Friday Cat Blogging - 9 October 2015

| Fri Oct. 9, 2015 2:55 PM EDT

Hmmm. What happened here? There is no documentary record, so perhaps if Hopper hides no one will connect her with it. Worth a try! Meanwhile, Hilbert hangs around absentmindedly, not realizing that his sister is doing her best to pin the rap entirely on him. That's family values, folks.

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The "Gig Economy" Is Mostly Just Silicon Valley Hype

| Fri Oct. 9, 2015 2:22 PM EDT

How big is the "gig economy"? An Uber driver is the archetypal gig worker, but more generally it refers to anyone who works independently on a contingent basis. This means, for example, that an old school freelance writer qualifies.

Still, it's tech that's driving the gig hype, and if the hype is true then the number of gig workers should be going up. Lydia DePillis takes a look at this today and recommends two sources:

The Freelancers Union, which advocates for self-employed people of all kinds, recently came up with the 53 million number Warner mentioned. MBO Partners, which provides tools for businesses that use contractors, put it at 30.2 million. But for lawmaking purposes, it's probably a good idea to get your information from a source that doesn't have a commercial interest in the numbers it's putting out.

True enough, but let's start with these folks. The Freelancers Union reports that in 2015 the gig economy "held steady" at 34 percent of the workforce. MBO Partners reports that it "held firm" at 30 million. They additionally report that it's increased 12 percent in the past five years, which is not especially impressive considering that total employment has increased 9 percent over the same period.

The government does not track this directly, and I assume that these two sources are generally motivated to be cheerleaders for the gig economy, which means their numbers are about as optimistic as possible. If that's true, it looks as though the gig economy is almost entirely smoke and mirrors. After all, if it were a big phenomenon it would be getting bigger every year as technology became an ever more important part of our lives. And yet, both sources agree that 2015, when the economy was doing fairly well, showed no growth at all in the gig economy. What's more, as Jordan Weissmann and others have pointed out, what little government data we have isn't really consistent with the idea that the gig economy is growing.

So be wary of the hype. Maybe the gig economy will be a big thing in the future. Maybe the tech portion is growing, but the growth is hidden by a decline in traditional freelancing. Maybe. For now, though, it appears to be mostly just another example of the reality distortion hype that Silicon Valley is so good at.

Monsanto's Stock Is Tanking. Is the Company's Own Excitement About GMOs Backfiring?

| Fri Oct. 9, 2015 2:08 PM EDT
If only we had more pesticides.

Pity Monsanto, the genetically modified seed and agrichemical giant. Its share price has plunged 25 percent since the spring. Market prices for corn and soybeans are in the dumps, meaning Monsanto's main customers—farmers who specialize in those crops—have less money to spend on its pricey seeds and flagship herbicide (which recently got named a "probable carcinogen" by the World Health organization, spurring lawsuits).

Monsanto's CEO hinted that the company may be too invested in high-tech seeds, and underinvested in old-fashioned pesticides.

Monsanto's long, noisy attempt to buy up rival pesticide giant Syngenta crumbled into dust last month. And Wednesday, Monsanto reported quarterly revenues and profits that sharply underperformed Wall Street expectations. For good measure, it also sharply lowered its profit projections for the year ahead.

In response to these unhappy trends, the company announced it was slashing 2,600 jobs, 12 percent of its workforce, and spending $3 billion to buy back shares. Share buybacks are a form of financial (as opposed to genetic) engineering—they magically boost a company's earnings-per-share ratio (a metric closely watched by investors) simply by removing shares from the market. And buybacks divert money from things like R&D—or keeping a company's workforce whole—and into the pockets of shareholders.

In a conference call with investors (transcript), Monsanto CEO Hugh Grant put a positive spin on the company's prospects. "Our germplasm performance has never been better, our trait technology has continued to leap and our market position and pipeline remains strong," he declared. But later, he hit upon a theme that became obvious when Monsanto was stalking Syngenta: that Monsanto's leadership feels the company is too invested in high-tech seeds, and underinvested in old-fashioned pesticides. (The market for Syngenta owns the globe's leading position.)

In the call, Jeff Zekauskas, an analyst with JP MorganChase, asked Grant whether Monsanto was still interested in boosting its pesticide portfolio by buying a competitor. Grant's answer was essentially yes: "We still believe in the opportunity of integrated solutions," i.e., selling more pesticides along with seeds. He added:

We've got a 400 million acre seed technology footprint. We've seen time and time again that we can increase revenue and improve grower service by bringing chemistry up on that footprint.

Translation: Our patented seeds and traits are sown on 400 million acres worldwide (about four times the size of California), and if we could sell more pesticides (chemistry) to the people who farm those acres, we could make more money. Later, he noted:

We continue to see duplication in R&D in the sector. We continue to see the low effectiveness of R&D with some of our competitors and we continue to think that consolidation in this space is inevitable.

Translation: Research-and-development investments in the ag-biotech/agrichemical sector aren't paying off—not enough blockbuster new products—so the few companies remaining in the field (there are six) are going to start swallowing each other up. 

Massive layoffs, share buybacks, dreams of buying up the pesticide portfolios of competitors—these aren't characteristics of a company confident in the long-term profitability of its core technology: the genetic modification of crops.

Here's Why Sea World in San Diego Can't Breed Killer Whales Any Longer

| Fri Oct. 9, 2015 1:37 PM EDT

You may have seen the news that Sea World in San Diego will no longer be allowed to breed killer whales:

After an all-day meeting that drew hundreds of supporters and critics of the park, the California Coastal Commission moved to ban captive whale breeding and drastically restrict the movement of whales in and out of the park.

The California Coastal Commission? Why do they have any say over Sea World's orca breeding? One of the charmingly idiosyncratic aspects of governance in California is that the Coastal Commission regulates all construction done within about 1000 yards of the coastline. As you can see, Sea World is well within that boundary, and it so happens that they wanted to build a bigger tank for their killer whales. But they could only do this if the Coastal Commission approved it.

Still confused? Well, the initiative that created the Coastal Commission didn't really put any boundaries on the commission's power. They can pretty much cut any deal they want, which is why they're so furiously hated by every gazillionaire who lives near the coast. In this case, their deal was this: you can build the bigger tank, but only if you stop breeding whales and don't bring any new ones in. And that was that.

This has been today's California Explainer for all you poor folks who are forced to live in less desirable parts of the country and don't understand our tribal customs. You're welcome.

Ben Carson Is Wrong About Hitler and Guns

| Fri Oct. 9, 2015 12:16 PM EDT

More guns, fewer holocausts?

Ben Carson said Thursday that Adolf Hitler’s mass murder of Jews "would have been greatly diminished” if German citizens had not been disarmed by the Nazi regime…"But just clarify, if there had been no gun control laws in Europe at that time, would 6 million Jews have been slaughtered?" Blitzer asked.

"I think the likelihood of Hitler being able to accomplish his goals would have been greatly diminished if the people had been armed," Carson said…"I’m telling you that there is a reason that these dictatorial people take the guns first."

This got me curious: Did Hitler take away everyone's guns? As you can imagine, I know zilch about the history of gun control in Germany, so I surfed over to Wikipedia, the source of all knowledge, for a quick refresher course. Here's what they say:

  • In 1919, the Treaty of Versaille disarmed Germany. "Fearing inability to hold the state together during the depression, the German government adopted a sweeping series of gun confiscation legislation." This was long before Hitler came to power.
  • In 1928 this legislation was relaxed. "Germans could possess firearms, but they were required to have [] permits…Furthermore, the law restricted ownership of firearms to '…persons whose trustworthiness is not in question and who can show a need for a permit.'" Again, this was before Hitler came to power.
  • In 1938, Hitler relaxed the law further. Rifles and shotguns were completely deregulated, permits were extended to three years, and the age at which guns could be purchased was lowered to 18.

Now, Hitler did effectively ban Jews from owning guns in 1938. However, this is highly unlikely to have affected the fate of the Jews even slightly. The Nazis were considerably better armed and organized, and if Jews had taken to shooting them it would have accomplished nothing except giving Joseph Goebbels some terrific propaganda opportunities. The 1943 Warsaw Ghetto Uprising is a good example of this: Jews fought back, and the result was a few dead Germans and 13,000 dead Jews.

The bottom line is familiar to anyone with even a passing knowledge of history: Hitler was popular. He didn't need to take away anyone's guns. Whatever you think about gun control, using Hitler to defend your position is a bad idea.

Hillary Clinton Wants to Cut Mega-Banks Down to Size

| Fri Oct. 9, 2015 11:24 AM EDT

Bring back Glass-Steagall! This is a popular cry among lefty populists, but it's probably not a very good idea on the merits. Glass-Steagall is a New Deal law that split up commercial banks and investment banks, and it was repealed in 1999. Ten years later Wall Street went up in smoke. But commercial banks and investment banks both had problems, and so did combined banks. The repeal of Glass-Steagall really had nothing to do with it.

On the other hand, the repeal of Glass-Steagall did allow banks to get bigger, and that increased size was a problem. When small banks go bust, we just clean up the mess and get on with things. When gigantic banks go bust, Wall Street goes up in smoke.

So rather than turning back the clock and reinstating Glass-Steagall, a better idea is to address bank size directly. The Fed approved one approach to this a couple of months ago by requiring the very biggest banks to hold larger capital reserves than smaller banks:

As well as making the big banks safer, the rules may also persuade them to get smaller. Capital is an economically expensive funding source for a bank. As regulators demand that large banks have more capital, their overall expenses rise. In turn, the banks may decide to pare down their less profitable businesses and shrink over time. Previous regulatory initiatives that increased capital already seem to have had that effect, and the Fed may want to see that continue.

Hillary Clinton wants to go even further by directly taxing big banks, and taxing them even more if their capital structure is relatively risky. Matt Yglesias runs down her plan for us:

Clinton doesn't spell out precise numbers for her fee, perhaps recognizing that in the real world this would all be subject to negotiation in Congress anyway. But the key pillars are:

  • The fee would be assessed on banks with more than $50 billion in assets (34 banks fit the bill as of today, though two of them are very close to the line) as well as on a handful of other institutions that the government has already flagged for extra regulatory scrutiny.
  • The fee rate would be higher on short-term debt than on long-term debt.
  • The fee rate would be higher on banks with more debt in their financing structure.
  • FDIC-insured bank deposits would be exempt from the fee.

The upshot of all this would be to nudge the banking system toward institutions becoming either smaller or else more boring, because risky activity would be more profitable in a smaller institution than in a larger one. The result would be to push risk out of the kinds of institutions whose failure would be catastrophic, without impeding banks' ability to become big per se.

So wonky. So boring. But, as Yglesias says, also a pretty good idea. That's often the case with well-thought-out plans.

In any case, the Fed plan affects the eight biggest banks in the country. Hillary's plan would affect 34 banks. And of course, the eight mega-banks would have to abide by the Fed's higher capital requirements and Hillary's tax.

All of these plans, by the way, are roundabout methods of reducing the amount of leverage that big banks can engage in. As a purist, I'd prefer to just pass rules that directly regulate leverage levels. But that's easier said than done, and higher capital requirements are a close substitute. Hillary's plan is even more indirect, but it also reduces risk by nudging banks to get smaller. Lots of leverage is still bad, but a smaller bank that goes bust is less catastrophic than a bigger one that goes bust.

More details are here, part of the Clinton campaign's rather startling array of detailed policy statements. It's enough to make you think she might be a wee bit more serious than anyone on the Republican side.

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All Those Annoying Drug Ads on TV Might Be Paying Off

| Fri Oct. 9, 2015 10:48 AM EDT

Good news! According to a new study, the placebo response is getting stronger, and if this continues perhaps all our pain woes will soon be treatable with sugar pills. But this is happening only in the United States for some reason. Why?

One possible explanation is that direct-to-consumer advertising for drugs — allowed only in the United States and New Zealand — has increased people’s expectations of the benefits of drugs, creating stronger placebo effects. But Mogil’s results hint at another factor. "Our data suggest that the longer a trial is and the bigger a trial is, the bigger the placebo is going to be," he says.

Longer, bigger US trials probably cost more, and the glamour and gloss of their presentation might indirectly enhance patients’ expectations, Mogil speculates. Some larger US trials also use contract research organizations that can employ nurses who are dedicated to the trial patients, he adds — giving patients a very different experience compared to those who take part in a small trial run by an academic lab, for instance, where research nurses may have many other responsibilities.

So good old glamor and gloss—American specialties, for sure—could be making anything in the shape of a pill more effective. On the other hand, the paper itself suggests a more prosaic possibility:

Our study results are of course potentially influenced by trends in study quality and/or publication bias....In the past, small studies were conducted. If they had a large placebo response, they did not show a positive treatment advantage and therefore they were not published. In contemporary U.S. studies, trials are typically large enough to detect positive treatment advantage despite large placebo responses, and therefore reported placebo responses appear to have increased.

So it's possible this is all an artifact of publication bias. In the past, studies with null results for the target drug (i.e., large placebo responses) never saw the light of day. Then pharma companies got smart, and started running larger trials that would show statistically significant results no matter what. So all the studies got published, even those with large placebo responses.

You may decide which to believe. I recommend believing the glitz and glamor explanation, since glitz and glamor are bound to get ever glitzier and more glamorous over time, and are thus likely to improve your pain more. And really, who cares why your pain gets better? If it's better drugs, fine. If it's because pharma companies are spending lots of money on marketing, fine. Just make it go away, please.

Donald Trump's Base Is Pretty Old, But Not All That Conservative

| Fri Oct. 9, 2015 9:25 AM EDT

Someone asked me the other day where Donald Trump's support comes from. I realized I didn't really know, so I figured I should check it out. According to David Brady and Douglas Rivers, a pair of political scientists at Stanford, recent YouGov polls break it down like this:

  • Not particularly ideological....20 percent of Trump's supporters describe themselves as “liberal” or “moderate,” with 65 percent saying they are “conservative” and only 13 percent labeling themselves as “very conservative.”
  • A bit older, less educated, and less affluent than the average Republican.
  • Slightly over half are women.
  • About half are between 45-64 years of age, 34 percent over 65, and less than 2 percent younger than 30.
  • One half of his voters have a high school education or less, compared to 19 percent with a college or post-graduate degree.
  • Slightly over a third of his supporters earn less than $50,000 per year, while 11 percent earn over $100,000 per year.

The only two of these that are noteworthy are the first one, which shows that Trump's appeal spans ideological boundaries, and the fourth one, which shows that his support comes almost exclusively from the middle-aged and the elderly. Aside from that, he appears to be a fairly standard issue Republican.

British Photographer Don McCullin Gets a Smashing Present for His Birthday

| Fri Oct. 9, 2015 6:00 AM EDT

Without question, British photographer Don McCullin is one of the best and most influential photojournalists of the 20th century. With his visceral frontline images, he brought intense, gut wrenching moments of combat into the homes of millions. A regular photographer for London's Sunday Times Magazine, McCullin's work ran in all the major magazines and newspapers. He unflinchingly showed readers exactly what was happening in the wars being fought in their names.

Don McCullin sitting for a portrait
Photojournalist Don McCullin CBE at the Oxford Union, Oxfordshire, Britain, 2014. Roger Askew/REX/AP

McCullin spent decades in the thick of some of the most hellish wars: from Vietnam to Biafra, Czechoslovakia, then Northern Ireland, the genocide of Brazilian Indians. He was one of the few photojournalists to cover the Khmer Rouge's take over of Cambodia (where he was badly wounded). In Uganda he was captured and held in the cell right next to where executions were taking place. He covered Beirut off and on for years. In between those wars, he didn't let up, photographing the homeless in London, the Bangladeshi monsoon of 1971 and the Consett steel works in Northern U.K. Later McCullin began shifting away from wars to photographing less damaging subjects. He made trips to India and Indonesia, photographing quieter moments.

This retrospective, first published by Random House UK in 2001, is being re-released to coincide with McCullin's 80th birthday on October 9th, 2015. Since this book's original publication, McCullin's still been at it–this edition is updated with newer images shot since 2001, photos that flow incongruously with the classics. The new edition includes an entire new section on African work from 2004, a handful of new photos from India. And it should be noted that McCullin covered the war in Iraq and the early days of the Syrian conflict, shooting Aleppo in 2012.

Though it should go without saying, this is not a book for the squeamish. As with most books of war photography, there are some very graphic pictures. But it's also not just a collection of war photos and it's nothing compared to his earlier photobooks that really pulled back the curtain on the violent, bloody reality of war.


Don McCullin (Aperture, 2015) Don McCullin/Contact Press Images
Outside Buckingham Palace, 1960 Don McCullin/Contact Press Images
Fishermen playing during their lunch break, Scarborough, Yorkshire, 1967 Don McCullin/Contact Press Images
Vietnamese family after a grenade-attack on their bunker, Hue, 1968 Don McCullin/Contact Press Images
The battlefields of the Somme, France, 2000 Don McCullin/Contact Press Images
Consett, County Durham, 1974 Don McCullin/Contact Press Images


Don't Do It, Paul!

| Thu Oct. 8, 2015 7:29 PM EDT

REPORT: John Boehner is personally asking Paul Ryan to step up and be Speaker. They have spoken twice today by phone....Boehner told Ryan he is the only person who can unite GOP at this crisis moment. Ryan undecided but listening, per source.