« May 2006 | Main | July 2006 »


June 30, 2006

Middle Class Living Standards Have Risen


(p. C1)  ONE of the most influential political books of the last few years has been ''What's the Matter With Kansas?'' by Thomas Frank. Published during the 2004 campaign, it neatly captured the Republicans' success in using social issues to attract blue-collar Kansans who don't really benefit from Republican economic policies.

''All they have to show for their Republican loyalty,'' Mr. Frank writes, ''are lower wages, more dangerous jobs, dirtier air, a new overlord class that comports itself like King Farouk,'' and a culture in ''moral free fall.''

The book was a New York Times best seller for 35 weeks.

But close inspection uncovers a big problem with Mr. Frank's economic analysis.  Wages haven't been falling in Kansas. Up and down the economic spectrum, they have been higher in the last few years than they were at any point in the 1980's or 90's, according to inflation-adjusted numbers from the Economic Policy Institute.  The median Kansas worker made $13.43 an hour in 2004, 11 percent more than in 1979, which might help explain why many people don't vote on bread-and-butter issues anymore.

Now, an 11 percent raise over the course of a generation -- which is similar to the national increase -- is (p. C10) not especially impressive.  It's certainly smaller than the increase workers received in the 25 years leading up to 1979, and for the last few years, wages have not risen at all. But they did rise during the 1990's boom, and pretending otherwise does not jibe with most people's experiences.

More to the point, some other improvements have accelerated recently.  In just the last 15 years, the murder rate has been cut almost in half.  Many big cities are far more vibrant places than they used to be.  About 33 percent of young adults get a bachelor's degree these days, up from 25 percent in the early 1990's.  The gap between men's and women's pay reached its lowest ever last year.  The divorce rate has stopped rising.

Many luxuries of earlier generations -- owning a three-bedroom house, flying across the country, calling relatives who live overseas -- are staples of middle-class life.  If all this doesn't add up to a rise in living standards, I'm not sure what the phrase means.

 

For the full commentary, see:

DAVID LEONHARDT.  "This Glass Is Half Full, Probably More."  The New York Times  (Wednesday, May 24, 2006):  C1 & C10.

 




June 29, 2006

An Unintended Use of Shipping Containers


Source of top image:  online version of NYT article cited below.  Source of bottom image:  http://www.2odessa.com/wiki/index.php?title=Seventh-Kilometer_Bazaar

 

SEVENTH-KILOMETER MARKET, Ukraine, May 16 - Most of the shops here on the airport road outside Odessa are neither buildings nor stalls.  They are shipping containers, stacked two high in rows long enough to be called streets, though these are little more than overcrowded alleys.

From their steel gates spills a consumer abundance of inexpensive clothes, shoes and toys, kitchenware, hardware and software, cosmetics, sporting goods and various sundries -- virtually everything, in short, in a part of the world that not long ago was used to getting by with virtually nothing.

. . .

''They were growing wheat here when I came,'' said Aleksandr Sedov, who once programmed computers for the Soviet space program and now sells, mostly, suspenders and women's blouses.  ''Now this place is called the field of wonders.''

It was also a dump and a garbage incinerator -- paved over and torn down, respectively -- when the last Soviet city fathers of Odessa expelled the pioneers in a previously unknown free market from the city, banishing them to a 10-acre spot seven kilometers, or about four miles, from the city's limits, hence the name.  That was in 1989, as the Soviet Union itself was unraveling, and what has since emerged is Europe's most extraordinary and, some say, largest market.

 

For the full story, see: 

Steven Lee Myers.  "Seventh-Kilometer Market Journal: From Soviet-Era Flea Market to a Giant Makeshift Mall."  The New York Times  (Fri., May 19, 2006):  A4.

 




June 28, 2006

"What Digital Divide?"


  "Jazmyn Johnson, 9, recently helped her mother, Barbara, use their high-speed DSL Intenet connection at their home in Duluth, Ga."  Source of caption and photo:  online version of NYT article cited below. 

 

(p. A1)  African-Americans are steadily gaining access to and ease with the Internet, signaling a remarkable closing of the "digital divide" that many experts had worried would be a crippling disadvantage in achieving success.

Civil rights leaders, educators and national policy makers warned for years that the Internet was bypassing blacks and some Hispanics as whites and Asian-Americans were rapidly increasing their use of it.

But the falling price of laptops, more computers in public schools and libraries and the newest generation of cellphones and hand-held devices that connect to the Internet have all contributed to closing the divide, Internet experts say.

Another powerful influence in attracting blacks and other minorities to the Internet has been the explosive evolution of the Internet itself, once mostly a tool used by researchers, which has become a cultural crossroad of work, play and social interaction.

. . .

"What digital divide?" Magic Johnson, the basketball legend, asked rhetorically in an interview about his new Internet campaign deal with the Ford Motor Company's Lincoln Mercury division to use the Internet to promote cars to black prospective buyers.

 

For the full story, see:

MICHEL MARRIOTT.  "Blacks Turn to Internet Highway, And Digital Divide Starts to Close."  The New York Times  (Fri., March 31, 2006):  A1 & A15.

(Note: ellipsis added.)





June 27, 2006

Free Market Wealth Funds Archaeology


ReinhartLeonBanker.jpg SaturnoBillArcheologist.jpg Upper left is retired banker Leon Reinhart.  Lower right is Bill Saturno, who's archeology dig is being funded by Reinhart.  Source of photos:  online version of WSJ article cited below.

 

(p. P1)  NORTHERN GUATEMALA -- Aboard a small helicopter crossing a seemingly endless rainforest, Leon Reinhart is describing our destination, the San Bartolo archaeological site.  "We are uncovering the oldest-known Maya murals and the oldest writing anyone has ever found in the Americas," he says.

Mr. Reinhart isn't an archaeologist.  He isn't an academic.  He is a retired banker.

In providing funding for the excavation at San Bartolo, Mr. Reinhart is one of a growing number of bankers, entrepreneurs and philanthropists who are playing a crucial role in archaeology.  They are providing millions of dollars to study and preserve the relics of ancient civilizations from Latin America to Italy and Turkey, giving life to projects that would otherwise die.

. . .

(p. P4)  Among the other members of the new generation of benefactors is Charles Williams II, himself an archaeologist.  He directed the enormous excavation project in Corinth and has supported projects in Sicily and at Gordia in Turkey, where Alexander cut the Gordian knot.  Through his foundation, David Packard, son of the Hewlett-Packard founder, financed the work at Zeugma in southwest Turkey that rescued a large number of mosaics just before they were submerged by a new dam.  And a foundation created by Artemis Joukowsky, the former chancellor of Brown University, is funding conservation work at the Great Temple of Petra in Jordan.

Mr. Reinhart learned about San Bartolo thanks to the efforts of an investment banker, Lewis S. Ranieri, who pioneered the mortgage-securities market at Salomon Brothers in the 1980s and now is chairman of CA, the information-technology concern formerly known as Computer Associates.  Mr. Ranieri created the Foundation for the Advancement of Mesoamerican Studies, or Famsi, devoted to archaeology.

On Famsi's Web site, Mr. Reinhart read an article about San Bartolo written by Bill Saturno, the young archaeologist who literally stumbled across the ruin in 2001.  Entering a tunnel cut by looters, he immediately understood that the paintings were much older than previously discovered Mayan murals with such complicated iconography.

Fascinated by Mr. Saturno's article, Mr. Reinhart sent him an email.  Because the project had received grants from Famsi and the National Geographic Society, Mr. Reinhart assumed it was fully funded; he soon learned that wasn't the case.  Mr. Saturno was borrowing on his personal credit card to keep the work going. Mr. Reinhart agreed to cover most of the needed funds -- a sum that has now crossed the $1 million mark.  (Among this year's expenses: $65,000 for stabilizing the murals and $18,700 in food.)

 

For the full story, see:

G. BRUCE KNECHT.  "Culture; The Rich Dig Deep: Archaeology's New Players; As traditional funds for excavations fall short, wealthy benefactors are bolstering the hunt for antiquities."  The Wall Street Journal  (Sat., May 13, 2006):  P1 & P4.

 

(Note: ellipses added.)





June 26, 2006

Co-Founder of Home Depot, Funds Ambitious Georgia Aquarium


GeorgiaAquariumTube.jpg GeorgiaAquariumRays.jpg Scenes from the Georgia Aquarium.  Source of photos:  online version of the NYT article cited below.

  

(p. B1)  One of its sensations, . . ., is simply its ambition — look what we have gathered and constructed!  The Georgia Aquarium is billed as the world's largest, and one can't escape statistics of size and number: over 100,000 fish are displayed in five galleries and 60 habitats in the more than 500,000 square foot building; there is a 6.2 million gallon pool in which 1.8 million pounds of salt and minerals have been dissolved since last October and in which two whale sharks — the world's largest fish — swim, displaying themselves to visitors through acrylic walls that are two feet thick.  A stainless steel "commissary" behind the scenes holds 20,000 pounds of frozen food at minus 20 degrees Fahrenheit.

This aquarium is also somewhat unusual in its origins: it is not created by a municipality, or a society of subscribers like those that founded the earliest public zoos.  It is almost completely the creation of a single man, Bernard Marcus, co-founder of the Home Depot, as a "gift" to the people of the city in which his company began.  He and his wife, Billi, donated $250 million of the $290 million cost.

. . .

(p. B7) The aquarium has been an overwhelming popular success. Even with admission prices of $22.75 for adults ($17 for children), demand has been so great that the building is often sold out.  Tickets come with timed entrances, and 290,000 annual passes, costing almost $60 for adults, were purchased before their sale was stopped in January.  A million visitors have come since the opening.

 

For the full story, see:

EDWARD ROTHSTEIN.  "Aquarium Review | The Georgia Aquarium A Hundred Thousand Fish, Behind a Pane 2 Feet Thick."  The New York Times (Thurs., March 23, 2006):  B1 & B7.

(Note: ellipses added.)





June 25, 2006

Illegal Immigration Reduces Wages for High School Dropouts by Only 3.6%


ImmigrantEffectOnWages.jpg  Source of graphic:  online version of the NYT article cited below.

 

As Congress debates an overhaul of the nation's immigration laws, several economists and news media pundits have sounded the alarm, contending that illegal immigrants are causing harm to Americans in the competition for jobs.

Yet a more careful examination of the economic data suggests that the argument is, at the very least, overstated.  There is scant evidence that illegal immigrants have caused any significant damage to the wages of American workers.

The number that has been getting the most attention lately was produced by George J. Borjas and Lawrence F. Katz, two Harvard economists, in a paper published last year.  They estimated that the wave of illegal Mexican immigrants who arrived from 1980 to 2000 had reduced the wages of high school dropouts in the United States by 8.2 percent. But the economists acknowledge that the number does not consider other economic forces, such as the fact that certain businesses would not exist in the United States without cheap immigrant labor. If it had accounted for such things, immigration's impact would be likely to look less than half as big.

. . .

. . . , as businesses and other economic agents have adjusted to immigration, they have made changes that have muted much of immigration's impact on American workers.

For instance, the availability of foreign workers at low wages in the Nebraska poultry industry made companies realize that they had the personnel to expand.  So they invested in new equipment, generating jobs that would not otherwise be there.  In California's strawberry patches, illegal immigrants are not competing against native workers; they are competing against pickers in Michoacán, Mexico.  If the immigrant pickers did not come north across the border, the strawberries would.

"Immigrants come in and the industries that use this type of labor grow," said David Card, an economist at the University of California, Berkeley.  "Taking all into account, the effects of immigration are much, much lower."

In a study published last year that compared cities that have lots of less educated immigrants with cities that have very few, Mr. Card found no wage differences that could be attributed to the presence of immigrants.

. . .

When Mr. Borjas and Mr. Katz assumed that businesses reacted to the extra workers with a corresponding increase in investment — as has happened in Nebraska — their estimate of the decline in wages of high school dropouts attributed to illegal immigrants was shaved to 4.8 percent. And they have since downgraded that number, acknowledging that the original analysis used some statistically flimsy data.

Assuming a jump in capital investment, they found that the surge in illegal immigration reduced the wages of high school dropouts by just 3.6 percent.

 

For the full commentary, see:

EDUARDO PORTER.  "ECONOMIC VIEW; Cost of Illegal Immigration May Be Less Than Meets the Eye."  The New York Times, Section 3  (Sunday, April 16, 2006):  3.




June 24, 2006

Increases in Demand for Online Video, Stabilize Prices for Fiber-Optics Lines


FiberOpticPricing.gif Source of graphic:  online version of WSJ article cited below.

 

(p. B1)  At long last, the pipes are starting to fill up.

For years, the fiber-optic communications industry has been awash in spare capacity that sent prices for data transmission plunging.  Now, thanks to continued growth in Internet traffic, demand is beginning to catch up with supply in many areas of the active global network.

Still, plenty of inactive fiber-optic lines remain -- the majority of the lines put into the ground or underwater have gone unused for years and can be activated on short notice and relatively inexpensively.  That means the glut has not come to a definitive end and consumer prices are unlikely to rise.  But at the moment, prices for sending data traffic at least appear to be stabilizing, providing a welcome reprieve for companies that operate the so-called backbone of the world's telecommunications infrastructure.

. . .

What's behind the increased demand for network capacity?  Industry executives and Prof. Odlyzko say video sent via the Internet is a key driver.  That includes the increasing distribution of movies online, many sent illegally.  On local (p. B4) phone networks that reach into most homes and offices there has never been excess capacity, and carriers like Verizon Communications Inc. are spending billions to beef up local connections to handle tasks like video.

. . .

Level 3 Chief Executive James Crowe admits "our crystal ball got cracked pretty badly there" during the tech boom, but says on Level 3's network now "there's every sign that inventory that was up on the shelf is being drawn down and in some areas even exhausted."

 

 

For the full story, see:

MARK HEINZL and SHAWN YOUNG.  "With Rising Internet Traffic, Spare Fiber-Optic Lines Fill Up."   The Wall Street Journal  (Thurs., April 27, 2006):  B1 & B4. 




June 23, 2006

In China Too, Special Interest Groups Lobby Against Free Markets


RisingForeignInvestmentInChina.gif Source of graphic:  online version of WSJ article cited below.

 

(p. A1)  BEIJING -- When Chinese President Hu Jintao visits the U.S. in mid-April, he is sure to field tough questions about Beijing's trade and economic policies amid a wave of rising protectionism.  But he also is grappling with a similar backlash at home.

Amid one of the longest and fastest growth streaks of any modern economy, China is wrestling with concerns from a rising wealth gap to corruption to environmental damage.  But the latest uproar has turned on foreigners, targeting the many outside investors that have piled into China and prospered -- even while fueling much of the country's growth.

. . .

(p. A8)  In some ways, the 63-year-old Mr. Hu faces a more complex situation than his predecessors, as China becomes more like the U.S., with greater tolerance of dissenting views and organized interest groups.  Resistance to some market-oriented changes is mostly driven by special interests such as disenfranchised farmers, private businessmen and ministries trying to hold on to their powers.  At the national legislature's March meeting, lobbying by interest groups picked up markedly.

 

For the full story, see:

KATHY CHEN.  "Amid Tension With U.S., China Faces Protectionist Surge at Home."  The Wall Street Journal  (Fri., March 31, 2006):   A1 & A8.




June 22, 2006

Precariousness: In France it is Sought and it is Feared


Coombs and VanderHam on the April 3, 2006 extreme ski run, in which they both died.  Source of caption information, and of photo:  online version of the first NYT article cited below.

 

Some seem to seek risk:

(p. A1)  ''La Grave goes from tranquil to frightening and mad, and it's so exhilarating to be in those moods,'' Mrs. Coombs said in a telephone interview last week.  Her husband, she said, ''never found anything more perfect.''

Last month, Mr. Coombs slipped off a cliff and fell 490 feet to his death.  He was 48. He was trying to rescue Chad VanderHam, his 31-year-old protégé and skiing partner from the United States.  Mr. VanderHam had gone over the same cliff moments earlier.  He also died.

Their accident, during a recreational outing, has focused attention on extreme skiing and on this remote destination, high in the Alps about 50 miles east of Grenoble.

For the full story, see:

NATHANIEL VINTON.  "Skiing Beyond Safety's Edge Once Too Often."  The New York Times (Wednesday, May 17, 2006):   A1 & C23.

 

Others seem to fear risk:

PARIS, April 8 - Standing amid the chaos of the protests here this week, Omar Sylla, 22, tried to explain why the French are so angry about what seems to many people like such a small thing: the French government's attempt to loosen labor laws a bit by allowing employers the right to fire young workers without cause during a trial period on the job.

Even after President Jacques Chirac promised to shorten the period to one year from two, the protests continued, and French students and unions have vowed to keep demonstrating until the law is repealed.

''We need less precariousness, not more,'' said Mr. Sylla, the son of immigrants from Ivory Coast, who still lives with his parents in a government-subsidized apartment in a working-class suburb of Paris.

Mr. Sylla said he had searched for years for a job before finding work about a month ago as a baggage handler at Charles de Gaulle International Airport.  Even then, he said, he only got the job because his sister works at the airport and pulled strings on his behalf.

For the full story, see:

CRAIG S. SMITH. "French Unrest Reflects Old Faith in Quasi-Socialist Ideals." The New York Times, Section 1  (Sunday, April 9, 2006):   8.

 

Economists have long puzzled at how the same person can both buy insurance and gamble in a casino.  The first seems an act of risk-aversion, and the second of risk-seeking.  (Milton Friedman, and others, have tried to explain the paradox.)

But I am puzzled by something else.  When risks are taken, why are they so often taken in arenas such as rioting in the streets, or extreme skiing, where they achieve no noble purpose?  Whatever risks one is going to take, why not take them in the arena of innovation and entrepreneurship, where the potential benefits to the innovator and to human progress, are huge?

 




June 21, 2006

Economic Efficiency Arguments Mattered in Clearing Whirlpool to Acquire Maytag


A few weeks ago, the Justice Department cleared Whirlpool's $1.7 billion acquisition of Maytag even though the new entity would have a dominating share of the marketplace, controlling about three-quarters of the market for some home appliances.

The department justified its decision by a combination of evidence and law.  That included confidential commercial information that the department says it cannot make public; a very broad definition of the marketplace to include foreign companies, some of which have yet to make a bigger push in the United States; and an expansive reading of the economic efficiency defense for permitting such deals.

The decision demoralized the career ranks of the antitrust division at the Justice Department, officials there have said.  And it left private antitrust practitioners in Washington wondering whether, in light of the decision and the flurry of corporate dealers, there are could really be any mergers that this administration would challenge.

 

For the full commentary, see:

Stephen Labaton.  "STREET SCENE: LEGAL BEAT; New View of Antitrust Law: See No Evil, Hear No Evil."  The New York Times (Friday, May 5, 2006):   C5.

 




June 20, 2006

Container Ships Revolutionized Shipment of Goods


Source of book image:  http://www.pupress.princeton.edu/titles/8131.html

 

Virginia Postrel's periodic column in the New York Times over the past six years, was a beacon of optimism, clarity and fresh insights on how the economy works.  The excerpt below is from her last column.  Presumably she is moving on to other worthy challenges, but her column in the Times will be missed.

 

''Low transport costs help make it economically sensible for a factory in China to produce Barbie dolls with Japanese hair, Taiwanese plastics and American colorants, and ship them off to eager girls all over the world,'' writes Marc Levinson in the new book ''The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger'' (Princeton University Press).

For consumers, this results in lower prices and more variety.  ''People now just take it for granted that they have access to an enormous selection of goods from all over the world,'' Mr. Levinson said in an interview.  That selection, he said, ''was made possible by this technological change.''

. . .  

The idea of containerization was simple:  to move trailer-size loads of goods seamlessly among trucks, trains and ships, without breaking bulk.  But turning that idea into real-life business practice required many additional innovations.

New equipment, from dockside cranes to the containers themselves, had to be developed.  Carriers and shippers had to settle on standard container sizes.  Ports had to strengthen their wharves, create connections to rail lines and highways, build places to store containers and strike new deals with their unions.

Along the way, even the most foresighted people made mistakes and lost millions.  Malcom McLean himself bought fast fuel-guzzling ships right before the 1973 oil crisis and slow, economical ships just as fuel prices turned down.  ''Almost everybody who was concerned with containerization in any way at some point got the story wrong,'' Mr. Levinson said.

It is a classic tale of trial and error, and of creative destruction.

 

For the full commentary, see: 

Virginia Postrel.  "ECONOMIC SCENE; The Container That Changed the World."  The New York Times  (Thursday, March 23, 2006):  C3.

 

The full reference to Levinson's book is:

Levinson, Marc.  The Box:  How the Shipping Container Made the World Smaller and the World Economy Bigger.  Princeton University Press, 2006.

 




June 19, 2006

"giving individual schools more autonomy"


(p. A1)  SAN DIEGO -- When San Diego's school district began overhauling its science-education curriculum five years ago, it wanted to raise the performance of minority, low-income and immigrant students.

But parents in middle- and upper-income areas, where many students were already doing well, rebelled against the new curriculum, and a course called Active Physics in particular.  They called it watered-down science, too skimpy on math.

A resistance movement took hold.  Some teachers refused to use the new textbooks, which are peppered with cartoons.  They gathered up phased-out texts to use on the sly.  As controversy over the issue escalated, it played a part in an election in which the majority of the school board was replaced.  Now, further curriculum changes are under consideration.

. . .

(p. A11)  Mitz Lee, a parent activist at Scripps Ranch High, also a high-achieving school, continued quietly organizing opposition and eventually made it a cornerstone of her 2004 campaign for a seat on the school board.

Opposition to the program remained sharp among some veteran science teachers.  Tom Deets, who teaches at Patrick Henry High, argued that freshman who hadn't passed eighth-grade algebra weren't ready for physics.  Rather than teach the new course, he switched to math until the district offered him an administrative job.

Aiming to keep their hands on alternative teaching materials, an active underground sprang up, with teachers squirreling away old physics textbooks to make sure the district couldn't collect them.  "At one time, I probably had 400 books," says Hal Cox, a retired submarine commander who teaches physics at Hoover High School.  "I put them in lockers, everywhere I could find."

The opposition came to a head with the school-board elections of 2004, when three critics of the district's overall curriculum changes, including those in math and reading, were elected to its five-member school board.  The winners included Ms. Lee, who had campaigned for an end to "fuzzy" science and was elected by the widest margin of the new board members.  She has lately been pushing for giving individual schools more autonomy on course choice.  "I don't want any more central mandates," Ms. Lee says.

  

For the full story, see:

ROBERT TOMSHO.  "Textbook Battle; Top High Schools Fight New Science As Overly Simple; San Diego's Physics Overhaul Makes Classes Accessible, Spurs Parental Backlash; Test Scores Barely Budge."  The Wall Street Journal  (Thurs., April 13, 2006):   A1 & A11.




June 18, 2006

Virginia Senator George Allen has "a libertarian sense"


Virginia Senator George F. Allen.  Source of photo:  http://en.wikipedia.org/wiki/Image:George_Allen_official_portrait.jpg

 

Mr. Allen says he has "a libertarian sense."  He describes himself as more in sync with Thomas Jefferson and Ronald Reagan than with George Bush.  "I'm one who dislikes limits.  I don't like restrictions.  I like freedom.  I like liberty.  Unless you're harming someone else, you leave people free."

 

For the full interview, see:

FRED BARNES.  "THE WEEKEND INTERVIEW with George Allen; The Virginian."  The Wall Street Journal (Sat., April 22, 2006):  A8.




June 17, 2006

Hydrocarbons Exist in Abundance


Source of book image:  http://www.amazon.ca/exec/obidos/tg/detail/-/books/0521679796/reviews/702-4209854-6789623

 

In a useful commentary, Holman Jenkins quotes Exxon CEO Rex Tillerson:

"It is true that the age of 'easy oil' is over.  What many fail to realize is that it has been over for decades.  Our industry constantly operates at the edge of technical possibility, constantly developing and applying new technologies to make those possibilities a reality," he told a group in Washington last week.

Doubters might consult a new book by energy economist Mark Jaccard, entitled "Sustainable Fossil Fuels," winner of Canada's Donner Prize.  He argues that hydrocarbons, in the form of oil, gas and coal, exist in such abundance, the challenge of technology is how to burn them more cleanly, not how to survive without them.

 

For the full commentary, see:

HOLMAN W. JENKINS, JR.  "BUSINESS WORLD; On Gasoline, Voters Get the Politicians They Deserve."  The Wall Street Journal (Weds., May 10, 2006):  A19.

 

The full reference to the Jaccard book mentioned by Holman, is:

Jaccard, Mark.  Sustainable Fossil Fuels:  The Unusual Suspect in the Quest for Clean and Enduring Energy.  Cambridge University Press, 2006.

 

 




June 16, 2006

R. Glenn Hubbard Coins a Phrase: "Nondestructive Creation"


 

In much of the press speculation right before Bush named the replacement for Alan Greenspan as head of the Fed, three names were usually mentioned as frontrunners:  Ben Bernanke, Martin Feldstein, and R. Glenn Hubbard.  Based on various speeches and writings, I had reason to believe that Feldstein and Hubbard understood and appreciated the importance of Schumpeter's process of creative detruction.  So I hoped that Bush would pick either Feldstein or Hubbard.  Alas, I have found no evidence that Bernanke has ever mentioned creative destruction (but maybe I just haven't dug hard enough). 

In the passage below, Hubbard suggests that much job creation, occurs through nondestructive creation, rather than through creative desruction.  An interesting claim, that may be true.  But I doubt it.  Some evidence would be nice.

 

Much of the current policy discussion of the ups and downs of the labor market harkens back to entrepreneurship as "creative destruction."  This conception has fueled policy anxiety over job loss and global competition.  But so much of productivity-enhancing entrepreneurship is really about "nondestructive creation," in which new products and ideas generate growth.

There are policy lessons, too, in the observation that it is not simply opportunity (e.g., IT) but the seizing of opportunity (e.g., new types of firms or business practices) that enhances productivity.  Competition can promote entrepreneurial innovation in a way that raises productivity growth:  Foreign competition has long been a source of productivity-enhancing innovation.  In the domestic economy, policy can enhance or limit competition by its stance toward new business formation and employment. The U.S. has enviably low regulatory costs of business formation, while, by contrast, entry restrictions limit business formation in a number of other competitor countries. Labor market policy matters, too:  Recent OECD research finds a strong negative correlation between a country's technology growth-rate and the strength of its employment protection laws.

. . .

Over the past quarter-century, average U.S. labor productivity has risen by two-thirds.  This enormous increase in workers' ability to produce has not come at the expense of jobs.  The 40 million new jobs created over the same period reveal the secret of an entrepreneurial economy:  Successfully seizing business opportunities can raise living standards and employment.  For this reason, entrepreneurship--the motor that drives the labor market--must be a focus of study in business education and policy making.

 

For the full commentary, see:

R. Glenn Hubbard.  "'Nondestructive Creation'."  The Wall Street Journal  (Wednesday, September 7, 2005):  A16.

 

P.S.  Mark Wohar alerted me to an amusing music video, satarizing Hubbard's possible ambitions to become chair of the Fed.  I later saw the video receive publicity on CNBC's Power Lunch program, where the video's student-creators at the Columbia Business School were feted.  The video may be found at:  http://www0.gsb.columbia.edu/everybreath/

 




June 15, 2006

An Inconvenient Truth About "An Inconvenient Truth"



   Al Gore.  Source of photo:  http://in.news.yahoo.com/051008/137/60gzj.html

 

(p. A25) If Al Gore's new movie weren't titled ''An Inconvenient Truth,'' I wouldn't have quite so many problems with it.

. . .

Gore shows the obligatory pictures of windmills and other alternative sources of energy.  But he ignores nuclear power plants, which don't spew carbon dioxide and currently produce far more electricity than all ecologically fashionable sources combined.

A few environmentalists, like Patrick Moore, a founder of Greenpeace, have recognized that their movement is making a mistake in continuing to demonize nuclear power.  Balanced against the risks of global warming, nukes suddenly look good -- or at least deserve to be considered rationally.  Gore had a rare chance to reshape the debate, because a documentary about global warming attracts just the sort of person who marches in anti-nuke demonstrations.

Gore could have dared, once he enticed the faithful into the theater, to challenge them with an inconvenient truth or two.  But that would have been a different movie.


For the full commentary, see:

JOHN TIERNEY.  "Gore Pulls His Punches."  The New York Times  (Tuesday, May 23, 2006):    A25.





June 14, 2006

Tech Advances, Are Not Always Advances in All Respects


Advances in technology are not uniform along all dimensions.  The new technology is often better overall, but may actually represent steps backward along some dimensions.  For example I used to use a word-processor called "Wordmarc" that permitted me to go to a page by simply typing in  the page number of the page, which I still wish I could do with large documents in Microsoft Word.  And the first email system we used in the college, from Wordperfect, I think, allowed you to retrieve an email, if you had second thoughts about it, before it was opened by the intended recipient. 

Here are a couple of more examples:

 

(p. A8)  In the age of film, when the button was pressed, the picture was captured in an instant. In the vast majority of digital cameras, there's a delay that can last as long as two seconds.

To some users, it's another example of how advanced-technology products often lack important virtues of their predecessors.  Cellphones often crackle with static that Ma Bell eliminated in rotary phones many years ago; computer printers need endless adjusting before they can print an address on an envelope -- a task that typewriters took in stride.

"I think we've really gone backwards on these technologies," complains Marcia Gregg, a mother of two from Boston who has a digital camera but still fondly recalls her Pentax from the 1980s that "was instantaneous and made a really cool sound" when its motor drive was running.

 

For the full article, see: 

WILLIAM M. BULKELEY.  "Why Digital Cameras Often Shoot the Pony But Get Only the Tail The Answer Is 'Shutter Lag,' The Bane of Shutterbugs; Photo Ops Become Oops."  The Wall Street Journal  (Fri., May 26, 2006):  A1 & A8. 




June 13, 2006

Becoming Rich by "playing the tuba on the day it rained gold"


MungerCharlie2.jpg Charlie Munger. Sourge of image: online version of the NYT article cited below.

 

CHARLES T. MUNGER, Warren E. Buffett's partner and one of the smarter thinkers on the planet, had few kind words for money managers at the recent annual meeting of his company, Wesco Financial.  

"I regard the amount of brainpower going into money management as a national scandal," he said. He later recalled a story told when he was a child in Texas: "When some idiot would get rich, they'd say, 'Well, old Charlie was out in the field playing the big brass tuba on the day it rained gold.' A lot of people have become rich lately who were playing the tuba on the day it rained gold."

Lately, though, it has been raining lead on the tuba players.

 

For the full commentary, see:

JENNY ANDERSON. "Insider; Hey, You Have a Problem Paying Alpha Fees and Getting Beta Returns?" The New York Times (Fri., May 26, 2006): C7.




June 12, 2006

Prices Can Be Lower When Few Firms in Industry


TabarrokAlex.jpg   Alex Tabarrok.  Source of image:  http://www.gmu.edu/centers/publicchoice/faculty.html

 

Price gouging can work only if firms have monopoly power -- so if gouging is the explanation for higher premiums, we would expect to see higher premiums in states with less competition. My student, Amanda Agan, and I tested this hypothesis in a study released two days ago by the Manhattan Institute. Contrary to the gouging hypothesis, we found that a 10% increase in industry concentration reduces premiums by $2,200. The result makes sense if we remember that, to increase market share, firms don't raise prices but rather lower them. Wal-Mart has grown into the nation's dominant retailer by lowering prices, not raising them.

 

For the full commentary, see: 

ALEX TABARROK. "Rule of Law; Price Gouging Is Bad Medicine." The Wall Street Journal (Sat., May 20, 2006):  A9.

 




June 11, 2006

We Should Reward Those Who Take Risks to Produce What We Need


On the Democratic and Republican-in-Name-Only side, we have the idea of "windfall profits taxes" on energy companies. These would presumably mandate a desirable level of corporate profits in one sector on which we depend. (And how long do you think it would apply to only one industry?) If profits exceeded that level, they would be taxed.

As far as I can tell, there is no plan to give a rebate to the companies if their profits have fallen below that desired level.

In other words, the plan is to send this message to energy-company investors, including retirees and pension funds: "Yes, we are in a situation of oil and gas shortage. Yes, we want you to risk billions of dollars exploring for and producing and refining oil and processing gas. But if you succeed for any reason, and even if no price-fixing is found, we will punish you for it."

This is what I would call confusion. You usually get more of something by rewarding people for doing it or producing it, not by punishing them for doing it or producing it.

Yes, the human instinct of envy demands that we get some licks in against people who are doing well, even if we are doing only slightly less well ourselves. But economies built on the politics of envy are rarely successful. Ask the Cambodians or the Chinese or the Russians before they went capitalist.

 

For the full commentary, see:

BEN STEIN.  "Everybody's Business; A Quick Course in the Economics of Confusion."  The New York Times  (Sun., May 28, 2006):




June 10, 2006

"My Merit Is My Caste; What Is Yours?"


NEW DELHI, May 22 — The problem of caste prejudice here is as ancient as the Hindu texts. The efforts to redress it date from the formation of modern India nearly 59 years ago. Today — as India enjoys awesome rates of economic progress and confronts the challenge of spreading the benefits to its needy majority — the nation faces a polarizing totem of public policy: a government plan to extend college admission quotas to certain "backward" castes.

Affirmative action is in some ways an even more emotional issue in India than in the United States. In recent weeks, a proposal to extend quotas for admission to some of the country's flagship, federally financed universities has caused fresh turmoil.

Protests — particularly by medical students who say merit should be the only basis for admission to India's intensely competitive medical schools — have spread across the country and, here in the capital, hobbled public health services. Advocates and opponents of the measure have exchanged often ugly rants.

. . .

Medical students have been particularly outraged because the plan would further restrict the limited number of seats. Medical education in India begins with a five-year undergraduate program, and the proposal could affect students' chances of completing their training.

The central lawn of the All India Institute of Medical Sciences, the pre-eminent public hospital, was occupied Friday by medical students on the fifth day of a strike that began last week and continued on Monday. "My merit is my caste. What is yours?" read one T-shirt.

. . .

The opponents say set-asides would diminish the quality of India's best universities and divide students along caste lines.

"Why after 55 years are we still thinking in terms of caste-based reservation?" demanded Poojan Aggarwal, a third-year student at Safdarjung Medical College here. "We should talk now of total meritocracy. We know on this issue none of the political parties will support us."

 

For the full story, see:

SOMINI SENGUPTA. "Quotas to Aid India's Poor vs. Push for Meritocracy."  The New York Times  (Tues., May 23, 2006):  A3.

(Note: ellipses added.)





June 9, 2006

Leapfrog Competition in Video Game Machines


  Source of book image: http://www.amazon.com/gp/product/customer-reviews/0385479492/ref=cm_cr_dp_2_1/104-0758544-2447945?%5Fencoding=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

 

Co-opetition is a readable book with some plausible discussion of interesting cases.  The central message is that business is not always a zero-sum game (in contrast, say, to competitive sports).  One implication is that the firm's complementary relationships with other firms, may deserve as much attention as its competitive relationships. 

One qualitfication:  I think the book too much emphasizes game theory as the sine qua non source of the book's insights.  About the only game theory you really need to understand 99% of the book's analysis is the concept of the "zero-sum game."

In a couple of places, the book discusses "leapfrog" competiton in the video game industry:

 

(p. 102)   By mid-1995 the price of the 3DO machine was down to $400 (with $150 worth of software thrown in).  Cumulative sales passed half a million.  Progress, surely, but as of early 1996, 3DO's future remains uncertain. It no longer has the 32-bit game to itself.  Sega is shipping its 32-bit Saturn machine at $400.  Sony has launched its 32-bit PlayStation at $300.  Looking to leapfrog them all is Nintendo, whose 64-bit Ultra machine is due out in April 1996 at a price under $250.  

(p. 114)  Could a challenger hope to breach Nintendo's virtuous circle?  Not once the circle had got rolling.  Forget about alternatives--TV,  books, sports.  From a kid's perspective, there were no good alternatives to a video game.  The only real threat came from alternative video game systems.  Here, software was key, as always.  With a huge library of Nintendo titles to choose from, why would anyone buy another machine?  Perhaps a challenger could take successful Nintendo games over to its platform and then offer its own library.  But the exclusivity clause killed that option.  No game could be taken to another platform for a two-year period, by which time the game was passe.  A challenger would have had to start from scratch.  While large profits and shortages normally invite entry, the virtuous circle made competing in Nintendo's game hopeless.  The only hope was to leapfrog Nintendo with a new technology; that's what Sega ultimately did, as we'll see in the Scope chapter.

 

Source: 

Brandenburger, Adam M., and Barry J. Nalebuff.  Co-Opetition;  a Revolution Mindset That Combines Competition and Cooperation; the Game Theory Strategy That's Changing the Game of Business,  1st ed.  Currency, 1996.

 

 




June 8, 2006

Doha Tariff Cuts Would Save Global Economy About $100 Billion; France Objects


 

FoodExportsAndTariffs.gif  Source of graphic:  online version of the WSJ article cited below.

 

(p. A1)  The so-called Doha round of talks, which began in 2001, were designed to boost developing nations; among other things, they want lower barriers to their agricultural exports.  France has vowed to veto any deal that doesn't protect its farmers.  A pivotal missed deadline April 30 has led to predictions the talks could die by summer if countries including France don't change their stance.

The standoff shows how cultural and emotional factors can combine with politics to stifle free-trade goals that most economists believe would provide a net benefit to the world.  The tariff cuts envisioned by Doha would not only help developing countries sell their minerals and food products, but would also lower barriers to the industrialized world's exports of goods and services.  The World Bank calculates that Doha would boost the global economy by around $100 billion.

Overall, France itself likely would be a major economic gainer from a global (p. A10) deal.  Though it's the world's second-largest agriculture exporter after the U.S., farming accounts for just 2.5% of the French economy.  World-class manufacturing and service companies, such as car maker Renault SA and insurer AXA SA, are larger engines of the French economy.  France could gain more income than it would lose in opening its agricultural markets to budding farm superpowers like Brazil.

Even in agriculture, France can be a formidable competitor, notably in products such as wine and cheese.  Its brand is well-known the world over.  And its farms are increasingly home to capital-intensive agribusiness companies, not just small family producers.  Most of the $11.5 billion in European Union subsidies that France receives each year goes to the largest, most commercially viable farms.

WTO chief Pascal Lamy, a Frenchman, says he doesn't understand France's position.  "As an efficient farm producer, the strategy should be to reduce subsidies and prices, because others won't be able to compete with you," he said in a recent interview.

. . .

The French rural tradition, however, is changing.  Between 1993 and 2004, the number of arable farms fell by nearly a third.  Wide swaths of neglected land are now home to unsightly scrub, and the farms people see as they drive down France's immaculate highways are often parts of major business enterprises.  Oxfam says as much as 60% of subsidies went to the richest 15% of French farmers in 2004, the latest figures available.

Oxfam believes the EU's tariffs and farm subsidies, which total over €40 billion annually, are harmful to the world's poorest countries.  High customs duties keep products from poor nations out of the wealthy EU market.  At the same time, EU farmers overproduction is dumped cheaply abroad, driving down global prices and harming farmers in the developing world.

 

For the full story, see:

SCOTT MILLER.  "Food Fight; French Resistance To Trade Accord Has Cultural Roots; WTO Talks Promise Benefits But Farmers Retain Hold On the Nation's Stomach; 'Politicians Are Frightened'."  The Wall Street Journal  (Tues., May 16, 2006):  A1 & A10.

 




June 7, 2006

Doctor Overhead Increased 15 - 20% Due to Insurance Delays in Paying Claims


MedInsuranceDelays.jpg  Source of the graphic:  the online version of the NYT article cited below.

 

What is noteworthy in the table above is not the differences in delays in paying.  What is noteworthy is that the fastest payer still takes a month to pay.   

(p. C1)  Few things rankle a doctor more than an insurance company's saying it cannot find a claim for medical services.  Particularly when there is even a signed return receipt to document delivery of the bill.

"We actually had the little green card to show who signed for the dang thing," said Elizabeth Wertz, chief executive of the Pediatric Alliance, a large group of Pittsburgh doctors.  "We sent it by certified mail. The insurance company said they didn't have it."

The claim was for several thousand dollars, according to Ms. Wertz, who declined to identify the company, a large regional insurer, for fear of making it more difficult to wrangle payments.  It is a problem known to many doctors as they struggle to balance the rising cost of providing patient care with what they see as a reluctance by some powerful insurers to pay promptly.

Pediatric Alliance's 37 doctors are among the 7,000 physicians, nurse practitioners and other health care providers around the country who are clients of the claims-processing company Athenahealth, which plans today to present a rare warts-and-all look at how well — or not — the nation's seven biggest health insurers pay their bills.

Not well enough, in many cases, according to the data and to experts who say the survey provides the most comprehensive look yet at the state of accounts payable vs. accounts receivable in the nation's health care system.

Tardiness or refusal to pay what doctors consider legitimate medical claims may add as much as 15 to 20 percent in overhead costs for physicians, forcing them to pursue those claims or pass along the costs to other patients, according to Jack Lewin, a family doctor who is chief executive of the California Medical Association, a professional group of 35,000 physicians.

. . .

(p. C10)  Athenahealth, which says it collected $1.8 billion on behalf of its physician clients last year, is among the biggest of several thousand companies that help doctors and hospitals get paid by editing their claims and helping them to deal with difficult cases.  Health care providers who can afford such services say they have become a necessary part of doing business.

In the case of Pediatric Alliance, with 37 pediatricians in a dozen offices in and around Pittsburgh, the doctors' group spends at least $250,000 a year on salaries for eight billing clerks who handle claims and pursue money owed by insurers and patients.  That is on top of salaries in Pediatric Alliance's offices for staff members to verify the patient's coverage and collect co-payments, plus paying an outside company to check for errors before the bills go out.

Ms. Wertz, the alliance's chief executive, says some insurers' telephone call centers limit claims-related issues to 10 per call.  "That's incredibly inefficient," she said.  "We see thousands of patients.  Our people have to sit on phone 30 minutes to get a live person."

. . .

"I would much rather have my staff talking to patients than talking to insurance companies," Dr. Katz said.

 

For the full story, see:

MILT FREUDENHEIM.  "The Check Is Not in the Mail."  The New York Times  (Thurs., May 25, 2006):   C1 & C6. 

(Note:  The "Dr. Katz" mentioned is "Dr. Molly Katz, a Cincinnati gynecologist and former president of the Ohio Medical Association.")




June 6, 2006

U.S. Government "spending $3,500 to find out if we handled $1 correctly"


Indian records buried in a limestone cave near Lenexa, Kansas.  The Omaha-World Herald identifies the unhappy gentleman as "Ross Swimmer, a special assistant with the Interieor Department" (see source cited for excerpt below).  The Olympian Online of Olympia, Washington identifies him as "John Allshouse, assistant regional administrator for the National Archives" (see source cited for image).    Source of image:  http://159.54.227.3/apps/pbcs.dll/article?AID=/20060507/NEWS/60507029

 

LENEXA, Kan. (AP) - Seventy feet beneath the prairie, the government is filling limestone caverns - protected by guards and a bomb-sniffing dog - with truckloads of American Indians' financial and cultural records.

What is ground zero for an accounting that will take seven years and cost $335 million owes its existence to a bitter class-action lawsuit brought against the Interior Department a decade ago.  Still, it's only a short version of the historical accounting that Indians demanded but no longer want, because they do not think it can be done properly.

The Indians say the government mismanaged a trust in their names for 120 years and now owes them tens of billions of dollars.

. . .  

Concerns about the how the trust accounts are managed are almost as old as the trust itself.

In 1915, the Joint Commission of Congress on Indian Funds warned of "fraud, corruption and institutional incompetence almost beyond the possibility of comprehension."  In 1928, the Interior Department found Indian trust data unreliable and almost useless.  Dozens of other scathing reports followed.

Finally, in 1994, Congress demanded that the department fulfill an obligation to account for money received and disbursed.  A year later when account statements still had not been reconciled, Elouise Cobell of the Blackfeet Indian tribe in Montana joined with the Boulder, Colo.-based Native American Rights Fund and others in suing.

"Fractionalization" of accounts is a major obstacle in managing the trust.  As ownership of the 160-acre and smaller land parcels transferred from generation to generation, proceeds from the trust accounts had to be divided among more and more descendants.  Department officials say 90 percent of the transactions are for less than $100.

"In every category it has cost us more to find the errors than the total amount of the errors we found," said departing Interior Secretary Gale Norton.  "When you consider that we have millions of transactions under $1, you're spending $3,500 to find out if we handled $1 correctly."

 

For the full story see:

"Paper Trail Fills Massive Cave."   Omaha World-Herald  (Sun., May 21, 2006):  10A.

 

(Note, the online version, has a different title and a day-earlier publication date:   

"Counting Up What Indians Are Owed."  Omaha World-Hearald  (Sat., May 20, 2006).)




June 5, 2006

Leonard Read's Comparative Advantage



When I was a student at Wabash College, Ben Rogge arranged for Liberty Fund to finance my attendance at a couple of weekend seminars at the Foundation for Economic Education in New York.  The seminars were taught by Rogge, Edmund Opitz, and Leonard Read.  I remember upon returning to Wabash after one of the seminars, Rogge asking me what I thought of Read.  I said something along the lines that I didn't much like his presentation style.  I remember saying that he expressed himself in a way that I associated with used car salesmen.  (So unlike Rogge's low-key, witty, intensity.)

My memory is that Rogge did not respond directly to my comment, but (perhaps with a hint of a smile) mentioned that among many audiences, especially in business, Leonard Read was an extremely effective speaker. 

I do not doubt that, and I also do not doubt that Read belongs in the pantheon of free market defenders.  His essay "I, Pencil" is by itself sufficient for admission.  But he did more than write and speak; he nurtured and called attention to others who had wisdom to offer.  For one small example, many of us learned about Albert Jay Nock's "The Remnant" through Leonard Read's The Freeman.

I believe that the last time I saw Read was at the memorial service at Wabash College for Ben Rogge.  I ended up sitting near Read and Opitz, who had flown in from New York.  I introduced myself as a Rogge student who had attended FEE seminars. 

I remember Read looking very sad, and depressed, and almost lost.  I also remember that he expressed some mild indignation that more of Rogge's students hadn't made it back for the memorial service. 

But as a serious reader of "The Remnant," Read on further reflection probably realized that the attendance at a memorial service is not a good measure of a teacher's influence on his students.

Apparently one student, whom Read himself influenced, was Charles Koch:


(p. A8) Whereas the bookshelves of most of America's leading CEOs are stocked with pop corporate management and "how to succeed" books, Mr. Koch's office is a wall-to-wall shrine to writings in classical economics, or, as he calls it, "the science of liberty." The authors who have had the most profound influence on his own political philosophy include F.A. Hayek, Ludwig von Mises, Joseph Schumpeter, Julian Simon, Paul Johnson and Charles Murray.  Mr. Koch says that he experienced an intellectual epiphany in the early 1960s, when he attended a conference on free-market capitalism hosted by the late, great Leonard Read.

 

For the full commentary, see: 

STEPHEN MOORE. "THE WEEKEND INTERVIEW with Charles Koch; Private Enterprise." The Wall Street Journal (Sat., May 6, 2006):  A8.

(Note:  In the quotation above, I have corrected the WSJ's misspelling of Read's last name.)





June 4, 2006

United States Exports More Services, than it Imports (a.k.a. "Outsources")


This month a poll by Zogby International for the Foreign Policy Association found that 71 percent of Americans believed outsourcing was hurting the economy.   It also found that 62 percent of American workers believed the federal government should penalize companies that send work offshore.

Now, however, we can add some actual figures to the overheated debate.  The Government Accountability Office has issued its first review of the data, and one undeniable conclusion to be drawn from it is that outsourcing is not quite the job-destroying tsunami it's been made out to be.  Of the 1.5 million jobs lost last year in ''mass layoffs'' -- that is, when 50 or more workers are let go at once -- less than 1 percent were attributed to overseas relocation; that was a decline from the previous year.

. . .

The data did show that from 1997 to 2002, annual imports of business, technical and professional services increased by $16.3 billion.  However, during that same half-decade, exports of those services increased by $20.5 billion a year.  In 2002 alone, the United States ran a $27 billion trade surplus in business services, the sector in which jobs are most likely to be outsourced.  The G.A.O. correctly stressed that it is impossible to compute exactly how many jobs are lost because of outsourcing, but unless its figures are off by several orders of magnitude, there's no crisis here.

 

For the full commentary, see:

Daniel W. Drezner.  "Where Did All the Jobs Go? Nowhere."  The New York Times  (Weds., September 29, 2004):  A25.




June 3, 2006

Paperwork is 31% of U.S. Health Care Costs


. . . ,  a large part of America's health care spending goes into paperwork.  A 2003 study in The New England Journal of Medicine estimated that administrative costs took 31 cents out of every dollar the United States spent on health care, compared with only 17 cents in Canada.

For the full commentary, see:

PAUL KRUGMAN.  "The Medical Money Pit."   The New York Times   (Friday, April 15, 2005):  A19.

 

Canada may beat the U.S. in this dimension of health care, but they lose in many other important dimensions--for example the wait time to receive 'elective' surgeries.  And anyway, isn't 17 percent still too high?




June 2, 2006

Free Market Philanthropy


KochClharles.gif Charles Koch.  Source of image:  online version of WSJ article cited below.

 

Mr. Koch's latest crusade to spread the ideas of liberty has been his sponsorship of a twice-yearly conference that gathers together many of the most successful American entrepreneurs, from T. Boone Pickens to former Circuit City CEO Rick Sharp.  The objective is to encourage these captains of industry to help fund free-market groups devoted to protecting the fragile infrastructure of liberty.  That task seems especially critical given that so many of the global superrich, like George Soros and Warren Buffett, finance institutions that undermine the very system of capitalism that made their success possible.  Isn't this just the usual rich liberal guilt, I ask.  "No," he says, "I think they simply haven't been sufficiently exposed to the ideas of liberty."

 

For the full commentary, see: 

STEPHEN MOORE.  "THE WEEKEND INTERVIEW with Charles Koch; Private Enterprise."  The Wall Street Journal   (Sat.,  May 6, 2006):  A8.




June 1, 2006

"Everybody wants to be like Bill Gates"


Vietnamese university students hoping to see Bill Gates.  Source of image:  http://www.nytimes.com/2006/04/27/world/asia/27vietnam.html?ex=1303790400&en=255d4d4996b1a9a6&ei=5088&partner=rssnyt&emc=rss

 

HANOI, Vietnam, April 26 — It was Lenin's birthday.  The most important Communist Party meeting in five years was under way. And the star of the show was the world's most famous capitalist, Bill Gates.

The president, the prime minister and the deputy prime minister all excused themselves from the party meeting on Saturday to have their pictures taken with Mr. Gates, who has more star power in Vietnam than any of them.

When people heard he was in town, hundreds climbed trees and pushed through police lines to get a glimpse of him.  He was the subject of the lead article in the next day's newspapers.

This is where Vietnam stands today, moving cautiously toward a new version of communism while the people and their leaders lunge eagerly for the brass ring of capitalist development.

"That was very symbolic," said Le Dang Doanh, an official in the Ministry of Planning, speaking of the reception for Mr. Gates.  "It is a very clear sign of the new mood of society and the people.  Everybody wants to be like Bill Gates."

 

For the full story, see:

SETH MYDANS.  "Communist Vietnam Lunges for Capitalism's Brass Ring."  The New York Times (Thurs., April 27, 2006):  A3.

Note:  the version of the article above corrects an error in the print version that had misidentified the day of Lenin's birth, and Gates visit as a Sunday (it was a Saturday).




HP3D5006CropSmall.jpg






Most Popular Posts









If you value this blog, and want to help support the expenses of hosting and maintaining it, please consider making a donation through PayPal:










The StatCounter number above reports the number of "page loads" since the counter was installed late on 2/26/08. Page loads are defined on the site as "The number of times your page has been visited."


View My Stats