NEWSWIRE: 7/29/19

  • Amid growing public concern over teen vaping, parents are struggling to handle the first wave of young people repeatedly exposed to high levels of nicotine. The tide is turning against e-cigarettes as doctors report treating severe addiction symptoms and schools increasingly ban the devices. (The Washington Post)
    • NH: U.S. public opinion about e-cigarettes is slowly but surely turning--in a negative direction. A few years ago, most Americans didn't really know much about e-cigarettes and the publicity surrounding them was still mostly as a smoking cessation device. No longer. Today, nearly all Americans know about them. What's more, according to one recent survey, 69% would like to raise the legal age for purchasing them (from 18 to 21). Some 39% favor banning them altogether. And fully 72% agree that teens are "initiating smoking with e-cigarettes"--far more than the share who agree that teens (32%) or adults (15%) are using them to quit smoking cigarettes.
    • What's changing people's minds? Almost certainly, it's the dramatic recent growth in teen vaping. Most parents are seeing it. And nearly every teacher. Some high schools are banning thumb drives, conducting body searches, and tearing the doors off bathrooms (sometimes known to students as "Juul rooms.")
    • Last fall, preliminary results from the National Youth Tobacco Survey revealed a near-doubling of nicotine vaping in high schools over just the past year. Those results were confirmed by the CDC in February. Back in 2015, the share of high-school students who had used e-cigs briefly rose to 16%, leading to the first well-publicized worries about teen use. In 2016 and 2017, the rate fell back to around 12%, quelling some of the concern. But then in 2018 it soared to 21%. Monitoring the Future, a separate youth drug survey, similarly reported that the share of 12th-graders who had vaped nicotine within the last 30 days jumped from 11% in 2017 to 21% in 2018.
    • So what's driving the big 2018 teen jump in vaping? In a word, Juul. This one firm has become an overnight titan of the e-cigarette industry. Juul started selling its own brand of e-cigarettes in 2015, became an independent company in 2017, and reached a $38 billion valuation in December, 2018, when it sold 35% of its equity to Altria. Meanwhile, its market share among all users has grown from 0% to 75%. And among young users, it's pretty much the only brand. The secret of Juul's success is a super-smooth draw (based on its patented use of nicotine salts); its super-cool packaging (it looks like a thumb drive and can be charged in a USB port); its many fanciful and fruity flavors; and its deft use of social media invoking celebrity young adults.
    • Juul appears to be disoriented by its own success. Only last year did CEO Kevin Burns seem to realize how much public opinion--led by parents, teachers, regulators, and Congress--was turning against his firm. He has put his marketers into full reverse gear. Juul had ditched social media, gotten rid of most fruity flavors, and terminated its teen "educational campaigns" (whose alleged message was that vaping is harmless).
    • It may be too little, too late. Burns was aggressively cross-examined this week in congressional hearings by both Democrats and Republicans. FDA chief Scott Gottlieb, who once defended e-cigarettes as a smoking cessation tool, sounded the alarm late last year and in any case will soon be leaving. (See "FDA Tackles the Teenage Vaping Epidemic.")
    • Indeed, the future of the entire e-cigarette industry seems newly in doubt. Calls are rising not just for raising age limits nationwide, but for stricter regulation on marketing and sales. Stricter FDA rules are pending. Ten congressmen have introduced legislation targeting vaping. San Francisco just enacted a ban on all e-cig sales. And a growing number of states and cities are banning vaping in restaurants or workplaces.
    • Everyone agrees that vaping nicotine is not as dangerous as smoking cigarettes. Vapers are inhaling no known carcinogens, no carbon monoxide, and few particulates.
    • On the other hand, nicotine is extremely addictive and may influence brain and emotional development in young people. Juul-type packaging often encourages heavier nicotine dosing than a smoker would get. And there is evidence suggesting that vapers are more likely to become smokers over time. (See "Is Vaping Creating a Whole New Generation of Cigarette Smokers?") Cases of extreme nicotine addiction in teens are heartbreaking. Today's teens are much less likely to be smoking cigarettes than their parents were as teens. The public, apparently, is adamant that this progress not be reversed.

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart2

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart3

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart4 

  • The gap in life expectancy between blacks and whites has narrowed to the smallest ever: 4.4 years for men and 3.1 years for women. But the reasons aren’t all  positive: Premature deaths among blacks from homicides and HIV have plunged, while drug overdose deaths among whites have skyrocketed. (The Economist)
    • NH: While the divergences in income, wealth, and educational attainment between blacks and whites in America remain stubbornly persistent, the divergence in life expectancy has been rapidly closing.
    • Back in 1990, the life expectancy at birth was 50 years for whites and 34 years for blacks--a staggering 16-year gap. In the early decades of the 20th century, most of the improvement for both races was driven by a rapid decline in infant and child mortality due to improved public health and (eventually) antibiotics. Black longevity jumped ahead during the 1910s after the "great migration" from southern farms to northern cities, where (contrary to myth) life was indeed healthier. Rising living standards, both in absolute terms and relative to whites, were also a long-term plus.
    • During the postwar decades of the 1970s, 1980s, and 1990s, black progress on longevity slowed down or reversed--especially among men. Exploding homicide and incarceration rates are mostly to blame, together with the HIV epidemic, which has ravaged blacks far more than whites.
    • Over the last twenty years, however, the dramatic decline in violent crime has differentially advantaged blacks. Ditto for new HIV therapies. Meanwhile, the recent scourge of opioids, suicides, and "deaths of despair"--which has caused average U.S. life expectancy to flatten out over the last 7 years--has largely spared blacks. As a result, the gap between black and white life expectancy has again been rapidly closing.

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart5

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart6

  • The use of shot-tracking technology is on the rise among basketball players who trust computers more than their coaches. More players are analyzing their past shots with AI-powered apps like HomeCourt in hopes of scoring more 3-pointers. (The Wall Street Journal)
    • NH: When I say that Millennials are a left-brained generation, I'm talking about a digitial, menu-driven rationalism that pervades so many aspects of their lives. Even where you might least expect it, like athletics. For Xers and Boomers, "moneyball" is mostly about how to coach, manage, and bet. For Millennials, it's how you develop yourself. Some are now talking about the NBA's new "data generation" of rookies.
    • John Carter, CEO of the firm (Noah Technology) that makes shot tracking devices, has it absolutely right: "The most common quote I hear, whether it’s a middle-school coach, high-school coach, college or NBA," he says, "is that today’s players will not argue with a computer." When choosing between subjective "gut" coaches and objective "analytical" coaches, they'll mostly go with (yes, you got it) their left brain.
  • Fully 63% of 15- to 28-year-olds consider their mom or dad their best friend, according to a new study. Parents are also their top source of financial advice by far, and continue to be a lifeline of financial support well into their 20s. (TD Ameritrade)
    • NH: Depressingly, according to this survey, only 55% of young people age 15 to 28 say they will be more financially successful than their parents. The rest say the same or less well off. While you are still young? At the peak of a business cycle? The emerging Homelander outlook is one of carefully managed (if not diminished) expectations.
  • Three years after the Brexit vote, the generational rift left in its wake is as wide as ever. Most older voters opted to leave and most younger voters to stay, and as dealmaking drags on, young people still bristle at the idea that their parents voted to “steal our future.” (The Wall Street Journal)
    • NH: "As far as British politics is concerned," observes The Economist, "Brexit is the defining issue of our time." The Brexit debate has unleashed the passions of populism and nationalism. It has triggered the venting of complaints against established elites. And it threatens to tear apart Britain's established two-party system.
    • As this article points out, there is a wide generational gap in attitudes toward Brexit: The old want it, and the young don't. And this gap actually seems to be widening over time. The familiar argument of the young is that the old are acting selfishly because they don't care about the future. The familiar argument of the old is that the young don't have the experience to understand what's really at stake.
    • Surveys show that, while the young have the advantage in absolute numbers, the old have the advantage in intensity of conviction.
    • The Remain argument focuses on economic advantage, which is a relative question. Most of the young would be happy to vote for a leader (like Jeremy Courbyn) who can't even make up his mind about Brexit. Indeed, Courbyn's socialist platform embodies its own brand of protectionist nationalism.
    • The Brexit argument, on  the other hand, focuses on sovereignty, which is an absolute question. Few of the old who favor Brexit would even consider voting for a leader who is anti-Brexit. And many can't abide a leader who waffles at all about it. Witness how Boris Johnson has deployed Churchillian do-or-die rhetoric on Brexit to buttress his support among older voters.

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart7

  • After attending VidCon, NYT business columnist Kevin Roose came away convinced that social media influencers “are taking over the world.” Whether their niche is politics, life hacks, or fashion, influencers are building their brands and chasing fame with the drive and ambition of business moguls. (The New York Times)
    • NH: The rise of social-media celebrities certainly shows how technology has democratized the pop culture. In the old days, you needed connections and "entrée" to have any chance of becoming a star. Today, any teen--with luck, skill, and determination--has that chance. All you need is a laptop, a video camera, and a broadband connection.
    • That said, the odds of attaining fame and fortune remain very small. For every teen who has uploaded at least 25 videos to YouTube (that's roughly 5% of all teens), that teen's chances of landing in the top 100 are about 1 in 15,000. Not much better than getting drafted by the NBA or NFL. As a result, most teens who dedicate their lives to social media end up being "nanonfluencers" who at best eke out a miserable (monetary) return on their time. (See "The Rise of the Nanoinfluencer.")
    • Those who do succeed, moreover, work very hard at it. Don't let the casual, unplugged style of teen videos deceive you. These productions can consume 10, 20, or even 30 hours a week--sending parents and teachers into fits. In this respect, the VidCon conference has it right: Popular social media requires not just luck and talent, but remarkable self-discipline and persistence. That may be the single most positive lesson that teens learn from starting a social media business.
    • Generationally, what's most interesting about the media productions by these teens on the Millennial/Homeland cusp is just how friendly, approachable, and positive they are. From Boomers or Xers at the same age--if they had had access to a webcam--we would have expected edginess, stridency, risk taking, even overt threats against the system. Rarely a hint of that from these kids. By and large, they want to please, entertain, be helpful, and fit in.
  • Divorce is wreaking havoc on the financial and emotional health of Americans over 50. Splitting up is hard at any age, but “gray divorcées” have it worse: Older women who get divorced are seeing a 45% drop in income, and men a 21% drop—far higher declines than those reported in studies on younger divorcées. (Bloomberg)
    • NH: Overall, the divorce rate (per 1,000 married persons) has been gradually declining over the last 30 years. But this trend masks an important divergence by age. Under age 45, the divorce rate has been declining. Over age 45, the divorce rate has been rising.
    • Yes, this does reveal a generational contrast. Millennials and Xers have been divorcing less at every age than prior generations. And Boomers and Silent have been divorcing more at every age. A lot of these Boomers are now engaging in so-called "gray divorce"--splitting up near or in retirement--something we seldom saw in their parents.
    • It's a new hazard in the social landscape. Even if the rate of divorce over age 50 remains unchanged, there will be four times as many divorces per year in this age bracket in 2030 than there were in 1990.
    • These gray divorces are economically punishing. Post-divorce, couples can typically expect their net worth to decline by half and their living standards to plummet. Divorce adds to other economic challenges facing Boomers (late-wavers, especially) late in life. (See "The Old and the Bankrupt.") Women are hit worst economically, with a post-divorce poverty rate of 27%. Divorce is also associated with depression and deteriorating health, though this effect is not permanent--especially for those who find another partner.
    • For a Boomer CEO, the impact of a divorce on his company is surprisingly counter-intuitive. Most health afflictions have a negative impact on the firm. But divorce is associated with less equity volatility, apparently because the net-worth hit of a divorce settlement causes the CEO to take fewer risks with the firm. Divorce is also associated with a rise in CEO pay, perhaps due to the desire of boards to free their leader from any economic constraint that could hurt the firm.

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart8

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart10

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart9 

  • In a new essay, 31-year-old author Ben Judah sticks up for the Millennial left. Both conservatives and progressives in power, he argues, have reduced his peers to caricatures: “[They’re] not a faction that needs to be slapped down, but a generation that should be engaged with, brought into the fold, and better understood.” (The Atlantic)
    • NH: The political left is strong with Millennials, as Judah points out. His best observation is how Saikat Chakrabarti, AOC's Silicon-Valley VC-turned-chief of staff, is emblematic of the sort of hyper-rational techy leftism that inspires the ranks of progressive Millennials. He is less persuasive when trying to defend his generation's leftism from detractors. He objects to the charge that Millennial leftists are in favor of "open borders," for example, when all they really want to do is abolish ICE, decriminalize illegal immigration, and increase total immigration. Huh? There must be something here I missed.
  • For the first time, the world population is projected to virtually stop growing by the end of this century. Due in large part to falling fertility rates, annual population growth by 2100 is expected to be less than 0.1%, with more than all of the gain coming from sub-Saharan Africa. (Pew Research Center)
    • NH: There's no big revelation here. The UN has long been telling us that population growth will decelerate over the next century.
    • The news. I guess, is that the projected deceleration is getting stronger each year as the evidence grows in favor of falling global fertility. See the following two graphs. The first shows the UN's current "median" or official projection, bounded on each side by alternatives if the world's TFR is 0.5 higher or 0.5 lower. The second shows a matching projection for the TFR.
    • There are two good arguments for why the UN's official projection may be overestimating future TFR (and hence, future population). First, the UN unrealistically assumes that the TFR of today's low-fertility nations will gradually rise back up to replacement (2.1). There is no evidence supporting this long-term "rebound-to-replacement" hypothesis. Second, the UN may be underestimating the likely TFR decline in sub-Saharan Africa. That is because, on its current TFR trajectory, sub-Saharan Africa is destined to acquire population densities which are manifestly unsupportable without rapid economic development. That development, in turn, would foster lower TFR. (See "Africa Expected to Carry World Population Growth.")

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart11

Teen Vaping Epidemic Darkens Future for E-Cigarettes. NewsWire - July28 chart12

  • The South Korean government is fighting an epidemic of “smombies”: smartphone zombies who keep stepping out in front of cars and causing accidents. After mass-distributing “look up” stickers didn’t work, authorities are now attempting to meet people’s eyes by installing floor-level traffic lights. (The Economist)
    • NH: It's happening in America as well. I see "smombies" here on the streets all the time.
    • Since 2009, pedestrian deaths have grown twice as fast as total traffic fatalities. There are only two obvious contemporaneous trends that would explain this differential growth rate. One is the ubiquitous use of smartphones--both by drivers and by pedestrians. The other is the rising percentage of SUVs as a share of all vehicles. SUVs are more likely to cause fatal injuries to pedestrians due to their higher impact profile. (See "U.S. Pedestrian Fatalities Hit a 28-Year High.")


Fitbit Goes to Work. Your boss can already keep track of when you clock in at the office and what you type. (See: “The Rise of ‘Total Tech.’”) Now researchers at Dartmouth have developed a system that takes this monitoring a step further by measuring how productive you are. The system, which consists of an app, fitness bracelets, and sensors, tracks the physical and emotional signals produced by an employee throughout the day and uses them to create a performance profile over time with about 80% accuracy. But here’s a twist: It’s not meant for bosses. It’s for the employees. Dartmouth professors Andrew Campbell and Pino Audia told The Washington Post that they want this technology to empower workers by providing them with information about anything that affects their productivity and by offering suggestions on how to reduce stress. In short, they want to make it your ally instead of your enemy the next time you argue for a raise.