Welfare Makes America More Entrepreneurial

[Note:  This item comes from friend Mike Cheponis.  DLH]

Welfare Makes America More Entrepreneurial
Research shows that when governments provide citizens with economic security, they embolden them to take more risks.
Mar 26 2015

In 1988, Ronald Reagan traveled to the Soviet Union and gave a speech at Moscow State University, making the case for capitalism. America’s secret, he argued, was its entrepreneurs, whose “courage to take risks” was responsible “for almost all the economic growth in the United States” and much of its technological edge. This risk-taking was made possible, he continued, by economic freedom, which he associated with “limited, unintrusive”government. 

Reagan was right about the link between startups and growth, but wrong in assuming that small government was the way to encourage them. 

His belief in a tradeoff between taking care of citizens and promoting innovative new businesses is at odds with the evidence. In fact, one way to get more people to start companies, according to a growing body of research, is to expand the welfare state.

Pundits and researchers often note the negative correlation between government spending and entrepreneurship, both within the U.S. and internationally, and conclude that growth requires trimming social welfare programs. Jim Manzi of the National Review, for example, a thoughtful commenter on economic policy, wrote last year that, “we must accept some amount of social dislocation in return for innovation.” But correlations can be misleading. A series of more recent studies challenge the view that larger or more activist government necessarily threatens entrepreneurship. In fact, that may get the relationship precisely backwards.

Entrepreneurs are actually more likely than other Americans to receive public benefits, after accounting for income, as Harvard Business School’s Gareth Olds has documented. And in many cases, expanding benefit programs helps spur new business creation. 

Take food stamps. Conservatives have long argued that they breed dependence on government. In a 2014 paper, Olds examined the link between entrepreneurship and food stamps, and found that the expansion of the program in some states in the early 2000s increased the chance that newly eligible households would own an incorporated business by 16 percent. (Incorporated firms are a better proxy for job-creating startups than unincorporated ones.) 

Interestingly, most of these new entrepreneurs didn’t actually enroll in the food stamp program. It seems that expanding the availability of food stamps increased business formation by making it less risky for entrepreneurs to strike out on their own. Simply knowing that they could fall back on food stamps if their venture failed was enough to make them more likely to take risks.

Food stamps are not an isolated case. In another paper, Olds looked at the creation of the Children’s Health Insurance Program (CHIP), which offers publicly funded health insurance for kids whose families don’t qualify for Medicaid. By comparing the rate of entrepreneurship of those who just barely qualified for CHIP to those whose incomes just barely exceeded the cutoff, he was able to estimate the program’s impact on new business creation. The rate of incorporated business ownership for those eligible households just below the cutoff was 31 percent greater than for similarly situated families that could not rely on CHIP to care for their children if they needed it. 

The same is true of recent immigrants to the United States. Contrary to claims by the right that welfare keeps immigrants from living up to their historic role as entrepreneurs, CHIP eligibility increased those households’ chances of owning an incorporated business by 28 percent. 

The mechanism in each case is the same: publicly funded insurance lowers the risk of starting a business, since entrepreneurs needn’t fear financial ruin. (This same logic explains why more forgiving bankruptcy laws are associated with more entrepreneurship.)

A 2010 study by RAND found a similar effect with Medicare. American men were more likely to start a business just after turning 65 and qualifying for Medicare than just before. Here again, government can make entrepreneurship more appealing by making it less risky. By this logic, Obamacare doubles as entrepreneurship policy by making it easier for individuals to gain health insurance without relying on an employer.


FCC to Close 16 of 24 Field Offices

FCC to Close 16 of 24 Field Offices
Chairman pleads budget proposal before Congress
Mar 24 2015

WASHINGTON—Field offices are on the chopping block at the Federal Communications Commission. Sixteen of 24 are being targeted for closure, FCC Chairman Tom Wheeler told members of Congress Tuesday. Wheeler appeared before the House Subcommittee on Financial Services and General Government to plead the agency’s case for 2016 funding. 

He said an audit of field offices revealed several with one manager to four employees in “oversized rental facilities, which are draining our resources.”

“After analyzing a contractor report on field office use, we have determined that we can more efficiently deploy staff using a ‘tiger team’ approach and make better use of regional offices,” he said in prepared testimony. “This plan, if accepted by my fellow commissioners, will lead to 16 field office closures and annual savings of $9 million without diminished productivity.”

Non-auction flat funding has led to staff cuts, he said. The commission currently has 1,708 full-time positions, compared to a 20-year average of 1,877. Contractors have been cut as well, from 600 in 2012 to 435 by the end of 2016.

Yet the 2016 budget request is the first in 10 years that doesn’t include a request for more bodies, but rather cuts 37 positions—30 of them from field offices. (See “FCC Possibly Downsizing Enforcement Field Offices,” at Radio World.)

Wheeler said while the staff’s been shrinking, demands have increased and so has the workload for those still standing. At some point, he said, the cuts will have a negative effect.

“For example, in the licensing operations area since 2010, our FTE levels have declined by more than 25 across several bureaus, versus steady growth in licensing activity over that same time, so at some point licensing operations could slow,” he said. 

Licensees ultimately will feel the pain, he said. 

The commission is asking for an $84 million increase for 2016 in part because the agency’s lease is up in 2017. After mentioning that the commission has generated 13 times its operational costs for the U.S. Treasury for 20 years, Wheeler went on to request auction funding of up to $117 million, $25 million from the Universal Service Fund and $388 million in general spending authority.  

“If the commission’s lease were not expiring in 2017, our budget proposal would look different and my presentation today…,” Wheeler said. “We would have been asking for a modest increase over last year’s funding level…”

Wheeler said moving would cost around $51 million up front—similar to the costs associated with moving for the National Institutes of Health and the National Labor Relations Board. In the long run, he said the move would save money.


As Twitter launches Periscope, Meerkat announces $14 million in funding

As Twitter launches Periscope, Meerkat announces $14 million in funding 
Welcome to the live-streaming wars 
By Ben Popper
Mar 26 2015

This morning saw dueling announcements in the world of live-streaming apps. Twitter finally pushed Periscope to the public, and Meerkat announced it had raised a pile of cash with strong connections to Hollywood. Right now Meerkat has the hype, coming off a strong SXSW and high-profile celebrity users like Jimmy Fallon. At the same time, Meerkat relies heavily on Twitter for its distribution. That puts it in a perilous position, something we saw at work when Twitter cut off Meerkat’s access to its social graph.

Part of the Meerkat money, $14 million, comes from traditional tech players like Greylock, Comcast Ventures, and other Silicon Valley investors. But the list also includes Ashton Kutcher, Lorne Michaels’ BroadWay Video Ventures, and talent agencies like William Morris Endeavor and CAA. Twitter reportedly paid $100 million for Periscope before it had even launched.

Over the last two weeks Meerkat has shot up the iOS app stores charts. Analytics firm App Annie shows it’s moving from number 500 in the social category and under number 1,000 overall, to number 22 in the social category and 160 overall. Neither service is available yet on Android.

One key difference between the two services for now is that Periscope allows users to archive their broadcasts for replay when they are done. In our reviewwe found this to be its killer feature, removing the somewhat overwhelming urgency of needing to tune in to every live stream that sends along a push notification.

Periscope, Twitter’s answer to Meerkat-style live streaming, is now available

Periscope, Twitter’s answer to Meerkat-style live streaming, is now available 
And it’s pretty great
By Casey Newton
Mar 26 2015

Live-streaming apps are the thirstiest of all media. A Facebook post wants a like, a tweet begs for favs, and a snap means little without a response. But for sheer drop-everything, look-at-me arrogance, nothing beats the push notification that says “LIVE NOW.” I’m doing literally anything, the notification says. Watch now, or you’ll miss out forever.

The surprise emergence of Meerkat as a social phenomenon this year has been accompanied by a frequent complaint: the links are usually dead by the time you click them. All that thirst, and it’s totally unslaked. But even as the app began to be discovered by celebrities and other high-profile users, Twitter employees began shouting that a better solution was on the horizon: Periscope, an app the company acquired in January for a reported $100 million. Periscope, they said, was more than a way to stream yourself live: it’s also a way to play those streams back.

Replays are Periscope’s killer feature

And now we can see for ourselves. Periscope arrives today on iPhone, with streams also viewable on the web. (An Android version is forthcoming.) Like Meerkat, it allows you to broadcast whatever you’re doing — whether it’s breaking news or making breakfast — live, through video, with a couple of taps. Unlike Meerkat, Periscope can save streams so that you can replay them later. It turns out to be Periscope’s killer feature — and the main reason that it’s likely to become my live-streaming platform of choice.

For everything it got right, Meerkat still looks like an app built in eight weeks — which it was. Periscope has been in development for more than a year, and the app arrives showing nice attention to detail. You sign in with Twitter, and the first thing you see is a list of streams that are currently live. Below it, you’ll see a list of recent streams. Not all can be played back — when you record yourself, you can stop your stream from being replayed with a single tap. But they save by default, and the result is an app that can actually be browsed.

Periscope is warm and fuzzy

Where Meerkat in its current incarnation is a bare-bones utility, Periscope is more warm and fuzzy. It introduces the world to the concept of infinite hearts — while you watch a stream, you tap to send the person recording it a heart. As soon as you tap, the heart appears on the screen for you and the rest of the audience to see. And you can tap as many times as you like — you can even double-tap to send two hearts simultaneously. It seems silly, but the multi-heart approach serves a purpose: they let the person recording know that their audience still appreciates what they’re doing, even several minutes into a stream.


Drones Beaming Web Access Are in the Stars for Facebook

[Note:  This item comes from friend Bob Frankston.  DLH]

From: “Bob Frankston” <bob19-0501@bobf.frankston.com>
Date: March 26, 2015 at 08:45:32 EDT
To: dewayne@warpspeed.com
Subject: Drones Beaming Web Access Are in the Stars for Facebook – NYTimes.com

The bulk of the article is about other issues such as Facebook expanding the capabilities of their messaging applications. But drones and high-speed fiber make for a better story because of our fascination with gadgets. It leads us to try to solve economic problems by deploying hardware. We also tend to solve the old problem such as more web access rather than expanding the ways in which we can use connectivity. As I’m wont to point out – the lack of connectivity is an economic problem caused making “providing Internet” a business in the style of 19th telegraph companies. 

We see a similar problem in foreign policy in deploying soldiers instead of diplomats.


Drones Beaming Web Access Are in the Stars for Facebook
Mar 26 2015

MENLO PARK, Calif. — In classical mythology, Aquila is the eagle carrying Jupiter’s thunderbolts skyward. At Facebook, it is the code name for a high-flying drone, indicative of the social networking company’s lofty ambitions.

The V-shaped unmanned vehicle, which has about the wingspan of a Boeing 767 but weighs less than a small car, is the centerpiece of Facebook’s plans to connect with the five billion or so people it has yet to reach.

Taking to the skies to beam Internet access down from solar-powered drones may seem like a stretch for a tech company that sells ads to make money. The business model at Facebook, which has 1.4 billion users, has more in common with NBC than Boeing.

But in a high-stakes competition for domination of the Internet, in which Google wields high-altitude balloons and high-speed fiber networks and Amazon has experimental delivery drones and colossal data centers, Facebook is under pressure to show that it, too, can pursue projects that are more speculative than product.

One of those offbeat ideas, or so the thinking goes, could turn out to be a winner.

“The Amazons, Googles and Facebooks are exploring completely new things that will change the way we live,” said Ed Lazowska, who holds the Bill and Melinda Gates Chair in Computer Science and Engineering at the University of Washington. “There are other companies out there like Hewlett-Packard and IBM, but they aren’t doing the really huge things anymore.”

At a conference in San Francisco on Wednesday, Mark Zuckerberg, Facebook’s chief executive, explained how Facebook was opening the code to Messenger, its mobile messaging app, so other companies can build right on top of what it’s already doing. The move is a key component of its efforts to improve its already strong position among mobile computing devices.

That is Step 1 in a series — including drones, goggles that plug into virtual reality, and artificial intelligence — Facebook plans to work on in the coming years to broaden its influence.

At the conference, the company showed off nearly 50 apps for Messenger, including one that turns text messages into songs and another that allows a user to search for and send an animated GIF to express a mood.

“Until now, we have focused on improving Messenger by building all of these features ourselves,” Mr. Zuckerberg told developers.

By opening the platform, he said, Facebook wants to tap the creativity of other app makers. “We’re really excited about what you all are able to do with these fast and simple tools we are rolling out,” he said.

Facebook said it would soon begin testing a system to allow businesses to use Messenger to offer personalized service to customers after a purchase is made. For example, a person might be able to use Messenger to change the color of a shirt in an order or see where the package is in the UPS delivery system.

Facebook’s initial partners are the clothing retailers Zulily and Everlane, and the company hopes to lure other types of businesses, like airlines and cable companies, that frequently face customer service issues.


More than 1 million travelers have enrolled in TSA pre-check

More than 1 million travelers have enrolled in TSA pre-check
Mar 24 2015

The U.S. airport security program that offers passengers shortcuts to their boarding gates now counts 1 million travelers, the Transportation Security Administration announced Tuesday.

TSA started pre-check (“TSA Pre✓”) at the Indianapolis International Airport in 2011, and has pushed hard in the last year to increase enrollment numbers.

“Low-risk” travelers can sign up and, if approved, are eligible to go through an expedited screening process. That means being able leaving on shoes, light outerwear and belts, and leaving any laptops and carry-on approved liquids inside bags. There are now 133 airports in the U.S. where travelers can be selected for expedited screening.

“This milestone is a testament to the outstanding collaborative work between TSA, airports, airlines and most importantly, the traveling public,” TSA Acting Administrator Melvin Carraway said in a statement.

TSA wants higher enrollment numbers to justify the number of designated pre-check lanes at the airports. Travelers have been able to apply directly, for a fee, to join pre-check since December 2013.

Expedited screening isn’t guaranteed, however, even for those who sign up.

“As always, TSA continues to incorporate random and unpredictable security measures both seen and unseen throughout the airport,” TSA said in a statement. “All travelers will be screened, and no individual will be guaranteed expedited screening.”

Increasing enrollment numbers have not been met happily by all, especially by those who joined the program early.


US broadband is getting faster but still lags behind Asia

US broadband is getting faster but still lags behind Asia
By Andrew Tarantola
Mar 24 2015

It’s been a good year for the internet in America. Not only did it receive much needed federal Net Neutrality protections, the average download speed increased by a solid 10 Mbps nationwide over the previous year. As of March 2015, the average download speed in the US is 33.9Mbps — thanks, in part, to increased infrastructure investments by ISPs. That figure puts the US ahead of a number of European nations including the UK (30.18Mbps), Germany (29.95Mbps), Spain (28.28Mbps) and Ireland (27.29Mbps). But don’t start chanting “SCOREBOARD!” just yet. Those speeds are only enough to move the US up to 27th out of 199 connected countries worldwide and roughly half of what South Korea (84.31Mbps) and Japan (60.49Mbps) enjoy.

These figures come from Ookla’s Speedtest March 2015 survey. In April of last year, America’s national average hovered at 23.9 Mbps; barely better than the global average of 22.9Mbps. And it’s not as though every state of the union enjoyed these speeds. While Washington, Missouri, New York, California and Utah offered the highest average download speeds (ranging from approximately 40 to 45Mbps), states like Maine, Kentucky and Idaho could only muster between 17.7 and 20.9Mbps.

What’s more, these speed tests included Google Fiber (230.69Mbps) despite the fact that it’s only available in eight cities nationwide. And given that the next three fastest ISPs — Verizon FIOS (42.27Mbps), Cox (39.42Mbps) and Comcast (38.70Mbps) — are all five times slower than Google, Fiber’s inclusion does appear to skew the results to some degree. No wonder Kansas City, MO topped the nation with an average DL speed of 68.59Mbps. You can find the complete test results and further analysis at NetIndex.com.