Economics: Why People Love Big Tech And Politicians Hate Them

 (Drivebycuriosity) - It seems that the people love Big Tech but politicians hate them. There is a crusade going on and politicians on the left and right side of the political spectrum are bashing "Big Bad Tech". President Joe Biden signed an executive order to sharpen the regulatory controls and the US Congress introduced five antitrust bills aimed at limiting the power and size of Amazon, Apple, Facebook, and Google (iwf.org). Apparently politicians loath big corporations, they prefer Big Government. 

Is big really so bad? Apple, Google, Facebook & Amazon became huge because billions use their services and buy their products. Big Tech doesn`t need to be our friend, but the giants  have to behave friendly otherwise they would go out of business. Adam Smith declared “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest”. If the customers wouldn`t be served well, they would walk away. If Big Tech would be too expensive, too slow, too inconvenient, their customers would walk away. Consumers love Big Tech because they benefit from them. The Big Tech haters don´t understand these basic facts, maybe they don´t even care.

The crusaders ignore that Big Tech is doing a service for the society. Consumers benefit from Amazon because the company is reliable and delivers fast with reasonable prices. Even in the peaks of the pandemic Amazon has been capable to support millions of customers and was able to deliver a huge amount of goods to everywhere in the US in very short time. Amazon could fulfill the gargantuan task of supplying America in a crisis because of her sheer size, a dense network of fulfillment centers and a lot of experience in stocking goods and in logistics. They saved potentially many lives - especially of elderly and disabled individuals - by making it possible for them to shelter at home during the current pandemic, shop online and receive necessary goods at their front door in a short time.

Google´s search engines and maps make live easier. They help to find doctors, clinics, shops, restaurants and more - for free. Google`s YouTube provides entertainment & information without costs. Apple`s products & services like iPhones, iPads, iMacs & MacBooks make it easier to work, study and to get entertained at home. These products make living and working more efficient.

Google and Facebook`s social networks (including the Facebook`s daughter Instagram) help people to stay in touch, share ideas, allow people to gather virtually, , hold business meetings,  celebrate special occasions, and console distant loved ones from within their own homes ( reason ). We will likely never know how many lives have been saved by these services, many of which are free of charge (cei.org).

Big Tech companies are the engines of the economy because they are efficient and are growing fast, much faster than the rest of the economy, driving economic growth. Big Tech invest billions into new technologies and the enormous success of Big Tech is stimulating talents to start new & disrupting (innovative) businesses (me-too effect)  and animates huge venture capital funds to invest massively in newcomers, fueling competition & innovation. It seems we are experiencing a Cambrian explosion. According to Benedict Evans, "Tech startup creation has risen by three to four times in the last decade" (ben-evans ). There are so many new & rising companies which are changing society & economy - inspired and on the coat-tails of Big Tech.

Without Big Tech the inflation would be even worse. Since going online Amazon has been been obsessed with efficiency, cost cutting and delivering goods cheap, fast & reliably. They have been constructing a network of huge fulfillment centers which are very efficient and save a lot of costs. Customers spend muss less money & time when they get things delivered at home. "We see ourselves as the shock absorber, absorbing a lot of the costs so that the customer is not impacted and sellers are not impacted" ( Amazon). Amazon`s growth forces competitors like Walmart & Target to act similarly and to become more efficient & to curb their prices as well. Today Jet.com, owned by Walmart, and many other e-commerce companies are competing with Amazon which forces them all to sell at low prices. Google´s search machines & maps - which are free - help to find shops and other services with lower prices and intensify the competition as well.

The crusaders claim that Amazon, Google, Apple & Facebook have monopoly power and that the technology giants abuse their alleged power and do so harm to the economy. The bureaucrats ignore that the power of companies is always constrained by competition. When a corporation has success, her rising profits attract automatically others who want a share from the pie.  The Internet makes it very easy to compare prices and to switch to other shops, news providers & entertainers, sharpening the competition. Customers can choose the company which has the best quality, the best service and/or the lowest prices which gives the consumers a lot power. As a result, customers have more power than the corporations.

But the Big Tech haters don`t care.  Opportunistic senators like David Cicilline, Josh Hawley, Ken Buck, Pramila Jayapal and others are building their careers on Big Tech bashing. A law student named Lina Khan became famous by publishing an anti-Amazon pamphlet and President Biden put her on the top of the powerful Federal Trade Commission (FTC), America`s trustbuster authority. So-called progressives like Elizabeth Warren, Bernie Sanders and other politicians are harassing Big Tech, supported by antifa activists like Alexandria Ocasio-Cortez (AOC). They all want to sabotage Big Tech for ideological reasons.

Khan & Co.  want to implement more bureaucracy and foster their own careers. More regulation encourages corruption because powerful politicians & bureaucrats can blackmail corporations by threatening them to regulate them more (ssrn).  

The trustbusters are throwing sand into the gears of successful companies, which are the engine of the US economy. The crusade leads to more bureaucracy which " is the death of any achievement” according to Einstein. New regulations and inquiries reduce the productivity & efficiency of Big Tech companies; they shrink their abilities to further innovate because they are occupying management capacities and are slowing decision processes, making business more complicated and costly. 

The politicians from both parties want to profile themselves by bashing Big Tech. Their crusade gets a lot media attention which might attract potential voters and impress political leaders (including the President). The trust busters also aim to gain more power and acquire more access to tax payer`s money. Lina Khan & Co. seek to expand their budgets and demand more onerous reporting requirements, so they can expand their offices and hire more people which in return gives them more political influence, prestige and higher incomes. "All of this is coupled with an oversized federal presence for enforcement, from greater congressional oversight to enhancing the powers of both the Department of Justice and the Federal Trade Commission through expanded budgets, more onerous reporting requirements, and an invigorated use of merger retrospectives" writes Wayne T. Brough (aier.org ).

 Antitrust law is designed to protect the consumers but Washington`s trust busters don´t care about customers, they want to create a bureaucratic world as described by Franz Kafka. The uncertainty of political demands, let alone new regulations imposed through antitrust enforcement threats and action,  amounts to an enormous cost passed directly to American consumers through higher prices and reduced economic dynamism (insidesources). Big Tech are serving the consumers, the society, by spurring price reductions, delivering better quality & innovation. US politicians are making the world a poorer place by fighting the quartet of Google, Amazon, Facebook, and Apple that have helped so many Americans and are making the Covid-19 pandemic a little more bearable ( twitter).

 

Contemporary Art: Anne Samat @ Marc Straus Gallery New York

 

(Drivebycuriosity) - Contemporary art is full of discoveries. While walking on Manhattan´s Grand Street I passed Marc Straus Gallery, which had 2 interesting exhibitions (marcstraus ). I already posted about the funny images by Paul Pretzer ( driveby). This post focuses on works by Anne Samat (b. 1973, Malaysia).

 

 

according to the press release the artist "employs the South East Asian art of Pua Kumbu weaving, which she formally studied. She adds humble household goods from 99 cent stores to construct totemic wall sculptures."

 

On top of this post you can see "Eyes Are Like Angels But Heart is Cold #1" (2021,
Rattan sticks, kitchen and garden utensils, beads, ceramic, metal and plastic ornaments
120.5 x 95 x 5 in and 41 x 38 x 5.5 in (304.8 x 241.3 x 12.7 and 104.1 x 96.5 x 13.9 cm).

 

 

To be continued

Stock Market: Merry Christmas 2021

(Drivebycuriosity) - It`s Christmas again. Unfortunately the US & Europe are suffering another wave of Covid-19 infections caused by the Delta mutation and the even more aggressive Omicron variant. But here in the US anyone who wants it can get vaccinated, at least twice. And there are additional (booster) shots available, which apparently limit the severity of infections considerably. So, the mood is mixed.

Covid or not, the US stock market climbed in the recent days to a new all-time high. The S&P 500, the gauge for the US stock market, gained 26% year-to-date, 28% y-o-y and continued the positive trend of the recent years (chart below). 

 

 

 

 

 ( source )

I stay optimistic for the stock market. Stock prices are accompanying the seemingly eternally rising company profits. They are fueled by the accelerating technological revolution which got boosted by the Covid-19 crisis. It seems that the pandemic started a new Roaring Twenties, comparable to the boom phase which happened during the 1920s years after the Spanish Flu. 

Covid-19 accelerated the fundamental trends that have been shaping economy & society in the recent decade. The Covid-19 Pandemic changed many habits. The pandemic reduced the resistance against technological progress (faz.net ). The crisis forces many people to work, learn, shop,educate & entertain themselves from home which is fostering digitization and raising efficiency & productivity of the economy ( driveby ). During the pandemic the rise of the Internet gained even more speed and turned into a great leap. 

 

 

I suppose that the stock market will continue the climb in 2022 and beyond. Maybe we are at the begin of a new Roaring Twenties, comparable to the boom phase which happened during the 1920s years after the Spanish Flu. Companies restructured and reduced costs crisis significantly during the recession of the years 2008 and the recent pandemic in order to survive. They are getting fitter and more efficient than before. I believe that this learning process will continue and will translate into a long term trend of rising company profits & stock markets.

Merry Christmas!

P.S. The image above is created by Jeremy Miranda (American, born 1980

Science Fiction: Shards Of Earth By Adrian Tchaikovsky

 

(Drivebycuriosity) -  Space operas are an amazing genre. There are no limits for the imagination of the author. Adrian Tchaikovsky`s novel "Shards of Earth" describes a future universe where humans have colonized many worlds but still struggle with many conflicts and a mysterious alien enemy (amazon ).

Tchaikovsky has many grand and unique ideas which are the reason why I read science fiction. There is a mysterious and hyper-powerful alien enemy, called "the architects". I will not tell what this enemy does (this is a spoiler free blog), but his bizarre actions are unique & fascinating.  

Tchaikovsky`s protagonists don´t travel to other worlds - or galaxies - through wormholes or portals as usual in modern scifi, instead they use an alternative way which leads to surreal scenes soaked with psychedelic horror. Another reason to read science fiction. There are also a lot alien and strange worlds & species, another feature of top-notch science fiction. These elements lift Tchaikovsky into the class of Heinlein, Asimov & Clarke.

But "Shards" disappoints anyway. The novel is way too long and too ambitious for my taste. The grand ideas - so brilliant they are - don´t fill the more than 500 pages properly. Tchaikovsky filled the plot with too many ridiculous skirmishes and the dialogs are one the (low) level of contemporary TV series. "Shards" could have been an amazing novella over 100 pages or even a strong novel over 300 pages. 

 

Contemporary Art: Ogino Yuna`s Erotic Abstracts @ Mizuma & Kips New York

 (Drivebycuriosity) - Contemporary art is full of discovies. On a recent walk on Manhattan´s Grand Street I passed Mizuma & Kips gallery. They showed works by Ogino Yuna, painted in Japan during the COVID-19 outbreak. The exhibition is called "Relate" (mizuma-art).

 

 

I like her mixture of abstract expressionist painting with erotic scenes. On top of this post you can her "Embrace P-25821" (oil on canvas).

 

 

To be continued

 

Books: A Personal History Of Thirst By John Burdett

 (Drivebycuriosity) - Whom does the law system serve? Do courts, judges & lawyers serve the good or the bad? The society or the criminals? If you want an answer you might find one in the novel "A personal History of Thirst" by John Burdett ( amazon).

The novel, set in England in the 1970s, is written in first person by James, a criminal lawyer. He tells about Oliver Thirst, a criminal who has been one of his clients, and his former girlfriend Daisy, an alternatively thinking American. Thirst is dead, murdered (this is a spoiler free blog).

The novel is about three persons, who are somewhat attracted to each other. Burdett, who is a former English Barrister himself, focuses on the deficiencies of the law system (the English law is not much different from the American or German). He also muses about the causes of criminality, the horrible prison regime, dysfunctional families, sex, England in the 1970s and much more.

I was entertained but I found the described relations not very plausible. They were too irrational, too self destructive and too aggressive for my taste, but I understand that rational behavior is not a story (man bites dog instead of dog bites man). The Amazon page of this book has a lot very positive comments. It seems that Burdett`s plot caters many tastes. Who am I to judge? 

Economics: The Case For Self-Driving Cars

 

(Drivebycuriosity) - There is a lot resistance against self-driving cars ( twitter). The skeptics don`t  trust computers, they believe more in human drivers. The aversion towards self-driving vehicles is often emotional and aggressive. The opponents follow the luddites who have been fighting against technological progress for centuries. The technology haters are called "Maschinenstürmer" (machine stormers) in German. Even one of the most popular heavy metal groups named themselves: "Rage Against the Machine". 

The skepsis is unfounded. Self-driving cars cause fewer accidents. Computers have a much shorter response time than humans. They don`t drink and drive, they don´t text while driving. Robots don`t drive aggressively, they don´t take drugs, they aren´t distracted, they don`t feel the need to impress by speedy driving. Self-driving cars do not engage in car races, they don´t do suicide by driving, they don´t fall asleep while driving and they adapt their speed to the traffic situation. They behave strictly rational.

Computers don´t make mistakes and they don´t behave unlawful. A computer needs just a nanosecond to respond to a surprising event (like a child on the street), much faster than a human brain. And with the assistance of sensors the computer can respond to the traffic situation (hydroplaning, ice, potholes) much better than a human driver. Fewer accidents mean less lost lives and save a lot of costs for the economy. 

Self-driving cars are more efficient, because computers can calculate the optimum speed, track and driving rhythm. Therefore they use less energy to move from place A to place B. Self-driving cars will burn less gasoline which reduces the consumption of fossilized energy and create less exhaust, dampening the greenhouse effect.

Fewer accidents will translate into lower insurance costs, so driving will get cheaper which also will reduce the costs for Uber, Lyft and taxi rides. China`s Baidu already started offering driver-less taxi rides in Beijing and other cities ( cnbc). 

Welcome to the self-driving car.

Contemporary Art: Have Fun With Paul Pretzer @ Marc Straus Gallery New York

 (Drivebycuriosity) - Contemporary art is full of discoveries. While walking on Manhattan´s Grand Street I passed Marc Straus Gallery, which had 2 interesting exhibitions (marcstraus ). This post focuses on works by Paul Pretzer, an Estonian artist (born 1981) who lives now in Barcelona. 

I like his surreal & funny collages. I display my favorites here, a very subjective selection as usual. On top of this post you can see "Arrangement Blue" (2021, oil on wood)

 

 

Above this paragraph follow "Rider" & "Gideon & George".

 

  

 

Above you can see "Schwanenlied"; "Right here" & "The Beauty of Magnetism".

To be continued

 

 

Photography: Autumn In Manhattan

  (Drivebycuriosity) - The days are short, the sun shine is weak, it`s autumn again in Manhattan. The autumn light creates pastel and ocher tones, with a lot of shades, an occasion for interesting shots.

 

Above some pics I shot on the Lower East Side, a gentrifying area, which blends old with new, small buildings with towers.

 

The Empire State Building seems to more beautiful than usual.

An amazing sunset on 5th Avenue.

A Broadway segment in late afternoon light

 

The Washington Square Park looks wonderful

 

 

Old buildings, lamps & autumn trees create a nice combination 

The Madison Square Park is worth a visit as well

 

More shots from the Lower East Side.

A rock band played on a chilly evening in the Thompson Square Park.

 

Manhattan seen from New Jersey shore

Autumn or not, Manhattan´s huge construction sites are still active.

To be continued

Economics: Are Robots The Answer To The Supply Crisis?

 (Drivebycuriosity) - It seems that we are in a supply crisis. Prices for goods and services are rising steeply. The US inflation rate climbed to 6%. This is mainly caused by the ongoing Covid-19 pandemic. Lockdowns, quarantines, sick leaves & the fear of infections reduced the labor force. The shrinking labor force slows industrial production, reduces services and fractionates the supply lines. 

CNBC reports that "workers quit jobs in record number" ( cnbc). The reduced supply of goods & services meets a sharp rise in demand, fueled by trillions of Federal Reserve dollars and generous government checks. People want to come back to normality and started spending again. The result is a widening gap between demand and supply which is getting filled by rising prices.

How can we get the economy to produce more? Apparently we need more robots and similar machines to replace the missing labor force.  Robots don´t get sick. They don´t spread  diseases, they don´t strike, they are not unhappy with their jobs, they are trustworthy & reliable.

Machines, including computers, have been substituting labor for a long time. There has been a continuing automation trend since the 19th century at least. Machines overtook many dangerous, dirty, heavy, tedious and unhealthy tasks. Even farmers are using more and more robots, for instance for harvesting strawberries or milking cows (wikipedia). Machines - often steered by software - are reducing the costs of producing things significantly, making them cheaper and more affordable. Hence robots have been raising the living standard of everybody by reducing the costs of most things considerably.

Apparently the secular automation process was not fast enough to compensate for the Covid-19 shock. I assume that companies are now ramping up their investments in software and machines to get more productive & flexible and to compensate for the scarcity of labor and pre-products. A recent Federal Reserve survey of chief financial officers found that at firms with difficulty hiring, one-third are implementing or exploring automation to replace workers ( time.com).

The CEOS of Microsoft and other Internet/software based companies report that their customers are boosting their investments in cloud computing, AIs and other software applications to get more productive and efficient. Robots "improve speed and accuracy of routine operations, particularly in warehousing and manufacturing" notes the consulting firm deloitte. And Forbes writes that "autonomous technology is seen in warehouses and stores, on highways and in mines, and in last mile deliveries". They also report that "drones are being used in warehouses and yards for inventory management. Using a combination of computer vision technology, artificial intelligence, and RFID sensors, drones are able to perform inventory management tasks within the warehouse or yard faster and more accurately than the human eye". 

Amazon invests a lot of money into robots which help to optimize the supply chains, they also reduce the infection & accident risks for workers. Robots also help restaurants to deal with the scarcity of labor. "Domino’s Pizza Inc. is putting in place equipment and technology that reduce the amount of labor that is required to produce our dough balls", reports time.com.  3D-printers also can replace workers, even in constructing. "A 3D printer can build the walls of a house in as little as two days versus weeks or months with traditional construction materials" notices today.com.

Robots are the answer to the supply crisis.