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Derek Thompson

Derek Thompson is a senior editor at The Atlantic, where he oversees the Business Channel. More

Thompson has written for Slate, BusinessWeek, and the Daily Beast. He has also appeared as a guest on radio and television networks, including NPR, the BBC, CNBC, and MSNBC.

Yes, Millennials Are Cheap—and This Graph of the Teenage Budget Explains Why

When Piper Jaffray last surveyed teenagers to learn how they spend money, they got this:

Nobody ever said it was easy being a teenager, but, man, does this make it look fun. Clothes (including shoes), electronics, movies, music, video games, concerts, accessories, food: That is the life. And together, it makes up about 70 percent of the teen budget.

Half a century ago, the difference between the teenage budget and the young adult budget, seen below in 2009, was vast. Teens don't have much money, because they scarcely work, but they can still "afford" to spend on luxury goods—shoes, jewelry, concerts—because they don't have to pay for the things that actually cost money—homes and insurance.

But in the last few years, the young-adult budget has moved away from the adults and toward the young. Twentysomethings, graduating into a recession-bit economy, have less money, and they're putting off, or giving up, on things like cars and houses.

Some economic analysts consider it a mystery that this recession generation can't afford houses and cars, yet somehow manages to afford iPhones and constantly dine out. But if you understand the young adult budget through the teen budget, it's not a mystery at all. If you don't own a house, or drive a car, or have layers of insurance for your family (because you don't yet have one), life is much cheaper. Not cheap, but cheaper. And it creates opportunities to build your own economy around things like mobile technology and restaurants.

 

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The Myth of Teens Rejecting Television

Reuters

Teenagers' favorite technologies and online behavior has a way of predicting the entire country's favorite technologies and online behavior. From Facebook, to mobile-phone addiction and Snapchat, the habits we dismissed yesterday as silly and childish have a way of going national.

So what does that mean for the future of TV?

Ever since the emergence of Netflix and other Internet-based video options, people have been predicting the "death of television." There are facts behind the hyperbole. Pay TV is having its worst year ever. Ratings are falling across most networks, and traditional TV's share of our attention is slipping. But television's optimists have facts, too. Overall, Americans are watching more "TV" than ever when you include time-shifted TV and Internet videos.

There’s a sense that, with the proliferation of screens and devices, young people are turning away from TV faster than the rest of the country in a way that predicts that cord-cutting is poised to fell the TV industry. In fact, Nielsen’s latest cross-platform report shows that teens (a) have always watched less TV than older Americans; (b) are watching slightly less traditional TV than they used to; but (c) aren't exactly fleeing the living room screen.

A Kaiser study found that more than 70 percent of teens had a TV in their room:

Meanwhile, the average teenager still watches almost three hours of television per day. That's about half as much as the 65+ crowd, but still. Twenty hours a week? That's a part-time job. 

Another graph (this one showing young U.S. and Canadian audiences) offers a glimpse at television's future, if we buy the hypothesis that young people guide national attitudes toward media. Let's break this down: One in three young people only watches old-fashioned TV; 12 percent cuts the cord and doesn't pay for the cable bundle at all; and the rest—about a half—pay for TV and mix in OTT (over-the-top, or Internet-enabled TV).

This suggests a near future for TV where new technologies aren't replacing television so much as complementing TV. When you count up all the different ways to watch a TV show (live, saved, time-delayed, on Netflix, on Hulu), as Peter Kafka writes, you're watching more TV than ever.

You Can't Fix Income Inequality Without Fixing Unemployment

Reuters

President Obama's speech today on income inequality was long and eloquent, but if I could boil it down to a one-sentence summary, it would be this: 

Large-scale efforts to protect the economy's neediest have a triumphant history in America.

Jump back a 100 years. Our problems are different—and much worse. 

  • Working conditions in turn-of-the-century industrial revolution are animalistic. So, Teddy Roosevelt and his successors fought for an eight-hour workday, introduced protections for workers, busted the trusts, and passed laws to end dangerous child labor. 
  • The Great Depression left millions in hopeless indigence. But it inspired Social Security, which has cut the poverty rate among seniors from 50 percent to less than 10 percent.
  • "Before Medicare, only half of all seniors had some form of health insurance," Obama said. "Today, virtually all do."
  • In the last 40 years, the expansion of tax credits has spared millions of families from living solely on market wages, which would have left them well below the poverty line. 

Obama uses this big-thinking triumphalism to make his case for the beleaguered Affordable Care Act. Indeed, universal care is a moral cause. But another issue arguably deserves even louder trumpeting: full employment.

There are still millions of people who are hopelessly out of work. Although short-term joblessness has fallen to its pre-recession levels, long-term joblessness is up 213 percent, and the official figures don't count workers who've simply quit, are waiting for Social Security, or hopped onto its disability program to collect a check. Matt Yglesias has it exactly right: The most important cause of 2013 is still jobs.

Presidents will always get more credit and more blame than they deserve, since they're the anointed figureheads of an impossibly complex system. It's easy to say Obama has signed few laws to help the unemployed recently, but then again, he has proposed programs, like the American Jobs Act, which disappeared into Washington's maw of indifference.

Social Security and Medicare, two of the most popular government programs today, work on the theory that there is a virtue to universalism. Obamacare is, well, slightly popular at the moment, but it works on the same principle. On jobs, however, it cannot be said the U.S. government has seriously considered universal (or, at least, full) employment anything near to a priority. We simply gave up early. It's good and right to talk about income inequality for American workers. But when 20 million people are unemployed or marginally attached to the labor force, you're going to have an awful income inequality crisis, no matter what your minimum and median wages look like.

How Teenage Behavior Predicts the Future of Technology

Reuters

Studying teenage behavior to learn about the future of anything might initially strike you as somewhat crazy. These are kids, after all, and their lives scarcely resemble the world of adults. They have pop quizzes, not salaried jobs; they spend more on shoes and concerts than families spend on food, as a share of their budget. What in the world could we learn from them?

But as we hope to explain in Kids These Days, our new special report on teen behavior and its lessons for business, technology, and health, those who'd ignore young people simply because they're young are overlooking this demographic at our own peril. 

One important category where teenage behavior acts as a leading indicator for the national trends is social media. The archetypal social network, Facebook, started as an online yearbook for teenagers and young twentysomethings at Ivy League universities. Even after it went national, adults still considered it a mysterious toy for their college-age children. But the very things that teenagers found useful about Facebook—it was an elegant way to follow, or keep up with, friends around campus and the country—turned out to be just as useful for adults.

This story—adults finding teenage social media behavior stupid, just before the entire country adopts it —has played itself out over and over again. "Stop looking at your phone!" used to be what you said to your kid at the dinner; now it's what everybody says to everybody at every table. Snapchat was very recently considered, among most people I read and know, at best a joke and at worst a teenage sexting app. (Nevermind that people are actually more likely to "sext" on regular SMS.) Indeed, the app gained traction first among college and high school kids. But today, studies have estimated that Snapchat has a 20 percent iPhone market share and more than 25 million active users in the U.S. Just like Facebook, what adults once considered an illicit toy has turned into a real, massive communication protocol. Facebook and Google both bid $3 billion for the service, and both were turned down.

One person who seems to understand the predictive power of  teenagers' social media behavior is Mark Zuckerberg. When he bought Instagram, a popular photo-sharing app with a young audience, for $1 billion, it was considered borderline reckless.Today Instagram is now as popular as Facebook among teens, according to a recent survey by Piper Jaffray. Indeed, Facebook has acknowledged that it's losing the invaluable patina of cool among teenagers. That's one of the reasons why it's thought to have bid so highly for Snapchat: The $116 billion company understands and values the power of teenage addiction.

Why might teenage tech at so accurately, and routinely, predict national attitudes? As Potluck's Josh Miller alluded to in this essay, high schools are the perfect offline social network to amplify the viral potential of online social networks. If an app is easy and addictive enough for kids to use and share as they're scurrying between classes, it will probably be simple and alluring enough for adults to use when they turn away from their computer screens. 

Why Are Colleges Getting So Expensive?

 

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The Secret Life of Grief

(Arkadiusz Benedykt/flickr)

Someone laughed. It might have been my sister, dad, grandmother, or one of the dozen friends and family members arrayed around that bed in my parents' room. Before we cried, said goodbye, and fanned out in separate cars to begin our private journeys of grief, something was said, at the moment she died, in a summer evening's half-light. And somebody laughed. Maybe it seems strange, but I like to remember it.

* * *

I come from a long line of mama's boys. My dad is a mama's boy, my uncle is a mama's boy, and my grandfather's mama's-boy-ness was practically clinical, according to family tradition. So, really, what choice did I have in the matter, born at the confluence of all this maternal devotion, except to be helplessly devoted to my mom? When I was a kid, I adored her in a way that made people with perfectly adequate mother-son bonds think, there is a boy who needs more friends in life.

Jewish mothers, however, will sooner cut off a pinky than apologize for cultivating religious devotion in their children. Realizing that she had invented a human who would believe everything she said, my mom lied to me constantly about her most mortal enemy: her age. Through her late 30s and into her early-40s, she told me she was 27. The years would climb; her age would not. I believed her, not only because I was a supremely gullible kid, but also because I preferred to think that she, too, was a kid, passing undetected through the land of adults. Even before I knew too much about death, I wanted her closer to me on this side of life.

One day, when I was 8, my younger sister Kira got the hunch that mom was making stuff up. Secretly digging through our mother's wallet, Kira found the incriminating ID and brought it to me.

"Mom is not 27," she said, displaying the evidence, radiating with a cruel glee. "She's 43!"

The words shattered my dumb little ears. I promptly burst into tears. 

The rest of the story is a memory of other people's memories, but according to the folklore, I ran downstairs and hid in the basement. My mom looked around the house until she discovered her distraught son, curled up in a ball, weeping. "I am so sorry I lied to you all this time,” she said, still lying, probably.

Through a staccato of tears, mucus, and traumatic convulsions, I mustered an explanation. "I'm not mad because you lied to me,” I said. “I'm mad because you're old."

* * *

Eulogies ought to begin with a laugh, I decided, so this is how my eulogy began: with the story of how I learned that parents grow up, too.

My mom died on July 18, 2013, of pancreatic cancer, a subtle blade that slips into the host so imperceptibly that by the time a presence is felt, it is almost always too late. Living about 16 months after her diagnosis, she was "lucky," at least by the new standards of the parallel universe of cancer world. We were all lucky and unlucky in this way. Having time to watch a loved one die is a gift that takes more than it gives.

Psychologists call this drawn out period "anticipatory grief." Anticipating a loved one's death is considered normal and healthy, but realistically, the only way to prepare for a death is to imagine it. I could not stop imagining it. I spent a year and a half writing my mother a goodbye letter in my head, where, in the private theater of my thoughts, she died a hundred times. In buses and movie theaters, on Connecticut Avenue and 5th Avenue, on crosswalks and sidewalks, on the DC metro and New York subway, I lost her, again and again. To suffer a loved one's long death is not to experience a single traumatic blow, but to suffer a thousand little deaths, tiny pinpricks, each a shot of grief you hope will inoculate against the real thing.

A boundless black terror is how I imagined life without my mom. The history of grief, or what we know of it, is written by its greatest sufferers and ransacked with horror stories, lugubrious poetry, and downward-spiraling memoirs plunged in sadness. For some people, the death of a loved one is truly life-stopping, and I worried it would stop mine.

Then, in the weeks after she died, something strange happened. I did not plunge. Life did not stop. Instead, I felt something so unspeakably strange, so blasphemous, that I wondered if I could talk or write about it, at all. I felt okay.

Even stranger, I discovered, is that I wasn't strange, at all. Despite the warnings that grief would drag me through the prescribed five stages and discard me in a darker place, bereavement researchers have recently learned that we've been wrong about loss for centuries. For some, grief is a dull and unrelenting ache that fades—or doesn't. But for many of us, grief is something else. Grief is resilience.

* * *

If George Bonanno's office were discovered underground by a group of archaeologists, they would think they'd found a tomb. Volumes about death and mourning fill the wall-sized bookcase. Terra cotta figurines, excavated from Chinese burial sites, line the shelves, facing inward. At the center of the room, there is a full-size standing skeleton.

One afternoon in October, I visited Bonanno, perhaps the most renowned grief researcher in the United States, at Teachers College, Columbia University, to talk about his research. His lab might be trailblazing, but the mission is classically conservative. By studying grief like any other psychological condition, he has exposed the history of bereavement research to be a thread of fables.

For centuries, grief has lived a secret life, hiding in plain view, even from our experts. Sigmund Freud coined the phrase "the work of grief," and ever since, there has lingered an idea that mourning is homework to do before we move on. The first systemic study of grief in the United States, by the Harvard psychiatrist Erich Lindemann, in 1942, described a horror show, marked by restlessness, hostility, hallucinations, and an overwhelming preoccupation with the dead. Lindemann had gathered a group of bereaved people—many of whom had lost friends in a recent night-club fire—and recorded his observations, motivated by the conviction that traumatic loss was a medical problem. Grievers who seemed normal in the weeks after, he claimed, were victims of dangerous repression. 

Twenty years later, in the 1960s, Elisabeth Kubler-Ross' five stages of loss would tattoo themselves onto the collective conscious of Americans. Kubler-Ross, a Swiss-born psychiatrist, interviewed patients at a Chicago hospital about the experience of dying. She devised a theory of five periods, from anger to acceptance, with each stage serving an essential part in the mourning process. Her book, On Death and Dying, became a national bestseller, but it wasn't just a mess of shoddy science. It was shoddy science based on people who were dying, not people who were grieving. 

Bonanno's work, which has redefined the science of grief research, revealed that Freud was wrong about work, Lindemann was wrong about repression, and Kubler-Ross was wrong about everything. The deepest grief is powerful, but sometimes short-lived, and most of us are wired to compartmentalize our most heart-breaking tragedies, even if it makes us feel ashamed to feel all right in the face of expectations that we feel terrible.

We are, both tragically and indispensably, born to grieve. The Harvard psychologist Dan Gilbert has compared our brains to rudimentary emotional thermostats, working to hold a baseline in extreme conditions. Bliss and tragedy swirl around us, but fundamentally, we are hardwired to reset. As Bonanno wrote in his book, The Other Side of Sadness:

"The good news is that for most of us, grief is not overwhelming or unending. As frightening as the pain of loss can be, most of us are resilient. Some of us cope so effectively, in fact, we hardly seem to miss a beat in our day-to-day lives. We may be shocked, even wounded by a loss, but we still manage to regain our equilibrium and move on. That there is anguish and sadness during bereavement cannot be denied. But there is much more. Above all, it is a human experience. It is something we are wired for, and it is certainly not meant to overwhelm us. Rather, our reactions to grief seem designed to help us accept and accommodate losses relatively quickly so that we can continue to live productive lives."

One of the stickiest myths about loss is that it requires extensive processing– that, in a Puritan sense, short-term pain is long-term gain. To the contrary, Bonanno has found that those who seem to be "working" hardest with their grief often report the hardest coping—not only in the first weeks, but also in the first years. "The more people engaged in their most intense emotions, the longer they would be grieving," he said. In a revelation that surprised even him, “it was laughter and smiling that led to quicker recovering."

[IMAGE DESCRIPTION]
George Bonanno, The Other Side of Sadness

Bonanno doesn't pretend that smiling is a magical elixir or that laughing will cure the hardest-suffering patients. Grief isn't a single track, he’s found, but a long private journey that splits along three rough paths. Ten percent of us experience "chronic" and relentless grief that demands counseling. Another third or so plunges into deep sadness and gradually begins recovery. But most of us—"between 50 and 60 percent," Bonanno said—quickly appear to be fine, despite day-to-day fluctuations. Scientists used to consider these patients tragic actors, shoving their feelings into the core of their bodies, where they would only explode with volcanic violence in dreadful ways later in life. But this, Bonanno says, might be the biggest myth of all. "If you think you're doing okay," he said, "then you're doing okay."

"I'd look to the ancient Asian cultures," he said, pouring me a tiny glass of green tea from a copper pot in his office. "They have the idea that the person isn't really gone, that the afterlife is porous, and that you can still have a relationship with that person."

Years after Bonanno’s father died, he was in China with his family, studying rituals of grief, where he took part in an ancient custom of burning paper offerings in a temple for an ancestor. Bonanno visited a store that sold paper shoes, paper houses, and even life-sized paper people. "It was incredibly cathartic," he said. "You spend a lot of time thinking about their life, what they were really like."

"What did you burn for your father?" I asked.

"Gold bullion," he said. "He was a working-class guy, didn't get much of an education, didn't like anything rococo. He was down to earth. I thought, with gold bullion, he could finally relax. 'Here's gold, Dad, do whatever you want with it!' It struck me as the right thing to do."

* * *

"Derek," my dad said toward the end dinner, "tell them about China!"

Food is my family's religion, and restaurants our sacred temples, so to celebrate what would have been my mom’s 64th birthday, our closest friends filled out the back room of a Spanish taperia in D.C. to toast her. This suggested story, however, was not an obvious way to celebrate her motherly qualities.

When I was 19, my mom, dad, and I went to China. Over the course of a few days in Beijing, the left side of my face stopped moving. I had contracted Bells Palsy, a temporary paralysis of the facial nerve. A hypochondriac, I was certain that I was dying. My mom, however, seemed to consider my broken face hysterical, lightly mocking my crooked smile in photographs in Shanghai, and laughing uproariously when wine dribbled from my slack mouth onto my pants in a five-star restaurant.

Weeks later, my face and dignity healed, I confronted her: Why had she taken such a cavalier approach to the sudden paralysis of her son’s face?

"I was worried," she replied, not sounding worried.

"Why didn't you tell me?" I asked.

She answered with a look—defensive, bemused, adoring. "I couldn't fix your face," she said with a laugh. "Why would I tell you how worried I really was, when all that would do is make you more worried?"

For the 16 months after her diagnosis, I returned the favor. We never spoke of the food she couldn't eat, the thick hair she couldn't grow back, or the weight she couldn't keep. Instead, riding home from New York once a month and bounding onto her bed, I'd serve a feast of happy stories harvested from a life spent trying not to worry. I cried often, but privately, in the stairway at work, on the train behind a pair of sunglasses, and in my apartment, indulging a memory behind a locked door. But I only lost it twice in front of her, both times trying to say the same thing: What makes me saddest isn't imagining all the things I’ll miss, but imagining all the things you’ll miss. The wedding dances, the wine-fueled parties, her birthday cards, each emblazoned with ludicrously incorrect ages. For Mom, who drew kinetic energy from every drip of living, as if by photosynthesis, and braved the winter of life with spring in her heart, smiling like a sweet little maniac all the way to the end, cancer was such cosmic robbery.

Two weeks ago, transcribing Bonnano's interview in a coffee shop in New York, I was typing this passage:

"In the Asian cultures, the idea is that the person isn't really gone. You honor them. You appease them. You can still make them happy, elsewhere."

Tears burned in the gutters as I reread those words. "You can still make them happy." It would be so nice to think so. But for those of us who cannot believe in God and afterlives, this is just one of the things you lose forever when you lose a person: the ability to make them happy.

My mom and I would play rallying partners in a long game of optimism. Don't worry about me, I said to her, month after month, curled on the bed as her weight dropped, below 100 pounds, below 90, below 80. I'm strongYou seem strong. I'm doing better. You look better. But here I am, still clinging to a lifetime of distractions, and mom has missed a birthday. Not just the things I'll miss. The things you'll miss.

* * *

Like life and hell, grief is other people.

"Hey, you look gross," I told my sister, in the afternoon of the day before my mom died. Kira stood in the hall, hands on hips, sucking air, glowing and sweaty. At the moment, I sat, slumped in a chair, feet on the glass table, with a large plastic 1997 MLB All Star Game cup with a splash of Johnnie Walker Gold dangling off the edge. Feeling normal: being a jerk.

"Actually, I just ran 10 miles," she replied: being a jerk. "What are you doing?"

"Your uncle and I are on our second scotch. So, this is how I've chosen to spend my day."

"Hmm. I think my day is healthier." 

"You think that, Keek, but we're a team in this, and if you add you and me together, we're both exercising and drinking responsibly." We laughed, and she promised to take a sip, and I agreed to take a run, both of us lying politely.

Mourning, even for the resilient, is a study in extremes, and, for the family and friends filling out our house, the crescendos were violent. We would scream at each other, and then laugh over wine, and then scream some more, and back to the wine. Grief is not a steady process, Bonanno said, but rather an "oscillation," like everything inside of us. Muscles tighten and relax, our bodies warm and cool, and so do our tempers. In that house, in those last days, we might have thought of ourselves as individual antibodies, pinging around the home, attaching ourselves to tasks to invent a small sense of utility. But we were also one house, one body, mourning to and fro.

My mom always attracted friends with unteachable charisma, but in the last days, the gravity of her dying star pulled harder than ever. The house overflowed with people asking to ease the pain, mostly through our stomachs, cooking enough food to feed a moderately sized petting zoo. There was a theatricality to it, our trying to be heroes in a play where heroism is in vain, when the most poignant acts of generosity toward my mom were the smallest—a pillow fluff, a drop of Vaseline for her cracked knuckles, a half-spoonful of Jell-O so she could steal a taste after she knew her cancer would prevent her from eating again.

They were hectic final moments, when the simplest requests about her condition would inspire a scene from Beckett.

"What time is the doctor's appointment?"

"Eleven."

"You don't know."

"I do know. It's 11."

"On Friday?"

"Dad?"

"On Thursday."

"Dad."

"I see it's scheduled for 3 on Friday."

"Wait, you said Thursday."

"Dad. Let her talk."

"I am letting her talk. She's talking right now. Aren't you talking?"

"I wasn't. She was."

"If I could finish my—"

"There are two appointments. One at—"

"—sentence."

"Eleven."

"Right."

"And Friday."

"No, 1 on Thursday."

"Dad!"

"That's what I said, on Thursday."

"And Friday?"

"Eleven."

"That's Thursday."

"STOP! There are two appointments. Thursday at 11. And Friday at 3."

"Thursday 11. Friday 3."

"Got it."

[IMAGE DESCRIPTION]

We got it. Everybody got it. And then, shattering the fragile calm, sat up my beloved grandmother, as if introduced by sitcom writers, chiming in, with perfect cadence—

"But what time on Thursday?!"

This scene is verbatim. I wrote it down minutes after the exchange, convinced that deaths in Jewish families invented the genre of absurdism. But it wasn't fighting or theater, at all. It was the opposite. The deconstructive wave interference of too much love in a room.

* * *

George Bonanno's book ends with a note from Karen Everly, whose daughter, working in the upper floors of the South Tower, died on September 11. Karen was devastated by the loss, but returned to work in a week, surrounded herself with the business of life, and seemed "poised" from her first meeting with Bonanno. Years later, she summed up her grief in a note:

"There is always a little flicker there. It is a bit like the small glowing embers you see after a fire dies down. I carry that around me, a little ember, and if I need to, if I want to have Claire next to me, I blow on it, ever so gently, and it glows bright again."

There are too many memories. Many of them are slipping from me. Others are so faint that only the rarest combination of triggers—vanilla, morning, a kitchen with an island table—bring the embers back to life. But a few are as close to me as breathing.

We are eating at home, my mom, my dad, and me, organized around the sunroom table for dinner. It's a late-spring night, and the family band is keenly in sync, working our way through the memory catalog, grooving on the old hits, passing the melodies between us.

"You always knew how to finish my sentences," my dad says. 

“Yeah," mom answers, "but if I could, I would end them with duct tape."

He booms with laughter so hard that he has to dry his eyes. As I bus the dishes to the kitchen sink, I hear him over my shoulder, catching his breath.

"Baby, you have to admit, it hasn't been easy, but it has been a laugh a minute."

A pause. A last scratch of forks and knives. Enough time for the right answer.

“Yes,” she says. “It has been. It has been a laugh a minute."

Graph: Countries With Higher Math Scores Have Unhappier Kids

One interesting nugget in international student test scores released today by OECD is that the countries with the smartest students also reported the unhappiest kids. Korea, for example, boasts the best math scores in the world, but also has the least-happy students. Indonesia's kids report being the world's happiest students, but they produce the world's second-lowest math scores. Click the chart to enlarge (to be clear: this is self-reported happiness in school):

Is there be a relationship between math and misery? Economist Justin Wolfers runs the math. The variation is pretty large (Eastern Europe seems egregiously unhappy, while southeastern Asian students seem to be having a unduly good time in class), but the correlation is statistically significant. 

There are so many ingredients here—culture, economics, happiness-based expectations—and I'm not going to pretend I can explain why several million children are happy or unhappy in their classrooms. (Students in the United States fall below the OECD happiness average, too, by the way.) But a simple hypothesis would be that kids in Korean and Finnish schools, who have notably long school hours, are, after all, just kids. And it's not a revelation that kids don't like working too hard.

Amazon's Drone Dreams and the Future of Retail

Last night on "60 Minutes," Amazon CEO Jeff Bezos showed Charlie Rose a video from the future.

A drone with propellers, nicknamed "octocopter," snatched a package off a conveyer belt in an Amazon warehouse, took off through the door, flew above a grassy field, and dropped it off in a family's backyard. It's a neat clip (watch it below), and within five years, Bezos said, Amazon PrimeAir won't just be YouTube video. It will be a way to deliver packages to families within 30 minutes of their purchase click.

The project is theoretical bordering on science fiction, and five years is an eternity in Internet and mobile technology (five years before Apple introduced the phone I use, iPhone 4S, there was no iPhone). But in a way, Amazon's drone dreams fit snuggly into the sweep of retail innovation, which I reviewed for my last Atlantic column, The Amazon Mystery.

The turbulent 150-year history of American retail is one of enormous companies desperately trying to anticipate the whims of mobile shoppers and mobile technology. Amazon's stated plan to ask robots to deliver packages in cities is a perfect extension of the last century's lessons in how retail companies grow, thrive, and die.

Planes, Trains, and Octocopters

In 1890, the frontier was "closed," and for the first time it could be said that the union was united—by rail and telegraph. Although the population was still two-thirds rural, mass retailers like Sears and Montgomery Ward could respond to catalog orders, load merchandise onto outgoing trains, and accomplish something unprecedented. They brought the stores to the people.

In the early-to-mid 20th century, however, a "mobile" technology even more advanced than trains—the automobile—did something even better: It brought the people to the stores. Sears adapted to this transportation shift brilliantly. As families streamed off farms into cities, Sears followed, building 300 national stores in four years. With revenue approaching 1 percent of the entire U.S. economy, Sears was America's perfect retail company.

Until it wasn't. In the 1980s, the slow demise of manufacturing weakened Sears' core demographic. Meanwhile, new competitors were lapping Sears in the race for the best information technology, both down-market, like Walmart, and up-market, like The Gap. From their brief history of the rise and fall of Sears, Daniel Raff and Peter Temin write:

For Sears to have competed directly with Wal-Mart, it would have had to rethink from the ground up how goods passed from manufacturers to consumers. Sears managers told themselves that Wal-Mart and other low-price firms succeeded because they sold cheap goods, representing a move down-market that Sears would not follow. The focus on the goods sold obscured the innovations in the way Wal-Mart and other firms organized like it handled the products. The goods were cheap partly because Wal-Mart's costs were low.

In short, Sears lost on infrastructure.

When people think of retail companies, what comes to mind is everything we can see inside the store: the merchandise, the layout, the clientele. But more important is everything you can't see inside the store: the supply chain, the warehouse management, the software that relays sales data to the people making decisions about the next batch of orders. In the short run, shopping is about seizing on trends and stocking the most popular merchandise. In the longer run, the best retail companies turn out to be the best infrastructure companies.

And drones are an answer perhaps the most contentious retail/infrastructure question facing Amazon and its competitors: Convenience and delivery time.

Drone Dreams

"Amazon is an e-commerce platform and a logistics machine," the analyst Benedict Evans emailed me for my research on the Atlantic column. "This is what Sears did with the mail and railways. Amazon is doing it with the web and now mobile."

Today, Amazon is the world's most successful online retail company because it has the world's best offline, real-world infrastructure for rapidly getting stuff to people's doorsteps. But the competition is steep: Walmart, eBay, and a batch of startups are breathing down its neck, and that's just in the U.S. The company faces even stiffer competition in Europe and China.

Just as small-town stores couldn't have predicted how the continental railroad would bypass them, and Montgomery Ward couldn't have predicted how cars would diminish the mail-order business, and Sears didn't anticipate the technologies that would catapult Wal-Mart, it's hard to predict what development will mark the next inflection point in online retail.

Bezos' plan to fill the skies with drones might be a PR stunt. But it's also a vision of distribution that fits perfectly with their current strategy to cut order times for downtown homes. The company, which used to buy warehouses in cheap states to avoid taxes, is now building new centers near cities to win the delivery-time war for affluent urban customers. Drones would give Amazon an edge in speed and cost for items up to five pounds, which make up 86 percent of the items it delivers.

The potential for drone delivery is massive, but also, I think, inchoate. What sort of purchases are created or destroyed by having 30 minutes between you and almost every item in the Amazon catalog? How many drives to the store are eliminated? How many shopping stores and sites are obliterated by the convenience, and how much could Amazon earn charging tens of millions of households for such the service? And then, the consumer surplus: How much time and energy is saved by having robots fly the Everything Store to our doorstep? (Not to mention, how many jobs are eaten by the drones?) 

It's not worth going too deep on regulatory and social hurdles for a technology that might or might not exist in half a decade.  Rather, Amazon's drone dreams are another chapter in two old stories: Thinking long-term about infrastructure is what makes and destroys retail giants; and Bezos' perspective is nothing if not long-term.

At $114,651, the 12 Days of Christmas Are an Extremely Impractical Gift

Wikimedia Commons

To begin December on a humbug note: "The 12 Days of Christmas" plays a dubious role, both as a carol (it takes approximately half an hour to sing) and furthermore as a shopping guideline. Geese are lovely creatures, but there's no reason to buy somebody six of them for seven consecutive days, no matter how true your love.

To drive home the latter point, the folks at PNC annually calculate the rough cost of each round in the "12 Days of Christmas," from the partridge in the pear tree ($199.99) to a dozen drumming drummers ($2,854.80). This year, they report the full Christmas Index at $27,393.17.

How does one calculate the cost of a milking maid? A piping piper? A leaping lord? The PNC team explained that the Pennsylvania musicians union shares wage information for its drummers and pipers. Pittsburgh's National Aviary provides the cost of most of the birds. PHILADANCO, a modern dance company in Philadelphia, shares the cost of one performance with nine lady dancers. The maids, considered unskilled labor, are thought to receive Pennsylvania's minimum wage.

What you get, in the end, is a faintly representative mix of low- and middle-skilled human labor, commodities (gold), and food staples (poultry). Maybe that's why the 30-year change of the Christmas Index is very similar to overall inflation (116 percent vs. 122 percent). Or maybe it's just pure happenstance.

In calculating the true cost of this ridiculous song, remember that the total haul isn't each alliterative line item, but rather each alliterative line item over and over again until you get to the 12 drummers drumming. That means, not seven swans-a-swimming, but 42; not five golden rings, but 40; and so on. 
 
The total cost of the 12 Days of Christmas in 2013 comes out to $114,651.18. Stick with Amazon gift cards.

11 Economic Lessons to Make You a Smarter Shopper This Black Friday

Reuters

The first and last rule of prices is that nobody knows what anything is really worth. Shoppers are guided by shallow clues ("this is cheaper than that") and latent emotions ("it just feels like a good deal") rather than knowledge and deliberate thinking.

The discounts you'll see Friday are equal parts economics and theater co-produced by retail stores and suppliers. A red cardigan sweater on sale for more than 40 percent off looks pretty appealing at $39.99. But 40 percent off of what, exactly? "It was [probably] never meant to sell at its $68," the Wall Street Journal reported in its wonderful investigation of the black magic of Black Friday. The discount game works for everybody: We get our discount dopamine hit, and the stores get their profit.

Smart shopping might be an oxymoron. But smarter shopping? It is, at least, a noble goal. Here are 11 tips from microeconomics, behavioral economics, and social psychology to guide you to successful and as-smart-as-possible Black Friday.

(1) Remember Why It's Called "Black Friday." No, not because it starts at 3 am. It's called Black Friday because it's the beginning of the season when many stores go from being in the red to being in the black. That doesn't sound like much of an economic lesson for you, but that's the point. Black Friday isn't for you. It's for the stores.

The biggest mistake that people make on Black Friday is that they assume that the most popular day of the year to shop is the best day of the year to buy anything. If you're walking into a store at 5 AM Thursday morning, you're expecting floor-kissing prices in every corner. But store-wide discounts aren't in the best interest of the store. It's more common that a few tantalizing items will be sold at a loss to lure shoppers while smart floor design guides them toward more profitable (even full-priced) items. "Black Friday is about cheap stuff at cheap prices, and I mean cheap in every connotation of the word," Dan de Grandpre, a veteran deal expert, told the New York Times.

Stores know you're making this mistake, and they know how to manipulate floor traffic to their higher-margin stuff. As experts in "retail ergonomics" (it's a thing) have shown, counterclockwise traffic flows result in more spending; putting high-margin items at eye-level to the customers' right is most likely to motivate a purchase; and forcing you to walk around a display is an easy way to draw our attention to items the store wants us to throw in the cart.

(2) The Best Deals Aren't This Week (Probably). The two most common reasons for steep discounts are price discrimination and inventory pressure. Price discrimination is the store saying: "Hey you, cheapo, I know you won't buy this steel pot at $50, so we're selling it at $40. Buy it now!" Inventory pressure is the store saying: "You didn't buy our steel pot at $50, or $40, and now it's taking up space and costing us money, so, please, just take it, how about $38?"

It's in the stores' interest to make you think prices will go up after Black Friday. Otherwise, everybody will wait until Saturday. But as inventory piles up, prices will stay low or go lower in early December, as Stephanie Clifford has reported in the New York Times. In general, though, predicting exactly when prices on your single favorite item will be lowest is like trying to buy a plane ticket at its single lowest price. Even our smartest algorithms struggle to do it.

(3) The Full Price Is More Than What's on the ReceiptTo appreciate the net cost of your shopping trip, remember to include the gas you use commuting from mega-sale to mega-sale, the shipping and handling costs, and the warranties and rebates (much more on those later).

We tend to ignore net cost when we shop because we're focused on the bargain story. Shoppers love stories—"This skirt was 80% off, I am a discount ninja!"—because when it comes to prices, nobody knows anything, and stories are all we have. Narratives fill the space where knowledge should be. If you drive 40 minutes to a super-sale and sit in a parking-lot line for another 20 minutes, that's an hour of your time and gasoline. That hour might not be part of the story you tell yourself and your friends later. But those are real costs counting against that magnificent 80% discount you found inside.

(4) Make a List. Check it Twice. Shoppers understand that spending a little money makes it easier to spend a little more money. We get a dopamine rush from buying the perfect thing. But making decision after decision depletes our good judgment. This effect, called decision fatigue, exhausts our ability to resist items that feel cheap at the end of a shopping trip.

Keeping track of how much you've spent sounds like sage advice, especially if you're keeping a budget. But be aware that that number will also frame prices in a negative way. Economist Dan Ariely has called this the "problem of relativity." Imagine you see a fetching $150 chair. But you'll be more likely to buy it after a $500 spending spree than a $5 lunch. Expensive is a relative term.

The best way to overcome decision fatigue and the problem of relativity is to write a list and buy only what's on the list. That way you approach Black Friday not as an exploratory mission into the dark world of discounts and window shopping, but as a pure check-the-boxes trip.

(5) Beware of "Free." Something weird happens to our brains when the price for something goes from $1 to $0.01 to free. We stop thinking clearly. Getting things for free feels like such a good deal that we'll go out of our way to get it. Here's Dan Ariely in his book Predictably Irrational:

"A few years ago, Amazon.com started offering free shipping of orders over a certain amount. Someone who purchased a single book for $16.95 might pay an additional $3.95 for shipping, for instance. But if the customer bought another book, for a total of $31.90, they would get their shipping FREE! Some of the purchasers probably didn't want the second book (and I am talking here from personal experience) but the FREE! shipping was so tempting that to get it, they were willing to pay the cost of the extra book."

Free isn't bad. It's good. It's great. It's free! But we're often so enraptured by free that we overreact, tailoring our purchases around getting to FREE! shipping, or FREE! membership, or FREE! headphones, and wind up spending more in the process. Don't do it. Instead, just buy exactly what you want.

(6) Warranties Are Dastardly Tricks. Price discrimination is most dangerous when you can barely see it. Buying insurance on an electronic toy? Ah, such peace of mind! Rebates? Ah, the savings!

Perhaps. But warranties push risk-averse customers into paying a higher price for the same product.  "[Warranties] make no rational sense," Harvard economist David Cutler told theWashington Post. "The implied probability that [a product] will break has to be substantially greater than the risk that you can't afford to fix it or replace it. If you're buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances."

Rebates test customers' memories and willpower. A $10 rebate on a $40 candlestick feels right in the moment. But four months later, when the words "candlestick rebate" flash in your brain at work, are you really going to take time out of your day to save the equivalent of one day's lunch?

Your brain is smarter in slow motion. Feeling hurried can force bad decisions in all aspects of life, as nowhere is it true more than a crowded store. When we're bombarded with stimuli, racing to grab cardboard boxes before the frantic mother of five behind us, we forget the key question in shopping: Will I still want this thing when I leave the store?

(7) Focus on the Long Game. Thinking about how much we'll regret our purchases can radically change our shopping behavior. A recent study of holiday shopping out of Harvard and Columbia Business Schools devised a mischievous three-part experiment. First, shoppers chose between an expensive or cheap article of clothing. Second, they were randomly divided into groups and asked how much they expected to regret their purchase in one day or ten years. Third, they were released into a mall. The economists found that thinking about short-term regret moved shoppers to buy discounted products. Those primed to take the long view bought more extravagant goods.

One conclusion from the study is that short-term thinking leads to discount-hunting while taking a longer perspective on our buying habits motivates us to price quality over bargains. In the frenzied atmosphere of a Black Friday store, we're manically focused on saving money. But a broader perspective might move us to spend more on the few items we really care about.

(8) Beware "Good Deals" on Items You Know Nothing About. I love this story from Priceless by William Poundstone. Once, Williams-Sonoma couldn't sell their $279 breadmaker, perhaps because, you know, it was a $279 breadmaker. But when the company introduced a $429 breadmaker next to their $279 model, sales of the cheaper model doubled even though practically nobody bought the $429 machine. 

Plausible Lesson 1: Williams-Sonoma shoppers are inscrutably nuts. Plausible Lesson 2: We don't know what anything's worth, especially weird stuff like breadmakers, so we're more susceptible to cues that tell persuasive stories about what they *should* cost. Don't let that happen! Don't fall for what looks like a "good deal" just because you can justify it to yourself on the basis of "it was 40% cheaper than the other model." Research prices before you allow store cues to give you answers.

(9) The Most Efficient Gift Is the Worst Gift. It's cash. Yes, it's awful. It's cold and bloodless and impersonal and everybody will hate you if you get it for them. It's also extremely efficient for buying somebody exactly what they want for the perfect price. The famous economic paper "The Deadweight Loss of Christmas" showed that gift-giving "destroys" between a tenth and a third of the value in what we buy. That means the recipient of a $100 shirt would value it between $70 and $90. Cash is better.

You can't get cash for that special someone, unless you happen to be dating an economist studying deadweight loss. So best to follow the advice of Geoffrey Miller, the University of New Mexico professor, whose book The Mating Mind informs us the best gifts are "the most useless to women and the most expensive to men."

(10) Waking Up at 2 AM to Stand in Line For Hours Isn't *Necessarily* Crazy. Your shopping experience, like any experience, has a value. In other words, it has a price. It might seem silly for people to waste perfectly good hours of sleep to wait in line at Best Buy. I happen to think it is silly. But it is not irrational, for two reasons. 

First, it's another example of price discrimination, since retail stores are essentially gifting their best deals to their most discount-desperate customers. Second, if you love waiting in frigid Walmart lines at 2 AM, well that's just, like, your time-cost preference, man. Maybe the absurd inconvenience of the wait is a part of the story you want to remember and tell friends later. We pay for memories and stories and extreme experiences that will bring us joy later down the line all the time. Maybe this isn't any different. So don't think: While I was sleeping, my friends were wasting their lives for a slim bargain. Think: While I was sleeping, my friends were paying for an entertaining experience with their time.

(11) One Last Thing: Don't Buy That One Last Thing! Black Friday is exhausting. And when you feel exhausted, your brain gets drunk with stupid. It's decision fatigue, it's leg fatigue, it's everything fatigue. Retail stores know this. So they put cheap stuff tantalizingly close to our arms in the checkout aisle. It's so cheap, and small, and cute, I have to have it, your decision-fatigued brain will plead. Don't listen.


This post is based on a version we originally published on November 21, 2012.

The Slow Death of 'Traditional' Families in America

Thanksgiving is perhaps the quintessential American family holiday, but what, exactly, does the quintessential American family look like today? Gay marriage laws have happily extended legal rights to same-sex couples, but over the last half century, a less auspicious family development has been the rise of single moms and dads and the decline of two-parent households, particularly among lower-income and less-educated families.

New Census numbers help tell the story:

The big takeaway here is that college graduates overwhelmingly raise children together (88 percent have a married spouse present). Non-college-grads are more than twice as likely to raise their child alone.

I took the Census figures and turned them into pie charts to accentuate the percentage difference in family arrangements by education. What you might call the "traditional" family structure (two parents raising their kids, together) dissipates as you move down the education ladder.

The blue slice represents what some people might consider a traditional family: Two married parents raising kids together.

Education and income go hand-in-hand, and so it will come as no surprise that richer individuals are more likely to married, regardless of race and education, and poorer individuals are much less likely to be married. This graph shows *all* Americans over the age of 15.

The point here isn't that marriage should be universal, or that we should abolish divorce, or that married two-parent households are the only possible way to properly raise a child. Rather, the big idea is that rich, educated people are more likely to marry, more likely to marry each other, and more likely to use their resources and the obvious time benefits of a two-parent household to produce educated (and rich) children. This is a virtuous cycle, and it turns vicious for the poor. Across the income spectrum, single parents have a tough time balancing work and child-rearing, especially when work earns them very little money. You don't have to be a cultural conservative to acknowledge that the disintegration of the traditional family structure at the bottom of our economic ladder means that too many kids have fallen behind before they set foot in school.

Being raised by both parents should not be a rich kid's exclusive privilege. And it isn't, yet: More than 60 percent of high-school dropouts still raise their children in two-parent households. But that figure is inching dangerously downward.

No, Large Numbers of Greek People Are Not Giving Themselves HIV to Collect Benefits

Reuters

Greece is such a nightmarish hellscape these days that people will believe just about anything about it. 

And why not? Youth unemployment hit an ungodly 65 percent. Families who can't afford energy are literally burning their living rooms to heat their homes. Neo-Nazis, whose members have murdered political opponents, are the country's third-most popular party. As Matthew O'Brien has put it, Greece is the economic equivalent of the Tyson Zone: "a rarified plane of crazy where any story about it seems plausible."

But not this story...

This week, Rush Limbaugh and the Drudge Report jumped on an astonishing claim: Large numbers of Greeks were giving themselves HIV on purpose to collect government benefits.

"Half of new H.I.V. infections [are] self-inflicted to enable people to receive benefits of €700 per month and faster admission on to drug substitution programmes," read one version of the European Region report from the World Health Organization.

The story played right into a bevy of right-wing talking points: Over-spending killed the Greek economy; the social safety net has dangerous consequences; Europe is horrible, generally. Limbaugh raged with characteristic restraint and sensitivity... 

It's all the fault of the Greek government.  So the people -- ignorant though they are, blissfully ignorant though they are -- they're always victims, they are always innocent ...  Is that true, Greece is like the Gay Capital of the World?  You heard that?...

Wow, well, anyway, the WHO report was wrong, thank God. Although the organization has record "a few" cases of self-inflicted HIV (a tragedy, in itself), an editing error created the impression that "half" of all new cases were purposeful attempts to collect benefits.

Here is the WHO correction:

In September 2013 the WHO Regional Office published a report “Review of social determinants and the health divide in the WHO European Region” which was prepared by the UCL Institute of Equity, United Kingdom. In this report, reference is made to: “HIV rates and heroin use have risen significantly, with about half of new HIV infections being self-inflicted to enable people to receive benefits of €700 per month and faster admission on to drug substitution programmes.”

WHO wishes to point out that this statement is the consequence of an error in the editing phase of the document. The original source for the statement is a correspondence published in the Lancet by Alexander Kentikelenis and colleagues in September 2011. In this article, Kentikelenis mentions “accounts of deliberate self-infection by a few individuals to obtain access to benefits of €700 per month and faster admission onto drug substitution programmes,” based on the report of the “Ad hoc expert group of the Greek focal point on the outbreak of HIV/AIDS in 2011” (Greek Documentation and Monitoring Centre for Drug, 2011).

WHO recognizes that there is no evidence suggesting that “deliberate self-infection with HIV” goes beyond few, anecdotal cases. At the same time WHO recognizes that Greece has reported an significant, 52% increase of new HIV infection in 2011 compared to the 2010, largely driven by infections among people who inject drugs in recent years. The reasons for this increase remain multifaceted and WHO welcomes efforts to of the ad hoc working group and other entities to fully understand the underlying reasons and recommend appropriate measures to extend the benefits of the comprehensive package of interventions for harm reduction to all people who inject drugs.

This is the problem with the Greek Zone: "I'll believe whatever I hear" becomes a rationalization for "too good to check."

Your Brain on Poverty: Why Poor People Seem to Make Bad Decisions

Shoppers at a food pantry. (Reuters)

In August, Science published a landmark study concluding that poverty, itself, hurts our ability to make decisions about school, finances, and life, imposing a mental burden similar to losing 13 IQ points. 

It was widely seen as a counter-argument to claims that poor people are "to blame" for bad decisions and a rebuke to policies that withhold money from the poorest families unless they behave in a certain way. After all, if being poor leads to bad decision-making (as opposed to the other way around), then giving cash should alleviate the cognitive burdens of poverty, all on its own.

Sometimes, science doesn't stick without a proper anecdote, and "Why I Make Terrible Decisions," a comment published on Gawker's Kinja platform by a person in poverty, is a devastating illustration of the Science study. I've bolded what I found the most moving, insightful portions, but it's a moving and insightful testimony all the way through.

I make a lot of poor financial decisions. None of them matter, in the long term. I will never not be poor, so what does it matter if I don’t pay a thing and a half this week instead of just one thing? It’s not like the sacrifice will result in improved circumstances; the thing holding me back isn’t that I blow five bucks at Wendy’s. It’s that now that I have proven that I am a Poor Person that is all that I am or ever will be. It is not worth it to me to live a bleak life devoid of small pleasures so that one day I can make a single large purchase. I will never have large pleasures to hold on to. There’s a certain pull to live what bits of life you can while there’s money in your pocket, because no matter how responsible you are you will be broke in three days anyway. When you never have enough money it ceases to have meaning. I imagine having a lot of it is the same thing.

Poverty is bleak and cuts off your long-term brain. It’s why you see people with four different babydaddies instead of one. You grab a bit of connection wherever you can to survive. You have no idea how strong the pull to feel worthwhile is. It’s more basic than food. You go to these people who make you feel lovely for an hour that one time, and that’s all you get. You’re probably not compatible with them for anything long-term, but right this minute they can make you feel powerful and valuable. It does not matter what will happen in a month. Whatever happens in a month is probably going to be just about as indifferent as whatever happened today or last week. None of it matters. We don’t plan long-term because if we do we’ll just get our hearts broken. It’s best not to hope. You just take what you can get as you spot it.

When neuroscientists Joseph W. Kable and Joseph T. McGuire studied time, uncertainty and decision-making, they found that virtues like patience and self-control weren't as simple previous studies suggested. In the ubiquitous Marshmallow study, for example, kids who ate the treat quickly were deemed impatient and kids who waited had self-control and, on the whole, went on to lead more productive lives, the study found.

But rational self-control in the real world, Kable says, isn't so black-and-white. Perhaps you have enough patience to wait an hour for a train, or to lose one pound each week with exercise and dieting. That sounds responsible. But what happens if the train isn't there in 90 minutes? If you never lose weight and you're making yourself miserable with your diet? Maybe you should give up! "In this situation, giving up can be a natural — indeed, a rational — response to a time frame that wasn’t properly framed to begin with," Maria Konnikova summed it up for the Times.

As Andrew Golis points out, this might suggest something even deeper than the idea that poverty's stress interferes with our ability to make good decisions. The inescapability of poverty weighs so heavily on the author that s/he abandons long-term planning entirely, because the short term needs are so great and the long-term gains so implausible. The train is just not coming. What if the psychology of poverty, which can appear so irrational to those not in poverty, is actually "the most rational response to a world of chaos and unpredictable outcomes," he wrote.

None of this is an argument against poorer families trying to save or plan for the long-term. It's an argument for context. As Eldar Shafir, the author of the Science study, told The Atlantic Cities' Emily Badger: “All the data shows it isn't about poor people, it’s about people who happen to be in poverty. All the data suggests it is not the person, it's the context they’re inhabiting.”

Tipping Doesn't Work: Why Do Americans Still Do It?

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The Case Against Cars in 1 Utterly Entrancing GIF

Here is a brilliant piece of data viz to show how public transit reduces congestion. I sort of can't stop staring at it. 

If you do succeed in dragging your eyes away, read more about America's evolving car habits at The Atlantic Cities and check out Jordan Weissmann on the decline of driving in the U.S. over the last few years.

We continue to lead advanced economies in per-capita carbon emissions, 28 percent of which come from transportation. But even if the crunchy granola argument isn't good enough to make you see the benefits of public transit, consider that trains, trams, buses, and the like reduces traffic congestion, which is good for the life satisfaction of everybody behind the wheel, since science shows long commutes make us unhappy.

Commuting by public transit isn't amenable to all lifestyles, particularly for families who live in the suburbs outside the tentacles of the public transit system. But for both the country and the biosphere, the benefits are obvious.

 (Via The Atlantic's Andrew Golis)

 

ESPN Is Still 2X Bigger Than Every Other Cable Sports Network Combined

ESPN is the richest media brand in the U.S. today not only because cable television is practically the best business in the country, but also because among cable sports networks, ESPN has a virtual monopoly on the best games, and, subsequently, your attention.

Here's a look at ESPN vs. non-ESPN sports cable networks (broadcast, TNT, and TBS not included) and their average primetime viewership the last three Septembers, when baseball nears the playoffs and football starts.

Being number one has cascading benefits in an entertainment industry like this. ESPN gets the highest subscription fees ($6.4 billion each year in subs, and that's before selling a cent of advertising), so it has the most money, so it can afford the most popular live sports rights, so it has the highest viewership, so it gets the highest subscription fees, and around and around we go.

Fox Sports 1 isn't ESPN's competition, no offense to Fox. ESPN's competition is stagnant wages and slow household formation that turns the cable bundle into luxury good.

Apple Is Winning America and Losing the World on Purpose

Everybody wants Apple to be Volkswagen, but Apple just wants to be BMW.

Or, more to the point, Apple just wants to be Apple. Instead of making cheap phones to grow market share, it's making expensive phones to maintain high profit margins—and market share is fading.

About 80 million smartphones were sold between the third quarters of 2012 and 2013. This graph, from Gartner data of smartphone growth in the last year, shows who got what. Apple might be the second biggest phone seller in the world, but Lenovo sold more phones in the last year. And Samsung sold almost five times more units.

In the U.S., it's still customary to walk into a classroom, boardroom, or any sort of room, and find that literally every single human there has an iPhone. Apple's market share (defined in the graph below by operating system, rather than phone manufacturer) is still expanding here, as Android has leveled off.

This is a feature, not a bug, of the Apple strategy. Apple phones are relative luxuries compared to the rest of the market, and they're priced for a middle-to-upper class customer, which describes most of the U.S. but only a minority of the countries where smartphone penetration is growing fastest. Plus, since carriers subsidize phones in the U.S., most smartphone owners can quote you a price for their device that has nothing to do with the official price of the phone.

Apple's not interesting in making stuff that meets "the Chindia price." It's interested in the Chindia price rising to meet Apple.

The 15 Most Popular Cities for Millennials (D.C. Is #1)

Reuters

In the two years before Obama became president and job losses bottomed out, young people born between the 1980s and the end of the century (a.k.a.: Millennials) were fleeing Washington, D.C. But in the next two years, the city and its surrounding suburbs in Maryland and Virginia added more Millennials than any other city in America.

Here's your chart, with the 15 most popular cities for young people listed from left to right. The blue bars are show average annual net gain between 2007 and 2009; the red bars show annuals gains in 2010 and 2012.

The story underneath this story is that, although you're looking at where the young people are moving, the fact is that Americans, including young people, are moving around much less than they used to. In the 1970s, about one in five households moved each year, according to Census data. In 2011 to 2012, with the recession's bite marks still left in the economy, just 12 percent of households moved.

Upworthy: I Thought This Website Was Crazy, but What Happened Next Changed Everything

Upworthy

The first blockbuster hit came from an unlikely source: Irish talk radio.

In 2010, Michael D. Higgins, then a foreign-policy spokesperson for Ireland (and now its president), went on the radio in Galway and excoriated a conservative American talk show host for opposing President Obama's plan to enact universal health care. For a long time, the audio file of the berating lingered in Internet purgatory. Then, in August 2012, Mansur Gidfar uploaded the audio to the new, rapidly growing site Upworthy.com in August 2012. He tried the headline, "A Tea Partier Decided To Pick A Fight With A Foreign President. It Didn't Go So Well." The article went certifiably berserk, eventually becoming the site's first million-hit story.

Today, Upworthy is a million-hit machine for heartfelt, progressive content, and it is trying to use this alchemy—spinning hearty fiber into viral gold—on behalf of the Bill and Melinda Gates Foundation. On Tuesday, the company announced it is launching a global health and poverty section backed with Gates money, suggesting a future for not only the site's editorial strategy but also for its business.

Upworthy has mastered the dark viral arts with a unique blend of A/B technology and lily-white earnestness. The staff scours the Web for "stuff that matters," writes multiple headlines for a test audience, selects the top-performer, and blasts it out on social media. It's a deceptively simple plan that's devouring the Internet, one Facebook Newsfeed at a time. The site nearly surpassed 50 million unique visitors in October, which suggests traffic comparable to giants like Time.com, and Fox News.

Upworthy has run paid content, like a Microsoft-sponsored video of a Ugandan man talking to his family over Skype. But this is the first time that an organization like the Gates Foundation has paid to popularize a particular concept like global health and poverty. In a way, the partnership harkens back to Upworthy's founding idea to be a bullhorn for non-profits, amplifying their research and message, and then taking a cut. This pilot partnership will provide one full-time "curator" to trawl the Web for stories about toilets (Everyone Poops, But 2.6 Billion People Do It In A Really Crappy Way) and global disease (When Future Generations Look Back On Us, They'll Say We Had The Opportunity To End 3 Awful Epidemics).

"We've always wanted to draw attention to the most important issues," co-founder and CEO Eli Pariser told me. "The health and poverty of the lower third of the world's population is one of the least covered issues of our time. There are people who put incredible effort and creativity into making a YouTube video on malaria, and it just gets 5,000 views. We're hoping to go out and find those things and bring them to a much wider audience."

... And Made Me a Little Sick

Upworthy's vertiginous success isn't without criticism. The site's pleading, occasionally histrionic, gooeyness has inspired criticisms of so-called "glurge" and a popular parody account, @UpWorthIt. Here, for example, is a list of Upworthy's 11 greatest hits, whose pageviews are downright otherworldly.

There is an amygdala-tickling genius here, but also a kind of movie-trailer mawkishness. What's the "secret"? An entertaining slideshow of Upworthy's headline-writing strategies last year repeatedly references the "curiosity gap." The idea is both to share just enough that readers know what they're clicking and to withhold just enough to compel the click.

Upworthy rankles some journalists partly because, even as it innocently coos Web readers with tender headlines, the repetitiveness of its style suggests a rather cynical ploy to lasso cheap attention rather than fully engage an audience hunting anything more than a dopamine rush. 

But Pariser has heard these critiques and has a ready rebuttal: What special virtue is there in letting great videos, articles, and images fall into the Internet's abyss simply because nobody thought of the right combination of words to unlock its audience? What's more, when readers find themselves hating a headline picked by a testing audience and shared by 10 million people, whose tastes are we really objecting to—Upworthy's or ours?

Pariser, who honed his data-driven chops at MoveOn.org, said the media's obsession with Upworthy headlines misses half the story. "Some of the stories about us have focused too much on the headlines, but to have content that's really shareable, it has to be something people actually want to share," he said. "We look at how much people click, but also how much people share [after they click]. The only way to get something that does really well is to deliver on the quality that you're promising in the headline."

As for his critics, Pariser said that a handful of journalists with Twitter bullhorns shouldn't get to out-vote 50 million (and growing) monthly unique visitors. "I'm not going to pay too much attention to some snarky New Yorkers who see [our headlines] too many times in their feed," he said. "Part of the ambition is to build something that isn't a niche product. And for folks building great content that is more for a specific NYC elite audience, the sensibility is not going to mesh."

The Gates Foundation's sponsorship has already inspired posts that will feel familiar to both Upworthy's fans and skeptics. Marketing a video by Water Is Life to promote the accessibility to drinking water, you have the supplicating headline: "The Things This 4-Year-Old Is Doing Are Cute. The Reason He's Doing Them Is Heartbreaking." It is classic Upworthy. Unapologetic, sentimental, cliff-hangery as heck, and two sentences long. And video itself? Pretty touching, really. I can't say I regret the click.

How Uber's Taxi App is Changing Cities

 

"D.C. is a real pain in my butt," Uber CEO Travis Kalanick told the audience at the Washington Ideas Forum this afternoon.

In a wide-ranging interview with James Fallows of The Atlantic, Kalanick introduced his company as part of a new wave of tangible technology that is changing urban policy and city protectionism, starting with the taxi lobby. In Washington, he said, a late-night attempt to pass a law to effectively ban Uber prompted a voracious social media response, including 37,000 tweets, which eventually defeated the so-called Uber Amendment. The experience created a "playbook" that Kalanick is taking across the country, and overseas, as he fights to popularize his app, which connects wannabe passengers with on-demand drivers.

There are 13,250 cabs in New York City today, he said, the same number as in the early 1950s. In cities like New York, where people's demand for transportation has outstripped the supply of cabs, services like Uber are "like an injection of oxygen," Kalanick said.

Still, he stressed that Uber's guiding principle isn't to become a headache for city governments. Rather, he said, Uber is the business of delivering cars in five minutes. "Our motto is 'Everyone's Private Driver,'" he said. The company, most famous for its black-car service, has come down-market with ride-sharing products like UberX that make on-demand auto transportation affordable to people who couldn't afford lobby-protected cab rates.

Ironically, the one thing that could make Uber's life easier is more government. "The lack of involvement from the federal [government] makes my job harder," Kalanick said, because interstate rules could theoretically ban regulations that keep Uber from competing in individual markets. But he's confident that the regulations will fall on their own. Either the cities change the laws, he said, or else they're forced to publicly support "really bad laws."

The Biggest Story in Photos

Nelson Mandela 1918-2013

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