2020年10月13日 星期二

What’s good for corporations isn’t good for America

It never was, but now the disconnect is bigger than ever.
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By Paul Krugman

Opinion Columnist

So Donald Trump is back to boasting about the stock market. It’s a peculiar time to be making that boast. Investors are, after all, watching the polls, which are increasingly favorable to Joe Biden; Nate Silver’s FiveThirtyEight gives Trump only a 13 percent chance of winning, and other models put his chances even lower. After 2016, nobody is going to be complacent, but these days Wall Street analysts are all talking about the likelihood of a blue wave — and the market doesn’t seem to mind. So rising stock prices aren’t the endorsement Trump thinks they are.

In any case, as I and many others have said repeatedly, the stock market is not the economy. There has historically been a weak connection, at best, between stock prices and economic performance; Paul Samuelson famously quipped that the market had predicted nine of the past five recessions. And I’ve wondered whether the connection between the market and the real economy — in particular, between the market and what matters to most Americans, namely jobs — has gotten even weaker over time.

Well, recently a paper by Frederik P. Schlingemann and Rene M. Stulz landed in my inbox, and it seems to confirm my suspicions. It’s titled “Has the stock market become less representative of the economy?”, and its conclusion seems to be yes, at least as far as jobs are concerned.

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The authors do a lot of statistical analysis, finding that the correlation between the number of workers a company employs and its market value has gone down steadily over time. An easier way to see what has changed, however, is to look at the top one or two corporations by market value.

Back in the 1950s, when Charles Erwin Wilson declared that “what was good for our country was good for General Motors and vice versa,” he sort of had a point. GM, which consistently was either the most or second most valuable company in America (it kept swapping places with AT&T), employed more than half a million people; as a share of the work force, that would be the equivalent of 1.5 million employees today. And it paid good wages, so what was good for GM was, in fact, good for a lot of American workers.

In 2019, by contrast, the most valuable company was Apple, which only had 90,000 U.S. workers. The company tries to sell itself as a much bigger source of jobs, claiming to have a jobs “footprint” far larger than its direct payroll. Still, the fact is that Apple doesn’t employ many Americans. Its value comes from its technology and market power, not from employing large numbers of people to make stuff.

Also, a lot of Apple’s reported profits come from its overseas subsidiaries (although much of that may reflect tax avoidance strategies rather than genuine investment abroad). All of this may be fine for investors, but it’s not especially relevant for the vast majority of Americans, who own little stock and depend on wages to make ends meet.

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So going back to where I started, Trump boasting about the market is truly silly at this point. Even on its own terms, this is as much or more a Biden market than it is a Trump market; and the market, which was never a good gauge of the economy, is even less of one than it used to be.

Quick Hits

Larry Kudlow, Trump’s top economist, explaining in 2007, that a rising market meant that things were going wonderfully. The Great Recession started six months later.

Small investors using Robinhood have been driving some stocks; some of them are also being hacked and losing their money.

Investment banks are remarkably bullish on the economic impact of a Biden presidency.

One scenario for election night: it will be obvious that Biden has won, but the networks will be hesitant about calling it because of outstanding ballots. Lots of room for mischief.

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Facing the Music

Can’t stand the suspense anymoreYouTube

Some all-American bluegrass from, um, Bob Dylan and, um, Norway.

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2020年10月12日 星期一

On Tech: You can’t escape Uber’s lobbying

Just being a customer now makes people a target for inescapable corporate advocacy.

You can’t escape Uber’s lobbying

Doug Chayka

Imagine if you had opened a box of Cheerios this morning and found a note from General Mills: Pending legislation about genetically modified corn would make your favorite breakfast unavailable or unaffordable.

That would feel odd and unwelcome, right?

That is essentially what app companies like Uber, Lyft, DoorDash and Instacart are doing in California. State residents who open those apps are seeing blaring banners or are getting email blasts pushing the companies’ position on a state employment law.

It’s not unusual for companies to want their customers to know about laws that might affect how they operate and to ask people to take action. But there’s a pattern by young companies — Uber in particular — of taking the lobbying a step too far.

The simple act of being a customer now makes people a target for inescapable corporate advocacy.

This is happening because Uber, Lyft, Instacart and other companies that hire large numbers of contractors have been fighting a law passed in California that would force them to reclassify at least one million workers in the state as employees.

California’s argument is that app-based companies like Uber dictate how their drivers or other workers do their job, and therefore workers should count as employees with minimum wages and similar protections.

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The companies have said the law doesn’t apply to them and fought it in court. They’ve also backed a ballot measure for California voters next month that would exempt the app companies from the new law. The ballot proposal, known as Proposition 22, would create something of a middle ground between the state law and the companies’ status quo.

There are complicated questions that voters have to consider, including whether it’s better to have more jobs with less of a safety net, or fewer but arguably better jobs. (The Washington Post has a good explanation of the details on Proposition 22.)

But the companies are not going for complexity or subtlety. “Your ride prices and wait times are likely to substantially increase,” Uber warned in its app in California. People have to click on the message before they can ask for an Uber ride. Lyft and Instacart are doing similar bombardments to get customers to vote their way.

Again, it’s not wrong or unusual for companies to try to sway people in business disputes or legal fights. Television viewers regularly see warnings on their screens about contract disputes that threaten to make their favorite channels go dark. Netflix, Wikipedia and other popular websites, when facing internet policy changes, posted warnings that were impossible to ignore.

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What these app companies are doing is both more invasive and a regular tactic rather than a rarity. Uber has done versions of lobbying through its app over and over and over again in many parts of the United States.

The in-app messaging will probably win Uber and its friends some votes. They can get the word out to millions of potential voters in ways that seasoned politicians would envy. But the corporate propaganda risks turning people off, too. We should be able to take a ride across town or eat a bowl of cereal without becoming a target for self-serving corporate propaganda.

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You don’t have to buy stuff because a company says so

This week, Apple will show off new models of iPhones and declare that it made the best smartphones in history. Amazon, Walmart and other companies will tempt you with fake shopping “holidays” to buy something because … it’s fall, I guess? I don’t know why.

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The point of Apple’s annual iPhone unveiling and Amazon’s Prime Day is to generate a Pavlovian reaction to buy something — now! I get it. If your phone is held together with electrical tape or you’ve been waiting for a good price on a new blender, this week might be useful.

But mostly, these events serve the companies’ interest, not ours. We don’t have to buy stuff on a company’s time frame. (Today’s newsletter is grumpy. Sorry. I’m going to blame the rain at On Tech HQ.)

Prime Day exists partly to lure people into Amazon’s shopping club and reinforce the habit of turning to Amazon as our default shopping destination. There is now a predictable banality about Apple’s overhyped Tupperware party for iPhones but it draws a lot of attention to Apple’s phones.

Yes, fine. The New York Times will write about those new iPhones. And Wirecutter, the product review site that’s part of The Times, has a guide to the good deals and the rubbish “deals” for Prime Day and Walmart’s version of the shopping event.

But here’s a reminder to myself and you: Your phone is probably fine! And are you buying a blender because you want one, or because there’s a countdown clock on Amazon warning that you’ll miss out on saving 50 cents if you don’t get it now? We don’t have to do this!

Before we go …

Hugs to this

This is a sweet essay about how a family of raccoons in a New York park is the one predictable thing in a very unpredictable year. (Don’t get too close to raccoons, everyone. But it’s safe to look at a video of them scaling this stone wall.)

We want to hear from you. Tell us what you think of this newsletter and what else you’d like us to explore. You can reach us at ontech@nytimes.com.

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