artdiamondblog.com

Source of book image:  http://www.amazon.com/gp/product/0226556638/sr=8-1/qid=1153708722/ref=pd_bbs_1/104-2835260-2878345?ie=UTF8

Deirdre McCloskey's unfashionable,  contrarian and compelling manifesto in favor of what she calls the bourgeois virtues starts with an uncompromising "apology" for how private property, free labor, free trade and prudent calculation are the fount of most ethical good in modern society, not a moral threat to it.

The intelligentsia -- in thrall for centuries to religion and now to socialism -- has for a long time snobbishly despised the bourgeoisie that practices capitalism.  Ms. McCloskey calls such people the "clerisy."  Their values and virtues, like those of the proletariat and the aristocracy, are widely admired.  But almost nobody admires the bourgeoisie.  Yet it was for anti-bourgeois ideologies, she notes, that "the twentieth century paid the butcher's bill."

As Ms. McCloskey explains:  "Anyone who after the twentieth century still thinks that thoroughgoing socialism, nationalism, imperialism, mobilization, central planning, regulation, zoning, price controls, tax policy, labor unions, business cartels, government spending, intrusive policing, adventurism in foreign policy, faith in entangling religion and politics, or most of the other thoroughgoing nineteenth-century proposals for government action are still neat, harmless ideas for improving our lives is not paying attention."  By contrast, she argues, "capitalism has not corrupted our souls.  It has improved them."

For the full review, see:

MATT RIDLEY.  "Capitalism Without Tears; Fashionable thinkers sneer at the free market and its practitioners, but economic liberty may actually be a force for personal goodness."   The Wall Street Journal  (Sat., July 22, 2006):  P10.

(Note:  in the passage above, I took the liberty of correcting a misspelling of "Deirdre.") 

The full citation to the McCloskey book is: 

McCloskey, Deirdre N.  The Bourgeois Virtues:  Ethics for an Age of Commerce. Chicago:  University of Chicago Press, 2006.  (616 pages, $32.50)

  Source of photo:  http://www.nytimes.com/2006/07/27/world/middleeast/27mideast.html?pagewanted=2

The photo of Condi Rice touching her forehead ran on the top of the front page of the New York Times on Thurs., July 27, 2006.  It ran big:  filling over a third of the length of the paper, and over half of the width.  It ran right next to the main headline of the front page:  "CEASE-FIRE TALKS STALL AS FIGHTING RAGES ON 2 FRONTS."

It appears that Condi Rice is discouraged, or has a headache, or is overcome. 

But a great CNN report by Jeanne Moos run on Sat., July 29, shows a dynamic version of the minute during which this snapshot was taken.  It shows that this photo is a split-second moment of Condi Rice brushing hair off of her forehead.

Our usual view of competition is to look at how many competitors there are at a moment in time.  We look at a snapshot.  But to really judge competition we must take Schumpeter seriously and look dynamically at whether there is the possibility of leapfrog competition over time.

In an earlier blog entry, I noted that Ronald Reagan resisted sitting for still photos because he thought that still photos could easily be manipulated to mislead.  Ronald Reagan was right.

(Jeanne Moos's report was entitled "Hairy Talks or Hair in Eyes?" on the CNN web site.  I believe it first ran on 7/28/06, though I saw it replayed in the afternoon of 7/29/06.)

(p. 8)  Would you change places with your grandfather?  Would you want to work 11 brutal hours a day... in yesterday's Bethlehem Steel mill, a Ford Motor Company factory circa 1935?  Not me.  Nor would I change places with my father ... who labored in a whilte-collar sweatshop, at the same company, in the same building, for 41 l-o-n-g years.

A workplace revolution is under way.  No sensible person expects to spend a lifetime in a single corporation anymore.  Some call this shift the "end of corporate responsibility."  I call it ... the Beginning of Renewed Individual Responsibility.  An extraordinary opportunity to take charge of our own lives.

Source of passage:

Peters, Tom.  Re-imagine!  London: DK, 2003.

(Note:  all of the ellipses in the above passage, appear in the original.)

The report described below documents an incredibly high rate of errors in the administration of medications.  Notice that one of the recommended practices is for patients to bring with them to each doctor's visit, a complete listing of all of their medicines.  It reminded me of accompanying my mother and father while my father was being treated for melanoma at one of the top cancer hospitals in the country.  We were shuttled from doctor to doctor.  And at each stop we were asked to give a full account of the medicines that Dad was taking.  It gradually sunk in to me that the doctors at this prestigious hospital did not even know which drugs Dad had been prescribed, from within the hospital itself. 

The Institute of Medicine has identified a problem, but has not identified a cure.  If we really want to reduce medical errors, the key is not just to push isolated practices.  The key is to change the system so that medical practitioners and institutions are rewarded when they do a better job of reducing errors.  If the system provided the right incentives, then the practitioners themselves would be competing to invent and learn the practices that would be most efficient at improving patient health and well-being.

(p. A12) WASHINGTON, July 20 — Medication errors harm 1.5 million people and kill several thousand each year in the United States, costing the nation at least $3.5 billion annually, the Institute of Medicine concluded in a report released on Thursday.

Drug errors are so widespread that hospital patients should expect to suffer one every day they remain hospitalized, although error rates vary by hospital and most do not lead to injury, the report concluded.

The report, “Preventing Medication Errors,” cited the death of Betsy Lehman, a 39-year-old mother of two and a health reporter for The Boston Globe, as a classic fatal drug mix-up.  Ms. Lehman died in 1993 after a doctor mistakenly gave her four times the appropriate dose of a toxic drug to treat her breast cancer.

Recommendations to correct these problems include systemic changes like electronic prescribing and tips for consumers like advising patients to carry complete listings of their prescriptions to every doctor’s visit, the report said.

. . .

Drug computer-entry systems, which are supposed to ensure that hospital patients get the right drugs at the right dose, are used in just 6 percent of the nation’s hospitals, said Charles B. Inlander, president of the People’s Medical Society, a consumer advocacy group, and an author of the report released Thursday.

Electronic medical records can help ensure that patients do not receive toxic drug combinations.  The 1999 report urged widespread adoption of these systems.  Thursday’s report called for all prescriptions to be written electronically by 2010.

Just 3 percent of hospitals have electronic patient records, said Henri Manasse, chief executive of the American Society of Health-System Pharmacists.  Few doctors prescribe drugs electronically.

Even simple medication safety recommendations — block printing on hand-written prescription forms — are widely ignored.

. . .

Thursday’s report said that in any given week, four out of five adults in the United States took at least one medication.  A third take at least five different medications.  As the use of medications has soared, so, too have medication errors, Dr. Manasse said.

Effective strategies to prevent such errors have, however, been known for years, Mr. Inlander said.

“This is not rocket science,” Mr. Inlander said.  “It’s simple.  The key is having the will to make these changes in an organized and uniform way.  And it’s not that expensive.”

For the full story, see: 

GARDINER HARRIS. "Report Finds a Heavy Toll From Medication Errors." The New York Times  (Fri., July 21, 2006): A12.

For a link to the full "Preventing Medication Errors" report from the Institute of Medicine, see:  http://www.nap.edu/catalog/11623.html#toc

  A potato farm in Greenland has been able to expand as more land is arable due to higher temperatures.  Source of image:  the online version of the WSJ article quoted and cited below.

(p. A1)  QAQORTOQ, Greenland -- Stefan Magnusson lives at the foot of a giant, melting glacier.  Some think he's living on the brink of a cataclysm.  He believes he's on the cusp of creation.

The 49-year-old reindeer rancher says a warming trend in Greenland over the past decade has caused the glacier on his farm to retreat 300 feet, revealing land that hasn't seen the light of day for hundreds of years, if not more.  Where ice once gripped the earth, he says, his reindeer now graze on wild thyme amid the purple blooms of Niviarsiaq flowers.

The melting glacier near Mr. Magnusson's home is pouring more water into the river, which he hopes soon to harness for hydroelectricity.

"We are seeing genesis by the edge of the glacier," he says.

Average temperatures in Greenland have risen by 2.7 degrees Fahrenheit over the past 30 years -- more than double the global average, according to the Danish Meteorological Institute.  By the end of the century, the institute projects, temperatures could rise another 14 degrees.

The milder weather is promoting new life on the fringes of this barren, arctic land.  Swans have been spotted recently for the first time, ducks aren't flying south for the winter anymore and poplar trees have suddenly begun flowering.

. . .

(p. A12)  For Greenlanders, adapting to the effects of climate change is nothing new.  Oxygen isotope samples taken from Greenland's ice core reveal that temperatures around 1100, during the height of the Norse farming colonies, were similar to those prevailing today.  The higher temperatures were part of a warming trend that lasted until the 14th century.

Near the end of the 14th century, the Norse vanished from Greenland.  While researchers don't know for sure, many believe an increasingly cold climate made eking out a living here all but impossible as grasses and trees declined.  Farming faded away from the 17th century to the 19th century, a period known as the Little Ice Age.  Farming didn't return to Greenland in force until the early 1900s, when Inuit farmers began re-learning Norse techniques and applying them to modern conditions.  A sharp cooling trend from around 1950 to 1975 stalled the agricultural expansion.

Since then, temperatures have mainly been on the upswing.  Ole Egede is taking advantage of the warmer climate.  He and his brother live on Greenland's southwest coast on an isolated farm at the head of an inlet that can be reached only by helicopter or by a boat that can navigate around the icebergs that often choke the blue fiord.  Mr. Egede started Greenland's first commercial potato farm in 1999 and it remains the largest potato farm in Greenland.

Improved farming technology and methods, such as new cold-resistant seed varieties and cultivation techniques -- are responsible for some of Greenland's expanding agriculture.  But experts credit the more-favorable climate with much of the new growth.  "There's no doubt he's now growing potatoes because of better conditions," Mr. Hoegh, the farming consultant, says of Mr. Egede.

For the full story, see: 

LAUREN ETTER.  "Feeling the Heat For Icy Greenland, Global Warming Has a Bright Side As Temperatures Inch Up, Melting Glaciers Bring New Life to a Frozen Land But Could Polar Bears Vanish?"   The Wall Street Journal  (Tues., July 18, 2006):  A1 & A12.

 Source of map:  the online version of the WSJ article quoted and cited above.

Phil Hester, apparently a chip hotshot, joined A.M.D. ten months ago as its technology chief, to "help lead its battle against Intel."  (Hector Ruis, mentioned below, is the C.E.O. of A.M.D.)

Mr. Hester and other A.M.D. executives say that the technology in its laboratories gives them plenty of reason for optimism, and that in some product categories Intel is just catching up to advances A.M.D. pioneered.  Just next month, for example, A.M.D. is expected to introduce improvements to Opteron, and both companies are designing chips to run cooler and consume less energy.

Much like Intel, A.M.D. is working to increase the number of processors on each chip from two to four, and the company says it will introduce new designs for servers and desktop systems that will be released in mid-2007, followed later in the year by a new design for notebooks.  Many analysts are also expecting the company to counter Intel’s pricing moves with price cuts of its own.  At A.M.D.’s annual conference for analysts last month, Mr. Hester also disclosed an unusual plan to let other manufacturers build chips that work closely with its own chips, indicating an openness and flexibility that has not been seen before in the company’s strategy.

With that effort, referred to as Torrenza, A.M.D. is licensing some of its chip specifications to other technology developers so they can add specialized functions, like advanced graphics and math processing.

“We want to open up our technology and unleash a completely new wave of innovation,” Mr. Ruiz told analysts at the conference.

Advanced Micro has picked up about five percentage points of market share over the past year, nearly all of that from Intel, according to Mercury Research.  Today, A.M.D.’s overall share is about 21 percent, to Intel’s 74 percent, and at the analyst meeting Mr. Ruiz said the goal was to have a 30 percent share by 2008.

Mr. Hester said A.M.D.’s road map for new products had not changed much since his arrival.  Mostly he has focused on improving the way employees manage projects and pushing them to develop multiple designs at one time.  He said he also emphasized cooperation inside development teams, rather than having teams compete for attention.

The competitive situation has helped with this.  “Being the underdog creates a culture of cooperation,” Mr. Hester said.

For the full story, see: 

LAURIE J. FLYNN.  "Jumping at the Chance to Fire Away in the Chip War."  The New York Times (Weds., July 19, 2006):  C7. 

(Note:  the online version of the article has a different title, viz., "A.M.D. Seeks to Gain in Its Rivalry With Intel.")

Source of book image:  http://www.amazon.com/gp/product/customer-reviews/078949647X/ref=cm_cr_dp_2_1/104-2835260-2878345?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Tom Peters became famous as the co-author of the business classic In Search of Excellence (1982).  His Re-imagine! is exuberant, optimistic, exaggerated, and stylistically over-the-top.  I find it fun, bracing, entertaining, and sometimes edifying.  If you like the prose of The Cluetrain Manifesto and Gilder's Telecosm, then you may also like Re-imagine!

Here is an early, very brief passage: 

(p. 9)  My overall vision, in brief:  Business is cool. It's about Creativity and Invention and Growth and Service.  It's about Adam Smith's "hidden hand."  And Nobel laureate Frederick Hayek's "spontaneous discovery process."  And economist Joseph Schumpeter's "gales of creative destruction."  At its best, it's about building things that make life less burdensome than it was in medieval times.  About getting us beyond---far, far, far beyond---the quasi-slavery of the Middle Ages, the indentured servitude of the first 150 years of the Industrial Revolution, and the cubicle slavery of the last three-quarters of a century. 

Yes, business is cool.

(Or at least it can be.)

The citation to the book is:

Peters, Tom. Re-Imagine! London: DK, 2003.

(Note:  the italics in the above passage appears that way in the original.)

Source of book image:  http://www.amazon.com/gp/product/1400065526/sr=8-1/qid=1153368329/ref=sr_1_1/104-2835260-2878345?ie=UTF8

The levees are built by the Army Corps of Engineers, with the Orleans Levee District enjoying local control.  It is instructive to learn that the former president of the levee district bought himself an inflatable rubber craft a decade ago.  As Mr. Horne writes, some levees gave way "even before water reached the heights the walls were meant to contain and, in some cases, after it had begun to ebb."

Beset by outsourcing, brain drains and budget cuts, the Army Corps has been skimping for years.  This spring, its commanding officer conceded that there had been problems with flood-wall engineering.  But the government hardly has a monopoly on blame.  As Mr. Horne notes, the corps had intended to build a flood barrier at the mouth of Lake Pontchartrain on the city's northern border ("an idea that would, after Katrina, suddenly seem like the highest sort of wisdom"), but the plan was scrapped when environmentalists sued.

By the mid-1970s, "the completion date for the upgraded flood defense that Congress had mandated for New Orleans had already been pushed back thirteen years," Mr. Horne writes, and one section was still unfinished as Katrina hit.  Apathy and indifference "turned government work into a jobs program for people who couldn't make it in the private sector or who couldn't be bothered to try."

Government handouts of a different sort followed the hurricane:  After a slow start with its relief effort, FEMA helped countless hurricane victims who were truly in need, but the agency also began cutting checks for almost anyone who asked.  "An initial $2000 would turn up in the mail within a few days of registering online or placing a call," Mr. Horne writes.  In fact, the agency "rolled over for millions in fraudulent or duplicate claims without checking to see that the applicant had offered a vacant lot or a nonexistent address as his or her residence."  Perhaps that was easier than risking further accusations of bias.

For the full review, see:

TOM BETHELL. "Books; Levying the Blame; Nearly a year after a hurricane ravaged a city and the finger-pointing began, two books dissect the destruction and the government's response."  The Wall Street Journal (Sat., July 15, 2006):  P8.

The citation for the Horne book is:

Horne, Jed.  Breach of Faith.  Random House, 2006.  (412 pages, $25.95)

  Source of book image:  http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300106211

From a useful review of a book on environmental policy:

(p. D8) The striking aspect of his new book is the story he tells of his own journey from supporter to critic of the Spaceship Earth theory of environmental law.  His first step toward disenchantment was seeing, as an NRDC lawyer, the EPA's personnel up close.  "The EPA had not come from Starfleet Academy," he notes, "but rather was an amalgam of the federal government's preexisting environmental programs," then part of the Department of Health, Education and Welfare.  In short, the bureaucrats were real people with real incentives, just like politicians and voters—but unanswerable to the public.

The next educational step, for him, was the decision to buy a farm in upstate New York.  Mr. Schoenbrod was surprised by the wisdom of his rural neighbors.  He movingly describes how a local logger changed his mind about forestry practices by showing him, among much else, that sometimes cutting down particular trees can benefit the forest.  (It sounds like a simple observation, but it is the kind of thing that bureaucrats, with their sweeping mandates, often don't allow for.)  Mr. Schoenbrod also looks at the local reaction to a number of environmental decisions, such as the EPA's ordered dredging of the Hudson River because of the small risk of PCBs.  The intent was to protect the health of local communities, but upstate landowners opposed the dredging by a ratio of more than 2 to 1.

For the full review, see: 

John Berlau.  "Bookshelf; A Law Unto Themselves."  The Wall Street Journal  (Thurs.,  August 18, 2005):  D8.

The full reference to the Schoenbrod book:

Schoenbrod, David.  Saving Our Environment from Washington:  How Congress Grabs Power, Shirks Responsibility, and Shortchanges the People. Yale University Press, 2005.

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

(p. E1)  The dirty secret among former high school and college jocks is that many don't remain active as adults.  In their glory days they were the fittest among their peers.  But as adults many are overtaken by nonjocks who embrace fitness as a commitment to health, forget the varsity letter.

Onetime elite athletes often languish once organized competition is over and a coach isn't hounding them, sports scientists and exercise physiologists say.  Many are burned out.  Others become discouraged when their lackluster fitness can't compare to their highlight reels.  Running on a treadmill in a sea of anonymous gym-goers doesn't compare to the thrill of being an m.v.p. on campus.

"Basically, they've been to the mountaintop and now they're on these little hills, and that is difficult to deal with," said Dan Gould, the director of the Institute for the Study of Youth Sports at Michigan State University in Lansing.

Extrinsic motivation is tricky business, said Dr. Gould, a professor of kinesiology.  He said he has found that athletes who played for trophies (p. E8) or attention are more at risk of becoming sedentary as adults than people who have taught themselves to get off the sofa and exercise, those with "intrinsic motivation."

For the full story, see:

JILL AGOSTINO.  "Once an Athletic Star, Now an Unheavenly Body."   The New York Times  (Thurs.,  July 6, 2006):  E1 & E8.

 Researchers at work at the Emeryville Shellmound.  Source of photo:  online version of The Washington Post article cited below.

Like the Europeans who came later, the first Americans apparently had a propensity for killing and eating any animal they could lay their hands on without giving a lot of thought to the future, judging by the bones they left behind at one notable site.

"The general public probably buys into the 'Pocahontas version' that Native Americans were inherently different and more in tune with nature," said University of Utah archaeologist Jack Broughton.  "The evidence says otherwise."

After studying thousands of animal bones found in a garbage heap on the shores of San Francisco Bay, Broughton concluded that Native Americans living in an area where Emeryville is now located hunted several species to local extinction from 600 B.C. to A.D. 1300.

For the full story, see: 

Guy Gugliotta. "SCIENCE Notebook; Indians Depleted Wildlife, Too." The Washington Post (Monday, February 20, 2006):  A09. 

A more detailed summary of the research can be found in a University of Utah press release:

"Early California: A Killing Field; Research Shatters Utopian Myth, Finds Indians Decimated Birds."

The full, academic version of the research can be found in: 

Broughton, Jack M.  Prehistoric Human Impacts on California Birds: Evidence from the Emeryville Shellmound Avifauna, Ornithological Monographs, 2004.

When employees jump from company to company, they take their knowledge with them.  ''The innovation from one firm will tend to bleed over into other firms,'' Professor Rebitzer explained.  For a given company, ''it's hard to capture the returns on your innovation,'' he went on.  ''From an economics perspective, that should hamper innovation.''

He found a possible answer to the puzzle in the work of two management scholars, Carliss Y. Baldwin and Kim B. Clark.  In their book ''Design Rules:  The Power of Modularity'' (MIT Press, 2000), they argued that when there is a lot of technological uncertainty, the fastest way to find the best solution is to permit lots of independent experiments.  That requires modular designs rather than tightly integrated systems.

''By having a lot of modular experimenters, you can take the best, which will be a lot better than the average,'' Professor Rebitzer said.  Employee mobility may encourage productive innovation, as people quickly move to whichever company comes up with the best new technology.

. . .

To Professor Rebitzer's surprise (though not his co-authors'), it turns out that Silicon Valley employees really do move around more often than other people.  The researchers looked at job changes by male college graduates from 1994 to 2001.  During that period, an average of 2.41 percent of respondents changed jobs in any given month.

But, they write, ''living in Silicon Valley increases the rate of employer-to-employer job change by 0.8 percentage point.''

''This effect is both statistically and behaviorally significant -- suggesting employer-to-employer mobility rates are 40 percent higher than the sample average.''

For the full commentary, see: 

VIRGINIA POSTREL.  "ECONOMIC SCENE; In Silicon Valley, Job Hopping Contributes to Innovation."  The New York Times  (Thursday, December 1, 2005):  C4.

A PDF of the paper by Rebitzer and colleagues is downloadable at:    http://www.federalreserve.gov/Pubs/feds/2005/200511/200511abs.html

The book Postrel praises, is:

Source of graphic: online version of The Gateway article cited below.

The Gateway, the student newspaper at the University of Nebraska at Omaha, ran a nice feature article on artdiamondblog.com on July 18, 2006, as the first installment of a projected series on blogs created by members of the campus community.

If you click the citation below, you will arrive at the online version of the feature:

Reed, Charley. "Meet the Blogger: UNO Professor Art Diamond." The Gateway (Tues., July 18, 2006):  3.

For your convenience, the text of the feature also appears below.

While many may only associate “blogging” at UNO with student pages on MySpace or Facebook, there are faculty members and professors that run their own blogs as well. One of them is economics professor Art Diamond.

Diamond started his blog, artdiamondblog.com, just over one year ago and during that time has published his thoughts on topics that include Iraq, Hurricane Katrina and even Harry Potter.

For those who have never been to your blog, could you give a summary overview?

“Ever since I began teaching economics, over 20 years ago, I have clipped articles that I thought illustrated important points about how the world worked… The blog gives me a way to preserve and share this treasure trove of meaningful examples.

“Most of my entries involve government policy issues related to the economy. And most of these entries in one way or another illustrates the problems that arise from the intrusion of government into the free market.”

What caused you to decide that a blog was something you wanted to start up?

“If I am right that the economics profession is currently undervaluing examples, then one way that I can contribute to truth and economic progress (as well as freedom and justice) is to preserve and highlight some of the revealing examples that might otherwise be neglected by the profession.

“The well-known international economist Stanley Fischer is reported to have said that ‘one good example is worth 1,000 theories.’ That may be an exaggeration, but I do agree that good examples are worth a lot: partly as evidence and partly as pedagogy.”

Do you think your position as a teacher at UNO affects what you put on your blog?

“I identify my blog as a ‘personal blog’ to make it clear that I speak for myself, and not for my department or college or UNO. I pay a monthly fee to a small blog-server outfit to host the blog, so that the UNO information technology infrastructure is not used for it.

“I probably write a bit more freely on this personal blog than I would if the blog were maintained and supported by UNO.”

How do you think that blogs have influenced communication in the 21st century and what experiences have you had personally that helped you form that opinion?

“What Amazon does for books, blogs do for news and commentary. The variety is enormously increased, and the gain is in terms of the greater odds you will be able, more quickly and more exactly, to find what you are looking for.

“Almost every day, I use blogs to help me be more productive.”

In the "Dig for a Day" program, participants pay $25.00 to spend three hours helping to excavate a Tel Maresha cave.  Source of the image:  the online version of the NYT article cited below. 

While most archaeological excavations require hundreds of thousands of dollars, Mr. Alpert said, this one is unusual because it is self-supporting.  “We have the people working and paying for the work, which has proven itself archaeologically and from a tourism standpoint,” he said.  “That’s why we are able to dig for so long.”  The Maresha excavation is licensed by the Israeli Antiquities Authority, and reports are submitted each year to evaluate its scientific contribution.

“This is the ultimate chutzpah,” said Ian Stern, another of the company’s three owners, who has a doctorate in archaeology and emigrated to Israel from New Jersey (the third owner is Asher Afriat, a historian and native Israeli).  “We are providing the public with an active educational experience, while they do the work.  Their money underwrites the excavation and is used for all the follow-up of putting the pottery together, registering and photographing the finds, and writing the scientific reports.” 

For the full story, see:

CAREN OSTEN GERSZBERG.  "Family Journeys; Israel; Amateur Archaeologists Get the Dirt on the Past."  The New York Times, Section 5 (Sun., July 16, 2006):   11.

  Amateur archaeologists excavate a cave.  Source of the image:  the online version of the NYT article cited above.

Source of book image:  the WSJ review cited below.

According to Mr. Anderson, technology is not just accelerating the delivery of traditional pop culture but affecting the choices we make.  The key to such change is a phenomenon he calls "the long tail."

In a traditional graph of sales and demand, there is a stratospheric swoop upward where hot products and services are tracked, and a long descending line tracing the less spectacular performance of low-volume also-rans.  For years, these outliers fell off the edge of the market or held only a marginal position, with minimal profits.  These days, though, technology has allowed such niche interests to thrive, finding steady customers and rising levels of interest.

For the full review, see: 

STEVEN ZEITCHIK. "BOOKS; A Nichefied Mediaquake; Technology has revolutionized distribution, but doesn't talent still matter?" The Wall Street Journal (Sat., July 8, 2006): P8.

Anderson's book highlights an important result of the internet revolution:  the increase in the variety.  In an earlier academic article, that discusses and measures this effect, Erik Brynjolfsson and his co-authors (see below) looked at the effects of Amazon.com on consumers.  They found a substantial benefit to consumers from lower book prices, due to more competition, and better information.  But their surprising result was that they found a much larger benefit to consumers from the greater variety of books that Amazon.com makes readily available.

The darkened long tail in graph below roughly represents the books available through Amazon that would not be available in even the very largest 'bricks-and-mortar' book store.

There are important implications for both readers and writers.  Readers are more likely to find the kinds of books they want.  Writers are more likely to find a sufficient readership to be able to sustain themselves through their writing.   

Source of graph is p. 1589 of:  Brynjolfsson, Erik, Yu (Jeffrey) Hu, and Michael D. Smith. "Consumer Surplus in the Digital Economy: Estimating the Value of Increased Product Variety at Online Booksellers." Management Science 49, no. 11 (2003): 1580-96.

The citation for the Anderson book is:

Anderson, Chris. The Long Tail. Hyperion, 2006.  (238 pages, $24.95)

  Some major donors who want to make a difference during their lives.  Source of graphic:  online version of WSJ article cited below.

(p. A1)  "If we give it away now, we're going to do a good job with it, instead of leaving it to future generations of foundation folks," says Herbert M. Sandler, 74 years old.  He and his wife, Marion, intend to donate the $2 billion they expect from the sale of the California savings and loan Golden West Financial Corp. before "we shuffle off this mortal coil."

The Sandlers' plan, like Mr. Buffett's $30 billion gift to the Gates foundation announced last month, exemplifies the changing pattern of U.S. philanthropy -- and the (p. A8) Gates organization's increasing influence over it.  The charitable titans of today are unlike many of the old-school business bluebloods who sought to immortalize their names by setting up foundations that parceled out small gifts forever.  Instead, some of America's wealthiest moguls-turned-philanthropists -- Eli Broad, Charles Bronfman, Lawrence Ellison, Michael Milken and Sanford Weill, among others -- favor spending money faster, while retaining a high degree of control and demanding more accountability from the programs they fund.

. . .

By contrast, some of today's tycoons increasingly limit the time frame, leaving tomorrow's magnates to handle tomorrow's problems.  Mr. Bronfman, an heir to the Canadian liquor fortune, says he plans to exhaust the money in his $120 million foundation by 2020.  He is spending at a $12 million to $14 million a year clip.  "Why should I saddle the next generation with something I'm passionate about?" he says.  "Let them have their own passions and do their own things."  Mr. Bronfman, 75, believes in narrowly targeted goals -- in his case, they include helping pay for young Jews to visit Israel.  So far, his organization has had a hand in sending 112,000 people on such trips.

Mr. Milken, a financier who served two years in jail for securities fraud in the 1990s, funds medical research and K-12 education; he founded the Prostate Cancer Foundation in 1993 after being diagnosed with the disease himself.  He said the six foundations he and his brother Lowell have established  -- which have funds of about $350 million -- spend an average of 15% of their assets each year.  Three of the six have attracted a total of $300 million in gifts from outside donors who, like Mr. Buffett, preferred supporting existing ventures to starting their own.

Mr. Milken said he negotiates with medical centers to make sure gifts go to research and clinical trials rather than overhead.  In return,  his foundations waive patent rights to any discoveries made as a result of their funding.  "You can't just write checks," he said.  "You have to be actively involved.  You have to introduce new management, marketing, other types of activities to empower medical research."

Mr. Sandler and his wife, Marion, have no patience for big foundations that spend 5% annually.  "They are never going to give it [all] away," he says.  Many foundations, he adds, "become bureaucratic."

He and his wife built their Oakland S&L, Golden West, from a small thrift into the nation's second largest savings and loan by emphasizing lean operations and a laser-like focus on home lending.  The couple, who are co-chief executives, recently agreed to sell the company to Wachovia Corp.

The Sandlers have already given heavily to start the Center for Basic Research in Parasitic Diseases at University of California at San Franciso's medical school.  The center focuses on Third World diseases neglected by major drug companies.  Along with malaria, the family's philanthropy has focused on finding treatment for the millions in South America afflicted by Chagas disease, a deadly insect-born ailment.  A donor to the Democratic Party, Mr. Sandler has also backed progressive causes, including Human Rights Watch, the American Civil Liberties Union, and Association of Community Organizations for Reform Now, Acorn.

Mr. Sandler patterns his giving after the Gates foundation.  He admires the Gates foundation's program in Zambia, fighting malaria, and hopes to work together to replicate its methods in other countries.  Like Mr. Gates, Mr. Sandler is looking for "gaps" in giving that he can fill, such as basic scientific research shunned by most big drug companies.  Another interest:  fighting asthma,  which disproportionately afflicts the poor in inner-city America.

Mr. Sandler says he's not afraid to take risks with his money, the same way he did in business.  And he doesn't want a foundation that, after his death, would spend frugally just to stay in business, or support causes far from his heart.  "One prays that when we are going down the tubes, we will be giving that last million dollars," he says.

For the full story, see: 

JOHN HECHINGER and DANIEL GOLDEN. "The Great Giveaway; Like Warren Buffett, a new wave of philanthropists are rushing to spend their money before they die." The Wall Street Journal (Sat., July 8, 2006): A1 & A8.

  Source of graphic:  online version of the WSJ article cited above.

Source of screen captures:  the downloaded Orange Business Services BBC World ad cited below.

Last month (June 2006) when I was in France, I saw a fun Orange Business Services ad on BBC World.  Two entrepreneurs open their fast food truck in the middle of an empty desert.  Something like a comet strikes the desert and a crowd of cars appears and a line forms at the truck.  The entrepreneurs smile.  Tag line:  "here's to the entrepreneur in all of us."

Orange Business Services let's you watch, or download, the ad at:  http://www.francetelecom.com/sirius/obs/en/index.html?cmp=BAC-van-bbcworld

(I saw the ad in Sophia Antipolis, France on BBC World, at about 7:10 AM, French time, on 6/23/06.)

As a fellow-signer of the Open Letter, I second Professor Armentano's response to Rep. Rohrabacher: 

 

So according to Rep. Dana Rohrabacher (Letters, July 5), economists who advocate relatively free international labor markets must be "lefty academics."  Oh, yeah?  I thought that "lefties" took the opposite position, that government (and not the market) should control resource availability in the so-called "national interest."  And I also thought that advocating the removal of restrictions and penalties on the free movement of labor and other resources was the essence of a free-market position.

The economists (such as myself) who signed the Independent Institute's Open Letter to the President on immigration were taking a consistent free-market position.  We hardly need to be slandered with a label that implies the exact opposite

Source:

Dominick T. Armentano.  "Open Letter to President Was a Free-Market Stance."  The Wall Street Journal (Sat., July 8, 2006):  A11.

The text of the Open Letter can be found at:   http://www.independent.org/newsroom/article.asp?id=1727

Or access the Open Letter by clicking the link below:

Writing on Weds., July 12th, libertarian litigator Clint Bolick, seeks to improve failing schools by using the courts to increase parental choice:

A world of education reform will change tomorrow when a group of families files a class action lawsuit in Chancery Court in Newark, N.J.  They are asking for an immediate and meaningful remedy for 60,000 children trapped in failing schools -- by transferring control over education funds from bureaucrats to parents.

Seeking to vindicate the state constitutional guarantee of a "thorough and efficient" education, the plaintiffs in Crawford v. Davy ask that children be allowed to leave public schools where fewer than half of the students pass the state math and language literacy assessments that measure educational proficiency; and that the parents of these children be permitted to take the pro rata share of the public money spent on their children, to seek better opportunities in other public or private schools.  Supporting the families are three prominent New Jersey groups:  the Black Ministers Council, the Latino Leadership Alliance, and Excellent Education for Everyone.

The remedy these parents seek is fundamentally different from the one established by more than three decades of litigation across the country.  Courts in states like New York, Texas and California have ordered massive increases in school funding to fulfill state constitutional mandates for educational "equity" or "adequacy," all on the belief that more money will boost school quality and student performance.  The funds have produced new programs and bureaucracies, but too often they fail to trickle down to the students by way of improved educational quality.

In any area other than education such a remedy would be considered bizarre.  Suppose you purchased a car whose warranty promised "thorough and efficient" transportation, and it turned out to be a lemon.  If you sued to enforce the warranty, would a court order a multibillion dollar payment to the auto maker in the hope that someday it would produce a better product?  Of course not:  It would order the company to give your money back so you could buy a different car.

For the full commentary, see:

CLINT BOLICK. "Remedial Education." The Wall Street Journal  (Weds., July 12, 2006):  A16.

If Warren Buffett is as serious about doing good with his wealth, as he was in becoming wealthy, he would ponder the Wall Street Journal's sage editorial page advice:

We can't think of two people less in need of our two cents than Messrs. Buffett and Gates.  But since giving free advice is our business, we'd suggest that they put at least a smidgen of their money back into strengthening the foundations of the free-market system that has allowed them to become so fabulously rich.  There's something to be said for reinvesting in the moral capital of a free society and trying to sustain and export free-enterprise policies.

Capitalism has done very well not just by Mr. Buffett but also by the world's poor, as several hundred million Chinese and Indians might attest.  African nations in particular need property rights and a rule of law as badly as they need vaccines.  On that score we were encouraged by a report this week that the Gateses thanked Mr. Buffett for his gift by presenting him with a book from their personal library:  Adam Smith's "The Wealth of Nations."

For the full editorial, see:

"Mr. Buffett's Gift."  The Wall Street Journal  (Weds., June 28, 2006):  A14.

  One of the Viking landers on Mars.  Source of photo:  http://www.msss.com/mars/pictures/viking_lander/viking_lander.html

When scientists announced Monday that the search for life on Mars 30 years ago may not have been quite the bust it has long been portrayed, it didn't mean that the mission had missed any microorganisms, let alone advanced life forms.  But it did underline the growing sense that decades of assumptions about extraterrestrial life need serious re-examination.

In 1976, scientists studying data sent back by the Viking landers were quick to dismiss life on Mars.  . . .

. . .

Some three decades later, more-sophisticated instruments have shown that the Vikings couldn't have detected organic molecules even if any were present.  When scientists fed soil from the Atacama Desert of Chile and Peru, and the Dry Valleys of Antarctica, experiments like those the Vikings conducted came up empty.  Yet, new techniques show the samples contained 10 to 1,500 micrograms of carbon per gram.

"If we knew this 30 years ago, our interpretation of the Viking results would have been very different," says Rafael Navarro-González of Mexico's National Autonomous University, who led the study published in Proceedings of the National Academy of Sciences.

For the full story, see: 

SHARON BEGLEY.  "SCIENCE JOURNAL; Scientists Revisit Data On Mars With Minds More Open to 'Life'."  The Wall Street Journal  (Fri., October 27, 2006):  B1.

Bjorn Lomborg.  Source of image:  online version of WSJ article cited below.

(p. A10) Bjorn Lomborg busted -- and that is the only word for it -- onto the world scene in 2001 with the publication of his book "The Skeptical Environmentalist."  A one-time Greenpeace enthusiast, he'd originally planned to disprove those who said the environment was getting better.  He failed.  And to his credit, his book said so, supplying a damning critique of today's environmental pessimism.  Carefully researched, it offered endless statistics -- from official sources such as the U.N. -- showing that from biodiversity to global warming, there simply were no apocalypses in the offing.  "Our history shows that we solve more problems than we create," he tells me. For his efforts, Mr. Lomborg was labeled a heretic by environmental groups -- whose fundraising depends on scaring the jeepers out of the public -- and became more hated by these alarmists than even (if possible) President Bush.

Yet the experience left Mr. Lomborg with a taste for challenging conventional wisdom.  In 2004, he invited eight of the world's top economists -- including four Nobel Laureates -- to Copenhagen, where they were asked to evaluate the world's problems, think of the costs and efficiencies attached to solving each, and then produce a prioritized list of those most deserving of money.  The well-publicized results (and let it be said here that Mr. Lomborg is no slouch when it comes to promoting himself and his work) were stunning.  While the economists were from varying political stripes, they largely agreed.  The numbers were just so compelling:  $1 spent preventing HIV/AIDS would result in about $40 of social benefits, so the economists put it at the top of the list (followed by malnutrition, free trade and malaria).  In contrast, $1 spent to abate global warming would result in only about two cents to 25 cents worth of good; so that project dropped to the bottom.

"Most people, average people, when faced with these clear choices, would pick the $40-of-good project over others -- that's rational," says Mr. Lomborg.  "The problem is that most people are simply presented with a menu of projects, with no prices and no quantities.  What the Copenhagen Consensus was trying to do was put the slices and prices on a menu.  And then require people to make choices."

Easier said than done.  As Mr. Lomborg explains, "It's fine to ask economists to prioritize, but economists don't run the world."  .  .  .

So all the more credit to Mr. Lomborg, who several weeks ago got his first big shot at reprogramming world leaders.  His organization,  the Copenhagen Consensus Center,  held a new version of the exercise in Georgetown.  In attendance were eight U.N. ambassadors, including John Bolton.  (China and India signed on, though no Europeans.)  They were presented with global projects, the merits of each of which were passionately argued by experts in those fields.  Then they were asked:  If you had an extra $50 billion, how would you prioritize your spending?

Mr. Lomborg grins and says that before the event he briefed the ambassadors:  "Several of them looked down the list and said 'Wait, I want to put a No. 1 by each of these projects, they are all so important.'  And I had to say, 'Yeah, uh, that's exactly the point of this exercise -- to make you not do that.'"  So rank they did.  And perhaps no surprise, their final list looked very similar to that of the wise economists.  At the top were better health care, cleaner water, more schools and improved nutrition.  At the bottom was . . . global warming.

For the full interview, see:

KIMBERLEY A. STRASSEL.  "The Weekend Interview with Bjorn Lomborg; Get Your Priorities Right."  The Wall Street Journal  (Sat., July 8, 2006):  A10.

(Note:  first ellipsis is added; the second ellipsis is in the original.)  

    Source of book image:   http://www.amazon.com/gp/product/customer-reviews/0521010683/ref=cm_cr_dp_2_1/104-0101568-2686373?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Source of book image:  online version of WSJ article cited below.

As Robert Calderisi makes clear in "The Trouble With Africa," foreign aid is usually mismanaged, wasted or simply diverted to various precincts of the continent's busy kleptocracies, subverting the evolution of normal markets.

Africa is by no means the only region in the world where corruption seems endemic.  Paul Wolfowitz, the head of the World Bank, addressed the problem of corruption on a trip to Indonesia earlier this year.  Even building a new baseball stadium in the Bronx can involve community-outreach efforts that might better be called payoffs.  But Africa seems to find it especially difficult to set up a legal system that can enforce contracts and compel transparency.

Mr. Calderisi says more explicitly than anyone -- except perhaps George B.N. Ayittey and the late British economist P.T. Bauer -- that foreign aid is almost always harmful to the African counties that receive it.  The fault, he notes, is not in the stars but in the behavior of Africans themselves, especially the leaders who have pocketed so much of the money intended for their citizens.

For the full review, see:

Roger Kaplan.  "Bookmarks."  Wall Street Journal  (Fri., June 2, 2006):  W7.

The full reference to the Calderisi book is:

Calderisi, Robert. The Trouble with Africa. Palgrave Macmillan, 2006.  (249 pages, $24.95)

The 157-mile Indiana Toll Road had lost money five of the last seven years.  A principal reason was its antique pricing; tolls had not changed since 1985 and were far below what comparable American toll ways charged.

As a private citizen, I had always been intrigued to stop at a concrete booth and fish out a dime and a nickel to pay the 15-cent toll at Gary.  As governor, I asked, ''What does it cost us to collect a toll?''  This being government, no one knew, but after a few days of calculation, the answer came:  ''About 34 cents, we think.''  I said, only half in jest, that we should just go to the honor system and we'd come out way ahead.

Why would a losing enterprise with an underpriced product drift on in that way?  Because it was run by politicians, who are rarely businesslike and deathly afraid to annoy anyone.  So the state lost money on the road, postponed repairs and expansions and failed to install the electronic technology that makes toll ways elsewhere faster, more convenient and more efficient.

Just as many business units are more valuable if separated from their conglomerate parent, an asset like a highway can be worth vastly more under different management.  When we offered our road for long-term lease, we received a high bid of $3.8 billion, cash, from Macquarie-Cintra, an Australian-Spanish consortium.  The highest estimate of the road's net present value in state hands was less than half that amount, and even that estimate assumed regular toll increases of the kind past governors steadfastly refused to impose.  Noting the road's record of losses, one finance professor remarked, ''If they'd gotten a dollar for it, it would have been a good deal.''  Instead, Indiana will soon cash a check that closes a gap most had believed insoluble.  Future toll increases will be capped at the level of inflation.

For the full commentary, see: 

MITCH DANIELS.  "For Whom the Road Tolls."  The New York Times  (Sat., May 27, 2006):  A13.

 

(p. 19) That the United States is using corn, among the more expensive crops to grow and harvest, to help meet the country's fuel needs is a testament to the politics underlying ethanol's 30-year rise to prominence.  Brazilian farmers produce ethanol from sugar at a cost roughly 30 percent less.

But in America's farm belt, politicians have backed the ethanol movement as a way to promote the use of corn, the nation's most plentiful and heavily subsidized crop.  Those generous government subsidies have kept corn prices artificially low -- at about $2 a bushel -- and encouraged flat-out production by farmers, leading to large surpluses symbolized by golden corn piles towering next to grain silos in Iowa and Illinois.

For the full story, see:

ALEXEI BARRIONUEVO.  "THE ENERGY CHALLENGE: A Modern Gold Rush; For Good or Ill, Boom in Ethanol Reshapes Economy of Heartland." The New York Times, Section 1 (Sunday, June 25, 2006): 1 & 19.

   Tall grass grows where Qingtu Lake used to be; and the desert encroaches on the grass.  Source of image:  online version of the NYT article cited below.

(p. A1)  An ever-rising tide of sand has claimed grasslands, ponds, lakes and forests, swallowed whole villages and forced tens of thousands of people to flee as it surges south and threatens to leave this ancient Silk Road greenbelt uninhabitable.

Han Chinese women here cover their heads and faces like Muslims to protect against violent sandstorms.  Farmers dig wells down hundreds of feet.  If they find water, it is often brackish, even poisonous.

Chinese leaders have vowed to protect Minqin and surrounding towns in Gansu Province.  The area divides two deserts, the Badain Jaran and the Tengger, and its precarious state threatens to accelerate the spread of barren wasteland to the heart of China.

The national 937 Project, set up to fight the encroaching desert, estimated in April that 1,500 square miles of land, roughly the size of (p. A14) Rhode Island, is buried each year.  Nearly all of north central China, including Beijing, is at risk.

Expanding deserts and a severe drought are also making this a near-record year for dust storms carried east in the jet stream.  Sand squalls have blanketed Beijing and other northern cities, leaving a stubborn yellow haze in the air and coating roads, buildings, cars and lungs.

. . .

Government-led cultivation, deforestation, irrigation and reclamation almost certainly contributed to the desert's advance, which began in the 1950's and the 1960's, and has accelerated.  Critics warn that some lessons of past engineering fiascoes remained unlearned.

During the ill-fated Great Leap Forward in the late 1950's, Mao ordered construction of the giant Hongyashan reservoir near Minqin, which diverted the flow of the Shiyang River and runoff from the Qilian Mountains into an irrigation system.  It briefly made Minqin's farmland fertile enough to grow grain.

But Minqin is a desert oasis that gets almost no rainfall.  The Shiyang and its offshoots had been its ecological lifeline.  With the available water resources monopolized for farming, nearly all other land became a target for the desert.

Today, patches of farmland that cling to irrigation channels are emerald islands in a sea of beige, an agricultural Palm Springs.

Even the irrigated plots risk extinction. Competing reservoirs on upper reaches of the Shiyang reduced its flow so severely by 2004 that the Hongyashan went dry for the first time since its construction in 1959.  It was refilled after Beijing ordered an emergency diversion of water from the Yellow River, which now runs dry through much of the year here in its northern reaches.

Local officials, whose promotions in the government and Communist Party hierarchy depend more on increasing economic output than on improving the environment, have tried desperately to preserve Minqin's farming.

. . .

"This is not a natural disaster — it is man-made," Mr. Chai said.  "And unless people study the lesson of Minqin, it will repeat itself clear across China." 

For the full story, see: 

JOSEPH KAHN.  "A Sea of Sand Is Threatening China's Heart."  The New York Times (Thurs., June 8, 2006):  A1 & A14.

  Women wear headresses and face masks, not out of modesty, but to protect against the sand.  Source of photo:  online versio of the NYT article cited above.

Close, and distant, maps of the areas effected.  Source of maps:  online version of the NYT article cited above.

If Ramsey Clark is looking for something to get outraged about, maybe he should visit the Blue Man's grave?  Source of photo:  the online version of the NYT article cited below.   

(p. A1) ON THE EDGE OF THE ASH SHAM DESERT, Iraq, June 3 — Among experts on the American-led team investigating Iraq's mass graves, the skeletal remains lying face-up at the rear of the tangled grave here have been given a name — the Blue Man — that speaks for a sorrowful familiarity developed by some of those who work with victims of mass murder.

But more than his blue shirt, and his blue-striped trousers, what distinguishes the remains is the way they speak for the terror of death under Saddam Hussein.  The man was thrown backward by automatic weapons fire, his eyes blindfolded and his arms tied behind his back, his skull jerked upward at the neck, his fleshless mouth gaping, his two rows of teeth stretched apart, as though in a primal scream.

Together, in the late winter of 1991, at least 28 men were executed here, crowded together in a pit their killers scraped with a backhoe from the desert floor.  Rounded up along the alleyways of their native city, they were forced aboard a bus or truck and driven out along an isolated highway.

After barely half an hour's journey, the grim caravan turned down a bumpy track, halting just far enough into the desert for gunfire to be muffled from passing traffic.

The end would have come quickly, the forensic experts said, victims stumbling out of the vehicle, herded into the pit, then pushed forward into a shallow cut not much wider or longer than a stretch limousine.  At the last moment, judging by the pile of bodies, the victims surged backward, perhaps in terror at the sound of rifles being readied for fire.

Among the bodies, the experts have located at least 80 spent cartridges from Kalashnikov rifles, which were the weapon of choice among the killers of Mr. Hussein's secret police.

Michael Trimble, who is called Sonny, the leader of the mass-graves team that set up camp beside an escarpment in Iraq's western desert last month, is a 53-year-old forensic archaeologist from St. Louis.  He is a veteran of other sites of mass killings around the world, on assignment from a civilian post with the Army Corps of Engineers.

Standing above the pit where the desert victims died, he said the 120-member team here, now in their third week of excavation and examination of two mass-grave sites, were sustained through days of punishing 130-degree heat by an urge to bring justice for the victims.

"When you work with these people for some time," he said, referring to the remains, "you get real attached to them, you feel real bad about what happened to them, and you want to do whatever you can to bring their killers to account."

For the full story, see:

JOHN F. BURNS. "Uncovering Iraq's Horrors in Desert Graves." The New York Times  (Monday, June 5, 2006):   A1 & A10. 

Mike Matthews holding one of the vacuum tubes produced in the Russian factory he owns.  Source of photo:  online version of the NYT article cited below.

(p. C1)  SARATOV, Russia — Mike Matthews, a sound-effects designer and one-time promoter of Jimi Hendrix, bought an unusual Russian factory making vacuum tubes for guitar amplifiers.  Now he has encountered a problem increasingly common here: someone is trying to steal his company.

Sharp-elbowed personalities in Russia's business world are threatening this factory in a case that features accusations of bribery and dark hints of involvement by the agency that used to be the K.G.B.

Though similar to hundreds of such disputes across Russia, this one is resonating around the world, particularly in circles of musicians and fans of high-end audio equipment.

Russia is one of only three countries still making vacuum tubes for use in reproducing music, an aging technology that nonetheless "warms up" the sound of electronic music in audio equipment.

"It's rock 'n' roll versus the mob," Mr. Matthews, 64, said in a telephone interview from New York, where he manages his business distributing the Russian vacuum tubes.  "I will not give in to racketeers."

Yet the hostile takeover under way here is not strictly mob-related.  It is a dispute peculiar to a country where property rights — whether for large oil companies, car dealerships or this midsize factory — seem always open to renegotiation.  It provides a view of the wobbly understanding of ownership that still prevails.

. . .

(p. C4)  If the tube factory dies, so will the future of a rock 'n' roll sound dating back half a century, the rich grumble of a guitar tube amplifier — think of Jimi Hendrix's version of "The Star-Spangled Banner" — that musicians say cannot be replicated with modern technology.

"It's nice and sweet and just pleasing sounding," Peter Stroud, the guitarist for Sheryl Crow, said in a telephone interview from Atlanta.  "It's a smooth, crunchy distortion that just sounds good.  It just feels good to play on a tube amp."

He added:  "It would be a catastrophe for the music industry if something happened to that plant."

For the full story, see: 

ANDREW E. KRAMER.  "From Russia, With Dread; American Faces a Truly Hostile Takeover Attempt at His Factory."  The New York Times   (Tuesday, May 16, 2006):  C1 & C4.

The transistor disrupted the vacuum tube, a case that would usually be described as an episode of creative destruction.  One secondary lesson from the story above is that there may be a previously unremarked symmetry to the process of disruption.  A disruptive technology typically appeals only to a niche in the market, while the incumbent technology dominates the mainstream.  But after the disruptive technology improves sufficiently to capture much of the mainstream market, maybe there often will remain a niche market that still prefers the older disruptive technology?

To use Danny DeVito's example in "Other People's Money," the car may have disrupted horse-and-buggies.  But for some nostalgic "jobs" the horse-and-buggy may still be the better product, so there will likely remain some demand for buggy whips.

To the extent that this phenomenon is significant, it might serve to ease the labor market transition when one technology leapfrogs another.

 A vacuum tube used in guitar amplifiers, that was produced in the factory that Mike Matthews owned.  Source of photo:  online version of the NYT article cited above.

George B. Kaiser.  Source of photo: http://www.forbes.com/finance/lists/10/2003/LIR.jhtml?passListId=10&passYear=2003&passListType=Person&uniqueId=OXNB&datatype=Person

(p. A1)  In 2002, Kathleen Eisbrenner, then an executive at El Paso Corp., spent months trying in vain to find a buyer for the company's novel technology for importing natural gas.

In February 2003, she left for a vacation in Cancun, convinced that El Paso would be forced to abandon the project.  As she sat on the beach one afternoon, she got a call on her cellphone.  A colleague had a message from an intermediary, who said he had an "interested buyer," identified only as a "Midwest billionaire."

"It's Warren Buffett calling," she recalls telling her husband as they clinked pina colada glasses together in celebration.  "I was absolutely sure."

But it wasn't Mr. Buffett.  It was another billionaire named George B. Kaiser. 

 . . .

(p. A6)  . . . , Ms. Eisbrenner called Nicolas Saverys, the chief executive of Belgium-based Exmar NV.  Exmar was building two of the new-style LNG vessels.  Ms. Eisbrenner gushed that there was a wealthy buyer.  Mr. Saverys was initially skeptical.  He changed his mind in late February 2003 after meeting Mr. Kaiser in New York.  "At last, I was talking to someone who was putting his own money at stake," he says.

Mr. Saverys sealed the relationship by presenting Mr. Kaiser with a box of pralines from Belgian chocolatier Pierre Marcolini at their second meeting.  Mr. Kaiser, an avowed chocoholic, returned the favor a couple of weeks later in Tulsa, giving Mr. Saverys a box of candy made by Christine Joseph, a Tulsa chocolatier who also was born in Belgium.

Convinced that Energy Bridge could work, Mr. Kaiser agreed to take over the business, closing the deal last December.  El Paso paid him $75 million; in return, he assumed a $120 million obligation to Exmar.  El Paso also agreed to pay to install the underwater pipeline connection that carries the gas from the ship to existing pipelines in the Gulf of Mexico.

The bulk of the $660 million Mr. Kaiser invested went to modify three specially equipped tankers and to charter them for 20 years.  If Energy Bridge opens on time in January, it will be at least two and a half years ahead of any new terminals being developed by other energy companies.  In addition, civic leaders in Massachusetts and Rhode Island, eager to keep LNG terminals and tankers far from the mainland, are encouraging Mr. Kaiser to build an offshore tanker-based project along the Atlantic coast of the U.S.

Mr. Kaiser, who declined requests for an interview but answered some questions by e-mail, concedes he doesn't like "taking a risk on an undemonstrated technology."  But he says that the chance to import natural gas quickly was "such an obvious and alluring business opportunity" that he felt compelled to get Energy Bridge into operation.  He's betting that new LNG-export facilities expected to come online next year in Egypt, Trinidad and Nigeria will create enough extra supply to provide him with ample LNG.

 . . .

He says he acquired Energy Bridge as a challenge.  "I don't gain much pleasure from personal expenditure or recognition," he wrote in an e-mail.  "And any gains I make from the enterprise will accrue to charity.  But I enjoy problem solving and I want to keep my brain active to forestall (or at least diminish) atrophy."

For the full story, see:  

Russell Gold.   "Liquid Assets: A Billionaire Takes a Gamble To Fix Natural-Gas Shortage; Mr. Kaiser Plans to Shift Processing Onto Tankers, Avoiding Terrorism Fears; A Deal Sealed With Sweets."  The Wall Street Journal  (Fri., July 23, 2004):   A1 & A6.

(Note: ellipses added.)

. . . , Ted Kennedy, argues that the minimum wage should be increased because it's difficult to raise a family with the only breadwinner making the current minimum.  It's a popular claim, but it is flawed, for three reasons.

•  First, a study by economist David A. Macpherson of Florida State University and Craig Garthwaite of the Employment Policies Institute suggests that only 20% of the workers who would have been directly affected by an earlier $1 increase in California's minimum wage were supporting a family on a single minimum-wage income.  The other 80% were teenagers or adult children living with their parents, adults living alone or dual earners in a married couple. 
• Second, as economists David Neumark of the Public Policy Institute of California and William Wascher of the Federal Reserve Board show, increases in minimum wages actually redistribute income among poor families by giving wage increases to some and putting others out of work.  They estimate that the federal minimum-wage increase of 1996 and 1997 increased the proportion of poor families by one half to one percentage point.
• Third, consider the long run.  Mr. Neumark and Olena Nizalova have found that even people in their late 20s worked less and earned less the longer they were exposed to a high minimum wage, presumably because the minimum wage destroyed job opportunities early in their work life.

For the full commentary, see:

David R. Henderson.  "Rule of Law; Minimum Wage, Minimum Sense."  Wall Street Journal (Sat., Feb 25, 2006):  A11.

  The skin of Timothy Hall's hands melted together in a coal mine accident in September 2005.  Source of image:  online version of the WSJ article cited below.

I am not against coal.  But I am puzzled why public sentiment and government policy discourage new nuclear reactors.  Per unit of energy produced, isn't nuclear safer than coal?

(p. A1)  MCDOWELL, Ky. -- Last September, Timothy D. Hall was drilling holes in the deepest part of a low-roofed coal mine when an explosion thrust him from his drill machine and set him on fire.

He crawled 45 feet to a mudhole inside the mine to douse the flames.  The fireball melted the bill of his hard hat, charred his oxygen canister and burned his jacket, according to government investigators.  After he was carried outside, but before any pain set in, he was shocked to see the flesh of his fingers had melted together.

For the full story, see:

KRIS MAHER.  "Deep Trouble As Demand for Coal Rises, Risky Mines Play Bigger Role Small Operations Overall Have Higher Fatality Rates; The Dangers of 'Dogholes' Long-Term, a Safer Industry."  The Wall Street Journal  (Thurs., June 1, 2006):  A1 & A10. 

In the graphic below, note that the long-term trend has been a decline in fatalities in coal production.  But the fatalities remain higher, per unit of energy produced, than the fatalities for nuclear energy production. 

 Source of graphic:  online version of the WSJ article cited above.

  Source of book image:  http://www.randomhouse.com/catalog/display.pperl?isbn=9780307265555

The titular wealth they speak of comes from substituting "ever-more-refined knowledge for the traditional factors of industrial production — land, labor and capital."  The United States is producing more stuff than ever with fewer workers.  The Tofflers write that only 20 percent of the work force is now in the manufacturing sector, while some 56 percent (and growing) is engaged in what they call "knowledge work" — managerial, financial, sales-related, clerical and professional tasks.  Even activities like agriculture have gone high-tech, through biotechnology and increasingly sophisticated use of global-positioning satellites to customize irrigation and fertilization down to the individual acre. Knowledge-based wealth, they argue, is revolutionary not just because it gets more output from fewer inputs.  Unlike such physical resources as oil, knowledge can be shared by an infinite number of people, and its value and benefits are generally increased by wider circulation.  (A network, after all, is only as powerful as the number of participants.) Just as important, the Third Wave wealth system "demassifies production, markets and society," creating space for unending experimentation, innovation and individuation.

. . .

Despite visionary passages about nanotechnology (the manipulation of objects at the atomic level) and potential moon-based helium energy, "Revolutionary Wealth" is less interesting for its specifics (most of which will be familiar to readers of publications like Wired, The Economist and Red Herring) than for its evidence of how far we've come since the 70's, when politics, economics and culture all seemed as played out as Richard Nixon's denials of criminality.  In "Future Shock," the Tofflers warned that many people "will find it increasingly painful to keep up with the incessant demand for change that characterizes our time.  For them, the future will have arrived too soon."  These days, from Baghdad to Bangalore to Boston, it seems more likely that people worry that the future will arrive too late.  That's no small change, and it's one on which the Tofflers have been shining a light for years.

For the full review, see: 

NICK GILLESPIE.  "The Future Is Now."   The New York Times Book Review, Section 7 (Sun., May 14, 2006):  9.

The full reference to the Toffler book is:

Toffler, Alvin, and Heidi Toffler. Revolutionary Wealth.  Alfred A. Knopf, 2006.