Category: Equitablog

Piketty’s Treatment of Housing as Capital Is not an Excuse to Ignore His Predictions

Posted on by Ed Paisley

Thomas Piketty’s “Capital in the 21st Century” is clear from the beginning: housing and real estate generally ought to be included in the definition of “capital” for the book’s purpose, since the point is to examine the aggregate effect of accumulated wealth that produces an annual return through no effort on the part of its owner. A whole set of Piketty “rebuttals” attacks that treatment.

  • Lawrence Summers claims that housing price dynamics—namely, the housing bubble and eventual firesale in the 2000s—are driven by supply restrictions and inelastic demand, not capital accumulation.
  • Kevin Hassett at the American Enterprise Institute says that since you can’t replace workers by houses in production, workers aren’t threatened by the wealth accumulation Piketty emphasizes, since that wealth is attributable in large part to housing.
  • A group of economists at the Institute for Political Studies in Paris points out that a large portion of the increase in the value of capital—and in France, all of it—is due to housing appreciation, which they argue is sensitive to the decision to value it using market prices rather than the market rental stream. That critique was trumpeted by Tyler Cowen and Veronique de Rugy, and then enlarged upon in a more recent paper by Matt Rognlie, an economist at the Massachusetts Institute of Technology.

My recent column shows why those attacks fail, and why they reflect a larger reluctance on the part of macroeconomic theorists to confront the empirical failings of their received wisdom. Economists have developed a relatively sophisticated understanding of how the value of housing is determined, including by politics. “Capital in the 21st Century” doesn’t explore all of those findings, but they are nonetheless consistent with the book’s main arguments.

In short, the housing-based critique of Piketty’s book is not what its proponents have been desperately looking for—an excuse to throw Piketty’s data, theory, and predictions away.

Are Arguments Over the Shape of the Social Welfare Function “Mistaken” “Obnoxious” Fallacies?: Tuesday Focus for June 24, 2014

Posted on by Brad DeLong

NewImageKevin Drum flags a strange post from the estimable Tyler Cowen:

Kevin Drum: Is it Obnoxious to Support Health Care For the Poor?: “Gary Silverman in the Financial Times…

…What I like about Obamacare is that it shows some respect for “those people”–as Hudson called them in Giant–who are good enough to work the fields and mow the lawns, and build the roads and sew the clothes, and diaper the babies and wash the dishes, but somehow aren’t good enough to see a doctor from time to time to make sure there is nothing wrong inside….

This makes Tyler Cowen unaccountably angry:

I am not in this post seeking to adjudicate… [or] go after these two authors…. I am interested in different game. The deeper point is that virtually all of us argue this way… [with] innocuous-sounding arguments we use all the time come perilously close to committing the same fallacies as do these quite transparent and I would say quite obnoxious mistaken excerpts…

What’s obnoxious about this?… We think everyone, even the poor, should have access to decent health care. A great many conservatives prefer to simply turn their heads away from this human suffering, often because they prefer to keep their taxes low. A great many liberals prefer the opposite. This isn’t a secret, or a hidden agenda…. Our values are the motivation for a large share of human activity, especially including political activity. What’s wrong with that?

Very good question. Let’s look at Tyler’s entire post:

Tyler Cowen: Why you should not confuse sympathy with policy: ”
I was disappointed but not surprised by…

…this passage by Gary Silverman:

What I like about Obamacare is that it shows some respect for “those people”–as Hudson called them in Giant–who are good enough to work the fields and mow the lawns, and build the roads and sew the clothes, and diaper the babies and wash the dishes, but somehow aren’t good enough to see a doctor from time to time to make sure there is nothing wrong inside…

That is in fact what most of politics is about, namely debates over which groups should enjoy higher social status and which groups should receive lower social status.  Of course critics of Obamacare have their own versions of desired status reallocation, typically involving higher status for the economically productive.

Here is another example of the argument from sympathy, by Norman Podhoretz, applied to a very different field of discourse:

Provoked by the predictable collapse of the farcical negotiations forced by Secretary of State John Kerry on the Palestinians and the Israelis, I wish to make a confession: I have no sympathy–none–for the Palestinians. Furthermore, I do not believe they deserve any.

I am not in this post seeking to adjudicate ACA or U.S. policy in the Middle East.  The easy target is to go after these two authors, but I am interested in different game.  The deeper point is that virtually all of us argue this way, albeit with more subtlety.  A lot of the more innocuous-sounding arguments we use all the time come perilously close to committing the same fallacies as do these quite transparent and I would say quite obnoxious mistaken excerpts.  One of the best paths for becoming a good reader of economics and politics blog posts (and other material) is to learn when you are encountering these kinds of arguments in disguised form.

As I see both Gary Silverman and Norman Podhoretz, there are two questions you can ask of each: Is this argument correct? Is this kind of argument a legitimate one to make? Keep those two clear and distinct.

Tyler Cowen seems to think that this kind of argument is not legitimate to make. Arguments of this kind, he says, are “mistaken”, “obnoxious”, “fallacies”, and about “desired status reallocation”. Why does he say this? It is not clear to me. And it is not clear to Kevin Drum either.

Gary Silverman is making an argument that:

  1. situates us behind some veil of ignorance,
  2. makes assertions about what our social welfare function ought to be,
  3. judges what the consequences of some policy would be,
  4. and applies that social welfare function to those consequences to reach a judgment.

That is, I think, a public-policy argument. That is what a public-policy argument has to be. If an argument does not have those four components, it is not a public-policy argument but rather something else.

In Gary Silverman’s (2), he asserts that our social welfare function ought to be a broadly egalitarian one–and argues that the uninsured ought to have a relatively high weight because they are our benefactors in a gift-exchange relationship: “good enough to work the fields and mow the lawns, and build the roads and sew the clothes, and diaper the babies and wash the dishes”. That seems to me to be a fine kind of argument to make about what our social welfare function ought to be. And it seems to me to be a fine argument that ought to convince people.

In John Podhoretz’s (2), he asserts that we should not care at all about what happens to “Palestinians”. This is, once again, an argument over the weight people get in our social welfare function, which is a fine kind of argument to make. But on the substance this seems to me to be a not-fine argument, if only because public-policy arguments do need to be cosmopolitan in essence, and to simply say that we are the strong and the strong do what they wish while the weak suffer what they must is not the strongest of public-policy arguments.

Underneath Tyler Cowen’s reaction, I think, is his vulnerability to one of the Great flaws of economics: its tendency to succumb to the siren song of pretended value neutrality. It goes roughly like this: economists are supposed to be interested in facts like the total value of production, more production is good, but to judge whether a distribution of that production is good or not is a question of value, and that is not scientific. But just as though everybody who is actually willing to make a complete book on the world is a Bayesian with a prior, so everyone willing to make any policy recommendations at all as a social welfare function in mind. Those who claim indifference about distribution have committed themselves to the belief that a marginal dollar promotes equal welfare everywhere. If you think that utility is roughly logarithmic in income, they have thereby committed themselves to a social welfare function that gives each person a weight proportional to their wealth.

That is where Tyler’s belief that we should not make the kind of argument that Gary Silverman makes leads us to. And I do not think we want to go there.

Things to Read on the Morning of June 24, 2014

Posted on by Brad DeLong

Should-Reads:

  1. Jason Gubbles sends us to Esther Duflo: Patronizing The Poor: “Paternalism is everywhere in our lives. We have to immunise our children unless we are upset about it. In India, it is the opposite. It is possible to get your kids immunised but you really have to want to. In our lives, water comes clean out of the tap so we don’t have to ask ourselves whether to boil it, or just put chlorine in it…. For the poor, the default is that they have to think very hard. They can get it wrong not because they are stupid but there is a chance they will. And even if they don’t get it wrong, by the end of the day, they have exhausted all their mental energies, self-control and intellectual energy to solve problems that are not very interesting. There shouldn’t be a debate that it is better not to have diarrhoea than to have diarrhoea…”

  2. Heather Boushey and Alexandra Mitukiewicz: Job Quality Matters: How Our Future Economic Competitiveness Hinges on the Quality of Parents’ Jobs: “The consensus on the importance of early childhood education… rests on the findings of a small number of important experimental studies done in the late 1960s and early 1970s…. We will most likely never see a controlled experiment assigning one group of parents in otherwise identical families to high quality jobs with the kinds of flexibility that allows them to address conflicts between work and family…. We are already having a national conversation about the importance of job quality for addressing conflict between work and family. Facebook’s Sheryl Sandberg’s Lean In is a call to action for women to push themselves to aspire professionally and she devotes an entire chapter, “Don’t Leave Before You Leave,” to encouraging women to ask for the flexibility they need. Professional women may have the power to demand these kinds of workplace changes…. But, as Sandberg and others recognize, not all workers have the ability to make these kinds of demands, let alone get what they need…”

  3. Council of Economic Advisers: The Economics of Paid and Unpaid Leave | Work-Life Balance and the Economics of Workplace Flexibility | Nine Facts About American Families and Work | The Economics of Fatherhood and Work

Should Be Aware of:

And:

  1. Mark Strauss: Star Wars Still a Bust: “On Sunday, a ground-based interceptor fired from Vandenberg Air Force Base destroyed a mock enemy warhead launched from the Marshall Islands. The Pentagon hailed it as a major success for the troubled national missile defense system, which has cost $40 billion since 2004. But, in truth, it changes little… the U.S. Ground-Based Midcourse Defense (GMD) system has been plagued by mismanagement and design flaws since the Bush administration decided to rush it into development ten years ago…”

  2. Michael Ignatieff: Are the Authoritarians Winning?: “The conflict between authoritarianism and democracy is not a new cold war, we are told, because the new authoritarians lack an expansionary ideology like communism. This is not true. Communism… as a model of state domination… is very much alive in… China and in Putin’s police state. Nor does this new authoritarianism lack an economic strategy… modernization that secures the benefits of global integration without sacrificing political and ideological control… price-fixing state capitalism… rule by (often corrupt) fiat in place of the rule of law… a claim that the Chinese and Russian civilizations are self-contained moral worlds. Persecution of gays… is intrinsic to their vision of themselves as bulwarks against Western individualism…. Both explicitly refuse to accept liberal democracy… insist that their twentieth-century experience… necessitates centralized rule with an iron fist…. The new authoritarians offer the elites of Africa and Eurasia an alternate route to modern development: growth without democracy and progress without freedom. This is the siren song some African, Latin American, and Asian political elites, especially the kleptocrats, want to hear. Faced with these resurgent authoritarians, America sets a dismaying example…. Its constitutional machinery… in the hands of polarizing politicians in Washington and in the two parties… generates paralysis…. It’s difficult to defend liberal democracy with much enthusiasm abroad if it works so poorly at home…”

Already-Noted Must-Reads:

  1. Rob Grimshaw: “Ultimately, it does come back to the content”: “We were always going to a niche site on the web. Our traffic figures were always going to be a constraining factor…. When the advertising guy took over the business, which is me…. conscious of the fact that advertising wasn’t going… we needed an alternative… being much more bold on the subscription side… turning the dial on the meter model over toward subscription… to the point where many people were coming up to barriers, a lot of people went through, and more than that, they were happy to come through at price points that were far above what any of us had anticipated…”

  2. NewImageTwitter / amprog: STARTING NOW: “STARTING NOW: The White House Summit on Working Families! Watch the livestream here h #FamiliesSucceed…”; Betsey Stevenson: “Fact 1: Mothers are increasingly the household breadwinners…”

  3. Dominick Bartelme and Yuriy Gorodnichenko: Linkages and Economic Development: “A single Honda… is made of 20,000 to 30,000 parts produced by hundreds of different plants and firms…. Complex production chains are a salient characteristic of modern economies and the immense productivity gains of the past several centuries have relied on an extensive division of labor across plants which trade specialized inputs with one another in convoluted networks…. An early literature (e.g. Hirschman (1958)) reasoned these industry linkages were essential for economic development and focused on how to promote the formation of robust input markets in poor countries and target investment to the industries with the strongest linkages. However, before the data and methods to test these ideas became available, one-sector models that abstracted from intermediate goods altogether became the standard framework for studying growth…. Most of the analysis at this middle level is theoretical and qualitative but the predictions are clear: these linkages should play an important role in economic de- velopment…. Having built a database of input-output tables for a broad spectrum of countries and times, we provide evidence consistent with these predictions… [that] is quantitatively strong and robust… in line with the results from a calibrated multisector neoclassical model…”

  4. WCEG: Gender pay gap linked to workplace flexibility: “The White House, the Department of Labor, and the Center for American Progress are hosting a Summit on Working Families… to explore… equal pay and workplace flexibility…. Claudia Goldin… two issues are intimately related… hold implications for the broader economy… ‘A Grand Gender Convergence: Its Last Chapter’. [Goldin] calls the converging roles of men and women “among the grandest advances in society and the economy in the last century…”

Daily Piketty: Matthew Yglesias on Greg Mankiw

Posted on by Brad DeLong

Matthew Yglesias: What the right doesn’t get about Piketty: “Greg Mankiw… the latest entry in a…

…genre of… rebuttals that appear to be written by people who aren’t familiar with… Piketty…. Nobody really worries too much about arbitrary inheritance of freckles because freckles aren’t important. But wealth is great! That’s why Piketty thinks it’s sad that so much of the wealth is in the hands of so few people, and it’s why he’s frightened by the prospect of a world in which the best way to get wealth is to be lucky in your parentage. So what’s the solution?… [Piketty:]

When I talk about the progressive wealth tax, I’m not thinking of increasing the total tax burden…. My point is not to increase taxation of wealth. It’s actually to reduce taxation of wealth for most people, but to increase it for those who already have a lot of wealth….

The idea is that it would be a world in which possession of wealth is less skewed, and therefore the typical person is more likely to inherit some…. Piketty’s right-wing critics should engage with the fact that imposing a progressive wealth tax and using the proceeds to finance a giant middle class tax cut is hardly a sweeping rejection of capitalism. The question he’s putting on the table is whether it’s really necessary for a small number of people to live so large for so long and leave so little for the rest of us.

Sports fans: I need help. What are the right-of-center critiques of Piketty besides the excellent one by the very sharp Matt Rognlie that are good enough to be worth recommending, or assigning, or citing?

How paid leave insurance can help economic growth

Posted on by egdev

Today’s Working Families Summit, an event hosted by the White House, the Department of Labor, and the Center for American Progress, will highlight the myriad ways the modern workplace could be reformed to better fit the needs of the 21st century family. The American workplace was designed in a period when the workforce was primarily male and women were the primary caretakers in the household. Today, the majority of mothers are breadwinners and household work and childcare are more equitably divided.

Public policy can make the tradeoffs between work and family less severe. Specifically, paid family and medical leave insurance would help workers take time off from work to recover from an illness, spend time with a new child, or care for ill family member. This policy would not only help working families but also the broader economy.

The United States is one of the few rich, industrialized countries without a law that allows workers to earn paid time off for family or medical reasons. Currently, the Family and Medical Leave Act allows workers to take time off, but they are not guaranteed paid leave. Many workers can’t afford to take unpaid leave, which effectively denies leave to less-well-off families. Paid family leave insurance would help families afford time off by paying the worker a set percentage of her typical wages.

Helping workers navigate family changes and emergencies sounds like a kindhearted policy, but is it hardheaded? Equitable Growth’s Heather Boushey and Alexandra Mitukiewicz along with the Center for American Progress’s Ann O’Leary looked at the economic consequences of paid family and medical leave insurance. And they found several ways that the program would benefit the economy, particularly economic growth.

One benefit is that leave insurance appears to increase employee retention. Employees with paid leave are more likely to return to their original employer. This workplace continuity reduces employee turnover, which can be very costly. According to one estimate, the median cost of turnover to an employer is 21 percent of an employee’s annual salary.

There are several costs to turnover. First, the employer has to search for a replacement, which takes time and resources. Secondly, once a new employee is hired they have to be trained in the job. Given the particularities of certain jobs, this training can take a while. The cost to the employee here is not only the resources spent on the training but also the lost productivity of the former employee who already had the employer-specific knowledge and skills.

In other words, the increased continuity from leave insurance could boost productivity, the source of long-run economic growth.

Another major benefit of leave insurance in an increased labor force participation rate and work hours. Leave insurance helps keep workers, particularly women, in the labor force. Boushey, O’Leary, and Mitukiewicz cite work by Cornell University economists Francine D. Blau and Lawrence Kahn on the female labor-force participation rate. Blau and Kahn found that the United States had the sixth-highest female participation rate among advanced economies in 1990, but by 2010 that ranking had fallen to 17th highest. The authors point to the lack of programs such as leave insurance for the difference: the United States lacked them and the other rich economies did not. A higher labor force participation rate boosts the long-run growth potential of the economy.

So leave insurance appears to be both a kindhearted and hardheaded policy. By strengthening families, public policy can help the long-run strength of our economy. Unfortunately, the immediate prospects for enactment of such a program look long at the federal level. States are making headway by passing leave insurance laws. But an issue of this scale requires a national effort.

Morning Must-Read: Claudia Goldin on Women’s Work and Human’s Work

Posted on by Brad DeLong

WCEG: Gender pay gap linked to workplace flexibility: “The White House, the Department of Labor, and the Center for American Progress…

…are hosting a Summit on Working Families… to explore… equal pay and workplace flexibility…. Claudia Goldin… two issues are intimately related… hold implications for the broader economy… ‘A Grand Gender Convergence: Its Last Chapter’. [Goldin] calls the converging roles of men and women “among the grandest advances in society and the economy in the last century…

Lawrence Mishel, Josh Bivens, and Alyssa Davis Have Convinced Me that Steve Kaplan Is Largely Wrong on CEO Pay: Monday Focus for June 23, 2014

Posted on by Brad DeLong

In the 1970s and 1980s CEOs received about three times the average earnings of the top 0.1%-ile and about 45 times the earnings of the average worker. Today CEOs receive about 5 tuies the earnings of the top 0.1%-ile and about 300 times the earnings of the average worker. I am now convinced that there is an extra, corporate-control and finance-driven story to CEO pay that does not apply to the earnings of the top 0.1%-ile in general. What might it be? A self-reinforcing iron oligarchy of effective control rights redirecting cash flows in which CEOs, board members, and financiers all of whom form a social network in which it is impolite not to treat each other as well as possible seems inadequate as an explanation, but that seems to be what we have…

Mishel and Davis:

CEO Pay Continues to Rise as Typical Workers Are Paid Less Economic Policy Institute CEO Pay Continues to Rise as Typical Workers Are Paid Less Economic Policy Institute

Kaplan:

Www nber org papers w18395 pdf

While average pay has increased markedly in the last 30 years, the ratio of pay to the top 0.1 percent has increased by much less. The ratio increased from the mid-1980s to the turn of the century. Since then, it has declined, although it remains above its historical average and the level in the mid-1980s. Interestingly, the ratio in 2007 was lower than the ratio in the late 1930s when dispersed shareholdings and problems of managerial power were presumably less acute than they are today. The ratio today is modestly higher than in the late 1930s. The unanswered question, then, is to explain what drove the ratio so high from the early 1980s to the early 2000s and has led to its decline since then…. Holmstrom and Kaplan (2001) and Murphy (2012) both suggest that the relatively low pay of CEOs at the start of the 1980s was suboptimal at the start of the 1980s. In summary, taken together, Figures 15 to 18 suggest that a combination of firm scale and the market for talent are associated with a meaningful amount of the movement of large company CEO pay over time.

More from Mishel and Davis:

Lawrence Mishel and Alyssa Davis: CEO Pay Continues to Rise as Typical Workers Are Paid Less: “The 1980s, 1990s, and 2000s were prosperous times…

…for top U.S. executives, especially relative to other wage earners and even relative to other very high wage earners (those earning more than 99.9 percent of all wage earners)…. Consequently, the growth of CEO and executive compensation overall was a major factor driving the doubling of the income shares of the top 1.0 percent and top 0.1 percent of U.S. households from 1979 to 2007….

  1. Average CEO compensation was $15.2 million in 2013… up 2.8 percent since 2012 and 21.7 percent since 2010….
  2. From 1978 to 2013, CEO compensation, inflation-adjusted, increased 937 percent, a rise more than double stock market growth and substantially greater than the painfully slow 10.2 percent growth in a typical worker’s compensation….
  3. Over the last three decades, CEO compensation grew far faster than that of other highly paid workers, those earning more than 99.9 percent of other wage earners. CEO compensation in 2012 was 4.75 times greater than that of the top 0.1 percent of wage earners, a ratio 1.5 higher than the 3.25 ratio that prevailed over the 1947–1979 period….

That CEO pay grew far faster than pay of the top 0.1 percent of wage earners indicates that CEO compensation growth does not simply reflect the increased market value of highly paid professionals in a competitive market for skills (the “market for talent”) but reflects the presence of substantial rents embedded in executive pay….

CEO compensation has grown a great deal, but so has pay of other high-wage earners. To some analysts this suggests that the dramatic rise in CEO compensation was driven largely by the demand for the skills of CEOs and other highly paid professionals. This interpretation, then, is that CEO compensation is being set by the market for “skills” and is taken as evidence that rising CEO compensation is not due to managerial power and rent-seeking behavior (Bebchuk and Fried 2004). One prominent example of the “it’s other professions, too” argument comes from Kaplan (2012a, 2012b)…. Kaplan (2012a, 4) claimed:

Over the last twenty years, then, public company CEO pay relative to the top 0.1 percent has remained relatively constant or declined. These patterns are consistent with a competitive market for talent. They are less consistent with managerial power. Other top income groups, not subject to managerial power forces, have seen similar growth in pay.

And in a follow-up paper for the CATO Institute, published as a National Bureau of Economic Research (NBER) working paper, Kaplan (2012b, 21) expanded this point further:

The point of these comparisons is to confirm that while public company CEOs earn a great deal, they are not unique. Other groups with similar backgrounds—private company executives, corporate lawyers, hedge fund investors, private equity investors and others—have seen significant pay increases where there is a competitive market for talent and managerial power problems are absent. Again, if one uses evidence of higher CEO pay as evidence of managerial power or capture, one must also explain why these professional groups have had a similar or even higher growth in pay. It seems more likely that a meaningful portion of the increase in CEO pay has been driven by market forces as well.

Bivens and Mishel (2013)… CEO compensation grew far faster than compensation of other highly paid workers over the last few decades…. We employ Kaplan’s own series on CEO compensation and compare it to the incomes of top households, as he does… [and] a better standard, the wages of top wage earners…. CEO compensation grew from 1.14 times the income of the top 0.1 percent of households in 1989 to 1.85 times top 0.1 percent household income in 2012. CEO pay relative to pay of top 0.1 percent wage earners grew even more, from a ratio of 2.68 in 1989 to 4.75 in 2012…. Is this a large increase?…

I genuinely do not see why Steve Kaplan is claiming that there is no CEO pay increase fact at all different from the top 0.1% earnings increase fact: there definitely is something else going on.

Morning Must-Read: Dominick Bartelme and Yuriy Gorodnichenko: Linkages and Economic Development

Posted on by Brad DeLong

Dominick Bartelme and Yuriy Gorodnichenko: Linkages and Economic Development: “A single Honda… is made of 20,000 to 30,000 parts…

…produced by hundreds of different plants and firms…. Complex production chains are a salient characteristic of modern economies and the immense productivity gains of the past several centuries have relied on an extensive division of labor across plants which trade specialized inputs with one another in convoluted networks…. An early literature (e.g. Hirschman (1958)) reasoned these industry linkages were essential for economic development and focused on how to promote the formation of robust input markets in poor countries and target investment to the industries with the strongest linkages. However, before the data and methods to test these ideas became available, one-sector models that abstracted from intermediate goods altogether became the standard framework for studying growth…. Most of the analysis at this middle level is theoretical and qualitative but the predictions are clear: these linkages should play an important role in economic de- velopment…. Having built a database of input-output tables for a broad spectrum of countries and times, we provide evidence consistent with these predictions… [that] is quantitatively strong and robust… in line with the results from a calibrated multisector neoclassical model….

Various works in economics grapple with the importance of these linkages and specialization… domestic foreign-owned companies as well as imports of foreign inputs appear to be associated with increased productivity… corporate spin-offs aimed to increase the focus of their operations appear to earn higher abnormal returns…. However, these efforts seem disparate and lack a unifying framework with a macroeconomic perspective. We hope that future research will take up these challenges.

Morning Must-Read: Rob Grimshaw: The Financial Times Adapts to the Digital World

Posted on by Brad DeLong

Rob Grimshaw: “Ultimately, it does come back to the content”: “We were always going to a niche site…

…on the web. Our traffic figures were always going to be a constraining factor…. When the advertising guy took over the business, which is me…. conscious of the fact that advertising wasn’t going… we needed an alternative… being much more bold on the subscription side… turning the dial on the meter model over toward subscription… to the point where many people were coming up to barriers, a lot of people went through, and more than that, they were happy to come through at price points that were far above what any of us had anticipated….

My strong belief is that the core of… a successful model on the web is unique, differentiated content… finance or business news or general news or local news. If you’ve got something that nobody else has, and there is a group of people who want that, then you have a business…. Now the scale of that business is an open question…. People will pay a lot for things they want…. Ultimately, it does come back to the content. It’s got to be good enough or unique enough for people to want to buy it, and unless those two things are true about it, then actually they won’t succeed either way. They won’t generate the audience they need for advertising, let alone sell a subscription…