The Truth About Wealth

Thursday, January 5th, 2012

The truth about wealth is that great wealth often comes with great volatility:

Despite heated rhetoric emanating from politicians and pundits, the top 1% is hardly a fixed group that enjoys consistent income gains. To the contrary, the wealthiest have become the most crash-prone group in our economy.

The total income of the top 1% — or those earning more than $343,000 in 2009 — fell by more than 30% from 2007, according to the most recent Internal Revenue Service data. By contrast, the average income of the bottom 90% fell less than 3% during the same period.

A November Federal Reserve study, meanwhile, found that a third of the people in the top 1% in 2007, as measured by wealth, were no longer in the top 1% in 2009.

Only 15% of the Forbes 400 stayed on the list over a 21-year period, according to a study that cited these five reasons for dropping off the list:

  1. Overconcentration
  2. Leverage
  3. Spending
  4. The “toxic cocktail” [of those first three reasons combined]
  5. Family issues

(Hat tip to Kent.)

The Right Fit

Tuesday, January 3rd, 2012

The narrative heart of Nicholas de Monchaux’s Spacesuit: Fashioning Apollo, Rosten Woo says, is the story of Playtex, the women’s undergarment manufacturer:

The company, known at the time as the International Latex Corporation, triumphed over the more politically connected, engineering-driven Hamilton-Standard to win the Apollo lunar space-suit contract. It plays out like an after-school special: ILC’s team, a motley group of seamstresses and engineers, led by a car mechanic and a former television repairman, manages to convince NASA to let them enter their “test suit” in a closed, invitation-only competitive bid at their own expense. They spend six weeks working around the clock — at times breaking into their own offices to work 24-hour shifts — to arrive at a suit solution that starkly outperforms the two invited competitors. In open, direct competition with larger, more moneyed companies, ILC manages to produce a superior space suit by drawing on the craft-culture handiwork and expertise of seamstresses, rather than on the hard-line culture of engineering.

The ILC workshop was a hybrid endeavor: Producing new forms required new skills and habits. Space suit contract in hand, ILC now had to adapt to NASA’s engineering culture. Though ILC seamstresses were hand-making each suit to order based on the astronauts’ measurements, the rigorous specifications of the space suit took the craft to an extreme unknown even to couture: “Tolerances allowed for sewing — less than a sixty-fourth of an inch in only one direction from the seam — meant that yard after yard was sewn to an accuracy smaller than the sewing needle’s eye.” Modified treadles allowed the workers to punch a single stitch with each footfall. To curb the use of pins (just one of these misplaced in a suit’s lining could render an entire suit useless), numbered pin-sets had to be checked out at the beginning of each day and returned each evening as a complete set. Once each part of the suit was produced it also had to be described — made intelligible and traceable by NASA, whose bureaucracy was ill-equipped, to put it mildly, to comprehend or regulate an object like a garment. Because each suit and each component of each suit was designed for a specific astronaut, mountains of paperwork followed. Every alteration to the suit required NASA to register the garment as a new object, a complication worthy of a Borges story.

Yet the suits, de Monchaux says, were never actually constructed according to engineering drawings. The drawings were always descriptive, not prescriptive: produced after the fact. To fit into NASA’s engineering system, ILC had to essentially reverse-engineer construction documents of each space suit after they had already been produced. This seemingly small detail points to the vast blind spots across different cultures of making and knowing, and de Monchaux happily points out the appealing irony: The very image of NASA’s technical triumph, the most iconic image of the space race, is in fact a “throwback” — more craftwork than Kraftwerk.

Should the World of Toys Be Gender-Free?

Monday, January 2nd, 2012

Peggy Orenstein (Cinderella Ate My Daughter) has a surprisingly sane piece in the New York Times asking, Should the world of toys be gender-free?

Hamleys, which is London’s 251-year-old version of F.A.O. Schwarz, recently dismantled its pink “girls” and blue “boys” sections in favor of a gender-neutral store with red-and-white signage. Rather than floors dedicated to Barbie dolls and action figures, merchandise is now organized by types (Soft Toys) and interests (Outdoor).

That free-to-be gesture was offset by Lego, whose Friends collection, aimed at girls, will hit stores this month with the goal of becoming a holiday must-have by the fall. Set in fictive Heartlake City (and supported by a $40 million marketing campaign), the line features new, pastel-colored, blocks that allow a budding Kardashian, among other things, to build herself a cafe or a beauty salon. Its tasty-sounding “ladyfig” characters are also taller and curvier than the typical Legoland denizen.

So who has it right? Should gender be systematically expunged from playthings? Or is Lego merely being realistic, earnestly meeting girls halfway in an attempt to stoke their interest in engineering?

Among the “10 characteristics for Lego” described in 1963 by a son of the founder was that it was “for girls and for boys,” as Bloomberg Businessweek reported. But the new Friends collection, Lego says, was based on months of anthropological research revealing that — gasp! — the sexes play differently.

While as toddlers they interact similarly with the company’s Duplo blocks, by preschool girls prefer playthings that are pretty, exude “harmony” and allow them to tell a story. They may enjoy building, but they favor role play. So it’s bye-bye Bionicles, hello princesses. In order to be gender-fair, today’s executives insist, they have to be gender-specific.

As any developmental psychologist will tell you, those observations are, to a degree, correct. Toy choice among young children is the Big Kahuna of sex differences, one of the largest across the life span. It transcends not only culture but species: in two separate studies of primates, in 2002 and 2008, researchers found that males gravitated toward stereotypically masculine toys (like cars and balls) while females went ape for dolls. Both sexes, incidentally, appreciated stuffed animals and books.

Human boys and girls not only tend to play differently from one another — with girls typically clustering in pairs or trios, chatting together more than boys and playing more cooperatively — but, when given a choice, usually prefer hanging with their own kind.

Score one for Lego, right? Not so fast. Preschoolers may be the self-appointed chiefs of the gender police, eager to enforce and embrace the most rigid views. Yet, according Lise Eliot, a neuroscientist and the author of “Pink Brain, Blue Brain,” that’s also the age when their brains are most malleable, most open to influence on the abilities and roles that traditionally go with their sex.

Every experience, every interaction, every activity — when they laugh, cry, learn, play — strengthens some neural circuits at the expense of others, and the younger the child the greater the effect. Consider: boys from more egalitarian homes are more nurturing toward babies. Meanwhile, in a study of more than 5,000 3-year-olds, girls with older brothers had stronger spatial skills than both girls and boys with older sisters.

At issue, then, is not nature or nurture but how nurture becomes nature: the environment in which children play and grow can encourage a range of aptitudes or foreclose them.

A Parable about Quality

Thursday, December 29th, 2011

Bill Waddell shares a parable about quality:

A toothpaste factory had a problem: they sometimes shipped empty boxes, without the tube inside. This was due to the way the production line was set up, and people with experience in designing production lines will tell you how difficult it is to have everything happen with timings so precise that every single unit coming out of it is perfect 100% of the time. Small variations in the environment (which can’t be controlled in a cost-effective fashion) mean you must have quality assurance checks smartly distributed across the line so that customers all the way down to the supermarket don’t get mad and buy another product instead.

Understanding how important that was, the CEO of the toothpaste factory got the top people in the company together and they decided to start a new project, in which they would hire an external engineering company to solve their empty boxes problem, as their engineering department was already too stretched to take on any extra effort.

The project followed the usual process: budget and project sponsor allocated, RFP, third-parties selected, and six months (and $8 million) later they had a fantastic solution — on time, on budget, high quality and everyone in the project had a great time. They solved the problem by using high-tech precision scales that would sound a bell and flash lights whenever a toothpaste box would weigh less than it should. The line would stop, and someone had to walk over and yank the defective box out of it, pressing another button when done to re-start the line.

A while later, the CEO decides to have a look at the ROI of the project: amazing results! No empty boxes ever shipped out of the factory after the scales were put in place. Very few customer complaints, and they were gaining market share. “That’s some money well spent!” – he says, before looking closely at the other statistics in the report.

It turns out; the number of defects picked up by the scales was zero after three weeks of production use. It should’ve been picking up at least a dozen a day, so maybe there was something wrong with the report. He filed an inquiry against it, and after some investigation, the engineers come back saying the report was actually correct. The scales really weren’t picking up any defects, because all boxes that got to that point in the conveyor belt were good.

Puzzled, the CEO travels down to the factory, and walks up to the part of the line where the precision scales were installed. A few feet before the scale, there was a $20 desk fan, blowing the empty boxes off the belt and into a bin.

“Oh, that,” says one of the workers — ‘one of the guys put it there cause he was tired of walking over… “every time the bell rang”‘.

(Hat tip to David Foster.)

The Ordinary Heroes of the Taj Mumbai

Wednesday, December 21st, 2011

The ordinary heroes of the Taj Mumbai were the employees who looked after hotel guests during the terrorist attack in 2008.

One reason for their tremendous loyalty and sense of duty is that they are recruited specifically for their values:

The Taj Group’s three-pronged recruiting system helps to identify people it can train to be customer-centric. Unlike other companies that recruit mainly from India’s metropolitan areas, the chain hires most of its frontline staff from smaller cities and towns such as Pune (not Mumbai); Chandigarh and Dehradun (not Delhi); Trichirappalli and Coimbatore (not Chennai); Mysore and Manipal (not Bangalore); and Haldia (not Calcutta). According to senior executives, the rationale is neither the larger size of the labor pool outside the big cities nor the desire to reduce salary costs, although both may be additional benefits. The Taj Group prefers to go into the hinterland because that’s where traditional Indian values — such as respect for elders and teachers, humility, consideration of others, discipline, and honesty — still hold sway. In the cities, by contrast, youngsters are increasingly driven by money, are happy to cut corners, and are unlikely to be loyal to the company or empathetic with customers.

The Taj Group believes in hiring young people, often straight out of high school. Its recruitment teams start out in small towns and semiurban areas by identifying schools that, in the local people’s opinion, have good teaching standards. They call on the schools’ headmasters to help them choose prospective candidates. Contrary to popular perception, the Taj Group doesn’t scout for the best English speakers or math whizzes; it will even recruit would-be dropouts. Its recruiters look for three character traits: respect for elders (how does he treat his teachers?); cheerfulness (does she perceive life positively even in adversity?); and neediness (how badly does his family need the income from a job?).

The chosen few are sent to the nearest of six residential Taj Group skill-certification centers, located in the metros. The trainees learn and earn for the next 18 months, staying in no-rent company dormitories, eating free food, and receiving an annual stipend of about 5,000 rupees a month (roughly $100) in the first year, which rises to 7,000 rupees a month ($142) in the second year. Trainees remit most of their stipends to their families, because the Taj Group pays their living costs. As a result, most work hard and display good values despite the temptations of the big city, and they want to build careers with the Taj Group. The company offers traineeships to those who exhibit potential and haven’t made any egregious errors or dropped out.

One level up, the Taj Group recruits supervisors and junior managers from approximately half of the more than 100 hotel-­management and catering institutes in India. It cultivates relationships with about 30 through a campus-connect program under which the Taj Group trains faculty and facilitates student visits. It maintains about 10 permanent relationships while other institutes rotate in and out of the program. Although the Taj Group administers a battery of tests to gauge candidates’ domain knowledge and to develop psychometric profiles, recruiters admit that they primarily assess the prospects’ sense of values and desire to contribute. What the Taj Group looks for in managers is integrity, along with the ability to work consistently and conscientiously, to always put guests first, to respond beyond the call of duty, and to work well under pressure.

For the company’s topmost echelons, the Taj Group signs up 50 or so management trainees every year from India’s second- and third-tier B-schools such as Infinity Business School, in Delhi, or Symbiosis Institute, in Pune, usually for functions such as marketing or sales. It doesn’t recruit from the premier institutions, as the Taj Group has found that MBA graduates from lower-tier B-schools want to build careers with a single company, tend to fit in better with a customer-centric culture, and aren’t driven solely by money. A hotelier must want, above all else, to make other people happy, and the Taj Group keeps that top of mind in its recruitment processes.

Mapping the Value Stream in Education

Monday, December 19th, 2011

If we map the value stream in education, we get something like this:

That’s according to Toyota Culture, as cited by Aretae.

That’s according to Aretae, who’s reading Toyota Culture at the moment.

As Wobbly (BC) notes, that accords well with the Bloom 2-sigma problem.

Network TV

Friday, December 16th, 2011

Network television as we know it came into being 60 years ago, when AT&T threw the switch on the first transcontinental coaxial cable:

Oct. 15, 1951: “I Love Lucy,” the first Hollywood-based sitcom to be shot on film with three cameras in front of a live studio audience. Lucille Ball’s zany antics soon made it the most popular show on the air. At a time when there were only 15 million TV sets in America, 11 million families watched “I Love Lucy” every Monday night.

Nov. 18, 1951: “See It Now,” the first TV newsmagazine, whose first episode opened with a shot of two control-room monitors. One showed a live picture of the Statue of Liberty, the other a live picture of the Golden Gate Bridge. Edward R. Murrow, the host, was visibly impressed: “For the first time, man has been able to sit at home and look at two oceans at the same time.” It may sound quaint now, but 60 years ago that image took people’s breaths away.

Dec. 16, 1951: “Dragnet,” the first filmed crime drama to make extensive use of location shooting. When Jack Webb opened each episode by saying “This is the city,” he meant Los Angeles, not a cramped TV studio somewhere in midtown Manhattan — and that’s what you saw on the small screen.

Sound familiar? It should — just as it did in 1951. Not only did “See It Now,” “I Love Lucy” and “Dragnet” originate on radio, but they’re still being imitated. Mr. Murrow’s show was the grandfather of “60 Minutes,” whose creator, Don Hewitt, can actually be seen on camera calling the shots in the first episode of “See It Now,” which he directed. The three-camera system used to film “I Love Lucy” became and remained ubiquitous. And every police procedural TV series on the air today owes an incalculable debt to the no-nonsense just-the-facts-ma’am storytelling of “Dragnet,” which inspired Dick Wolf to create the “Law & Order” franchise.

This isn’t to say that network TV hasn’t undergone drastic changes in the course of the past 60 years. Take a look at the TV listings for a typical week in 1951 and you’ll be surprised by much of what you see there. Sixty years ago, most TV programs were still broadcast live from New York, and prime time was dominated by variety shows, game shows and hour-long “anthology drama” series. While many were banal, some were impressively sophisticated. NBC’s “Your Show of Shows,” which starred Sid Caesar and Imogene Coca, was written by Mel Brooks, Neil Simon and Carl Reiner and featured sharply observed comic skits that remain fresh to this day. Up-and-coming young writers like Paddy Chayefsky, Horton Foote and Rod Serling regularly sold scripts to “Kraft Television Theater,” “Philco Television Playhouse” and “Studio One.” Those were the days of “The Frank Sinatra Show,” Groucho Marx’s witty “You Bet Your Life” and TV’s classiest guessing game, “What’s My Line?” (The panelists included Bennett Cerf, the president of Random House, and everyone on the show wore evening dress.)

No One Hit Toy This Christmas

Thursday, December 15th, 2011

There’s no one hit toy this Christmas:

Retailers have cut down on toys overall — imports of toys in August and September, important months for building holiday inventory, dropped by 9.8 percent compared with last year, according to an analysis of Census Bureau data by Panjiva.

Yet not every product is being cut. Shipments of Legos into the United States in August, September, October and November rose about 155 percent from the same period last year, while those of Hot Wheels rose 43 percent and Barbie merchandise rose 17 percent, according to an analysis of Customs data by Panjiva.

Institutional memory and reverse smuggling

Monday, December 12th, 2011

An engineer tells his tale of institutional memory and reverse smuggling:

Thus I landed the strange job of trying to explain to the company how its plant worked.

I could draw on several kinds of personal memory for this job. I remembered how some things worked, and the 30-year-ancient engineering practices were my own. More importantly, I had an idea of what was important and how the pieces fit together.

Perhaps equally importantly, I unofficially had some documentation. During our office moves and reorganizations, the document situation became increasingly dire. I would wait days to get something mailed to me, after tracking down a series of merged document libraries, some of which were halfway through the digitization processes. Paranoid corporate management also had rules about anything relating to trade secrets, which meant anything relating to the polymer process at all, which made it hard to work while visiting contractors’ offices.

So, we developed a don’t-ask/don’t-tell policy of making private copies of documents and carrying them around with us. Engineers, to generalize, hate waiting around for stupid reasons, and having documents meant that we could get to work. It also made us look better, since we got things done on time, instead of having to send out lame excuses that we’re late because we’re waiting on a fax.

My job now was to smuggle these documents back into the company. I would be happy to just hand them over. But that doesn’t make any sense to the company. The company officially has these documents (digitally managed!), and officially I don’t. In reality, the situation is the reverse, but who wants to hear that? God knows what official process would let me fix that.

No, the documents need to be brought back in to where they ‘already were’ unofficially. Physical copies are made and added to the local group library. Eventually they’ll probably work their way into the digital document management system, the next time someone canvasses and notices some documents with no inventory control tags. I hope they aren’t lost this time, because I won’t be around in another 30 years to smuggle them back in again.

Oh, and as an external consultant, I’m not allowed to know some of the trade secrets in the documents. The internal side of the team needs to handle the sensitive process information, and be careful about how that information crosses boundaries when talking to the external consultants. Unfortunately, the internal team doesn’t know what the secrets are, while I do. I even invented a few of them, and have my name on some related patents. Nonetheless, I need to smuggle these trade secrets back into the company, so that the internal side can handle them. They just have to make sure they don’t accidentally repeat them back to me.

We hear a lot about the spy-movie kind of corporate espionage. I’d love to read a study of reverse corporate espionage, where companies forget their own secrets and employees have to unofficially get them back. I’m convinced it happens more than you’d think.

(Hat tip to Ilkka.)

Eric Hautemont of Days of Wonder

Sunday, December 4th, 2011

Eric Hautemont, CEO & co-founder of Days of Wonder, the company behind the boardgame Ticket to Ride, has an interesting history:

I was born in France, came to the US in 1988. I was in the computer graphics industry, and formed Ray Dream. In 1996, I sold Ray Dream to Fractal Design and decided to become a venture capitalist. I wanted to help other small companies get off the ground the way I had gotten help. But I soon discovered that being a VC was a lucrative, but very boring job. Some companies, you’d go to and they’re so smart that you feel you’re bringing down the average IQ by being there, others need so much help you won’t make much of a difference. Either way, most of the time you write a check and then that’s about all you can do — the rest won’t make much of a difference to your fund’s return.

So I wanted to do something else. By this time I had two young kids, and I wasn’t really interested in getting back into the tech-world rat race, working so many hours every week. I wanted something where the pace would be more reasonable. I was thinking about traditional board games. About this time, at Hasbro, the CEO was Alan Hassenfeld, who was the grandson of the founder Henry Hassenfeld. [Hasbro was originally Hassenfeld Brothers and became Hasbro Industries in 1968.] And that was so different from the way things worked in Silicon Valley and the high-tech industry, where things rise and fall and change. I liked the idea of forming something that would last that would still be around in generations. If you look at Monopoly, it was published in the 1930s and is still the highest-selling game. How many other consumer goods can you think of that were at the top of the market over 70 years ago and still are? So at this point I really wanted to think about creating a board game company, and I went back to running a product company, like I had done at Ray Dream. I went to some of the people from Ray Dream — Mark Kaufmann, who was Director of Product Marketing, and Yann Corno, another co-founder of Ray Dream whom I knew from high school — and we started Days of Wonder.

North Carolina Beer Gardens

Saturday, December 3rd, 2011

Asheville, North Carolina is becoming the craft brewery capital of the Southeast, if not the nation, State Rep. Tim Moffitt claims, and a new law could accelerate that:

The legislation now before Gov. Bev Perdue would allow all breweries in the state, regardless of size, to offer tastings and sell beer onsite, even beers they produce outside North Carolina.

It’s aimed at attracting Sierra Nevada and New Belgium, two well-known midsize breweries, to western North Carolina. But brewers hope it further ferments the state’s reputation as a beer capital.

Todd Ford, who opened the NoDa Brewing Company and taproom with his wife a month ago, said he doesn’t worry about the potential competition. He feels a law that boosts interest in craft beers or beer tourism will benefit brewers like him.

“If somebody’s likely to go to a Sierra Nevada taproom and have a Sierra Nevada beer, they’re more likely to try my beer,” he said. “I may have to share those sales with Sierra Nevada, but it’s much more likely to bring more craft beer drinkers to me.”

Until now, state law reserved the beer garden niche to breweries that produced less than 25,000 barrels a year, using the cap as a way to help regulate alcohol sales. All of the state’s approximately 50 small craft breweries fit under the ceiling in the existing law.

State Rep. Tim Moffitt, an Asheville Republican, said the change would help attract the Colorado-based New Belgium and the California-based Sierra Nevada to open East Coast production facilities, potentially creating about 275 jobs and more than $200 million in capital investments.

New Belgium is looking to open a facility in Asheville and Sierra Nevada is eyeing property in Hendersonville, officials said.

“Asheville is becoming the craft brewery capital of the Southeast, if not the nation,” Moffitt said. “This was a small change in the law to allow our state to benefit from additional jobs and additional investment.”

The bulk of North Carolina’s current small breweries produce less than 20,000 barrels a year, but the two new companies could each produce about 200,000 barrels annually, officials said.

But by removing the cap, the law also would allow mega-beer producers, such as Budweiser and MillerCoors, to tread on the craft brewers’ turf with tasting rooms. MillerCoors owns a brewery in Eden that produces 9 million barrels a day, but a beverage industry representative told lawmakers there are no current plans for it to develop an onsite retail component.

The folks at Reason are clearly in favor of free beer… markets:

Nest Learning Thermostat

Friday, December 2nd, 2011

David Pogue reviews the Nest Learning Thermostat, which brings the iPhone aesthetic to HVAC:

Don’t snicker. This isn’t trivial. According to Nest, there are a quarter of a billion thermostats in this country alone; 10 million more are bought each year.

Half of your home’s energy is controlled by this ugly, beige tool. Most people never even bother to program their programmable thermostats. As a result, their houses actually use more energy than homes without them. Two years ago, the federal government eliminated the entire programmable thermostat category from its Energy Star program.

As the kind of rara avis who installed and programmed his own programmable thermostat — let’s not bring up the fuse I blew on the heater’s circuit board — I wasn’t sure that the $250 learning thermostat would have much to offer me, but, Pogue says, it introduces four radical changes:

RADICAL CHANGE 1 The look. The Nest is gorgeous. It’s round. Its screen is slightly domed glass; its barrel has a mirror finish that reflects your wall. Its color screen glows orange when it’s heating, blue when it’s cooling; it turns on when you approach it, and discreetly goes dark when nobody’s nearby.

Sweating over attractiveness makes sense; after all, this is an object you mount on your wall at eye level. A thermostat should be one of the most beautiful items on your wall, not the ugliest.

RADICAL CHANGE 2 The Nest has Wi-Fi, so it’s online. It can download software updates. You can program it on a Web site.

You can also use a free iPhone or Android app, from anywhere you happen to be, to see the current temperature and change it — to warm up the house before you arrive, for example. (At this moment, vacation-home owners all over the world are wiping drool off their keyboards.)

RADICAL CHANGE 3 Learning. The Nest is supposed to program itself — and save you energy in the process. When you first install the Nest, you turn its ring to change the temperature as you would a normal thermostat — at bedtime, when you leave for work, and so on. A big, beautiful readout shows you the new setting and lets you know how long it will take your house to reach that temperature. That information, Nest says, is intended to discourage people from setting their thermostats to 90 degrees, for example, thinking that the temperature will rise to 70 faster. (It doesn’t.)

Over the course of a week or so, the thermostat learns from your manual adjustments. It notes when that happened, and what the temperature and humidity were, and so on. And it begins to set its own schedule based on your living patterns.

RADICAL CHANGE 4 Energy savings. Let’s face it, $250 is a lot to pay for a thermostat. But Nest says that you’ll recoup that through energy savings in less than two years.

The mere act of having a correctly programmed thermostat is the big one, of course. Why should you waste money heating or cooling the downstairs when you’re in bed upstairs? Or when you’re away at work all day?

But the Nest’s smartphone-based components offer other goodies, like Auto Away. The Nest contains two proximity sensors (near and far), which detect whether anybody is actually in a room. If the sensors decide that nobody’s home, they let the temperature drop or rise to an outer limit you’ve defined — say, 65 in winter, 80 in summer — even if that absence isn’t part of your normal schedule.

This feature is useless, of course, if your thermostat can’t see the room — say, if it’s in a closet or behind an open door. But often I’ll return from a day trip, having forgotten to turn down the heat, and see Auto Away on the screen. Good ol’ Nest!

Nest says that turning down your thermostat by even a single degree can save you 5 percent in energy. To that end, it offers a little motivational logo: a green leaf. It glows brighter as you turn the ring beyond your standard comfort zone. As a positive-reinforcement technique, it’s a lot more effective than an exhortation from Jimmy Carter to put on a sweater.

The wi-fi sounds great, but what I really need is a better way to send heat right where I need it — and without drying out the air to lip-cracking, nose-bleeding extremes.

Decision Quicksand

Thursday, December 1st, 2011

Two marketing professors were able to demonstrate that hard, unimportant tasks lead us into decision quicksand:

In the first experiment, 106 participants in Amazon’s Mechanical Turk online labor market were presented with real-world choices about which task they’d take on, for pay. They could either change their decision later, or not (making it “important” or “unimportant”). And the choice either involved a choice between two jobs, in which one was clearly more pleasant for the money involved, or among four jobs, with various plusses and minuses (making it “difficult” or “easy”).

The Mechanical Turkers, as they’re known, spent roughly the same amount of time making the easy decisions, regardless of whether they were important or unimportant. (After all, they were easy decisions!) They spent a little longer on the hard, important decisions, though the difference wasn’t statistically significant. But they spent much more time on the hard, unimportant decisions — in fact, double the time they spent on the easy, unimportant decisions. Afterwards, these people also reported themselves less happy about the process.

The researchers basically repeated the experiment using decisions about hypothetical airline flights and course selections, finding the same result: Faced with complexity, and urgency, we can be decisive. Faced with complexity, and no urgency, we waste our time. Researchers referred to the tendency as “decision quicksand.”

In the context of unimportant-but-challenging decisions, people were more inclined to seek out fresh sources of information, dragging out the decision. When they were misled into thinking that they’d spent more time on an unimportant decision than they actually had — a stopwatch was sped up — they chose to spend even more time, effectively doubling down on their time investment.

Gluten-Free

Wednesday, November 30th, 2011

General Mills might be described as Big Gluten, but they’ve made the unusual move of pushing gluten-free foods, because there’s a small but dedicated and growing market:

Gluten-free packaged foods — in which wheat has been replaced by alternative ingredients like rice, sorghum and tapioca flours, among others — were almost impossible to find in the 1990s. Most of what did exist was dreadful: think cardboard. It was also hard to find people who understood the disease itself. Doctors believed it wasn’t much of a problem in this country.

“Nobody really was ready to accept the 1 percent prevalence of celiac disease,” says Dr. Stefano Guandalini, founder and medical director of the University of Chicago Celiac Disease Center, who came to the U.S. from Italy in 1996 and found very little awareness of celiac disease. Even experts ignored it, Guandalini says, noting that a prominent medical textbook published as recently as 1999 questioned how widespread it was. “The chapter on celiac disease,” Guandalini says, “quotes a prevalence of 1 in 10,000 in the U.S. and adds that this is mostly a European condition — and the prevalence is decreasing. This is the formal, official teaching in ’99.”

But Guandalini didn’t buy it. And neither did Dr. Alessio Fasano, another Italian who was practicing at the University of Maryland. The genes were here, Fasano recalls thinking, courtesy of our European ancestors, and so was the gluten, a natural component of wheat that provides the elastic qualities that make for delicious baked goods. But the protein is also difficult to digest. And even a healthy intestine does not completely break gluten down. For those with celiac disease, the undigested gluten essentially causes the body’s immune system to lash out at itself, leading to malabsorption, bloating and diarrhea — the classic gastrointestinal symptoms — but also, at times, joint pain, skin rashes and other problems. In Italy, Fasano routinely saw celiac disease. Surely it was in the U.S. too. Hence, in 1996 Fasano published a paper, asking, in the title, a simple question: “Where Have All the American Celiacs Gone?”

The same year that he published the paper, he founded the University of Maryland Center for Celiac Research. He started small; Fasano had only one patient the first year. In a 1998 paper, however, he reported that he had randomly screened 2,000 blood samples for the antibodies that typically indicate a diagnosis of celiac disease and discovered that 1 in 250 tested positive.

Still, doubts lingered. So Fasano set out to do a more comprehensive study — or, as he called it, “the most insane, large epidemiological study” on celiac disease in the U.S. to date. More than 13,000 subjects in 32 states were screened for the antibodies. Those who tested positive underwent further blood tests and, when possible, a small-bowel biopsy to confirm the presence of celiac disease. The results, published in 2003, were stunning: 1 in every 133 people had celiac disease. And among those related to celiac patients, the rates were as high as 1 in 22. People were listening now — and everything about gluten-free living was about to change. “Believe it or not,” he says, “the history of celiac disease as a public health problem in the United States started in 2003.”

As awareness of the disease became more widespread, Fasano expected celiac diagnoses to increase. That, in fact, is what has happened. Since 2009, Quest Diagnostics, a leading testing company, has seen requests for celiac blood tests jump 25 percent. But Fasano didn’t anticipate other developments. He now estimates that 18 million Americans have some degree of gluten sensitivity. And experts have been surprised, in general, by the rising prevalence of celiac disease overall. “It’s not just that we’re better at finding it,” says Dr. Joseph A. Murray, a gastroenterologist at the Mayo Clinic in Rochester, Minn. “It truly has become more common.”

Comparing blood samples from the 1950s to the 1990s, Murray found that young people today are nearly five times as likely to have celiac disease, for reasons he and others researchers cannot explain. And it’s on the rise not only in the U.S. but also in other places where the disease was once considered rare, like Mexico and India. “We don’t know where it’s going to end,” Murray says. “Celiac disease has public health consequences.” And therefore, it has a market.

Gluten-free products aren’t just selling these days; they appear to be recession-proof. According to a recent Nielsen report on consumer trends, the volume of gluten-free products sold in the past year is up 37 percent. Spins, a market-research-and-consulting firm for the natural-products industry, says the gluten-free market is a $6.3 billion industry and growing, up 33 percent since 2009. Niche companies like Amy’s Kitchen, Glutino, Enjoy Life, Bob’s Red Mill and Udi’s Gluten Free Foods are reporting incredible growth.

Major corporations have also been moving into the marketplace: Anheuser-Busch introduced Redbridge, a gluten-free beer, in 2006, and Kellogg rolled out gluten-free Rice Krispies this year. Other companies have begun adding labels that indicate when their products are gluten-free — that is, when they contain fewer than 20 parts per million gluten (the proposed federal standard). Both Frito-Lay and Post Foods have begun such labeling in the past year. It’s the golden age of gluten-free.

Celiacs aren’t the only ones who are grateful. Athletes, in particular, have taken to the diet. Some claim to have more energy when they cut out gluten, a belief that intrigues some experts and riles others. Guandalini dismisses the idea as “totally bogus.” Yet no one can argue with the success of the world’s No. 1 men’s tennis player, Novak Djokovic. Within months of revealing this year that he had a gluten allergy and had altered his diet accordingly, Djokovic posted a remarkable 64-2 record. By September, sportswriters barely let a moment pass without asking about, as one called it, his “off-court eating habits.” After his victory at the U.S. Open final, a reporter wanted to know what he ate for dinner the night before, for breakfast that morning and what he planned to eat that night. “I’ll give you a simple answer,” Djokovic said with a smile. “Last night I didn’t have any gluten, and tonight I will have a bunch of gluten.”

The Magic of Education

Wednesday, November 30th, 2011

Bryan Caplan, like most professors, has spent most of his life in academia and has very little real-world experience, so, he admits, he can’t very well teach his students real-world skills — yet employers care deeply about the grades he hands out. That’s the magic of education:

Yes, I can train graduate students to become professors.  No magic there; I’m teaching them the one job I know.  But what about my thousands of students who won’t become economics professors?  I can’t teach what I don’t know, and I don’t know how to do the jobs they’re going to have.  Few professors do.

Many educators sooth their consciences by insisting that “I teach my students how to think, not what to think.”  But this platitude goes against a hundred years of educational psychology.  Education is very narrow; students learn the material you specifically teach them… if you’re lucky.

Other educators claim they’re teaching good work habits.  But especially at the college level, this doesn’t pass the laugh test.  How many jobs tolerate a 50% attendance rate — or let you skate by with twelve hours of work a week?  School probably builds character relative to playing videogames.  But it’s hard to see how school could build character relative to a full-time job in the Real World.

At this point, you may be thinking: If professors don’t teach a lot of job skills, don’t teach their students how to think, and don’t instill constructive work habits, why do employers so heavily reward educational success?  The best answer comes straight out of the ivory tower itself.  It’s called the signaling model of education — the subject of my book in progress, The Case Against Education.

According to the signaling model, employers reward educational success because of what it shows (“signals”) about the student.  Good students tend to be smart, hard-working, and conformist — three crucial traits for almost any job.  When a student excels in school, then, employers correctly infer that he’s likely to be a good worker.  What precisely did he study?  What did he learn how to do?  Mere details.  As long as you were a good student, employers surmise that you’ll quickly learn what you need to know on the job.

In the signaling story, what matters is how much education you have compared to competing workers.  When education levels rise, employers respond with higher standards; when education levels fall, employers respond with lower standards.  We’re on a treadmill.