Puncturing an Inflation Myth



Inflation is here — it’s just not evenly distributed. When we say “inflation is virtually flat these days,” the truth of those low numbers hides a more complex reality. Actually, plenty of prices are rising, while others are dropping (The Washington Post) — averaging out to a nearly flat decade. What’s costing more? Education. Childcare. Healthcare. Food. And of course housing. What’s costing the same or less? Cars. Furniture. Clothing. Electronic stuff. Software. And toys. As you may notice, the first list is dominated by services, the second by goods. Also: The first list is full of necessities, the second is mostly optional or luxuries. The economists who performed this study say that technological efficiencies and international trade keep whittling down the price of manufactured goods, while services don’t benefit from those cost-cutting pressures. In other words, as long as people plan to keep eating and sleeping and raising families, their cost of living will probably rise. These numbers tell us a lot about today’s political passions — and also underscore where the business opportunities lie.

Stock options for cooks and drivers, too. Startups are expanding the spectrum of ownership. At one end of this range, there’s the conventional world of corporate ownership (invest your money, get your share). At the other end lies the idealistic world of worker cooperatives. Somewhere in between you’ll find Silicon Valley’s hybrid model: share stock options with employees. Startups have traditionally used rich option packages to reward founding employees or to lure key talent. Now some NewCos in the platform economy are trying to expand that model by offering equity to their contractors (Fast Company). Josephine, the Bay Area startup that offers homemade meals from neighbors’ kitchens, plans to share 20 percent of its equity with its cooks, starting next year. And Uber competitor Juno has reserved half its shares for its drivers. Option-spreading is no panacea — worker-shareholders might find themselves facing novel conflicts (higher wages or higher profits?). But these ownership experiments are worth watching: At the least they’ll yield valuable data and map how to look for better results the next time we try to solve this problem.

Amazon tries out one-click part-time jobs. Tech employees at Amazon in Seattle can participate in a new pilot program that lets entire teams work part-time, while retaining their benefits (GeekWire). Maybe it’s a reaction to the drubbing Amazon took in the media a year ago when The New York Times painted its culture as cutthroat and workaholic. Or maybe it’s just another effort to figure out how to hang on to technical talent in a crazy-hot market. Either way, it’s a good sign when even the most hard-driving of workplaces acknowledges employees’ need for flexibility.

Give the capitol a capital budget. The Democrats and Republicans agree on almost nothing these days, but there’s one enthusiasm their candidates share. Hillary Clinton wants to spend lots of money on new infrastructure projects — roads, trains, airports, and other public works. Donald Trump? However much Hillary wants to spend, he’ll spend twice! Only one thing stands in the way of this New New Deal: Traditional Republicans hate to throw cash around, and they control Congress. Here’s an idea (from John Cassidy in The New Yorker): Split federal expenditures into operating and capital budgets, the way most businesses do, so that voters and lawmakers can more clearly distinguish between short-term expenses and investments with long-term payoffs . Such an approach might stand a chance of breaking Washington’s partisan logjam. Then again, the federal budget process is hypercomplex and dysfunctional, and if we wait for reforms before starting to break ground, we might never see a new road or bridge.

Fear and loathing on the startup trail. “Your wifi enabled coffee maker downloads the perfect instructions to brew a cup of Blue Bottle — and you don’t have to do anything.” That’s daybreak in Sunil Rajaraman’s “This is Your Life In Silicon Valley,” (Medium), a sharply observed, lightly satirical day-in-the-life of a startup’s director of business development — fiction, but stitched with real-life detail. Through this lens, Valley life is an app-driven existence, charged with aimless envy of rivals who’ve lucked into jackpot fortunes and never-to-be-requited yearning for a cheaper, quieter life somewhere else, anywhere else. Rajaraman’s jaunty narrative dances merrily on the boundary between celebration and mockery. Is this life paradise by the smartphone light, or electronic inferno? Probably, a little of both.

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