It has been exactly a decade since the financial crisis swept all across the globe in the fall of 2008, but for many countries and economies, the issues brought upon remain very much alive, and the aftershocks can still be felt today. As countries and economies already were functioning in each of their own unique ways, they had put forward different monetary and fiscal policies in response to the financial crisis, and were met with varying results. Among the many distinct measures taken was Britain’s highly controversial Austerity Programme. First officially proposed by both Labour and Conservative Party during the 2010 General Election, and subsequently implemented by the Conservative-Liberal Democrat coalition government, its impacts have persevered over the past decade, and are as relevant now as ever. Though the process of leaving the European Union (Brexit) has since replaced it as the top national issue in Britain, Prime Minister Theresa May recently brought the attention back to the Austerity Programme with her central message at the 2018 Conservative Party Conference “The end of it is in sight.” It remains to be seen whether the claim turns out to be valid, but there should be little doubt the Austerity Programme has reshaped the British economy as well as millions of people’s lives, for better, and, yet, for worse.

 

 

To determine how effective the Austerity Programme has been, one has to first fully understand the context it was conceived in. When the United Kingdom was due to go into election season in April 2010, the financial crisis had been in full effect for over 18 months already, and the damage it had dealt the UK was painfully obvious. Having previously produced a strong and stable economic growth for three terms of parliament spanning a decade as the Chancellor of the Exchequer, Gordon Brown had to go through his own election campaign as the Prime Minister who was in the middle of it all when the financial crisis hit. A mere 5 years prior, he, along with the economy he produced, was widely credited as the real reason why Labour was able to win the election, in spite of Prime Minister Tony Blair’s unpopular decision to invade Iraq in 2003. Now, in 2010, the most notable thing associated with his name was a peacetime record high deficit £157 billion, highest figure in Europe second only to Ireland, as well as a 300% increase in net borrowing in proportion to GDP between 2008 and 2010. Admittedly, there was no guarantee that, had the financial crisis not happen, Gordon Brown would have won the 2010 General Election fair and square. Nevertheless, it had indubitably dealt quite a heavy blow on his premiership in its infancy. The seemingly ridiculously high borrowing numbers became an opportunity for political attack, something a strategist and tactician such as the then Leader of Opposition, David Cameron, would not, for a second, hesitate to seize. During Prime Minister’s Questions on October 29, 2008, at the height of the financial crisis, accused Brown and Alistair Darling, then Chancellor of the Exchequer, of breaking the fiscal rules that they had set up. “Rule 1 was, ‘Only borrow to invest’; now he is having to borrow to pay for unemployment benefit. That rule is dead. Rule 2 was, ‘Don’t have debt over 40 per cent of national income.’ Even on his own fiddled figures, that rule is now dead.” (Hansard) Not complacent with simply dishing out criticism, he followed it up six months later in April 2009, proposing an “age of austerity” as the potential Prime Minister.

 

He did not have to wait long before he got the chance to turn the potential into reality. The largest party coming out of the 2010 General Election but without a majority in the parliament, the Conservative Party formed a coalition government with the Liberal Democrats in May 2010. A month into the new government, Chancellor George Osborne announced in the emergency budget dramatic government spending cuts, a Value-Added Tax increase from 17.5% to 20%, welfare cuts, in addition to a personal allowances increase of £1,000. Osborne claimed such measures would be “tough, but fair”, and “unavoidable”, while calling the previous government’s massive spending in response to the financial crisis “irresponsible”. With the new budget, the coalition government had cutting the aforementioned deficit and lowering debt to GDP ratio as its top priorities. With new policies going in the opposite direction of the previous Labour government, the coalition set out to fix the financial problems as much as they could, if not at the cost of people’s living standards. Increased Value-Added Tax without increased wages meant goods were less affordable than before, and welfare cuts, most notably child benefits and pregnancy grant, meant another hit on people who needed them. The downsizing on public sectors unsurprisingly led to an increased unemployment rate during a period in the following year. Granted, while it was true that the post held tremendous power over monetary and fiscal policies, the Chancellor or the Exchequer had always been a far cry from an easy and popular job. Former Chancellor Norman Lamont, infamously known as the man responsible for Black Wednesday, called himself “the most hated man in England” after being appointed. Osborne’s public image, likewise, was practically destroyed by his direct link to the Austerity Programme, as he was perceived as the guy who simply and solely took goods and services from the British people for his own personal good. As the years went on, the coalition government did nothing to shy away from the austerity route, even adding privatizing public assets into their arsenal, with the privatization of Royal Mail causing most controversy. Despite the fact the United Kingdom’s net borrowing in proportion to GDP had been effectively cut down at the end of the parliament to half of the 2010 figures, one cannot help but wonder if it was worth the sacrifices made elsewhere in people’s welfare, purchase power, and since this was a British topic, the traditions.

 

 

Fast forward to today, over two years after the man behind the Austerity Programme had been removed from power, the effects of the programme are still pervasive and prevalent. Whilst the former Prime Minister-in-waiting has been doing his best Niccolò Machiavelli impression as editor of the Evening Standard, his predecessor has generally followed his footsteps, and steadily furthered the progress of the Austerity Programme. In his spring 2017 budget, current Chancellor Philip Hammond cut down on more benefits for working age people, and confirmed that he intended continue with the Austerity Programme during the 2017 General Election campaign. With a business background before entering parliament and “Spreadsheet Phil” for a nickname, Hammond is much less of a politician than Osborne ever was, but it was evident that his main goal was still to tackle the deficit. A year later, in August 2018, it was announced the government had turned in a surplus of £2 billion with a net borrowing of £12.8 billion, both new records since when Gordon Brown was steering the ship as Chancellor. However, it is important to look at both numbers in context. The United Kingdom GDP growth has fallen from a steady 1.7% to 1.1% at the beginning of the year, so the record numbers might not necessarily mean everything is fine and dandy. An extended period of decrease in GDP growth means the UK is at rick of bottlenecking the economy, which would defeat the very purpose of the Austerity Programme.

 

 

Just a few weeks after Prime Minister Theresa May had vowed the austerity was in its last leg in the 2018 Conservative Party Conference, and less than two weeks until Philip Hammond is due to reveal a new budget, it is quite the tricky time to comment on the future of the Austerity Programme. The United Kingdom has indeed made strides in fighting back the financial crisis with a distinct and decisive strategy, but it also introduced problems that were not present before the programme took effect. If the claim had not been purely a decoy to distract people from the mess that is the Brexit fiasco, the British people can expect real changes in the upcoming budget, given the Prime Minister’s bold claim and the most updated figures. The budget may include increased public spending, considering the newly-found liquidity in the government budget, but it would not necessarily mean a complete derail from the Austerity Programme. After all, Hammond has been merely functioning in the George Osborne-shaped mold so far. The Austerity Programme has been the dominating driving force in the British society for the better part of the past decade, and even if it were to go away in the foreseeable future, it would not do so quickly, and it is entirely likely the country would still be haunted by certain policies left over, or simply the everlasting memories of it. Moreover, mind you, the “Austerity Chancellor” himself is still young enough, relevant enough, and dare I say it, more politically charged than ever. Now that he has recovered his public image as time passed, who is to say that he is not lurking for a better time to mount a comeback for the top job?

 

 

Sources:

https://www.telegraph.co.uk/news/politics/labour/10451851/Labour-are-cowards-for-racking-up-billions-in-debt-says-Ken-Livingstone.html

https://hansard.parliament.uk/Commons/2008-10-29/debates/08102932000022/Engagements#contribution-08102932000090

https://www.theguardian.com/politics/2009/apr/26/david-cameron-conservative-economic-policy1

https://www.yorkshirepost.co.uk/news/infographic-osborne-sells-off-more-public-assets-in-12-months-than-in-past-20-years-1-7393492

https://www.bbc.com/news/business-45256075

https://drive.google.com/file/d/1DiR9XcQusHQrkY9PqPAkwN4xf1TBt-HI/view?usp=sharing

 

This is probably the most unpleasant job in the world – trash sorter. It is smelly, boring and intense. The job exists because citizens throw all types of garbage into the same bin. Trash trucks take everything in the bin and pour them onto a conveyor belt. The belt rolls with the pulley in front of the recycling workers, who spend days after days watching the belt rolling and sorting them out.

Till 2018, recycling companies still rely on manual labor to categorize materials, since the assembly lines in recycling factories neither produce identical output nor have repeatable processes. According to a study released by the University of Illinois, recycling workers are more than twice as likely to be injured at work as the average worker. Seventeen American recycling workers died on the job from 2011 to 2013.

“I was created to do this job,” said Max, a robotic sorter created by Bulk Handling System (BHS) with the artificial intelligence technology. Fundamentally, Max identifies recyclables in a similar way to a person. A process called “deep learning” runs through hundreds of thousands of images to train neural networks to “think out” the correct identification. Once built these neural networks resemble the architecture of the brain and, when paired with a camera, will correctly identify the items in our recycling stream.

Max is volunteering at just the right time. The dedicated mechanical sorter is widely welcomed, as China’s ban on plastic trash import lends urgency to upgrading the recycling industry in the exporting countries. Now that the world’s biggest trash importer only allows half percent of contamination, the recycling plants need to double or triple sort the product before the shipment. Companies are getting squeezed on a number of levels. Now they are anxiously seeking every possible way to reduce labor cost.

BHS has three sites in the U.S. and three in Europe. Two waste management companies in the U.K., Viridor and Green Recycling, have invested in Max-AI, expecting to upgrade their processing line, according to the companies’ websites.

More companies than just BHS are dedicated to developing smart machines to cater for that need. Moblieye, a vehicle manufacturer, recently designed an electronic trash truck for heavier city distribution and refuse transport operations with gross weights of up to 27 tons.

“Chinese government is allowing a window for imports, but the quality has to be there,” said Brett Johns, Director of Sales, Marketing, and Procurement at City Fibers, a family recycling company in Los Angeles. Johns said that they need robots to help improve quality. “We are looking at the elimination of probably ten to twenty percent of human jobs positions,” he said.

China’s import ban is not the only reason for Max to exist. “Automation has been a trend in the last ten to fifteen years,” Nick Morell said. He is the Recycling Coordinator from Sanitation District of Los Angeles County (LACSD).

According to Morell, the agency currently relies on both mechanical and human sorters to run its processing line. “It will be out of service in next 12 months. As we put in a new mechanical sorting line,” he said, adding that LACSD is about to sign a contract with BHS to optimize their facilities this October. This means the current employed sorters will be soon out of jobs.

Morell said they were temporary labors through contracts, so they would be either reassigned to other facilities or temporarily laid off as “they are not gonna work on the line anymore”.

While sorting trash is unpleasant, it can be worse for people to lose jobs.”This conversation should not be about jobs.”said Peter Raschio in an email. He is the marketing manager of the company. Raschio argued that automation might result in the the loss of sorting position for a future hire, but those positions were not “sustainable, long-term jobs”.

Steve Miller, CEO of BHS, believed that the impact on labors would be positive. He said in an interview that the increased efficiency in assembly line could cut recycling costs and create more jobs at paper mills, plastic recyclers, and other firms that reuse raw materials.

“I would say that green jobs are going away as automation progress,” Morell said on the contrary. He predicted that green jobs in the future would be more about quality control, engineering and processing line. “It would be almost like the mining operation — the way things are ground up and that they use magnet and optical sorters. There’s not a lot of people involved in those process until you are dealing marketing and commodities,” he said.

The newest Recycling Economic Information (REI) released by the environmental protection agency (EPA) shows that the estimated recycling jobs have declined from 2001 to 2016 national wide, including those in iron and steel mills, non-ferrous foundries and glass container manufacturing plants. The number of plastic converters dropped from 178,700 to 30,535 during the 15 years. Firms that reuse raw materials in all categories of scrap commodities, except for rubber, have seen a decreasing demand for recycling workers. Miller’s optimistic outlook might not come true in the short term.

(Professor Dowell Myers, Director of the Population Dynamics Research Group in at the University of Southern California, commenting on automation’s impact on labors)

(Labor union comments, hopefully with anecdotes)

……

 

Our global economy is connected through the energy industry. For centuries, nations and firms have fought over and sought the right to acquire “black gold” – oil [Yergin]. However, the production and use of these natural resources emits dangerous carbon into the atmosphere, endangering our planet. These carbon emissions result in a changing climate — through higher temperatures, more heat, and stronger natural disasters such as tropical storms and wildfires. In acknowledging the perilous effects of climate change, the world’s fifth-largest economy – the state of California – is embarking on a goal to transition out of a state of affairs governed by the dominant energy sources (oil, petroleum, natural gas) and towards complete utility of carbon-free clean electricity by 2045.

Signed into law in September by Governor Jerry Brown, the bill sets increasingly greater targets on California’s renewable energy capability, with 50 percent by 2026, 60 percent by 2030, and one hundred percent clean electricity by 2045. California represents the second state to set this goal [Ige, 1]. Many are skeptical of the ability of the state to fully transition to clean electricity by the time 2045 rolls around, or are perturbed by possible high costs of energy bills caused by the transition. These being legitimate causes for concern, there are myriad reasons Californians could accomplish this challenging aspiration. The development of battery storage will play a vital role and its economic viability will determine California’s success at this effort. As Fareed Zakaria writes, “We need to store the energy [produced] for when the sun isn’t shining and the wind isn’t blowing. For that we need battery power on a different scale than we have today.”

As has often been the case in its innovative history, California’s investment and pledge to transition entirely to clean electricity sets an important example for the rest of the world to follow and should help influence the private sector to act. Explains the energy expert Daniel Yergin: “High energy prices, climate change and energy security are converging as the new engine driving the development of clean energy … They are being bolstered by public policy…” [Yergin, 1].

The state has crafted policies that incentivize companies and utilities to spend on enhancing renewable energy strategies and investment in energy storage, which is seen as vital towards reaching the one hundred percent clean energy goal. Although currently natural gas power plants currently makes up a large quantity of California’s energy, the state’s leadership and many companies forecast that declining costs of energy storage will ensure that electricity is much more strongly stored. Following his signature on the one hundred percent clean energy bill, Gov. Jerry Brown recently signed another law that allows the state to allocate “an additional $800 million for energy storage to capture electricity generated by solar panels during daylight hours to help keep the lights on after the sun goes down” [Penn, 1]. This money goes into the state’s Self-Generation Incentive Program, which incentivizes providing support for “distributed energy resources” and “rebates for qualifying distributed energy systems installed on the customer’s side of the utility meter” [CPUC, 1]. Through this initiative, California is essentially creating a market for the utilities to research ways to develop new advanced energy storage systems. The state has increased the program’s funding to over $1 billion. The rebate money is available for energy storage and can be used for residential and commercial systems, including for schools, farms and businesses.

Vox’s energy and climate writer, David Roberts argues that it is imperative to get these new markets right, for they are “better at determining the proper amount and location of storage than” politicians. The state should help furnish “a market that values carbon, capacity, ramping, voltage regulation, and all the other services storage can provide, lower barriers to entry, set up transparent rules, and let profit-seeking companies battle it out” [Roberts, 1].

In many sectors, need drives innovation. California is hoping that its regulation of carbon-emitted energies drives private sector innovation vis-à-vis energy storage and new energy markets. This is especially the case for solar generation and capture, smart meters and smart grids that can store and send out energy when necessary.

“For utilities invested in the right analytics capabilities [in smart meters and the smart grid], they enable data-based analyses, planning, and diagnostics. Smart grids are more efficient and less capital intense, allowing for predictive maintenance and better asset health” [McKinsey, 3].

For example, with smarter grids and meters, the potential for energy arbitrage – storing/selling energy during higher-power times during the day and releasing/buying it during less-peak times – will grow. More powerful sensors, smart grids and energy storage provide new opportunities to develop tailored programs for consumers, which will help them control energy usage, heating, and cooling more sufficiently. This is what California is counting on. According to McKinsey & Co. research, there are a number of energy markets that – through improvements in battery storage – will grow significantly in economic value:

Source: McKinsey & Company research, June 2017

Ultimately, “the industry wants dynamic pricing and hourly rates so that solar-plus-storage owners can respond in real time to the real needs of the grid,” Brad Heavner, California Solar and Storage Association policy director, vouches. With new and more efficient batteries, solar energy can be stored by consumers and offers alternatives to carbon emitting energies.

Southern California Edison (SCE), Pacific Gas and Electric (PG&E) and San Diego Gas and Electric (SDG&E) are the three major California utilities. Despite possible rising energy bills due to these initiatives, an indicator of progress is that the economics of energy storage are becoming more cost-friendly every year. This should be a positive trend for the utilities, who could improve services by “incorporating new distributed energy alternatives”, and consumers alike [McKinsey, 2]. The International Energy Agency reported in 2017 that battery costs have declined significantly every year since 2009 and that, concurrently, battery energy storage is enlarging yearly.

Source: International Energy Agency report, 2017

Moreover, Bain & Company partners Julian Critchlow and Aaron Denman – head of and partner in the firm’s Global Utilities practice – come to the conclusion that “large-scale energy battery storage is reaching an inflection point, advancing from limited experimentation to wide adoption” [Critchlow and Denman, 1]. This inflection point is a necessary incubation for California to accomplish its goals. For utilities, grid-connected batteries and battery storage are integral for “managing peak loads, regulating voltage and frequency, ensuring reliability from renewable generation and creating a more flexible transmission and distribution system” [2]. With California-based energy storage systems working with commercial clients, utilities, and governments and using machine-learning and deep learning to “optimize power generation,” Bain determines that immediate benefits should be seen and additional value will be realized over time.

Winston Churchill once remarked regarding oil that “on no one process … or field must we be dependent” [British Parliament Speech, 1913]. Similarly, today we cannot depend on “one process” of gaining energy — society must aim to discover and utilize more efficient, environmentally-friendly energy tactics. Battery storage will be pivotal in this effort. As battery power and costs rise and fall, respectively, California’s ambitious endeavor to use completely clean electricity should be emulated, and if achieved represent a realistic, necessary path forward on energy policy for the world within a changing climate.

Sources:
Beatty, Jack. “A Capital Life: A biography of John D. Rockefeller traces his rise from threadbare country boy to Standard Oil magnate.” The New York Times, The New York Times, 17 May 1998, www.movies2.nytimes.com/books/98/05/17/reviews/980517.17beattyt.html.
Berke, Jeremy. “There’s New Evidence That Fossil Fuels Are Getting Crushed in the Ongoing Energy Battle against Renewables.” Business Insider, Business Insider, 9 Apr. 2018, www.businessinsider.com/solar-growth-outpaces-coal-oil-fossil-fuels-2018-4.
Critchlow, Julian, and Aaron Denman. “Embracing the Next Energy Revolution: Electricity Storage.” Bain Insights, Bain & Company, 31 Aug. 2018, www.bain.com/insights/embracing-the-next-energy-revolution-electricity-storage/.
Garner, Dwight. “’The Quest,’ by Daniel Yergin – Review.” The New York Times, The New York Times, 20 Sept. 2011, www.nytimes.com/2011/09/21/books/the-quest-by-daniel-yergin-review.html.

Genier, Bethany. “Yergin: Renewables Moving Toward Competitive Role in Energy Markets.” Yergin: Renewables Moving Toward Competitive Role in Energy Markets | IHS Online Newsroom, 5 Mar. 2008, https://news.ihsmarkit.com/press-release/energy/yergin-renewables-moving-toward-competitive-role-energy-markets
Gilbert, Ben. “’It’s the Dumbest Experiment in Human History’: Elon Musk Rails against Fossil Fuel Use and Climate Change.” Business Insider, Business Insider, 8 Sept. 2018, www.businessinsider.com/elon-musk-dumbest-experiment-2018-9.
Government, U.S. “U.S. Energy Information Administration – EIA – Independent Statistics and Analysis.” California – State Energy Profile Analysis – U.S. Energy Information Administration (EIA), https://www.eia.gov/state/analysis.php?sid=CA
Ige, David. “David Y. Ige.” David Y. Ige | PRESS RELEASE: Governor Ige Signs Bill Setting 100 Percent Renewable Energy Goal in Power Sector, 8 June 2015, governor.hawaii.gov/newsroom/press-release-governor-ige-signs-bill-setting-100-percent-renewable-energy-goal-in-power-sector/.
International Energy Agency. “Global EV Outlook 2017.” International Energy Agency, IEA, June 2017, https://www.iea.org/publications/freepublications/publication/GlobalEVOutlook2017.pdf
Nikolewski, Rob. “Can California Really Hit a 100% Renewable Energy Target?” Sandiegouniontribune.com, San Diego Union Tribune, 19 June 2017, www.sandiegouniontribune.com/business/energy-green/sd-fi-california-100percent-20170601-story.html.
Penn, Ivan. “California Lawmakers Set Goal for Carbon-Free Energy by 2045.” The New York Times, The New York Times, 29 Aug. 2018, www.nytimes.com/2018/08/28/business/energy-environment/california-clean-energy.html.
Roberts, David. “California Just Adopted Its Boldest Energy Target Yet: 100% Clean Electricity.” Vox, Vox Media, 10 Sept. 2018, www.vox.com/energy-and-environment/2018/8/31/17799094/california-100-percent-clean-energy-target-brown-de-leon.
Santos, Paulo. “On The Tesla Model 3 Being The Safest Car.” Seeking Alpha, 12 Oct. 2018, seekingalpha.com/article/4211218-tesla-model-3-safest-car.
The Parliamentary Debates (official Report).: House of Commons. By Great Britain. Parliament. House of Commons
Yergin, Daniel. The Prize: the Epic Quest for Oil, Money & Power: with a New Epilogue. Free Press, 2009.
Yergin, Daniel. The Quest: Energy, Security and the Remaking of the Modern World. Penguin Press, 2012.

http://faculty.haas.berkeley.edu/wolfram/papers/aea%20dynamic%20pricing.pdf

https://www.utilitydive.com/news/as-california-leads-way-with-tou-rates-some-call-for-simpler-solutions/532436/

https://www.nytimes.com/2011/09/25/books/review/the-quest-by-daniel-yergin-book-review.html

https://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/battery-storage-the-next-disruptive-technology-in-the-power-sector

https://sites.hks.harvard.edu/fs/whogan/PES_paper_09_salles_final.pdf

https://www.sciencedirect.com/science/article/pii/S0301421506003545

https://www.vox.com/energy-and-environment/2018/4/27/17283830/batteries-energy-storage-carbon-emissions

When the phrase “world domination” is used in reference to a powerful entity, the first image that often comes to mind is a villain in a cartoonish suit who absorbs power as the surrounding world crumbles — sometimes even accompanied by evil-sounding thunder in the background. World domination, however, is not limited to unrealistic individuals who wear masks that shield their true identities from being associated with their heinous crimes. Instead, the modern-day world dominator takes on a more digital form, making their tactics easily accessible to the public by interacting with their followers on a daily basis. As loyal followers build trust in the entity, individuals are more willing to divulge information as the power source grows in influence, teaching the dominator to tactfully increase its followers based on previous behavioral patterns. The cycle repeats until the dominator has created such a large presence that its followers literally cannot go about their day-to-day lives without it but, even worse, don’t really question this codependency.

Yes, Amazon and Facebook are the culprits of world domination — or, at least, they’d like to be.

The digital sphere as the modern world knows it has only been in existence for about two decades but has completely revolutionized the way humanity functions. Twenty years may be an extremely short period relative to all of time, but this small sliver of time has seen unprecedented societal and economic progress that has rewired the way we consume goods, interact with others and even perceive ourselves. This progress will only continue to exponentially grow, and digital companies like Amazon and Facebook will play a vital role in evolving our economic choices alongside forming our digitally-dependent society.

On one hand, the accessibility and connectivity Amazon and Facebook provide have made experiencing life in the 21st century easier than ever before between instant communication with peers and having nearly anything imaginable delivered right to one’s doorstep with the click of a button. As mentioned earlier, however, people unquestionably are becoming increasingly co-dependent on these large digital companies to live their everyday lives and make economic decisions — emphasis on unquestionably. While individual consumers make their lives easier by passively allowing these massive digital entities to become interwoven in their lives, the dominance of Amazon and Facebook on a grander economic scale may prove more dangerous than anticipated.

Primarily, the superiority Amazon has over specific producer markets and the dominance Facebook has over advertising are reminiscent of Standard Oil’s monopoly on oil in the late 19th century. By owning or controlling 90 percent of the U.S. oil refining business, Standard Oil was able to form trusts with other oil companies and drive out competition with others in the same business. Though Standard Oil was able to provide a good quality product at a reasonable, stable price, the company, from the government’s perspective, uncomfortably wielded too much power in one of the nation’s most important industries. Ultimately, the government put antitrust laws into practice, breaking down Standard Oil’s trust and, ideally, preventing further monopolies from forming.

Now in the digital age, the large-scale presence of Amazon and Facebook isn’t as tactile as, say, oil, but that doesn’t mean their potential to monopolize isn’t as — if not more — dangerous. The way consumers interact with these companies may be limited to a screen, but their impact is both felt and seen in the real world.

Amazon, as most any digitally literate citizen knows, is an online retailer that consumers can utilize to buy nearly anything — anything — and have it shipped to their door. As discussed by Jonathan Taplin in his book “Move Fast and Break Things,” Amazon has created a monopsony over certain goods, which is essentially the inverse of a monopoly. A monopsony, according to Taplin, is when a buyer, as opposed to a seller in a monopoly, has control over who can enter a specific market to buy goods, which drives prices down.

“Amazon has a near-monopoly position in the distribution of ebooks,” Taplin writes. “Beyond books, Amazon captures fifty-one cents of every dollar Americans spend in online commerce. It wasn’t supposed to be this way.”

Ironically, in 2014, New York Times opinion writer Paul Krugman published an article titled “Amazon’s Monopsony Is Not O.K.,” where Krugman claimed that “Amazon doesn’t dominate overall online sales, let alone retailing as a whole, and probably never will.” Come 2018, research by eMarketer tells an updated story: Amazon now shares 49.1 percent of retail ecommerce sales, which is nearly 5 percent of the total U.S. retail market online and offline.

Further, Taplin points out that the main consequence of Amazon’s monopsony in the book business forces authors and publishers to work for less money. He details how Amazon is able to practice a form of “rent-seeking” by denying publishers access to its large customer base and extracting excessive “rents” from publishers because the company has driven out seller competition. Arguably, Amazon’s path to digital retail dominance came rapidly and without much question because of the convenience the company brought to consumers. As a result, however, the consequences of Amazon’s presence are only recently being felt and studied.

“Monopsony power has probably always existed in labor markets, but the forces that traditionally counterbalanced monopsony power and boosted worker bargaining power have eroded in recent decades,” writes Alan Krueger of the Princeton Economist.

VIDEO: Here’s Amazon’s impact on the economy

Beyond damaging competition with selling in the book market, Amazon has established other monopsonies that have had disastrous effects for classic physical retailers.

“Amazon has changed the market in many ways. By the end of this week, Sears will file for bankruptcy. That’s a direct result of Amazon. Kmart will file for bankruptcy probably within the next two months. There’s really no place for the old-fashioned retail to exist in a world where Amazon can undercut their prices,” said Taplin in an interview. “Amazon wants to rule the world. It’s simple.”

Facebook is a whole other beast.

As mentioned, Amazon holds a monopsony over particular retail markets, like ebooks. This makes it harder for other buyers to enter the market because Amazon’s prices are so competitive that any smaller buyer would have a hard time being successfully profitable. Facebook, on the other hand, is the largest social network in the world with over two billion monthly active users or “MUAs.” The platform also owns Instagram and WhatsApp, which each have over a billion MUAs.

Facebook’s increasing MUAs from 2008-2018, according to Statista.

With such a large reach in the social media realm, Facebook has a near monopoly on affinity-side advertising, according to Dan Faltesek’s Medium article “Social Monopsony.” Taplin discusses Facebook’s business model in the same light, noting that the platform centers around selling advertising at a higher rate than comparable internet sites.

“In short, if you are looking to make a large social buy, Facebook is your only option,” writes Faltesek. “The case that Facebook has a near monopoly on in-stream affinity network advertising is fairly clear.”

Why is Facebook’s advertising scheme so successful? It’s simple: Microtargeting.

Microtargeting is a marketing strategy by which a company collects specific information on consumers — where they live, what they like, what their friends like and so forth — and pushes advertising content their way that directly reflects their specific interests. While this can be an effective strategy for marketers, in a world where there is only one buyer of user attention, regulation is necessary, as Faltesek points out.

So where does this leave modern society? For how much longer will we be so codependent on these massive digital entities? Digital enterprise is no longer an experiment — it’s a legitimate business with large impacts on the consumer market and needs to be treated as such. On the security side, in light of data leaks like the Facebook Cambridge Analytica scandal that took place earlier this year, these digital companies have shown that while they have a massive presence, they don’t always have control over where their data goes, which is a major issue that needs to be addressed. Additionally, increasing amounts of people have shown distrust in being so digitally present or have removed themselves completely from social media platforms, so now is a crucial moment that will determine if living digitally dependent lives is sustainable in the long-term.

“Until these companies begin to take responsibility for what’s on their platform, it’s going to be complete chaos and anarchy. This is not healthy for democracy, and I don’t think it’s healthy for humans, as you can tell in terms of what I think about your addiction to your smartphone that it is probably not a good thing. It’s not making you smarter. It’s just making you more distracted,” said Taplin in an interview.

At the end of the day, the digital sphere can change intensely in only a short period of time. While one cannot be certain where certain digital platforms will be in the next two decades, one can know for sure that the digital market is here to stay. Now, it’s just up to consumers to decide how digitally codependent they want to be. The digital sphere may be prominent, but allowing it to have personal dominance is an individual choice.

On July 6^th, 2018, the United States declared war on China. This war, however, is not being fought with bombs and guns or by millions of soldiers, but is being fought with tariffs. Trump and Chinese President Xi are engaged in a full-on trade war, and neither side is showing signs of concession.

Trump has never been a big fan of the way Americans have traded with the Chinese. He says that China is profiting too much from U.S farmers without returning the favor.

At the root of Trump’s decision back in early July to tax $34 billion worth of Chinese imports lies his belief that too much manufacturing abroad is hurting domestic industrial efforts. This protectionist philosophy is highly debated by economists and is complicated as it results in both negative and positive effects throughout the economy.

Trump’s policies are not popular with other countries that rely on a stable U.S trade relationship to meet their importing schedule. Engaging in tit-for-tat trade disputes may seem like it will yield results, but in the long-term, it damages crucial relationships that could hurt America’s biggest industries. One big American industry may take a permanent hit—soybeans.

The United States’ biggest export is food, beverage, and feed according to a U.S Commerce report in 2017. Soybeans make up the largest part of that industry, and 60% of them were exported to China last year.

As demonstrated by a case study of the soybean market, the economic impact of tariffs on U.S. exports and a protectionist trade policy may damage the Chinese economy in the short term, but will eventually just push China to find alternative ways to avoid importing such high amounts of this product from America.

China does receive most of its soybeans from the United States, but it also gets them from Brazil. South America may be Xi’s best option if Trump doesn’t step down.

Though Brazil consistently runs out of soybeans at the end of each cycle, it could likely ramp up production efforts if need be. In the last 20 years, the country has increased its soybean production by 266%, whereas the United States’ production has only increased by 63%. However, production costs for Brazilian farmers may end up being too high to keep up with Chinese demand.

Another option for China is for investors to buy and develop land to produce soybeans in Brazil or another country, which would take a few years to fully implement. Then again, if this is a viable option in the long term, it could take away China’s need to rely on American soybean farmers.

President Xi’s Belt and Road Initiative (BRI) is also a key player in reducing reliance on U.S agriculture throughout this trade war. The Initiative is an effort to connect Asia, Africa, and Europe for mutually beneficial economic opportunities. China wants a “belt” of overland corridors and a “road” of shipping lanes between 71 countries. That means the BRI streamlines trade between half of the world’s population and a fourth of the global GDP.

The BRI brings an increased level of economic interaction to China, making it that much easier to locate untapped areas equipped to produce soybeans other than the United States.

If China resorts to any of these options, U.S soybean farmers are going to take a long-term hit. While America can refocus its efforts to shipping out the product to other countries, if China manages to get Brazil to ramp up production levels or invests in agricultural land in other countries, it would lower the need for U.S trade partners to exclusively import soybeans from America.

China is now taking short term measures to deal with Trump’s tariffs. The China Feed Industry Association proposed in September to ration out soybean feed to pigs.

Furthermore, the Xi administration is maintaining a positive attitude by looking to increase domestic soybean production.

“Unilateralism and trade protectionism are rising, forcing us to adopt a self-reliant approach. This is not a bad thing,” Xi said in September.

The Vice Agriculture Minister Han Jun also warned that Trump is playing with fire.

“Many countries have the willingness and they totally have the capacity to take over the market share the U.S. is enjoying in China. If other countries become reliable suppliers for China, it will be very difficult for the U.S. to regain the market,” Han Jun told the Xinhua news agency in August.

Soybean producers in China are already benefiting from the conflict. Yang Guiyin, the sales manager of an agricultural company in the Heilongjiang Province, said that soybean profits are on the rise.

“Our farmers really hope that China will import less soybeans so that domestic soybean production and soybean-related businesses will flourish,” Guiyin told NBC News in July.

The Chinese Government is pushing its domestic agenda even further as it aims to add $1.6 million acres of land to its existing soybean production. It is also subsidizing $190 to $320 per acre instead of the previous $150.

On the other side of the war, the U.S is not taking a visibly huge hit just yet. Soybean producers have been able to maximize productivity this last quarter by exporting to other countries other than China. The profit margins on the products are still diminishing, however.

 

 

 

Some experts believe this will not last.

“I view this as being a surge that will not persist, but it’s huge,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told the Wall Street Journal in July. “If you’re doing lots [of exports] in absolute terms at a time when normally you wouldn’t be doing very many, then the seasonals will be very favorable.”

Looking ahead, the future of U.S soybean farmers will be determined by conversation between Trump and Xi. The world leaders have planned to meet on several occasions, but due to rising tensions, have not been ready to negotiate quite yet. The White House decided recently to move forward with conversation. Trump and Xi are planning to discuss the escalating situation at the Group of 20 leaders’ summit in Buenos Aires at the end of November.

For the Trump administration, the pressure is on. President Xi purposely targeted the soybean industry because the farmers primarily reside in states that elected Trump to office. China is looking to hit his weak spots. If Trump’s support system loses faith, it could have detrimental effects for republicans come November’s elections.

 

Iowa, Minnesota, Nebraska, North Dakota, and Indiana are all major soybean producing states and all voted for Trump in 2016.

In any trade war, just like in real wars, people are hurt. Trump stands by his belief that the United States will beat China, but if Xi continues to match Trump’s level of tariffs, it could get very ugly. Americans have no choice but to wait and see if Trump is correct in tweeting that “we win big.”

 

 

 

 

 

The huge influx of Chinese students into U.S. colleges has opened new opportunities for study abroad agencies – crisis management for students who received expulsions from schools.

While President Trump relentlessly blamed China for taking away hundreds of thousands of jobs in the country, Chinese students have made a whopping contribution to the U.S. economy over the past decade. As the fasting-growing importer of U.S. services, the exports services to China recorded a jump of 307% from 2007 to 2016, while travel, including education, accounted for $29.9 billion of the export market in 2016, a report from the U.S.-China Business Council showed.

Source: The U.S.-China Business Council

In 2016/17, there were 350,755 Chinese students enrolled in an educational institution in the U.S., about one-third of the international students in the country, according to the Open Doors report published by the Institute of International Education.

Supported by the Bureau of Educational and Cultural Affairs at the U.S. Department of State, Open Doors is a data portal with information about international students studying in the U.S. or American students enrolling in study abroad programs.

As American universities are constantly inundated with Chinese students, a lucrative business opportunity has emerged – education agencies filing college applications for students in China.

Chinese Education Organizations Are on a Rise

Kudos to services delivered by her consultants, Viola Chen, a native Chinese, received her acceptance letter from Boston University in 2013. The RMB 50,000 service, equivalent to more than $7,000, gave Chen a package of 10 college applications. “The price of packages ranged from RMB 50,000 to RMB 200,000, depending on the experience and qualification of the advisors,” Chen said. “I had the cheapest plan,”

The lack of English proficiency and familiarity with American education has made Chinese parents willing to pay for application services worth tens of thousands of dollars. When admission packages arrive at their doors, all those charges pale into insignificance. “They don’t want to risk the opportunity, getting into good schools outweighs the additional service fees.” Chen said.

The booming industry features a one-stop solution for students seeking services pertained to college applications: tutoring classes for SAT and TOEFL tests, internship arrangement, essay editing, application mailing services, visa interview preparation, and meet-and-mingle networking events among students.

As a token of celebration, students attending similar-ranking universities will get the chance to meet at parties organized by the agency prior to the start of school year. “We get the network in China, and expand it in the U.S.,” Chen said.

To meet this mounting demand for college-admissions consulting, a glut of companies in China have hopped on this bandwagon over the past 10 years. However, the growing reliance on agencies has laid bare a serious consequence among this massive population – susceptibility to academic dismissal.

According to a report from WholeRen Education, 5,631 of their students were involved in the process of expulsion from 2013 to March 2018, while poor academic performance and academic dishonesty were the two major causes of dismissal.

Source: WholeRen Education

“We have around 10 students seeking emergency services or help every day, either through regular channels or social media,” Jennifer Cao, an L.A.-based consultant at WholeRen Education, said.

WholeRen Education is a company headquartered in Pittsburgh, Pa., with operations in eight cities across the U.S., and three in China. To facilitate its business with Chinese students, the majority of its staff are native Mandarin speakers with experience studying in the U.S.

Apart from traditional agency services, the company also carries out a crisis management plan, namely emergency services, for students who are on the verge of getting expelled from schools. It is the pioneering education organization in the U.S. to provide second-chance solutions to academic expulsions, the report said.

“We see the opportunities, students are having problem going through these emergency matters.” Cao said.

The emergency consultation offers a series of services, including advising on how to win an expulsion hearing, ironing out the college transfer process, and providing daily supports to students with mental health issues. Service charge varies from cases to cases. It typically ranges from $1,500 to $4,500, the most expensive package, however, can go up to $50,000 per year.

Cultural Context Behind the Expulsion Story

With the overall surge in Chinese household wealth, sending children abroad is now an honorable move showcasing the family’s socioeconomic status. But the cultural clash between the U.S. and China remained as a major roadblock for Chinese students to perform their ability in the best possible light. It is not true that every child is well-versed enough in an English-speaking environment and the American education system before embarking on their college journey.

“Psychological preparation is a problem, language is another,” Cao said. “Some of them can’t even understand English,”

While there are a host of reasons contributing to the number of dismissal cases, disparity in teaching style appears to be one of the most patent factors. The spoon-feeding education in China made the parent-teacher oversight an important part of learning. With the teacher-led recitation, jam-packed tutoring schedules and strict parental supervision, students excel at academics under the Chinese education system.

Getting adapted to the American teaching style could be nothing but challenging to them. “The story is different here in the U.S.,” Cao said.

When limited guidance and language barriers come into play, these students would easily fall into the trap of skipping school or using ghostwriting services. If they are lucky enough to hide the shenanigans from schools, they could still celebrate college graduation by tossing their caps into the air. But at the same time, Cao said it could pose serious academic threats to those who get caught.

So when it comes to emergency cases, consultants might have to fight daily battles with students over completing their assignments or force them to attend lectures by knocking on their doors. “We are like their parents in the U.S. and help them develop the way right to study.” she said.

Back in early September, Governor Jerry Brown signed one of the most ambitious clean energy bills in the country. The bill, entitled SB 100, plans to move California to 100% clean electricity by 2045.

Currently, the state generates about 33 percent of its energy from renewables.

The plan is to hit 50 percent by 2025 (five years earlier than targets set by previous bills), then 60 percent by 2030. Eventually, it should hit 100 percent “zero carbon” by 2045. This would include nuclear power, which is not renewable.

SB100 is not a mandate, but a target goal that would require state agencies, like the Air Resources Board and the California Public Utilities Commission (CPUC), to use the 100 percent target as a measurement for long-term planning. It would also further expand existing clean energy technologies.

One major project that’s been underway involves the electrification of transportation, which is the largest contributor to emissions. According to a press release by the CPUC back in May, $738 million have been allocated on furthering already-existing transportation electrification projects and other incentives. Some of these include funds to install 870 infrastructure sites to support the electrification of medium and heavy-duty vehicles.

But the task is still extraordinary. Can the world’s fifth largest economy de-carbonize its entire electric grid in less than 30 years? And what will be the cost?

For instance, renewable energy tends to be extremely intermittent. Solar power can only generate energy when it’s, well, sunny. This is particularly challenging since energy use is greatest at dark. Hence, natural gas is still used to compensate during those intermediary periods.

The use of battery storage units that would capture solar energy for later use is one way to get around this. But, as some critics note, this could be expensive and inefficient compared to the use of natural gas.

In addition, the closure of gas-emitting industries and diesel-fueled transportation could destroy many jobs.

For example, back in 2017, Garcetti offered to bring zero-emission trucks to the port of Los Angeles. The costs of these cleaner trucks were much greater than their diesel-fueled counterparts. The financial burdens subsequently fell on the truck drivers, whom had already been facing cost burdens since the passage of the Clean Trucks Program a decade ago.

As the LA Times editorial noted, clean air goals should be implemented whilst taking into account those it leaves behind.

And the cost of not pursuing more aggressive climate policies is simply all too clear. After all, it is our planet that is at stake.

Fortunately, plenty of studies have shown that the switch to full renewables doesn’t just have to be an emergency measure to save the planet, but an extraordinary progressive model that could be a boon to economies, both locally and globally.

In certain regions in California, the results have proven, thus far, to be quite positive.

A comprehensive study commissioned by the non-profit group Next 10 showed that between 2010 and 2016, Riverside and San Bernardino counties experienced a net benefit of $9.1 billion in direct economic activity and gained 41,000 jobs through the construction of renewable power plants.

When taking into account spillover effects, climate policies resulted in $14.2 billion in economic activity as well as the creation of more than 73,000 jobs in the region over the seven years.

Lead researcher Betony Jones stated in the report that even if we were to take into account construction for a “business-as-usual scenario”, the construction of renewable power plants still created the largest number of jobs in the Inland area.

In addition, the more we continue to invest in clean air technologies, the more costs will go down. Solar panel prices, for instance, have dropped precipitously over the decades.

Furthermore, as the world market moves to cleaner technologies, the more economies will be incentivized to pour their resources into it.

Colleen Kredell, director of research at Next10, said that the issue isn’t only about climate change but about global competitiveness.

“You have companies in China, UK, Germany, and India fazing out internal combustion vehicles,” she said. “You got some of the world’s most populous nations, most developed economies, saying ‘we are no longer using gas powered vehicles’. That means there will no longer be a market for those cars.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A place to live is one of the most basic human necessities on earth. Yet for many across the country, recent economic trends have made finding an affordable place to live increasingly difficult.

Today, more than half of America’s homes are at higher prices than they were before the Great Recession. And the issue doesn’t just impact buyers – according to the National Low Income Housing Coalition, no state in America has enough affordable rental housing for the lowest income renters. In California specifically, the state faces a shortage of over 1.1 million available rental homes for extremely low income (ELI) individuals.

Source: National Low Income Housing Coalition

In somewhat rare form, this issue hurts not just those at the bottom, or ELI and homeless individuals, but also those at the top, who also have to cough up more dough in order to afford a home or luxury apartment. Alan Greenlee, Executive Director of the Southern California Association of Nonprofit Housing, says he’s sure “Dr. Dre is pissed off that he had to pay 15 million dollars for Gisele Bundchen and Tom Brady’s house in Malibu,” just like regular Americans across the country are growing progressively disheartened by and frustrated with the trend.

Luckily, a multitude of creative and ambitious tactics are already underway across the country. Some Americans are choosing to participate in the ever-growing “Yes in My Backyard” or YIMBY campaign, which seeks to convert extra living spaces in backyards into licensed and habitable areas for low-income or homeless individuals. The movement has local chapters across the United States, and just held its annual YIMBYtown conference in Boston in late September. In particular, YIMBY has aggressive goals in California, where it sets out what it calls an “Inclusionary Policy Design” to compressively address the housing crisis in the state.

Local legislators are also stepping in. In Denver, the city is subsiding luxury apartments, allowing individuals who make between 40-80% of average area incomes to pay only up to 35% of their salaries to live in expensive apartments that would otherwise sit empty. In Austin, nonprofits and grassroots organizers pushed in June for the City Council to approve a bond initiative that would dedicate $300 million to build new permanently affordable housing units. And in Los Angeles, a variety of propositions and measures have been paying special attention to affordable housing since 2016.

Although these tactics and transformations are bold and well-intentioned, are they doing enough?

At the end of the day, the housing crisis sweeping across the nation is “a pretty simple economic issue. Supply under-paces demand, and as a result, prices go up,” says Greenlee.

While the relationship between supply and demand relationship is the root cause, in Denver, which was pegged to be one of the nation’s “hottest” housing markets in 2018, “sales and construction activity have slowed,” according to Ben Cassleman at the New York Times, meaning less homes are on the market. In fact, across the US, residential investment has been falling steadily for three consecutive quarters, meaning construction and brokers fees are continually shrinking. From there, add in rising mortgage rates. Mix together all of those forces and there you have it – a deadly combination that created a slowdown in the housing economy, leaving Americans to feel the burn all across the country.

Citizens have chosen to adapt in different ways. From Greenlee’s perspective, it comes down to two options: either live in a “catastrophically overcrowded situation” in order to afford high rent in a desirable or at least tolerable place, or move further away from where you work, which in Los Angeles means that you usually subject yourself to a horrific morning commute.

In California specifically, Greenlee argues that the state is a victim of how good it was at building housing after the second World War. At that time, everyone believed that living in the coastal state meant you could get a house, a yard, and a nice green lawn. Today, that is nowhere near the case. Compound the trend of not building enough homes over the course of an entire generation, and Greenlee says you have the very simple explanation for how we arrived at where we are today.

One way to curb the higher costs that come with less supply may be through higher wages. From 2007 to 2015 in the United States, the median price of rent rose 6 percentage points, whereas the median income for renter households rose only 1%. In California in 2017, a worker would have needed to earn around $31 an hour or work 118 hours a week at minimum wage just to afford a two-bedroom apartment. Perhaps even more startling is the fact that rents over the last 10 years in California have gone up 13%, but incomes have actually gone down 6%, says Greenlee.

Source: National Low Income Housing Coalition

But of course, California just raised the minimum wage to $13.25 an hour, with a progressive system set up to continue increases for the next few years. While higher wages translate to more money in people’s pockets to spend on housing, that policy change—although certainly not intended solely to fix the housing crisis—addresses the symptom, which is expensive houses, not the cause, which is not enough homes on the market.

There’s also a notion in California that trends such as our growing technology sector—when combined with the state’s historic dominance in the entertainment industry plus boundless sunshine and lanky palm trees—have caused an influx of migration, just making the issue worse. On this topic, Dr. Benjamin Henwood, a professor at the University of Southern California and an expert on homelessness and affordable housing, notes that while creating jobs and attracting Americans towards our coast is great, “people who fill these jobs need a place to live.”

However, Greenlee says not so fast – if no one else moved to California, just by birth and death rates alone over the next 10 years we still would not have enough housing to meet demand. Thus, while our robust economy certainly draws people in, the core issue comes back to basic economics.

Given what we know about the need for more housing in Los Angeles to meet demand, how can we get people to want to do something about it? Perhaps the answer lies in a deeply correlated issue that we see firsthand in Los Angeles every day.

No matter whether you live Downtown or in West Hollywood, you’ve likely seen homeless people living on the street in your area. Even if you live in a suburb where the homeless are nowhere to be seen, you probably take the freeway to work, where you get to see first-hand the tents and makeshift shelters that our city’s massive homeless population is forced to live in. The issue is unavoidably and unquestionably visible.

Although homelessness is a function of many contributing factors, on the most basic level, “homelessness is primarily a housing issue,” says Henwood. Although not all affordable housing addresses the needs of homeless people who are out of the housing market entirely, Henwood also argues that “housing shortages will continue to undermine best efforts to address homelessness.”

A plethora of research backs up his argument. One 2017 study by a data agency based out of San Francisco found that eight of the 10 states with the largest number of homeless individuals also have the country’s highest average home prices.

In 2017, California was one of 10 states with both high homelessness and the most expensive housing (Inman)

Furthermore, Zillow researchers in 2017 found that the “relationship between rising rents and increased homelessness is particularly strong in four metro areas currently experiencing a crisis in homelessness,” one of which was—unsurprisingly—Los Angeles.

Source: Zillow

Thus, although getting the prices down for apartments for low-to-middle income Americans by building more places to live for them may seem unrelated to homelessness, in general, less expensive rent and more options for Americans will help not just those currently on the search for a home, but could potentially also have the trickle-down effect of reducing the number of homeless as well.

After voters in Los Angeles had to live and breathe in direct contact with the sprawling homeless population for a number of years due to changed regulations, they took action, and in November 2016 passed measure JJJ, which “changed fundamental land use rules around how you build in order to make sure that if developers are going to make something, it had to include housing that was available for low-income people” says Greenlee. That same year, voters also passed Proposition HHH, which funded affordable housing through a bonding program. And before that, the County in 2015 dedicated $100 million a year to support affordable housing development. Why the sudden change? According to Greenlee, “because people decided our current situation related to homelessness was intolerable.”

Thus, although housing affordability may be deeply rooted in failed city planning and put tremendous financial strain on a plethora of individuals, true visibility of the issue through the homeless is what caused Angelinos to act. And by Greenlee’s standards, while the programs in place are not an end-all solution, they are certainly steps in the right direction.

Given that a variety of measures and propositions are already in place, what more can people in Los Angeles do? First, support similar initiatives as they show up on the ballot. And second, Greenlee says that financially secure Americans can be vocal in their support for greater density and affordable housing in their areas rather than “going bananas” when they hear affordable housing is coming in. In particular, Greenlee cited a recent housing development program put forward by the Mayor of LA, in which council districts would be required to create temporary housing. In some areas – like Koreatown, Venice, and Sherman Oaks – local residents met that proposal with furry, enraged that they would have to live in close contact with the homeless. While it’s human nature for people to want to be separate from the poor, that argument ignores the fact that homeless Californians are already residents of our neighborhoods—they are just forced to sleep on the street rather than in apartments or homes.

Protestors in Koreatown, Los Angeles reacting to plans for homeless housing in their area (LA Weekly)

To more comprehensively address the issue, Angelinos—and for that matter, Americans across the country living in areas where housing prices have spiked—may need to get more comfortable with homeless and extremely low income individuals moving into their neighborhoods. Although that is sure to be an uncomfortable transition, it’s a necessary one if we are serious about addressing the crisis. In long-run, everyone from Dr. Dre to the homeless living in tents under the freeway stands to benefit.