None of the above

It looks like I've underestimated the trickiness of the Prosperity vs Inequality question discussed earlier.

To reveal preferences we typically construct a test using four steps:

1. Present two choices.
2. Make the choices binary.
3. Load each choice with a bad side effect (preferably hidden).
4. Evaluate how much the respondents are willing to trade positive vs negative.

This is enough to reveal preferences, but not enough to create justified moral indignation on both sides. Therefore, we need two additional steps:

5. Make choices personal.
6. Make personal choices public.

Polarization ensues. Somehow, people don't realize that they've been tricked into defending choices with artificially constructed bad side effects.

Quote of the Day: Sunkenness of the Intangible

“As well as helping inflate bubbles, the sunken nature of intangible investment could make it more painful when the bubbles finally burst. We’re used to the idea that when a market crashes, businesses often have to sell their assets very cheaply, since almost everyone else also wants to sell. This is bad enough when the assets are somewhat fungible, like property or fiber-optic cable: the price plummets, but there is usually at least some residual value. But when a bubble based on sunk, firm-specific intangible assets bursts, there’s the risk that the assets will be worth more or less nothing.”

--- Haskel, Jonathan, Westlake, Stian. “Capitalism without Capital.”

Coastal Elites

Something happened at the end of the 20th century. Before, American industries reinforced each other: hollywood advertised cars that needed oil and computers helped optimize production and distribution of both. Now, finance needs software and hollywood advertises networked vehicles that run at 200 m/h on solar/wind power. What new industries should emerge to sustain economic life between the coasts?