Andy Kessler

WSJ: Finally, the Low Prices We Deserve

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https://www.wsj.com/articles/finally-the-low-prices-we-deserve-11589740923

Stanford Health Care cut employees’ pay 20% in late April. JetBlue Airways halved top executive compensation. A huge glut of oil, wine, airline seats and even lobsters means prices are plummeting. And whoa, Apple’s new iPhone SE is $399, quite a change from its $999 models. It’s starting: April’s consumer-price index was down 0.8%, but get ready for steady price declines and a long trip down that escalator. Like a released balloon going pffflllttt in slo-mo. Let’s call it the Great Unflation.

Yes, a made-up word—technically it’s deflation. As Milton Friedman said, “inflation is always and everywhere a monetary phenomenon” that is “produced only by a more rapid increase in the quantity of money than in output.” The opposite trend, deflation, is typically caused by a more rapid decrease in money. Current price declines aren’t primarily a monetary phenomenon, as many price increases in the past 35 years weren’t counted in the inflation stats. They were hiding in plain sight.

Have they hit a breaking point? Here’s what I mean: The 2015 Golden State Warriors, mid-playoff run, raised beer prices to $13 from $11 and—I’m convinced—shrank the cup size. Ticket prices tripled over the next few years. That didn’t show up in the CPI, but it’s real nonetheless.

You’ve seen it: $3,000 for a one-bedroom apartment in San Francisco, $4,000 in New York—more than twice what you’d pay in Austin, Texas. It’s $300 for five minutes with a doctor and $75,000 to spend a year at Columbia or the University of Chicago. Average ticket prices for Lady Gaga’s concerts last year were $420. Average.

First-class stamps are 55 cents even though almost everything in your mailbox could be delivered online for free. A caramel macchiato costs $4.80. It’s $8.99 for Cold Pressed Watermelon Water at Whole Foods. We have $100 cable TV bills—same for a middling red Bordeaux or a ticket to Disneyland. Curry 7 sneakers are $140. And for a while I’ve been convinced that the word “organic” means the same thing for twice the price. Time for the pffflllttt.

We’ve been blessed for 35 years with an economy driven by relentless cost reductions in electronics.

WSJ: Graduation Is a Time for Unlearning

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https://www.wsj.com/articles/graduation-is-a-time-for-unlearning-11589139567

Dear Grads, Lockdown Class of 2020: Switch off “Animal Crossing,” wrap up that episode of “The Masked Singer,” pause practicing your TikTok “Renegade” dance, finish ironically chugging your Corona beer, and listen up—Karens, Beckys and Chads, too.

Yes, someone owes you an apology. You’re heading into the worst job market, competing with 33 million recently laid-off plus furloughed employees. I told you to take that antifungals course. To paraphrase the philosopher Bluto, 3¾ years of college down the drain. All this from a coronavirus 22-year-olds have a statistically insignificant chance of dying from. You will forever be Generation C. All of Gen X through Z’s FOMO—fear of missing out—has morphed into FOGO, fear of going out.

You got cheated out of a graduation ceremony, but don’t despair: Facebook to the rescue. This Friday it’s hosting #Graduation2020. Woo-hoo! And professors be damned—“words of wisdom” will come from Oprah, Awkwafina, Jennifer Garner, Lil Nas X and Simone Biles, with special musical guest Miley Cyrus. But, get this, only two of those six graduated from college and they are all incredibly successful. I think this is Harvard dropout Mark Zuckerberg rubbing it in.

They may not be sages, but neither are the people you trusted who got you to blow through your parents’ savings. Especially since you finished classes via videoconference—remember, you can’t Zoom a zoomer because a zoomer can’t be zoomed (ask your dad). The only good news is that you won’t have bad dreams like the rest of us about missing class or that last test. You likely passed automatically.

You were told to go to college, study hard and you’ll get a good job. But that model has been broken for a while. Instead you got cancel culture, pronoun police, plus diversity and inclusion—of everything but sound ideas, which need to be free to mingle and test-drive. You’ve been run down, you’ve been lied to. You ended up with someone else’s agenda.

“You’re going to find that many of the truths we cling to depend greatly on our own point of view. . . . The truth is often what we make of it; you heard what you wanted to hear, believed what you wanted to believe.” Sound familiar? For 20 points, who said it? Socrates? Kant? Hume? Rousseau?

WSJ: How Big Data Is Attacking the Coronavirus

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https://www.wsj.com/articles/how-big-data-is-attacking-the-coronavirus-11588541839

The value of a network rises in proportion to the square of the number of users, observed Ethernet inventor Robert Metcalfe. Metcalfe’s Law— precisely expressed by the formula n(n-1)/2—is what enabled Facebook, Twitter, WhatsApp and all social networks. The more the merrier. But it’s exactly the opposite for pandemics. You’re safest on your own or in small groups. The harm goes up in proportion to the square of the number of your contacts.

Or rather it does until it doesn’t, according to 19th-century British epidemiologist William Farr. He didn’t guess. In 1840 he studied data from the 1837-39 smallpox epidemic and noted that the number of deaths followed a normal bell-curve distribution. Known as Farr’s Law, it’s his curves that we’ve flattened. As the journalist Michael Fumento said of Covid-19, “Communicable diseases nab the ‘low-hanging fruit’ first (in this case the elderly with comorbid conditions), but then find subsequent fruit harder and harder to reach.” That echoes Farr’s observation that pandemics burn out as fast as they start. Yet that tendency, and the data that back it, has barely been mentioned during the Covid crisis.

Farr obviously didn’t plot his data on a MacBook. The first useful, programmable and electronic digital computer, Colossus, was created by Alan Turing and friends a century later in England to decrypt the Nazis’ Enigma and Lorenz code-machine communications. After the war the British were so nervous that Colossus would end up in the hands of Soviet spies that they destroyed all plans and copies. A colossal mistake.

In the U.S., by contrast, the Eniac computer, designed to help create artillery tables, wasn’t turned on until November 1945, completely missing the war. Rather than destroy it or keep it secret, on Feb. 14, 1946, the War Department miraculously put out a press release with details and invited interested parties to meetings to share ideas. Yes, share! That simple press release is why technology is dominated by U.S. firms and Silicon Valley emerged in displaced California orchards and not in, say, Shropshire, England. Call it the Eniac law: Open is better than closed. Dissemination is better than secrets. Turns out, to invoke Metcalfe’s law, ideas network too.

Fast-forward to the Covid era, with apocalyptic pandemic models driving policy. A few short weeks after the World Health Organization declared a global pandemic, Silicon Valley veteran Tom Siebel’s artificial intelligence company C3.ai went live with an open cloud-based repository. Known as a data lake, it contains location and confirmed case data from the World Health Organization and Johns Hopkins, genome sequences of Covid-19 samples from the National Center for Biotechnology Information Virus Database, global patient data such as symptoms and lab results, and the Milken Institute’s database of treatment and vaccine trackers. It’s available to everyone—nonexclusive, royalty-free. The Farr and Eniac laws in action.