When economists work for money, do they get dumber?

Let’s read the article from the Washington Post on Alan Krueger’s research paid for by Uber:

Uber drivers in many of the company’s major markets are making about $6 an hour more than their traditional — and professional — taxi-driver counterparts, according to a rare analysis of internal data the company released Thursday along with Princeton economist Alan Krueger. In Washington, the difference is about $4.60, in San Francisco it’s about $10 and in New York it’s closer to $15.  These gross earnings don’t account for the considerable costs drivers pay to deploy their own cars as modern-day taxis. But Uber argues that these numbers paint a picture of decent work in a shifting economy where tens of thousands of people — nearly half of them with college degrees — have recently found supplemental income and more flexibility doing a job that has long been the domain of immigrants and middle-aged men.  The analysis, drawn from internal figures as well as a survey of about 600 UberX and UberBlack drivers, offers the most extensive look at how fast the company has grown, who’s driving for it and how this work supplements their other employment. Krueger, who previously served as chairman of President Obama’s Council of Economic Advisers, contracted with Uber to write the analysis, along with the company’s head of policy research, Jonathan Hall.  The analysis shows that Uber’s drivers in the United States collectively received $656.8 million in payments from the company in the last three months of 2014 (that translated in October to about $17.79 an hour in Washington, and $30.35 in New York). The taxi earnings in comparison — which reflect net income, not gross earnings — come from Bureau of Labor Statistics Occupational Employment Statistics.

Wait…. Krueger and Hall in their paper compared gross earning of Uber driver with net earnings of taxi drivers and permitted the Washington Post to publish an article with lead sentence, “Uber drivers in many of the company’s major markets are making about $6 an hour more than … taxi-driver counterparts”?  Could that be true that they compared gross with net, or did the reporter take something out of context?  Fortunately the reporter provides the link to the report, and you can verify that is actually what they do.  And they baldly add a caveat: “Nonetheless, the figures [hourly wages] suggest that unless their after – tax costs average more than $6 per hour, the net hourly earnings of Uber’s driver – partners exceed the hourly wage of employed taxi drivers and chauffeurs , on average.”  Could they not have done a back-of-the envelope calculation of the costs?  Suppose you have to drive 15 miles in an hour to earn the $20 per hour they say Uber drivers earn.  That is, you drive about 30 minutes at average speed 30 mph.  Is that reasonable?  I have no idea.  (The Krueger report says drivers average 1.7 trip per hour in San Francisco.)   But 15 miles in a normal car, last year, would cost you $3.00, 3/4 of a gallon of gas maybe?  And auto depreciation is usually something like 10 cents a mile at least… so another $1.5.  So wait, now there is now a pretty small difference.  AAA actually has a little booklet about the cost of driving (fuel, depreciation etc). The lowest estimated cost is 40 cents a mile.  So  $6 if the Uber driver is going 15 miles for the fares in an hour.

Parenthetically and extra-heavy-dose-of-sarcasm: How much did Krueger ask to be paid in return for calling Uber employees “driver-partners”?  Yeah, right, I’m a “learning partner” and not a teacher.  How about this sentence: “These findings relate to a broader, more generalized demand by many individuals for workplace flexibility that favors alternative work schedules, family – oriented leave policies, flextime, and telecommuting arrangements over the standard nine – to – five work schedule in order to support a more family – friendly lifestyle.” The “findings” are that in the Uber world everything is fine.  To me, that sentence has to be worth at least $10,000… I mean, aren’t median wages falling?  But that’s OK, things are now family-friendly… oh wait, nobody lives in families anymore.  So lonely middle-age people friendly?  I’m sorry but as I read the report practically every sentence is begging for sarcasm.  How about this one: “This paper does not purport to have all the answers, but it represents a first step toward understanding the nature of work in the sharing economy by providing new evidence on hours of work, income, and the motivations and backgrounds of participants in an important segment of  the sharing economy.”  Sigh of relief. When I read the early paragraphs I actually thought it was going to have all the answers, because the co-author must be earning like $5m a year and so perhaps he actually has all the answers?  (He gives his work history on the first page, so he kinda tells us…)  Good to know there is still room for more research by the little guys.   Hey, I’m sorry, when you work for a company that calls itself Uber on purpose, you have to earn your compensating differential.

via Now we know how many drivers Uber has — and have a better idea of what they’re making​ – The Washington Post.

Posted in United States | Leave a comment

Microsoft to acquire Revolution Analytics

I’m very pleased to announce that Microsoft has reached an agreement to acquire Revolution Analytics. Revolution Analytics is the leading commercial provider of software and services for R, the world’s most widely used programming language for statistical computing and predictive analytics. We are making this acquisition to help more companies use the power of R and data science to unlock big data insights with advanced analytics.

As their volumes of data continually grow, organizations of all kinds around the world – financial, manufacturing, health care, retail, research – need powerful analytical models to make data-driven decisions. This requires high performance computation that is “close” to the data, and scales with the business’ needs over time. At the same time, companies need to reduce the data science and analytics skills gap inside their organizations, so more employees can use and benefit from R. This acquisition is part of our effort to address these customer needs.

via Microsoft to acquire Revolution Analytics to help customers find big data value with advanced statistical analysis – The Official Microsoft Blog.

Posted in Santa Clara University | Leave a comment

The Snow Queen by Michael Cunningham

I confess the book lost my attention in the final third.  I felt like I had understood enough, so I skimmed.  I enjoyed reading it, even though I do not ordinarily like American family drama novels (I live it, what’s the point of reading it?).  This is a quiet, meditative family drama.  Unusual in that the characters are regular intelligent people (rather than Franzen-Eggers types) leading everyday lives.  Their mental life is rich, but normally rich.  The writing is what makes you continue to read, because Cunningham has here a style that I found interesting and hard to put my finger on.  New York Times reviewer says Woolfian… I don’t know enough to say yes that is it… but I did appreciate that the writing style was complex and interesting.

The brothers have been close since their mother’s sudden death (golf, lightning) years ago. These motherless boys, so gifted in their youth, have become middle-aged without ever quite finding their vocations or making a go of their talents. Barrett, “who’d seemed for so long to be the magical child,” developed an array of “languid capabilities (he can recite more than a hundred poems; he knows enough about Western philosophy to do a lecture series, should anyone ask him to”), but never “the ability to choose, and persist.” Tyler, blessed with “athletic ease” and a “singular gift for music” as a boy, has become, at 43, “an unknown musician,” tending his dying girlfriend in a dingy apartment with slanting floors in the depths of ungentrified Bushwick.

via ‘The Snow Queen,’ by Michael Cunningham – NYTimes.com.

Posted in Book reviews | Leave a comment

Sarcastics United: Justice Scalia Is our Champion, Literally and Snootily

Justice Scalia might have a different objection. “I’m a snoot,” he once said.  “Snoots are those who are nit-pickers for the mot juste, for using a word precisely the way it should be used,” he explained.  Professor Hasen, on the other hand, used a broad definition of sarcasm.  “We’re talking about a combination of harsh language and irony,” he said. Many standard reference works agree, defining sarcasm to include hostile or contemptuous remarks.  But Justice Scalia would probably differ, based on a database search that revealed him to be a student of the question. He seemed to define sarcasm in a narrower way, as limited to saying one thing while meaning another.  The word sarcasm or a variant appeared five times in Supreme Court opinions since he joined the court, and he is the author of four of those opinions. (The fifth use of the word was in a quotation.) All four used the narrower definition.

In 1994, he rejected the argument that “modify” can mean “to change fundamentally.”  “ ‘Modify,’ in our view, connotes moderate change,” he wrote. “It might be good English to say that the French Revolution ‘modified’ the status of the French nobility, but only because there is a figure of speech called understatement and a literary device known as sarcasm.”

via Scalia Lands at Top of Sarcasm Index of Justices. Shocking. – NYTimes.com.

Posted in Personal Kevane life | Leave a comment

Another top economist (Sachs) disserves his readers

Jeffrey Sachs writes in an opinion piece (The War with Radical Islam by Jeffrey D. Sachs – Project Syndicate)

To be clear, Western actions do not provide Islamist terrorism with a scintilla of justification. The reason to point out these actions is to make clear what Islamist terrorism in the West represents to the terrorists: Middle East violence on an expanded front. The West has done much to create that front, arming favored actors, launching proxy wars, and taking the lives of civilians in unconscionable numbers.

Wait, let me understand. Being in a war, traditionally, is a justification for violence (what else is the justification for dropping the atomic bomb?).  Sachs says Islamic terrorists are in a war. He says “the West” is also waging that war (and indeed started it!).  So…. that’s a justification, then, is it not? But no, it is not a “scintilla” of justification.  Why write an article that appears, to any reasonable reader, to be offering a justification (that is, a reasonable explanation for why some people resort to violence in their interactions with other people), and then deny that it is indeed such a justification?

Maybe Sachs argument is: What to some people seem like reasonable justifications (they bombed a lot of civilians so we are in a war and are retaliating) are not really justifications at all.  War and violence are never justified.  Ever (scintilla, after all, is very small).  In that case, why claim that the war is not a scintilla of justification for the Islamic terrorists, and not also claim that Islamic terrorism (9-11 and human rights violations of Asad and helping anti-Asad rebel groups etc) is “not a scintilla” of justification for “the West’s” war?  In Sach’s world, the United States would just unilaterally withdraw involvement and disarm right away?  There is no “scintilla” of justification it seems for having any military at all.  Why even talk about “Islamic terrorism”?

Wow, glad I spent time reading such a carefully thought out and insightful op-ed.  Oh wait… maybe it was satire? That opens a whole new dimension of interpretation.

Posted in United States | Leave a comment

Horrible writing from Larry Summers and Ed Balls

A report on wage stagnation in the United States, that I quickly perused, prompted the following question on style:  Why do so many prominent economists think that nobody cares what they write as long as they understand the general thrust of the writing?

For example, I know pretty much what this sentence from Ch. 3 of the report means:

Where these countries’ fiscal positions allow and where demand is weak, governments should consider making investments in their people, stimulating demand and addressing the challenge of stagnant wages.

Yet, as I think about the sentence… maybe the sentence does not actually mean anything. The sentence is a “pointer” to “see last U.S. budget when I was Secretary of Treasury” or “see last wishlist Pres. Obama articulated before a policy group in Washington.”  By not discriminating (which “investments” exactly? which “stimulating” exactly? and which “addressing” exactly?) the sentence really is vacuous.  The report is filled with similar sentences.

Indeed, no society has ever succeeded without a large, prospering middle class that embraced the idea of progress.

(You want to ask the authors: Is there really some society out there that embraces the idea of “not-progress”? That proclaims, “We would like to be increasingly worse off, please!”)

Does bad writing like this matter?  There are a number of possibilities:

  • Reports are opportunities to be on television, where discourses matter, so writing does not matter.
  • Writing does not matter because finer writing means can only appeal to a narrower constituency, and goal is to let everyone broadly aligned with the authors “read into” the report what they want.
  • Writing does not matter because the quality of writing does not substantially change people’s “reading” of report, so may as well economize on a scarce resource (good writing).
  • Bad writing is a virtue, because the authors do not actually know with precision what they want to say.  For public intellectuals, it is bad to state, with precision, that one has no position on an issue.

PS. Anyone want to disagree with this tautology (p. 69)?

As our societies become increasingly diverse, ensuring
that people of every race, ethnicity, gender, background, and faith participate and share in economic gains is not only a matter of fairness but also one of the most fundamental approaches to ensuring inclusive growth in our economies.


Ensuring that people participate and share in economic gains is  one of the most fundamental approaches to ensuring inclusive growth.

Posted in Teaching macroeconomics | 3 Comments

Beautiful Darkness by Kerascoët’s and Fabien Vehlmann

This was on many lists of best graphic novel of 2014, so I ordered it for Christmas present for Sukie.  Very disturbing, but we had an intense discussion of what it “meant” where I got to be like a middle-school teacher and “scaffold” into deeper meanings, or even the “meaning” of a “lack of meaning.”  It is this: transistor radio:ipod::BD:Grimm fairy tale.  I can’t believe structuralist anthropologists used to waste time writing things like that!  But they did.  Anyway, it is a traditional folk/fairy tale, full of the random eating of children and shedding of skin and arbitrary death that old tales had (I once read all the collections of Sudanese folk tales available, so I do know what I am talking about, not just blathering).  At the same time an all-infusing spirit of wonder, nostalgia, innocence and hope, with a background of admiration for the authors/illustrators for conceiving and then bringing into being the work.  Not for everyone… so ask your local librarians to get it for you before ordering your own copy.  Here is the link to Beautiful Darkness by Kerascoët’s and Fabien Vehlmann.

Posted in Politics