=>from xkcd.com, by (author unknown) May 01, 2013 at 02:00AM
Everywhere you went around Austin this past week, there were people queuing up for things, Grumpy Cat, the GroupMe Grill, the Twitter party, Salt Lick BBQ.
One startup fête was so packed even a founder couldn’t get in immediately. “If only all these people were daily active users,” one person at the same party quipped, on the app’s lack of popularity relative to the line outside.
“The most valuable part of a trade show is seeing where the lines are,” Bing Gordon told me at KPCB’s private SXSW lunch event, which didn’t have a line on purpose. Like a Petri dish of demand, the conference was a good, if flawed, gauge of which brands could generate “buzz.” Hence every marketer and their mother flew to Texas to hawk their wares, with Oreos and Cap’n Crunch joining Uber and TaskRabbit in a four-day-long exercise to acquire unique users.
The equivalent of startup steroids, hype isn’t necessarily a bad thing. As a new startup you’re judged by where you are today — nowhere. When you’ve got nothing, hype, manufactured by blog posts and marketing gimmicks among other efforts, is a tried-and-true way to raise venture capital and capture the imagination of early adopters. Not that many early-stage startups can tell a VC “Look at what we did”; but quite a few can say “Look what we’re going to do.”
The gulf between that promise and the satisfaction of that promise is driven by hype, and it creates a situation in which a company’s or person’s brand is further along in the market than their product is. Hype = potential.
This works for all new entrants to a space — hype for a VC means access to better deals. See A16Z, which, at four years in, is already considered a top-tier VC despite not having a decades-long roster of returns (they do have a slick domain name, though). The trick is building a brand where people want to work with you; there’s a reason a PR person has become the best accessory for many venture folks.
While hype’s network effect can help you acquire customers, if you court it you’re taking a bigger risk — you have to eventually fulfill expectations. When you go creating hype, the clock starts ticking. The pressure is on to satisfy the gap between what your brand promises and your actual product/value add. Don’t let your hype write a check that your product can’t cash, because the pressure can cause your company to lose focus.
The road to the Deadpool is filled with startups whose products never lived up to the noise they made, most recently Formspring. The overhyped Color, which sold to Apple for low-digit millions, was compared to Google by Sequoia, which led its $41 million dollar funding round. But let’s not pick on whipping-boy Color; Foursquare, Zaarly, Highlight, Path and countless others, all for one reason or another, made a big headline splash and, for one reason or another, failed to live up to initial expectations and had to recalibrate along the way.
“Being overhyped means you have the wrong product at the right time,” investor David Tisch noted. “The brand and PR got too far ahead of the product, or they built the wrong product, or a bad product, or didn’t execute well.”
Perhaps the idea that hype can harm you if you don’t manage expectations is the strategy behind Snapchat’s shunning of the media spotlight. It had no presence at SXSW despite being the social app of the moment (or at least one of them). The management team even ditched the Crunchies, where it won “Fastest Rising Startup.” The founders are as surreptitious as their products.
Snapchat shows us that whether intentional or not, avoidance can at times be part of the hype strategy. And that hype is a necessary, but not sufficient, condition of success: Success will lead to hype — blog coverage, awards, etc., but hype won’t necessarily lead to success.
Pinterest, a startup that eschewed the tech media early on, is even further proof of this. At a $2.5 billion valuation, the company has convinced investors that it will eventually have a commerce ability and will eventually bring in meaningful revenue. Pinterest’s hype is writing a big check. But many believe that its product will make good on its vow, and that is where the magic happens.
As Foursquare struggles to live up to its hype, Mailbox, an app that has over half a million people still lined up just for the privilege of using it, cashed in on what was perhaps the most lucrative product relaunch in tech news history — getting Dropbox to place a nine-figure bet on the hope that the app will one day be able to expertly handle email attachments. It doesn’t at the moment.
One could argue, as Gartner does, that the tech industry on a macro level is an example of hype, promising that emerging technologies will actually create the future world we want to live in.
We’ll see.
=>from Don’t Let Your Hype Write A Check That Your Product Can’t Cash | TechCrunch, by (author unknown) March 24, 2013 at 01:42AM
I stuck my neck out in January, saying that Cyprus was “certain” to default. After all, the Europeans weren’t willing to come up with the €17 billion needed to bail the country out, and EU economics commissioner Olli Rehn told the WSJ’s Stephen Fidler that Cyprus would have to restructure its debt. But now the bailout has arrived, and — in something of a shocker — there’s no default. Instead, €5.8 billion of the bailout is going to come directly from depositors in Cyprus’s banks, in the form of what the EU is calling an “upfront one-off stability levy”.
Don’t for a minute believe that this decision is part of some deeply-considered long-term strategy which was worked out in constructive consultations between the EU, the IMF, and the new Cypriot government. Instead, it’s a last-resort desperation move, born of an unholy combination of procrastination, blackmail, and sleep-deprived gamesmanship.
The details aren’t entirely clear yet: we’re told that deposits of more than €100,000 are going to have to pay a tax of 9.9%, for instance, but it’s not obvious whether that applies to all of the large deposit or just to the amount over €100,000. And there’s still a real chance that the Cypriot parliament could scupper the whole deal. But for the time being, everybody’s going on the assumption that the deal will go through, that Cyprus will get its €10 billion bailout from the EU, and that everybody with a Cypriot bank account in Cyprus (a group which includes members of the UK military) will see their accounts taxed by at least 6.75%.
In January, I said this wouldn’t happen:
The last thing that Cyprus or any other country needs is a bank run, which will leave the national balance sheet in the classic pinch where “on the left, nothing’s right, and on the right, nothing’s left”. What’s more, in many ways the precedent of forcing depositors to take a haircut would be even more damaging than the precedent of imposing a haircut on Greek bondholders: at that point there would be really no reason at all to have deposits in any Mediterranean country.
It might seem a little bit like shutting the stable door after the horse has bolted, but the lines in front of broken ATMs certainly suggest that there will indeed be a substantial bank run out of Cypriot banks when they reopen on Tuesday morning. (Cyprus’s loss, here, is likely to be Latvia’s gain.) Cyprus has been relying up until now on its status as an offshore financial center, especially for Russians. That has bloated its banks with deposits, and if the deposit bubble bursts, the government has no money at all to bail out the banks. Cyprus’s president, Nicos Anastasiades, said today that he was forced to choose this path because the only alternative was the collapse of Cyprus’s two major banks, with “catastrophic” consequences. What he didn’t say is that those banks aren’t remotely safe yet — not with the prospect of a massive bank run hanging over their heads.
And of course it’s not only Cyprus where a bank run is a very real fear. If bank deposits can be seized in Cyprus, they can be seized in other EU countries as well. Ed Conway has a fantastic post explaining exactly why this is a horrible idea:
Given that this policy was not merely rubber-stamped but engineered by Eurozone finance ministers and the IMF (indeed, the IMF wanted an even deeper cut of deposits), it sends a disquieting message to anyone with deposits in a euro area bank. Although the ministers were quick to insist that this is a one-off and is “exceptional”, anyone even vaguely acquainted with the initial Greek bail-outs will remember precisely how long such exceptions last.
“The best the rest of the world can hope for,” says Neil Irwin, “is that Cyprus’s case is sufficiently unique that it won’t spark panic in Athens and Madrid (or in Lisbon, Dublin and Rome).” But his post is headlined “Why today’s Cyprus bailout could be the start of the next financial crisis”, which gives a reasonably good idea of how optimistic he is that any bank run in Cyprus will be contained.
And Europe won’t be home dry even if depositors in Portugal do decide to keep their money in their home country on Monday morning. That might make this bailout look like a brilliant wheeze. But the consequences of this choice are permanent: countries like Ireland and Portugal might not be at risk of a deposit tax right now, but they’re still getting bailed out on a continuous basis, and the more fraught the bailout negotiations become, the more likely it is that the EU will insist on bailing in depositors. It’s an option on the table, now, and as a result a deposit run is surely more likely to happen whenever a Eurozone country finds itself in need of a bailout. Which, of course, is always the worst possible time for a bank run.
From a drily technocratic perspective, this move can be seen as simply being part of a standard Euro-austerity program: the EU wants tax hikes and spending cuts, and this is a kind of tax: “a one-off wealth tax”, as Matt Yglesias puts it. Other taxes would raise less money, or if they didn’t they would be more harmful to the Cypriot population, since much of this one is going to be paid by Russians. Cypriots are sadly going to have to pay somehow, and although this is an unpleasant way of forcing them to do that, it’s also extremely effective and almost impossible to replicate by any other means.
But there’s something sacred about bank deposits, and especially about insured bank deposits. The one part of this scheme that no one is defending is the 6.75% tax on deposits less than €100,000 — the level to which Cyprus guarantees all deposits. As Nick Malkoutzis puts it,
Anastasiades also has to explain to Cypriots why small-time depositors have to pay a similar levy to the one some eurozone countries supposedly demanded so alleged Russian oligarchs would be forced to pay for bailing out the island’s banking system. Furthermore, he has to inform them why the Cypriot government’s pledge to guarantee deposits up to 100,000 euros – supposedly even in the most extreme circumstances – is not even worth the paper it was written on.
What we’re seeing here is the Cypriot government being forced to break one of its most important promises — the promise that if you put your money in the bank, and your deposits total less than €100,000, then they will be safe. What’s more, there’s no good reason for insured deposits to be hit in this manner: the same amount of money could be raised just by taxing the uninsured deposits at a slightly higher rate. The insured depositors are being hit, it seems, just so that the uninsured depositors can be taxed at single-digit rather than at a double-digit rate.
Meanwhile, people who deserve to lose money here, won’t. If you lent money to Cyprus’s banks by buying their debt rather than by depositing money, you will suffer no losses at all. And if you lent money to the insolvent Cypriot government, then you too will be paid off at 100 cents on the euro.
This is more by accident than by design. As Joseph Cotterill explains, Europe dragged its feet on Cyprus for so long that it effectively missed the deadline for doing a bond restructuring. It takes time to put that kind of a deal together, and there simply isn’t enough time between now and Cyprus’s next big coupon payment to do that. As a result, the EU found itself with a massively reduced menu of options: either fund the bailout itself, in full — an option which the Germans were adamant would never happen — or force a haircut on Cyprus’s depositors. Given the balance of power in the Eurozone, it comes as no surprise that in this battle, Germany won and Cyprus lost.
They won dirty, too: by forcing a tough all-night negotiating session in which Anastasiades was given what you might call an offer he couldn’t refuse. Either confiscate deposits wholesale, or see those deposits rendered even more worthless when the ECB cuts off its funding to Cypriot banks, a decision which would — through devaluation and insolvency — lead to depositors losing as much as 60% of their money.
The big winner here is the ECB, which has extended a lot of credit to dubiously-solvent Cypriot banks and which is taking no losses at all. And although they might wake up bruised, the big Russian depositors are probably winners too, given that they risked losing everything and will end up losing just 10%. Finally, of course, there are all the hedge funds who have been betting that the Cypriot government won’t default: they’re all popping Champagne right now.
The big loser are working-class Cypriots, whose elected government has proved powerless in the face of decisions driven by Germany, and who are now edging towards fury. The Eurozone has always had a democratic deficit: monetary union was imposed by the elite on unthankful and unwilling citizens. Now the citizens are revolting: just look at Beppe Grillo. Across the continent, they’ve lost their democratic right to determine their own fate at the ballot box, and instead they’re being instructed what to do by Germans. Now, in Cyprus, they’re simply and directly losing their money.
Someone with €8,000 of life savings in the bank can ill afford to lose an arbitrary €540, but that’s exactly what is going to happen. The Cypriot parliament is probably not going to revolt this weekend, but any politician who votes for this bill is going to have a very, very hard time getting re-elected. This decision is important not only because of the precedent it sets with regard to bank depositors, but also because of the way in which it points up just how powerless all the Mediterranean countries (plus Ireland) have become. More than ever before, it’s Germany’s Europe. That’s bad for Cyprus — and it’s not even particularly good for Germany.
=>from Felix Salmon, by Felix Salmon March 17, 2013 at 01:19AMFree messaging apps are a dime a dozen these days. There’s everything from Viber, to Skype, to WhatsApp to GroupMe. But while these startups concentrated on smartphone apps, it has been in the emerging markets that messaging over data has made a huge impression, and that has required paying attention to feature phones which use Java apps. We saw Saya.im appear only last year in Africa for instance. So starting way back in 2006, this is exactly what Nimbuzz, a startup originally from the Netherlands, did. And that strategy is paying off. Today it announces that it has just passed 150 million users globally and is doubling its users year on year.
Indeed, the growth is such that AC Nielsen now thinks Nimbuzz is putting the heat on Facebook messenger in Asia and especially in India, according to the latest Nielsen India Rankings. These put Nimbuzz into the top 4 consumer brands in India, ahead of Facebook Messenger, YouTube and Gmail amongst others.
The trajectory has been quick. Nimbuzz says it reached 50 million users in August 2011 and 100 million in August 2012, thus doubling its user base every year. It’s strongest in Asia, mainly India and Saudi Arabia. In India it is used by twenty-five million users, or a quarter of the entire mobile Internet population of the country. That also translates into over 1 billion minutes of calls made per month and more than 102 billion messages sent and received on Nimbuzz per month.
For the stats heads amongst you here they are:
• More than 150 million users in 200 countries: Asia (78 million including middle east); Africa (16); Europe (10); USA (9)
• 100-percent year-over-year growth
• More than 5,000 devices supported
• More than 1 billion minutes of Nimbuzz P2P, NimbuzzOut and SIP calls made per month
• More than 102 billion messages sent and received per month
• Android devices account for more than 35% of all active and new users
But Nimbuzz is not just mobile messaging, but also includes calling and entertainment via its smartphone apps which pull in their party messaging services. This means you can add, say, a horoscope chat app which you can interrogate rather like a text-based Siri. Brands also interact with users in a chat format. So developers have started developing games like Hangman for instance or an app called “Stranger Buddy” which is like Chat Roulette in text form. These are hugely popular in regions where text messaging works where data is thin.
Nimbuzz is available on all major platforms such as BlackBerry 10, Android, iOS, Symbian, Windows Phone, and J2ME, as well as Windows and Mac computers. It’s pre-loaded onto all local OEM handsets in India apart from Nokia, Samsung, LG.
Nimbuzz started in 2006 and came out of beta in 2008. It created an India office in 2008, but quickly became a full-blown Indian company.
Nimbuzz CEO Vikas Saxena says the appeal of Nimbuzz to users in thesemarkets is that it is as a “single platform capable of handling immense amounts of data for little or no cost at all.”
The company has produced an info graphic, but as TechCrunch is not fans of these, please just take it with a pinch of salt.
It’s investors include Mangrove and Naspers.
=>from TechCrunch, by Mike Butcher March 15, 2013 at 09:27AM
On Tuesday, Google paid $7 million to settle charges with a coalition of 38 states in relation to its privacy breaches. The 14-page agreement is pretty detailed, and includes promises from Google to spend a substantial amount of effort educating the public about the importance of securing wifi networks. (Which gives me a sad: I love unsecured wifi networks, and have yet to find any empirical data supporting the thesis that they cause real damage.)
On Wednesday, Google announced that it was shutting down Google Reader.
I’m not saying that the second event was directly caused by the first, but the two are linked. As the NYT explains today, the settlement is no less than an attempt to change the very culture of Google, to make it less freewheelingly Silicon Valley and more of a mature and responsible corporate giant.
Google Reader was a part of that freewheeling culture, although just how freewheeling Google was is open to debate. Om Malik has a fantastic interview with Reader’s founder, Chris Wetherell, who hacked it together with a small team and who never really managed to get Google senior management interested in the product or its potential.
“There was so much data we had and so much information about the affinity readers had with certain content that we always felt there was monetization opportunity,” he said. Dick Costolo (currently CEO of Twitter), who worked for Google at the time (having sold Google his company, Feedburner), came up with many monetization ideas but they fell on deaf ears. Costolo, of course is working hard to mine those affinity-and-context connections for Twitter, and is succeeding. What Costolo understood, Google and its mandarins totally missed.
But whether or not Reader was ever going to be a good business for Google, it was from day one a fantastic public service for its users. Google started as a public service — a way to find what you were looking for on the internet — and didn’t stop there. Google would also do things like buy the entire Usenet archives, or scan millions of out-of-print books, or put thousands of people to work making maps, all in order to be able to get all sorts of information to anybody who wants it. All of that was good business, as Daniel Soar explained in 2011:
Google is learning. The more data it gathers, the more it knows, the better it gets at what it does. Of course, the better it gets at what it does the more money it makes, and the more money it makes the more data it gathers and the better it gets at what it does – an example of the kind of win-win feedback loop Google specialises in – but what’s surprising is that there is no obvious end to the process.
The end to the process, it turns out, is the government — the Germans, of course, but also US states and many other authorities around the world. Governments love gathering data themselves, but they’re less excited when a private, for-profit company does it — and often does it better than they themselves can do it. What’s more, while many of their citizens are still excited about Google and its range of offerings, a lot of them are worried, too, that they’re losing their privacy and that Google has a scary amount of information about them.
Meanwhile, Google was becoming too big to manage, with far too many bits and pieces which could in theory help the broader company but which in practice, like Reader, just sat there using up resources and contributing very little in return. So Larry Page decided that he would start killing them off, and making Google more focused; I’m sure that decision was made easier by the fact that if Google now needs to control the amount of information it collects about people, it can’t have engineers freewheelingly making unilateral decisions to start collecting exactly that kind of information. Dick Costolo’s ideas were probably great in 2005; in 2013, they would be politically suicidal.
The result is that Google is going to be less of a utility, less of a public service, and more of a company with a constrained set of products. The problem with the death of Reader is that it was the architecture underpinning lots of other services — the connective tissue of just about all RSS readers and services, from Summify to Reeder to Flipboard. You didn’t even need to use Google Reader; it was just the master central repository of your master OPML list, all the different feeds that you were subscribed to. Google spent real money to provide that public service, and it’s going to be sorely missed. As Marco Arment says, “every major iOS RSS client is still dependent on Google Reader for feed crawling and sync.”
Arment sees a silver lining in the cloud, saying that with Google gone, “we’re finally likely to see substantial innovation and competition in RSS desktop apps and sync platforms for the first time in almost a decade.” I’m less sanguine. Building an RSS sync platform is a hard and pretty thankless task, it costs real money, and it might not work at all — especially in a world where less and less content is actually available in RSS format. (You can subscribe to my Tumblr feed in RSS format, but there’s no such feed for my posts on Twitter or Facebook or Instagram or Path or even Google+.)
RSS has been dying for years — that’s why Google killed Reader. It was a lovely open format; it has sadly been replaced with proprietary feeds like the ones we get from Twitter and Facebook. That’s not an improvement, but it is reality. Google, with Reader, was really providing the life-support mechanism for RSS. Once Reader is gone, I fear that RSS won’t last much longer.
=>from Felix Salmon, by Felix Salmon March 14, 2013 at 10:01PMA new paper by Giorgios Servas, John Byers, and Michael Mitzenmacher explores the relationship between a Groupon surge (like when a small bakery has to make 100,000 cupcakes) and a drop in Yelp ratings. Tim Worstall at Forbes explains:
Imagine that you are an enthusiastic and regular consumer of the finest chimichangas that you can find. You’ll likely have scoped out your neighbourhood, tested the chimichangas on offer and zeroed in on those places that make excellent ones. You might even provide reviews on Yelp pointing other enthusiasts for the comestible so as to guide them to the good places.
Now imagine that you’re not actually very worried about or interested in chimichangas. Or even, as with myself, not entirely sure what they are. And you see a Groupon deal offering, say, 50% off at Jimmy’s Chimichangas and you take it up. Heck, why not, it’s a good way to try them out with a decent saving attached. But if you’re uninterested, not sure what it is that you’re about to get, it’s not all that difficult to imagine that your subsequent Yelp review is less than glowingly enthusiastic.
If you prefer, a Groupon is going to attract in the marginal customers for whatever it is. And marginal customers are likely to be less enthusiastic simply because they are marginal customers. They’re marginals because the basic offering is not exactly aligned with their interests: thus the finding that marginal customers find the offering not exactly aligned with their interests or tastes is not entirely a surprise.
(HT: Mark McCrery)
=>from Freakonomics, by Freakonomics March 11, 2013 at 02:04PMTheir somewhat mysterious announcement, which refers to financial irregularities, can be read here.
On January 7, the auxiliary power unit (APU) of a Boeing 787 caught fire at Logan airport. The APU is a lithium-ion battery, roughly 1-foot cube, and the consequences of a fire can easily be catastrophic. There was no one on the plane at the time, which is lucky, because the fire was extremely difficult to extinguish, with firefighters encountering “no visibility” thanks to thick smoke. What’s more, the “quick-disconnect knob” was melted. In flight, these batteries control critical flight systems: they cannot fail.
And yet, twice in 58,000 hours of usage, the lithium batteries on the new 787 contrived to catch fire; this is obviously not something the FAA — or even Boeing, for that matter — can risk happening again. There’s really only one thing to be done: all lithium batteries on the 787 must be swapped out for nickel-cadmium or lead-acid batteries, which have the great advantage that they don’t catch fire.
The bigger story here, however, is about engineers’ hubris and regulatory capture. As the interim report from the National Transportation Safety Board says, the FAA was well aware, when Boeing said it wanted to use lithium batteries, that such batteries are inherently dangerous and have a tendency to catch fire whenever they are used elsewhere.
But Boeing persisted, and came up with some hilariously overprecise probability estimates. The batteries would only emit gas or smoke once every 10 million hours, the company calculated, and would only catch fire once every billion hours. The reasoning is bonkers: Boeing’s analysis “determined that overcharging was the only known failure mode that could result in cell venting with fire”. They then contrived to conclude that if they put in overcharge protections, the risk of overcharging would be brought down to one in a billion, and that therefore the risk of a fire would also be brought down to one in a billion.
As Steve LeVine notes, Nassim Taleb would take one look at that reasoning and simply laugh. For one thing, how on earth is it possible to determine that the risk of an overcharge is less than or equal to one in a billion? Probabilities that small simply can’t be measured. And more importantly, how did Boeing determine that the probability of a fire absent an overcharge was zero? There’s good evidence that neither of the battery fires were caused by an overcharge — but Boeing seems to have decided that fires caused for any non-overcharge reason were, literally, impossible. Once again, it’s incredibly hard to conceive of any coherent line of reasoning which could come to that conclusion.
But somehow the FAA accepted Boeing’s analysis at face value, and allowed Boeing to install lithium batteries on its planes, just as long as certain safeguards were put in place.
This is the same kind of literal quantitative thinking which helped cause the financial crisis. Put engineers in charge of something, and they’ll measure what they can measure, they won’t measure what they can’t measure, and they’ll protect against only the things they managed to foresee. And as all of us who spend our lives surrounded by electronic devices know, sometimes they fail. In a sense it doesn’t matter what the reason is: failure is just a fact of life, which is a real problem when failure could mean the fiery death of hundreds of people.
Statistically speaking, airplanes are safer today than they’ve ever been. And electronics are a key part of that trend: they might occasionally fail, but they are also increasingly good at preventing human error, or just at doing the things that fallible humans used to do, only much more reliably. That said, as airplane engineers stop being grease monkeys and start being coders, we’re losing a certain amount of holistic and heuristic understanding of how to ensure real-world safety.
If you basically outsource an entire airplane, as Boeing did, you lose your institutional ability to ensure that airplane is safe. And sadly, it seems that Boeing’s failures on that front will automatically cascade down to the FAA. The reports and post-mortems surrounding the lithium batteries’ safety will be very deep. Let’s hope the FAA is just as critical when it comes to its own decision to accept Boeing’s analysis at face value.
=>from Felix Salmon, by Felix Salmon March 08, 2013 at 10:04PMToday’s jobs report is an unambiguously positive one: America had 236,000 more jobs in February than it had in January, and the unemployment rate is down to 7.7%, the lowest it’s been since 2008, before Barack Obama was even sworn in. (Although, it’s still nowhere near the 6.5% at which the Fed will start thinking about tightening monetary policy.) Things are getting better, US fiscal policy notwithstanding, and it’s great to see construction in particular, especially non-residential construction, finally making a substantial positive contribution to the numbers.
All is not entirely sweetness and light, though, as Brad DeLong and many others have noted. The number of multiple jobholders rose by 340,000 this month, to 7.26 million — a rise larger than the headline rise in payrolls. Which means that one way of looking at this report is to say that all of the new jobs created were second or third jobs, going to people who were already employed elsewhere. Meanwhile, the number of people unemployed for six months or longer went up by 89,000 people this month, to 4.8 million, and the average duration of unemployment also rose, to 36.9 weeks from 35.3 weeks.
In terms of the economy, it’s not good enough to simply increase employment and decrease unemployment, if the proportion of people with jobs isn’t actually going up. Which is why this chart, from Calculated Risk, is the most important one to look at right now:
Both the employment-to-population ratio ad the labor force participation rate are much lower than they ought to be: if this is a recovery, the former in particular ought to be going up, rather than going nowhere. Yes, it’s important to ensure that the unemployed get jobs. But in many ways it’s even more important to try to create jobs for people who simply aren’t working, rather than just for the people who are actively looking for work.
To turn these ratios into hard numbers: there are 89.3 million Americans who are not in the labor force, of whom just 6.8 million currently want a job. The economy ought to be able to find good, rewarding jobs not only for the 6.8 million, but for a large chunk of the other 82.5 million as well. Just imagine what that would do for tax revenues: all our fiscal problems would be solved at a stroke!
=>from Felix Salmon, by Felix Salmon March 08, 2013 at 04:49PM
