A blog about business and economics.

Aug. 5 2016 1:00 PM

Toronto’s Answer to Central Park Could Be a Massive Victory for Public Space

It's been three years since Toronto, boosted by its late-‘90s amalgamation with its suburbs, surpassed Chicago to become North America's fourth-largest city.

Now it may get a public space befitting the title.

On Wednesday, Mayor John Tory announced a plan to build a 21-acre park on top of the rail yards in the city's downtown core. That’s about twice the size of Los Angeles'Grand Park and considerably larger than Boston's Rose Kennedy Greenway. Under a full build-out of 27 acres, the Rail Deck Park could be as large as Chicago’s Millennium Park, which the city cites as a model.

Should the plan go through, it would be a rare and enormous victory for public space over private development, a contribution to the city that doesn’t require turning over parkland for condominiums, stadiums, or other private uses.

If Toronto can pull it off, that is.

Aug. 4 2016 1:48 PM

Cities Think Strip Clubs Are Bad for Neighborhoods. This Study Says Otherwise. 

The American city is built on the defense of home values by voters, politicians and planners. It’s an instinctive defense, motivated by anecdote rather than research, but it shapes the way we live.

Take strip clubs. For half a century, American planners have devised municipal codes to restrict the locations of strip clubs and other “sexually-oriented businesses,” fearing moral corrosion and neighborhood decline. The assumption that such establishments spawn “secondary effects,” a kind of halo of seediness, has been cited by the U.S. Supreme Court four times as grounds to corral them—despite the First Amendment protection for dancing as a form of speech.

But new research shows that in and around Seattle—a city not known for its perversions or moral deficiencies—strip clubs have had no effect on residential property values.

Aug. 3 2016 4:24 PM

Even Time Warner Has Realized That Cord Cutters Are the Future

Time Warner is about to give consumers a bit more reason to cut the cord. The cable-network giant revealed on Wednesday that it had spent $583 million on a 10 percent stake in Hulu and had agreed to provide programming to the $40-a-month online TV service that the streaming company plans to launch early next year. Per the deal, Time Warner networks like Turner Classic Movies, Cartoon Network, CNN, TNT, and TBS will be available live and on-demand on Hulu’s new service—a service that will now be even more appealing to consumers looking to give up on their cable bundles.

The online streaming market is currently dominated by giants like Netflix and Amazon Prime, but it’s clear that Time Warner is trying to insert itself more into the game—just not too far. The company wants to open up a new revenue stream without cannibalizing its current one.

By investing in Hulu and making its current-season content available on Hulu’s soon-to-debut cable-TV service, it could gain an online market it wasn’t reaching before—but it might also cut into its own traditional cable revenues. Other companies are also rolling out bundle offerings to entice consumers with an opportunity to cut the cord without losing all their television programming. The Dish Network has Sling TV, AT&T has the U-Verse package, and Comcast offers a “skinny bundle” of TV and broadband.

None of which, of course, has been lost on Time Warner, whose entrance into the online market has been extremely slow. Time Warner launched HBO Now last year to appeal to individuals no longer interested in paying for premium channels on top of a traditional cable subscription. Since then the company has been offering streaming subscription services for some of its other popular brands, like Adult Swim. The Hulu investment is a good opportunity for Time Warner to move more aggressively into streaming, but it’s also an investment in a competitor.

Aug. 2 2016 6:21 PM

Did an American City Finally Build a Good Streetcar?

Just when we were all set to consign the 21st century American streetcar to the scrap heap, Kansas City comes along and injects a sliver of uncertainty into the debate.

Streetcars have been popping up all over the U.S. in the past couple decades, in cities like Salt Lake City, Tucson, Tampa, Atlanta, and Washington, D.C. Critics say they’re badly designed, as short spurs of track, with streetcars stuck in traffic—and shoddily managed, with poor service that discourages riders from the get-go.

The proof has been in the ridership. Salt Lake’s S-Line counted about 1,000 passengers per day along its 2-mile route in 2015. Atlanta’s 2.7-mile streetcar was counting just 1,000 riders a day during the first months of 2016. In June, Tampa’s TECO line counted just 600 passengers a day!

And then there is the new streetcar route in Kansas City, which is getting 6,660 riders a day over three first three months of operation—and rising. Total ridership is 550,000 riders in just 84 days of operation. That’s an order of magnitude above its counterparts in Atlanta and Salt Lake City, and more than double ridership on the H Street Streetcar in D.C., which runs in a densely populated urban area.

Per mile, Kansas City ridership is double Phoenix’s exemplary, set-apart light rail, and on par with the Los Angeles Blue Line, one of the country’s most successful transit projects of the past few decades.

This is...surprising.

Aug. 2 2016 4:56 PM

Massachusetts Just Banned Companies From Asking Job Applicants How Much They Make

When it comes to negotiating salaries, employers tend to have some built-in advantages over workers—namely, they know more. Companies spend lots of money on consultants who can tell them the market rate for, say, an accountant or database manager. They can ask job applicants about their previous salaries. They often discourage staff from discussing their pay among themselves, even when doing so might violate the law, making it tough for Cathy in marketing to figure out whether the guy two cubicles down really makes more than her.

You and me? We can go on sites like PayScale or Glassdoor to try and figure out our worth. We can talk with friends in the industry. But, when it comes time to haggle, the end result is almost always a case of asymmetric information.

This week, Massachusetts enacted a new law that could even the playing field a bit, by barring employers from asking job applicants about their salary history. Prospective hires can still choose to tell companies how much they earn. But no longer will residents of the Bay State be forced to fudge their pay by a few grand every time they fill out a job form; they can just leave the HR department in the dark and force corporate to make a decent offer.

Massachusetts is the first state to pass such a rule. Primarily, the statute is designed to help close the wage gap between men and women, the logic being that if women fall behind on salary early in their career, whether because of discrimination or motherhood or shyness about asking for a raise, the new law will keep it from penalizing them when they move on to a new job. That said, the rule could help anybody who started off their working life on a slightly weak foot, and might cut down on the role of luck a bit in what both men and women make over time. People who graduate into a recession, for instance, tend to earn lower salaries for years after the economy has recovered, mostly because they picked the wrong moment to go out for their first job; the Massachusetts law might make it easier to make up for that kind of early disadvantage.

There are other potentially helpful parts of the law, too. On the gender equity front, it requires companies to pay men and women the same when they do “comparable” work—not just when they have the exact same, potentially meaningless job title. It also guarantees employees the right to discuss their pay with their colleagues. That right is supposed to be enshrined in federal law under the National Labor Relations Act, but that law doesn't apply to supervisors, and many employers ignore it by enforcing pay secrecy agreements, knowing they're unlikely to be punished. Making sure that workers can talk among themselves should make workplaces a bit more transparent, and make it easier for people to make sure they are paid what they deserve.

Could this new law backfire? There's always a chance of unintended consequences—maybe companies will start trying to low-ball more potential hires, knowing that job applicants who currently earn more will ask for a better deal. But this mostly strikes me as an interesting experiment, not to mention a good example of how laws meant to help women can help everybody.

Aug. 1 2016 3:15 PM

After Surrendering in China, Uber Could Now Own Part of Lyft. Huh?

The competition between Uber and its Chinese rival, Didi Chuxing, is often described by the business media in violent terms: a “battle,” a “bruising” fight, with the two companies “bleeding” cash.

For everyone else, though, it wasn’t bruising at all. The two companies competed to lure drivers and riders, offering subsidies to both groups. Riding in a vehicle for hire in China, or driving one, has been a blissfully good deal, driven by what the Financial Times called the “game of subsidy one-upmanship that has come to define the Chinese ride-hailing market.” For starters, Uber had to develop a totally different model for compensating drivers than the one it uses everywhere else, which caused the company to lose more than a billion dollars in China in 2015 in its efforts to gain dominance there.

That era officially came to an end on Monday, when the two companies announced that Uber China—Uber’s only independent subsidiary—would be folded into Didi. The Chinese company announced it had acquired Uber China; Uber CEO Travis Kalanick painted the deal as a merger.

Either way, the consolidation will help fulfill the terms of China’s new ride-hailing laws, which were released last week and stipulated that “online ride-booking companies… must not set prices below cost to push out competitors.” Uber’s investors, who had reportedly urged the company’s leadership to throw in the towel in China (following the lead of other U.S. tech companies like Google and Yahoo), will be pleased.

Per the deal, Uber will own almost 20 percent of Didi; Didi will invest $1 billion in Uber. Didi, already on its way to profitability in China, will get there faster, and Uber will reap some of those gains.

The deal also brings Uber into a closer—and complex—relationship with Didi’s other affiliates.

Aug. 1 2016 1:54 PM

Gawker’s Nick Denton to Declare Personal Bankruptcy

Gawker Media founder Nick Denton has filed for personal bankruptcy after failing to win a court order that would protect him from having to pay out most of the $140 million verdict in Hulk Hogan's sex-tape lawsuit.

Hogan—aka Terry Bollea, aka the Hulkster—named Denton as a co-defendant in his case against Gawker Media, which declared bankruptcy and began the process of selling itself to a new owner after a Florida jury decided that it had violated the wrestler's privacy by publishing part of a video of him having sex with a friend's wife. Filing for Chapter 11 effectively prevented Hogan from collecting on the judgment from Gawker while the jury's decision was being appealed. However, the court declined to extend that protection to Denton himself, who was liable for $125 million of the damages. A Florida appeals court also refused to overrule a lower-court decision that gave Hogan the go-ahead to seize Denton's assets. As Law360 reported late last month, “A personal Chapter 11 filing would give Denton, via an automatic bankruptcy stay, breathing room during the appeal.” Or, in other words, as long as he's in bankruptcy, he won't have to pony up anything until the Hogan suit is entirely settled.

In the meantime, Denton tweeted out a hopeful message Monday.

Said tech billionaire is, of course, Peter Thiel, who funded Hogan's lawsuit as a rather breathtaking act of personal revenge for a Gawker story that outed him as gay years ago. In tangentially related news, Thiel is currently investigating whether he might be able to live forever by undergoing transfusions of young people's blood. You know, sort of like a vampire.

Aug. 1 2016 10:26 AM

Jill Stein Watered Down Her Own Statement Rejecting the Myth That Vaccines Cause Autism

A number of writers, myself included, have accused Green Party presidential candidate Jill Stein of pandering to vaccine skeptics, who likely make up some chunk of her far-left political base. This weekend, she tried to assuage those concerns on Twitter but instead may have deepened them by watering down her own statement rejecting a link between childhood immunizations and autism.

It all started, oddly, thanks to a tweet from Decemberists frontman Colin Meloy.

Stein graciously responded.

This was not a perfect response. The “I am not aware” seemed like a questionable bit of hedging. I mean, just imagine it in other contexts. “I am not aware of any evidence that Ted Cruz's father was the second gunman in the JFK assassination.” Or: “I am not aware of any evidence that your mother works nights dancing at a gentleman's club in order fund a cocaine habit.” Those sentences sound absurd! But still, the tweet signaled progress. She was personally rejecting the the vaccines-autism link. I even praised her for it.

Turns out, there was more to the story. A couple of eagle-eyed Twitter users noticed that Stein had originally tweeted out, then deleted, a stronger version of her statement that simply read: “There's no evidence that autism is caused by vaccines.”

Why did Stein feel compelled to dilute her language? Well, it's possible she experienced a sudden jolt of epistemological modesty, then thought to herself, “Jill, have you really done a comprehensive review of the recent medical literature on vaccines? Shouldn't you maybe leave a little wiggle room to save face in case someone digs up a paper you hadn't heard about? That would be responsible.” Or, maybe she got worried her first tweet would go down poorly with hardcore anti-vaxxers and decided to soften the language a tiny bit. I can only speculate, since her campaign won't respond to my emails asking for comment.

And so Stein's awkward dance over vaccine safety continues. Again, nobody is claiming that she personally believes vaccines are ineffective or dangerous. Instead, the concern is that the Harvard-trained physician is catering to vaccine skeptics by engaging in a bit of double-speak. Stein acknowledges that vaccines have done enormous good for public health and says she supports them. But she simultaneously suggests that there may be unresolved “questions” about their safety and makes broad claims that the American drug-approval process has been tainted by corporate influence. In some ways, this subtly mirrors the rhetoric from famous vaccine skeptics like Jenny McCarthy, who claims, “We’re not an anti-vaccine movement. We’re pro-safe-vaccine schedule.” Stein's latest vacillations on Twitter haven't helped the impression that she's trying to avoid alienating anti-vaxxers without outright bear-hugging them.

As Dominican University professor David M. Perry notes, however, the angry response that even her revised statement received from some anti-vaxxers shows how hard it is to thread that needle.

Stein really isn't going to please everybody on this. Maybe she'd just be better off keeping things simple and saying the words: “Vaccines are safe.”

July 29 2016 4:38 PM

Tech Companies Are Dominating the Stock Market as Never Before

Most days, Exxon Mobil is one of the three or four most valuable companies in the world. But on Friday morning, something remarkable and perhaps unprecedented happened. Fresh from reporting blockbuster earnings this week, both Amazon and Facebook eclipsed the petroleum giant in market capitalization.

So why is that noteworthy? Because it meant that, for at least a short time, the five largest companies in the world by market cap were all technology companies.

For decades, tech titans such as IBM, Microsoft, Intel, and Cisco have shared that “world’s most valuable” leaderboard with leaders from other sectors of the economy, like retail, health care, and energy. But for a few hours this morning, as USA Today’s Eli Blumenthal noticed, there was no sharing, at least among the top five. Here's how the list looked, as of 10:50 a.m. ET on Friday, when Blumenthal reported the latest numbers from Google Finance:

Silicon Valley, Silicon Valley, Seattle, Seattle, Silicon Valley.

Derreck Johnson

Exxon was sixth, Berkshire Hathaway seventh.

To be clear, this leaderboard in itself has no direct impact on, well, anything, other than public perception. No one gets a prize for ranking at the top of it, nor a penalty for dropping down the list. And “most valuable,” in this context, doesn’t mean the company that produces the most value for the world, or even makes the most money. It’s simply the company whose stock is worth the most, when you multiply its share price by the total number of outstanding shares.

Still, it feels like a cultural moment to see what are sometimes called the "big five" U.S. tech companies surpass all others in market value. The outspoken venture capitalist Marc Andreessen declared back in 2011 that "software is eating the world." While that's a hard claim to define or validate empirically, a chart like the one above seems like pretty compelling anecdotal evidence—if not that software has eaten the world, then at least that investors are convinced it will.

Is this the first time in history that the top five has been all tech? It’s hard to prove, but it seems plausible, given that Exxon Mobil in particular has been a mainstay on that list since before the first tech boom in the 1990s. Berkshire Hathaway, PetroChina, General Electric, and Walmart, among others, have all shared a top-five ranking with Exxon Mobil for long stretches over the past 20 years. Before that, the information technology industry was relatively nascent.

Tech analyst Patrick Moorhead, of the advisory firm Moor Insights and Strategy, said this was indeed the first time he was aware of that tech companies swept the top five spots in market cap. “It's really a reflection of how valuations are determined by future expectations,” he said. "It says investors are bullish on the future of tech. It also says they're less bullish on energy.”

The moment was fleeting, as it turned out. Facebook's stock gave back some of its recent surge, and Exxon's regained its footing to pull back into fifth place by midday. By 3:15 p.m. ET, Exxon had drawn nearly even with Amazon, too.

It’s worth recalling that this moment comes almost five years after it became fashionable among industry observers to declare that we were witnessing a second tech bubble. And perhaps we still are! But if so, it has turned out to be a rather durable one.

July 29 2016 3:44 PM

Jill Stein Continues Pandering to Anti-Vaxxers

She just can't help herself.

Jill Stein, the Harvard-educated doctor and Green Party candidate for president, was given yet another opportunity to clarify her position on whether vaccines are safe for children during an interview with the Washington Post published Friday. And yet again, she delivered an answer that no-so-subtly pandered to immunization skeptics.

“As a medical doctor, there was a time where I looked very closely at those issues, and not all those issues were completely resolved," Stein said. "There were concerns among physicians about what the vaccination schedule meant, the toxic substances like mercury which used to be rampant in vaccines. There were real questions that needed to be addressed. I think some of them at least have been addressed. I don’t know if all of them have been addressed."

Let's consider this statement carefully. Stein is invoking her authority as a medical professional to say that there were legitimate reasons to be concerned about the toxicity of vaccines, and that she doesn't know if those issues have been resolved. Stein is not saying vaccines are necessarily unsafe. But for all she knows, they might be—some way, somehow. She is leaving open the possibility.

Back here on Earth, there is no evidence that vaccines pose a danger to children's health. Doctors know this.

Stein's new answer on vaccines may actually be more egregious than the Reddit AMA post in which she first addressed the issue, which I reported on earlier this week. In that statement, she explained that while childhood immunization had “made a huge contribution to the public health,” one couldn't blame parents for being skeptical of vaccines because our food and drug regulators were controlled by corporate lobbyists. She also revisited some of those themes in her Washington Post interview. (Note: I transcribed this from the Post's video; the article misses a few words:)

I think there’s no question that vaccines have transformed public health and been absolutely critical in ridding us of the scourge of many diseases—smallpox, polio, etc. So vaccines are an invaluable medication. Like any medication, they also should be—what shall we say?—approved by a regulatory board that people can trust. And I think right now, that is the problem. That people do not trust a Food and Drug Administration, or even the CDC for that matter, where corporate influence and the pharmaceutical industry has a lot of influence.

Stein sums it all up this way: "We have a real compelling need for vaccinations,” Stein said. “It requires an agency that we can trust to sort through all of those concerns.”

Stein is talking from both sides of her mouth (much as she did in the Reddit AMA). In one breath, she acknowledges that vaccines have been indispensable for public health. In another, she darkly hints that vaccines are regulated by shills for big pharma—an idea for which, as the Washington Post notes, there's little evidence. Of the 17 members of the Vaccines and Related Biological Products Advisory Committee—the body that provides independent advice to the Food and Drug Administration on these issues—two work for drug companies. The others mostly work at research centers, hospitals, and medical schools; the chairwoman is Kathryn Edwards, who runs the vaccine research program at the University of Vanderbilt Medical School. Perhaps some of those individuals have conflicts of interest thanks to less obvious drug industry ties (maybe they did time in a Pfizer lab), but advocates ought to provide some evidence of that before casting aspersions.

So let us review. Jill Stein says that:

  1. Vaccines have been critical to eliminating diseases like polio.
  2. There were serious questions about the safety of vaccines, that may or may not have been dealt with.
  3. The FDA is in the pocket of big pharma.

Does this make Jill Stein a hardcore anti-vaxxer? No. She's not standing around telling crowds that smallpox disappeared because of better hygiene, thank God. She's not Jenny McCarthy, circa 2008. But rather than helping to put to bed the concerns of worried parents, she's indulging and even encouraging their fears by saying something may be wrong with childhood immunizations, and that the government appointees who tell them otherwise are bought and paid for. Just as I wrote earlier this week, she's pandering to the anti-vaxxers without explicitly embracing their most extreme views. Her position is arguably no worse than statements Hillary Clinton and Barack Obama made in 2008 suggesting there were questions about vaccine safety. The difference is that it's now 2016, Clinton and Obama have both seen the light, and Stein is a doctor.

The sad irony is that Stein could play a constructive role dampening this controversy. She's a far-left politician who is probably winning the trust of many vaccine-skeptic voters based on issues that have nothing to do with bio-science. As such, she'd be an ideal messenger for the idea that vaccines are safe. A simple statement from her that vaccines do not pose a toxic threat to children, and that skipping vaccines could harm both their health and the public's, might help convince worried parents to take their kids in for shots. Instead, she's playing politics with the subject. It's a shame.

Update, July 29, 2016, at 6:47 p.m.: Late on Friday, Stein tweeted out the following:

This may sound reassuring. It's not. Many anti-vaxxers wil claim that they support vaccines in the abstract but believe there may be problems with the immunization schedule (a topic she brought up in her interview with the Washington Post), or that there are very specific safety issues that the medical community needs to address. Jenny McCarthy, arguably the most famous vaccine skeptic in the country, is fond of saying, “We’re not an anti-vaccine movement. We’re pro-safe-vaccine schedule.”

In my opinion, it will be clear that Stein has stopped pandering to anti-vaxxers only when she unequivocally acknowledges the following:

  1. Vaccines are safe and all children should be vaccinated.
  2. Choosing not to vaccinate a child puts their health in danger.
  3. Choosing not to vaccinate a child puts other children in danger.

As a medical doctor, of course this should not be difficult for her.