Mark Zuckerberg is the world’s front-page editor now. That’s the real problem.

from BobSullivan.net

Mark Zuckerberg never set out to be the world’s editor in chief, but here we are.  And sorry Mark, you are a terrible front page editor.

Hearings in Congress today dug into the weeds of why Americans feel like social media is letting them down — it was a ready-made tool for Russian election interference; it’s now silencing some voices based on vague criteria, and so on.  But these aren’t aren’t THE problem. They are just symptoms.

Two thirds of Americans get their news from social media today. Most from their Facebook wall. That’s s a very, very small window through which to see the world.  Worse yet, most of them don’t know how social media really works.  Pew just released a study showing a majority have no idea how stories are selected for Facebook’s news feed. And don’t believe they have any influence over what appears there.

That’s THE problem.

Fairly recently, a consumer reading a newspaper who didn’t like what was on the front page could do something simple, but now seems revolutionary — she could turn the page.  Over and over.  And within 10 minutes or so, she’d be exposed to hundreds of stories, neatly organized in sections.  If she were really smart, she might do this with three or four papers. More to the point, she had a pretty good understanding of why those headlines and those stories appeared in those sections.

Today, we scroll.  A supercomputer designed to hack our attention span optimizes that “front page” for “engagement,” with the goal of hypnotizing you into sticking around. There’s no sections, no priorities. Only click-bait.  And whatever Facebook has decided is important to the hypnotics that month (Live video! Puppies!) If a good story doesn’t click with the first few folks who see it, it’s dismissed into the long tail of Internet oblivion, destined to be a tree that’s fallen silently in an empty forest. This story, I’d think, will be a good candidate for that scrap heap.

I don’t begrudge that (ok, of course I do. Facebook’s algorithm changes have killed my website in recent months).  But I found this piece of Pew’s most recent survey the most troubling: Facebook offers token tools for adjusting what’s on users’ front pagea, but even these are rarely used. Fully two-thirds of users have never even tried to influence the content on their news feed. Of course, the older users get, the less likely they’ve taken an active step to change their feed, such unfollowing groups or asking that certain friends be prioritized. (Please choose “see more” of me.)

In other words, news consumption in America is dangerously passive.  And Mark Z is the most powerful front page editor in history.

This is not what Facebook set out to do; I genuinely think many at the company are horrified by this state of affairs.  I am one who believes it is an existential threat to the company — it’s very far from the Mark’s core expertise. And users will eventually revolt. In a separate Pew survey, researchers found that 42% of users had taken some kind of Facebook break recently. And 26% said they had deleted the app from their phone. Those numbers seem awfully high to me, but you get the point.  People sort of hate Facebook now for what it’s done to their lives.  That’s not a great business model.

And it’s getting worse. As Facebook works frantically to save itself, and to diffuse the bomb it’s been turned into, news feed is often shrunken. Puppy photos are back on top; interesting news stories (like this one!) are out.  Users see an even smaller selection of “follows” when they look.  You might have 500 friends, but only 25 of them appear in your feed, urban legends and empirical evidence tells us.

Why are we really here? Since the beginning of time, Facebook has refused to offer an unfiltered option that would simply list every post from every friend.  When a software maker invented a third-party app to make such a raw feed, Facebook forced it to shut down. Users would be overwhelmed by so many posts, the firm believes.  News feed must be edited.  And so, here we are.

Yes, in some ways, we did this to ourselves.  Nothing stops Americans from visiting SeattleTimes.com on their own, instead of relying on the news feed (or Google News) for their headlines. Heaven forbid, we could actually subscribe to a newspaper, too.  But, as I began this piece, here we are.  The world’s most efficient tool for connecting human beings, one of the Internet’s original killer app, has killed our curiosity.  We’re devolving into digital-made tribes, only listening to the 25 or so people who make the front page of our lives.

As the saying goes, you made this mess, Mark. You have to clean it up.

Are you living below the ALICE line? 43% of Americans can’t cover the basics

from BobSullivan.net

Two-thirds of all jobs in the country are low-paying at less than $20 an hour or $40,000 a year
About 43% of households, or about 51 million, don’t earn enough to cover the basics.
Asset Limited, Income Constrained, Employed, or ALICE, is a worrisome group for America

What’s the minimum amount of money you need in America to get by? How many Americans are earning that? Are Americans doing well, or poorly, or somewhere in between? It’s hard to measure these things, but incredibly important to try. What is your monthly nut, the minimum you need to earn to pay your basic bills, and how does your income compare to that? I’ve taken several cracks at this with The Restless Project. The United Way has now done an admirable job with its new ALICE project — a study of a group the organization has identified as “Asset Limited, Income Constrained, Employed.”

Here’s is the organization’s answer: 43% of households, or about 51 million, don’t earn enough to cover the basics.

But isn’t the economy doing better? Yes and no. The unemployment rate is low, but wages are low, too. New jobs don’t help if they are minimum-wage jobs. Another harsh data point from the study: two-thirds of all jobs in the country are low-paying at less than $20 an hour or $40,000 a year, if full time. That’s far less than the $59,000 needed to cover the basics in Ada County, Idaho. Live in a place like Portland ($73,000) or Seattle ($85,000) and that $20-an-hour job looks even worse.

To perform its calculations, United Way added up local expenses for housing, child care, food, transportation, health care, technology, taxes, and miscellaneous and came up with county-level minimum budgets for these basics. In Ada County, $30-an-hour wages are needed to support that budget.

Some states are worse off than others. California, Florida, and Texas have the largest number of ALICE households in the country, the organization says. In California, 49% of residents are below the ALICE line. In Florida, 44%, and Texas, 43%.

While North Dakota’s mix of low housing costs and good-paying jobs made it the most prosperous state for residents, no state is really spared. In all 50 states, at least 32% of residents are below the ALICE line.

“Despite seemingly positive economic signs, the ALICE data shows that financial hardship is still a pervasive problem,” said Project Director Stephanie Hoopes, Ph.D., who leads the data analysis.

I’ve long argued that terms like poverty and middle-class muddy the waters in discussions like this. Folks who earn $20 an hour have a lot more in common with folks below them on the economic ladder than folks in what I have started to call the “Lucky” class — people who by virtue of family, connections, or an outsized wage don’t suffer from housing cost anxiety. You shouldn’t have to be lucky to know your kids can go to college and you can afford a decent home. The American Dream is dead if luck is the only path out of that kind of anxiety.

How does your monthly nut budget compare to the ALICE Project results? Tell me in comments or write to me privately.

A Student Debt Crisis is Imminent, But Loan Companies and the Trump Administration are Not Likely to Provide Solutions

By all accounts the country faces a looming student debt crisis.  Debts from student loans currently amount to $1.4 trillion, a number that has grown exponentially over the last decade as more and more students take on debt only to face a demanding labor market.  Default rates are also on the rise—recent data from the U.S. Department of Education indicates that 11.5 percent of student borrowers who began paying off their loans in 2014 have since defaulted.  A recent analysis from The Brookings Institute projects that these default rates will continue to escalate if no large-scale changes are made.

The situation of struggling debtors has been made worse by the dubious practices of the loan servicing companies that manage the Federal government’s Direct Loan program. Navient (formerly part of Sallie Mae) is one of the largest of these companies and currently faces lawsuits in Pennsylvania, Washington, and Illinois, as well as from the Consumer Financial Protection Bureau for its alleged mishandling of loan collection.  The CFPB suit alleges that Navient systematically deceived or misled borrowers over the phone and in writing, incorrectly processed or misallocated payments, and obscured information relating to income-driven repayment plans. Between 2010 and 2015 Navient added over $4 billion in interest rate charges. The CFPB asserts these charges could have been avoided had the company informed borrowers of their eligibility for less demanding payment plans. In its defense filing, Navient argued that “there is no expectation that the servicer will act in the interests of the consumer”—a somewhat extraordinary statement from a company contracted by the Federal government and ostensibly in the employ of U.S. taxpayers.  Such practices are not limited to Navient alone. The Pennsylvania Higher Education Assistance Agency (also known as FedLoan Servicing), which handles about a quarter of national student loans, is currently facing a suit brought by the Massachusetts Attorney General.  That suit alleges that the company overcharged borrowers and prevented public service workers and teachers from accessing benefits and loan forgiveness programs specifically targeted toward those entering public sector employment.

States that challenge these companies may soon have to directly contend with the Trump administration.  In California the Student Loan Servicing Act recently signed into law requires loan collectors to comply with a licensing program, giving the state oversight into questionable practices.  But  a confidential memo leaked in early March reveals that the U.S. Department of Education will direct states to stop interfering with collectors.  The memo first defends the Federal Direct Loan Program, pointing out that Congress created it  “with the goal of simplifying the delivery of student loans to borrowers, eliminating borrower confusion, avoiding unnecessary costs to taxpayers, and creating a more streamlined student loan program.” (Based on the Navient complaints gathered by the CFPB, theses goals of simplification and efficiency are clearly far from being reached.)  The memo goes on to say that “state regulation of the servicing of Direct Loans impedes uniquely Federal interests.”  The statement is revealing in two ways.  First, it seemingly reverses the tendency of the Trump administration to shift responsibility to states on issues, underscoring its fealty to the interests of business over that of jurisdictional principle.  Second, many argue that the most distasteful and unjust aspect of student loan administration is that it is actually profitable for the Federal government—to the tune of, by most recent estimates, $135 billion over ten years.  If this is the case, the Federal government has a vested interest in preserving the status quo.

Student debt accounts for the second largest category of consumer debt after housing.  And, as with the market for subprime housing mortgages, there is a crisis in the making.  This being said, we do not lack for remedies.  States and the CFPB, must continue to regulate and monitor loan collectors and repayment plans based on income should continue to be made accessible and comprehensible to borrowers.  But broader solutions such as debt cancellation and free college tuition are economically feasible and enjoy popular support.  Oregon, Tennessee, New York, and Rhode Island have all made community college tuition free, and there’s a push to make 4-year public colleges free as well.  As this push continues, the obstacle lies with the lobbying efforts of the loan industry and with a Federal government keen to protect their interests.