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July 31, 2006

"Capitalism has Not Corrupted Our Souls; It has Improved Them"



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)





July 30, 2006

Beware of a Snapshot of a Moment in Time


  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.)

 




July 29, 2006

Current Workplace Revolution Benefits Labor


(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.)




July 28, 2006

Medication Errors Harm 1.5 Million a Year



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





July 27, 2006

Global Warming Turns Greenland Green


 

GreenlandPotatoFarm.jpg  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.

 

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

 




July 26, 2006

Intense Competition in Chip Duopoly


IntelAMDWar.gif

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.")




July 25, 2006

Tom Peters: Over-the-Top Schumpeterian



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.)





July 24, 2006

"a jobs program for people who couldn't make it in the private sector"


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)

 




July 23, 2006

Environmental Bureaucrats Ignore Local Knowledge



  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.





July 22, 2006

Exercising to Win, Hurts Lifetime Fitness


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.




July 21, 2006

Indians Hunted Several Species to Local Extinction


 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.

 




July 20, 2006

Job Hopping May Aid Technological Experimentation


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 book image:  http://www.amazon.com/gp/product/customer-reviews/0262024667/104-2835260-2878345?redirect=true



July 19, 2006

Gateway Features artdiamondblog.com


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.”

 



July 18, 2006

Entrepreneurial Archaeology


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.

 




July 17, 2006

Internet Increases Variety of Goods, Services, and Culture


LongTailBK.jpg 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)




July 16, 2006

Entrepreneurial Philanthropy


  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.




July 15, 2006

Entrepreneurs Saluted in Orange Business Services Ad


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.)




July 14, 2006

Free International Labor Markets


 

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:

Dear President George W. Bush and All Members of Congress:

People from around the world are drawn to America for its promise of freedom and opportunity. That promise has been fulfilled for the tens of millions of immigrants who came here in the twentieth century.

Throughout our history as an immigrant nation, those who were already here have worried about the impact of newcomers. Yet, over time, immigrants have become part of a richer America, richer both economically and culturally. The current debate over immigration is a healthy part of a democratic society, but as economists and other social scientists we are concerned that some of the fundamental economics of immigration are too often obscured by misguided commentary.

Overall, immigration has been a net gain for American citizens, though a modest one in proportion to the size of our 13 trillion-dollar economy.

Immigrants do not take American jobs. The American economy can create as many jobs as there are workers willing to work so long as labor markets remain free, flexible and open to all workers on an equal basis.

In recent decades, immigration of low-skilled workers may have lowered the wages of domestic low-skilled workers, but the effect is likely to have been small, with estimates of wage reductions for high-school dropouts ranging from eight percent to as little as zero percent.

While a small percentage of native-born Americans may be harmed by immigration, vastly more Americans benefit from the contributions that immigrants make to our economy, including lower consumer prices. As with trade in goods and services, the gains from immigration outweigh the losses. The effect of all immigration on low-skilled workers is very likely positive as many immigrants bring skills, capital and entrepreneurship to the American economy.

Legitimate concerns about the impact of immigration on the poorest Americans should not be addressed by penalizing even poorer immigrants. Instead, we should promote policies, such as improving our education system, that enable Americans to be more productive with high-wage skills.

We must not forget that the gains to immigrants coming to the United States are immense. Immigration is the greatest anti-poverty program ever devised. The American dream is a reality for many immigrants who not only increase their own living standards but who also send billions of dollars of their money back to their families in their home countries—a form of truly effective foreign aid.

America is a generous and open country and these qualities make America a beacon to the world. We should not let exaggerated fears dim that beacon.

American Signatories top^

Jeffery Abarbanell, University of North Carolina, Chapel Hill
Jason Abrevaya, Purdue University
Richard Adelstein, Wesleyan University
William P. Albrecht, University of Iowa
Michael V. Alexeev, Indiana University
Bruce T. Allen, Michigan State University
Richard A. Almeida, Southeast Missouri State University
Lee J. Alston, University of Colorado, Boulder
Santosh Anagol, Yale University
Gary M. Anderson, California State University, Northridge
Michael Anderson, Washington and Lee University
Robert M. Anderson, University of California, Berkeley
James E. Anderson, Boston College
Robert Warren Anderson, George Mason University
William L. Anderson, Frostburg State University
Dominick T. Armentano, University of Hartford
Richard Arnott, Boston College
Pierre Azoulay, Columbia University
Howard Baetjer, Jr., Towson University
Dean Baim, Pepperdine University
David Balan, Economist
A. Paul Ballantyne, University of Colorado, Colorado Springs
Owen Barder, Center for Global Development
Frank M. Bass, University of Texas, Dallas
Jonathan J. Bean, Southern Illinois University
Peter M. Beattie, Michigan State University
Scott Beaulier, Mercer University
John H. Beck, Gonzaga University
Stacie Beck, University of Delaware
Steven R. Beckman, University of Colorado, Denver
David T. Beito, University of Alabama
Jere R. Behrman, University of Pennsylvania
Donald M. Bellante, University of South Florida
Daniel K. Benjamin, Clemson University
Bruce L. Benson, Florida State University
George S Berger, University of Pittsburgh, Johnstown
Ernst R. Berndt, Massachusetts Institute of Technology
David Berri, California State University, Bakersfield
Alberto Bisin, New York University
Linda J. Bilmes, Harvard University
Greg Blankenship, Illinois Policy Institute
Alan S. Blinder, Princeton University
Barry Boardman, Chief Economist, Kentucky Legislature
Alan E. Boese, Virginia State University
Peter J. Boettke, George Mason University
Elizabeth C. Bogan, Princeton University
Cecil E. Bohanon, Ball State University
Ben W. Bolch, Rhodes College
James E. Bond, Seattle University
Robert A. Book, Independent Economist
Thomas E. Borcherding, Claremont Graduate University
Michael D. Bordo, Rutgers University
Donald Boudreaux, George Mason University
Scott Bradford, Brigham Young University
Ryan R. Brady, United States Naval Academy
Serguey Braguinsky, State University of New York, Buffalo
Jorge Bravo, Duke University
Stephen Eric Bronner, Rutgers University
Taggert J. Brooks, University of Wisconsin, La Crosse
Wayne T. Brough, Freedom Works
Robert K. Buchele, Smith College
Mark Buckley, University of California, Santa Cruz
James B. Burnham, Duquesne University
James L. Butkiewicz, University of Delaware
Bruce Caldwell, University of North Carolina, Greensboro
John E. Calfee, American Enterprise Institute
Joe Calhoun, Florida State University
Anil Caliskan, George Mason University
Charles W. Calomiris, Columbia University
Noel Campbell, North Georgia College and State University
Bryan Caplan, George Mason University
Robert S. Carlsen, University of Colorado, Denver
Bo A. Carlsson, Case Western Reserve University
Robert B. Catlett, Emporia State University
Emily Chamlee-Wright, Beloit College
Henry W. Chappell, Jr., University of South Carolina
Kristine L. Chase, St. Mary's College of California
Carl F. Christ, Johns Hopkins University
Harold Christensen, Centenary College of Louisiana
Lawrence R. Cima, John Carroll University
James E. Clark, Wichita State University
R. Morris Coats, Nicholls State University
Loren Cobb, The Quaker Economist
Mark A. Cohen, Vanderbilt University
Ben Collier, Northwest Missouri State University
William B. Conerly, Conerly Consulting LLC
Patrick Conway, University of North Carolina, Chapel Hill
John E. Coons, University of California, Berkeley
Lee A. Coppock, University of Virginia
Roy E. Cordato, John Locke Foundation
Paul N. Courant, University of Michigan
Tyler Cowen, George Mason University
Dennis J. Coyle, Catholic University of America
Christopher J. Coyne, Hampden-Sydney College
Donald Cox, Boston College
Erik D. Craft, University of Richmond
Peter Cramton, University of Maryland
Maureen S. Crandall, National Defense University
Robert Thomas Crow, Business Economics
David Cuberes, Clemson University
Kirby R. Cundiff, Northeastern State University
Scott Cunningham, University of Georgia
Christopher Curran, Emory University
Hugh M. Curtler, Southwest Minnesota State University
Kirk Dameron, Colorado State University
Jerry W. Dauterive, Loyola University New Orleans
Paul A. David, Stanford University
Antony Davies, Dequesne University
Steven J. Davis, University of Chicago
Alan V. Deardorff, University of Michigan
Alan de Brauw, Williams College
Gregory Delemeester, Marietta College
Bradford DeLong, University of California, Berkeley
Michael Dennis, College of the Redwoods
Arthur T. Denzau, Claremont Graduate University
Arthur M. Diamond, Jr., University of Nebraska, Omaha
John L. Dobra, University of Nevada, Reno
Asif Dowla, St. Mary's College of Maryland
Daniel W. Drezner, University of Chicago
Lloyd Dumas, University of Texas at Dallas
Manoranjan Dutta, Rutgers University
William R. Easterly, New York University
Richard M. Ebeling, Foundation for Economic Education
John C. Edmunds, Babson College
John B. Egger, Towson University
Barry J. Eichengreen, University of California, Berkeley
Eric Eliason, Brigham Young University
Jerome R. Ellig, George Mason University
Randall P. Ellis, Boston University
Sara Fisher Ellison, Massachusetts Institute of Technology
Jeffrey C. Ely, Northwestern University
Ross B. Emmett, Michigan State University
Richard E. Ericson, East Carolina University
Barry S. Fagin, United States Air Force Academy
Frank Falero, Jr., California State University, Bakersfield
Jonathan Falk, NERA Economic Consulting
Eugene F. Fama, University of Chicago
Susan K. Feigenbaum, University of Missouri, St. Louis
Roger D. Feldman, University of Minnesota
J. Peter Ferderer, Macalester College
David N. Figlio, University of Florida
Morris P. Fiorina, Stanford University
Hartmut Fischer, University of San Francisco
Eric Fisher, Ohio State University
Franklin M. Fisher, Massachusetts Institute of Technology
Robert J. Flanagan, Stanford University
Mark C. Foley, Davidson College
Fred E. Foldvary, Santa Clara University
William F. Ford, Middle Tennessee State University
Peter Frank, Wingate University
Robert H. Frank, Cornell University
Michele Fratianni, Indiana University
Jesse M. Fried, University of California,. Berkeley
Lowell E. Gallaway, Ohio University
Gary M. Galles, Pepperdine University
B. Delworth Gardner, Brigham Young University
Judith Gans, University of Arizona
Justin Garosi, North Dakota State University
David E. R. Gay, University of Arkansas
Adam K. Gehr, Jr., DePaul University
Michael Giberson, Independent Economist
Douglas M. Gibler, University of Kentucky
Adam Gifford, Jr., California State University, Northridge
John Gillingham, University of Missouri, St. Louis
William Gissy, Kennesaw State University
Edward L. Glaeser, Harvard University
Nathan Glazer, Harvard University
Brian Goff, Western Kentucky University
Steven M. Goldman, University of California, Berkeley
Deborah Goldsmith, City College of San Francisco
Don Goldstein, Allegheny College
Jack A. Goldstone, George Mason University
Peter Gordon, University of Southern California
Richard L. Gordon, The Pennsylvania State University
Roger H. Gordon, University of California, San Diego
Scott F. Grannis, Western Asset Management
Wayne B. Gray, Clark University
Martin Greenberger, University of California, Los Angeles
Michael Greenstone, Massachusetts Institute of Technology
Gene M. Grossman, Princeton University
Peter Z. Grossman, Butler University
Richard S. Grossman, Wesleyan University
James D. Gwartney, Florida State University
David D. Haddock, Northwestern University
Larry M. Hall, Belmont University
James Halteman, Wheaton College
W. Michael Haneman, University of California, Berkeley
Robin Hanson, George Mason University
Andrew Hanssen, Montana State University
Stephen K. Happel, Arizona State University
W. Penn Hardwerker, University of Connecticut
Donald J. Harris, Stanford University
M. Kabir Hassan, University of New Orleans
Kevin A. Hassett, American Enterprise Institute
Robert H. Haveman, University of Wisconsin
Thomas Hazlett, George Mason University
Cary W. Heath, University of Louisiana, Lafayette
James J. Heckman, Nobel Laureate, University of Chicago
Scott Hein, Texas Tech University
Eric A. Helland, Claremont McKenna College
David R. Henderson, Hoover Institution
Jack High, George Mason University
Robert Higgs, The Independent Institute
P. J. Hill, Wheaton College
Bradley K. Hobbs, Florida Gulf Coast University
Randall G. Holcombe, Florida State University
Harry J. Holzer, Georgetown University
Richard Hooley, University of Pittsburgh
R. Bradley Hoppes, Missouri State University
Steven G. Horwitz, St. Lawrence University
Daniel E. Houser, George Mason University
Douglas A. Houston, University of Kansas
Charles W. Howe, University of Colorado, Boulder
John S. Howe, University of Missouri, Columbia
James E. Howell, Stanford University
Frank Howland, Wabash College
Hilary W. Hoynes, University of California, Davis
James L. Hudson, Northern Illinois University
James L. Huffman, Lewis & Clark College
Jeffrey Rogers Hummel, San Jose State University
David Hummels, Purdue University
Lester H. Hunt, University of Wisconsin, Madison
Christine Hurt, Marquette University
Roxana Idu, SUNY Buffalo
Frederick S. Inaba, Washington State University
Christopher R. Inama, Golden Gate University
Robert P. Inman, University of Pennsylvania
Michael Intriligator, University of California, Los Angeles
Thomas D. Jeitschko, Michigan State University
Bruce K. Johnson, Centre College
Douglas H. Joines, University of Southern California
Seth K. Jolly, Duke University
Garett Jones, Southern Illinois University
Kristin Roti Jones, Hartwick College
Michael Jones-Correa, Cornell University
William H. Kaempfer, University of Colorado, Boulder
Alfred E. Kahn, Cornell University
Joseph P. Kalt, Harvard University
Mark S. Kamlet, Carnegie Mellon University
Theodore C. Kariotis, Towson University
Stephen H. Karlson, Northern Illinois University
Jonathan M. Karpoff, University of Washington
David L. Kaserman, Auburn University
Raymond J. Keating, Small Business and Entrepreneurial Council
Peter B. Kenen, Princeton University
Miles S. Kimball, University of Michigan
Meelis, Kitsing, University of Massachusetts
Robin Klay, Hope College
Benjamin Klein, University of California, Los Angeles
Daniel Klein, George Mason University
Audrey D. Kline, University of Louisville
Paul R. Koch, Olivet Nazarene University
Roger Koppl, Fairleigh Dickinson University
Laurence J. Kotlikoff, Boston University
Melvyn B. Krauss, Hoover Institution
Brent E. Kreider, Iowa State University
Mordechai E. Kreinin, Michigan State University
David W. Kreutzer, James Madison University
Lawrence A. Kudlow, Kudlow & Company
Mukund S. Kulkarni, Penn State University, Harrisburg
 Sumner J. La Croix, University of Hawaii
Arthur B. Laffer, A. B. Laffer Associates
Courtney LaFountain, University of Texas, Arlington
Deepak Lal, University of California, Los Angeles
Steven E. Landsburg, University of Rochester
Richard N. Langlois, University of Connecticut
Nicholas A. Lash, Loyola University
Wolfram Latsch, University of Washington
Robert A. Lawson, Capital University
Phillip LeBel, Montclair State University
Don R. Leet, California State University, Fresno
Kenneth M. Lehn, University of Pittsburgh
David K. Levine, University of California, Los Angeles
David M. Levy, George Mason University
Dale B. Light, Independent Scholar
P. Mather Lindsay, Mather Economics LLC
Tian Hao Liu, University of Chicago
George Lodge, Harvard University
Robert R. Logan, Northern Economic Research Associates
Edward J. Lopez, San José State University
Franklin A. Lopez, Tulane University
Anthony Loviscek, Seton Hall University
Robert E. Lucas, Jr., Nobel Laureate, University of Chicago
John E. Lunn, Hope College
W. Bentley MacLeod, Columbia University
Robert Main, Butler University
Burton G. Malkiel, Princeton University
Laurence Malone, Hartwick College
Yuri N. Maltsev, Carthage College
N. Gregory Mankiw, Harvard University
Geoffrey A. Manne, Lewis & Clark College
William F. Marina, Florida Atlantic University
Matthew Marlin, Duquesne University
Michael L. Marlow, California Polytechnic State University
Andres Marroquin Gramajo, George Mason University
Giovanni Mastrobuoni, Princeton University
David N. Mayer, Capital University
Carrie Mayne, Utah Department of Workforce Services
Michael J. Mazzeo, Northwestern University
Will McBride, George Mason University
Deirdre McCloskey, University of Illinois at Chicago
Paul W. McCracken, University of Michigan
Rachel McCulloch, Brandeis University
Michael J. McCully, High Point University
Daniel L. McFadden, Nobel Laureate, University of California, Berkeley
Joseph A. McKinney, Baylor University
Walter W. McMahon, University of Illinois, Champaign-Urbana
Robert McNown, University of Colorado, Boulder
Matthew Q. McPherson, Gonzaga University
Tom Means, San Jose State University
Roger Meiners, University of Texas, Arlington
John D. Merrifield, University of Texas, San Antonio
Harry Messenheimer, Rio Grande Foundation
Carrie Meyer, George Mason University
Jacob B. Michaelsen, University of California, Santa Cruz
William Milberg, New School for Social Research
Paul R. Milgrom, Stanford University
Demaris Miller, Psychologist
James C. Miller, III, George Mason University
Stephen C. Miller, Western Carolina University
Maria Minniti Koppl, Babson College
Jeffrey A. Miron, Harvard University
Wilson Mixon, Berry College
Robert Moffitt, Johns Hopkins University
Michael R. Montgomery, University of Maine
Cassandra Chrones Moore, Cato Institute
Thomas Gale Moore, Hoover Institution
John C. Moorhouse, Wake Forest University
Michael A. Morrisey, University of Alabama at Birmingham
Andrew P. Morriss, Case Western Reserve University
Milton L. Mueller, Syracuse University
Robert F. Mulligan, Western Carolina University
Michael C. Munger, Duke University
Ben Muse, Economist
David B. Mustard, University of Georgia
Richard F. Muth, Emory University
Thomas J. Nechyba, Duke University
Robert H. Nelson, University of Maryland
Russell Nelson, Economist
Hugh B. Nicholas Jr., Pittsburgh Supercomputing Center
M. Scott Niederjohn, Lakeland College
Eli M. Noam, Columbia University
Roger G. Noll, Stanford University
Masao Ogaki, Ohio State University
Lee Ohanian, University of California, Los Angeles
David J. O'Hara, Metropolitan State University
Randal O’Toole, Thoreau Institute
Lydia D. Ortega, San Jose State University
Evan Osborne, Wright State University
Randall E. Parker, East Carolina University
Allen M. Parkman, University of New Mexico
Jeffrey S. Parlow, Macomb Community College
Mark V. Pauly, University of Pennsylvania
Matthew C. Pearson, University of California, Davis
Sandra J. Peart, Baldwin-Wallace College
William S. Peirce, Case Western Reserve University
Robert L. Pennington, University of Central Florida
Jeffrey M. Perloff, University of California, Berkeley
Timothy Perri, Appalachian State University
Mark J. Perry, University of Michigan, Flint
William H. Peterson, Ludwig von Mises Institute
William S. Peirce, Case Western Reserve University
Owen R. Phillips, University of Wyoming
Robert S. Pindyck, Massachusetts Institute of Technology
Joseph S. Pomykala, Towson University
Steven Postrel, Southern Methodist University
Benjamin Powell, The Independent Institute
John M. Quigley, University of California, Berkeley
Carlos Ramirez, George Mason University
Elizabeth L. Rankin, Centenary College of Louisiana
James B. Ramsey, New York University
Ronald A. Ratti, University of Missouri, Columbia
Salim Rashid, University of Illinois, Champaigne-Urbana
Laura Razzolini, Virginia Commonwealth University
Edward M. Rice, University of Washington
Raymond Riezman, University of Iowa
Salvador Rivera, State University of New York, Cobleskill
Luis N. Rivera-Pagan, Princeton University
Richard W. Rahn, Center for Global Economic Growth
Mario J. Rizzo, New York University
Michael J. Rizzo, Centre College
Donald John Roberts, Stanford University
Seth Roberts, University of California, Berkeley
Malcolm Robinson, Thomas More College
James D. Rodgers, Pennsylvania State University
Harvey S. Rosen, Princeton University
Nathan Rosenberg, Stanford University
Philip Rothman, East Carolina University
Ronald D. Rotunda, George Mason University
Brian Rowe, University of Michigan
Charles T. Rubin, Duquesne University
Paul H. Rubin, Emory University
Gerard Russo, University of Hawaii
Andrew R. Rutten, Stanford University
Matt E. Ryan, West Virginia University
Andrew Samwick, Dartmouth College
Steven C. Salop, Georgetown University
Raymond D. Sauer, Jr., Clemson University
Thomas R. Saving, Texas A & M University
W. Charles Sawyer, University of Southern Mississippi
Edward M. Scahill, University of Scranton
D. Eric Schansberg, Indiana University, New Albany
Thomas C. Schelling, Nobel Laureate, University of Maryland
Richard Schmalensee, Massachusetts Institute of Technology
Ken Schoolland, Hawaii Pacific University
Stewart J. Schwab, Cornell University
Anna J. Schwartz, National Bureau of Economic Research
Kenneth E. Scott, Stanford University
Carlos C. Seiglie, Rutgers University
Barry J. Seldon, University of Texas, Dallas
George A. Selgin, University of Georgia
Richard Sennett, Massachusetts Institute of Technology
John F. Shampton, Texas Wesleyan University
Richard Sherlock, Utah State University
Tyler G. Shumway, University of Michigan
Randy T. Simmons, Utah State University
Rita Simon, American University
Charles David Skipton, University of Tampa
Daniel J. Slottje, Southern Methodist University
W. Gene Smiley, Marquette University
Alastair Smith, New York University
Charles Welstead Smith, Ohio State University
James F. Smith, University of North Carolina, Chapel Hill
Jeffrey Smith, University of Michigan
Karl Smith, North Carolina State University
Nathan Smith, World Bank
Robert S. Smith, Cornell University
Vernon L. Smith, Nobel Laureate, George Mason University
Russell S. Sobel, West Virginia University
Ilya Somin, George Mason University
John W. Sommer, Political Economy Research Institute
John C. Soper, John Carroll University
Martin C. Spechler, Indiana University
David B. Spence, University of Texas, Austin
Mark Steckbeck, Hillsdale College
Roland Stephen, North Carolina State University
E. Frank Stephenson, Berry College
Robert M. Stern, University of Michigan
Robert T. Stewart, Fordham University
Hans Stoll, Vanderbilt University
Edward P. Stringham, San Jose State University
Amy H. Sturgis, Belmont University
Paul J. Sullivan, Georgetown University
Anita Summers, University of Pennsylvania
Scott Sumner, Bentley College
William A. Sundstrom, Santa Clara University
Shirley V. Svorny, California State University, Northridge
Aaron M. Swoboda, University of Pittsburgh
Richard E. Sylla, New York University
Alexander Tabarrok, The Independent Institute
John A. Tatom, Indiana State University
Jason E. Taylor, Central Michigan University
David J. Theroux, The Independent Institute
Clifford F. Thies, Shenandoah University
Christopher R. Thomas, University of South Florida
T. Nicolaus Tideman, Virginia Polytechnic Institute and State University
Richard H. Timberlake, Jr., University of Georgia
Robert D. Tollison, Clemson University
Mark Toma, University of Kentucky
John F. Tomer, Manhattan College
Jay L. Tontz, California State University, East Bay
Joel P. Trachtman, Tufts University
Adrian E. Tschoegl, University of Pennsylvania
Kevin K. Tsui, Clemson University
David Tufte, Southern Utah Unhiversity
Frederick Tung, Emory University
Gordon Tullock, George Mason University
Chad S. Turner, Nicholls State University
Nicola C. Tynan, Dickinson College
Michelle A. Vachris, Christopher Newport University
John J. Villarreal, California State University, East Bay
Georg Vanberg, University of North Carolina, Chapel Hill
Mark Van Boening, University of Mississippi
T. Norman Van Cott, Ball State University
Hendrik Van den Berg, University of Nebraska, Lincoln
Alvaro Vargas Llosa, The Independent Institute
Karen I. Vaughn, George Mason University
Richard K. Vedder, Ohio University
Erik Voeten, George Washington University
George Vredeveld, University of Cincinnati
Deborah L. Walker, Fort Lewis College
Eric Wanner, Russell Sage Foundation
Michael R. Ward, University of Texas, Arlington
John T. Warner, Clemson University
Alan Rufus Waters, California State University, Fresno
Michael J. Webb, Regulatory Economics Group
William Weber, Southeast Missouri State University
Ivo I. Welch, Brown University
David L. Weimer, University of Wisconsin, Madison
John T. Wenders, University of Idaho
J. Fred Weston, University of California, Los Angeles
Robert M. Whaples, Wake Forest University
Lawrence H. White, University of Missouri, St. Louis
Ronald F. White, College of Mount St. Joseph
John Whitehead, Appalachian State University
Marina v. N. Whitman, University of Michigan
Roland Wiederaenders, Austin Capital Management
Christopher Wignall, University of California at San Diego (grad econ student)
Richard W. Wilcke, University of Louisville
James A. Wilcox, University of California, Berkeley
Thomas D. Willett, Claremont Graduate University
Arlington W. Williams, Indiana University, Bloomington
Douglas Wills, University of Washington, Tacoma
Bonnie Wilson, St. Louis University
Larry T. Wimmer, Brigham Young University
Michael K. Wohlgenant, North Carolina State University
Barbara Wolfe, University of Wisconsin, Madison
Justin Wolfers, University of Pennsylvania
Gary Wolfram, Hillsdale College
Arthur Woolf, University of Vermont
Eric C. Woychik, Strategy Integration LLC
Brian Wright, University of California, Berkeley
Joshua D. Wright, George Mason University
Bruce Yandle, Clemson University
David B. Yoffie, Harvard University
DeVon L. Yoho, Ball State University
Derek K. Yonai, Campbell University
Jeffrey T. Young, St. Lawrence University
Asghar Zardkoohi, Texas A & M University
Lei Zhang, Clemson University
Kate Xiao Zhou, University of Hawaii
Zenon X. Zygmont, Western Oregon University


Foreign Signatories top^

Lord Meghnad Desai, London School of Economics, England
Kevin Dowd, University of Nottingham, England
Jose Antonio Fontana, Uruguay
Francisco Javier Aparicio, CIDE, Mexico
Jurgen G. Backhaus, Erfurt University, Germany
Alvaro Bardon, Universidad Finis Terrae, Chile
Alberto Benegas-Lynch, University of Buenos Aires, Argentina
Niclas Berggren, Ratio Institute, Sweden
Andreas Bergh, Lund University, Sweden
Sonja Boehmer-Christiansen, University of Hull, England
Gregor Bush, BMO Economics, Canada
John B. Chilton, American University of Sharjah, United Arab Emirates
Julio H. Cole, Universidad Francisco Marroquin, Guatemala
Janet Coleman, London School of Economics and Political Science, England
Enrico Colombatto, University of Torino, Italy
Daniel Cordova, Peruvian University of Applied Sciences, Peru
Eric Crampton, University of Canterbury, New Zealand
Fredrik Erixon, Timbro, Sweden
Ana Marie Fossati, Agencia Interamericana de Prensa Económica, Uruguay
Angel Solano Garcia, Universitad de Granada, Spain
Ronald Hamowy, University of Alberta, Canada
Steffen Hentrich, German Advisory Council on the Environment, Berlin, Germany
 Andrew Leigh, Australian National University
Pierre Lemieux, University of Québec in Outaouais, Canada
Christopher R. Lingle, Francisco Marroquin University, Guatemala
Lance J. Lochner, University of Western Ontario, Canada
Francis T. Lui, Hong Kong University of Science and Technology, China
Robert Nef, Liberales Institut Zurich, Switzerland
Jan Narveson, University of Waterloo, Canada
Maximilian Oberbauer, University of Vienna, Austria
John F. Opie, Feri Rating & Research GmbH, Germany
Mohamed Oudebji, Economics and Social Sciences of Marrakech, Morocco
Tomi Ovaska, University of Regina, Canada
Eduardo Pegurier, Catholic University of Rio de Janeiro, Brazil
Victoria Curzon Price, University of Geneva, Switzerland
Herbert Reginbogin, University of Potsdam, Germany
Friedrich Schneider, Johannes Kepler University of Linz, Austria
Parth J. Shah, Centre for Civil Society, India
Claudio Djissey Shikida, Brazil
Saul Trejo, Grupo Acex, Mexico
Alec van Gelder, International Policy Network, England
Sam Vermeersch, NPO Fakbar Letteren, Belgium
Anthony M. C. Waterman, University of Manitoba, Canada


Useful References top^

Borjas, George J., and Lawrence F. Katz. 2006. Evolution of the Mexican-Born Workforce in the United States. NBER Working Paper No. 11281. Cambridge, Mass.: National Bureau of Economic Research.

Card, David. 2005. Is the New Immigration Really So Bad? NBER Working Paper No. 11547. Cambridge, Mass.: National Bureau of Economic Research.

Card, David, and Ethan G. Lewis. 2005. The Diffusion of Mexican Immigrants During the 1990s: Explanations and Impacts. NBER Working Paper No. 11552. Cambridge, Mass.: National Bureau of Economic Research.

Couch, Jim F., Brett A. King, William H. Wells, and Peter M. Williams. June 2001. Nation of Origin Bias and the Enforcement of Immigration Laws by the Immigration and Naturalization Service. Independent Institute Working Paper. Oakland, Calif.: The Independent Institute.

Cowen, Tyler, and Daniel Rothschild. May 15, 2006. Hey, Don't Bad-mouth Unskilled Immigrants: You Don't Have to Be a Computer Genius to Be Good for the U.S. Los Angeles Times.

__________. June 12, 2006. Blending In, Moving Up. Washington Post.

Friedberg, Rachel M. 2001. The Impact of Mass Migration on the Israeli Labor Market. The Quarterly Journal of Economics 116 (4): 1373-1408.

Friedberg, Rachel M., and Jennifer Hunt. 1995. The Impact of Immigrants on Host Country Wages, Employment and Growth, Journal of Economic Perspectives 9 (4): 23-44.

Gallaway, Lowell E., Stephen Moore, and Richard K. Vedder. 2000. The Immigration Problem: Then and Now. The Independent Review 4 (3): 347-364.

Gandal, Neil, Gordon H. Hanson, and Matthew J. Slaughter. 2000. Technology, Trade, and Adjustment to Immigration in Israel. NBER Working Paper No. 7962. Cambridge, Mass.: National Bureau of Economic Research.

Krueger, Alan B. April 6, 2006. Two Labor Economic Issues for the Immigration Debate. Washington, D.C.: Center for American Progress.

Ottaviano, Gianmarco I.P., and Giovanni Peri. 2006. Rethinking the Gains from Immigration: Theory and Evidence from the U.S. NBER Working Paper No. 11672. Cambridge, Mass.: National Bureau of Economic Research.

Powell, Benjamin. April 30, 2005. Immigration, Economic Growth, and the Welfare State. Oakland, Calif.: The Independent institute.

__________. May 18, 2005. Immigration Reform that Both Sides Can Support. San Francisco Business Times.

___________. April 4, 2006. How To Reform Immigration Laws. Atlanta Journal-Constitution.

___________. December 22, 2005. The Pseudo Economic Problems of Immigration. San Diego Union-Tribune.

Powell, Benjamin, and Peter Laufer. September 21, 2005. Immigration Wars: Open or Closed Borders for America? Transcript of Independent Policy Forum. Oakland, Calif.: The Independent Institute.

Simon, Julian. 1999. The Economic Consequences of Immigration, 2nd ed. Ann Arbor, Mich.: University of Michigan Press.

_______. 1990. Population Matters: People, Resources, Environment, and Immigration. New Brunswick, N.J.: Transaction Publishers.

Smith, James P., and Barry Edmonston. 1998. The Immigration Debate: Studies on the Economic, Demographic, and Fiscal Effects of Immigration. Washington, D.C.: National Academies Press.

Tabarrok, Alexander. 2000. Economic and Moral Factors in Favor of Open Immigration. Oakland, Calif.: The Independent Institute.

Vedder, Richard K., and Lowell E. Gallaway. 1993. Out of Work: Unemployment and Government in Twentieth-Century America, rev. ed. New York: New York University Press for The Independent Institute.




July 13, 2006

When Public Schools Fail, Give Parents a Refund


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.




July 12, 2006

Buffett and Gates Should Strengthen Foundations of Free-Market


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.




Test That Showed No Life on Mars, Now Also Shows No Life on Earth, Either


  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.

 

 




July 11, 2006

Global Warming Ranked at Bottom of World Priorities by Economists and Ambassadors



LomborgBjorn.gif 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





July 10, 2006

Foreign Aid Is Harmful to African Countries: More on Why Africa is Poor


TroubleWithAftricaBK.jpg 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)




July 9, 2006

Government Paid 34 Cents to Collect a 15 Cent Toll


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.

 




July 8, 2006

Government Corn Subsidies Are Inefficient


 

(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.

 




July 7, 2006

Chinese Central Planning Turns Lake Into Desert


   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.

 

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




July 6, 2006

'Dead Men Tell No Tales'--But If They Did, the Times Suggests They Would Not Speak Well of Saddam Hussein


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. 




July 5, 2006

Russians Try to Steal Rocker's Vacuum Tube Factory


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.

 

VacuumTubeBox.jpg 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.




July 4, 2006

Entrepreneur Risks His Money; Government Risks Yours



KaiserGeorgeB.jpg 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.)




July 3, 2006

Raising Minimum Wage Destroys Job Opportunities


. . . , 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.




July 2, 2006

Why Fear Nuclear When Coal is More Deadly?


HallTimothy.gif  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. 

 CoalMiningFatalities.gifSource of graphic:  online version of the WSJ article cited above.

 

 

 




July 1, 2006

Toffler Fear of Future Changes to "worry that the future will arrive too late"


  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.

 




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