Category Archives: Web Article Review

The Retail Meltdown of 2017

The Atlantic has an article about “the retail meltdown of 2017”.

There have been nine retail bankruptcies in 2017—as many as all of 2016. J.C. Penney, RadioShack, Macy’s, and Sears have each announced more than 100 store closures. Sports Authority has liquidated, and Payless has filed for bankruptcy. Last week, several apparel companies’ stocks hit new multi-year lows, including Lululemon, Urban Outfitters, and American Eagle, and Ralph Lauren announced that it is closing its flagship Polo store on Fifth Avenue, one of several brands to abandon that iconic thoroughfare…

So, what the heck is going on? The reality is that overall retail spending continues to grow steadily, if a little meagerly. But several trends—including the rise of e-commerce, the over-supply of malls, and the surprising effects of a restaurant renaissance—have conspired to change the face of American shopping.

A lot of people like the car-dependent suburbs because they are perceived to be quiet, safe, and have good public education. But do people actually like sitting in traffic or have they seen that as a necessary price to pay. I like how the Place Shakers blog talks about this:

So what was the motivation [for the rise of auto-dependent retail]? I’d suggest it was (and still is, really) a desire for the easiest possible access to the stuff we want at the time — a desire so strong, it seems to me, that we began structuring our entire built environment around its fulfillment…

That’s why we built bigger arterials which fed bigger chain stores with more of the items we wanted to get our hands on. And why we built malls, where the variety of available goods seemed to increase exponentially. And it’s also why we established hefty parking minimums. Because you’re not effectively delivering on the promise of easy access to goods if you can pave the way to a warehouse full of stuff but leave no space to park within a few feet of the door. And parking within a few feet of the door is a fundamental part of the need being fulfilled.

But what happens when times and technologies change, and new ways of addressing our needs emerge? Suddenly we’re afforded new opportunities to prioritize how we spend our time and money.

In other words, we can get the stuff we want without spending so much time sitting in our cars, and we have figured out that there are other, better ways to be spending that time. I think something very similar is playing out with the trend of a lot of people working from home, at least on Fridays. By saving that commuting time to and from the office, your free up hours of your day for sleep, family, leisure, or extra productivity.

Philadelphia’s comprehensive subway system

Like Boston, New York, Chicago, and many European cities, Philadelphia had a plan to build a comprehensive subway system early in the 20th century. Hidden City Philadelphia describes why most of it was never built.

The “Taylor Plan” outlined creating subway lines along Chestnut, Walnut and Arch Streets, a loop to distribute riders of the Broad Street Subway around City Center, a spur into Northeast Philadelphia on Roosevelt Boulevard, and a line along the Benjamin Franklin Parkway to points north. In his plan, Taylor outlined this Parkway line as an extension of the Broad Street Line, which eventually opened with service from City Hall to Olney Avenue on September 1, 1928. The Parkway-Roxborough (or Northwestern) line would have started as an subway at City Hall and then proceed below the Parkway to 29th Street, where it would have continued as an elevated line to Henry Avenue, following that road north past Wissahickon Creek…

The majority of Taylor’s planned routes never came to be nor did Philadelphia’s original transit master plan. Taylor was replaced in 1916 by a more pragmatic transit commissioner, William S. Twining, who took exception to many of Taylor’s ideas. Where Taylor saw transit as a stimulant of growth, Twinning believed that lines should only be built where there was already demand…

The last gasp of an enhanced mass transit system came in July of 1929 when Mayor Harry Mackey signed an ordinance for a ten-year transit program that included the Ridge Avenue subway line, the Locust Street subway line, and several other never-built transit routes. The Mayor authorized a $55,000,000 loan that never materialized. Unlike New York City, Philadelphia did not move forward with subway expansion projects to alleviate the city’s crushing unemployment rate during the Great Depression.

It’s a sad missed opportunity. It could still be done, and in fact it is being done throughout the developing world today. But U.S. leaders generally do not have the vision or imagination to consider even the possibility of picking up a plan like this.

value added tax

Here is a Fresh Air interview with T.R. Reid explaining how great the VAT is.

This is the most important innovation in taxation in the last 60 years. This is a tax that’s like a sales tax on steroids. It’s a tax – our sales tax is called a retail sales tax. The tax is only collected when the retailer sells you the book. But on a value-added tax, a tax is collected when the paper mill sells the paper to the publisher and when a publisher buys ink from an ink company and then the publisher sells it to a wholesaler and a wholesaler sells it to a distributor, distributor to the bookstore and the bookstore to you.

That tax is collected at every level, and every time you pay the tax to the other guy, you report it to the government to get a credit for the tax you paid which means every penny of tax that’s paid is reported to the government. So the VAT turns out to be a very easy tax for government to collect and a very hard tax for taxpayers to avoid. And so if you put in a value-added tax, they’re very steady collections, and it’s hard to cheat on.

And you could use that money to reduce the rate of the corporate or the personal income tax. So 176 countries have adopted this innovation. It’s a great idea. The only countries that don’t have it are a bunch of countries so poor they have no taxes and the United States of America. So I say in my book in taxation, Americans are still banging out letters on a typewriter and dropping them in a mailbox, and everybody else is texting and using Instagram.

So let’s do it. There are actually some signs the Trump administration might consider it. But instead of eliminating income tax, they may be thinking of going after the Social Security payroll tax.

augmented reality and Rainbow’s End

This video is meant to convey a concept of what augmented reality could look like in the not-too-distant future. Which reminded me of Rainbow’s End, a fantastic Vernor Vinge novel set in the not-too-distant future. In Rainbow’s End, people have wearable computing and contact lenses that allow them to project pretty much anything they want onto the world, from basic information to, yes, strange fantastic beasts. The dark side of the novel is that weapons of mass destruction have also progressed quite a bit, and various governments and groups are fighting that behind the scenes unbeknownst to most of the people and their gadgets.

best practices for sidewalk closures

Here are some best practices for sidewalk closures published by the city of Oakland, California. In a nutshell, contractors have to provide a walkway rather than make pedestrians cross the street in downtown areas, expect for very short periods. The walkways have to be ADA accessible. If the walkways take up a bike lane, there has to be a safe place for the bikes to go. Barriers have to be substantial enough to actually protect pedestrians if vehicles hit them. I could walk 5 minutes in any direction in Philadelphia and see every one of these principles violated.

An American Sickness

The New York Times has a review of a new book called An American Sickness: How Healthcare Became Big Business and How You Can Take It Back. Here’s an excerpt from the review:

Rosenthal thinks the health care market is different, and she sums up these differences as the “economic rules of the dysfunctional medical market.” There are 10 — some obvious (No. 9: “There’s money to be made in billing for anything and everything”); some humorous (No. 2: “A lifetime of treatment is preferable to a cure”) — but No. 10 is the big one: “Prices will rise to whatever the market will bear.” To Rosenthal, that’s the answer to Scalia’s question. The health care market doesn’t work like other markets because “what the market will bear” is vastly greater than what a well-functioning market should bear. As Rosenthal describes American health care, it’s not really a market; it’s more like a protection racket — tolerated only because so many different institutions are chipping in to cover the extortionary bill and because, ultimately, it’s our lives that are on the line…

The difference between the United States and other countries isn’t the role of insurance; it’s the role of government. More specifically, it’s the way in which those who benefit from America’s dysfunctional market have mobilized to use government to protect their earnings and profits. In every country where people have access to sophisticated medical care, they must rely heavily on the clinical expertise of providers and the financial protections of insurance, which, in turn, creates the opportunity for runaway costs. But in every other rich country, the government not only provides coverage to all citizens; it also provides strong counterpressure to those who seek to use their inherent market power to raise prices or deliver lucrative but unnecessary services — typically in the form of hard limits on how much health care providers can charge.

In the United States, such counterpressure has been headed off again and again. The industry and its elected allies have happily supported giveaways to the medical sector. But anything more, they insist, will kill the market. Although this claim is in conflict with the evidence, it is consistent with the goal of maximum rewards to (and donations from) the industry. As a result, Medicare beneficiaries have prescription drug coverage (passed by Republicans in 2003), but Medicare administrators have no ability to do what every other rich country does: negotiate lower drug prices. In January, President Trump said drug companies were “getting away with murder” because they had “a lot of lobbyists and a lot of power,” insisting he would get Medicare to bargain. Should we really be surprised that the dealmaker in chief dropped the subject after meeting with pharma executives earlier this year?

At the individual level, there are really only two things I can think of to do. One is to attempt to shop around for health care. If you call your doctors office or hospital and ask for the price they charge for a particular service you are considering buying, which is how every other market works, they are likely to laugh at you. Your insurance company might actually help though. I have tried this with Blue Cross Blue Shield with limited success, but it definitely takes time and effort. The second option is to go abroad for checkups, lab work, and elective procedures. It’s not that hard to combine a vacation with a doctor or dentist visit. Insurance companies will generally cover it, because it will almost always save them money, but you definitely have to talk to them in advance. Foreign hospitals (I have experience in Singapore and Thailand) will sometimes bill U.S. insurance companies provided you have a letter form the insurance company up front. Otherwise you might have to front the cash and do the paperwork for reimbursement when you get back.

Like I said, all this takes time and effort, but there are significant savings to be had. So why aren’t third parties stepping into the vacuum to make comparison shopping and medical tourism easier for the masses?