The most important book of 2015

I have wrung my hands in the past, in this space and elsewhere, about the collapse of a workable market for digital goods.  I find it hard to get people as excited about this as I am–if I still had enough hair for anyone to notice it would be on fire–but I have some help from Scott Timberg now  so I am going to try again.  Short version: buy this book, Culture Crash, and read it. Now. I believe it is the Piketty of 2015, and the first book I’ve stayed up to read straight through at one sitting–sometimes literally in tears, both of pain and of rage– in years.  It is not just about culture, but about whatever really big issue you lie awake worrying about.

Long post, get a cup of coffee (no, not a substitute for the book; read it) .

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Housing policy success

As is well-known, housing prices in the Bay Area of California have become unsustainable; the median home price is $ 3/4 million in San Francisco/Oakland, more in the South Bay.  You need a household income of almost $150K to buy that house (which is no kind of mansion), and we are experiencing yuppification/gentrification conflicts and an exodus of the middle class (don’t even ask about blue-collar and service workers) to hour-long commutes away.

One thing that would help a lot is relaxing the traditional hostility of our local planning bodies to owner-occupied rental housing. Last night, the Berkeley City Council started to put our zoning law on a new course, approving (not enacting, yet, but the train is on the tracks) new rules that greatly ease the parking, minimum and maximum unit size, and lot size requirements for these accessory dwelling units (details to be posted at Annotated Agenda for the March 24 meeting here).

Why is this such a good idea? I discuss these “in-law” units in an op-ed in the San Francisco Chronicle (below the jump, if you have trouble with the paywall).  It may have been useful, but my wife, Debra Sanderson, who used to be Berkeley’s land use planning manager, was the heroine of this success, doing the real politicking. As we met in MIT’s city planning department, it was especially fun to partner on a project like this again.

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The bottom of the pit

Will Rogers said it first:

When you find yourself in a hole, quit digging.

From an IEA press release on Friday 13 March (sic), my emphasis:

Global emissions of carbon dioxide stood at 32.3 billion tonnes in 2014, unchanged from the preceding year. [...]
In the 40 years in which the IEA has been collecting data on carbon dioxide emissions, there have only been three times in which emissions have stood still or fallen compared to the previous year, and all were associated with global economic weakness: the early 1980′s; 1992 and 2009. In 2014, however, the global economy expanded by 3%.

This statistic is highly reliable. The IEA was set up in 1974 with the initial task

to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks.

Keeping tabs on the oil market and giving advance warning of another price spike means counting barrels of oil, and later wagons of coal and millions of cubic feet of gas. It’s what they do for a living. If you want to challenge their methods, outlined here, feel free, but I reckon it’s a waste of time. Continue Reading…

Public Service Announcement: Don’t Judge Mass Media Writing by the Title

A short note from all of us who write for magazines and newspapers to all of you who write essays and emails denouncing us based on the title of our latest contribution.

(1) Authors don’t generally pick their titles. Editors do. Even if your screaming is justified, you are screaming at the wrong person. The author may not like the title either.

(2) It’s excusable not to know that authors usually don’t pick the titles of their articles because it’s the inside baseball of journalism. However, when you write your long ranting emails and essays based on a title that doesn’t match the content of the article (because a different person penned each) you are effectively announcing to the world that you feel comfortable making lengthy pronouncements about material you have not in fact read. This is particularly acute when you make points that are in the author’s own piece and which you would have agreed with if only you’d troubled to read the piece you are criticizing.

End of PSA. You may now resume your regularly scheduled blathering, but those of us who write hope you won’t.

Not logic but experience: why I was wrong about the ACA then, and will be right in the future

The Affordable Care Act turned five years old yesterday. As any honest parent knows, that’s a common occasion for saying, “thank goodness: we survived.” And it’s as good an occasion as any for me to write a post I’ve been considering for some time but never got around to because I lacked the time for proper research on public opinion. Rather than delay longer, I’m writing it now as a thought piece. My confidence that I’m right is, for the moment, strong but fragile. It relies on the evidence of things not cited.

The basic point is this: the ACA is set up to mimic private insurance coverage for those who previously lacked it. I claimed that would and should make it, over time, acceptable and routine. That claim tacitly assumed, though, that everyone had experience with private insurance coverage and thought it worked OK. The uninsured in fact lacked that experience, and that more-or-less automatic judgment. Continue Reading…

Prohibition and Marijuana Potency

At Washington Post Wonkblog, Christopher Ingraham notes that the potency of available marijuana has been increasing:

Retail outlets in Denver and elsewhere advertise strains that contain 25 percent THC or more. As legalization opponents are forever fond of saying, this isn’t your daddy’s weed.

There is extensive evidence available to support Christopher’s observation about rising marijuana potency. But I am not sure that his causal explanation for the potency increase comports with the facts. He attributes it to prohibition and believes therefore that legalization will reverse the trend:

As prohibition eases and legal markets open up, growers now have the breathing room to select for traits beyond high THC content. Demand from new users looking to experience a social high, rather than four hours of couch lock, will likely drive this. The end result may be a resurgence of milder strains of weed that are more akin to fine wines than to bathtub gin.

There are a couple analytic problems here. First, over the past 5-10 years, legalized marijuana markets (medical and recreational) have expanded dramatically and marijuana enforcement has dropped sharply, but as the data Christopher himself presents show, potency went up rather than down during that time. Second, if one looks at other legal industries that sell psychoactive drugs, they typically do anything they can to give customers as much potency as possible for every dollar they take in.

For example, the British alcohol industry has been warring with the government from at least 1751 (e.g., The Gin Act) to the present day (e.g., minimum unit pricing) over the former’s efforts to churn out cheap, high potency alcoholic beverages. Even if one restricts analysis to the “fine wine” analogy that Christopher evokes, it has to be said that over the past quarter century, the alcohol content of wine sold in the U.S. has crept up from the 8-10% range to 12-14%.

For drug producing industries, higher potency products are a good. They lower transport costs because the product has less mass and weight. Consumers like getting more bang for the buck. Finally, higher potency products are more addictive, and addicted customers are the best customers. I can’t stress strongly enough that all these advantages accrue to both legal and illegal drug sellers. There is nothing in the legalization of drug-producing industries that eliminates these financial incentives and because they can operate openly, such legal sellers actually may be better at achieving a saturation of lower cost, high-potency products in a market than are sellers constrained by prohibition.

People who enjoy the occasional low potency marijuana cigarette tend to assume that sellers have a big economic interest in catering to them. But about 90% of the weed being sold in Colorado is used by people who smoke every day or almost every day. There just isn’t as much money in the “fine wine” set of occasional marijuana users as there is in daily, physically dependent users of high-strength pot.

A legal market thus doesn’t inherently bring us low potency. Rather, it brings us a fight between regulators who generally want low potency products to dominate the market and sellers who generally want high potency products to dominate the market. Sometimes the regulators win, sometimes the industry does. When the industry wins, higher potency products are more available than they are under prohibition. When the regulators win, industries are forced against their economic interests to produce more of the lower potency products that Christopher and I agree pose less risk to consumers.

Quote of the Day

It was strange to Old Robert that he, who knew so much more than his neighbors, who had pondered so endlessly, should be not even a good farmer. Sometimes he imagined he understood too many things ever to do anything well.

– John Steinbeck, “Cup of Gold”

Cannabis policy for conservatives: the unpalatable vesus the disastrous

Josh Barro’s report in the New York Times starts with the debate about the Washington D.C. grow-and-give system and opens out into the broader question of whether it’s possible to create a system of cannabis controls that:

(1) Allows adult access;

(2) Substantially eliminates the harms from organized illicit business;

(3) Minimizes arrest and incarceration;

(4) Minimizes the increase in heavy use and use by minors.

Those seem to me to be the four key objectives in designing a cannabis policy. (Of course supporters of the current laws don’t regard #1 as an objective at all; tax revenue is relatively unimportant substantively, though a winning argument politically.)

Prohibition is a disaster in terms of illicit markets and law enforcement. Decriminalization might reduce the number of arrests, but wouldn’t reduce the extent of the illicit traffic (currently $40B/yr.) or do much incarceration (about 40,000 behind bars at any one time).  No one seriously proposes mounting the sort of enforcement effort that would be required to shrink the illicit trade back to the level of 20 years ago.

So prohibition is no longer a viable option, and the question is what to do instead. There’s no reason to think that commercialization on the alcohol model will have acceptable results in terms of heavy use and use by minors. “Grow and give” is one among a family of options for non-commercial legalization, alongside state-monopoly retailing, cooperative and other not-for-profit production, or production by public-benefit corporations.

Barro quotes David Frum, an adviser to an anti-legalization group, as praising grow-and-give as an “elegant” approach to finding a middle way, but doubting that it’s sustainable in the face of lobbying pressure. I share that doubt. But if a possibly workable option such as grow-and-give is politically unsustainable, what does that say about trying to hold the line on an increasingly unworkable  prohibition?

If the voters are given a choice between the current system and commercial legalization, it’s increasingly clear that they will choose to treat cannabis the way we treat alcohol. So if, like Frum (and me), you’re worried about the bad   consequences of commercialization, you ought to be working hard at building a political coalition to support some non-commercial option, even if (like Frum but not me) you would really prefer prohibition.

Twenty years ago, the anti-pot forces made the historic blunder of resisting the development of cannabis-based medications, leaving the political field clear for the “medical marijuana” bamboozlement.  Now they’re doubling down on that mistake, resisting non-commercial legalization and paving the way for the very Big Marijuana they most fear.

When the predictable upsurge in problem use arrives, the prohibition forces will have the gloomy consolation of being able to say “I told you so.” But what will console the victims of the avoidable increase in cannabis use disorder, and their parents?

John Kenneth Galbraith once defined politics as “the art of choosing between the disastrous and the unpalatable.” I appreciate that Frum finds the thought of people getting stoned unpalatable. But I hope that he, and his allies, will figure out – before it’s too late, if it isn’t already too late – that the results of allowing cannabis to be pushed the way alcohol is pushed are likely to be disastrous.

Standing athwart history yelling “Stop!” is picturesque, but not productive.

Weekend Film Recommendation: Psycho

psycho-12
Part of Alfred Hitchcock’s magnificence as a filmmaker stemmed from his restlessness. He ruled 1950s cinema, delighting both audiences and critics with big budget, suspense-and-romance movies shot in glossy color. The studio heads at Paramount Pictures expected that for the final film he was contracted to shoot for them, he would go back to the well that had made him world-famous and Paramount executives very rich. But the suits misjudged the genius’ desire to keep pushing the envelope rather than repeating himself. Hitch announced that he wanted to make a low-budget, black-and-white horror film based on the exploits of real-life serial killer. The studio execs wouldn’t touch it, so he got the money together on his own and used the crew from his Alfred Hitchcock Presents television show to shoot the movie. The result was a trendsetting, nerve-shredding masterpiece: 1960′s Psycho.

The story opens with Marion Crane (an achingly vulnerable Janet Leigh) and her lover (John Gavin) discussing how they can never get married because of the financial constraints they face. Enter one of Hitchcock’s most inspired MacGuffins: $40,000 in cash that Marion is entrusted by her boss to deposit in the bank. Impulsively, she steals the money and drives to visit her lover, getting lost on a lonely road in a rainstorm. Fortunately, she finds an empty motel, where she meets Norman Bates (Anthony Perkins, in his signature role). The lonely young man tends the failing motel, while also watching over his emotionally disturbed mother. As shown in one of the movie’s many beautifully scripted and acted scenes (with evocative incidental music), Marion and Norman connect with and at the same unnerve each other:

I was blessed to see Psycho many years ago with no idea of the plot or legend of this film, and for that reason I will reveal no more of the story other than to say that it’s a masterclass in horror and psychological tension, with coruscating performances, direction and camerawork (The staircase sequence with private investigator Arbogast and the subsequent shot of Norman carrying his mother down to the fruit cellar are both technical marvels). The famous score by Bernard Herrmann is one of his best, and amps up the terror almost beyond belief. Credit also must go to screenwriter Joseph Stefano for realizing that Robert Bloch’s novel had to be significantly altered to work as a film, particularly in terms of building out the backstory of Marion Crane and re-conceptualizing the character of Norman Bates.

It is difficult to appreciate today how challenging it was for Hitchcock to get this film past the censors in 1960, but to give you one example of how strict the prevailing norms were, this is the first American movie to show someone flushing a toilet (Think of the children!). There is of course much more here than that to upset the censors, but Hitch mostly got the sexuality and graphic violence he wanted, thus pre-figuring what the 1960s would later bring in a flood to movie audiences. As ever, the Master was ahead of the curve.

p.s. With the aid of fellow director Barry Levinson, Mel Brooks brilliantly parodied the most famous scene in Psycho in his 1977 film High Anxiety.

p.p.s. The 2012 film Hitchock focuses heavily on the making of this movie. Although it garnered mixed reviews, I thought that Anthony Hopkins and Helen Mirren have rarely been better.

“Pre-existing condition” gets personal: the case of Kevin Drum

Kevin Drum explains what would happen to him if ACA were repealed: due to his cancer, he’d be uninsurable. If his current employer folded – not a remote eventuality, in the world of magazine and online journalism – he’d be s.o.l.

Kevin, let us recall, is neither poor nor reckless. He didn’t choose to get cancer. He did choose to have health insurance. Nothing he could have done – short of working for a government or TBTF private outfit – could have protected him from the risk he will face if a Republican is elected President in 2016 and does what he will have promised to do in order to become the Republican nominee.

So, here’s a challenge to my conservative and libertarian readers:  Tell me, if you can, why that would be OK with you.

I promise to publish any literate and coherent reply verbatim, or link to any post elsewhere that answers the challenge.

Update A reader points me to this Megan McArdle post from 2012, which explains in detail how a little-known provision of HIPPA (a law that long pre-existed ACA) would protect someone in the position Kevin would be in should Mother Jones fold. Anyone who has continuously maintained health insurance is, apparently, eligible to buy new insurance without underwriting. That’s not much help to people who, when they lose their jobs, don’t have enough in the bank to keep paying for unsubsidized health insurance. But that’s not Kevin’s situation. Unless some health care wonk tells me otherwise, I’ll count my challenge as having been fully met, and will have to fall back on the other 69,000 reasons Friends Don’t Let Friends Vote Republican.

Second update Harold Pollack says there are more twists and turns. Yes, HIPPA protects someone who has been continuously insured, and who can afford to pay for health insurance without an employer subsidy after he’s lost his job. That would include Kevin. But what that person is protected against is only explicit discrimination in premium or coverage based on his pre-existing condition.  He’s still at the mercy of the individual-insurance market, whose products are often designed with “adverse selection” in mind: since some  healthy people who are unemployed or self-employed or employed without health benefits will decide to go uncovered rather than pay the full cost of health insurance, the individual-insurance market will have a higher share of sick people, and insurers tend to tailor their individual plans accordingly.

In the absence of ACA, insurers could and did exercise many non-underwriting strategies to avoid high-cost individuals or to impose high out-of-pocket costs on these individuals. Some of the most obvious issues included stringent annual and lifetime caps on dollar coverage now abolished under ACA. There were also limitations on benefits now included in ACA’s essential health benefit structure. HIPAA left untouched many aspects of coverage important to cancer patients and others with costly conditions. 

As I noted here, groups such as the American Cancer Society’s Cancer Action Network and the National Multiple Sclerosis Society had good reason to rank among the leading supporters of universal coverage.
So while HIPPA did protect a rather narrow group of relatively well-off people against the specific suckage of “underwriting” based on pre-existing conditions, they were still fully exposed to the general suckage of the individual health insurance market.
So, with that amendment to the question, this column is still open to any ACA opponent who wants to explain why we should be willing to subject ourselves to that sort of risk.