When Amazon rolled out its plan to offer same-day delivery, Farhad Manjoo (now of the WSJ) heralded the moment as the death of local retail. Who, after all, would take the time and effort to track down a purchase in the physical aisles of a superstore when “the everything store” would send it to your doorstep courtesy of FedEx? As the New York Times reported yesterday, there appears to be a third way.
Amazon has spent the past couple years laying out hundreds of millions of dollars to build distribution centers across the country to facilitate its expedited delivery program. As Manjoo described last year,
Amazon is investing $130 million in new facilities in New Jersey that will bring it into the backyard of New York City; another $135 million to build two centers in Virginia that will allow it to service much of the mid-Atlantic; $200 million in Texas; and more than $150 million in Tennessee and $150 million in Indiana to serve the middle of the country. … In total, Amazon will spend $500 million and hire 10,000 people at its new California warehouses.
All told, that’s $1.2 billion and change to establish warehouses coast-to-coast. It is also a dramatic shift in Amazon’s business model, as there is no way to get out of collecting sales tax when you have enormous business operations in a state, neutralizing one of its long-standing advantages over brick and mortar retailers. The “immediate gratification” push is thus more than an incremental step in services offered; it’s a bet on the future of the company.
Yet as Amazon starts to set up shop by concentrating stores of purchaseables in the proximity of major cities, others, including online auction giant eBay, are realizing that local concentrations of salable items already exist: namely, in stores. According to the logistics VP of same-day delivery start-up Deliv, “Organizations like Sears and Walmart have inventory within five miles of 95 percent of the American population via their brick and mortar stores.”
The NYT tells the story of Karen Horowitz, a Manhattan mother in need of fresh diapers and a new changing table pad while watching her 5-week-old baby sleep. Rather than waking her newborn up, dressing her, and dragging her downtown to buy the needed supplies, Ms. Horowitz logged onto eBay Now. For a $5 fee, eBay dispatched to Babies “R” Us a young courier who bought the supplies with a company card and biked them up to Ms. Horowitz’s apartment. All within one hour.
This business model has been tried once before, and it failed in spectacular fashion. Every story about this rising trend will reference Kozmo, the online delivery service (actually partly Amazon-funded) that rose in 1999 promising a new revolution in online shopping, and fell apart as one of the most prominent failures of the dot-com bubble. Kozmo could not find a workable business model in time, as it required no minimum purchase and charged no delivery fee, instead skimming a bit off the sale. Even with its $25 minimum purchase and (soon to be waived for the holidays) $5 fee, it is hard to imagine eBay is making any money off of the enterprise.
What’s more, even as Amazon’s sales tax dodging advantage disappears, it maintains a price advantage from a business model that doesn’t require profits. For the brick and mortar businesses of the retail sector, however, any hope of competing with the Bezos buzz saw makes for a welcome change of pace.
A wealthy Manhattanite couple feared that their 5-year-old child, Erela, was not receiving a sufficiently refined palate from her hired nanny, who, being “from Wisconsin, does not always know the difference between quinoa and couscous.” So they hired a new service that trains nannies of the well-to-do in the shopping and food preparation that their employers would prefer. Organic? Locally sourced? Bringing styles in from South Asia and Portland alike? marc&mark will walk your nanny through the Whole Foods aisles and whip the less cultured into shape. In this instance, the mother “wanted her daughter to adopt a more refined and global palate, whether it’s a gluten-free kale salad or falafel made from organic chickpeas.”
In a certain corner of the Internet, near-Marxist rage and resentment at the TriBeCa couple and their perhaps even more distastefully disconnected profiler seethed forth. Yet Matt Yglesias of Slate swung into action with the seeming ultimate #SlatePitch: defending the system of hiring professional chefs to train the nannies you pay to take care of your children so you don’t have to bother. Though he did fear the mob enough to hedge himself: “Like every sensible denizen of the Internet, I find myself appalled by Caroline Tell’s article about how Dan Yashiv and Stephanie Johnson hired a consulting firm to instruct their nanny in how to cook fancier food.”
Yglesias argued that “But beyond cringing, we really ought to think a bit about the future of work and the future of the economy.” With a manufacturing sector that increasingly could be occupied by automated machines instead of unionized workers, and income inequality at peak levels that show no signs of peaking, chefs training nannies looks an awful lot like the future of the workforce:
[I]f you compare rich people in developed countries to middle class people in developed countries, the rich people don’t consume vastly larger quantities of manufactured goods than the middle class people do. Instead the rich people consume more and fancier services [emphasis original].
Indeed, Yglesias sees a silver lining to the Times story, that the parents are actually investing in the skills of their workforce, giving their Wisconsin nanny a chance to command a higher wage once she moves on from their TriBeCa digs. We can’t see that silver lining because we see personal service as essentially servile, and uncomfortably undemocratic.
Walter Russell Mead weighed in over the weekend, pointing out that “People Thought the Industrial Revolution Was Servile Too.” Mead says, “At the beginning of the industrial age, both the left and sentimentalists denounced factory work as servile and destructive, compared to the honest independence of the family farmer,” the same work being held up as today’s good, honest labor from a time quickly slipping by. It is worth remembering that the original Luddites were artisans feeling threatened by dehumanizing machinery, and when Henry Ford introduced the modern assembly line, his long-time factory workers simply walked out at the prospect of such degrading and monotonous work. Matt Crawford’s Shop Class as Soulcraft is essential reading for those interested in these issues.
Yglesias and Mead are right to dispel us of any overly sentimental attachments to assembly-line work. In fact, as the 20th century was marked by unparalleled human scientific, material, and medicinal progress, which we shouldn’t dispute, it was also a century driven by an impoverished theory of work. Frederick Taylor’s theories of “scientific management” pervaded, motivated by a vision of a few expert managers who could move human laborers around in the most optimal fashion, sucking as much intellectual work up the chain of command as possible and hollowing out the conception of the laborer to a machine that had to eat. Similar ideas infected more white-collar work as well, as the idea of a “manager” was invented and tasked with turning the product of human endeavors into spreadsheet results.
With all the disruption technologies have brought to our economy, we may have a chance to build the 21st century along more humane understandings of labor and productivity. If we do, it will be based on an a conception of people that accounts for human potentiality and organizes us to pursue common endeavors, not just play our part in the machine.
The service sector will very likely be a bigger part of our workforce going forward, but it shouldn’t be one based on a Style piece. As Hayes noted, for an article ostensibly about nannies, there was one person’s voice very conspicuously missing.
The New York Times reported over the weekend that the Obama administration is starting to throw its support behind a Senate proposal to raise the minimum wage to approximately $10 per hour. That would be higher than the $9 Obama called for in his State of the Union address, and would nearly match the high water mark of the historical minimum wage, adjusted for inflation.
Buried in the article, however, was a troubling detail:
Democratic senators from more conservative states favored an increase to $9 an hour, but including the expensing provision was enough of a sweetener to bring them behind the $10.10 proposal.
Under that provision, small businesses would be able to deduct the total cost of investments in equipment or expansions, up to a maximum of $500,000 in the first year. Including such a provision helped persuade the Senate to vote overwhelmingly in favor of the last two minimum wage increases
Pairing a minimum-wage hike with a small-business tax break makes sense, since as Noah wrote just about a year ago exactly,
A hike in the minimum wage would disproportionately impact small businesses. It would make sense to couple it with a pro-labor reform that would disproportionately benefit small businesses – such as a permanent cut in the employer portion of the payroll tax (offset by an increase in taxes on consumption, such as a VAT or carbon tax).
Unfortunately in the Senate proposal outlined above, the small business tax cut is not a cut in the employer portion of the payroll tax, or some other salutary benefit to ease the effects of the wage hike. Instead, as Jordan Weissmann noticed over at The Atlantic:
In other words, this bill would make it more expensive to hire workers and cheaper to buy the technology to replace them. From a political horse-trading perspective, this makes total sense. From a job-creation perspective, it’s a little alarming.
Increased automation is one of an employer’s options in deciding how to respond to a minimum wage hike. After all, robots don’t receive wages (yet), so one of the biggest obstacles is the large upfront outlay for purchasing and installing a robot in that (presumably) low-skill worker’s place. What the Senate proposal does, and apparently has done twice previously in minimum wage hikes, is to explicitly subsidize that outlay, to the cool tune of $500,000 in the first year. While one would hope that the increased productivity from automating certain tasks would be beneficial for the economy as a whole, that will be little consolation to any replaced workers.
At stake here is not whether we should use robots and approve of ever-increasing automation in out economy. That’s another discussion for another day. What’s at issue here is whether we should be deliberately pairing an incentive to one of the more potentially damaging responses to a minimum wage increase with that very increase. It seems unwise to drop in a double dose of nudges toward the elimination of low-skill jobs in a low-skill job market already under great stress.
All signs point to Gov. Chris Christie cruising to reelection in New Jersey tonight.
This is one of those times when personal bias is well nigh overwhelming: Christie—an authentic, half-Italian, New Jerseyan Bruce Springsteen uberfanatic, and a strong conservative by any reasonable standard—is about to rocket to the top tier of 2016 presidential contenders.
Judging by a spate of recent posts and on-the-ground reports, Business Insider’s Josh Barro is an unabashed fan of Christie as well. He even brushes aside the one serious reservation I have about the governor: his proclivity for in-your-face confrontations—in a word, “bullying”:
Christie’s confrontational personality can appeal to all sorts of electorates so long as he trains his anger in the right places.
When Christie yelled at that teacher yesterday about how education spending levels will “never be enough” for New Jersey’s teachers’ unions, he was doing so in a state that spent $19,291 per pupil on K-12 education last year — more than any state except New York and Vermont and 74% more than the national average. … So long as Christie keeps training his anger in the right place, Christie will be O.K. What national liberal reporters don’t get is that “towards teachers” can be the right place, politically and substantively, to train that anger.
This is true as far as it goes.
Which I fear is not actually very far.
Back in 2010, I wrote this at U.S. News:
In the short term, the example of New Jersey’s Gov. Chris Christie is instructive. He has maintained popularity while aggressively pushing an agenda of fiscal austerity. How does he do it? Simple: In teachers unions and state-government employees, Christie has found a juicy, isolatable adversary. This works on the state level, where things like pensions and teacher benefits are significant sources of budget shortfalls—unlike on the national level, where middle-class entitlements are the big driver.
The lesson is this: To the extent that “government” is a sectional entity—an interest group consisting of people who have not had to “sacrifice like the rest of us”—Republicans will find that cutting it is politically popular. To that extent that “government” is Grandma and Grandpa in Boca Raton, Republicans will need to tread carefully and—it’s possible to do both—honestly.
Zoom in on “juicy, isolatable adversary.”
At the presidential level, teachers aren’t going to cut it. Neither are employees of the federal government, whose salaries account for about 5 percent of total federal spending.
Is Chris Christie going to yell at senior citizens about Medicare?
Is he going to yell at beneficiaries of food stamps?
Is he going to yell at families on Medicaid or CHIP?
Is he going to yell at farmers about agribusiness subsidies?
If Christie is a wise and disciplined campaigner, I find it hard to believe he’d do any of those things. And given his recent disparagement of the GOP’s “libertarian strain” in the context of the debate over the national security state, I can’t see Christie getting up in the grill of a Pentagon contractor, either.
Teachers and public-sector employees who don’t want to pay as much for their healthcare as most of the rest of us do are the “right targets” when you’re arguing about state budgets. In fact, they are ridiculously easy targets. They are to Chris Christie what southern reactionaries are to Sacha Baron Cohen.
But I ask Josh: who are the analogously easy marks when you’re talking about the federal budget, and do you honestly think it will do Chris Christie any good to get in their faces?
I’m beginning to notice a pattern among the anti-crony-capitalist set.
They’ve adopted a view of the interaction between government and business that is manichean at best, New Leftism in conservative drag at worst.
National Review’s Jonathan Strong passed on this thought from Rep. Raul Labrador:
Great pt from Labrador that media has derided tea party for not being under Wall St’s thumb while normally they fret about $ in politics
— Jonathan Strong (@j_strong) October 16, 2013
Now there’s no middle ground between being in the pocket of big business and not blowing up the global financial system.
And yesterday, Forbes’s James Poulos mused that Sen. Ted Cruz was waging a quixotic battle against both Big Finance and Big Government:
Orderly non-default would go a long way to prove to Americans that our complex financial-political system does not need to run things. Who needs the Fed? We don’t even need to raise the debt limit! You can imagine the fallout. It seems impossible to me that Wall Street and the world’s key money elites would ever even consider throwing in the towel on this level. If the financial elite loses the popular perception that they and their ways are essential to basic economic order, the jig is up. And if you can bet on one thing, it’s that the financial elite isn’t going to opt for the jig to be up.
That’s why I rate it extraordinarily likely Cruz and Company will be whipped and the debt limit raised. They thought they could take on big government and big business without any radical-left allies. My expectation is that, come the end of this non-crisis, that was their only miscalculation that mattered.
Again, this notion that preventing a default on our national debt is some kind of sop to Wall Street. By all means, let’s have a debate about the financialization of the American economy. But let’s do so without bringing the system to ruin and hurting millions of ordinary participants of the real economy, shall we?
The Washington Examiner’s Tim Carney, bless his conflicted heart, wrote a column recently lamenting that a repeal of Obamacare’s medical device tax was the only concession Republicans would win in the shutdown/debt ceiling standoff. He acknowledges that the tax is “bad,” and that “Congress is correct to repeal it”—but then spends the rest of the column making a nearly airtight case for why the tax should remain in effect. (Read the piece from the sixth paragraph on, and tell me I’m exaggerating.)
The libertarian-populist take on the medical device tax was shared by enough Republicans that language to repeal it was actually stripped out of the House leadership’s final attempt at a bill to reopen the government and raise the debt ceiling.
Finally, this morning I made it about a fourth of the way through Kevin D. Williamson’s piece on the tempest-in-a-teapot controversy over the closing of national monuments during the shutdown. He writes, jauntily, “Every American has a little sedition in his soul, and this is a very good time to give it free rein.” To be charitable, Williamson has in mind Thoreauvian civil disobedience here, not outright sedition, but all the same, I find the whole tone utterly disturbing.
RedState’s Erick Erickson actually wrote the following sentence with a straight face: “Mitch McConnell is the single obstacle we have this week to taking our country back from the death spiral instigated by Obama and his merry band of community organizers.”
This talk of death spirals, storming barricades, of cleaning the Augean Stables of K Street, of exposing the naked emperors of Wall Street, of constitutional conventions—it seems painfully apparent to me that many folks on the right are suffering from radicalism envy. They are drama queens of the apocalypse.
Movement conservatism has always been half-crazy.
Lately it’s more like three-quarters crazy.
I’m now old enough to remember two federal government shutdowns.
Both turned out poorly for Republicans.
The difference this time was that every sane observer strongly suspected it was going to work out poorly for Republicans.
In the end, they won’t even get peanuts. They’ll get the discarded shells of peanuts.
The most infuriating, tear-out-your-hair reaction to the House GOP implosion came from Reps. Thomas Massie and Joe Barton, Republicans of Kentucky and Texas respectively: that “no deal is better than a bad deal.” No deal? Seriously? Ponder that for a moment: A faction of House Republicans, at the not-so-secret urging of Sen. Ted Cruz, noisily insisted on a foolish confrontation with Senate Democrats and the White House. Once that confrontation ended fruitlessly—as critics predicted it would—this faction skulked away and left its leadership dangling and embarrassed.
This is akin to goading a friend into a bar fight and then watching helplessly as he’s kneed in the crotch.
Make no mistake, though: the GOP leadership isn’t completely blameless. It had planned, too, on a dangerous confrontation over the debt ceiling. There is little reason, now, to believe that such an effort would have ended differently than this one.
Another round of negotiations over long-term budgeting, to be held between now and Dec. 13, will commence once this deal is enacted. Is there any hope for it? It’s hard not to be pessimistic. The eternal snag is as it always has been: there is no appetite within the GOP for exchanging higher tax revenues for entitlement reform. And contrary to Fox News pundit George Will, I think there’s little chance that President Obama will trade entitlement reform for sequester relief. As Jonathan Chait has noted, Democrats are unlikely to accept permanent cuts to mandatory spending in order to temporarily increase discretionary spending.
So we’re left the question, Can this divided government live with the status quo at least until the midterm elections?
Can it agree simply to do no more harm?
How much does “big data” know about you? Thanks to commercial data aggregator Acxiom, you can find out: the “data giant” has decided to make a large portion of its information public via a new website, Aboutthedata.com. The New Republic contributor Paul Rosenzweig explained the significance of the company’s revelations in a Monday post:
Acxiom is one of the largest commercial, private sector data aggregators around. It collects and sells large data sets about consumers (sometimes even to the government). And for years it did so quietly, behind the scene—as one writer put it ‘mapping the consumer genome.’ Some saw this as rather ominous; others as just curious. But it was, for all of us, mysterious. Until now.
Rosenzweig created a profile on the site, and was able to see Acxiom profile of his tastes and life. While he found the purchase and household interests rather boring and “un-illuminating,” the personal history “insights were at least moderately invasive of my privacy, and highly accurate.” All the same, Rosenzweig was not perturbed by his data profile. “…When I dove into one big data set (albeit only partially), held by one of the largest data aggregators in the world, all I really was, was a bit bored.”
Curious, I also created a profile. Unlike Rosenzweig, the company was more correct on my purchasing preferences than my personal history. (They thought I had a child and a truck. I have neither.) I didn’t feel that they knew me considerably well at all—and was quite pleased by that fact. But the website triggered a different question in my mind, separate from (legitimate) privacy concerns. On the Aboutthedata.com’s home page, they posit this claim: “We [consumers] no longer want to receive mass marketing – getting bombarded with ads that have no relevancy to our lives – because it’s intrusive and wastes our time. That’s why companies want to use data about you to personalize and shape your experiences with them.”
Companies are increasingly “personalizing” their advertising in an effort to buy our attention. Online advertisers increasingly shape consumer profiles to garner users’ time and money. But what are the detriments and dangers of such attention economics? Tom Chatfield elaborated on in an Aeon Magazine piece entitled “The Attention Economy.” He includes an interesting quote from David Auerbach of N+1 Magazine:
Robert Costa reports this morning:
In the coming days, the House will likely consider legislation that would establish a bipartisan negotiating group to resolve the current fiscal impasse. It’d include select members from both chambers, and once passed, it’d start immediately.
This sounds alarmingly similar to 2011’s deficit-reduction supercommittee, which could not reach bipartisan agreement of any kind and whose miserable failure led indirectly to the creation of the budget sequestration that nearly everyone hates, but is kept in place by Republicans who enjoy mutilating their nose to spite their face.
It seems increasingly clear that the House leadership is playing out the string in the hopes that Obama or Senate Democrats will crack.
Yet consider another report (also from the indispensable Costa) on the implacability of the Houses kamikaze-cons:
“They may try to throw the kitchen sink at the debt limit, but I don’t think our conference will be amenable for settling for a collection of things after we’ve fought so hard,” says Representative Scott Garrett (R., N.J.). “If it doesn’t have a full delay or defund of Obamacare, I know I and many others will not be able to support whatever the leadership proposes. If it’s just a repeal of the medical-device tax, or chained CPI, that won’t be enough.”
Representative Paul Broun (R., Ga.) agrees, and says Boehner risks an internal rebellion if he decides to broker a compromise. “America is going to be destroyed by Obamacare, so whatever deal is put together must at least reschedule the implementation of Obamacare,” he says. “This law is going to destroy America and everything in America, and we need to stop it.”
Does this sound to you like there’s even a remote possibility that any deal, big or small, could pass muster with both Senate Democrats and 218 Republicans? If not, why are we putting the country through this? Why are Republicans inflicting real, immediate, and tangible harm on the economy in order to accomplish the impossible (delay or defund Obamacare) address an abstract future threat (debt) or merely to save face? Why isn’t the majority of the House majority isolating its rightmost faction and ending this pointlessly asinine pissing match?
Contra the conventional wisdom, I maintain that no one in leadership will lose his job. The very nature of Tea Party opposition, whether it issues from the likes of Bazooka Ted and His Gang in the Senate or the unappeasable Jacobins in the House, is to throw weight without consequence. They evince no interest in actually wielding power from the inside, which would require restraint, conciliation, and moderation. They are hysterics on the brink of utter demoralization. The danger they pose to democratic norms, institutional comity, and political functionality is precisely why they can’t be bargained with; they must be marginalized.
It’s time, Republicans: it’s time to throw the One Ring into Mount Doom.
After a weekend of trying to imbibe as much as I could of the back-and-forthing over this latest Manufactured and Unnecessary Crisis—despite much better things to imbibe, like postseason baseball, football, or even hemlock—I shouted at no one in particular:
What the hell is this thing about, anyway?
I mean, is it Obamacare?
Or is it long-term debt?
One minute, the showboating Bazooka Ted and His Gang tried to hold up the bank and defund—or maybe just delay; or at the very least marginally fiddle with—Obamacare. Something! The “Vitter Amendment”! Anything! The next minute, we’re talking about a “grand bargain” again. An “epic battle” over spending. Doing something to save our grandchildren from runaway government debt.
If you want to win an epic battle, it’s probably a good thing to have a coherent idea of what you’re actually battling over.
African-Americans, for understandable reasons, tend not to be “regional” people. And given their history, I can understand fully why a resident of South Phoenix might feel closer to Harlem or the South Side of Chicago than to the Valley of the Sun as a whole, for example. But apparently, increasingly, the rest of us are starting to think the same way. Marketers like Claritas Prizm have divided our population into 66 tribes with colorful names like Money and Brains, God’s Country, Big Sky Families, Boomtown Singles, and other such. And America’s Zip codes are classified by which is dominant.
What seems to be happening is that, say, the Money and Brains pockets of Southern California identify more with similar pockets in New York, Chicago, Seattle, and Dallas than they do with Southern California as a region; and the same all over the country. The one exception to this is when sports comes on TV; for the duration of the game, all the tribes of Eastern New England rally behind the Red Sox, all of Southeast Michigan behind the Detroit Tigers, and the Los Angeles Basin behind the Lakers.
(Sports team owners themselves are not that regionally loyal, often moving to whichever city will build them the nicest stadium at the expense of the public. Los Angeles Lakers? Los Angeles Trolley Dodgers? The only time there are any appreciable number of lakes in Los Angeles is during a severe El Nino, when the city gets national attention—and more than a little schadenfreude—for mudslides. And for most of the last half of the 20th century there was not a single trolley to dodge in the city. The explanation, of course, is that the Lakers were once in Minneapolis, a place richly endowed with lakes, and the Dodgers were in Brooklyn.)
Furthermore, members of these tribes change tribes when they marry, when they have kids, and when the kids move out of the house. I have noticed that in many parts of our society the apartheid between People With Kids and People Without Kids is radical; they live in different kinds of places, and they vote differently. Admittedly, when you have kids, you kind of go into what I call the “baby monastery” and have to do different things for the next 20 years than you used to, but to completely segregate yourself from People Without Kids—or for People Without Kids to segregate themselves from you—is sad. Read More…