Thursday open thread

Talk amongst yourselves.

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117 thoughts on “Thursday open thread

  1. In the end, even Amazon has behaved according to this rule: In the modern tech economy, cities that already have wealth, opportunity, highly educated workers and high salaries will just keep attracting more of them.

    Of all its options across North America, the company appears to have narrowed its sights to New York and suburban Washington for a huge expansion of high-paying tech jobs. The 11th-hour decision to split its “second headquarters,” as Amazon is expected to announce shortly, makes the pattern only more glaring.

    A small number of rich and internationally connected cities keep increasing their economic advantages — and as a result, the inequality widens between them and everywhere else.

    Because of the pull of “superstar” cities, economists and policymakers fear what will happen elsewhere if the winners keep winning while many smaller communities are left behind. It’s possible Amazon executives genuinely believed a year ago that they might find a more surprising home (many observers are not so charitable). But, ultimately, the superstar magnet pulls them, too.

    “It’s just absolutely hard-wired into technology economies,” said Mark Muro, a senior fellow at the Brookings Institution. “It’s not just a sort of interesting thing that happens — it’s inherent to the technology.”

    Tech companies feed on highly educated and specialized workers, specifically dense clusters of them where workers and companies interacting with one another are more likely to produce new ideas. Washington and New York, as it turns out, are two of the most highly educated regions in the country, with already large pools of tech workers.

    “In that sense, we look naïve in even raising the question that this could have gone to a different kind of Midwestern, heartland place,” Mr. Muro said. “There wasn’t really an alternative.”

    By choosing to go where high-skilled workers and other prosperous companies already are, Amazon will effectively ensure that more companies follow it in turn. Opportunity will concentrate further. The differences between, say, New York and Scranton, Pa., will widen. This divergence, underway for about 30 years, has accelerated since the Great Recession.

    Between 2010 and 2017, according to Brookings, nearly half of the country’s total employment growth occurred in just 20 large metro areas (places that are home to about a third of the population). The Washington and New York regions alone accounted for about half of the net increase in business establishments across the country between 2007 and 2016, according to the Economic Innovation Group, which tracks economic inequality across the country.

    “This is a very rational decision for Amazon to make in the micro; in the macro, it reinforces a really challenging trend for the U.S. economy,” said John Lettieri, the president of E.I.G. “The divide between prosperous and distressed regions is growing wider. And it’s because of things like this.”

    In previous economic expansions, E.I.G. has found, the benefits were more broadly felt, and growth was driven by more places, including rural communities. Today, data points about the national economy no longer describe well what’s happening on the ground in many places.

    Part of what has changed is that the American economy has become dominated more by companies like Amazon, which produce services instead of manufactured products, and thus employ software engineers instead of assembly line workers.

    Drop a big Amazon headquarters into Washington or New York, and economists expect the 50,000 workers there to be more productive than if the same 50,000 jobs were dropped into Indianapolis. Simply putting them in New York, near so many other tech workers, increases the likelihood that Amazon invents more services, connects to more markets, makes more money.

    Those added benefits are so strong, economists say, that it’s worth it to companies like Amazon to pay more — a lot more — for office space and employee salaries in New York City.

    “If you are in the business of making new things — whether it’s a new product, or a new way of delivering things, or a new service — and it’s something that is unique, and it keeps changing and it needs updating, the most important factor of all is human capital,” said Enrico Moretti, an economist at the University of California, Berkeley. “It’s not like making soap, or like making textiles.”

    Mr. Moretti’s latest research suggests that scientists who move from small to larger clusters of experts produce more inventions, a pattern that plays out regularly in Silicon Valley. Looked at another way, a majority of patents come out of the largest metro areas. If we spread their inventors evenly across the country, Mr. Moretti said, we’d probably have significantly less innovation in America.

    In its request for proposals, Amazon asked for good airport connections, public transit and strong universities. But it’s not quite right to say that New York and Washington will probably win because they have these things. Rather, the presence of these amenities makes possible what Amazon was really looking for: that intangible thing that happens when certain kinds of workers are clustered in the same place.

    Communities that vowed to rapidly build transit from scratch missed that point. But of course the Amazon request didn’t say, “We’re looking for knowledge spillovers and agglomeration effects.”
    Image

    Long Island City in Queens is expected to share the spoils with Crystal City in Virginia.CreditJoshua Bright for The New York Times
    In one sense, it’s good for the country that companies like Amazon are as productive as they are, where they are, thanks to these forces. But higher national productivity is no comfort to communities that aren’t gaining jobs. Reconciling the two sets of places is one of the country’s deepest economic challenges.

    “This is too profound a structural shift to reverse,” Mr. Lettieri said. “It’s not going to reverse. That’s just the nature of the economy today.”

    But maybe we can slow down this shift, he said, or find better ways to ensure that more people get to benefit from what’s happening in superstar cities, and that more places get to join in this process. Mr. Lettieri argues that what’s good for New York doesn’t have to be bad for other parts of the country.

    It plainly looks that way in Amazon’s case, however, because of the public sweepstakes the company invited. These 50,000 jobs that look likely to go to New York and Washington are 50,000 jobs that won’t go to smaller finalists like Columbus or Nashville. Or to even smaller places, like Tucson or Fresno, that dropped out of the running months ago.
    Emily Badger writes about cities and urban policy for The Upshot from the San Francisco bureau. She’s particularly interested in housing, transportation and inequality — and how they’re all connected.

  2. Anyone have suggestions for a multi-device charging station? We bought one 6 months ago or such, and it has started to sort of randomly not charge devices. So we obviously need another one, but I’d like the next one to last a little longer, thanks very much.

    That discovery also made me think about how much things have changed in the past @12 years. Back in 2006 when we did the kitchen, I thought I was so ahead of the game: we set aside two stretches of countertop for electronic stuff. One of the areas was the phone area: it has a phone jack, an outlet for the answering machine, and room for a pad of paper and pen-holder. The other area is the device area: I made the builder put two outlets there, so we’d have four plugs for charging, and there’s an appliance garage to hide the mess. Twelve years later, we’ve never plugged the phone or answering machine back in; instead, the outlet is used for DD’s wireless speaker that she runs in the kitchen and to charge a device. On the other side, all four outlets are used to charge devices, and one of those is the plug for the six-device charging station that is now dying. And that doesn’t include the laptops, which live in the office.

    I swear, if I had realized the degree to which consumer devices would take over the world in the following decade, I could be a multi-multi-millionaire by now. It’s like you plug them in and they reproduce like rabbits when your back is turned.

  3. I may have related this here before and if so and you remember better than I, I apologize. Along the lines of the article’s ‘the rich get richer theme’:

    28 years ago next week DW & I closed on our house here; the same week my sister and her DH closed on their house in Marin County, CA. Within 1%, we paid the same for our houses. Her house would fit in my basement, which has the same sq ftage as our condo in LA had (~1400 sf) — and on which we made a bunch of $$ so we could afford the home we bought. Anyway, fast forward to today and per Zillow & Trulia my house has appreciated 41% and my sister’s has more than quadrupled in value. The difference in values, about $800k, means they’ve substantially funded their retirement nestegg via their primary residence while ours is funded mostly from our 401k contributions.

    The downside for them is that when retirement comes I know they are a lot less liquid in their asset mix than we are so they’ll have to tap their home equity via a reverse mortgage or something like it to help fund their lifestyle, since moving out of the bay area to someplace perfectly nice, like Sonora where they can find houses for under $300k is out of the question (or so they say). I’m interested to see if that holds true when retirement really comes.

  4. A couple of weeks ago, we were talking about early signs of dementia, vs. normal aging or forgetfulness. A friend of mine who is a geriatric-care manager just sent around a promotional piece with an article addressing that issue. I thought it was very good, so I am copying it here, in case anyone finds it helpful:

    “Clues that your aging parents may need help.

    Frequently in my practice, an adult child explains to me that his parent is experiencing small signs of memory loss that the family had been attributing to normal aging changes. While it is true that the aging brain will begin to slow in it’s recollection of memories, the memories are very much still there and retrievable. However, there are signs that can alert you to an actual problem, and I encourage you not to ignore them, as tempting as that may be.

    Here are a few to watch out for when visiting aging parents over the holidays:

    1. Mom’s lipstick

    Do you notice changes in a loved ones general appearance? Weight loss or weight gain? Increased frailty? Maybe bruises or other signs that they may have fallen? ‘Changes in their personal grooming habits?

    Scenario: Your mother’s appearance has always been important to her. She always looks polished and well dressed for any occasion. This year, you notice her lipstick is smeared, her clothes are hanging off of her and look thrown together instead of put together. She has some noticeable bruising on her arm, and her hair doesn’t look like it’s been set for months. At the same time, she tells you she is driving to church every Sunday without a problem, and she has made a wonderful looking apple pie. You think to yourself “this is just normal aging”, but the truth is, they are not.

    2. Dad’s car

    We know for a fact that driving remains a very important key to independence as one ages. No one wants to give this up before they are ready (and they are never ready). However, I would encourage you to look over the car for any concerning nicks or dents or any other signs of damage. If your dad mentions backing into another car in a parking lot, and your reaction is “well, that could happen to me too”, I would once again encourage you to dig deeper at the possibility that your dad may be nearing a time to retire from driving.

    3. The mail

    You’d be surprised at the clues you’ll gain from rifling through your parent’s mail. Look for unopened bills, unpaid notices, and even charitable giving letters. Unopened and unpaid bills are one of the early signs of a memory problem. In addition, older adults are often vulnerable to scammers and your loved one may not realize who they are actually giving money to. What’s worse, they may be giving multiple times forgetting they have already given.

    Note: If your parent’s always paid their bills late, this may not be concerning. However, if dad was an engineer who never was a day late on a payment, and never carried a balance on a credit card, this is a major sign of a problem!

    4. A smelly fridge

    The refrigerator can give you major clues about any potential issues. Look through it and see what foods are there. Hopefully you will find various nutritious foods. Check dates on any perishable items looking for spoiled foods. Check for multiples of the same item- 4 ketchup bottles, 6 jars of jelly, anything that might indicate forgetting mom was forgetting she already had an item when she went out shopping. Make sure the appliances look like they are all working properly, and that there are no signs of an accidental fire such as charred stove knobs, potholders or pot bottoms.

    5. Ground hog day

    About 5 years ago, I sat next to my grandmother who suffered from Alzheimer’s Disease. At one point she looked right at me and said “are you from around here?”. She was friendly and polite, and I understood this was the disease. She proceeded to ask me the same question about 10 times (and I answered, trying not to give away on my face that I had answered before.)
    Your dad’s forgetfulness may not be as drastic, but repetition of stories on a regular basis is another sign of a deeper issue. If dad is repeating his same story multiple times, or he has forgotten recent events such as a doctor’s appointment or visit from a loved one, I encourage you to not take it lightly and to reach out to the primary care doctor or other professional.
    Good luck out there! Coming to terms with aging parents, memory loss and illness are especially difficult during the emotional holiday times. Remember to breath deeply and reach out for help when needed!”

  5. The Myth of the Skills Gap

    The idea that American workers are being left in the dust because they lack technological savvy does not stand up to scrutiny. Our focus should be on coordination and communication between workers and employers.

    I think the title’s a little misleading, because they spend a certain amount of time talking about helpdesk stuff, which isn’t that hard to staff.

    https://www.technologyreview.com/s/608707/the-myth-of-the-skills-gap/?utm_source=newsletters&utm_medium=email&utm_content=2018_11_07&utm_campaign=clocking_in

  6. The horror. I was Facebook live for 7 minutes today. I put my phone, apparently unlocked, into my pocket. It started broadcasting the rest of my morning, including a few yells at the kids and a conversation with a visiting friend about how I’m hosting brunch today for a handful of local moms. And I find them kind of annoying. Wonder if anyone was tuned in for that special tidbit. Ready to delete FB forever. And move to another country.

    It only stopped when the neighbor came to clue me in. It could have been so much worse.

  7. Ada – I’m glad it was minor stuff. Another reminder why I don’t actively do Facebook, I just look at my kids’ pages every couple of months or so.

  8. Within 1%, we paid the same for our houses.

    Then why do you assume differing 401k balances? Or did she pay a greater portion of her income PITI than you did?

  9. Wow Ada! That is pretty much one of my nightmares.

    My mom has also deleted her FB account. She joined just to look at grandkid pics and read what they’re doing. But of course she didn’t know how to set the privacy features and such, and so within a week her account was sending out invitations to her entire contact list to “like” a porno website. Which, of course, then attracted a huge quantity of strange men who were more than happy to like that site and kept posting on her page asking for more lovely pics. I spent parts of two days with her walking through the various privacy settings and resetting everything, but she still couldn’t figure out how to unfriend the people who had already responded to the initial invitations and she just got frustrated with the whole thing and gave up.

    It strikes me that if tech companies want to attract more older users, they need to move away from the business method that allows all and sundry to get all of your data unless you very carefully jump through 73 separate hoops the moment you initially sign up.

  10. Rhett – we have always made a lot more $ than they have; their PITI was probably close or even over the (then) 28% guideline while ours was way below 20% at the start. I know we’ve been able to put away a lot more in our retirement accts, since DW has worked all these years and my sister was SAH/part-time/low wage until very recently. They refi’d at some point (which I only know about because my mom co-signed) and while it was for a shorter term, I think it still extended beyond the original 30 years, so they’ve just been able to pay less, but they’re not out from under it yet.

  11. Anyway, fast forward to today and per Zillow & Trulia my house has appreciated 41% and my sister’s has more than quadrupled in value.

    Inflation since 1990 has been 93.1% so in 2018 terms (assuming a $200k purchase price) you’ve lost $183k in 2018 dollars. Which only stands to reason as residential real estate hasn’t appreciated above inflation in 100 years. If a place in Marin is up by 400% then there are corresponding places like your that have lost half their value in inflation adjusted terms.

  12. https://www.carvana.com/

    I saw an ad for this company – had not heard of them before. Has anyone used them?

    Don’t think we’ll be in the market for another car for a year or 2 – depending on whether I pass mine down or we buy a ‘kid’ car – but interesting concept. You can pick up your car from vending machine!

  13. Rhett, they should have picked Newark. Exact same advantages as Queens, but far better optics.

  14. Rhett – I agree we’re behind inflation in appreciation of our home but I don’t think it’s as bleak as you make it out to be, again assuming $200k purchase price.
    200k + 93% (1990-2018 inflation) = $386k
    200k + 41% (actual gross appreciation) = $282k
    I’m behind by “only” $104k!

  15. I’m really surprised, truly, that the RTP in North Carolina didn’t make the cut. It has everything the article cites and a strong infrastructure. Maybe the crazy politics took it out of the running? Louise – any insight there?

  16. I’m really surprised, truly, that the RTP in North Carolina didn’t make the cut. It has everything the article cites and a strong infrastructure.

    Is there an actual city there? I seem to recall mostly car dependent sprawl.

  17. Rhett, interesting article. A few opinions
    1) The article doesn’t discuss the value of dual career couples both being able to get optimal jobs in larger areas or the value of getting a new job without moving when you are downsized by your tech company. Both of these are real advantages of larger cities.
    2) As a society, we haven’t decided whether we should subsidize working class people so they can live in large, expensive cities. I’ll imagine that in a free market economy, many people would make the choices that my colleagues’ children have made, which is to live in an expensive city (Bay Area, Seattle, Boston, NYC are top choices) for ~10 years until they get married/have kids and then move somewhere with lower costs and fewer career opportunities. Childcare and housing costs and school quality change the “where to live” calculus for people who choose to have children.
    3) I agree that economists find some benefit to clustering of skilled employees, but this doesn’t have to happen in large cities. Some companies are successful by giving employees the option to live in small cities. Dow’s headquarters is in Midland, MI, and Warsaw, IN, is the artificial hip-and-knee development capital of the world, to name two examples from my family besides myself. My company wishes our main global site were located somewhere more hip and closer to an airport, but the finance people complain about turnover and rapidly increasing salary costs in the hip places. SE Asia hasn’t remained as cheap as it was 20 years ago, when the company set up operations, and the Ireland site just closed, in part due to costs. Because large cities have been advantaged for 30 years doesn’t mean their advantage won’t level off or that the costs of locating in expensive areas will pay off for all companies. Corporate finance people follow the herd, in my experience- they don’t want to say, “I need to start my software engineers in one of these three locations for their first 3 years but then many of them could telecommute and 80% of my non-software engineer employees can work in Nashville or Indianapolis.” Far easier to do the analysis by putting everyone in northern Virginia, even though your accountants can be anywhere.

  18. The article doesn’t discuss the value of dual career couples both being able to get optimal jobs in larger areas or the value of getting a new job without moving when you are downsized by your tech company.

    You and your negative outlook bias:-) You also have the increased possibility of being poached by an employer with a better offer.

  19. I suspect that NC politics was a factor. But also, RTP doesn’t have the best transit, and its image is kind of staid and suburban. The tech folks there are not the hipster brogrammers that Rhett is picturing, but rather moms and dads with 4 bedroom houses. At least, that is the image. And yeah, Silicon Valley is pretty suburban too, but Amazon wasn’t looking at Silicon Valley.

  20. “Which only stands to reason as residential real estate hasn’t appreciated above inflation in 100 years.”
    We’ve bought and sold 8 houses over the years and long ago stopped including the value of our equity in our net worth. Houses are to live in; they really are consumption. I think people have been done a grave disservice by the idea that a house is an investment or nest egg. Sure, there are lots of folks who have made money on their houses, but ask anyone who had to sell in 2009….

  21. . The tech folks there are not the hipster brogrammers that Rhett is picturing, but rather moms and dads with 4 bedroom houses.

    My understanding of Amazon’s business model is that it’s a sweat shop that hires kids out of college and works them like galley slaves. But after a few years, with Amazon on your resume, you can write your own ticket. They aren’t looking for mid career folks.

  22. It seemed that in the 90’s, the tech industry, besides outsourcing to India, was rapidly suburbanizing. That has completely changed. No one outsources anything important any more, and high tech has decisively moved into the most urban cities. I just read that Google is going to expand its already huge Manhattan facility, for example. I think it has to do with what has been going on in the high tech industry for the last 20 years – a move to far more sophisticated software and hardware systems than we saw in the 90’s. In the 90’s, many of the tech jobs were basically code monkey jobs, but now, much of the high value software requires very advanced knowledge.

  23. It seemed that in the 90’s, the tech industry, besides outsourcing to India, was rapidly suburbanizing.

    1990 was also the peak of the crime wave. Murders in NYC are down by 90%, shootings by 80%, car theft by 99%, etc. since the 90s. That’s a big part of the changing relative appeal of city vs. suburbs since the 90s.

  24. Mooshi, high tech has moved, on average, into urban cities, but with Internet connectivity, that’s a WANT more than a MUST. DH is the key technical witness for a patent lawsuit about the algorithm he uses to do high volume data transfer via FPGA and the key issue is whether that particular algorithm is necessary or whether alternate algorithms would work just as well. He can think about algorithms and patents anywhere, not just here. (although when he IS intensely focused on that topic for a few days, don’t expect him to remember to make supper, buy milk, or pick up DD at childcare)

  25. “‘The article doesn’t discuss the value of dual career couples both being able to get optimal jobs in larger areas or the value of getting a new job without moving when you are downsized by your tech company.’

    You and your negative outlook bias:-) You also have the increased possibility of being poached by an employer with a better offer.”

    You say “negative outlook bias,” I say “BTDT 3.5 times in 8 years” . . . . ;-)

    DH really should’ve taken that first opportunity in Boston.

  26. Mooshi, high tech has moved, on average, into urban cities, but with Internet connectivity, that’s a WANT more than a MUST.

    For certain rolls yes but for a huge collaborative effort like Google’s self driving car or Amazon’s Alexa, things move a lot faster when everyone is in the office.

  27. WCE,

    If we turn on a spigot to increase demand for consumer products, we need to have some factor that measures the portion that goes to a domestically made product. That portion in the last ten years must have changed in a very major way. You want a measure? How about asking for the sourcing from China as a percentage of the goods sold at Walmart plotted as a function of time? When people run to Walmart and spend their money, the majority of that money may go to the Chinese economy. I don’t know the numbers, but it’s a knowable question.

    That’s an important thing to think about when deciding between taxes cuts, paying off debt, infrastructure spending, etc.

  28. Responding to a bunch of things:

    Re Amazon – it makes much more sense to go where there are already potential workers and infrastructure. It can be hard to attract workers to smaller cities. DW’s company was bought by a company with its HQ in Monroe, LA a few years ago. They tried to get people to relocate there and nobody wanted to go.

    Mooshi, why are you so fixated on Newark? Aside from the “optics”, what are the advantages over Queens?

    Re Facebook – I refuse to install the app or messenger because it takes over your phone. I use the website, and to respond to a message I have to request desktop site because the mobile site tells you to install the messenger app.

    Re houses: If you’re only looking on the difference in purchase price vs sale price, then yeah, it’s not a great return. But you also have to factor in that if you didn’t buy a home, you’d have to rent one because you have to live somewhere. So the actual investment amount is much smaller than your purchase price.

    For example, our mortgage + tax + insurance is around $1600 or so. To rent something comparable would be maybe $2000 a month (I could be way off, and it would have been closer to $1000 when we bought the house 18 years ago) + renter’s insurance. There are obviously more costs associated with owning, so factor that in, but it’s also a fixed payment whereas rents generally go up over time. The point is that in the 18 years we’ve lived in our house, even at $1,200 a month, we’d have spent $260,000 on rent. Our house has probably double in value, so a 50% return over 18 years isn’t that great. But subtract out $260k that we would have paid if we didn’t buy the house, and it’s a hell of an ROI.

    I’m sure the finance gurus will pick this apart :)

  29. Rhett, thanks for cutting and pasting.

    “The Washington and New York regions alone accounted for about half of the net increase in business establishments across the country between 2007 and 2016, according to the Economic Innovation Group, which tracks economic inequality across the country.

    “This is a very rational decision for Amazon to make in the micro; in the macro, it reinforces a really challenging trend for the U.S. economy,” said John Lettieri, the president of E.I.G. “The divide between prosperous and distressed regions is growing wider. And it’s because of things like this.”

    Well, the first observation is that an organization formed to find “economic inequality” is probably going to find it.

    But perhaps the EIG would have more credibility if it were located in, say, Gary or Detroit instead of DC.

  30. DD,

    Good point. I think it comes down more to being someone who says do I want to put $3k/month into my 401k(combined) vs. buying a house that’s $600k more expensive because real estate is such an amazing investment. Or someone who is deciding between a car, boat, vacations, etc. and a nicer house and decides on the more expensive house because it’s consumption that’s also an amazing investment. It’s not an amazing investment for most people.

  31. “The Washington and New York regions alone accounted for about half of the net increase in business establishments across the country between 2007 and 2016, according to the Economic Innovation Group, which tracks economic inequality across the country.

    That doesn’t support that idea that gov’t regulation is as big of an issue as some people want to claim.

  32. NoB, thanks for posting the dementia info.
    “At the same time, she tells you she is driving to church every Sunday without a problem,”

    One thing about my MIL was that she said things like this, with a perfectly straight face and absolutely no indication of dishonesty, when she had not been behind the wheel for more than a year. The family knew, of course, but hospital social workers and others who were evaluating her cognitive ability had no clue. At that point, she was getting ready for the assisted living move, so no harm done, but it did lead us to wonder how many other times she had misled her kids into thinking that things were fine when they were not.

  33. “The downside for them is that when retirement comes I know they are a lot less liquid in their asset mix”

    The other downside, not just in retirement, is living in a much smaller house.

  34. “In its request for proposals, Amazon asked for good airport connections, public transit and strong universities.”

    What are the strong universities in Crystal City and Long Island?

    When I think of metro areas with strong universities, DC and NYC aren’t top of mind. Boston comes up first, then the bay area, then a bunch of areas that could include NYC and DC. When thinking of areas with universities with strong tech programs, DC doesn’t come up at all, and NYC lags behind places like Pittsburgh and SoCal.

  35. Finn – it cuts both ways. From ~2003 – 2014 when we had 5 highly mobile people including 3 very loud young people it often seemed like our house, ~2800sf, excluding the basement, was too small. Now, aside from the fact that we need someplace to keep a fair portion of our crap until we get rid of / donate it, I think our house feels too big a lot of the time. Our living & dining rooms have almost always been museums and although now I do a lot of my book reading in the living room, they’re mostly unused space. Quite obv, the guys’ 3 bedrooms & their bathroom are used very little now, so we could feasibly have a much smaller place than we do. I would never want to downsize away space that will someday be used by visiting kids/partners/grandkids, and since it’s paid for the ongoing out of pocket is minimal, but we clearly now have more space than we need.

  36. The other downside, not just in retirement, is living in a much smaller house.

    Yeah, but it’s in Marin.

  37. Finn – strong universities in the immediate areas:
    in NYC – I’d put Columbia & NYU; DC – Georgetown

    Plus , maybe a self-fulfilling prophecy, lots of (young) people want to live in those places and will willingly move there, especially if there’s company relo $ to help, after they’ve finished up at top tech schools in other areas.

  38. When thinking of areas with universities with strong tech programs

    But how much of Amazon is tech? If Amazon wants to expand into retail pharmaceuticals, how much of that is tech vs. partnering with drug companies, pharmacy benefits administrators, getting through various FDA and state level regulatory hoops, marketing the idea to the public and to prescribers, how can they leverage the pharmaceutical info to pitch you other products you might like, etc.

  39. “I would never want to downsize away space that will someday be used by visiting kids/partners/grandkids”

    So the downside for your sister and her DH is lack of space for visiting kids/partners/grandkids, not to mention friends and other family.

  40. but it’s in Marin

    not in any of the fancy parts (Ross, Sausalito, Tiburon, Kentfield, Larkspur)

  41. Anybody ever bought tires online from e.g. Tire Rack or Tirebuyer, and had them installed at a garage local to you that was part of their network of installers? Do you think you actually saved money or got better tires for the same money as you would have by just buying from your regular repair place?

  42. LFB — I bought a multi-device charging station similar to yours after you commented here. Mine is still going strong but I’ve only had it for four months. We use it every day and it’s very convenient. But I’ll be watching if it gives out in a the next few months. ;)

    My H just bought a new tv for our bedroom. The price was about one third of the one it replaced, which was only about 3 1/2 years old. It’s huge, 55″ I think. But it’s too big to fit on the bureau so my H put a piece of particle board on top of the bureau to hold it. It gives a trailer park sort of look to our bedroom. It’s a Roku model, and apparently now I have to push two buttons to watch cable shows instead of just one. I’m sure there are some new features that I’ll learn and get to to like. Maybe.

  43. I would think the new NYC Amazon and Google jobs would be a boon for schools like MM’s and others in the region.

  44. DC has Georgetown, GW, U of Maryland, George Mason, American U. Plus Va Tech has a graduate tech program in northern Virginia.

  45. Wow, Ada’s FB live incident is scary. In other tech news, my DD showed me how to enlarge the text on my mobile phone so now I can actually see what emojis I’m sending.

  46. Scarlett, four of those (I didn’t think of UM as DC area) came to mind, and I don’t know that any of them have CoE. So yes, strong universities even if a cut or two below Boston and bay area, but lagging WRT strong technical programs.

  47. “But it’s too big to fit on the bureau so my H put a piece of particle board on top of the bureau to hold it.”

    I suggest you wall mount the TV. Even as screen areas have been getting larger, TV weights have been going down, so this has been getting easier, and less expensive wall mounts will work with the newer, lighter TVs. Many wall mounts allow you to easily move the TV around to optimize viewing.

    This will also free up the top of your bureau to accumulate miscellaneous items.

  48. July, something as inexpensive as this might work with your new TV:

    https://www.monoprice.com/product?p_id=21951

    If you don’t need the articulating arm, a basic tilting wall mount is even less expensive, but I don’t recommend those.

    The TV in our kitchen has an articulating wall mount that allows us to swing it around for optimal viewing. We love it.

  49. “If you’re only looking on the difference in purchase price vs sale price, then yeah, it’s not a great return.”

    And don’t forget that they are often leveraged, sometimes quite heavily.

    “It’s not an amazing investment for most people.”

    I think it’s an amazing investment for many people who otherwise would not accumulate assets, and whose net worth is largely the value of their homes.

  50. @Finn — yes, that kind of thing.

    Also, U Md is definitely DC area — it’s right on the beltway, just on the other side of DC.

    I actually agree that those are strange choices, though, given their stated criteria, which suggests that there were other issues at play somewhere behind the scenes.

  51. Really rough math:

    If Fred and his DW put down 20% and their house is now worth 41% more than purchase price, and if his after tax PITI over the years roughly offsets the cost of housing over that time, then their down payment has appreciated 205%, and they’ve also insulated themselves against increases in housing costs.

  52. A very few people can really affect the geographic inequality issue.

    E.g., Seattle has a thriving tech economy in large part because Gates and Allen are from there, and Bezos moved there.

    A major factor in Silicon Valley’s emergence was Hewlett and Packard going to LSJU.

  53. It isn’t only about where they went to school, but where they want to live after school. A lot of kids want to live in NYC, San Fran, LA, Austin, Chicago, DC metro etc. They want to live where many of their friends intend to live after school. Also, since when is it ok to just look at the number of HSS schools in a metro area to determine whether there is a highly educated population living?? seems snooty and doesn’t make sense.

    Also, Long Island City is not in Long Island. It is in Queens, but you could practically walk there from Manhattan because it is so close to the east side of Manhattan. It is also close enough to all of the other trendy neighborhoods where kids want to live now in Queens and Brooklyn.

    I am going to a Citibank reunion tonight. I didn’t work there for a long time because I wasn’t a Citi fan, but they did open a huge office tower in Long Island City when there was nothing there in the later 80s/early 90s. nothing. There are tons of apartments there now, and it is new housing. It is just one or two stops on the subway from Manhattan. It took me less time to get to meetings in Queens from Citi headquarters on Park Ave than it did to get to a meeting in lower Manhattan.

  54. Kerri, that reminds me that LSJU has a (should that be an?) NYC campus, although it’s not a technically focused.

  55. then their down payment has appreciated 205%

    vs. 844.78% for the S&P 500. Again, not amazing.

  56. LfB, we don’t have a charging station like that. Instead, we have chargers at our desks and in our bedrooms, and one in the kitchen, which are the places where in our house we spend the most time, so we can have our phones nearby while they’re charging.

    This is possible because we’ve accumulated a bunch of USB wall cubes, and bought a bunch of cheap but functional charging cables, including most recently a 10-pack from Amazon.

  57. “vs. 844.78% for the S&P 500. Again, not amazing.”

    Not amazing relative to the S&P 500, but much better than 41%.

    And for those who wouldn’t have saved had they not had buying a house as a reason to save, amazing.

  58. And for those who wouldn’t have saved had they not had buying a house as a reason to save, amazing.

    No argument there. But otherwise… not amazing.

  59. Fred, Costco currently has $70 off on a set of Bridgestone tires with $0.01 per tire installation, so if you like what they stock then it may be hard to beat that price.

    I’ve seen similar specials this year on other brands.

    This special is through 11/15, so this weekend their tire centers will probably be really busy.

  60. Finn,

    I also wondering about a chicken and egg issue. Did they not accumulate assets because they were house proud? Or would they have never accumulated assets under any other circumstances?

  61. “But otherwise… not amazing.”

    For totebaggers, I agree, not amazing; in large part, a consumer choice, often for bigger and more luxurious quarters than they would have lived in had they chosen to rent, and often in neighborhoods without a lot of rental availability.

  62. Rhett, for many people, I don’t think it’s a chicken and egg situation at all. I think that had they not bought their houses, their net worth would be pretty close to what it is now less the equity in their houses.

  63. “It seemed that in the 90’s, the tech industry, besides outsourcing to India, was rapidly suburbanizing.”

    In SV in the 90s, companies were running out of space and also competing quite fiercely for employees.

    Many of them were allowing workers to telecommute, and some were establishing telecommute centers/branch offices outside of the SV core. This was partly to attract workers who wanted to live outside the SV core, many due to CoL reasons, e.g., wanting to start families and live on one income, partly to alleviate the office space shortage, and partly to reduce office costs.

    The telecommute centers with which I was familiar were also set up to help reduce IT costs, facilitate face to face synergy, and assuage fears of middle managers.

    Had the tech bubble not burst in 2000, I think there would’ve been a much greater geographical distribution of technical talent. Many more SV immigrants would’ve taken their jobs back to their hometown areas.

    I could see something similar happening over the next 10 to 20 years or so, especially given that there is so much less dependence on physical infrastructure than there was back in the 90s.

    Or, based on the business model Rhett describes, I could see Amazon grads, or groups of grads, moving to low cost areas for their startups.

  64. That’s what it looked like to me. For the same tires, my independent place quoted me $976 + tax and thru Tire Rack (for whom they are an authorized installer) it’s $43 less, including installation. For 4% less, it’s probably not worth my time and gray matter to do the two-step by buying thru Tirerack vs just going thru my guy for everything.

    Generally I prefer doing all my auto maintenance at the same place vs trying to best-ball everyone. They then know me as a good customer and I think I get better service over time as a result.

  65. The huge swings in the acceptability of part-time telecommuting have definitely affected people I know. One manager (MIT undergrad, Ivy PhD) left because her single day of telecommuting each week was “no longer acceptable”, despite her long commute and young children. This is why I’m skeptical of Official Corporate Reasons for the lack of diversity in tech. It was more important to send a message to shareholders than to retain competent dual career managers.

  66. Completely off thread – Whomever recommended “Swimming Across” – thank you! I really enjoyed it. I was not familiar with that period of Hungarian history (mid 1930s – mid50s) and Andrew Grove has a very readable style.

    Currently reading Max Boot’s The Corrosion of Conservatism. Also an immigrant story like Grove (this time from Russia) in a very readable style, but of course focusing more on his life in America and political views.

  67. Finn,

    The Germans and Swiss generally don’t own their own homes and they have higher net worths. Two data points, cultural difference etc. but I’m not certain you’re right.

  68. I haven’t read today’s thread yet, but I just want to report that I am traveling for work, and I rode one of those scooters. It WAS fun, but I definitely lacked dignity. ;)

    (It’s Dallas. They are all over downtown/uptown but seem to be pretty neat aka not junking up crowded sidewalks. Then again – no one is really on the sidewalks around here either & the area is incredibly clean in general.)

  69. “repetition of stories on a regular basis is another sign of a deeper issue.”

    I’m in trouble.

  70. Or, based on the business model Rhett describes, I could see Amazon grads, or groups of grads, moving to low cost areas for their startups.

    And when your startup goes bust like +90% of them do then what do you do? As WCE mentioned mean time to hire is an important criteria. How long will it take you to find an equivalent job? In Kansas City it might be 6 months or even never* vs. a matter of days or weeks in SV.

    * In the sense that there are no equivalent jobs. You could maybe make the same but the upside etc isn’t the

  71. Denver Dad – I have a soft spot in my heart for Newark, having worked there for a number of years. I have followed it closely every since. Newark is a city poised to go somewhere. It has pretty much the same advantages as Queens, but the optics are better to the rest of the country because it is a majority black city, and still has a lot of poverty, though it is nowhere near as dire as it used to be.
    It is a fast easy commute from Manhattan. The transit connections are much better than Long Island City’s, which is mainly served by the 7 train. Newark is a major Amtrak stop, a NJ Transit hub, and the PATH train is a direct subway link to lower Manhattan. I’d ride the PATH any day over the slow, sad 7. It is really close to the hipster hubs of Jersey City and Hoboken, with PATH service to both. It is way easier to get to the Newark airport than to get to LGA. And it is also car-accessible, which Long Island City is not. It has a major stadium, and an NHL team. There are lots of restaurants popping up, and they even have a Whole Foods. They have easy access to Rutgers and NJIT as well as NYU. Columbia is a bit farther away, but that is an issue for Long Island City too. Most importantly though, there is already a huge groundswell of opposition to the Queens location, which I don’t think you would see with Newark, and it would be much easier for Amazon to defend itself against elitism charges.
    I think what many people don’t realize is that Newark is just part of the NYC metro area, similar to Queens really. I know, because I lived in Manhattan and worked in Newark for several years. Everyday I walked 2 blocks to a PATH station, hopped on, rode to Newark, and walked up the hill to work…

  72. I don’t think N.C. politics factors into Amazon’s decision. The political issues are just that, a controversy was created where none was warranted and to outsiders we appeared to be a highly prejudiced place which we are not. We have a new governor since 2016. The climate is business friendly and has been for some time.
    I think RTP was a second level contender. I thought Boston would have got it in the Northeast. I don’t know much about Crystal City. We did look at relocating to the Washington area from Boston but it wasn’t a hub for our type of jobs. We were a dual career couple, who worked long hours, made quite a good combined paycheck and went out frequently. In short at one point we were the young people living the cool life. Our equation changed once we had a family and a suburban house. Our cool life became not so cool and stressful. Our paycheck wasn’t stretching as much as we thought it should. Also, many people will move to a one income high earner family at this point. You will get waves of young people who will at certain points in their lives face decisions of how and where they want to live after 30.

  73. Fred-I used Tire Rack with my normal mechanic. I remember when I got the bill, it was much cheaper than I expected. I’ve probably been overcharged by tire places in the past. I don’t remember how much I paid, just that it wasn’t as much as I thought it would be.

    LfB-I’ve also tried one of those charging stations and it stopped working after a few months. Now, I have a power strip with the cords plugged in and I use the charging station just for the slots to keep the phones in order. It is in my closet, so I don’t mind all the cords, but I’m mad that it broke so quickly.

  74. Long Island City – the name is misleading “must be on Long Island” is the first thought that pops up. We have name mad realtors here. They will take areas between two well known areas/neighborhoods and give it a new name. Also, we have so much new construction the realtors go to town thinking up new names.

  75. No matter which cities it chooses, is the sense that Amazon will be importing thousands of new people to those places? Or are the folks they expect to hire already living there?

  76. Predictable move by Amazon. A Midwest city like Chicago with great airport would have worked great for all parties. As would have Atlanta I suppose.

    DH is in process of advising his client company, and will be talking to both google and Amazon among others to see which company will make a better partner for the client. I am looking forward to hearing his thoughts on how these two teams stack up against each other.

    I spent a week or so in Newark and liked it, granted I hung out only in a small area. The quick subway ride into Manhattan was an added bonus.

  77. “And when your startup goes bust like +90% of them do then what do you do?”

    You move to SV or LIC or wherever you need to for another job. But starting up in a low COL location can stretch your seed money and increase your chances of success.

  78. A number of SV companies expanded outside of SV in the 60s through the 90s, typically to lower COL places like OR, ID, NM, CO, and even lower COL places in CA like Santa Rosa, Folsom/Roseville, and Escondido/Rancho Bernardo.

    This then facilitated a common path in which they’d hire engineers out of college, who would work hard, gain experience and often additional schooling, then move to one of the sites outside the SV core to raise families and often have one SAHP or a PT SAHP.

    In many cases, multiple companies opened new facilities near each other, likely in part because of incentives offered; those clusterings mitigated many of the issues WCE raised. E.g., several of my former coworkers made intra-company transfers from SV to Escondido, and when they were victims of the bubble bursting, were able to find other work in that area.

    I don’t see why something similar can’t happen again. Amazon decided against that model, but that doesn’t mean other companies won’t.

    And as I mentioned earlier, this often depends on a very small number of people. I’ve heard stories of how several of these locations outside SV were picked in large part as a way for those companies to keep key employees who wanted to move away from SV, often to somewhere near their hometowns.

  79. But starting up in a low COL location can stretch your seed money and increase your chances of success.

    Amazing no one has managed to pull it off.

    I assume there are many reasons it won’t work, staring with how hard it is to get VC money in Kansas City. I think the other thing is scaling infrastructure. I have a friend who specializes in getting startups ready for sale (that’s way more common than going public) as there are a whole host of issues. Are folks with those skills thick on the ground in KC? No.

  80. The other issue is the Cassandra Factor. What’s the cost of a rigerous education for your kids and is it even available in a practicable way.

  81. Wasn’t Seattle was a low COL location, at least relative to SV and, I believe, route 128, when Microsoft moved there?

  82. Wasn’t Seattle was a low COL location, at least relative to SV

    You recall where MSFT started? Albuquerque. They didn’t stay in Albuquerque.

  83. Scarlett – I think Amazon will offer relocation to people from Seattle to these new locations. Initially they need existing employees to get the new locations up and running. Over time they will hire locally.
    I honestly think the whole thing is a bit of a let down. It was supposed to be this new shiny HQ2 location not Regional Hub 1 & 2.

  84. “You recall where MSFT started? Albuquerque. They didn’t stay in Albuquerque.”

    I did not know that.

    But while they didn’t stay in Albuquerque, they didn’t move to SV or NYC either. They moved to Gates’ and Allen’s hometown, to my point that the personal preferences of a very small number of people can have a huge impact on the geographic distribution of wealth about which the NYT writer bemoans.

  85. “E.g., several of my former coworkers made intra-company transfers from SV to Escondido, and when they were victims of the bubble bursting, were able to find other work in that area.”

    The question is always what is the critical mass necessary to make this happen? We actually paid attention to this when we moved to CO, and part of the reason we chose to go there was that there were 6 fabs in town, so even if option 1 didn’t work, there were many other options. What we didn’t foresee was the tech crash that shut his fab down and caused layoffs at the others, thus flooding the market with qualified applicants at a time when no one was hiring.

    There is value to the generic business degree, I think, so that in an inevitable downturn, you have more options nearby without having to move. And towns that are built around a single industry are always going to be more vulnerable than those with a variety of different types of businesses.

  86. Pre-Microsoft Seattle was a Boeing town, very much a tech hub for its time. When we lived there, the economy was really dominated by Boeing. From our POV, Seattle was expensive to live in, though I am sure it was way cheaper than California or NY.

  87. A momentary digression: Cassandra, are the fires affecting you? I have a friend up that way who just asked if she and her dog could evacuate to my house down in Santa Cruz, to which the answer of course is yes!

  88. As someone said above, Amazon is looking for a location attractive to a large pool of young educated committed workers, not to their future forty something family selves. Also the airport requirements eliminated many of the regions under nominal consideration. A third factor is a location in a state that has zero chance of passing rollback traditional cultural values legislation. Boston offered no tax incentives, is probably less attractive to the employment pool because of weather, and lacks the complete range of demographic diversity. I favored Chicago , but perhaps weather and notorious weather issues at airports did it in. Not sure on the incentives.

  89. Thanks for all the suggestions the other day re: staggered dinners. We got an e-mail last night that practice times have changed, and somehow we hit the b’ball lottery. Our kids’ practice times are now at the same time, and same place (adjoining gyms), AND finish at 7:15 AND the timing is perfect for DH to be able to pick them up. Sometimes the pieces of the juggle do fall into place…

  90. Ugh, so can I vent about work a bit? We have a matter I brought in that involves multiple clients, and one of our CA lawyers has been handling it because that’s where the matter is. And he just does NOT have the client management gene. Example: Client A wants a settlement with X, which is a critical issue for them; other clients are more interested in other issues. Client A has come up with a process to implement X, which lawyer correctly knows is not going to happen. His response: basically tells client can’t get A, so let’s move on to other client priorities. Client, not surprisingly, now feels like we are not advocating for them. And did I mention that this is the client that brought us the matter in the first place?

    Add to the situation that lawyer is male and client A’s lawyer is female, and we go directly into mansplaining. Client A actually told me that our lawyer is “dismissive” to her lawyer — which, duh, when the client says “X is important,” and the response is “we can’t get the process to implement X, so let’s drop it,” is pretty obvious. I was on the phone with the guy, explaining that Client A is unhappy because they don’t feel like we are advocating for them, and lawyer goes into a lecture about how that’s wrong, because XYZ. Dude: you are telling me that I am wrong about what the client literally just told me? You are now mansplaining to me what my own client feels? Well, there’s exhibit A right there. Yes, the word “dismissive” does come to mind.

    So now I get to hop on a plane and fly to SF to try to smooth things over, both with the settlement and with the client. And this is not the first time I have dealt with this with this guy, and he’s a nice guy and smart and all that, but he just won’t get a clue — he literally doesn’t see why the client might be upset, or understand that he needs to present himself in a way that makes it clear that he is doing everything he can to find a way to get the client what it wants — but I also don’t have anyone else out there with the specific expertise to take on this matter. So, just, UGH.

  91. @ LfB – I am super, super sympathetic. I deal with a bunch of lawyers, consultants, and scientists, and it is so incredibly rare for someone to be both a subject matter expert and a good business partner in the way you’re describing.

  92. RMS…We are fine. Wednesday night/Thursday morning the wind howled and the sky turned yellow not long after the sun came up. There was a wall of smoke that blew down the valley and blotted out the sun. Facebook is filled with postings asking for news of loved ones. The old people always have a hard time evacuating.

    Over 110 square miles have burned so far, and there was little time to get out. Usually, there is news of people needing space for livestock, but I don’t think there was time to get horses out this time.

    We aren’t hosting anyone yet, but the hotels and evacuation centers are filling up. No matter, I have a big house and a full pantry. The door is open.

    The hospital in Chico is asking for skilled people to show up and work. The hospital in Paradise, actually most of the whole town, is gone.

  93. Both of the fires are tragic. DH is not in SV this week, but his colleagues said ithe smoke is terrible near the office even though it’s 200 miles south of Paradise fire.

  94. “There is value to the generic business degree, I think, so that in an inevitable downturn, you have more options nearby without having to move.”

    There are other degrees/fields that provide a lot of geographic flexibility. MD and nurse come to mind.

  95. Cassandra, I’m so sorry for everyone having to deal with this. It sounds terrible. And shouldn’t this be the off-season for wildfires? – is it getting worse?

  96. HM. Fire season ends when the rains begin. We’ve only had one good storm so far, and that was over a month ago. One of the problems is that the towns don’t have a defensible space around them so when a fire gets close, it can take a town. The Paradise fire is a bad one. The canyons in that area funnel the winds. At one point, I heard gusts were over 50 mph. I saw a posting that said four towns were lost in fourteen hours.

    There is no rain in the forecast, humidity is low and the winds are supposed to pick up tomorrow night.

    My family is safe. DH and I are paranoid enough to pick a house on high ground, with defensible space. It is far better to offer refuge than to need it, and I will continue to open my door, but I confess that I am tired of offering refuge.

  97. If only we could offer you some of our excess humidity . . . flooding is our bugbear.

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