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A Facebook friend was enthusing about Bernie Sanders and arguing for “direct wealth transfer” to compensate Americans whose wages are stagnant and/or who lose jobs to robots.

I’m wondering if that isn’t already built into the U.S. system. Consider the labor force participation rate (chart), falling steadily since 2009. People who don’t work are eligible for subsidized and/or free housing, food stamps, free health care, a variety of free services for their children, and a free mobile phone (see the Redistribution Recession review). All of these are paid for primarily by high-income Americans because those are the people who pay the most in taxes (if not at as high a rate as Bernie Sanders would like to see collected).

So aren’t we already set up for increasing wealth transfer? The recipients of these transfers receive services, of course, rather than cash, but the function is the same.

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Nearly 20 years ago I argued, in “Tuition-free MIT”, that MIT needed to reduce tuition so that the student body didn’t become “people who were rejected by Harvard”. Economist magazine now looks at colleges ranked by how much they can do for a young person’s earning potential. Harvard is #4 on the list, giving its students a boost from $74.5k to $87.2k. MIT provides a much smaller boost, from $83.4k to $91.6k, ranking in at #26. At least from a purely dollars-and-cents point of view, particularly in light of Harvard’s lower costs for middle class families (MIT tries to play catch-up, however), Harvard is better than MIT.

[Of course, as the Wall Street Journal notes, becoming a California state prison guard may lead to a higher income than attending either school. As noted in Real World Divorce, a one-night sexual encounter with a dentist or physician can yield more in tax-free child support than any of the above pre-tax incomes would be worth. Not working at all combined with a friendship with someone in a taxpayer-funded housing authority, e.g., Cambridge’s, could also result in a superior material lifestyle to working at any of the above-mentioned wages. Young people should keep in mind that there are many paths to the American Dream!]

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A friend has moved from the Midwest to Silicon Valley to work for one of the dinosaurs.

Back in the Midwest he was a passionate liberal, spending a lot of Facebook ink denouncing Scott Walker and his attacks on unionized government workers, etc.

He is making more than double his previous salary, but his standard of living hasn’t improved. He can’t afford an apartment on his tech job salary so he stays in a “hacker hostel in San Jose” for $900/month: ” I understand supply and demand and the invisible hand on some level- but the idea of making 3x the average household income and spending 50 percent on rent for a place I don’t even like irritates me to no end. So many people make these inane salaries and buy a $120k car and pay $2500 for rent. I really would love an Audi R8, but I’ll buy it cash- unlike a lot of other people here.” As with many 19th century immigrant labor camps, the hacker hostel is a cramped all-male environment: “One room has 4 bunk beds; 8 people in it. Usually it is two bunk beds per room if it’s a small room and 3 rooms per house. One room is filled with Nigerian people doing a startup. The whole company lives and work together.” How does one locate such an abode? “You can see the places listed on Airbnb.”

[In other words, techies who earn over $100,000 per year are living in conditions that would be illegal for federal and state governments to supply to citizens who have never worked. (regulations require no more than two people per bedroom)]

A few weeks later we had another exchange: “Have you ever given, or do you know anyone who does give serious thought to leaving the USA for a period of time to save on taxes? So lets, say that at [the big company] I make $140k/year with little hope of raises or promotions in spite of working really hard and living in an overgrown dorm. (They promise I’ll learn to relax and drop that whole ambition disease) I pay about 28% federal taxes, and 10% California taxes. I think if I go to one or more of many islands that are income tax free, my first 100k is income tax free. So if I’m trying to take my net worth from zero to 500k in 5 years, and don’t have the skills to build a wildly succesful startup…this…seems like a good option, but whats the catch? Maybe John Mcafee will shoot me? Maybe they don’t have internet in the islands? Dysentery?”

[I responded that it was easier to move to Texas and simultaneously (a) escape state income tax, and (b) reduce one’s cost of living.]

Related:

• “A 23-year-old Google employee lives in a truck in the company’s parking lot” (related to my 2005 posting “Low-wage workers have to choose between car and rent“)

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I got the DJI Osmo and have been testing it out. Everything has been captured full-auto and I would like to hear reader comments on the following:

• walking (see this gimbal on/off test for how bad it looks without any electronic magic)
• from a Robinson R44 helicopter (trying to make it as smooth as from an $800 drone; it was probably a big mistake to capture 4K 30p rather than standard HD resolution at 60p or 120p (both available options))

[I’m not loving the 1/2.3″ sensor (GoPro-sized) but the stability is way better than my experiments using a gyro: suburbs; downtown Boston.]

The idea of this device is fantastic, in my opinion. Instead of trying to stabilize a monster camera, complete with heavy battery and LCD screen, just stabilize the lens and sensor. Push everything else out of the gimbal. Battery life is an issue. We consumed 50 percent of the battery capturing 22 minutes of 4K 30p footage over a 30-minute period from the helicopter. It would be great to have a cigarette lighter power option. The included 16 GB memory card is not going to last for much more than one complete battery, so I immediately purchased a SanDisk 64GB Micro SD.

This is a great product for older parents. If you point the stick straight down the gimbal system figures that out and reorients the camera/image. Now you’re capturing stabilized video at toddler height without bending over or crawling. You can also point the stick forward (“flashlight mode”) and have the camera align itself. (Switching among these modes doesn’t work as well in a helicopter; the system seems to get confused and the result can be a tilted horizon or video in a vertical format (Smartphone-owner style!).)

Potentially serious weak point: The microphone doesn’t pick up a lot of sound. With everything set to automatic it is nowhere near as sensitive as the microphone on a mobile phone recording even a distant subject or the on-camera mic of a digital camera.

Nits: The phone holder is a little tight for an iPhone 6 Plus with case. Sometimes the device gets extremely confused

Project for an Aero/Astro Engineering master’s student: Mount this on the crosstube of a helicopter’s landing gear, run a wire out to it for power from the helicopter electrical system, let the videographer control the camera from inside the helicopter via WiFi (everything that can be done from the switches on the handle, including panning and tilting, can be done from a smartphone), spend the rest of your professional life trying to get the FAA to approve it… [Please email if you are interested in doing this; I will pay for the required hardware, provide a Robinson R44 and pilot for flight tests, etc.]

Over-extrapolation: At $650, this is roughly a $400,000 value, by the standards of a decade ago (see SHOTOVER, and Cineflex for traditional tech). If this is how fast electro-mechanical technology can move, should we be so terrified of global warming? Isn’t there a chance that some crazy advanced technologies will be available to save the planet cheaply in 15 or 20 years? (on the other hand, the weakest feature of the Osmo is battery life) Separately, if this is what the young minds of Shenzhen can design and build, does it make sense for our political candidates to talk about tax rates from the 1950s, spending decisions that Johnson made in the 1960s, tax cuts that Reagan pushed through in the 1980s, etc. (notice how nobody wants to recall the 1970s! It is like a bad dream for Americans, though there was an amazing amount of deregulation (legacy of Gerald Ford, primarily))? Almost any political system works a lot better if you don’t have to compete with companies like DJI.

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I canceled my Apple Music Subscription. As noted in this July 2015 posting, their idea of “classical radio” is randomly selecting individual tracks out of larger works. Their hand-curated playlists also contain just one movement of a symphony before jumping over to an unrelated work. This is no worse than Rhapsody (launched 14 years ago), of course, or Google’s comparable service. But Apple Music can’t play on the Sonos and isn’t CD quality like Deezer (HDtracks goes beyond CD quality but isn’t streaming).

Readers: If you’re not classical fans, do you like Apple Music better than the established competitors?

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… you’ll like “Pond Scum,” a New Yorker piece that heaps abuse on Henry David Thoreau, our neighbor here at Hanscom Field.

(Personally I have always liked Thoreau’s travel writing the best, e.g., Cape Cod and A Week on the Concord and Merrimack Rivers.)

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Readers who are cool enough to work in San Francisco or Silicon Valley: I’ll be in San Francisco, Napa, Berkeley, and Santa Cruz (Hackers Conference!) next week. Please email me (philg@mit.edu) if you’d like to meet for coffee in San Francisco (at the Galleria Park Hotel) on Tuesday morning, 11/3, at 8:00 am. Or, alternatively, in Berkeley (near Claremont/Ashby) the morning of 11/6.

Thanks!

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Friends have fraternal twins. Last year one of them shut down the school for a while (previous post). They’re in Fourth Grade this year and the teacher asked them to write down what they wished for. The boy wished for $100 billion for himself. His sister wanted (a) money to help the homeless, (b) world peace, (c) “a huge pool. It will be enormously long and will stretch around the world so children can have fun after school. I wished for a pool because I think people that live in Africa can take a dip in the pool after they have finished working in the hot climates.”

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Half of Syria and Afghanistan are moving to Europe. Is that a problem? Not if you own apartment buildings in Europe it isn’t! These new EU citizens will need a place to live. It seems safe to assume that they don’t have the capital necessary to buy a house. Thus this will put pressure on rents and enrich owners of residential multi-unit buildings. The pressure should continue for the next 20+ years as these immigrants have kids. The population of Syria, despite the challenges of living there, has risen from 12.5 million in 1990 to 22.85 million in 2013. The population of Afghanistan rose, over the same period, from 11 million to 30.55 million. Imagine the fertility when these folks can tap into European governments’ free housing, free health care, free food, and free education!

There are European REITs, of course, but a generic REIT or REIT index (example) doesn’t seem ideally positioned to respond to this new wave of migration. Will there be more office jobs? If not, owning an office building won’t be any more profitable than before. Will there be more cash in the retail economy? It seems unlikely, especially if taxes need to be raised in order to support the newcomers. So investors in shopping malls won’t get a boost. Thus it has to be a REIT specializing in housing and, ideally, huge charmless buildings (see this ft.com article for some ideas).

[Interestingly, when this is all over, and the owners of residential property are crazy rich due to government action (providing free housing to immigrants), guys like Thomas Piketty will be looking at the statistics and calling for additional government action to reduce wealth inequality.]

Related:

• “Small-Town Sweden Chafes at Migrant Influx” (Wall Street Journal, October 20, 2015) — the journalist notes that “the migration agency is desperate for rooms to lodge asylum seekers due to a housing shortage in Stockholm and other large cities.” Among the Swedes interviewed, the real estate developer who is going to profit by building “a shelter for asylum-seekers … from Syria, Eritrea, Afghanistan, and Somalia” was the most enthusiastic about the project and about immigrants: “This won’t increase social tensions unless those who already live there start them. I’m convinced these children and teenagers will behave. These aren’t people who’ve come here to start trouble, they’re fleeing wars.” (unclear from the article if the developer lives in the same town as the proposed shelter)

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What would it look like if a cosmologist tested theories about the universe instead of writing a bestselling non-fiction book of randomly assembled scientific-sounding sentence fragments? (Free title for the next tenured academic who wants to write one: The Elegantly Hidden Massively Parallel Enigmatic Universe, introduction and cautionary scolding about global warming by Neil deGrasse Tyson.)

Join me at MIT tomorrow to find out! Brian Keating (tagline: “that other UC astronomer who is not in the news”) is talking about experimental results. Coffee at 3:30 pm in 4-349 and the actual talk in 10-250 at 4 pm. Details on the Physics Colloquium page. After the talk we can get together and anyone who actually understood it can explain it to the rest of us.

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