April 11, 2018

Zephyr Teachout (Fordham): Congress let Facebook CEO off the hook too easily (Michael Simkovic)

In the Guardian, Fordham's Zephyr Teachout argues that members of Congress let the CEO of Facebook off easily and essentially treated his hearing as an opportunity to curry favor with him.  Teachout writes:

"It was designed to fail. It was a show designed to get Zuckerberg off the hook after only a few hours in Washington DC. It was a show that gave the pretense of a hearing without a real hearing. It was designed to deflect and confuse.

Each senator was given less than five minutes for questions. That meant that there was no room for follow-ups, no chance for big discoveries and many frustratingly half-developed ideas. Compare that to Bill Gates’ hearing on Microsoft, where he faced lawyers and staff for several days . . . By design, you can’t do a hearing of this magnitude in just a couple of hours.

The worst moments of the hearing for us, as citizens, were when senators asked if Zuckerberg would support legislation that would regulate Facebook. . . . By asking him if he would support legislation, the senators elevated him to a kind of co-equal philosopher king . . . 

Teachout goes on to argue that Facebook's wealth, power, disregard for individual privacy, ability to manipulate public perceptions and refusal to take responsibility for accuracy of the content it presents makes it a "danger to democracy."

"Facebook is a known behemoth corporate monopoly. It has exposed at least 87 million people’s data, enabled foreign propaganda and perpetuated discrimination. We shouldn’t be begging for Facebook’s endorsement of laws, or for Mark Zuckerberg’s promises of self-regulation. We should treat him as a danger to democracy and demand our senators get a real hearing. . . . 

Zuckerberg strikes me as reliably self-serving. That doesn’t make him that interesting as the CEO of a corporate monopoly; it makes him a run-of-the-mill robber baron. . . [Senators should not] treat[] him as a good-hearted actor with limited resources, instead of someone who is making monopoly margins and billions in profits."

In fairness to Mr. Zuckerberg, traditional media organizations also often exhibit a disregard for privacy, manipulate public perceptions and refuse to take responsibility for the [in]accuracy of the information they publish and the harm it causes. Too many journalists and and editors invest the bare minimum in fact checking (often nothing), and prioritize entertainment value and "virality" over economic or political significance.  The established press too often write preconceived stories full of selective quotes or facts while disregarding contradictory information, refuse to print corrections, elevate the status of those willing to supply "helpful" quotes, and retaliate against those who point out their errors. 

This irresponsible behavior is made possible by defamation laws that make it virtually impossible for the press to incur liability unless it can be proved that they knowingly and intentionally lied with the specific goal of destroying an individual's reputation--which is virtually impossible.

Facebook may have contributed to the unexpected outcome of the last election, but so did other media organizations.  Mainstream media organizations gave one candidate billions of dollars of free publicity (hundreds of millions more than his rivals) mainly because his provocative statements--delivered with the practiced timing of a "reality" TV star--were entertaining and boosted their readership, and therefore their revenues.

This is what happens when competitive market pressures encourage media organizations to see their role as packaging advertising rather than as supplying accurate information.    Facebook may play the same game, only with better technology.

This does not mean that Facebook should get a free pass.  But we should not use Facebook as a scapegoat to avoid talking about problems with the media landscape that are systemic and that would persist even if Facebook disappeared tomorrow.

 

UPDATE: This article was corrected on 4/15/2018 to note that media organizations provided billions worth of free coverage, not just tens of millions.


April 11, 2018 in Guest Blogger: Michael Simkovic, Law in Cyberspace, Legal Profession, Of Academic Interest, Television, Web/Tech, Weblogs | Permalink

March 16, 2016

Statistician Hans Rosling: The Press Does Not Understand the World (Michael Simkovic)

Statistician and data visualization expert Hans Rosling recently took the media to task for misleading readers and viewers using unrepresentative anecdotes and ignoring contradictory data.

Rosling says "You can't trust the news outlets if you want to understand the world.  You have to be educated and then research basic facts."

While journalists often depict the developing world as full of "wars, conflicts, chaos" Rosling says "That is wrong.  [The press] is completely wrong.. . . You can chose to only show my shoe, which is very ugly, but that is only a small part of me. . . . News outlets only care about a small part but [they] call it the world."

Rosling complains that the slow but steady march of progress is not considered news.

Rosling is famous for his data visualizations, especially this video briefly illustrating 200 years of global progress toward health and prosperity.  It's optimism for the data-driven set (and is a big hit in my business law classes).

  


March 16, 2016 in Guest Blogger: Michael Simkovic, Of Academic Interest, Professional Advice, Science, Television, Weblogs | Permalink

March 23, 2015

BLS Employment Projections Are Unreliable (Michael Simkovic)

Labor economists have long cautioned against the misuse of Bureau of Labor Statistics (BLS) employment projections.

In 2004, Michael Horrigan at the BLS explained that the BLS projections should not be used to value education or to attempt to predict shortages or surpluses of educated labor.  Instead, the value of education should be measured based on earnings premiums—the measure used in The Economic Value of a Law Degree and Timing Law School

Horrigan wrote:

The general problem with addressing the question whether the U.S. labor market will have a shortage of workers in specific occupations over the next 10 years is the difficulty of projecting, for each detailed occupation, the dynamic labor market responses to shortage conditions. . . .  Since the late 1970s, average premiums paid by the labor markets to those with higher levels of education have increased.

 

It is the growing distance, on average, between those with more education, compared with those with less, that speaks to a general preference on the part of employers to hire those with skills associated with higher levels of education.

The BLS takes the same position in its FAQ.  The BLS does not project labor shortages or surpluses.

In 2006, Richard Freeman back-tested the BLS projections and found that “the projections of future demands for skills lack the reliability to guide policies on skill development.”

The BLS employment projections are not only unreliable.  Comparing occupation-specific employment projections to number of graduates in related fields systematically underestimates the value of higher education.

In 2011 David Neumark, Hans Johnson, & Marisol Cuellar Mejia wrote:

If there are positive returns to education levels above those indicated as the skill requirement for an occupation in the BLS data – and especially if these wage premia are similar to those in other occupations – then relying on the BLS skill requirements likely substantially understates projected skill demands.

 

For nearly every occupational grouping, wage returns are higher for more highly-educated workers even if the BLS says such high levels of education are not necessary. For example . . . for management occupations, the estimated coefficients for Master’s, professional, and doctoral degrees are all above the estimated coefficient for a Bachelor’s degree, which is the BLS required level. . . ..

 

If the BLS numbers are correct, we might expect to see higher unemployment and greater underemployment of more highly-educated workers in the United States.  As noted earlier, we do not find evidence of this kind of underemployment based on earnings data. Similarly, labor force participation rates are higher and unemployment rates are lower for more highly educated workers.

(note—above I link to and quote the 2013 published article; Neumark et al. said much the same thing in their 2011 working paper).

Neumark et. al. also noted that recent BLS projections appeared to be much too low for managerial and legal services occupations.

Starting around 2012 many law professors and pundits argued that the number of job openings for lawyers projected by the BLS relative to the number of expected law graduates suggested that too many students were attending law school and that they would not get much value out of their degrees.

In 2012, Deborah Merritt wrote:

The Bureau [of Labor Statistic]’s occupational employment projections . . . answer the very question that many law school applicants want to know: How many new lawyers will the economy be able to absorb this decade?

 

The Bureau currently estimates that the economy will create 218,800 job openings for lawyers and judicial law clerks during the decade stretching from 2010 through 2020. That number, unfortunately, falls far short of the number of aspiring lawyers that law schools are graduating.

 

The oversupply of entry-level lawyers deprives many graduates of any opportunity to practice law. At the same time, the lawyer surplus constrains entry-level salaries.

Merritt notes the possibility that law might be a versatile degree with value outside of legal practice.

In 2012, Paul Campos wrote:

Further evidence that law degrees are unlikely to become more valuable going forward can be found in the projections of the Bureau for Labor Statistics (BLS) . . . [which suggest many more law graduates than job openings].”

 In 2013, Brian Tamanaha wrote:

The U.S. Bureau of Labor Statistics estimates about 22,000 lawyer openings annually through 2020 (counting departures and newly created jobs). Yet law schools yearly turn out more than 40,000 graduates. This bleak job market coexists with astronomically high tuition.

Several and journalists also started comparing BLS projections and job openings to make much the same argument.

In 2013, unaware of the problems with job openings projections, I (Simkovic) suggested that projections might be used to make adjustments to more objective historical baselines for risk-based student loan pricing

On the chance that BLS projections that perform poorly in other contexts perform well in the legal education context, Frank McIntyre and I analyzed the extent to which BLS projections predict law graduate outcomes (earnings premiums).  The answer is: no better than random chance.  

As in other areas, BLS employment projections are not reliable or meaningful for predicting earnings premiums and are therefore not useful for valuing legal education.

But what about the number of job openings for lawyers?  Can BLS projections at least predict that reasonably well?

The answer appears to be “no.”  Recent analysis by the BLS suggests that their projection methods—the ones we analyze in Timing Law School—have systematically under-predicted job openings for lawyers.  

The BLS is considering changing its methodology to one that it believes will be more accurate.   Ted Seto has discussed this issue extensively. 

It is unclear at this point if the new job opening projections method will predict earnings premiums better than the old ones.  In any case, that was never their intended purpose, and it would be safer to predict earnings premiums and value education based on historical earnings premiums.

It remains likely that many law school graduates will not practice law.  Such has been the case in the past, and such is the case in other fields.   Many engineering, math and science graduates do not work as engineers, mathematicians or scientists in their fields of study.  Most fields of study do not have a one-to-one correspondence with a particular occupation, but are more broadly useful in the labor market, and law is no exception.  In spite of many individuals working outside their degree fields, higher education typically has been, and likely will remain, an investment with positive returns.

To best way to tell whether there is too much or too little investment in education is to consider relative returns that take into account risks and variability in employment.  Are the returns to education higher or lower than returns that can be had elsewhere with similar levels of risk?  The returns to education are generally much higher, and risk does not appear to explain this difference adequately.  The high relative returns to education suggest underinvestment in education.  

(A word of caution—BLS employment projections should not be confused with the BLS Occupational Employment Statistics (OES); the OES remains a useful and important, albeit imperfect, source of data). 


March 23, 2015 in Guest Blogger: Michael Simkovic, Legal Profession, Of Academic Interest, Professional Advice, Science, Student Advice, Television, Weblogs | Permalink