Tag Archives: economics

Why Journalism is Expensive

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Right, so I have this story in The New Republic about how and why the HIV epidemic was so much more severe in the United States than Western Europe. It’s nothing earth-shattering, just me listing the higher prevalence, incidence and death rates between countries and giving some (pretty speculative) reasons for them. Standard statistical explainer-type stuff.

Except that this is the first time I’ve ever done something like this, and I spent the whole time researching and writing it absolutely stunned at how much work it was, and the bottomless amount of time it sucked out of my life for the last two months.

One thing I always knew, but didn’t like know-know, about journalism is how much time you spend just getting people to talk to you. One of the tropes of these kinds of stories is saying ‘I called up [name of incredibly prominent and busy researcher or author] to ask him about this’. If you ever listen to the Freakonomics or Planet Money podcasts, that’s always how they introduce their sources—‘I called up Ben Bernanke to talk about why my change gets lost in the dryer’ or whatever.

I now realize that those three words—‘I called up’—are a synonym for ‘I wrote an introductory e-mail to the media relations department describing my project and my publication, then spoke to them on the phone, then submitted a list of questions, then scheduled the call two weeks in advance, then had the call, then sent them the quotes to approve.’

And those are just the times when you get to the right person. The more typical response to one of these ‘can I talk to you about your work?’ e-mails is ‘this isn’t in my field of expertise, try my colleague’. Then the colleague goes ‘oh I actually don’t work on that anymore, try this former colleague’, but then their contact info is out of date and on and on and on.

And this is all totally understandable. Journalists have nothing whatsoever to offer their sources. People literally talk to me out of the kindness of their hearts. They’re busy, they’re doing much more important work than talking to me on my little Skype-machine. Large organizations like the WHO and the CDC have staff members divided into very specific subject areas—that’s how professional organizations work! The only one with an overview of the research on a particular topic is the department head, and he (understandably) does not feel like giving over a significant portion of his day to some random voice on the other end of the telephone.

Gmail tells me I sent 57 requests for interviews or data since February. I downloaded 170 academic articles, popular publications and NGO reports (not that I like read them all or whatever, but still). I had 18 in-person or phone interviews, lasting anywhere from 1.5 hours (thanks Dr. Sabin!) to 20 minutes (Chris Beyrer talked to me from a hotel room in Geneva at 8 in the morning, getting ready to chair a meeting at the WHO).

And that’s just the main sources. The data-hunting, the interview prep and transcription, the actual writing—you open your laptop on a Saturday morning, crack your knuckles and before you know it it’s dark outside.

I’m not saying this because I want to brag about how much work I did (on the contrary, I could—should!—have done way more), I’m saying it because these stories are all around us now, and no one seems to be making any money off of them, and one of the reasons they aren’t is because the work that goes into them is invisible.

In his memoir Palimpsest, Gore Vidal talks how, when they were making Ben-Hur, their funder almost backed out when he realized they would be shooting more than three hours of film. Film was super expensive at the time, and the funder, some George Soros type, figured, well, it’s a three-hour movie, so three hours of film ought to do it. When they told him they would need hundreds, maybe thousands of hours of film for all the extra takes, he freaked out: ‘What do you need all this film for if you’re just gonna throw it away?!’

Journalism has the same problem. What you get—4,000 words summarizing some historical and epidemiological stuff most people already know—is totally out of proportion to what it costs to make it. Part of the reason my piece was so ‘expensive’, to be fair, is that I’m an amateur. I spent days tunneling down into statistical rabbit holes that petered out, some of my interview subjects didn’t turn out to be all that relevant, I polished and re-polished sections of the article that eventually got cut. But no matter how good you are at this, a three-hour movie is always going to require more than three hours of film. 

That, the extra footage, the outtakes and the failed experiments, can be reduced, but they’ll never be eliminated. And eventually, someone will have to agree to pay for them.

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Filed under Journalism, Personal

What Is ‘Semi-Industrial’ Food?

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One thing that fascinated me when I was in Portugal was the ubiquity of the ‘Pastelarias’, the little cafes—one espresso machine, four or five wooden tables, pastries behind glass—on nearly every corner.

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But the ubiquity wasn’t the most interesting thing about them, it was the uniformity.

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Each of them appeared to be an independent business. They didn’t have the same brand name or the same décor.

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What they did have, though, was the same pastries. Not, like, a similar selection. The exact same pastries. Same size, same shape, same flavors, same perfect little char-marks on the custard, everything.

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It wasn’t til I saw the same pastries in a grocery store that I started to get curious about what was going on. Most of these little hole-in-the-wall bakeries aren’t big enough for proper baking equipment, and seem understaffed as it is.

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I was convinced that all these cute little bakeries were actually frauds, they were getting shipments of pastries from some suburban warehouse every morning, putting them in the window, tricking me into thinking they’re all charming and artisanal.

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I imagined some vast conveyor belt near a suburban motorway. Chinese workers sweating into hairnets, mechanically charring an endless line of snack-size custards.

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It turns out it’s not as bad as that. In a random bookstore I came across a coffee table book called ‘The Design of Portuguese Semi-Industrial Confectionery’, and I learned some things:

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First, Portugal not only has the highest number of food establishments per capita, but also has the highest percentage of people who eat breakfast outside the home every day. This is why, I eureka’d, it’s the only European country I’ve been to where cafes are open before 8am.

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Second, there’s not some beltway warehouse making millions of pastries every morning and trucking them into the city. It turns out there’s a standardized baking school curriculum, and a strict licensing regime for confectionery makers.

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Not only that, but a lot of the pastries are made with powders and mixes (even the eggs, ew), minimizing the time and skill required to make them.

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These three things—high demand, standard methodologies and effort-free production—mean pastries are a viable and profitable business model.

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Due to the country’s history as a trading post where a lot of these recipes originated (the book’s version was that when Portugal Inquisitioned out the Jews starting in the 16th century, they all went to Vienna and became bakers), this business model is supported by government policies on opening hours, licensing, taxes, etc.

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If you’re gonna pick something for government subsidies and high standards, you can do worse than pastries. Still, I don’t know if bags of Bisquick and buckets of egg whites are any more edifying than a giant suburban croissant factory.

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The sustainable food movement wants to increase the availability of food that is ‘local’, ‘handmade’, ‘fresh’. These pastries are all of those things, at least technically, but there’s something about the process that leaves a bad taste in my mouth.

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Metaphorically speaking, I mean. Literally, the taste they leave in my mouth is delicious.

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But maybe that, more than anything, is what foodies should be afraid of.

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Filed under Food, Personal, Pictures, Travel

How I Learned to Stop Worrying and Love Chain Restaurants

Originally posted at The Billfold

 

Last weekend in London I had a cute little lunch at a cute little patisserie in Soho, and was feeling all satisfied with myself until I was on the Strand later in the day and saw the same patisserie—same food, same interior, same smell coming out the door.

Oh, I thought, deflated. It’s a chain.

Suddenly I felt scammed. These punks tricked me! They made me think their little bakery was all artisanal and small-scale, when actually it’s some venture-capitaled, focus-grouped, conveyor-belted profit factory. They probably have a corporate headquarters in midtown Manhattan, some Yale econ grad staring at the surveillance cam footage of my purchase, trying to moneyball me into buying more next time.

So my immediate reaction was Well! Never going there again. But now that I’ve thought about it, I’m less sure of my reaction.

First, let’s get the obvious out of the way: Of course it’s a chain. Soho is one of the most expensive neighborhoods in the world. Thatcher, gentrification, celebrity chefs, they ran mom and pop outta there decades ago. The only businesses that can afford Soho rents do so through high volume, high margins and manufactured cosiness. That “grandma’s cinnamon roll” smell coming out the door is as deliberate as the font above it. What did I expect?

So I should have known. Next up: Who cares? I had a tasty meal at a reasonable price in a pleasant environment. It was precisely what I wanted. What’s the difference if there is a duplicate of my experience happening elsewhere? Or 100 duplicates? Or 1,000?

When I lived in Copenhagen, my favorite bakery was called Lagkagehuset (“layer cake house”), and it had the best bread on the planet. There was only one location in Copenhagen, family owned, and I glowed with self-satisfaction every time I bought a dense loaf of bread or a misshapen (artisanal!) breakfast roll there.

A year after I left Denmark, it was bought by a private equity firm. Now there are nine of them in Copenhagen (industrial!), and last time I visited I walked past one at the airport (monetizers!).

But you know what? The products are exactly the same. Still dense, still misshapen, still crazy-overpriced, still so salty you want to dip them in a cup of water like a hot dog eating contest. The only difference, as far as I can tell, is that now I can buy them in nine places instead of one.

Which brings me to my last point: What am I actually against?

Among my people (urban, lefty, low BMI), places like Starbucks, McDonald’s and Applebee’s have take the role of a kind of punchline, the culinary equivalent of Coldplay. For us, they’re not restaurants or cafes, they’re totems of America’s—and the world’s—relentless, inevitable march toward sameness.

I’m generally sympathetic to this. Starbucks kills independent cafes, McDonald’s cuts down rainforests, Applebee’s wants you to have diabetes.

But in every other aspect of my life, this doesn’t bother me. I wear Nikes, I shop at Safeway, I use rapper-endorsed headphones to drown out the clacking on my MacBook. All of this is just as mass-produced as anything from Starbucks, and yet I willingly (OK, maybe grudgingly) submit.

But chains underpay their workers, my conscience shouts. They get foodstuffs from poor farmers and nonrecyclable lids from petroleum! They donate to ugly political causes!

All that’s probably true, but there’s no reason to think an independent restaurant or café is any better by default. Maybe the guy handmaking the gluten-free scones at that ‘small batch’ bakery makes the same minimum wage as the teenager at McDonald’s. Or maybe he owns the place, and thinks women never should have been given the vote. Just because I have no way of knowing his conditions, impacts or beliefs doesn’t mean they’re not there or that they’re not problematic.

So if I don’t object to chains in principle, and I don’t object to the goods and services of some chains in particular, then all I’m left with is opposition to chains as a class signifier. I reject them not because the food is bad or they’re worse for the planet than other corporations, but because I personally don’t want to be associated with them. Starbucks is for tourists, Applebee’s is for flyovers, McDonald’s is for the poor.

I’m not defending chains, really, I’m not going to start actively seeking them out or anything. I just need to be honest with myself about what I’m avoiding, and why.

My favorite cafe in Berlin is called The Barn. Silky lattes, snobby staff, handwritten prices, brownies dense as Jupiter—it’s perfect. Just before Christmas they opened a second location, closer to my house than their first. If I’m lucky, next year they’ll open a few more.

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Filed under America, Berlin, Food, London, Personal, United Kingdom

Why Organic Food is So Expensive

In recent years I’ve become increasingly frustrated with the willful blindness of the food movement to the fact that organic food is produced by profit-making entities.

Organic food has to be expensive, say the foodies. It’s more labor-intensive! It doesn’t use pesticides! It’s made in small batches!

These sound suspiciously like rationalizations to me. I have no doubt that the production costs of organic food are higher than non-organic food, but that’s not an explanation for why the retail price is up to three times higher.

Retail prices are only related to production costs up to a certain point. An iPhone costs about $170 to make. Apple charges you $650 to buy one not because this has some quantitative relationship to the production cost, but because the company has calculated that this is the highest price the greatest number of people are likely to pay. Any less than that, and the company would earn less profit. Any more than that, and the company would sell fewer units.

The price of a product is based on profitability and demand, not cost. As soon as the price is above $170.01, how much it costs to make is irrelevant to how much it costs to buy.

I hate to break it to everyone who takes healthy eating seriously (myself included), but there is no reason to believe organic food is the only sector of our economy that is immune to this reality.

A free range chicken at Whole Foods is $3.99/lb. At Safeway, it’s $0.89/lb. I’m sure it costs more to produce a chicken that’s free-range, no-GMO, gluten-free, dolphin-safe, etc. But you’re not gonna convince me that those two chickens are equally profitable for the retailer.

Or check out peanut butter: $0.24 per ounce for normal (‘natural’, even!), $0.44 per ounce for organic. Again, I’m sure organic peanuts are more expensive to produce than normal (natural!) ones. But seven bucks for a jar of peanut butter is just fucking hella, and the company that makes it is just as profit-seeking as McDonald’s or Nike or Halliburton or any other.

No one defends their Lexus by saying ‘Well, it cost more to make’. We accept that it’s a luxury good whose price is determined by a standard demand curve. A Lexus costs $80,000 because that is how much people are willing to pay. That jar of peanut butter costs $7 for the same reason.

In the context of our current food system, Whole Foods and other organic food producers and retailers are providing luxury goods. A whole chicken costs $12 not because it was raised on foie gras and asparagus tips, or allowed to roam freely and pursue its life’s dreams. It costs $12 because that is highest possible price the company can charge before demand starts to taper off.

Admitting you have a problem is the first step toward solving it. We need to acknowledge that organic companies are just another facet of Big Food, and aim our advocacy efforts toward universal sustainability standards (if pesticides are so harmful, why can they be used at all?).

Otherwise, we haven’t improved the food system. We’ve just added a Lexus to every meal.

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Filed under America, Food, Serious

Why Don’t Bad Employees Get Fired?

I know the purpose of this thread is to vent against our specific unproductive coworkers and marinate in middle-distance  smugness, but it mostly makes me sad. Every unproductive, overpaid employee is someone who would probably be better off doing something else, something they enjoyed more and were better at.

I think this phenomenon—people sleepwalking through their jobs—becomes an increasing problem in mid- and late-career employees, and I think it’s caused by a combination of America’s lack of a safety net for workers who quit or are fired and the extreme difficulty of switching careers after you have significant experience in one field.

People who realize at age 36 that their current job is not their passion have few options for finding another one. Going back to school is risky and financially ruinous. Leaving your current job means giving up healthcare. Employers are unlikely to hire a 40-year-old for an entry-level job. There might not be any better jobs in the city where you live and your kids go to school, etc.

We’ve built a whole labour market and economy on the assumption that workers enter and leave employment purely on the basis of their preferences and worth, but that’s rarely the case. Spending eight hours a day doing something you don’t enjoy is preferable to gambling your home, pension and security on a career change.

The real question isn’t why bad employees don’t get fired. It’s why they can’t quit.

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Stuff I Didn’t Know About the Great Depression

Last week I read Lords of Finance: The Bankers Who Broke the World by Liaquat Ahamed. It describes the leadup to the Great Depression through the directors of the U.S., British, German and French central banks. It begins with the debate over World War I reparations and follows all the interest rate hikes, speculation orgies and gold standardizing that led the world to the stock market crash in 1929.

The main thing I didn’t know about the 1920s was that pretty much everyone saw the stock market crash coming:

One is led to the inescapable but unsatisfying conclusion that the bull market of 1929 was so violent and intense and driven by passions so strong that the Fed could do nothing about it. Every official had tried to talk it down. The president was against it, Congress too; even the normally reticent secretary of the treasury had spoken out. But it was remarkable how difficult it was to kill it. All that the Fed could do, it seemed, was to step aside and let the frenzy burn itself out. By trying to stand up to the market and then failing, it simply made itself look as impotent as everybody else.

Another thing I didn’t know was that amateur stock market speculation was basically an American phenomenon:

Though the size of the British stock market was comparable as a percentage of GDP to that in the United States ,the average British person preferred to bet on sports and left the stock market to the City bigwigs, while in France and Germany the size ofthe stock markets was tiny. Thus the crash did not exert the same hold on the psychology of European consumers and investors, and the effect on their economies was correspondingly less traumatic. 

Someone needs to write the history of sports betting in Britain. I literally cannot fathom a more useless way to spend one’s time.

In the 1920s, all the major economies were pegged to the gold standard, and the supply of gold was crucial for the health of their exchange rates. As usual, I was much less interested in the economics than the logistics:

Unknown to most people, much of the gold that had supposedly flown into France was actually sitting in London. Bullion was so heavy–a seventeen-inch cube weighs about a ton–that instead of shipping crates of it across hundreds of miles from one country to another and paying high insurance costs, central banks had taken to ‘earmarking’ the metal, that is, keeping it in the same vault but simple re-registering its ownership.

Thus the decline in Britain’s gold reserves and their accumulation in France and the United States was accomplished by a group of men descending into the vaults of the Bank of England, loading some bars of bullion onto a low wooden truck with small rubber tires, trundling them thirty feet across the room to the other wall, and offloading them, though not before attaching some white name tags indicating that the gold now belonged to the Banque de France or the Federal Reserve Bank.

It’s a 564-page book, and I took away three factoids. Sounds about right.

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