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February 27, 2006

Notice of End of Telegram Service, Posted to Western Union Web Site



A telegram. Source of image: online version of article cited below.


BLOOMBERG NEWS

After 155 years in the telegraph business, Western Union has cabled its final dispatch.

The service that in the mid-1800s displaced pony-borne messengers has itself been supplanted over the last half-century by cheap long-distance telephone service, faxes and e-mail.

In a final bit of irony, Western Union informed customers last week in a message on its Web site.


For the full story, see the online version of:

"First Data Unit Scraps Telegrams." Omaha World-Herald (Thurs., February 2, 2006): 9D.

(In the online version, the headline reads: "Western Union Telegrams Are No More.")




February 25, 2006

Who Decides Treatment When Medicine is Socialized?




Ann Marie Rogers at High Court in London on Wed., Feb. 15, 2006. Image source: online version of NYT article quoted and cited below.


(p. A6) LONDON, Feb. 15 -- When her local health service refused to treat her breast cancer with the drug Herceptin, 54-year-old Ann Marie Rogers sued. But on Wednesday, a High Court judge ruled against her.

In his decision the judge, David Bean, said that although he sympathized with Ms. Rogers's predicament, the health service in Swindon, where she lives, had been justified in withholding the drug.

"The question for me is whether Swindon's policy is irrational and thus unlawful," Justice Bean wrote. "I cannot say it is."

The ruling has potentially serious implications for patients across the taxpayer-financed National Health Service.

Despite health officials' contention that decisions about treatment are based solely on clinical effectiveness, critics contend that with drugs growing ever more expensive, cost has become an increasingly important factor. They also say patients are at the mercy of the so-called postcode lottery, in which treatments are available in some postal zones but not others.



For the full story, see:

SARAH LYALL. "British Clinic Is Allowed to Deny Medicine; Decision on Cost Has Broad Impact." The New York Times (Thurs., February 16, 2006): A6.





February 24, 2006

Protecting the "Dots"


Is it the free market, or big government, that is most likely to treat individual human beings as expendible "dots"?


One of the best conspiracy movies ever made is the perfect British classic, "The Third Man." In the most haunting scene, the villain, played adroitly by Orson Welles, takes Joseph Cotten, the good guy, up in a Ferris wheel. The villain, named Harry Lime, has been selling adulterated penicillin in postwar Vienna, making a fortune and causing children to become paralyzed and die.

Mr. Cotten's character, a pulp fiction writer named Holly Martins, asks him how he could do such an evil thing for money. The two men are at the top of the Ferris wheel, and the people below them look like tiny dots. Mr. Welles's villain looks down and says, "Tell me, would you really feel any pity if one of those dots stopped moving forever? If I offered you £20,000 for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare?"

BEN STEIN. "Everybody's Business; When You Fly in First Class, It's Easy to Forget the Dots." The New York Times, Section 3 (Sunday, January 29, 2006): 3.




February 23, 2006

Missing the Boat: More on Why Africa Is Poor




Source of photo: online version of the NYT article cited below.



KHARTOUM, Sudan, Jan. 30 -- Sudan's government pulled out all the stops for the heads of state who swept into town for the African Union summit conference last week. Streets were scrubbed and welcome signs erected. Elegant new villas, outfitted with fancy linen and china, were put up along the Nile.

And then there was the fancy presidential yacht that was supposed to ferry the dignitaries up and down the river for evening soirees. Much like Sudan's hopes of assuming the chairmanship of the African Union at the conference, though, the boat never materialized.

Even after the presidents had come and gone, the yacht was nowhere to be found. It was not on the White Nile, which flows northward from Lake Victoria. Nor was it on the Blue Nile, which swoops into Khartoum from Ethiopia.

But Ibrahim Khalfalla never lost sight of the hulking craft, which has two decks and is 118 feet long and 32 feet wide. He was the man charged with getting the boat from Slovenia, where it was built for an estimated $4.5 million, to Sudan, where President Omar Hassan al-Bashir planned to inaugurate it. And although he missed his deadline, Mr. Khalfalla said he did the best he could under the circumstances.

"This is difficult, so difficult," he said, as the huge tractor-trailer that had been carrying the boat from Port Sudan to Khartoum by road inched close to its destination the other day. "You don't know how difficult."

It was actually rather easy to see how challenging a job this was. Even with the boat a mere 200 feet from the water's edge, serious obstacles remained, like the building that the precious cargo struck while Mr. Khalfalla motioned wildly at the man behind the wheel of the truck.

As the yacht scraped against a brick wall, onlookers let out a groan. Soon workers were atop the boat, prying away bricks.

. . .

But even before the craft hit the water, it was taking on criticism from those who viewed it as an extravagant symbol of just how far removed the government is from the people.

Disparaged in newspapers as "Bashir's boat" and a "million-dollar toy," the craft, with its sophisticated satellite technology, elaborate presidential suite and dining facilities for 76 guests, left critics unimpressed.

The Juba Post, saying the government had "missed the boat," called on officials to donate it to the Red Cross as a floating hospital ship. "Children scrounge for food in Khartoum North," the paper said, not far from "the president's expensive shipwreck."

Another newspaper, The Khartoum Monitor, lamented that the government was using barges to take people displaced from the long war in the south back to their homes while the government imported a luxurious vessel for partying.



For the full story, see:

MARC LACEY. "Khartoum Journal: Sudan Leader Waits, and Waits, for His Ship to Come In." The New York Times (Tues., January 31, 2006): A4.

(Note: ellipsis added.)


YachtStuck.jpg Source of photo: online version of the NYT article cited above.





February 22, 2006

Solow's Wit (But Not Wisdom): Treat Schumpeter "Like a Patron Saint"



(p. 195) As Robert Solow wrote acidly in 1994, commenting on a series of papes on growth and imperfect competition, "Schumpeter is a sort of patron saint in this field. I may be alone in thinking that he should be treated like a patron saint: paraded around one day each year and more or less ignored the rest of the time."

Schumpeter was a most unwelcome guest at the neoclassical table. Yet it was hard for the mainstream to reject him out of hand, since Schumpeter was such a celebrant of capitalism and entrepreneurship. He thought it a superb, energetic, turbulent system, one that led to material betterment over time. He hoped it would triumph over socialism. He just didn't believe it functioned in anything close to the way the Marshallians did, and he was appalled that economists could apply an essentially static model to something as profoundly dynamic as capitalism. Schumpeter wrote presciently, "Whereas a stationary feudal economy would still be a feudal economy, and a stationary socialist economy would still be a socialist economy, stationary capitalism is a contradiction in terms." Its very essence, as the economic historian Nathan Rosenberg wrote, (p. 196) echoing Schumpeter, "lies not in equilibrating forces, but in the inevitable tendency to depart from equilibrium" every time an innovation occurs.


Source:

Kuttner, Robert. Everything for Sale: The Virtues and Limits of Markets. Chicago: University of Chicago Press, 1999.





February 21, 2006

NGOs Throw Money at Poverty, and Then Declare Success


Mark Pendergrast, in his opus on coffee, tells us about Bill Fishbein, a coffee retailer from Rhode Island, who wanted to help small, poor, coffee farmers in Guatemala:

 

(p. 419) . . . , Fishbein wanted to do something to help.  At first, he worked with established nongovernment organizations (NGOs) but soon became disillusioned. Too often, the NGOs simply threw money at communities, then declared projects successful even without long-term improvements.  "It amounts to a network to move money around, to pull the heartstrings of donors," he complains.

 

Source:

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

 




February 20, 2006

"I would have fired me if I was him"


BuffettWarren.jpg

Warren Buffett. Source of image: online version of WSJ article cited below.

A couple of years ago, I think, in the mid-afternoon we went into a nearly deserted Dairy Queen near Dodge and 115th and walked by an old guy eating ice cream with a couple of others (I'm guessing his daughter and grandchild). I said to Jeanette and Jenny something like: if that guy wasn't dressed so weirdly, I'd say he might be Warren Buffett. He was wearing some kind of overalls with the word WOODS printed in capitals on the back. Suddenly I remembered that I had seen in the paper that Buffett had caddied for Tiger Woods in some sort of celebrity tournament a few weeks earlier. We were tempted to ask for his autograph, but we let him eat his ice cream in peace.


(p. A1) He spends most of his day alone in an office with no computer. He makes swift investment decisions, steers clear of meetings and advisers, eschews set procedures and doesn't require frequent reports from managers.

. . .

(p. A5A (sic)) Mr. Buffett tends to stick to investments for the long haul, even when the going gets bumpy. Mr. Sokol recalls bracing for an August 2004 meeting at which he planned to break the news to Mr. Buffett that the Iowa utility needed to write off about $360 million for a soured zinc project. Mr. Sokol says he was stunned by Mr. Buffett's response: "David, we all make mistakes." Their meeting lasted only 10 minutes.

"I would have fired me if I was him," Mr. Sokol says.

"If you don't make mistakes, you can't make decisions," Mr. Buffett says. "You can't dwell on them." Mr. Buffett notes that he has made "a lot bigger mistakes" himself than Mr. Sokol did.


For the full article, see:

SUSAN PULLIAM and KAREN RICHARDSON. "Warren Buffett, Unplugged; The hands-off billionaire shuns computers, leaves his managers alone, yet has notched huge returns. He just turned 75. Can anyone fill his shoes?" THE WALL STREET JOURNAL (Sat., November 12, 2005): A1 & A5A.


Source of graph: online version of WSJ article cited above.




February 19, 2006

E-mail Gathers Friends "into the immediacy of our lives"


Amid all that is wasteful, distracting, irrelevant and downright evil about e-mail, there is also this. We carry dozens of people, sometimes hundreds, around with us in our heads. They pass in and out of our thoughts as quickly as thought itself. E-mail is a way to gather these people — so many of them scattered across the globe — into the immediacy of our lives in a way that makes even a phone call feel highly formalized. It is the nearness of e-mail, the conversations it creates, that is addicting as much as the minute-by-minute stimuli. I try to remember that when I am getting twitchy, when I start wondering whether the mail server is down again. I tell myself that I'm just listening for a chorus of voices, a chorus of friends.


For the full commentary, see:

VERLYN KLINKENBORG. "EDITORIAL OBSERVER; ' No Messages on This Server,' and Other Lessons of Our Time." The New York Times, Section 4 (Sunday, January 29, 2006): 15.




February 18, 2006

Specialty Coffee: How Does it Fit Christensen?


Christensen and Raynor:
(p. 55) Not all innovative ideas can be shaped into disruptive stategies, however, because the necessary preconditions do not exist; in such situations, the opportunity is best licensed or left to the firms that are already in the market. On occasion, entrant companies have simply caught the leaders asleep at the switch and have succeeded with a strategy of sustaining innovation. But this is rare.

 

Source: 

Christensen, Clayton M., and Michael E. Raynor. The Innovator's Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.

 

In several later chapters of Mark Pendergrast's Uncommon Grounds, he documents how the major coffee retailers failed to perceive and respond to the threat posed to their business by the specialty coffee retailers.  In some ways specialty coffee firms would seem to be disruptors.  But they were neither "low end" nor "new market."  Wasn't specialty coffee what Christensen would call a "sustaining innovation"?

 




February 17, 2006

French "regard the open economy with horror"


The French still regard the open economy with horror. A recent poll suggests that, while two-thirds of the population accepted that reform was necessary, they also wanted to keep the advantages of the present system -- a short working week, early retirement for many, and almost invincible job protection. After years of assiduous propaganda, they believe that anything else will lead directly to the horrors of the United States: uninsured people dying of untreated diseases in the streets and, above all, riots.

The case of the state monopoly, EDF (Electricité de France) is instructive, and explains why any reform is so politically difficult. Employees of this vast organization work 32 hours per week; their meals are subsidized to the tune of 50%, their electricity and gas bills by 90%; they can retire at 55; they have the right to holidays at a fifth of their market value, and on average work the equivalent of eight months per year; and when their mother-in-law dies, they can take three days' paid leave to celebrate. These are not all their privileges, only some; so it is hardly surprising that when the government proposed the privatization of EDF, they went on strike. (The government caved in.) They did so in the name of "the defense of public service" -- and the French call the Anglo-Saxons hypocrites!

When a certain critical mass of such subsidy and special privilege for important sectors of the economy is reached, reform becomes impossible without explosion. The government has created an economic monster that it cannot tame, and that is now its master. In any case, periodic explosion has long been the means by which French society has undertaken major political and economic change. In the meantime, repression will become more necessary. For the moment, the banlieues are quiet: That is to say, only 100 cars a night are burned, and life elsewhere continues in its very pleasant way. But there is an underlying anxiety (the French take more tranquillizers than any other nation). No one believes that we have heard the last of les jeunes and of profound economic troubles. The last episode was but a very minor eruption of the social volcano. Every Frenchman believes that the question of a major eruption is not if, but when.

For the full commentary, see:

THEODORE DALRYMPLE. "An Update From France . . . (Remember Those Riots?)." The Wall Street Journal (Sat., February 11, 2006): A8.




February 16, 2006

Hayek Was Right: Free Speech is Fragile, When Property Can be Seized



For those who doubt the central message of Hayek's The Road to Serfdom, something to ponder:

 

(p. 351) The Sandinistas called coffee farmers who cooperated with them "patriotic producers." Anyone who questioned their politics or policies was labeled a capitalist parasite. Throughout most of the 1980s, any farms that did not produce sufficiently, or whose owners were too vocal, were confiscated by the government.

 

Source: 

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.





February 15, 2006

"Growing Recognition of Economic Costs" of Koyoto Protocol




Commentary on the Kyoto Protocol:

(p. 3) . . . the current stalemate is not just because of the inadequacies of the protocol. It is also a response to the world's ballooning energy appetite, which, largely because of economic growth in China, has exceeded almost everyone's expectations. And there are still no viable alternatives to fossil fuels, the main source of greenhouse gases.

Then, too, there is a growing recognition of the economic costs incurred by signing on to the Kyoto Protocol.

As Prime Minister Tony Blair of Britain, a proponent of emissions targets, said in a statement on Nov. 1: ''The blunt truth about the politics of climate change is that no country will want to sacrifice its economy in order to meet this challenge.''

This is as true, in different ways, in developed nations with high unemployment, like Germany and France, as it is in Russia, which said last week that it may have spot energy shortages this winter.

. . .

The only real answer at the moment is still far out on the horizon: nonpolluting energy sources. But the amount of money being devoted to research and develop such technologies, much less install them, is nowhere near the scale of the problem, many experts on energy technology said.

Enormous investments in basic research have to be made promptly, even with the knowledge that most of the research is likely to fail, if there is to be any chance of creating options for the world's vastly increased energy thirst in a few decades, said Richard G. Richels, an economist at the Electric Power Research Institute, a nonprofit center for energy and environment research.

''The train is not leaving the station, and it needs to leave the station,'' Mr. Richels said. ''If we don't have the technologies available at that time, it's going to be a mess.''



For the full commentary, see:

ANDREW C. REVKIN. "THE WORLD; On Climate Change, a Change of Thinking." The New York Times, Section 4 (Sun., December 4, 2005): 3.

(Note: ellipsis added.)





February 14, 2006

Coffee Cartel Quotas: "someone always cheated"


In his comprehensive history of coffee, Mark Pendergrast discusses efforts of the coffee-producing nations to raise the price of coffee in 1977:

 

(p. 332) Quota restrictions without consumer country participation never worked in the past, since someone always cheated.

 

Source:

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

 




February 13, 2006

A Censored Google is Better than No Google at All



Surfing the web at a Shanghai internet cafe. Source of image: the NYT article cited below.


At lunch a couple of weeks ago some of us in the department discussed Google's agreeing to China's desire to censor some searches. Some view this as Google violating its corporate motto: "don't be evil."

But I suspect that Chinese citizens with a hobbled Google, have more freedom than Chinese citizens with no Google at all.

There are many alternative ways to search for "freedom." No government is clever enough to block them all.

SHANGHAI, Feb. 7 — For months now, the news about the news in China has been awful. Carrying out its vow to tighten controls over what it calls "propaganda," the government of President Hu Jintao has busied itself closing publications, firing editorial staffs and jailing reporters.

More noticeably, the government has clamped down on the Internet, closing blogger sites, filtering Web sites and e-mail messages for banned words and tightening controls on text messages. Last year, Yahoo was criticized for revealing the identity of an Internet journalist, Shi Tao, who was subsequently jailed. [On Wednesday, the Committee to Protect Journalists said court documents posted on a Chinese Web site showed that Yahoo had done the same in 2003, resulting in the jailing of another writer, Li Zhi.]

Against this grim backdrop, the news that Google had agreed to apply censors' blacklists to its new Chinese search engine might have seemed like the ultimate nail in the coffin for freedom of information in this country. Chinese Internet mavens were outraged at Google for collaborating in the government's censorship effort. "For most people, access to more diversified resources has been broken," said Isaac Mao, a popular Chinese blogger, in a typical sentiment. "The majority of users, the new users, will only see a compressed version of Google, and can't know what they don't know. This is like taking a 30-year-old's brain and setting him back to the mind of a 15-year-old."

Some threatened that Internet companies that toed the government line would regret it someday. "Doing the bidding of the Chinese government like this is like doing the bidding of Stalin or Hitler," said Yu Jie, a well-known dissident writer. "The actions of companies that did the bidding of Stalin and Hitler have been remembered by history, and the Chinese people won't forget these kinds of actions, either."

Whether Chinese will hold a long-term grudge is arguable. But Web specialists are far more confident that the government will fail in its efforts to reverse a trend toward increasingly free expression that has been reshaping this society with ever more powerful effects for more than two decades.

Last year, China ranked 159th out of 167 countries in a survey of press freedom, Reporters Without Borders, the Paris-based international rights group, said. But rankings like this do not reflect the rapid change afoot here, more and more of which is escaping the government's control.

A case in point is the Chinese government's recent effort to rein in bloggers who tread too often into delicate territory, criticizing state policy or detailing official corruption. In December, the government ordered Microsoft and its MSN service to close the site of Michael Anti, one of China's most popular bloggers.

Although Mr. Anti — who is also an employee of the Beijing bureau of The New York Times — had his site closed, any Chinese Web surfer can choose from scores of other online commentators who are equally provocative, and more are coming online all the time.

Microsoft alone carries an estimated 3.3 million blogs in China. Add to that the estimated 10 million blogs on other Internet services, and it becomes clear what a censor's nightmare China has become. What is more, not a single blog existed in China a little more than three years ago, and thousands upon thousands are being born every day — some run by people whose previous blogs had been banned and merely change their name or switch Internet providers. New technologies, like podcasts, are making things even harder to control.

"The Internet is open technology, based on packet switching and open systems, and it is totally different from traditional media, like radio or TV or newspapers," said Guo Liang, an Internet specialist at the Chinese Academy of Social Sciences. "At first, people might have thought it would be as easy to control as traditional media, but now they realize that's not the case."

. . .

"Symbolically, the government may have scored a victory with Google, but Web users are becoming a lot more savvy and sophisticated, and the censors' life is not getting easier," said Xiao Qiang, leader of the Internet project at the University of California, Berkeley. "The flow of information is getting steadily freer, in fact. If I was in the State Councils information office, I certainly wouldn't think we had any reason to celebrate."


For the full story, see:

HOWARD W. FRENCH. "Letter From China; Despite Web Crackdown, Prevailing Winds Are Free." The New York Times (Thurs., February 9, 2006): A4.




February 12, 2006

'Purpose Brands' Built by Understanding Jobs Customers Need to Do


. . . , the marketer's fundamental task is not so much to understand the customer as it is to understand what jobs customers need to do -- and build products that serve those specific purposes.

Marketers who do this well can build what we call "purpose brands" -- ones that become so tightly associated with the job they perform that they become inextricably linked to it. Most of today's most successful brands -- Crest, Starbucks, Kleenex, eBay and Kodak, to name a few -- started out as purpose brands.

. . .

Federal Express illustrates how successful purpose brands are built. A job had existed practically forever: the "I need to send this from here to there -- as fast as possible with perfect certainty" job. Some U.S. customers hired the Postal Service's airmail; a few desperate souls paid couriers to sit on airplanes. But because nobody had yet designed a service to do this job well, the brands of the unsatisfactory alternative services became tarnished when they were hired for this purpose. But after Federal Express specifically designed its service to do that exact job, and did it wonderfully again and again, the FedEx brand began popping into people's minds.

This was not built through advertising. It was built as people hired the service and found that it got the job done. FedEx became a purpose brand -- in fact, it became a verb in the international language of business that is inextricably linked with that specific job.

Purpose brands create enormous opportunities for differentiation, premium pricing and growth. But reckless management can erode the equity of these brands. There are only two ways to extend brands without destroying them: Marketers can apply the brand to different products that address the same job. Or they can apply the brand to endorse the quality of products that do other jobs and create new purpose brands that benefit from the endorser quality of the original brand.

Marriott followed this strategy in leveraging its brand across the jobs for which hotels might be hired. It built its hotel brand around full-service facilities that were good to hire for large meetings. When it extended its brand to other jobs for which hotels were hired, it adopted a two-word brand architecture, appending to the Marriott endorsement a purpose brand for the different jobs its new hotel chains were intended to do. Hence, individual business travelers who need to hire a quiet place to get work done can hire Courtyard by Marriott -- the hotel designed by business travelers for business travelers. Longer-term travelers can hire Residence Inn by Marriott, and so on. Even though these disruptive hotels were not constructed and decorated to the same standard as full-service Marriott hotels, the new chains actually reinforce the endorser qualities of the Marriott brand because they do the jobs well that they are hired to do.


For the full article, see:

CLAYTON M. CHRISTENSEN, SCOTT COOK and TADDY HALL. "MANAGER'S JOURNAL; It's the Purpose Brand, Stupid." The Wall Street Journal (Tues., November 29, 2005): B2.





February 11, 2006

"We do free speech here"


COPENHAGEN – When Flemming Rose, the cultural editor at Denmark's leading newspaper, published cartoons of the prophet Muhammad late last September, he got an angry telephone call from a local Muslim news vendor who said he had removed the paper from his shelves in protest. The complaint didn't cause much alarm. "We get calls every day from people complaining about something," recalls Mr. Rose. Anger over the cartoons, he figured, would flare out in "two or three days."

Today, the 47-year-old editor has a security-service escort when he appears in public. He has received death threats and gets insulted by strangers on the street. His newspaper, Jyllands-Posten, evacuated its offices twice last week after anonymous bomb threats.

Across the Muslim world, Denmark, a nation of just 5.4 million, has been hit by a tsunami of rage. Protesters rally daily from Iraq to Indonesia. Mobs over the weekend stormed its diplomatic missions in Syria and Lebanon. Demonstrators yesterday attacked its embassy in Iran, and security forces in Afghanistan opened fire on demonstrators, killing at least four. A boycott of Danish products has hammered some of Denmark's biggest companies.


For the full story, see:

ANDREW HIGGINS. "How Muslim Clerics Stirred Arab World Against Denmark; Newspaper Cartoons Unite Religious, Secular Forces; Dossier Fans the Flames." THE WALL STREET JOURNAL (Tues., February 7, 2006): A1 & A25.


And now for something completely different:

Listen, I watched the funeral of Coretta Scott King for six hours Tuesday, from the pre-service commentary to the very last speech, and it was wonderful -- spirited and moving, rousing and respectful, pugnacious and loving. The old lions of the great American civil rights movement of the 20th century were there, and standing tall. The old lionesses, too. There was preaching and speechifying and at the end I thought: This is how democracy ought to be, ought to look every day -- full of the joy of argument, and marked by the moral certainty that here you can say what you think.

There was nothing prissy, nothing sissy about it. A former president, a softly gray-haired and chronically dyspeptic gentleman who seems to have judged the world to be just barely deserving of his presence, pointedly insulted a sitting president who was, in fact, sitting right behind him. The Clintons unveiled their 2008 campaign. A rhyming preacher, one of the old lions, a man of warmth and stature, freely used the occasion to verbally bop the sitting president on the head.

So what? This was the authentic sound of a vibrant democracy doing its thing. It was the exact opposite of the frightened and prissy attitude that if you draw a picture I don't like, I'll have to kill you.

It was: We do free speech here.


For the full commentary, see:

PEGGY NOONAN. "Four Presidents and a Funeral." The Wall Street Journal (Fri., February 10, 2006): A18.




February 10, 2006

Solzhenitsyn Endures: The Return of "The First Circle"



    Source of book image:   Amazon.com.


I remember Ben Rogge recommending The First Circle, decades ago when it first appeared in English. It is a powerful, courageous, wise work, bearing many lessons. As you read the book, you keep hoping you can find someone to blame for the evil that is happening. But as Solzhenitsyn works his way up the bureaucracy, each bureaucrat has a plausible motive for his part in evil; one motive, for example, is the protection of the bureaucrat's family. Only when you reach Stalin, do you find someone who you can really despise. But he seems borderline crazy, so even he is not a totally satisfying villian.

The book can be seen as illustrating a point that Rogge often made: socialism is not bad because it is run by bad people; it is bad because it provides ordinary people incentives to do bad things. (These are not his words, but I believe they capture his point.)



Alexandr Solzhenitsyn. Source of image: online version of the NYT article quoted and cited below.


(p. A1) MOSCOW, Feb. 8 -- A grandfatherly figure, his bearded face wrinkled into a smile, peers down from billboards around town.

It is surprise enough that the man is Aleksandr I. Solzhenitsyn, the once-exiled writer, Nobel Prize winner and, of late, octogenarian scold. It is even more so that the billboards advertise his adaptation -- broadcast on state television, no less -- of one of his fiercely anti-Soviet novels, "The First Circle."

Solzhenitsyn has been called the conscience of the nation, but his reputation has risen and fallen as tumultuously as Russia itself since the collapse of the Soviet Union. "First Circle" has once again placed him on the national stage, reaching an audience that would have been inconceivable to him four decades ago, when he smuggled the book out of the Soviet Union.


For the full article, see:

STEVEN LEE MYERS "Toast of the TV in Russian Eyes: It's Solzhenitsyn." The New York Times (Thurs., February 9, 2006): A1 & A3.



A scene from the Russian mini-series version of The First Circle. Source of image: online version of the NYT article quoted and cited above.




February 9, 2006

Trickle-Down in India


BANGALORE, India, July 4 - It has been a little more than a year since the government of Prime Minister Manmohan Singh came into power promising to embrace those excluded from the country's new economic prosperity.

While the impact of his government's efforts to help the poor -- like increasing credit to the country's many farmers and pumping in money for infrastructure, especially in rural areas -- will not show for another few years, experts say, the bounty from the expansion in manufacturing and services that has been putting money in the hands of millions of Indians is now noticeably trickling down.

''What is happening is amazing,'' said Joe Paul, the founder and chairman of the Uthsaha Society, a networking group that encourages slum dwellers in Bangalore to become financially independent. ''It is a ripple effect.''

. . .

. . . , where the new prosperity is percolating, it spans a broad spectrum and reflects much more than an occasional, isolated success story. A big catalyst is the construction boom in high-tech cities like Bangalore and Madras. Besides the demand for construction workers, workers at factories supplying the building materials, and drivers to transport those products, there is a demand for housekeepers, cooks and drivers to cater to the double-income families who live in the new residential complexes and high-rises. Caterers are needed to supply food to the office workers. Security guards are also in demand. Trained nurses are needed to tend to aging parents of workers traveling overseas or living in other cities.

''The last few years of strong growth has facilitated poverty reduction, even though the fruits of growth were not distributed evenly,'' said Ping Chew, a sovereign credit analyst at Standard & Poor's in Singapore. ''The middle-income group continues to be the biggest beneficiary and this will ensure that the benefits continue to pass on to the lower-income class.''


For the full story, see:

SARITHA RAI. "In India, Economic Prosperity Is Spreading Slowly." The New York Times (Tuesday, July 5, 2005): C3.




February 8, 2006

The Open Road


A strong argument could be made that the automobile is one of the two most liberating inventions of the past century, ranking only behind the microchip. The car allowed even the common working man total freedom of mobility -- the means to go anywhere, anytime, for any reason. In many ways, the automobile is the most egalitarian invention in history, dramatically bridging the quality-of-life gap between rich and poor. The car stands for individualism; mass transit for collectivism. Philosopher Waldemar Hanasz, who grew up in communist Poland, noted in his 1999 essay "Engines of Liberty" that Soviet leaders in the 1940s showed the movie "The Grapes of Wrath" all over the country as propaganda against the evils of U.S. capitalism and the oppression of farmers. The scheme backfired because "far from being appalled, the Soviet viewers were envious; in America, it seemed, even the poorest had cars and trucks."

. . .

The simplistic notion taught to our second-graders, that the car is an environmental doomsday machine, reveals an ignorance of history. When Henry Ford first started rolling his Black Model Ts off the assembly line at the start of the 20th century, the auto was hailed as one of the greatest environmental inventions of all time. That's because the horse, which it replaced, was a prodigious polluter, dropping 40 pounds of waste a day. Imagine what a city like St. Louis smelled like on a steamy summer afternoon when the streets were congested with horses and piled with manure.

. . .

There's a perfectly good reason that the roads are crammed with tens of millions of cars and that Americans drive eight billion miles a year while spurning buses, trains, bicycles and subways. Americans are rugged individualists who don't want to cram aboard buses and subways. We want more open roads and highways, and we want energy policies that will make gas cheaper, not more expensive. We want to travel down the road from serfdom and the car is what will take us there.


For the full commentary, see:

Moore, Stephen. "Supply Side; The War Against the Car." The Wall Street Journal (Fri., November 11, 2005): A10.




February 6, 2006

Unintended Consequences of Making My Cold Medicine Hard to Get



SudafedColdCcough.jpg
Source of image: http://www.sudafed.com/products/cold_and_cough.html

When I get a cold, nothing keeps me functioning as well as Sudafed Cold and Cough. Unfortunately, the pills contain pseudoephedrine, which apparently is an ingredient that can be used in the process of making meth. So in their zeal to protect people from their own bad choices, governments across the country, including my own Nebraska, have put increasingly severe restrictions on the sale and purchase of medicines like Sudafed Cold and Cough. Many stores that used to carry the medicine, have dropped it, and those that still carry it, have significantly increased the price.

So the government has made life harder for me. But at least they've benefitted the meth addicts, right? Read on:

(p. 1A) Restrictions on the sale of cold medicine appear to be reducing seizures of homemade methamphetamine labs in Nebraska and Iowa.

Both states passed laws last year restricting over-the-counter purchases of cold medicines used to make meth - and both report fewer lab discoveries.

But officials in the two states - and others with similar restrictions - now have a new problem: The drop in home-cooked methamphetamine has been met by a flood of crystal methamphetamine coming largely from Mexico.

Sometimes called ice, crystal meth is far purer, and therefore even more highly addictive, than powdered home-cooked meth.

And because crystal meth costs more, the police say thefts are increasing, as people who once cooked at home now have to buy it.

The University of Iowa Burn Center, which in 2004 spent $2.8 million treating people whose skin had been scorched off by the toxic chemicals used to make meth at home, says it now sees hardly any cases of that sort. Drug treatment cen- (p. 3A) ters, on the other hand, say they are treating just as many or more meth addicts.

And although Iowa child welfare officials say they are removing fewer children from homes where parents are cooking the drug, the number of children being removed from homes where parents are using it has more than made up the difference.



For the full story, see:

"Meth labs decline, but 'ice' fills gap." Omaha World-Herald (Sunrise Edition, Mon., January 30, 2006): 1A & 3A.


Apparently the only current substitute for pseudoephedrine in cold medicines is phenylephrine. But it has several drawbacks. Consider:

. . . pharmacologists, who specialize in the properties of medications, say oral phenylephrine has several disadvantages. First, the effects of the current formulations wear off faster than pseudoephedrine -- meaning users will need to take a pill after four hours instead of up to six for the shorter-acting pseudoephedrine. Pseudoephedrine also comes in long-acting 12- and 24-hour pills, an option not currently available for over-the-counter phenylephrine.

Another question is whether oral phenylephrine is as effective as pseudoephedrine. There have been no major published head-to-head trials comparing the two, and neither Pfizer nor Germany's Boehringer Ingelheim GmbH, a major supplier of powder phenylephrine for pills, has studied the matter. In 2003, Pfizer conducted a consumer survey in which 400 mall-goers with stuffy noses were given either standard Sudafed or Sudafed PE. In a telephone survey a week later, about 70% of each group reported "good" or "excellent" results, the company says.

But pharmacologists say there are reasons for caution. For one, oral phenylephrine is heavily absorbed by the intestine and broken down in the liver -- so only 6% to 40% of the actual medicine makes it into the blood stream, compared with nearly all of pseudoephedrine, scientists say. Moreover, its use as a decongestant has been far less heavily studied than pseudoephedrine's. The FDA review cited more than six studies, primarily unpublished work from a single laboratory, which found it effective. The review also cited a nearly equal number of studies from a variety of laboratories that found phenylephrine no better than a placebo -- but the agency concluded overall that it does work. Little has been published since then.

The American Heart Association warns that both drugs can raise blood pressure, so people with high blood pressure or heart disease should consult their doctor before taking them. It isn't known whether phenylephrine poses more or less of a risk than pseudoephedrine, though some experts say phenylephrine has been less tested so may merit more caution.

If a stuffy nose is making you miserable and only the most proven remedy will do, you may want to take the time to look for pseudoephedrine -- even if it means you have to wait at the counter.



For the full story, see:

LAURA JOHANNES. " ACHES & CLAIMS; Choosing a Pill for That Cold." THE WALL STREET JOURNAL (Tues., December 27, 2005): D4.




February 5, 2006

Free-Market 'Chaos' Versus Planning, in New Orleans


The rebirth of New Orleans does, . . . , require a leap into the unknown. It can't be meticulously planned. Preserve the old buildings. Rope off the lowlands. But then let imagination takes its course. Unfortunately, Mr. Nagin's Bring Back New Orleans group is loaded with central planners prescribing a dream city built around such highlights as light-rail transport, a "jazz district" and a neuroscience center. Typical is Michael Cowan, head of the city's Human Relations Commission, who warned that "the alternative to a 'good-enough' plan for the future of our city is free-market chaos, also known . . . as every man for himself and the devil take the hindmost."

Actually, it was precisely this chaos that made New Orleans a great city in the first place. It was planning -- specifically, the horrifying housing projects, largely destroyed in Katrina; the stultifying school system; the Superdome and other wasteful public-works projects -- that held the city back.


For the full commentary, see:

JAMES K. GLASSMAN. "CROSS COUNTRY; Back to the Future." The Wall Street Journal (Thurs., January 12, 2006): A13.




February 4, 2006

"If you're giving while you're living, you're knowing where it's going"


The American Council of Trustees and Alumni has published a short book, "The Intelligent Donor's Guide to College Giving," that lays out some basic ground rules for donating to higher education. These include placing clear restrictions on gifts, working with a particular professor (and, if possible, bypassing the development office) and avoiding endowments in perpetuity. As Sir John Templeton wisely said: "If you're giving while you're living, you're knowing where it's going."

Obviously, this sort of due diligence does require time and effort on the part of the donor, But if even a few more philanthropists were watching where their funds ended up, college officials would surely monitor their programs more carefully. There have been a few celebrated cases in recent years in which donors have asked for their funds to be returned after discovering that they were misused, and these cases have sent a shudder through the academic community.


For the full commentary, see:

JAMES PIERESON. "Only Encouraging Them." The Wall Street Journal (Fri., November 18, 2005): W13.




February 3, 2006

"Better Coffee Rockefeller's Money Can't Buy"



(p. 263) In the middle of this fierce competition, with its low quality standards and apparent market saturation, a New York nut vendor and restaurateur proved that a new brand stressing quality could triumph.

 . . .

Black understood the power of advertising.  In radio spots, which blanketed the New York metropolitan airwaves,  Black's second wife, Jean Martin, sang a hummable jingle:
Chock full o' Nuts is that heavenly coffee,
Heavenly coffee, heavenly coffee.
(p. 264) Chock full o' Nuts is that heavenly coffee-
Better coffee Rockefeller's money can't buy.
By August 1954, less than a year after its debut, Chock full o' Nuts had grabbed third place among vacuum-packed coffees in New York City.

 

Source: 

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

(Note:  ellipsis added.)

 




February 2, 2006

The Creation of "Freedom" in Iraq


 

Freedom.jpg "Freedom" (oil painting by Esam Pashwa). Source of image: http://www.artvitae.com/art.asp?art_id=1571&bhcp=1

 

When Saddam Hussein fell, artist Esam Pashwa pulled down a huge poster of Sadam and painted a mural underneath. The gesture, and the art, attracted the attention of art expert Peter Falk, who contacted and encouraged Pashwa. He learned that Pashwa, in addition to his art, has served as a translator for the coalition forces in Iraq. Falk has organized a show of Pashwa's work in a New York gallery.

As of 2/1/06, the "Freedom" oil painting above was offered for sale through the gallery. For more information: Peter Hastings Falk Hastings Art Management Services, Inc. P.O. Box 833 Madison, CT 06443 203.245.4761 peterfalk@comcast.net

(The source of most of the information in the entry above, was a CNN report/interview entitled "The Art of War" that was broadcast on 2/1/06. It is viewable at CNN.com at: http://www.cnn.com/video/partners/clickability/index.html?url=/video/world/2006/02/01/intv.art.of.war.cnn)

 




February 1, 2006

"Going Postal" Shows that Free Market Jobs Are Not the Only Ones with Stress


WASHINGTON (AP) - The deadly shootings at a California mail processing plant are a grim reminder of cases in the 1980s and '90s that raised public concern and brought the post office and its employees and supervisors together in an effort to end violence at work.

Postmaster General John Potter met with union leaders Tuesday to discuss the tragedy, while Deputy Postmaster General Patrick R. Donahoe headed to the scene of the shootings.

Donahoe urged all postal employees to stay vigilant about facility security.

"That's the best line of defense to keep ourselves safe," he said, urging workers to make sure all doors close correctly and all locks function properly, and that only authorized people are in postal facilities.

In the California case, the shooter had taken an identification badge from a postal worker at gunpoint, postal officials said.

A 1986 case in Edmond, Okla., resulted in 14 people being killed before a disgruntled carrier took his own life. It was followed by a series of killings stretching into the 1990s that led to the rise of the phrase "going postal."

In 1992, the post office and several of its unions and supervisors organizations signed a joint statement calling for zero tolerance of violence in the workplace, as well as banning harassment, intimidation, threats or bullying.

Some incidents were traced to disputes between workers and their managers, and in the statement the Postal Service promised that people who do not treat others with dignity or respect would not be rewarded or promoted.


For the full story, see the online version of the Omaha World-Herald:

"Postal Shooting a Grim Reminder of Past." Omaha World-Herald (Weds., February 1, 2006).




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