The first thought that came to mind is “if driving for Uber as an independent contractor is so bad, why do people keep doing it?” Is there no alternative? Perhaps not if (1) those drivers would normally take on low skill manufacturing jobs that no longer exist and (2) those drivers don’t want to pickup skills for high tech gigs instead (Udacity’s post-completion job guarantee comes to mind – learn C#, get a job at google, tuition reimbursed). On point #2, I understand that some Uber drivers may do so only for “extra cash.” But, I wager the ROI is much higher for the Udacity-C# route. As I told a barista many years ago when asked “what should I invest in?”: I said “yourself. Go back to school and learn an in-demand skill. That will do more for you than any stock tip I could give you.”

Next comes a quote near the end of the article

“Over time even bigger companies like Uber, many of which lose money and rely on investors to keep pouring in billions of dollars of capital,”

TSLA comes to mind for repeating this same practice of investor-subsidized losses. SNAP hasn’t made money and the last forecast I saw on Bloomberg shows losses for the next couple years. Twitter paid its executives 10s of millions of dollars last year even though the company and stock exhibited losses (including negative net income every year since at least 2013 [1]).

So just what is going on here? When will the promised (presumed, assumed?) earnings for these companies actually come through? Hot potato and “the greater fool hypothesis” come to mind…

-Dr. Moore

Opinion | The Gig Economy’s False Promise
The New York Times

Instead of freedom, workers at companies like Uber have encountered low wages and coercion. Read the full story

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[1] http://www.nasdaq.com/symbol/twtr/financials?query=income-statement

Some in our society would discourage the work of these high school students and label their task a witch hunt. From the limited information I have, I would say the high school journalism students called their principal on her BS (or MA and Ph.D. in this case). This reminds me of an old story about the person who lied about attending Stanford on his resume (http://money.cnn.com/2002/10/03/technology/veritas/). Ironically, it was for a company named Veritas which is Latin for truth. Also ironically, he lied about attending a school (Stanford) on the other side of the freeway from the company’s headquarters. SMH

Let the journalists, be it high school or the New York Times, do their job. I will end with a quote I heard from one of the heirs of the Guinness beer empire (at a conference at Stanford coincidentally):

“Without truth, there is only manipulation.”

A high school principal quit after student journalists investigated her credentials
Business Insider

l i g h t p o e t/shutterstock Student journalists at a high school in Kansas conducted an investigation into their new principal over concerns about her credentials. The investigation led to that principal’s resignation. The Pittsburg High School students looked into Amy Robertson shortly after she was hired in March, The Kansas City Star reported on Tuesday. “She was going to be the head of our school, and we wanted be assured that she was qualified and had the proper credentials,” Trina Paul, Read the full story

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If the appointment of billionaires and millionaires to cabinet positions was not enough to tip you off that the promise to “drain the swamp” was a total con job, take a look at the billions of dollars used to buy politicians. Nobody drained the swamp. It was all talk. It was a successful con job.

Instead of draining the swamp, the president and congress continue to bathe in the billions of dollars of swamp money. Maybe the general population will be more mindful when voting in the mid-term elections on November 6, 2018. Note that “all 435 seats in the United States House of Representatives and 34 of the 100 seats in the United States Senate will be contested.” (Wikipedia).

I’ll be looking for those who are “less bought” (thinking none of the human members in congress are perfect). 🙂

Here’s why no one’s going to ‘drain the swamp’
Business Insider

Former investment banker for Goldman Sachs Steven Mnuchin (R) speaks as US President Donald Trump (L) looks on during a swearing-in ceremony, in the Oval Office of the White House February 13, 2017 in Washington, DC. Mnuchin was confirmed by the Senate this evening to become the Treasury Secretary for the Trump Administration. whose products, risk-taking, and shenanigans blew up the sector and everything around it during the Financial Crisis – has finally gotten the memo in a serious way: During Read the full story

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But now there is a “Grand Mac” – a larger Big Mac. So, will we see Grand McMansions from 5,000 to 7,000 square feet for families of 2 to 3?

My recent conversations with persons in construction and recent home buyers also suggest that build quality is down, consistent with the Business Insider article. I was told part of the problem was due to the inability to find workers. This is an unintended (or intended?) consequence of lower unemployment combined with recent immigration polices pushing labor supply off-grid.

Who needs more rooms to hold more stuff anyway? Similarly, I noticed a rise in public storage facilities the past few years. So why do we need bigger homes and more storage facilities? Attachment to more and more material items?

Consider donating unused items to Salvation Army or Goodwill. Liberate yourself from attachment! Get a receipt so you can document the tax write off. Perhaps you can buy more stuff with the tax savings. 🙂

Americans could be killing the McMansion for good
Business Insider

New homes sit next to undeveloped lots in a subdivision in San Marcos, California February 29, 2012. The McMansion became a symbol of prosperity leading up to the recession. – Homebuyers today are emphasizing quality over quantity. – The typical McMansion is not considered the sound investment it once was. For many Americans, perhaps nothing better symbolizes pre-recession excess than the McMansion. If you live in a suburb of one of America’s major cities, you’re likely familiar with the idea of Read the full story

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Rather than call the economy a “mess” and point to one measure and say “GDP growth is historically low at 2% rather than 3%,” this evidence-based article provides numerous measures and context. For instance, did you know that the economy added an average of 200,000 jobs/month for 76 consecutive months? Did you know median household income increased 5.2% from 2014 to 2015, the fastest single year gain since 1968? How about cutting the budget deficit from 9% of GDP to 3%?

Time will tell if the current administration will improve on the same collection of measures presented in this article. I wonder if there is a financial instrument available to execute a parlay bet on unemployment, GDP growth, income gap, and budget deficit…

Nevertheless, I encourage everyone to consider the full set of measures and make their own decision on whether or not the economy is a mess. Then, use the same measures and criteria 4 years from now and see if the economy is worse off (losing jobs, widening wealth gap, larger deficits, etc.), in the same “mess” (e.g., adding 200,000 jobs/month, positive wage growth, deficit reduction), or doing better (e.g., a budget surplus, reduced income and wealth gap, adding 400,000 jobs a month, 4% GDP growth, etc.).

-Dr. Moore

Trump says the economy is a ‘mess’ — here’s the truth about Obama’s economic legacy
Business Insider

President Donald Trump addresses a joint session of Congress. President Donald Trump has been trashing the economy and his predecessor’s legacy lately. For example, in his free-wheeling Feb. 16 press conference, Trump said he “inherited a mess” from President Barack Obama. His newly minted Treasury Secretary Steven Mnuchin followed suit a week later by telling the Wall Street Journal that Obama’s policies are to blame for the slower-than-normal growth the U.S. has experienced since the financial Read the full story

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Why deregulate the more profitable than ever financial sector? Is it simply to say you reversed what your predecessor accomplished without regard to consumers and financial stability?

I do hear the argument that small community banks struggle with compliance costs. Perhaps we shouldn’t throw away the entire regulatory framework just to save a handful of small banks. Perhaps a better approach we be to adjust regulation to provide relief to the smaller banks while maintaining regulations on the larger banks that enjoy record profits with those regulations anyway.

A pastor once said “Rules are needed when there is an absence of love.” I for one don’t believe larger profit-motivated banks love consumers. We just saw the recent financial crisis and the Wells Fargo’s fake account scandal as evidence. Thus, as the SF Fed Chairman said during “Meet the Fed” last year: “we need rules and referees.”

Just my two cents,

-Dr. Moore

The problem with Trump’s plan to boost Wall Street: Banks are more profitable than ever
Denver Post

By Renae Merle, The Washington Post Wall Street has never been more profitable and that could be a big problem. The banking industry has cheered President Donald Trump’s promise to roll back regulations put in place after the financial crisis to rein in Wall Street. But the industry’s record-setting profits complicate the arguments for rolling back those rules, which banking analysts have said could boost their profits even more. The country’s nearly 6,000 banks – from large players like Bank of Read the full story

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Let me begin with a quote from this article:

“Just ask the Chinese, whose Great Wall took 2,000 years to build and failed to keep out invaders.”

So, even with modern technology, this science-based article suggests building this wall could take a very, very long time. I wonder if someone, friends of the administration, will get a no bid contract to rush through the surveys and start building a wall destined to fall down due to poor design and nature. Before even getting started there are private landowners, perhaps Native American burial grounds, endangered species, etc.

Perhaps the whole idea of a border wall is a big waste of time, money, and energy.

What Geology Has to Say About Building a 1,000-Mile Border Wall
Smithsonian

Compared to erecting a marble palace or high-steepled church, a wall may seem relatively straightforward—it isn’t Read the full story

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Let me steal a Nike tagline: “Just read it”:

http://www.npr.org/sections/ed/2017/02/04/513220220/betsy-devos-graduation-rate-mistake

Shaking My Head (SMH)…

Nevertheless, I look forward to seeing my students in person and in class. Finish in four!

The already-innumerable hypocrisies and conflicts of interest are growing at an exponential pace.

First, the commerce secretary Billionaire Wilbur Ross who offshored 2700 jobs since 2004. Now, we have the Labor Secretary pick who is also an outsourcer that also likes to use immigrant workers. Commerce and Labor secretaries that profit from outsourcing. Now, just how are they supposed to help American workers? Oh, perhaps we should just “wait and see.”

Perhaps it is time to ramp up the stock research to see which corporations will benefit from these picks.

http://time.com/4650794/andrew-puzder-labor-secretary-outsource-jobs/?xid=time_socialflow_twitter

I talked about this in class when the question arose about a “corporate tax holiday” and repatriation of funds. I questioned who would really benefit and concluded wealthy people with large stock portfolios.

As you can tell by people interviewed in this article, the working class, the “base” of voters for Trump, are not benefitting from stock market increases. In addition, they appear unaware of how Trump’s proposed policy changes will further widen the wealth gap.

Good to be in California…

https://apple.news/AlCI1S2nSSCGcha0oQTS_HQ

Half of Americans aren’t benefiting from Dow 20,000 – CNN