(Roughly) Daily

Posts Tagged ‘Disney

“He, indeed, who gave fewest pledges to Fortune, has yet suffered her heaviest visitations”*…

As Zachary Crockett explains, taking the kids to a baseball game, a movie, or Disneyland is a bigger financial commitment than it used to be for middle-class families… a much bigger commitment…

In the 1950s and ’60s — the so-called Golden Age of American capitalism — family outings were within the realm of affordability for most median income earners. Many blue-collar workers could afford new homes and cars and still take their kids to Disneyland.

Despite rising wages, many of those same activities are now out of reach for everyday Americans.

The Hustle analyzed the cost of three family activities in 1960 vs. 2022:

1. A baseball game

2. A movie at a theater

3. A one-day Disneyland visit

We found that these family outings have increased in cost at 2-3x the rate of inflation — and that, in order to afford them, today’s American families have to work up to 2x as many hours as they did 60 years ago…

The painful details at: “America’s favorite family outings are increasingly out of reach,” from @zzcrockett in @TheHustle.

* John Maynard Keynes

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As we rethink our plans, we might recall that it was on this date in 1951 that Disney’s Alice in Wonderland had its American premiere (in New York, two days after premiering in London). The average price of a movie ticket that year was $0.47 (or $4.53, adjusted for inflation); popcorn was 5-10 cents per bag.

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Written by (Roughly) Daily

July 28, 2022 at 1:00 am

“O brave new world, that has such people in ‘t!”*…

The estimable Steven Johnson suggests that the creation of Disney’s masterpiece, Snow White, gives us a preview of what may be coming with AI algorithms sophisticated enough to pass for sentient beings…

… You can make the argument that the single most dramatic acceleration point in the history of illusion occurred between the years of 1928 and 1937, the years between the release of Steamboat Willie [here], Disney’s breakthrough sound cartoon introducing Mickey Mouse, and the completion of his masterpiece, Snow White, the first long-form animated film in history [here— actually the first full-length animated feature produced in the U.S; the first produced anywhere in color]. It is hard to think of another stretch where the formal possibilities of an artistic medium expanded in such a dramatic fashion, in such a short amount of time.

[There follows an fascinating history of the Disney Studios technical innovations that made Snow White possible, and an account of the film;’s remarkable premiere…]

In just nine years, Disney and his team had transformed a quaint illusion—the dancing mouse is whistling!—into an expressive form so vivid and realistic that it could bring people to tears. Disney and his team had created the ultimate illusion: fictional characters created by hand, etched onto celluloid, and projected at twenty-four frames per second, that were somehow so believably human that it was almost impossible not to feel empathy for them.

Those weeping spectators at the Snow White premiere signaled a fundamental change in the relationship between human beings and the illusions concocted to amuse them. Complexity theorists have a term for this kind of change in physical systems: phase transitions. Alter one property of a system—lowering the temperature of a cloud of steam, for instance—and for a while the changes are linear: the steam gets steadily cooler. But then, at a certain threshold point, a fundamental shift happens: below 212 degrees Fahrenheit, the gas becomes liquid water. That moment marks the phase transition: not just cooler steam, but something altogether different.

It is possible—maybe even likely—that a further twist awaits us. When Charles Babbage encountered an automaton of a ballerina as a child in the early 1800s, the “irresistible eyes” of the mechanism convinced him that there was something lifelike in the machine.  Those robotic facial expressions would seem laughable to a modern viewer, but animatronics has made a great deal of progress since then. There may well be a comparable threshold in simulated emotion—via robotics or digital animation, or even the text chat of an AI like LaMDA—that makes it near impossible for humans not to form emotional bonds with a simulated being. We knew the dwarfs in Snow White were not real, but we couldn’t keep ourselves from weeping for their lost princess in sympathy with them. Imagine a world populated by machines or digital simulations that fill our lives with comparable illusion, only this time the virtual beings are not following a storyboard sketched out in Disney’s studios, but instead responding to the twists and turns and unmet emotional needs of our own lives. (The brilliant Spike Jonze film Her imagined this scenario using only a voice.) There is likely to be the equivalent of a Turing Test for artificial emotional intelligence: a machine real enough to elicit an emotional attachment. It may well be that the first simulated intelligence to trigger that connection will be some kind of voice-only assistant, a descendant of software like Alexa or Siri—only these assistants will have such fluid conversational skills and growing knowledge of our own individual needs and habits that we will find ourselves compelled to think of them as more than machines, just as we were compelled to think of those first movie stars as more than just flickering lights on a fabric screen. Once we pass that threshold, a bizarre new world may open up, a world where our lives are accompanied by simulated friends…

Are we in for a phase-shift in our understanding of companionship? “Natural Magic,” from @stevenbjohnson, adapted from his book Wonderland: How Play Made The Modern World.

And for a different, but aposite perspective, from the ever-illuminating L. M. Sacasas (@LMSacasas), see “LaMDA, Lemoine, and the Allures of Digital Re-enchantment.”

* Shakespeare, The Tempest

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As we rethink relationships, we might recall that it was on this date in 2007 that the original iPhone was introduced. Generally downplayed by traditional technology pundits after its announcement six months earlier, the iPhone was greeted by long lines of buyers around the country on that first day. Quickly becoming a phenomenon, one million iPhones were sold in only 74 days. Since those early days, the ensuing iPhone models have continued to set sales records and have radically changed not only the smartphone and technology industries, but the world in which they operate as well.

The original iPhone

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“The basic underlying problem does not entail misbehavior or incompetence but rather stems from the nature of the provision of labor-intensive services”*…

Agatha Christie with her daughter Rosalind in 1924 [source]

Why is it that stuff– clothing, electronics, toys– keep getting cheaper, while services– healthcare, education, child care– continue to rise on price?

Agatha Christie’s autobiography, published posthumously in 1977, provides a fascinating window into the economic life of middle-class Britons a century ago. The year was 1919, the Great War had just ended, and Christie’s husband Archie had just been demobilized as an officer in the British military.

The couple’s annual income was around around £700 ($50,000 in today’s dollars)—£500 ($36,000) from his salary and another £200 ($14,000) in passive income.

hey rented a fourth-floor walk-up apartment in London with four bedrooms, two sitting rooms, and a “nice outlook on green.” The rent was £90 for a year ($530 per month in today’s dollars). To keep it tidy, they hired a live-in maid for £36 ($2,600) per year, which Christie described as “an enormous sum in those days.”

The couple was expecting their first child, a girl, and they hired a nurse to look after her. Still, Christie didn’t consider herself wealthy.

“Looking back, it seems to me extraordinary that we should have contemplated having both a nurse and a servant,” Christie wrote. “But they were considered essentials of life in those days, and were the last things we would have thought of dispensing with. To have committed the extravagance of a car, for instance, would never have entered our minds. Only the rich had cars.”…

By modern standards, these numbers seem totally out of whack. An American family today with a household income of $50,000 might have one or even two cars. But they definitely wouldn’t have a live-in maid or nanny. Even if it were legal today to offer someone a job that paid $2,600 per year, nobody would take it.

The price shifts Christie observed during her lifetime continued to widen after her death…

As you can see, cars aren’t the only things that get cheaper over time. In the last 30 years, clothing, children’s toys, and televisions have all gotten steadily cheaper as well—as have lots of other products not on the chart.

It’s one of the most important economic mysteries of the modern world. While the material things in life are cheaper than ever, labor-intensive services are getting more and more expensive. Middle-class Americans today have little trouble affording a car, but they struggle to afford a spot in day care. Only the rich have nannies.

Who is to blame? Some paint the government as the villain, blaming excessive regulations and poorly targeted subsidies. They aren’t entirely wrong. But the main cause is something more fundamental—and not actually sinister at all.

Back in the 1960s, the economist William Baumol observed that it took exactly as much labor to play a string quartet in 1965 as it did in 1865—in economics jargon, violinists hadn’t gotten any more productive. Yet the wages of a professional violinist in 1965 were a lot higher than in 1865.

The basic reason for this is that workers in other industries were getting more productive, and that gave musicians bargaining power. If an orchestra didn’t pay musicians in line with economy-wide norms, it would constantly lose talent as its musicians decided to become plumbers or accountants instead. So over time, the incomes of professional musicians have risen.

Today economists call this phenomenon “Baumol’s cost disease,” and they see it as one of the most important forces driving the price trends in my chart above. I think it’s unfortunate that this bit of economics jargon is framed in negative terms. From my perspective as a parent, it might be a bummer that child care costs are rising. But my daughter’s nanny probably doesn’t see it that way—the Baumol effect means her income goes up…

A thoughtful consideration of a counterintuitive phenomenon: “Why Agatha Christie could afford a maid and a nanny but not a car,” from Timothy B. Lee (@binarybits) in Full Stack Economics (@fullstackecon).

From Baumol himself…

Briefly, the book’s central arguments are these:

1. Rapid productivity growth in the modern economy has led to cost trends that divide its output into two sectors, which I call “the stagnant sector” and “the progressive sector.” In this book, productivity growth is defined as a labor-saving change in a production process so that the output supplied by an hour of labor increases, presumably significantly (Chapter 2).

2. Over time, the goods and services supplied by the stagnant sector will grow increasingly unaffordable relative to those supplied by the progressive sector. The rapidly increasing cost of a hospital stay and rising college tuition fees are prime examples of persistently rising costs in two key stagnant-sector services, health care and education (Chapters 2 and 3).

3. Despite their ever increasing costs, stagnant-sector services will never become unaffordable to society. This is because the economy’s constantly growing productivity simultaneously increases the community’s overall purchasing power and makes for ever improving overall living standards (Chapter 4).

4. The other side of the coin is the increasing affordability and the declining relative costs of the products of the progressive sector, including some products we may wish were less affordable and therefore less prevalent, such as weapons of all kinds, automobiles, and other mass-manufactured products that contribute to environmental pollution (Chapter 5).

5. The declining affordability of stagnant-sector products makes them politically contentious and a source of disquiet for average citizens. But paradoxically, it is the developments in the progressive sector that pose the greater threat to the general welfare by stimulating such threatening problems as terrorism and climate change. This book will argue that some of the gravest threats to humanity’s future stem from the falling costs of these products, rather than from the rising costs of services like health care and education (Chapter 5).

The central purpose of this book is to explain why the costs of some labor-intensive services—notably health care and education—increase at persistently above-average rates. As long as productivity continues to increase, these cost increases will persist. But even more important, as the economist Joan Robinson rightly pointed out so many years ago, as productivity grows, so too will our ability to pay for all of these ever more expensive services.

William J. Baumol, from the Introduction to The Cost Disease: Why Computers Get Cheaper and Health Care Doesn’t

* William J. Baumol

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As we interrogate inflation, we might recall that it was in this date in 1933 that United Artists released the animated short “Three Little Pigs,” part of the Silly Symphonies series produced by Walt Disney (though some film historians give the date as May 25). A hit, it won the Academy Award for Best Animated Short Film. In 1994 a poll of 1,000 animators voted it #11 of the 50 Greatest Cartoons of all time.

Its song, “Who’s Afraid of the Big Bad Wolf,” written by Frank Churchill, was a huge hit and was often used as an anthem during the Great Depression.

“Everyone waits in line”*…

What we can learn from studying the crowd-management approaches at Disneyland…

Who gets to do what and when at a themepark may sound like a trivial question, but I think it’s a perfect little microcosm for the distributional problems that are at the heart of all political economy – questions that the pandemic’s shortages and shocks threw into stark relief…

Stay in your lane: “The definitive answers to Disney’s pernicious queueing debates,” from Cory Doctorow (@doctorow)

The video that Cory recommends:

(image at the top: source)

* Paul Theroux

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As we bide our time, we might recall that it was on this date in 1971 that traffic-choking crowds jammed Walt Disney World to capacity (on the day after Thanksgiving). Shortly before noon the Florida park closed its gates to additional visitors.

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Written by (Roughly) Daily

November 26, 2021 at 1:00 am

“I’m forever blowing bubbles / Pretty bubbles in the air”*…

 

Hertz

 

Last Wednesday, Hertz, which has filed for bankruptcy, suspended it’s plans to sell lots of new shares.  The backstory is fascinating… and sadly, all-too-indicative of our times…

Ok, so. Up until this year, I would’ve told you that there are two general kinds of financial bubbles.

The first kind of bubble is where everyone believes the future will be like the present. Think credit bubbles and real estate; think 2007-2008, where the fundamental belief that drove the bubble forward and into ruin was “We’ve figured this out. We can’t lose. The risk has all been worked out. Lever up, cowboy. We will never die.”…

The second kind of bubble is where everyone believes the future will be different from the present. Think equity bubbles, startups, and crypto; think 1999, where the fundamental belief that drove the bubble forward and into ruin was “It’s a new economy. All the rules are different. The upside is unlimited. If you get in now, you’ll be rich. We’re going to live forever.”…

I was wrong. There is a third kind of bubble, it’s happening spectacularly right now, and we’re going to see it a lot more in the future.

If the first kind of bubble is “everyone thinks the future will be the same”, and the second kind is “everyone thinks the future will be different”, the third kind is “everyone thinks the future doesn’t matter.”…

I’m sure most of you have heard of the Wallstreetbets subreddit by now; if you haven’t, the best way I know how to explain it is that it’s like “multiplayer Jackass for the stock market.”

Wallstreetbets started as a bunch of random internet yahoos bragging about crazy YOLO trades they’d make (and would actually follow through on!), and what enormous percentages of their net worth they’d win or lose spectacularly. I really do think that Jackass is a good comparison here. Yes, these people are trying to get rich; but more importantly, they’re trying to provoke reactions. It’s a game of who can be the most shocking. There’s really not much difference between reading some of these WSB posts and watching an old Jackass sketch. You’ll laugh until you can’t breathe, and then keep laughing when you realize someone actually got kicked in the crotch that hard.

But as it got more popular, some actually sophisticated (and supremely aggressive) traders are getting in on the fun, and it got highly competitive and weird. It’s the newest version of “the stock market as full-contact sports with legal gambling”, and it’s a lot of fun. No one here cares about valuation or fundamentals. It is explicitly a casino. Everyone is here to get in and out of a position in the most shocking way possible. And, astoundingly, there’s enough AUM getting accumulated behind these bets that it can actually start to move individual stocks in weird ways.

The groundwork for this strange show has been built up over a few years, but when the pandemic hit, all hell broke loose. A perfect storm of events come together: first, generational volatility in the stock market as everyone tried to get in front of (and then out from) a global pandemic; second, everyone getting quarantined at home and desperate to feel something, and third: no sports.

Enter Hertz. Hertz was in trouble anyway; it’s carrying around a ton of debt to pay for a fleet of cars that no one wants to drive, because we have Uber now. When the pandemic hit, they got called on their debt, couldn’t make it work, so they had to declare bankruptcy and start a restructuring process.

But then weird things started to happen. Hertz’s stock, which is presumably worthless, starts to go up. And up. And up. It gets bid up a whole 500% over a 3-day period last week. What is going on?

There’s no way to describe it other than, this is a Jackass sketch taking place. It started out as these internet YOLO traders playing an increasingly stupid game of chicken. But then it… caught on? Other people started to get in on this too. Hey, obviously the stock in the long run is worth zero. Everyone knows that. But it’s going up, and tomorrow it might go up more. If this were just some dumb penny stock with a cool story attached to it, that’d be old news. This is different.

When you see a stock getting bid up like this, the only conclusion you can draw is “The future does not matter, because in between now and then, this is explicitly just spinning a roulette wheel. The stock could go up or down, who knows, but at least you know it has nothing to do with the underlying value of the stock (which we all know is zero!), and everything to do with other gamblers.

So Hertz sees this happening, and they’re like, well, if there’s demand for our stock, we should go sell some! I mean, it’s a ridiculous kind of demand, and it’s not “real” demand, but hey, maybe it’s real enough. So Hertz files, and is granted, an emergency request to their bankruptcy judge to issue a billion dollars worth of new stock in order to take advantage of whatever this is. Tom Lauria, one of the attorneys representing Hertz, had an all-timer line: “New platforms for day traders may be facilitating this. There are forces at work that us non-financial people, that we can only observe.” The SEC, presumably between gasps of laughter, declined to weigh in on whether the transaction was legal, saying “it is up to the company to comply with securities law.”

Just to restate how funny this is: Hertz is granted permission, by their own bankruptcy judge, to sell stock in their company which has already declared bankruptcy, because due to weird mojo in the universe, there’s a small army of reddit trolls playing chicken with each other and it just might save the company. Financial Twitter goes crazy, and (of course!) people start bidding up stocks of other bankrupt companies. It was a great day to be online…

Eminently worth reading in full– the ever-illuminating Alex Danco on the emergence of a new kind of financial bubble: “Never Hertz to Ask.”

See also “Speculative Booms” in Jamie Catherwood’s “The State of the Market” (and then, here); plus “Hertz share issue: demolition derby” and “Trading Sportsbooks for Brokerages, Bored Bettors Wager on Stocks.”

And experts suggest that there’s going to be more–lots more– scope for creativity: “A Tidal Wave of Bankruptcies Is Coming.”

* Popular American song; music by John Kellette; lyrics credited to “Jaan Kenbrovin” — actually a collective pseudonym for the writers James Kendis, James Brockman and Nat Vincent, combining the first three letters of each lyricist’s last name. The number was debuted in the Broadway musical The Passing Show of 1918

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As we pucker up, we might recall that it was on this date in 1970 that Penn Central, a century-old American railroad company, declared Section 77 bankruptcy, the largest ever U.S. corporate bankruptcy up to that date.  They did not use the occasion to issue stock, and did later exit bankruptcy, and were ultimately folded into Conrail, the U.S. government’s railroad holding company.

150px-PennCentral_Logo.svg

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Written by (Roughly) Daily

June 21, 2020 at 1:01 am

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