Unemployment and the new American economy - with some fixes

The thinkers I follow [2] have been struggling to understand why America's unemployment is so high. Productivity is rising, the economy is growing, but workers are not in demand. Obama has hired Jeffrey Immelt to help, which is either clever politics or a sign that Obama's not as smart as I thought he was.

There's too much to say here. So I'll drop seven bullet points and a set of the best links. This is what I think is happening ...

• The Great Recession has exposed structural unemployment that otherwise would have become evident around 2015.
• The digital economy (IT) impacts predicted in the 1970s have come about thirty years later than expected. [3]
• The extremely rapid industrialization and post-industrialization of about 3 billion people is incredibly destabilizing. It is a testament to the power of civilization that we're not yet living in caves.
• In a virtualized economy workers with average analytic and social IQ less than 125 are increasingly disabled. Since this average falls with age the rate of disability is rising as the we boomers accumulate entropy. Experience counts for less.
• America is the world's most virtualized economy. We have invested more intellectual capital in Finance, entertainment and software than any other nation. We are also aging, though less quickly than many. We are the harbinger.
• China is going to hit the wall between 2011 and 2012.
• Peak Oil is here, soon and then later. Oil prices will rise until China's 2012 recession, then fall, then rise again.

Here is what I think we need to do ...

• Institute a Carbon Tax with a component that drops as supply decreases to both decrease carbon emissions and stabilize energy prices. We need a predictable rise to help us with extensive adaptations. Whether this is revenue neutral or not depends on politics. Global warming is real.
• Prepare for China's coming recession. The world needs a health, wealthy China. There are things we can say and do that will help China pass through these times and recover.
• Slow the progress of economic virtualization over the next five years[4]. I think this is going to happen anyway, but we need to encourage and support diversion to an economy with more employment niches. Throwing sand in the gears of Finance is a good idea. One way to do that would be to give Goldman Sachs more competition. Regulation, taxation, and, paradoxically, reducing barriers to entry into the Finance market are all important.
• Start applying the lessons learned from providing employment to cognitively impaired adults to the entire US population. The US is a world leader (yes, this shocks me [1]) in the integration and support of adults with disabilities. Might as well learn something.

See also

What I've been reading lately ...

• Why is the U.S. so awful at job creation? - How the World Works - Andrew Leonard, 1/18/2011. The US is unusual - in a bad way.
• The Age-Income Profile Is Less Steeply Sloped than I Had Thought It Was - DeLong 1/21/2011. Income basically peaks at 35, flatlines to 54, then falls quickly. This is important.
• Why Might There Be High Unemployment? DeLong commenting on WCI's ZMP post. Zero Marginal Product (ZMP) is the economic term for disability. WCI writes: "It is possible that some potential workers, perhaps because of severe disabilities, simply cannot produce anything useful, even in a perfectly functioning economy... They have a Zero Value Marginal Product. There's no coordination failure. The problem simply can't be solved, given existing technology, tastes, and resources.". This is what I call "mass disability". Disability, remember, is a relative term. I would be disabled in much of pre-industrial history.
• Nancy Folbre: Borderless Economy, Jobless Prosperity - Nancy Folbre, NYT 1/2011. Corporate incentives, and the incentives of the investors (I claim these aren't the same thing), no long align with American society. She includes a wide review of recent discussions.
• What Have We Unlearned from Our Great Recession? DeLong 1/15/2011
• William PFAFF-Are We Committing Economic Suicide?: This isn't terribly useful, but it's a common meme. Our problem isn't money. We are doing well by skimming the wealth of India and China. The problem is that we're now living in Goldman Sachs plantation.
• A radical pessimist's guide to the next 10 years - The Globe and Mail 10/8/2010. He makes me seem like a bundle of cheer. I admit though, we could be kin.

Some relevant old posts of mine

• Causes of the Great Recession: China, GPSII and RCIIIT. Now for Act III. IT and the rise of the world means whitewater economics.
• Mass disability and Great Depression 2.0 3/2008
• Post-industrial employment: adjusting to a new world 5/2010
• Civilization is stronger than we think: Structural deficits and complex adaptive systems 5/2010
• Why your daughters should be roofers -- not architects 3/2004
• Krugman on globalization: how to manage the losers 12/2007 - I think he still believes this, but it's not politic to say it
• 2011: The year American life changes: 7/2007. I predicted then that gas prices would hit $5/gallon in the US in 2011. I didn't expect the Great Recession, but I'll stand by this prediction. Note gas hit $3.60 in Chicago in 5/2007, we're heading back to that this May.
• Deficits, climate, BP and immigration: Saving America is suspiciously easy. 7/2007. Our problems are fixable. And ... American crisis – imagining a way out 2/2010.
• Retiring at 70? Don't legalize marijuana. 7/2010. Raising the retirement age is spitting in the hurricane.
• What would make Krugman wrong about spending? 6/2010. Not entirely successful post, but there's something there.
• Gasoline prices: refining or secular trend - the 11 year chart: 5/2007. I need to redo this now.
• Employment in the Great Stagnation: 8/2010. Remembering the Zero Sum Society.
• Peak Oil? Hell, yes. 10/2008, after pump prices cratered in the Great Recession. See also The three meanings of peak light sweet oil and praise for rational speculation and Oil price speculation: is it rational investment or a bubble? 3/2008
• My Peak Oil Call 8/2008. I make my call. Then the Great Recession hit and prices fell. Funny.
• When the market is your deity, there is no such thing as corruption 7/2009 - why the GOP can't help
• Welcome to the wild times... 5/2010. Don't believe in predictions, including these.

- fn --

[1] The ADA was enacted in 1990 under Bush I (!).
[2] Beyond my own stuff, I'm a DeLongian. DeLongian's are closely aligned with Krumanians, but are less constrained by the conventions of polemical discourse. I suspect, for example, that, in his heart, Krugman believes a lot of what I've written above. It's just not something he dares to say just now.
[3] Gibson's Neuromancer, written in 1984 and influenced by the memes of the late 70s and early 80s deserves a re-read.
[4] I'm being terse by necessity. The thesis is that virtual economies are winner-take-all; effectively, they create mass disability. We need to shift to an economy that has more diverse employment niches -- effectively lowering disability.

Update 1/30/11: Gordon's Notes: Unemployment and the great stagnation - this meme is in the air.

Suzhou

A student of mine grew up in Suzhou, China; she left about six years ago. It was, she said, an  hour west of Shanghai, and had a population of about 1 million.

Today it has a population of about 6 million. By way of comparison, Chicago has a population of about 2.9 million.

Google Earth still shows a gap of green between Suzhou and Shanghai, but that will not last long.

When I asked how her home differed from a city like Houston, she said it was much more compact, and that it was a continuous landscape of towers - "downtown" everywhere. I imagined something like downtown Chicago, but more widespread.

I imagined wrong. This is a random grab from Google Earth ...

"Downtown everywhere" was probably a language limitation. From Google Earth photos I see that each building brick is a multi-story apartment building. Many thousands of them, each holding hundreds to thousands of people. Much of Suzhou is now a continuous landscape of identical residential multi-story housing units.

Dog 2.0

A randomly selected purebred border collie associates sounds with objects, and perhaps sound permutations with objects and actions.

There are mid-sized dog breeds that live as long as 25 years. Given low cost whole genome sequencing, we could create a dog breed a 25 year lifespan and enhanced communication skills.

To develop greater language skills within a short time period would probably take some germline engineering. Maybe in 10 years we'll be able to do the germline engineering.

So does dog 2.0 get to vote in 2060?

See also:

• Gordon's Notes: What will be unacceptable in 50 years?
• Gordon's Notes: Dogs

Beyond America - Google world editions with Google Reader and Google Share

This morning, thinking of Brazil I wrote ...

I just wish I, and we, had a better way to share and understand the fascinating and terrible world that we live in. We see only slices and shards of it. My hope is that even though today's machine translation only works  for very closely related languages (ex: English, French, German) that it will improve dramatically in the next decade. When that time comes Google News (or the future equivalent) may reveal the invisible world. Maybe, one day, even Chicago.

This morning, reading the NYT on my iPhone's NYT.app, I was again annoyed by my inability to easily share my thoughts on what I read there. I want to create Google Reader Shared item notes on my shared item page/feed (and twitter reflection [2]), but that's not a NYT option. [1]. Google News gave me the same feeling a bit later. I wished I could read and share using Reeder.app with superb new "readability" integration.

This afternoon I realized I can take a step now towards all of these objectives.

Most of the NYT articles I'm interested in show up in Google News. Google News has editions for many nations (left). Each Google news edition or section has a unique feed.

So I've added a representative sample of Google News English language editions to my Google Reader feeds. Certainly Canada (my birthplace) and the US, but also India (english version) and Southeast Asia. I've grouped them in a single "folder" so I can easily mark the entire collection as read (this is a high volume collection).

I'll be tweaking the set, and sharing from this set.

Of course what I really want is integrated machine translation for Chinese sources, but we're not there yet. Machine translation barely works for closely related languages and it's computationally intensive.

-- fn -

[1] I've tried workarounds such as email to a hidden blog that I follow in Reeder, and sharing from there, but it's too tedious. There might be something I could do using Yahoo! Pipes, but, frankly, I'd forgotten about them.
[2] I'm seriously tired of Twitter's string length limits. It's darkly funny that some consider this a feature.

See also:

• Gordon's Tech: Filtering my Google Reader Share with Yahoo Pipes
• Gordon's Tech: How do I share my Google Reader Shared Items Feed and process it via Yahoo Pipes?
• Gordon's Tech: Social wrestling: Google Reader, Twitterfeed, Blogger and Facebook
• Gordon's Tech: Tweeting Google Reader Shares and Notes via feedburner
• Gordon's Tech: FreeMyFeed - Getting Twitter feed to Google Reader
• Gordon's Notes: How I discover people to follow - on Google Reader
• Gordon's Notes: My Google Reader bundles - November 2011

Brazil

Chicago is the invisible city. Massive. Wealthy. Complex. But invisible. Chicago is America's third most populous city and third largest metropolitan area, but we read far more about puny, dying Detroit. Even Obama's Presidency hasn't exposed Chicago. [1]

Brazil is, for Americans, the invisible nation. There are 190 million Brazilians; it's the world's fifth largest country and, by GDP, eight largest economy and growing fast. I'd love to visit Brazil [2].

Brazil is also nation where survivors of mudslides are walking out from a natural disaster ...

In Brazil, Mudslide Survivors Walk Miles for Aid - NYTimes.com

Thousands of traumatized mudslide survivors navigated steep, slippery jungle paths Saturday to find food, water and medicine as they slowly gave up hope that government rescuers would reach them anytime soon.

Those who escaped the slides that killed nearly 600 people over four days ferried bottles of water and sacks of groceries on their backs after trekking five miles to the center of this mountain town north of Rio de Janeiro.

Wanderson Ferreira de Carvalho, 27, lost 23 members of his family, including his father, his wife and 2-year-old son. He trudged up a path to his neighborhood, carrying supplies.

“We have to help those who are alive,” he said. “I’ve cried a lot and sometimes my mind goes blank, and I almost forget what happened. But we have to do what we must to help the living.”

Local and state fire departments said they had deployed 2,500 rescuers, while 225 federal policeman were in the area to maintain order. The federal government has been trying to fly in 11 helicopters to remote areas, but has found it hard because of poor weather conditions.

That's the full text of the entire NYT article.

Terosopolis isn't, on a map, that far from Rio ...

Rio is to the left of the great bay, Teresopolis is the A icon. Terosopolis is within 250 (spectacular looking) kilometers of the city.

I'm not moralizing about Brazil. America is far wealthier than Brazil, but we struggled to manage Katrina. (The stories of the Coast Guard response to Katrina, incidentally, are awe inspiring).

I just wish I, and we, had a better way to share and understand the fascinating and terrible world that we live in. We see only slices and shards of it. My hope is that even though today's machine translation only works  for very closely related languages (ex: English, French, German) that it will improve dramatically in the next decade. When that time comes Google News (or the future equivalent) may reveal the invisible world. Maybe, one day, even Chicago.

[1] Of course, it may also be that Chicago is grumpily dull. It's a corrupt old city, but it's been more corrupt in the past. It mostly seems to work. The weather is miserable, worse in its own way than Minneapolis, but the regional population is stable. Of course if it turns into Detroit then it will get a bit of attention.
[2] I roamed once. That was a prior life. I hope to have a few more lives yet.

What will be unacceptable in 50 years?

Ta-Nehisi Coates has been trying to imagine how, about 150 years ago, an American culture could celebrate the ownership of humans. That is unacceptable in America today. Times change.

Assuming we continued the historic trends of the past hundred years [1], what will be unacceptable fifty years from now?

I listed three ideas in a comment ...

Grappling With Genosha - Ta-Nehisi Coates - Personal - The Atlantic

.... What things do we love that will be despised in fifty years?

I eat pigs. I think that will be unacceptable in fifty years.

Coates loves football, a sport where brain damage is a normal outcome. I think that will be unacceptable sooner than fifty years from now.

We imprison and kill people with disabled brains. I think that will be unacceptable fifty years from now...

Any others?

[1] Of course this is simply a thought experiment. If the trends of the past century continue, humans will not be defining acceptability.

What China's rulers fear today

Blood and Treasure, one of my favorite blogs, suggests a leaked document as a guide to the current fears of China's leadership --  A General Notice from the Central Propaganda Bureau Regarding News and Propaganda in 2011. In bullet form, they are (emphases mine):

• income distribution, the stock and real-estate markets, employment and social security, education and health, and safety in manufacturing.
• reports on disasters and extreme incidents.  They "cannot include interviews or supervision from non-local areas".
• reports on the requisition of land and forcible demolition, especially report on incidents of violent demolition or “suicides, self-mutilation, or collective action”
• public selection of news, people, or events [jg: I think this refers to social reporting, public selection of topics]
• incidents of collective action ... prevent reports on collective action from pointing towards and focusing on the party and the government.
• anti-corruption cases ... Do not use the term “civil society” (gongmin shehui).
• Do not conduct questionnaires or on-line surveys on housing prices.
• instances of using a residential construction foundation to change a residential permit
• problems related to Spring Festival travel, such as “difficulties in obtaining even one ticket.”

For China in 2011 it's all about real estate and land seizures. Yes, they have a housing bubble too, and it's going to blow soon. I am really tired of "interesting times".

Extreme parenting

There's a book in play about "extreme parenting", which is apparently a Chinese thing (Koreans would disagree). It's gotten a lot of attention.

It's silly. Extreme parenting requires special needs children. Parenting bright kids without disability is recreational parenting.

The rise and fall of recreational clubs

From the Jan 2011 MN North Star Ski Club newsletter (emphases mine) ...

“Ted Wirth’s hiking club is on its last legs” This was a Star & Trib article on October 26, 2010 describing the decline and demise of a 90-year old Minneapolis Municipal Hiking Club. It peaked at about 500 members and apparently had a full program of 88 hikes in 1928, for example. One member described her first hike in 1934 as starting at West 54th Street and Penn Avenue South (where Settergrin’s Hardware has been for 100 years), going into the “countryside” and ending at Lake Calhoun.

Currently, the average age of its Board is 84. The article summarizes that the club is victim of aging membership and changing exercise habits. Is this pertinent to our North Star’s with our aging membership and gradually declining numbers? Along with the two previous NS Presidents, I wonder what we can do about this?

The "Ted Wirth" referenced in the Strib article lent his name to one of the best of many excellent MSP parks. Ninety years is an impressive record; most of the recreational clubs I've known had lifespans in the 10-30 year range.

I wonder what they the MMHC did right. Google didn't turn up any tips on what makes for a long-lived club. A lot of people would like to know the answer, not least the evidently shrinking North Star (nordic) Ski Club.

Maybe The Atlantic or The New Yorker will assign someone to survey long lived clubs and ask them how they both recruit new members and retain the faithful core (excluding university associated organizations of course. It's easy for them!). I'd buy that issue ...

Unloading the post queue

There are many things I'd like to write about, but only a bit of time to do it. So here's a quick list. I'll probably get back to most of these topics sooner or later ...

• 21st century America is 19th century South Carolina. Instead of plantations we have the titans of Finance. They don't have employees making cars, or slaves picking cotton, they have software moving money. The rest of us are the freemen of the Old South. It's quite stable until the software gets a bit smarter.
• William Pfaff (like Andy Grove) says America is committing economic suicide by (unlike Germany) abandoning manufacturing. Actually the problem isn't money. We are doing well by skimming the wealth of India and China. The problem is that we're now living in Goldman Sachs plantation.
• The first golden age of personal computing was multipolar. We had Lotus, Microsoft, WordPerfect, AshtonTate, Apple, Amiga, IBM, Intel, Atari and so on. Then we were bipolar - Microsoft and Apple. Then, for a time, we were monopolar. Now we're multipolar again; we have Apple, Microsoft, Google, Adobe, Facebook, Intel, ARM and so on. In the 1980s we had dueling document formats. In the 10s we have dueling video formats. Multipolar is better for people like me.
• It took 15 years to defeat email spam. Now we have Demand Media and GoogleFail. Demand Media isn't a parasite like email spammers, it's a Google symbiote. We knew funding the web through marketing was a Faustian bargain, but we didn't know what the price would be. Unintended consequences again.
• Google's Demand Media problem feels somewhat like the problems of democracy. America's founders tried, with limited success, to tackle these problems by mixing in some aristocracy and autocracy, and avoiding direct voting (government by referendum - ex: 2010 California).
• xkcd made wikipedia's list of common misconceptions famous. There is a small universe of these lists, including lists of categories of lists (meta-lists and list taxonomies). Geek heaven, and very Aspie.
• All the interesting business models for healthcare delivery are disruptive. That's true for most businesses, but especially true for American healthcare in 2010.
• There is a high cost to being #1, but it's a deferred price. There's some level in a hierarchy that has the best tradeoff between personal power and happiness. It's neither the top nor bottom ...
• Human evolution drove symbol manipulation, but not arithmetic skills. We are much better at math than mosquitofish, but only somewhat better at arithmetic. This explains much of the modern world.
• The Verizon iPhone will slow US iPad sales. Many iPad users bought them because they didn't have an iPhone, and they didn't have an iPhone because they were Verizon customers.

Neither Loughner, Palin, Beck nor Limbaugh are responsible. Who is?

Jared Loughner is a paranoid schizophrenic.

Loughner a "textbook" case paranoid schizophrenic - Jared Loughner - Salon.com

... He's a textbook case. Most psychiatrists will tell you they need to examine a patient before diagnosing him, but this guy has all of the symptoms. He has the right age of onset. He has a deteriorating social course, as they say in the [DSM], social and occupational dysfunction...

This is not a hard diagnosis. This is like diagnosing rain by looking at the splashing drops. In any sane society, Loughner would not be considered responsible for his actions. He is not the "face of evil" dammit, he is a victim of one of the most terrible diseases in the vast array of terrible diseases.

Nor are Palin, Beck or Limbaugh responsible. Yes, paranoid schizophrenics do listen to talk radio, and, yes, it does influence them. Palin and Limbaugh, at least, are sane enough to bear some responsibility for their rhetoric. The voices in Loughner's own head, however, would be stronger than their rants.

If I were a theist I would blame this one on God, but I'm not. There are, however, some close human substitutes. They would be NRA supporters and GOP voters.

If the 2004 assault weapons ban were still in place Loughner would still have shot Giffords, but his kill count would be much lower. If Arizona had a robust mental health care system nobody might have died.

People who support the GOP and the NRA are responsible both for the failure to renew the assault weapons ban and for the miserable state of Arizona (and America's) mental health care.

If you are looking for an intelligent and thoughtful response to this tragedy, forget Loughner. Forget (please) Palin, Beck and Limbaugh. Forget gun control, that won't happen in America. Instead, focus on the identification and management of major psychiatric disorders.

Google is clothes free - what's next

When a man's paycheck depends on his not understanding something, you can depend upon his not understanding it. Upton Sinclair's Law

After Jeff Atwood pointed out that Google search isn't working any more the rest of my geek tribe piled on. We all agree - the emperor isn't wearing anything at all. My recent personal anecdote concerns searches for Apple support documents. Instead of finding the ad-free originals Google found inferior answers.com rewrites [1].

The root cause of this problem isn't hard to understand. One easy fix would be for Google to boost the ratings of ad free pages like (cough) Gordon's Notes. In a stroke that would eliminate most of the splogs (spam blogs) and junk pages. It would also eliminate Google's revenue.

Google will dial back a bit and improve their results, but they have a fundamental business problem. So, for that matter, do all of its competitors. The only real fix is to charge end users for search.

We won't pay for search alone. We should, but we won't. We aren't smart enough. Apple has shown, however, that millions will pay for their ad-free, and remarkably crummy, MobileMe services.

What if Apple were to partner with Google (or Bing) and offer search results tweaked and reordered to favor ad-free content as a part of an enhanced pay-for-use MobileMe offering? For that matter, they could do their own search using their mysterious Carolina facility.

Search is expensive. Hideously expensive. The best search requires that we pay directly. Someone will have to figure out how to make this work. In the meantime we can read answers.com.

[1] Which, frankly, weren't bad. I wouldn't mind them if they actually referenced the source documents. Which they don't.

Update 2/24/11: Google dropped the hammer. The new algorithm gives similar results to the Chrome-only search personalization tool. In my own limited testing my blog posts are much more often on the front page -- even with personalized search turned off.

Most cultures punish the atypically generous

All cultures punish "cheaters". That's unsurprising.

What's surprising is that most cultures punish the atypically generous ...

Balkinization

... the U.S, Australia and the U.K. subjects were much less likely to punish players who HAD cooperated by contributing to the group project. In other societies, ‘[m]any subjects engaged in anti-social punishment; that is, they paid to reduce the earnings of ‘overly’ cooperative individuals (those who contributed more than the punisher did).’ ...

Looking at the graph some cultures punish atypical generosity even more than "free riders". On visual inspection I see three grades of anti-social punishment (emphases mine) ...

• Low levels: US, Australia, UK, Switzerland, China, Germany
• Mid level: Denmark, Ukraine, Korea, Turkey, Russia (I suspect Japan would resemble Korea)
• High level: Saudi Arabia, Greece, Oman

I suspect Canada would fall between Germany and Denmark, at the high end of low punishment. I grew up in Canada, where we understood it was rude to be exceptionally good in any way. I wonder if what's measured here is really a general response to being exceptional (talented, witty, generous, etc) rather than to a specific response to "excessive" generosity. It may also be that in some cultures there is a strong duty to reciprocate generosity (Japan?), so the generous act can be a bit of an unwanted gift.

I think these responses are important to understand -- particularly for those whose programming favors generosity. Even in the US the naturally generous will work with people from cultures that may resent or feel burdened by an unsolicited gift. It is often wise to balance gifts with requests, providing an opportunity for the recipient to balance the scales. Most of all it may be wise to do deed invisibly, so nobody will feel burdened and the Samaritan will go unpunished.

 

Is the GOP truly a pawn of corporations and the wealthy? We'll find out soon.

Charlie Stross says emergent corporate entities control America. Krugman says wealth alone is sufficient explanation, emergent entities are an unnecessary complication.

John Gordon says control (the bouncing yellow ball) of America is a dynamic balance between the emergent corporate entity (ECE) powerful (wealthy) individuals, and the voting masses [1]:

Of course I'm right, but it would be nice to have evidence.

Fortunately, there's a natural experiment coming up. The GOP is threatening to destroy the American, and world, economy. This is in the interests of neither powerful individuals nor ECEs. So if it happens, then Stross, Krugman and I are all wrong. The Voters have power after all, and it's just too bad so many Americans are detached from reality.

I bet, however, that the Tea Party GOP caves, and the GOP that serves the powerful and the corporate wins.

That doesn't tell us whether Stross, Krugman, or me has the best story though. We need a different falsifiable prediction.

It's tough to come up with that test because this is a triangle of frenemies, not enemies. Often the interests of (hypothetical) ECEs align with those of powerful people and/or Voters (who are both consumers and employees).  We need test where the voters are neutral, but the interests of corporate entities and powerful individuals are opposed.

The only test I've come up with so far would be to examine the pattern of legislation over the past 30 years. My hypothesis is that we'd find that legislation and accounting regulations have furthered the development of ECEs even as they've reduced the rate of return to Powerful individuals -- perhaps shrinking that pool [2] and even reducing overall economic growth.

Can anyone think of another falsifiable test?

[1] Similar picture here, but there the third point was "the weak". Also true, but different point.
[2] So we end up with fewer "players", even though they may be individually wealthier.

See also:

• Speculation: The corporate ecosystem and American stasis
• Understanding the elections - what's really changed
• America 2011: exploring the boundaries of democracy and capitalism

Smartphone choice made easy: iPhone vs. Android

Asymco estimates half of Americans will use a smartphone by the end of 2011. That means either an Android OS device or an Apple iPhone, since there are no viable competitors.[2]
Which one should you choose?
It turns out the decision is quite easy.

• If you want to stay with T-Mobile or Sprint -> Android
• if you are with Verizon or AT&T then ...
  • the phone is for a younger teen or child -> iPhone, Android has no parental controls
  • you want software without advertising -> iPhone, Android apps are almost entirely ad supported
  • you are an iTunes user and buy iTunes video/movies -> iPhone, Android phones can't play iTunes DRMd video or music
  • you want to avoid malware -> iPhone, the Android marketplace is not curated
  • you want the device to have value in two years -> iPhone, it can be used as an iPod touch equivalent after its phone lifetime has passed
  • you want software and OS support over the lifetime of the device -> iPhone, Android device manufacturers rarely provide more than a few months of updates
  • Google voice is very important to you -> Android, on the iPhone it's not fully integrated
  • You don't have, or don't want to use, a classic (legacy) computer -> Android [3]
  • You want Google Apps support -> Android [4]
  • If none of the above is true, you can save 20% of the phone cost by buying an Android phone [1]

Most Verizon and AT&T customers will be happiest with an iPhone.
[1] Assuming $500 in mandatory data fees over the 2 year contract span, prices are about $550 for an Android device and about $700 for a comparable iPhone.
[2] BlackBerry is walking dead. Talk to me about Microsoft's phone in a year or so. Nokia? What's that?
[3] I assume Android doesn't require a legacy (Windows/Mac) computer. The iPhone expects one, I don't know if you can really use an iPhone without iTunes
[4] iPhone is a mediocre fit for Google Apps. I assume Android is better, but nobody talks about this.