Stuff I've Read Today

WSJ: Obama increases lead over McCain. WSJ on the messy state of the real estate market in California. WSJ: now the problem with credit cards. WSJ: economist Rubin argues that Obama is dangerous to economic freedom (Caplan hopes he isn't). WSJ: China's economic pain is worse than most expected (not to my surprise). WSJ on high school dropout city champions. WSJ on why performance reviews stink (and I concur). WSJ: "Bernanke endorses Obama" by supporting his fiscal stimulus plan. The Chronicle of Higher Education on college dropouts (HT Selva Brasilis). Mankiw: fewer and fewer people are paying income tax. Tabarrok and Levitt on Heckman's bizarre behavior. Caplan on messianism. Selgin on "Planet of the Apes" and the bailout (HT Boudreaux). Perry: dollar keeps climbing. Sorman on IMF's Strauss Kahn scandal (in French).

Is Obama the Next FDR?

I've previously said that I'll count myself lucky as long as Obama doesn't turn out to be the next FDR. Now the affable Paul Rubin's arguing that my luck won't hold: Barack Obama is one of the most liberal members of the Senate. His reaction to the financial crisis is to blame deregulation. He even leverages fear of deregulation onto other issues. For example, Sen. John McCain wants to allow consumers to buy health insurance across state lines. Mr. Obama likens this to the financial deregulation that he alleges got us into the current mess. But a President Obama would also enjoy large Democratic majorities in Congress

It’s Just A Popularity Contest

I read on PFSK that “Google has a patent pending on a technology it says will rank the most influential people on social networking sites.” According to the BusinessWeek article, which PFSK quotes: The new technology could track not just how many friends you have on Facebook but how many friends your friends have. Well-connected chums make you particularly influential. The tracking system also would follow how frequently people post things on each other’s sites. It could even rate how successful somebody is in getting friends to read a news story or watch a video clip, according to people familiar with the patent filing. Traditionally people talk about the value of your network being determined by the number of people in it, other wise known as Metcalfe’s Law. Metcalfe’s Law can be illustrated with the following statement: A single fax machine is useless, but the value of every fax machine increases with the total number of fax machines in the network, because the total number of people with whom each user may send and receive documents increases. I disagree somewhat with the statement, as I have said in the past I believe it is due an update. Research from HP Labs has shown that while it is easy to build a network, it is very difficult to maintain real relationships with people you are connected to. While many people may comment on how the value of financial stocks have plummeted in recent weeks, I think the currency of the term friend has taken a nosedive thanks to social networks over the past couple of years. Does anyone else distinguish between people they know in reality and virtual worlds through use of air quotes when referring to friends If I look at my LinkedIn or Facebook accounts, while I may be connected to a large number of people, overall my networks aren’t that valuable because of the lack of interaction between the nodes in the network. In reality the value of your network should not simply be determined by how many contacts you have, but also by the level of interaction within your network. From a marketing perspective, the most interesting aspect of the quote from the BusinessWeek article is the last sentence - it could even rate how successful somebody is in getting friends to read a news story or watch a video clip. Ultimately most marketers aspire to uncovering influencers who can shape the behaviour of their peers. I only have to flick through my iTunes account and I can point out mp3s that I have purchased based on the recommendations or YouTube videos embedded on blogs I follow. Forget the popular cheerleader and track down the quarterback whose touchdown pass leads the consumer to take action. The inevitable problem will remain though. Once you have identified the influencers, how do you in turn influence them?

The Google Number: How Influential Are You?

Google has a patent pending on a technology it says will rank the most influential people on social networking sites. Although details are sparse, it’s reported that the system would work similarly to Google’s PageRank ( the algorithm for determining which Web sites appear in a list of search results). By understanding these social patterns, it’s hoped that advertising on social networks can be made more relevant and profitable. BusinessWeek reports: The new technology could track not just how many friends you have on Facebook but how many friends your friends have.