Update: This post does not even begin to do the talk justice. Steve has graciously made the slides available here.
Last night, I drove to San Francisco to hear world-renowned economist Steve Waldman present a talk on fiat money.
I arrived in one of those parking lots where you hand a guy your keys and the attendant parks the car somewhere. By lending me a parking spot, the lot owner created an asset (the future parking fee) and a liability (custody of my car). This increases the money supply.
Several hours later, I returned. By then it was raining pretty hard; the attendant was playing with his phone and didn’t want to leave the booth. He gave me my keys and told me to fetch the car myself without bothering to collect payment.
The parking lot economy is predicated on attendants taking people’s cars in exchange for future money. The collected fees are transferred to the property owner as a form of tax, minus the employee’s basic income of minimum wage.
Poor management policy discourages the parking lot attendants from productivity. There is no incentive for the employee to increase output once he has the currency needed to meet the tax obligation he thinks will be enforced. And an inability to impose and enforce tax liabilities limits the amount of resources the parking lot owner can command.
Last night, my $10 fiat money had less value to the attendant than the desire to remain dry. The ability to sit on one’s ass is the bubble that never pops.
Does any site have a worse ad experience than Forbes?
The “ad-light experience” employs 38 trackers consuming 83.1 MB of memory. What does the non-light experience look like? For reference, Google Maps’ scripts take 52.7 MB and they actually do something useful.
But back to Forbes’ 38 tracking scripts, which actively monetize your information on ad networks.
Ad trackers follow you all over the internet. The web is a big place, with more places to show ads than a sales team could ever keep track of. A tiny site like this one would be a tough placement to sell to advertisers.
Here’s how ad trackers solve the problem (adapted from this video).
1. Website begins to load2. Site runs a tracker for a Data Management Platform (DMP). The DMP aggregates information about the sites you’ve visited and assigns it to a digital fingerprint.3. The tracker sends information from the DMP to an ad server, requesting an ad that matches your profile.4. The ad server queries traders, ad networks, and supply-side platforms (SSP). An ad network is a broker that sells ad spots directly to marketers. Traders and SSPs are market-makers that turn around and sell inventory on ad exchanges.5. On the ad exchange, bidders submit a bid price for the ad slot.6. The bidders are advertisers and agencies that come through a demand-side platform (DSP). Ad networks and high-frequency traders also participate in the exchange.7. A buyer creates a bid by matching your user profile to the marketer’s targeting and budget rules. DSPs buy a lot of the information for their pricing rules from DMPs.8. The exchange selects a winning bid through second-price auction, then returns the winning ad to the publisher’s ad server.9. Publisher’s site loads the ad from the winning bidder’s server, as well as a script that tracks your interaction with the ad.
This is the timeline of network activity from Forbes.com after the site fully loaded. Every time I move my mouse, it generates a burst of traffic to third-parties, communicating my activity. Did my cursor linger over an ad? That is valuable information.
I get it; publishers need to make money. In a desperate bid to monetize content, they stuff their sites with trackers. More data is better, and trackers cost them nothing.
While it is irritating to have hundreds of tracking companies gathering your information, consolidation is worse.
Google’s DoubleClick is the largest ad network in the world, and all major websites use it. Forbes uses DoubleClick. Twitter uses DoubleClick. Even Pornhub uses DoubleClick. So an advertiser on Forbes can serve an ad not just based on your Google search history, but also your Twitter activity and porn habits.
And that’s exactly how you end up with shit likethis.
Digital Fingerprints
The tracking isn’t done with cookies; those are too easy to delete. Trackers identify you with a browser fingerprint: Your operating system, browser version, time zone, plug-in versions, screen resolution, installed fonts, IP address, and other things you thought were private.
The more uniquely-configured your system, the more identifiable you are. (How identifiable? Check here.)
It doesn’t matter if you use incognito mode and block cookies; that’s just another data point to add to your profile. It’s called a fingerprint because every one is unique. And each time you load a tracker, your fingerprint is captured and the activity is added to your browsing profile.
Facebook is Watching You
Can the trackers capture a user’s actual identity? Check out these innocuous-looking buttons:
Each one transmits information back to their respective social network. Facebook, Twitter, LinkedIn all know you’re here right now. In fact, any site with a or is a portal for a service provider to track your activity.
The tracking scripts load with the button images, so you don’t need to click anything. You don’t even need to be logged in.
Block it All
I’m tracking you right now. Well not me, I’m probably asleep, but the site scripts are. You can view this site’s trackers with the Ghostery extension:
While I like having social network buttons and site stats, I encourage you to block them: There’s no reason to trust me or my third-party trackers.
When sites like Forbes and Wired request that you disable ad-blockers, they’re really requesting that you enable tracking scripts. This isn’t about the ethics of ad-blocking – It’s about the unauthorized collection and sale of personal information.
At this point, you’re one government subpoena away from having your internet browsing history become a public court document. One data breach from your digital profile being served to the world.
Wait a minute, you might say. I only look at good, wholesome websites on the internet! I have nothing to hide.
Great, me too! Nonetheless, I support the privacy of those who wish to view degenerate porn without the risk of that becoming public information. Whether you should as well is a topic for another day 🙂
Why would anyone ever pay their employees minimum wage? I made minimum wage waiting tables in high school. Minimum wage is the employer’s way of saying I would pay you less if I could, but it’s illegal.
Employee theft is how we say Screw you too.
As a restaurant worker, I pilfered food and liquor bottles for my friends. The ones at In-N-Out comped meals. Those in retail rang up merchandise with blank receipts. The kid selling tickets at AMC gave free movie passes. It was like a Kula ring for grifted goods.
Sure, we were stealing from our employers, but we were also making $5.75 an hour. Who’s the real thief here? we reasoned.
The microeconomic view of minimum wage suggests that a mandatory increase in wages leads to a decrease in employment, but this assumes that supply and demand are elastic and employees are fungible.
After New Jersey increased its minimum wage in 1992, Card & Krueger observed higher employment rates in fast food establishments, relative to restaurants in Pennsylvania, where minimum wage remained fixed. Maybe cheap labor was actually supply-limited, and higher wages attracted more people to work at fast food restaurants.
In an ideal labor market, minimum wage is unnecessary. Employers competitively increase wages to find and retain workers. Low-wage labor supply is limited because there are many job options.
And in this ideal market, teenage-Elaine is earning a passable wage, thinks she’s got a good gig, and makes an effort to be a sober and honest employee. But market forces are complicated in the real world, and while it sucks to be making minimum wage, it sucks even more that we need a federal minimum wage.
Last night, I made a bet about the effects of minimum wage on employment rates in the Seattle restaurant industry.
On April 1, 2015, Seattle’s minimum wage increased from $9.47 to $11. The wager: The trendline for Seattle restaurant employment has fallen by at least 20% since then. I took the over.
Their rationale: Supply and demand. Increase the price of an employee, and people will hire fewer employees.
My rationale: Employer demand is inelastic, but employee supply is elastic. Restaurants already do not employ more workers than necessary.
I can see how the world might believe otherwise. This was the result of the first Google search I performed:
It came from Google, so it must be right. But let’s look at some actual numbers.
This is the chart presented by Mark Perry, author of Google’s first search result:
It seems to show that the Seattle metropolitan area lost restaurant jobs while Washington state as a whole gained restaurant jobs.
But the Seattle metropolitan area didn’t increase the minimum wage. Only Seattle city did. We’re talking about a population of 670,000 vs a population of 3.7 million.
If anyone lost restaurant jobs, it’s Pierce County, whose minimum wage didn’t change. King County did just fine.
I think I just won a peppercorn.
Seattle’s longer-term minimum wage effects are unknown, but none of this is new. In the last eight decades, federal minimum wage increased from 25 cents to $7.25, and the restaurant industry somehow didn’t get decimated along the way.
I’ll save speculation of why for a later post, but for now I’ll end with the references below. Most importantly, don’t trust Google search infoboxes.
The more you invest in a stripper, the less you get free things from that stripper.
The one suggestion that didn’t suck was Buy some seeds. Unfortunately, that response concluded with …so that you can plant a tree or two to make the world a better place.
Putting your 401k towards making the world a better place is not a good retirement strategy.
Here are some far better ways to invest a single dollar. Well really just one, but feel free to diverge from the path at any time.
Buy seeds. Given current commodity prices, choose coffee plant seeds. You may achieve better returns with medicinal plants, but you’re on your own with that one.
A dollars’ worth of seeds will result in a conservative estimate of 60 plants. Each plant yields 10 pounds of coffee cherry per year. This turns into 2 pounds of green beans. After one year, you can expect 120 lbs of coffee beans.
Sell 120 lbs’ worth of coffee futures with a one-year delivery date. The going rate is $1.24 per pound. Now you have $149.
Buy three-dozen baby chickens. Turn them loose on your coffee plantation, where they will eat grubs and produce fertilizer.
Hens lay 280 eggs per year. The expected annual yield for 36 hens is 10,080 eggs, or 840 dozen. Sell these organic free-range eggs for $5 a dozen.
Now you have $4,200.
Use that as down payment on a taco truck. Slaughter the chickens, drive to Portland, and sell artisanal chicken nuggets to hipsters.
or 
is a portal for a service provider to track your activity.
