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December 31, 2005

Memories of Hope after a Landslide Loss


My sixth grade daughter's teacher asked that the students have their parents write a paragraph about some memorable event that occurred during the year the parent was a sixth-grader. Here is what I wrote:

I was in sixth grade during the fall of 1964 and the spring of 1965. My main memory of that year was the election for president in 1964. My family strongly supported Barry Goldwater. We thought he spoke honestly and believed in freedom. My family became very discouraged as the polls showed that Goldwater was losing very badly. In the end, he lost 49 states and only won his home state of Arizona. I remember us all sitting in front of the TV a few days before the election, watching a short speech by a former actor, who said that freedom was worth fighting for, and that we should not give up hope. His name was Ronald Reagan.




December 30, 2005

Mathematical Rigor


Mathematics brought rigor to economics. Unfortunately, it also brought mortis.

Attributed, in various versions, and in various places, to Kenneth Boulding.




December 29, 2005

Nebraska Congressman Opposed Government Supporting Agricultural Prices


 

(p. 85) ". . . in March 1911 Nebraskan Representative George W. Norris sponsored a congressional resolution asking the Attorney General to investigate "a monopoly in the coffee industry."  Wickersham replied that he indeed was conducting an ongoing investigation.

(p. 86) In April, Norris lambasted the coffee trust from the floor of the House, summarizing the valorization loan process.  He concluded that "this gigantic combination [has been able] to control the supply and the sale of coffee throughout the civilized world.  [They] sold only in such quantities as would not break the market."  Frustrated by Brazil's involvement, he observed that when a conspiracy to monopolize a product involved a domestic corporation, it was termed a trust and could be broken.  "But if the combination has behind it the power and influence of a great nation, it is dignified with the new term 'valorization.'  Reduced to common language, it is simply a hold-up of the people by a combination."

 

Source:

Mark Pendergrast. Uncommon Grounds: The History of Coffee and How It Transformed Our World. Basic Books, 2000. (ISBN: 0465054676)

 




December 28, 2005

Hiring Managers for Experiences They Have Had


Christensen and Raynor in The Innovator's Solution argue against hiring managers for having 'the right stuff' and favor hiring managers who have had the right experiences tor the job that needs to be done. Maybe western venture capitalists are following this advice in China?

SHENZHEN, China -- China still is a magnet for ambitious, Western-educated entrepreneurs coming home to start high-tech companies and cash in on China's economic boom. Take Charles Zhang, the Massachusetts Institute of Technology-trained founder of Web portal Sohu.com Inc., and Edward Tian, who earned a doctorate in the U.S. and once charmed Rupert Murdoch into joining the board of his Beijing telecommunications company.

But this favored class isn't looking quite so favored, at least in the eyes of venture capitalists looking to invest in China. The trend is largely anecdotal, but for many "seed capitalists" poking around Beijing and Shanghai, slick Westernized returnees are out. Local, rough-around-the-edges entrepreneurs are in.

"The less English you speak, the better," says David Zhang, a venture capitalist in Beijing with San Francisco's WI Harper Group. He and other investors say locally trained executives often are more thrifty with cash and better understand local Chinese markets -- and businesses that know how to tap them -- than people who have been abroad for years.

"A lot of the returnees, actually, they have lost touch with China," agrees Vincent C.H. Chan, a managing director at Jafco Asia, part of Jafco Co. of Japan.

Instead of courting Ivy League graduates with slick business plans, Messrs. Zhang and Chan are plowing money into no-frills Chinese start-up businesses such as wireless-services provider China Broad Media Corp. The company, funded by WI Harper, is the brainchild of Tian Song, an entrepreneur who went to college in Beijing and toiled in the state-owned telecommunications sector there. He says, through a translator, that his only visit to the U.S. was a brief trip to Las Vegas.

Jafco has helped to finance such entrepreneurs as Zhou Hongyi, who founded Chinese Internet search-engine concern 3721 Network Software Inc. Yahoo Inc., intrigued by Mr. Zhou's technology -- it enables people to use Chinese characters to search the Web -- bought the company nearly two years ago for $120 million.

Some returnees may have "studied in a good school," says Andy Yan, managing partner of Hong Kong investment firm SAIF Partners. But "when they come back, they think they know everything."

One of Mr. Yan's favorite home-grown success stories is Hu Xiang, a founder of SAIF portfolio company Mobile Antenna Technologies (Shenzhen) Co. Mr. Hu, 52 years old, is about as far from a polished returnee as one can get in China: He doesn't speak English and missed nearly 10 years of schooling during the Cultural Revolution that began in the 1960s. Mr. Hu dug tunnels and later was a low-level factory worker, sometimes going hungry.

That Mr. Hu suffered during the Cultural Revolution and had to work so hard for his success, instead of leading a more comfortable life abroad, appealed to Mr. Yan. "We've been through so much," says Mr. Yan, who had similar experiences. "The challenges now don't seem so big."

For the full story, see:

REBECCA BUCKMAN. "In China, That Ivy League Degree Isn't Gold; Some Venture Firms Seeking Talent Favor Homegrown Entrepreneurs; No English Spoken? No Problem." THE WALL STREET JOURNAL (Fri., September 23, 2005): C1 & C4.




December 27, 2005

"Passengers Will Take Action"


. . ., much of the attention has been focused on relaxing the ban on relatively innocuous things like screwdrivers. But as frequent fliers have been saying since not long after 9/11, you'll have to pity the next idiot who tries to hijack an airplane with nothing more than a sharp object. Mr. Hawley alluded to that attitude shift in his comments Friday, noting ''the high likelihood that in the event of terrorist activity on an aircraft without an air marshal, passengers will take action.''

JOE SHARKEY. " ON THE ROAD; Get Ready, Frequent Fliers, For the 'Random' Pat-Down." The New York Times (Tues., December 6, 2005): C8.




December 26, 2005

The Innovator's Dilemma at the Movies?


Sounds like a possible example of Clayton Christensen's where the incumbent (movie theaters) move up-market in response to the threat from the disruptive technology (increasingly high quality home entertainment systems):

It was Saturday night at the Palace 20, a huge megaplex here designed in an ornate, Mediterranean style and suggesting the ambience of a Las Vegas hotel. Moviegoers by the hundreds were keeping the valet parkers busy, pulling into the porte-cochere beneath the enormous chandelier-style lamps. Entering the capacious lobby, some of them dropped off their small children in a supervised playroom and proceeded to a vast concession stand for a quick meal of pizza or popcorn shrimp before the show.

Others, who had arrived early for their screening of, say, ''Wedding Crashers'' or ''The Dukes of Hazzard'' -- their reserved-seat tickets, ordered online and printed out at home, in hand -- entered through a separate door. They paid $18 -- twice the regular ticket price (though it included free popcorn and valet service) -- and took an escalator upstairs to the bar and restaurant, where the monkfish was excellent and no one under 21 was allowed.

Those who didn't want a whole dinner, or arrived too late for a sit-down meal, lined up at the special concession stand, where the menu included shrimp cocktail and sushi and half bottles of white zinfandel and pinot noir. As it got close to curtain time, they took their food and drink into one of the adjoining six theater balconies, all with plush wide seats and small tables with sunken cup holders. During the film, the most irritating sound was the clink of ice in real glasses.

Not your image of moviegoing? Pretty soon it might be. At a time when movie attendance is flagging, when home entertainment is offering increasing competition and when the largest theater chains -- Regal Entertainment, AMC Entertainment (which has recently announced a merger with Loews Cineplex) and Cinemark -- are focused on shifting from film to digital projection, a handful of smaller companies with names like Muvico Theaters, Rave Motion Pictures and National Amusements are busy rethinking what it means to go to the movie theater. (B1)

BRUCE WEBER. "Liked the Movie, Loved the Megaplex; Smaller Theater Chains Lure Adults With Bars, Dinner and Luxury." The New York Times (Wednesday, August 17, 2005): B1 & B7.




December 25, 2005

With Flat Tax, Estonia Has 11% Growth





"Prime Minister Andrus Ansip of Estonia in the cabinet room, which is equipped with a computer for each minister." Source of caption and photo: online version of NYT article quoted and cited below.

(p. A4) TALLINN, Estonia - Estonia, one realizes after a few days in the abiding twilight of a Baltic winter, is not like other European countries.

The first tip-off is the government's cabinet room, outfitted less like a ceremonial chamber than a control center. Each minister has a flat-screen computer to transmit votes during debates. Then there is Estonia's idea of an intellectual hero: Steve Forbes, the American publishing scion, two-time candidate for the Republican presidential nomination and tireless evangelist for the flat tax.

Fired with a free-market fervor and hurtling into the high-tech future, Estonia feels more like a Baltic outpost of Silicon Valley than of Europe. Nineteen months after it achieved its cherished goal of joining the European Union, one might even characterize Estonia as the un-Europe.

"I must say Steve Forbes was a genius," Prime Minister Andrus Ansip declared during an interview in his hilltop office. "I'm sure he still is," he added hastily.

The subject was the flat tax, which Mr. Forbes never succeeded in selling in the United States. Here in the polar reaches of Europe it is an article of faith. Estonia became the first country to adopt it in 1994, as part of a broader strategy to transform itself from an obscure Soviet republic into a plugged-in member of the global information economy.

By all accounts, the plan is working. Estonia's economic growth was nearly 11 percent in the last quarter - the second fastest in Europe, after Latvia, and an increase more reminiscent of China or India than Germany or France.

People call this place E-stonia, and the cyber-intoxication is palpable in Tallinn's cafes and bars, which are universally equipped with wireless connections, and in local success stories like Skype, designed by Estonian developers and now offering free calls over the Internet to millions.

. . .

Germans showed how allergic they were to the idea when Angela Merkel chose a flat tax advocate as her economic adviser. Antipathy toward him was so intense that political analysts say it probably cost Chancellor Merkel's party a clear majority in the German Parliament.

Yet the concept has caught on in this part of Europe. Latvia, Lithuania and Slovakia all have a flat tax, while the Czech Republic and Slovenia have considered one. Tax policy, not support for the American-led war in Iraq, is the bright line that separates the so-called old Europe from the new.



For the full article, see:

MARK LANDLER. "Letter From Estonia: A Land of Northern Lights, Cybercafes and the Flat Tax." The New York Times (Weds., December 21, 2005): A4.

(Note: ellipsis added.)





December 24, 2005

Broad Increases in Income and Wealth


UpwardMobility.gif Graph source: online version of WSJ article cited below. http://online.wsj.com/article/SB113513427028228173.html?mod=opinion_main_commentaries

New reports by the Census Bureau and the Federal Reserve Board on the economic well-being of the typical American family reveal that over the past three decades, the vast majority of families have experienced a rapid growth in their income and wealth. Now that nearly six out of 10 households own stock and two out of three own their own homes, the average family -- for the first time ever -- has net worth (assets minus liabilities) of more than $100,000. Median family income has climbed to more than $54,000 a year.

Almost no one in the national media has taken notice of this good news, which has been camouflaged by a barrage of misleading and gloomy stories on "stagnant wages," "the growing income gap between rich and poor," "the disappearing middle class" and "rising poverty in America." The reality is that if the economic growth, employment and family-finances numbers get any better, the media will soon have to start calling this the "Clinton economy."

What the reports tell us is that the vast majority of Americans have not bumped into income glass-ceilings, but rather are experiencing an astonishing pace of upward income mobility. The Census data from 1967 to 2004 provides the percentage of families that fall within various income ranges, starting at $0 to $5,000, $5,000 to $10,000, and so on, up to over $100,000 (all numbers here are adjusted for inflation). These data show, for example, that in 1967 only one in 25 families earned an income of $100,000 or more in real income, whereas now, one in six do. The percentage of families that have an income of more than $75,000 a year has tripled from 9% to 27%.

But it's not just the rich that are getting richer. Virtually every income group has been lifted by the tide of growth in recent decades. The percentage of families with real incomes between $5,000 and $50,000 has been falling as more families move into higher income categories -- the figure has dropped by 19 percentage points since 1967. This huge move out of lower incomes and into middle- and higher-income categories shows that upward mobility is the rule, not the exception, in America today.

For the full story, see:

STEPHEN MOORE and LINCOLN ANDERSON. "Great American Dream Machine." The Wall Street Journal (Weds., December 21, 2005): A18.




December 23, 2005

Real Heroes in King Kong


My favorite lines from the new King Kong movie are spoken by the preening B-movie action actor Baxtor.

The fictional screenwriter says:  "I just never figured you for a coward."

To which Baxtor replies:  "Hey pal; hey, wake up!  Heroes don't look like me; not in the real world. 

In the real world they got bad teeth; a bald spot; and a beer gut."

"I'm just an actor with a gun; who's lost his motivation."

(Entry revised/corrected on July 5, 2006)




December 22, 2005

Disruptive Innovation Threatens Boeing and Lockheed?


SpaceXHeavyLifters.gif Source of table: online version of WSJ article cited below.

EL SEGUNDO, Calif. -- Maverick entrepreneur Elon Musk, who says he is prepared to spend nearly $200 million of his personal fortune creating a family of low-cost, reusable rockets, recently landed an unexpected customer: the U.S. intelligence community.

Mr. Musk and his fledgling company, closely held Space Exploration Technologies Corp., for years worked on advanced technologies and less-expensive manufacturing concepts to build small rockets capable of launching commercial or government satellites weighing around 1,000 pounds.

But the new contract for a single, classified launch -- shrouded in such secrecy that neither the spy agency nor specific type of satellite was identified -- envisions construction of a massive rocket by Mr. Musk's company, known as SpaceX. The launch vehicle is slated to be comparable to the largest, most powerful models built by Boeing Co. and Lockheed Martin Corp., but costing a fraction of the prices charged by the rocket-industry leaders

. . .

Mr. Musk doesn't minimize the challenge of trying to win more government business while criticizing government procurement practices. "I think it's extremely risky," he says of his overall strategy, "but we've got to fight for our right to win customers." If development of simpler, less-costly rocket alternatives is left to major defense contractors, he argues, "I can assure you it will never, never happen."

. . .

In spite of skepticism and criticism of SpaceX, industry leaders are keeping a wary eye on Mr. Musk, with some vowing stepped-up competition against the industry newcomer.

Tom Marsh, a senior Lockheed Martin space official, told a space conference last month that his company "absolutely intends to pursue, and to pursue vigorously" the market for smaller rockets initially targeted by SpaceX.

ANDY PASZTOR. "For Rocket Start-Up, Sky's the Limit; Surprise Contract Boosts SpaceX as It Competes With Boeing, Lockheed." THE WALL STREET JOURNAL (Thurs., September 15, 2005): B6.




December 21, 2005

Eugene McCarthy: A Person's Importance Is Not Measured by a Gallup Poll


Eugene McCarthy passed away on December 10, 2005. I often disagreed with Eugene McCarthy's substance, but I enjoyed his style. Eugene McCarthy, RIP.

. . . a Gallup poll reported that 58 percent of those sampled had never so much as heard of McCarthy. The senator refused to be discouraged. "Had they asked," he said, "they would have found that fewer still have heard of St. Benedict of Nursia, but that detracts not one whit from his importance."

ROGER KAHN. "The Quiet Man." The New York Times (Mon., December 19, 2005): A33.




December 20, 2005

Using Supply-and-Demand Parking Pricing to Reduce Urban Congestion


In big cities, drivers often waste time searching for parking places. While they are searching, they are adding congestion, to already congested streets. Technology now permits reall-time pricing at parking meters, where the price depends on the availability of open parking spaces.

Should parking meters cost $17 an hour? Donald Shoup thinks that's fine -- if the rate drops when demand falls. The University of California at Los Angeles urban planning prof wants to end wasteful trolling for empty meters by charging market prices on smart meters. "It's like Goldilocks," he says. "The price is too low if there are no spaces open, and too high if there are a lot of spaces open." Drivers should pay up at peak times and get a break when demand ebbs, he argues. Chicago, where an hour in a downtown lot can cost $17, is studying the idea. And in February, Redwood City, Calif., will adjust meter rates -- every three months -- to assure 15% vacancies.

Joseph Weber. " STREET PRICES: Adjustable-Rate Meters." BusinessWeek (NOVEMBER 21, 2005) 14.




December 19, 2005

Wal-Mart Benefits Rural Poor


 

Our research shows that Wal-Mart operates two-and-a-half times as much selling space per inhabitant in the poorest third of states as in the richest third. And within that poorest third of states, 80 percent of Wal-Mart's square footage is in the 25 percent of ZIP codes with the greatest number of poor households. Without the much-maligned Wal-Mart, the rural poor, in particular, would pay several percentage points more for the food and other merchandise that after housing is their largest household expense.

 

Source:

PANKAJ GHEMAWAT AND KEN A. MARK. "The Price Is Right." The New York Times (Weds., August 3, 2005): A23.

 




December 18, 2005

Indians "continually raiding and fighting, band against band"


IndianWarsBK.jpg Image source: online version of WSJ article cited below.


The Indians, as Mr. Yenne shows, were far from peaceful, cooperative peoples living in harmony with each other and with nature. They were continually raiding and fighting, band against band, tribe against tribe. They saw each newly arrived white group -- whether English, French, Spanish or Dutch -- as just another tribe to contest with. Some Indian tribes were weakened or decimated by these encounters, others were strengthened by getting hold of guns, iron tools and horses. Adopting the horse culture increased the power of the Plains Indians dramatically, making them especially tough foes for the whites moving into the Great American West.

ROGER D. MCGRATH. "Red vs. White, Uncolored by Ideology." The Wall Street Journal (Tues., December 13, 2005): D8.

The book McGrath is reviewing:

Bill Yenne. Indian Wars. Westholme, 2005. (325 pages, $26)




December 17, 2005

Sunnis Reject Car Bombings: "Bush has said it correctly"


Iraqi woman with purple ink on finger, indicating she has voted. (Photo by Matt Dunham/AP; photo source: http://www.nytimes.com/packages/html/international/20051216_IRAQ_FEATURE/blocker.html)


Optimistic news on Iraq appears on the first page of the Fri., Dec. 16, 2005 New York Times (not often identified as a lackey supporter of Bush administration foreign policy). Here is an excerpt from the article:

(A1) BAGHDAD, Iraq, Dec. 15 - Ali is only 9 years old. But when he and his buddies broke away from a street soccer game to drop into a polling station in Baghdad's Adhamiya district at noon on Thursday, Ali, a chirpy, tousle-haired youngster, seemed to catch the mood of the district's Sunni Arab population as well as anybody.

"We don't want car bombs, we want security," he said. Yards away, Sunni grown-ups were casting ballots in classrooms where the boys would have been studying Arabic or arithmetic or geography - "Boring, boring!" said Ali - had the school not been drafted for use as one of 6,000 polling stations across Iraq.

On a day when the high voter turnout among Sunni Arabs was the main surprise, Ali and his posse of friends, unguarded as boys can be, acted like a chorus for the scene unfolding about them. A new willingness to distance themselves from the insurgency, an absence of hostility for Americans, a casual contempt for Saddam Hussein, a yearning for Sunnis to find a place for themselves in the post-Hussein Iraq - the boys' themes were their parents', too, only more boldly expressed.

. . .

(A15) "Before, we had a dictator, and now we have this freedom, this democracy," said Emad Abdul Jabbar, 38, a teacher acting as supervisor at the Ahrar school polling site. "This time, we have a real election, not just the sham elections we had under Saddam, and we Sunnis want to participate in the political process."

A 60-year-old merchant, Abdul Kader al-Saffar, and his wife, Ammal Abdul Razzaq, 40, who voted with their three sons, agreed. "We have found candidates in this election we can trust," Mr. Saffar said, referring to the Iraqi Consensus Front, a moderate Sunni group that had several of its political workers killed during the campaign.

Another thing many Sunnis seemed to agree on was the possibility of a reconciliation between the Americans and the Sunnis, and a distancing of the Sunnis from some of the Al Qaeda-linked insurgent groups. Many were critical of American troops, saying, as Mr. Saleh did, that "they came as liberators, but stayed on as occupiers." But pressed on the question of an American troop withdrawal, most seemed cautious, favoring a gradual drawdown.

"Let's have stability, and then the Americans can go home," said Mr. Sattar, the store owner. Told that this sounded similar to President Bush's formula for a troop withdrawal, he replied: "Then Bush has said it correctly".


For the full article, see:

JOHN F. BURNS. "Freedom From Fear Lifts Sunnis in Iraqi Election." The New York Times (Fri., December 16, 2005): A1 & A15.




December 16, 2005

Proxmire: Inventor of the "Golden Fleece Award"



Former Wisconsin Democratic Senator William Proxmire passed away yesterday at age 90. Through his "Golden Fleece Award" Proxmire frequently skewered taxpayer-supported research on silly topics (or at least, topics that appeared silly based on the title of the research). For example, on a clip yesterday shown on CNN (12/15/05), Proxmire, speaking of one of his Golden Fleece Awards, expresses disbelief that the taxpayer, through the U.S. government, was supporting research on whether sunfish that drink tequila are more aggressive than sunfish that drink gin.

According to the same CNN report on 12/15/05, Proxmire was in favor of government support of dairy products. (The dairy industry is politically influential in Proxmire's state of Wisconsin.)

A complete listing of all of William Proxmire's "Golden Fleece Awards" can be found at:

http://taxpayer.net/projects.php?action=view&category=&type=Project&proj_id=809





December 15, 2005

Not All Foolish Laws Remain on the Books Forever


 

STOCKHOLM, Sweden (AP) - A mythical monster with a snake's body and a dog's head, believed by some to have lived for hundreds of years in the murky depths of Lake Storsjon, is now fair game for hunters, if they can find it. Authorities lifted a 19-year-old endangered species protection, saying that was hardly necessary for a creature whose existence is unproven.

 

Source: 

"Hunting of Snake-dog Permitted." The Omaha World-Herald (Saturday, November 12, 2005):

 




December 14, 2005

Good Eating for Experts: More on Why Africa is Poor


Michael Wines, writing from Malawi in Africa:

It makes one wonder why, with so many experts here to do good, the rest of the country not only isn't thriving, but is slipping backward.

. . .

There is even a hilarious poem demonizing "the development set":

We bring in consultants whose circumlocution
Raises difficulties for every solution
Thus guaranteeing continued good eating
By showing the need for another meeting.

MICHAEL WINES. "Letter From Malawi: Amid Squalor, an Aid Army Marches to No Drum at All." The New York Times (Weds., December 7, 2005): A4.




December 13, 2005

Finland Building Europe's First New Nuclear Reactor in 15 Years




Petr Beckmann holding a copy of his The Health Hazards of NOT Going Nuclear. Golem Press, 1976. Beckmann died on August 3, 1993. Source of photo and Beckmann date of death: http://www.commentary.net/view/atearchive/s76a1928.htm


Not all those who are right, live to see their ideas vindicated. Thank you Petr Beckmann, for writing the truth, when the truth was not popular.


. . . when Finland, a country with a long memory of the Chernobyl disaster in 1986 and considerable environmental bona fides, chose to move ahead this year with the construction of the world's largest nuclear reactor, the nuclear industry portrayed it as a victory, one that would force the rest of Western Europe to take note.

But the decision to build the reactor, Olkiluoto 3, Europe's first in 15 years, was not taken quickly or lightly.

. . .

"There is an expectation that others will follow, both because of the way the decision was made and the boosting of confidence in being able to get through all the oppositional fear-mongering," said Ian Hore-Lacy, the director of public communications for the World Nuclear Association, an industry lobbying group.

The United States, which has not had a nuclear plant on order since 1978, is experiencing a groundswell of interest. Taking the first step in a long process, Constellation Energy, a Baltimore-based holding company, announced in late October that it would apply to the Nuclear Regulatory Commission for permission to construct and operate a pressurized water reactor like the kind being built in Finland, possibly in upstate New York or Maryland. The Finnish reactor, designed by Areva, the French state-controlled nuclear power group, is being built by Framatome ANP, a joint venture of Areva and Siemens, a Germany company.

In addition, President Bush signed into law an energy bill in August that offers billions of dollars in research and development funds and construction subsidies to companies willing to build new nuclear plants. Several utility companies have applied for early site permits, a preliminary step toward building reactors.

Worldwide, the resurgent interest in nuclear power is even more pronounced. Twenty-three reactors are under construction this year in 10 countries, most of them in Asia, which has aggressively pursued nuclear energy. India is building eight reactors. China and Taiwan are building a total of four reactors and are planning eight more. Russia is building four and South Korea is planning eight.

...

Nuclear energy's selling points were timely: it does not create emissions, unlike coal, oil and gas, and provides predictable electricity prices, a major bonus for Finnish industries, nuclear proponents said.

"The only viable alternative, if we want to maintain the structure of the economy, maintain our industries and meet our Kyoto targets, is nuclear," said Juha Rantanen, the chief executive officer of Outokumpu, one of the world's largest steel producers and one of Finland's biggest energy users. "We can't have a declining economy. We face huge challenges and an aging population. Something had to be done."

Environmentalists, however, argued that nuclear reactors could never be entirely safe. They are always radioactive, and their waste remains toxic for 100,000 years.

But the designers of Areva's pressurized water reactor, which is costing $3.5 billion to build, helped counter those arguments. In the event of a core meltdown, they said, the nuclear material would flow into a separate enclosure for cooling. They also said that the reactor is being built with enough concrete to withstand the impact of an airliner.

In the end, Finland's largest trade union supported the project, basically sealing the deal.

. . .




Read the full article at:

LIZETTE ALVAREZ. "Finland Rekindles Interest in Nuclear Power." The New York Times (Mon., December 12, 2005): A10.

(Note: ellipses added.)





December 12, 2005

"Fierce" Competition Even When One Firm has Half the Market


 

   Graph source: page C6 of article cited below.

 

(C1) YOKKAICHI, Japan - Nestled in a valley in central Japan, surrounded by forested hills and terraced rice paddies, is one of the world's most sophisticated - and secretive - semiconductor plants. Inside the windowless plant, built by the Japanese electronics maker Toshiba, tiny cranelike robots shuffle along automated production lines, moving stacks of silicon wafers the size of dinner plates. Masked technicians watch as rows of tall machines grind the wafers, etch circuits on their surfaces and cut them into tiny rectangular computer chips. Inside, visitors are allowed to peek through windows at only a small part of the factory floor. Toshiba is anxious to guard the secrets beyond because it needs them to wage one of the most ferocious battles in today's electronics industry, for control of the fast-growing market for the advanced memory chips at the heart of portable music devices like the Apple iPod Nano. The fight pits Toshiba and its partner, SanDisk of Sunnyvale, Calif., a maker of memory cards, against Samsung Electronics of South Korea. Both camps are spending billions to build new factory lines, hire engineers and develop more powerful chips in a bid to gain supremacy. The chips, called NAND flash memory chips, differ from earlier computer memory chips in that data on them can be easily erased and replaced and they can store data even after the power is turned off. That makes them like miniature hard-disk drives, only much more durable because they lack moving parts. The newest flash memory chips are the size of a fingernail and can store two gigabytes, the equivalent of every word and image printed in nine years of a newspaper. While Toshiba invented the chips more than a decade ago, Samsung has seized the lead with bigger production volumes and lower prices. In the three months that ended in September, Samsung had a market share of 50.2 percent of the $2.97 billion in total global NAND sales, ac- (C6) cording to iSuppli, a market research firm based in El Segundo, Calif. Toshiba's share was 22.8 percent. SanDisk is not included in iSuppli's figures because it does not sell its chips, but instead uses them all in its own memory products. . . . At Toshiba's Yokkaichi plant, there is a palpable determination to catch up with the larger Korean rival. Engineers work in shifts around the clock to speed up development and production of new chips. Noriyoshi Tozawa, the plant's manager, said he kept workers on their toes with little reminders of darker times. One is an elevator that has been kept out of use since 2001; a sign on the doors says that it was turned off after a crash in computer chip prices almost forced the closure of the plant, which used to produce DRAM, another type of memory chip. "You have to always be at the leading edge to stay alive in this industry," Mr. Tozawa. "We know what it's like to lose."

To read full article, see: MARTIN FACKLER. "Among Makers of Memory Chips for Gadgets, Fierce Scrum Takes Shape." The New York Times (Mon., December 12, 2005): C1 & C6.

scrum: "a rugby play in which the forwards of each side come together in a tight formation and struggle to gain possession of the ball when it is tossed in among them" Definition source: http://www.m-w.com/cgi-bin/dictionary?book=Dictionary&va=scrum&x=6&y=21

 




December 11, 2005

Industrial Giants Succeeded in Philanthropy in the Same Way They Succeeded in Business


(p. 3) . . . the Gateses were not the first to see that money could sometimes move mountains in public health. They are following in the footsteps of the industrial giants of the late-19th century, said Dr. Howard Markel, director of the University of Michigan's Center for the History of Medicine.

These men also brought their fortunes to bear on social problems, and believed that they could succeed in philanthropy in much the way they had succeeded in business.

The donors of the robber-baron years started their philanthropy while still alive - a novel idea then. Andrew Carnegie, for example, gave away hundreds of millions of dollars to build libraries long before his death.

The largest bequest in American history prior to Carnegie's time was from Johns Hopkins, a Baltimore merchant, who left $7 million to found the eponymous university and hospital in 1873 - after he died.

But the closest parallel to the Gates approach to philanthropy is that of John D. Rockefeller, said Dr. Markel and Robert E. Kohler, a medical historian from the University of Pennsylvania.

Rockefeller built Standard Oil. Like Mr. Gates, he was the richest man of his time, and like him he was reviled as a greedy monopolist.

Rockefeller, like Mr. Gates, hired a professional to run his charities. And he, like Mr. Gates, used his money systematically to identify and attack important public health problems.

Rockefeller hired Frederick T. Gates, a former minister (and no relation to the Microsoft co-founder) as his philanthropic executive. Mr. Gates read an 1892 medical textbook that convinced him that diseases had causes, like germs and worms, that could be fought by science - not a universally accepted idea at the time.

The most famous health campaign he started with Rockefeller money was the drive, begun in 1907, to rid the rural American South of hookworm. Called "the germ of laziness" because it caused anemia and made victims lethargic and dull-witted, hookworm afflicted up to a third of Southerners.

The foundation set up clinics that administered purgatives and - because the worm is shed in feces and picked up by bare feet - taught people to dig deep privies and wear shoes. More Rockefeller money underwrote some of the 20th century's great public health drives, many using research done at Rockefeller University. Clinics were built in 50 other countries to eliminate hookworm worldwide. The effort failed because the worm can survive in soil and reinfect people; but the problem diminished, especially in parts of Asia.

In 1915, the foundation declared war on yellow fever; by 1932, scientists had realized that monkeys were also a reservoir for the virus, making eradication impossible, but by then Rockefeller scientists had invented the vaccine still used today.

Patty Stonesifer, chief executive of the Gates foundation, said she and William H. Gates Sr., the father of the software pioneer and co-chair of the foundation, consider the Rockefeller campaigns especially instructive. "We stood on their shoulders," she said.

. . .

As Ms. Stonesifer said admiringly of the Rockefeller campaign against hookworm: "A lot of people would say, 'you've got to reduce poverty to get rid of hookworm.' But the Rockefellers said, 'You don't need a 20-year intervention. You can use shoes.' "



For the full article, see:

DONALD G. McNEIL Jr. "The Rich, Sometimes, Are the Best Medicine." The New York Times, Section 4 (Sun., December 11, 2005): 3.

(Note: ellipses added.)






December 10, 2005

In Defense of Suburban Sprawl



SprawlBK.jpg Image source: web version of WSJ article quoted and cited below.

(p. P16) For at least half a century, academics, aesthetes and all-purpose agonizers have looked at our ever-sprawling cities with disdain and even horror. The spectacle of rings and rings of humankind nested in single-family homes has inspired in them all sorts of revulsion and, relatedly, a whole discipline of blame: Suburban sprawl has been faulted for exacerbating racial tension, contributing to energy shortages, worsening pollution and heating up the globe -- even expanding waistlines.

Largely missing from this debate has been a sound and reasoned history of this pattern of living. With Robert Bruegmann's "Sprawl: A Compact History," we now have one. What a pleasure it is: well-written, accessible and eager to challenge the current cant about sprawl.

No, Mr. Bruegmann says, don't go blaming the Federal Highway Administration for sprawl or the executives at General Motors and Exxon or racist developers fleeing urban environments. Don't even blame Karl Rove. You really don't need to blame anyone. Mr. Bruegmann notes that contemporary sprawl -- best defined by places like Los Angeles, Phoenix and Houston -- is nothing new. It represents "merely the latest chapter in a long and curious history."

What propels that curious history is something often overlooked by the makers of grand theories -- the particular choices of individual human beings. Mr. Bruegmann places the urge to sprawl squarely where it belongs: on people's logical desire to escape the high costs, crime, pollution, congestion and lack of privacy that accompanies life in dense cities.



For the full review, read:

JOEL KOTKIN. "In Praise of 'Burbs. Academics, planners and tastemakers may vilify suburbia as an American blight. But even the Romans knew: It can be nice to get out of the city." The Wall Street Journal (Sat., December 10, 2005): P16.

The book that Kotkin's review is praising:

Robert Bruegmann. Sprawl: A Compact History. Chicago: University of Chicago Press, 2005. (264 pages, $27.50)




December 7, 2005

Is Democracy a Normal or Inferior Good?


In economics a "normal" good is one where, ceteris paribus, consumers demand more of it when their incomes rise. Conversely, an "inferior" good is one where, ceteris paribus, consumers demand less of it when their incomes rise. Here is an example relevant to the continuing debate about whether political democracy is a normal or inferior good:

A huge throng of pro-democracy protesters poured through the skyscraper canyons of Hong Kong on Sunday afternoon, defying warnings from senior Chinese officials who refuse to set a timetable for general elections here.

The march continued well past sunset, as more and more men, women and children of all ages emerged from side streets and subway stations to join. Organizers estimated the peaceful crowd at 250,000, while the police put it at 63,000.

At either measure, the turnout was surprising because Hong Kong's economy is booming, unemployment is falling and the city now has a popular and charismatic chief executive, Donald Tsang.

KEITH BRADSHER. "Hong Kong Protesters Want Election Timetable." The New York Times (Mon., December 5, 2005): A6.




December 6, 2005

Audacious Nigerian Kleptocrat Cross-dresses to Evade Justice: More on Why Africa is Poor


"Workers installing imported marble on a staircase at Mr. Alamieyeseigha's official mansion." Photo by Michael Kamber for The New York Times. Source of photo and caption: http://www.nytimes.com/2005/11/29/international/africa/29nigeria.html?pagewanted=1

YENAGOA, Nigeria, Nov. 22 - Precisely where in the rogue's gallery of corrupt Nigerian leaders Diepreye Alamieyeseigha will fall is a matter for history to judge. Gen. Sani Abacha, the military dictator who helped himself to at least $3 billion and salted it away in foreign bank accounts, doubtless stole far more.

But General Abacha - who ruled the country from 1993 to 1998 - never fled money-laundering charges in a foreign land by donning a dress and a wig to match forged travel documents, as Mr. Alamieyeseigha, the governor of a small oil-producing state in the Niger Delta, did last week, government officials said.

For their sheer audacity, his antics are likely to earn him a prominent place among the leaders who in the past four decades are believed to have stolen or misspent $400 billion in government money, most of it the profits from Nigeria's oil reserves.

"It is a new low," said Gani Fawehinmi, one of Nigeria's most prominent lawyers and a longtime campaigner for good governance. "And in Nigeria that is saying something."

Mr. Alamieyeseigha is suspected of siphoning millions of dollars in cash and buying an oil refinery in Ecuador along with several houses in London, California and South Africa. He has denied stealing money from the state.

The sordid saga of the governor comes as the federal government has engaged in a broad effort to rehabilitate the country's image around the world.

Long associated with rampant corruption and kleptocratic governments, Nigeria has year in and year out gotten one of the worst scores in Transparency International's world corruption perception index, though this year its rating improved slightly.

Corruption touches virtually every aspect of Nigerian life, from the millions of sham e-mail messages sent each year by people claiming to be Nigerian officials seeking help with transferring large sums of money out of the country, to the police officers who routinely set up roadblocks, sometimes every few hundred yards, to extract bribes of 20 naira, about 15 cents, from drivers. (p. A1)

For the full article, see:

LYDIA POLGREEN. "As Nigeria Tries to Fight Graft, a New Sordid Tale." The New York Times (Tues., November 29, 2005): A1 & A12.




December 5, 2005

Never Say Die: Milton Friedman on Vouchers, Again


From an opinion-piece by Milton Friedman, at age 93, in today's Wall Street Journal:

Whatever the promise of vouchers for the education of New Orleans children, the reform will be opposed by the teachers unions and the educational administrators. They now control a monopoly school system. They are determined to preserve that control, and will go to almost any lengths to do so.

Unions to the contrary, the reform would achieve the purposes of Louisiana far better than the present system. The state's objective is the education of its children, not the construction of buildings or the running of schools. Those are means not ends. The state's objective would be better served by a competitive educational market than by a government monopoly. Producers of educational services would compete to attract students. Parents, empowered by the voucher, would have a wide range to choose from. As in other industries, such a competitive free market would lead to improvements in quality and reductions in cost.

If, by a political miracle, Louisiana could overcome the opposition of the unions and enact universal vouchers, it would not only serve itself, it would also render a service to the rest of the country by providing a large scale example of what the market can do for education when permitted to operate.

MILTON FRIEDMAN. "The Promise of Vouchers." The Wall Street Journal (Mon., December 5, 2005): A20.





December 4, 2005

The Right Way to Give Away Money


Why is the foundation closing, 52 years after its founding? John M. Olin, who died in 1982, feared that if it were to exist in perpetuity, it would eventually be captured by hostile forces; the example of Henry Ford II, who quit the board of the Ford Foundation in frustration over its liberal agenda, had especially impressed him.

. . .

The Olin model offers many lessons for foundations that would seek to mimic its success, some of them simply mechanical: restrict the number of trustees to avoid the creation of factions (there will be only six at tomorrow's Olin meeting); hire a staff of smart generalists with diverse backgrounds from outside the foundation world; and make sure that everybody sticks to a set of clearly defined guiding principles.

Other lessons are more strategic in nature. The Olin Foundation's leaders understood that success is often unplanned, and so they focused on creating the conditions for success rather than thrusting a set of detailed agendas and goals upon grant recipients. Nobody, for example, expected that Allan Bloom's "Closing of the American Mind" would become a runaway best seller whose meaning is still debated two decades after it was published; the John M. Olin Foundation merely decided in the early 1980's that Mr. Bloom, a political theorist at the University of Chicago, was a genuine talent who deserved financial backing.

. . .

Finally, the decision to spend itself out of existence may seem bizarre, like an act of philanthropic suicide, yet it magnified the Olin Foundation's influence. Although it never had much more than $100 million in assets, its refusal to hoard its endowment allowed it to spend at the rate of a much larger foundation.

JOHN J. MILLER. "The Very Foundation of Conservatism." The New York Times (Mon., November 28, 2005): A23.




December 3, 2005

Drucker Predicted "Universities Won't Survive"


Mr. Drucker also told us to expect enormous changes that will come in higher education, thanks to the rise of satellites and the Internet. "Thirty years from now big universities will be relics. Universities won't survive. It is as large a change as when we first got the printed book." He believed "High school graduates should work for at least five years before going on to college." It will be news to most college presidents and a lot of alumni that "higher education is in deep crisis. Colleges won't survive as residential institutions. Today's buildings are hopelessly unsuited and totally unneeded." All this from a life-long academic.

. . .

How higher education is managed did not impress Mr. Drucker; but what did is our continuing education system, whether in community colleges or by computers. Also: "Our most important education system is in the employees' own organization." That is where most Americans learn the most.

STEVE FORBES. "A Tribute to Peter Drucker." The Wall Street Journal (Tues., November 15, 2005): A22.




December 2, 2005

Willy and His Balls


Willy is a miniature dachshund. Willy's veterinarian has from the start urged us to have him neutered, but we have so far resisted the temptation to follow the politically correct practice.

I did not attend Willy's most recent visit to the vet, but I am told that he was placed on the counter and given two shots. Little Willy was not fond of this activity, so after receiving the second shot, he lifted up a hind leg and peed on the floor. Observing this, the vet said 'that's what you have to expect from an intact male.'

Willy's favorite activity is to chase after a ball that you throw for him. His favorite balls are racquetballs, because they are small enough for him to easily carry around and because they have a lot of bounce. But he is also happy to chase tennis balls, and when he sees a soccer ball, he goes beserk with enthusiasm. (When my daughter and I practice soccer in the backyard, little Willy switches to whichever side is most in need of help.)

Our miniature dachshund is a loyal, intelligent, rascally, affectionate, stubborn critter. My advice to little Willy: don't ever let them take away your balls.




December 1, 2005

Use for Subsidized Corn: Ski Iowa


Source of image: "Mark Kegans for The New York Times", at http://www.artsci.wustl.edu/~anthro/articles/09harvest.html


(p. A1) As Iowa finishes harvesting its second-largest corn crop in history, Roger Fray is racing to cope with the most visible challenge arising from the United States' ballooning farm subsidy program: the mega-corn pile.

Soaring more than 60 feet high and spreading a football field wide, the mound of corn behind the headquarters of West Central Cooperative here resembles a little yellow ski hill. ''There is no engineering class that teaches you how to cover a pile like this,'' Mr. Fray, the company's executive vice president for grain marketing, said from the adjacent road. ''This is country creativity.''

At 2.7 million bushels, the giant pile illustrates the explosive growth in corn production by American farmers in recent years, which this year is estimated to reach a nationwide total of at least 10.9 billion bushels, second only to last year's 11.8 billion bushels.

But this season's bumper crop is too much of a good thing, underscoring what critics call a paradox at the heart of the government farm subsidy program: America's efficient farmers may be encouraged to produce far more than the country can use, depressing prices and raising subsidy payments.

. . .

(p. A1) Even as the Bush administration tries to persuade member nations of the World Trade Organization that it is serious about trimming agricultural subsidies, federal spending on farm payments is closing in on the (p. C4) record of $22.9 billion set in 2000, when the Asian financial crisis caused American exports to fall and crop prices to sink, pushing the Midwest farm belt into recession.

If export sales stay weak, this year's subsidies could hit a new record. Just last week the United States Agriculture Department raised its projection of payments to farmers by $1.3 billion, to $22.7 billion. In 2004, the subsidies were only $13.3 billion.

In response to pressure, the Bush administration said last month that the United States was prepared to cut its most trade-distorting farm subsidies by 60 percent over five years. The world's poor nations, which tend to be heavily dependent on agriculture, complain that American and European Union farm subsidies spur growers to produce gluts that depress crop prices throughout the world.

. . .

Lately the giant piles have become the butt of jokes in farm country. They were spoofed in a fake picture, widely e-mailed, that showed a skier airborne atop West Central's biggest pile, with the caption that said ''one thing you can do with a 3-million-bushel pile of harvested corn: Ski Iowa.''

ALEXEI BARRIONUEVO. "Mountains of Corn and a Sea of Farm Subsidies." The New York Times (Weds., November 9, 2005): A1 & C4.

Source of image: http://www.chicagoboyz.net/archives/2004_11.html




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