But all of these effects manifest in the long run. In the short run, an increase in interest rates lowers aggregate demand.
The problem is that it’s always the long run. Today’s “long run” is next year’s “short run.” And today is the “long run” of four years ago. “The market will correct the price of these subprime mortgages eventually.” “We need companies to start spending now; we can deal with the consequences of bailing them out later.” Now is later! Today is the future of the past! We’re on all corners of the four-dimensional timecube simultaneously!1
Not to bury the lede, but this return to my prodigal youth came up after I linked to this lovely chart on income stagnation2 from The Economist. In 2010 dollars, income for the bottom 10% of America has been largely steady since 1967 and hasn’t improved much for the median 50% either.
I made the observation that average prices have gone up about 6X in that time (which is true; check for yourself). Tom asked me if this observation still mattered, given that inflation was already baked in to the rise in median income. I had to plot the reasoning out in my head several times to answer him because, again, macroeconomics does not come naturally to me. Ultimately, Tom was right to correct me, since people aren’t 6X worse off today than they were forty-five years ago. But I was still on to something.
If you’re in the 50th percentile of American households today, your income is about $50,000 in 2010 dollars. A household in similar straits in 1967 would have an income of about $40,000 in 2010 dollars. However, a new car in 1967 would cost about $17,755 in 2010 dollars (source); a new car today costs $29,217 in 2010 dollars (source). So the price of a new car has gone from about 44% of a middle class family’s income to … about 58% of a middle class family’s income.
This isn’t as damning a statistic as it sounds. “Middle class” is not an absolute term; it only means something in relation to the folks above and below it. If things besides income are getting better for everyone (like the quality of goods, hypothetically), then the relative allocation of prices doesn’t matter as much. And the people who were middle class in 1967 most likely weren’t middle class in 2010, if they’ve survived. But what’s noteworthy is that households in the top 10% haven’t suffered the same fate. While their membership isn’t absolute either, it tends to be stickier.3
We think of inflation as a force that weakens the purchasing power of a dollar. This is true. But inflation can also lift the wages we receive, since employers pay more for labor while we pay more for groceries. So you’d think it all evens out – until you see a chart like this. Then we recall that inflation enters the economy through an increase in the money supply. And even though an increase in the money supply trickles down to everybody, it hits those with easy access to credit first. The defense contractors, the institutional investors, and the ones with an inside scoop on appropriations. They get the “first batch” of new money – still warm to the touch, juggling steaming Andrew Jacksons from hand to hand – before people start raising their prices.
Don’t take it from me, though. I nearly flunked macroeconomics.
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1. Do I even need to link to Timecube anymore? They still hand that to you on your first day of Internet, don’t they?
2. Apologies for that “opinion cloud” sidebar, which is completely fucking up my browser.
3. “Families are always rising or falling in America, am I right?”
“Who said that?”
“Hawthorne.”
“What’s the matter, smartass, you don’t know any fuckin’ Shakespeare?”
New post up on Overthinking It about a happier 10-year anniversary from this past Sunday: the release of Jay-Z’s album The Blueprint:
The shadow of Biggie’s absence was growing more and more notable. Someone needed to step up and become unofficial chairman of the East Coast once more. And by critical consensus, attention fell on the two most prominent MCs in New York: Jay-Z and Nas. Nas had the critical depth, having produced one of the most acclaimed hip hop albums of all time just a few months before Biggie’s own Ready to Die came out. But Jay-Z had the mainstream success, stepping up with several MTV-friendly hits and embracing the glamorous aspects of the gangsta lifestyle.
To put New York back on the map would take a classic album, one that revived the East Coast technique of funky samples with profound rhymes. The strength of the samples depends on the strength of your producer, though. For his sixth studio album, Jay-Z found that producer, a young man from Chicago named Kanye West.
Sylvia needed to exchange something at the Apple store, so we stopped by the Cambridgeside Galleria after brunch on Saturday. We came out on the second floor, immediately opposite a Borders. “You mentioned you had a gift card, or might have a gift card,” I said. “Is there anything you …”
Sylvia, who hadn’t set more than a toe into the store, watched me vanish inside. “I’ll text you when I’m done,” she said to my back.
Living in Boston over a decade now, I knew the Cambridgeside Borders pretty well. I’d shopped here for gifts, picked myself up after job interviews with impulse buys, and whiled away summer afternoons with a random novel and a comfy chair. It wasn’t an intimate acquaintance, but it felt familiar because it felt like every other Borders. The same faux wood paneling, the same all-weather carpeting and soft but pervasive lighting. The warm feelings you had for your childhood Borders – the one that opened in Towson when I was twelve, a shot of unstepped heroin for a boy who’d grown up on Waldenbooks – were meant to be transferred to every Borders in the world. Thus the merits of corporate design.
The Borders in Cambridgeside Galleria has, as of this writing, less than a week to live. Shelves once bursting with books are now sparse, stacked with multiple copies of orders too recent to cancel. The taxonomy of affluent years has been abandoned: Romances jostle for space with Biographies, Business texts and Firearm catalogs. I found copies of Glenn Beck’s The Overton Window everywhere I went: Thrillers, Political, Literature, New Fiction, Science Fiction. Nothing essential or classic; everything brand new or badly dinged.
Books aside, everything in the store but the carpet was for sale. You could pick up three bookshelves for $99. Wire racks, plastic sleeves, CRT monitors, break room chairs and the syrup dispensers from the once packed cafe were all on the market. Someone had taken everything from the manager’s offices, given each its own plastic bag, and slapped a $1.00 price tag on each: used post-it notes, pencil cases, curly black plastic phone cords.
Two employees checked out a line of scavengers a dozen deep, including yours truly. A four-year-old knocked a bouncing rubber ball around with a poster tube. When it rolled away from him, I nudged it back in his direction with my foot. He lunged for it, toppling a small stack of Vampire Diaries puzzles, board games and sticker collections in the process. No one seemed in a hurry to clean it up. If I had opened a two-liter bottle of Coke and emptied it on the muted blue-green carpet of what was once the DVD section, would anyone have stopped me? Would anyone have cleaned it up? Were there mops?
Of the two employees behind the counter, one was an older gentleman with thick glasses that weren’t helping him with the screen. The other was a skinny young man with a bright red beard. He was explaining to a woman that he couldn’t promise that this atlas would still be there on Thursday, he couldn’t promise the doors would be open on Thursday, when a man in a uniform polo shirt with a cordless drill approached. “We just sold this shelf,” he said. “Can I take it apart and move it?”
The young man looked at the shelf behind the counter. A year ago it had been bursting with Harry Potter books and the newest loss leader merchandise. The contents and disposition of that shelf would have been dictated by the head office in Ann Arbor and passed down to local management as three-ring binders and stern emails (“FRONT SHELVES – REMINDER,” exclamation point, urgent). Now it held two copies of Rosetta Stone software (German and English), marked down 75%. “Umm,” the young man said. He thought for a moment, perhaps of a manager who no longer worked here, or the policy of an ancient store that had nothing in common with this wasteland but a name. The young man looked at the older man, then back at the contractor. Then he moved the two software boxes off the shelves. “Yeah, sure, go ahead.”
Trout Stanley: A weird but captivating little play, which blossoms under some excellent performances from Exquisite Corps Theatre.
I was initially skeptical of the play, as I would be of anything whose synopsis begins, “The morning after an exotic dancer and local Scrabble champion goes missing …” But I suspended my disbelief long enough to head to the Factory Theatre on Tremont St. The set alone convinced me to stick around: the most complete transformation I’ve ever seen, turning the brick-lined black box into a kitschy apartment, full of the accumulated knicknacks of ten years of solitude, cluttered but not filthy. The tech crew also did some ingenious things with lighting, going from morning to evening to twilight without losing visibility on the proceedings. (Some of the lighting changes seemed a little arbitrary, and there were a few sound flubs, but this happens in any production)
The play itself is better than it sounds, at least in the hands of a skilled cast. It’s Beckett by way of SCTV: a tale of two characters, plausible in the abstract but cranked up to extremes, who live in an eccentric spinsterhood in the Canadian suburbs. There’s Grace Ducharme, the feathered and flirty blonde who runs the local garbage dump, and there’s her twin sister Sugar, wearing their dead mother’s tracksuit – the Laura Wingfield of the family. When a grubby but naive wanderer stumbles into their home, it upsets the quarantine bubble they’ve made of their lives these past ten years.
Trout Stanley hinges so much on the characters believing the world they live in – as odd a world as it is – that it wouldn’t work without truly compelling performances. Kathryn Lynch (Grace) has excellent comic timing, lighting up every scene she’s in with the verve of a sketch show veteran. Sean George (Trout) has an animal intensity that makes him both weird and fascinating at the same time. When he says, “I never lie,” he says it with a desperate conviction that makes you believe him. But Becky Webber (Sugar) is the standout, primarily because she does so much with scenes where she’s the only one on stage. When she has nothing to play off of but her reflection in the mirror, a phone call with a man in town or a well-loved 12″ vinyl LP, she sinks into a trance of such complete self-obliviousness that it’s almost intrusive to watch her.
It’s an odd play, to be sure, but the production will make you laugh and keep you hooked. Worth a visit.