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December 31, 2006

Diverse Civic Groups Support Fee for Driving in Manhattan

A year ago, officials from a prominent civic group floated a proposal to reduce traffic by levying a $7 fee on cars and trucks driving below 60th Street, but they found themselves treated not like visionary crusaders but like bird flu patients when policy makers at City Hall said very firmly that such a change was not on the mayor's agenda for his second term.

Now a diverse array of civic and community groups -- including such unlikely allies as conservative scholars and take-back-the-streets cycling advocates -- are cautiously moving to raise the subject again in the hope of overcoming the resistance of New Yorkers and their political leaders.

. . .

The coalition wants more speed bumps on neighborhood streets and a crackdown on illegal parking, but it also asks that the city study congestion pricing.

''That is the gorilla in the room and, among all the measures we're discussing, it has the most potential for reducing traffic,'' said Paul Steely White, the director of Transportation Alternatives.

. . .

Advocates of congestion pricing are reluctant to make specific proposals on how it could be carried out in New York, but they often point to London as an example of a successful program.

Championed by an activist mayor, London's program began in early 2003 and has significantly reduced traffic and sped up bus lines. London drivers must pay as much as $19 a day to enter the road pricing zone in the city center. They can pay in a variety of ways, including online, by phone, by mail or at designated shops or gas stations. Cameras around the congestion zone read vehicle license plates and feed the numbers to a computer that checks to see who paid their fees. Those who have not paid can be fined.


For the full story, see: 

WILLIAM NEUMAN. "Bigger Push for Charging Drivers Who Use the Busiest Streets." The New York Times  (Fri., November 24, 2006):  C9.

(Note:  ellipses added.)


December 30, 2006

Feynman: Nothing in Biology Requires Us to Die

   Source of book image: http://stochastix.wordpress.com/files/2006/08/the-pleasure-of-finding-things-out.gif


(p. 100)  It is one of the most remarkable things that in all of the biological sciences there is no clue as to the necessity of death.  If you say we want to make perpetual motion, we have discovered enough laws as we studied physics to see that it is either absolutely impossible or else the laws are wrong.  But there is nothing in biology yet found that indicates the inevitability of death.  This suggests to me that it is not at all inevitable, and that it is only a matter of time before the biologists discover what it is that is causing us the trouble and that that terrible universal disease or temporariness of the human's body will be cured.   



Feynman, Richard P.  The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman.  New York:  Perseus Books, 1999.


December 29, 2006

T.W. Schultz May Have Been Right to Emphasize Innovation Over Invention

Antikythera_fragment_A.jpg    On the left is a photo of Fragment A, the largest of the 82 fragments of the Antikythera Mechanism.  On the right is an x-ray (radiograph) of Fragment A.  Source of images:  http://www.xtekxray.com/antikythera.htm


When I was a young graduate student at Chicago, in the mid-1970s, T.W. Schultz was a gentle, but still active and sharp, old man.  I respected him and liked him, but sometimes thought he was a bit naive.  For instance, one of his positions was that most useful technology is already out there somewhere---the hard part is figuring out how to efficiently get the useful technologies to market at a price people are willing to pay.  (I'm writing this from memory.)  In other words, to use Schumpeter's distinction between invention and innovation:  Schultz downplayed the role of invention and emphasized the role of innovation.

The amazing device discussed in the article below, seems like solid grist for T.W.'s mill.

(More grist would be a huge, fancy, ancient Chinese clock that is discussed in Daniel Boorstin's The Discoverers book.) 

Also, do not neglect to pause for a moment to notice the vindication of Derek J. de Solla Price.  Few today know his name, but he should be remembered as one of the first (Galton might be the first) to apply bibliometric measures to the study of science. 


A computer in antiquity would seem to be an anachronism, like Athena ordering takeout on her cellphone.

But a century ago, pieces of a strange mechanism with bronze gears and dials were recovered from an ancient shipwreck off the coast of Greece.  Historians of science concluded that this was an instrument that calculated and illustrated astronomical information, particularly phases of the Moon and planetary motions, in the second century B.C.

. . .

Technology historians say the instrument is technically more complex than any known for at least a millennium afterward.  Earlier examinations of the instrument, mainly in the 1970s by Derek J. de Solla Price, a Yale historian who died in 1983, led to similar findings, but they were generally disputed or ignored.

The hand-operated mechanism, presumably used in preparing calendars for planting and harvesting and fixing religious festivals, had at least 30, possibly 37, hand-cut bronze gear-wheels, the researchers said.  . . .

. . .

Dr. Charette noted that more than 1,000 years elapsed before instruments of such complexity are known to have re-emerged. A few artifacts and some Arabic texts suggest that simpler geared calendrical devices had existed, particularly in Baghdad around A.D. 900.

It seems clear, he said, that ''much of the mind-boggling technological sophistication available in some parts of the Hellenistic and Greco-Roman world was simply not transmitted further.''

''The gear-wheel, in this case,'' he added, ''had to be reinvented.''


For the full story, see: 

JOHN NOBLE WILFORD.  "Early Astronomical 'Computer' Found to Be Technically Complex."  The New York Times  (Thurs., November 30, 2006):  A7.

(Note:  ellipses added.)

The reference for the Nature article reporting the new analysis, is:

Freeth, T., Y. Bitsakis, X. Moussas, J. H. Seiradakis, A.Tselikas, E. Mankou, M. Zafeiropoulou, R. Hadland, D. Bate, A. Ramsey, M. Allen, A. Crawley, P. Hockley, T. Malzbender, D. Gelb, W. Ambrisco, and M. G. Edmunds. "Decoding the Ancient Greek Astronomical Calculator Known as the Antikythera Mechanism." Nature 444 (Nov. 30, 2006): 587-91.

The reference to the Boorstin book, is:

Boorstin, Daniel J.  The Discoverers.  New York:  Random House, 1983, pp. 59-61.

On the Chinese clock, the Boorstin book relies on:

Needham, Joseph.  Science and Civilization in China. Vol. 4 Physics and Physical Technology. Part II: Mechanical Engineering. Cambridge, England: Cambridge University Press, 1965, Figure 650, p. 449.

One of Derek J. de Solo Price's most important books, is:

Price, Derek J. de Solla.  Little Science, Big Science. New York: Columbia University Press, 1963.


 Antikythera_model_back_gears.jpg   A computer model re-construction of the Antikythera Mechanism.  Source of image:  http://www.xtekxray.com/antikythera.htm


December 28, 2006

Incentives Influence Doctors' Choice of Prostate Therapy

(p. A1)  The nearly 240,000 men in the United States who will learn they have prostate cancer this year have one more thing to worry about:  Are their doctors making treatment decisions on the basis of money as much as medicine?

Among several widely used treatments for prostate cancer, one stands out for its profit potential.  The approach, a radiation therapy known as I.M.R.T., can mean reimbursement of $47,000 or more a patient.

That is many times the fees that urologists make on other accepted treatments for the disease, which include surgery and radioactive seed implants.  And it may help explain why urologists have started buying multimillion-dollar I.M.R.T. equipment and software, and why many more are investigating it as a way to increase their incomes.

. . .

(p. C7)  The one certainty about I.M.R.T. is that for doctors who own the technology, it can be much more lucrative than alternative treatments.  Medicare and other insurers typically pay urologists only $2,000 or less for performing surgery to remove the prostate or for implanting radioactive seeds.  The insurers say the much higher I.M.R.T. payments, which in some cases exceed $50,000, are based on the technology's cost.  


For the full story, see: 

STEPHANIE SAUL.  "Profit and Questions as Doctors Offer Prostate Cancer Therapy."  The New York Times  (Fri., December 1, 2006):  A1 & C7.

December 27, 2006

Evan Williams Spurns Bad Money

   Evan Williams (on left) with Noah Glass, co-founded Odeo.  Source of photo:  http://www.nytimes.com/2005/02/25/technology/25podcast.html?ex=1267419600&en=b80f1d3808f556cc&ei=5088


Evan Williams' story illustrates Christensen and Raynor's advice that disruptive innovators need to seek good money, and spurn bad money.  Good money is patient for growth, but impatient for profit.  Bad money is the opposite. 


EVAN WILLIAMS recently bought his freedom.  It cost him a bit more than $2 million, and he says it was worth every penny.

I'm not talking about paying off a big debt to one of Tony Soprano's loan-shark underlings.  Mr. Williams is a serial entrepreneur, one of those Silicon Valley characters who start company after company.  And he purchased his freedom from the venture capitalists and others who financed his company, Odeo.  Mr. Williams dug into his pockets and gave them back their money.  He got to keep his struggling podcast company and renamed it the Obvious Corporation.

In the process, Mr. Williams, who is 34, has become something of a cause célèbre among a small group of mostly young entrepreneurs who seem determined to turn their back on venture capitalists.  They say they yearn for a new entrepreneurship model.  They talk about building ''sustainable companies'' suggesting something idealistic in their quest.  With comments on blogs urging Mr. Williams to ''keep up the goodness,'' it feels a bit like the birth of a mini-movement in the Valley.

. . .

In candid posts on his blog, Mr. Williams chronicled Odeo's story, warts and all. He admitted to making mistakes.  Getting too much venture money too early was one of them.  It made it harder to persuade the board and the company's 14 employees to change course when, for example, Apple Computer introduced a competing product that cut into Odeo's prospects.  ''It's a bigger ship to turn,'' Mr. Williams said.


For the full story, see: 

MIGUEL HELFT.  "STREET SCENE: VC NATION; Yearning for Freedom From Venture Capital Overlords."   The New York Times  (Fri., November 24, 2006):  C5.

(Note:  ellipsis added.)


The reference for the Christensen and Raynor book is:

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


December 26, 2006

Ignoring the Elephant in the Stent Hearing Room

Stent.jpg   A stent.  Source of photo:  online version of the 3/27/07 NYT article cited below.


(p. C1)  See, there was an elephant in the hearing room last week that went almost entirely ignored.  One study after another has found that whether or not a stent is coated, angioplasty — the process of opening up an artery before a stent is inserted — and stenting do not actually reduce the risk of heart attack or extend life span for most patients.

“There’s a much more liberal use of angioplasty and stenting than there needs to be,” Dr. Eric J. Topol, a member of the panel, told me last week.

Dr. Calvin L. Weisberger, the top cardiologist at Kaiser Permanente, said, “A large pool of angioplasties and bypass surgeries are being done without scientific evidence.”

. . .

Angioplasty dates back to the 1970s, and stents became a part of the process in the 1990s.  Doctors have assumed, sensibly enough, that blocked arteries caused heart attacks by preventing blood from reaching the heart.  Opening those ar-(p. C14)teries would keep the blood flowing.

But when researchers tried to prove the theory, they kept coming up empty.  The reason seems to be that heart attacks aren’t generally caused by a big buildup of plaque that blocks an artery.  They occur instead when a small piece of plaque bursts, causing a cascade that can suddenly clog an open artery.  The best way to reduce the risk of that is through cholesterol-lowering drugs, diet and exercise, rather than by opening up a couple of clogged arteries.

Yet stent use keeps growing.  “Cardiologists just believe that if you open up a blockage, you’re going to help someone,” said Dr. Judith S. Hochman, director of the cardiovascular clinical research center at New York University.  “And they make money from these procedures.”

Ah, yes — money.  Medicare typically pays $12,000 to $15,000 for a coated stent procedure, according to Thomas Gunderson of Piper Jaffray.  Angioplasty and stenting have accounted for almost 10 percent of the increase in Medicare spending since the mid-1990s, Jonathan S. Skinner, a Dartmouth economist, estimates.


For the full commentary, see: 

DAVID LEONHARDT.  "ECONOMIX; What Money Doesn’t Buy in Health Care."  The New York Times  (Weds., December 13, 2006 ):  C1 & C14.


Added on 3/22/08: For a later, related story, see: 

BARNABY J. FEDER.  "In Trial, Drugs Equal Benefits of Artery Stents."  The New York Times  (Tues., March 27, 2007):  A1 & A13.


December 25, 2006

Goverment Planning Destroys Poor People's Chance to Develop Themselves: More on Why Africa is Poor

  The refuse from homes demolished by the Abuja city government as part of their master plan.  Source of photo:    online version of the NYT article cited below. 


The story below, alas, is not an isolated example.  The lessons from Hernando de Soto's The Other Path, have still not been learned. 


“They don’t want to see the common man, the poor man,” said Comrade Daniel, a motorcycle taxi driver, standing in the rubble of his neighborhood.  He lost first his home and then his livelihood to a recent campaign to rid this stately capital of the blemishes of poverty.  “They only care for themselves,” he said.

Mr. Daniel and others who live on the unruly edge of this tidy city in the mossy hills of central Nigeria say that Abuja has declared war on its poorest citizens.

. . .  

. . .  the city’s master plan was ignored for years by corrupt officials who allowed illegal neighborhoods to blossom, unauthorized street markets to spread and torpedo-like motorcycle taxis, called okada, often driven by illiterate young men, to choke the streets.

Much of that expansion was sanctioned — or at least overlooked — by the rulers of the day, and deeds were obtained by many of those who have lost their homes in the recent cleanup.  Mr. Daniel, the motorcycle taxi driver, had a deed to his land, having paid about $160 for a small plot.

In 2003, a new minister was appointed to run the capital, and he declared his intention to hew strictly to the old master plan.  Many political leaders cheered the decision, fretting that Abuja, built at enormous expense as an antidote to Lagos, was headed to the same chaotic fate.

But the declaration effectively rendered much of the daily life of millions of people illegal.  As with most Africans, Nigerians deal mostly in the informal economy, the vast, unregulated, untaxed network that emerges, through the inexorable logic of the marketplace, to fill vital needs left unmet by government and the formal economy.

. . .

The master plan’s housing estates unfurl with the orderliness of a planned subdivision:  town houses and apartments for the well heeled, tract homes and villas for the even better heeled.  But there is little provision for the army of civil servants, whose low wages place the graceful homes of Abuja out of reach.

As for the maids, drivers, security guards and laborers without whom this city would cease to function — people like Mr. Daniel and his sister — there is no place for them at all.  Many have moved farther still, commuting for hours from neighboring states to escape the bulldozers.

The government has said it plans to help resettle those displaced by the demolition, estimated to be in the tens of thousands, but those who have lost their homes say no one has offered them any compensation or a new place to live.  And so they are left with the bitter knowledge that their capital has no place for them.

With their home reduced to rubble, Vashti and Comrade Daniel have moved into the back room of a cousin’s house.  The house they lost was not some tin shack, but a proper house of bricks and mortar.  Mr. Daniel’s income has been slashed by two-thirds by the ban on okada, and he does not know how he will rebuild.

“They say they want to make Abuja like London, but London wasn’t built in a day,” he said.  “Once upon a time they had poor people in London, but they developed themselves.  We just want that chance.”


For the full story, see:

LYDIA POLGREEN.  "ABUJA JOURNAL; In a Dream City, a Nightmare for the Common Man."  The New York Times  (Weds., December 13, 2006):  A4.

(Note:  ellipses added.)


The reference to de Soto's book is:

Soto, Hernando de. The Other Path. New York: Harper and Row, 1989.


  "Okada" are the motorcycle taxis that the city government of Abuja is trying to ban.  Source of photo:  online version of the NYT article cited above.

 NigeriaMap.gif   Source of map:  online version of the NYT article cited above.


December 24, 2006

Publishing Pretty Papers Full of Clever Mathematical Tricks

  Source of book image:  http://images.amazon.com/images/P/0738203491.01.LZZZZZZZ.jpg


In his elegant and thoughtful foreward, physicist, futurist, and guru Freeman Dyson writes:

(p. viii)  Before I met Feynman, I had published a number of mathematical papers, full of clever tricks but totally lacking in im-(p. ix)portance.  When I met Feynman, I knew at once that I had entered another world.  He was not interested in publishing pretty papers.  He was struggling, more intensely than I had ever seen anyone struggle, to understand the workings of nature by rebuilding physics from the bottom up.   


The reference to the book, is:

Feynman, Richard P. The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman. New York: Perseus Books, 1999.

December 23, 2006

Schumpeter's "Sarcastic Remark" on Mathematics in Economics

Erich Schneider had been a student of Schumpeter's at the University of Bonn in the late 1920s.  The following sentences are from his lectures on Schumpeter that he published in German in 1970, and that were were translated into English by W.E. Kuhn and published in that form in 1975.

(p. 41) When, after many years of separation, I saw Schumpeter again at Harvard in the fall of 1949 and heard his lectures on economic theory--which he gave at 2 p.m., as in Bonn--I found him to be exactly the same man as before. On that afternoon he talked about the nature of dynamic analysis and about the role of difference equations in the framework of such an analysis.

To the above passage, Schneider adds footnote 3:

(p. 59) He dropped the sarcastic remark: "There are economists who do not know what a difference equation is; but there are also those who know nothing else."

Schneider, Erich.  Joseph A. Schumpeter:  Leben Und Werk Eines Grossen Sozialokonomen (Life and Work of a Great Social Scientist). Lincoln, Neb.:  University of Nebraska--Lincoln Bureau of Business Research, 1975.

December 22, 2006

Environmentalists Back Biofuels that Cause Deforestation

  Forests are burned on plantations in Indonesia to clear land to produce palm oil which is "a key ingredient in biodiesel."  Source of caption quote and photo:  online version of WSJ article cited below.


(p. A1)  PONTIANAK, Indonesia -- Investors are pouring billions of dollars into "renewable" energy sources such as ethanol, biodiesel and solar power that promise to reduce the world's reliance on petroleum.  But exploiting these alternatives may produce unintended environmental and economic consequences that offset the expected benefits.

Here on the island of Borneo, a thick haze often encloses this city of 500,000 people.  The cause:  forest fires that have blazed across the island.  Many of them were set to clear land to produce palm oil -- a key ingredient in biodiesel, a clean-burning diesel fuel alternative.

The bluish smoke is at times so dense that it leaves the city dark and gloomy even at midday.  The haze has sometimes closed Pontianak's airport and prompted local volunteers to distribute face-masks on city streets.  From July through mid-October, Indonesian health officials reported 28,762 smog-related cases of respiratory illness across the country.

"I feel it in my breath when I breathe," said Imanuel Patasik, a 26-year-old delivery man, as he sat in one of Pontianak's many open-air coffee shops on a recent evening.  When the smoke is really bad, he wears a mask to work, but still wakes up the next morning feeling sick.  "It's part of life here," he sighed.

Seasonal rains have helped quell the fires over the past few weeks.  But the miasma of smoke from Borneo and the island of Sumatra -- an annual phenomenon that blankets large parts of Southeast Asia in smog -- underscores a troubling dark side of the world's alternative-energy boom.  Among other problems, the fires in Indonesia spew millions of tons of carbon dioxide and other greenhouse gases into the atmosphere, experts say.  In doing so, they exacerbate the very global-warming concerns biofuels are meant to alleviate.

Such side effects are not an isolated problem.  In Indonesia, Malaysia, Canada and elsewhere, forests are being slashed for new energy-yielding crops or other unconventional fuels.  In India, environmental activists say, water tables are dropping as farmers try to boost production of ethanol-yielding sugar.


For the full story, see:

PATRICK BARTA and JANE SPENCER.  "Crude Awakening As Alternative Energy Heats Up, Environmental Concerns Grow Crop of Renewable 'Biofuels' Could Have Drawbacks; Fires Across Indonesia Palm-Oil Boom Ignites Debate."  Wall Street Journal  (Tues., December 5, 2006):  A1 & A13.


   Midday in Pontianak the smoke haze from palm oil is dense, and causes respiratory problems.  Source of caption quote and photo:  online version of WSJ article cited above.


December 21, 2006

Silicon Graphics' Jim Clark Understood Disruptive Innovation

There's a great passage in The New, New Thing about Jim Clark trying to convince Silicon Graphics to produce a PC.  Clark talks about how hard it is for a company to create a product that competes with itself. 

Shades of Clayton Christensen:


Clark thought that Silicon Graphics had to "cannibalize" itself.  For a technology company to succeed, he argued, it needed always to be looking to destroy itself.  If it didn't, someone else would.  "It's the hardest thing in business to do," he would say.  "Even creating a lower-cost product runs against the grain, because the low-cost products undercut the high-cost, more profitable products."  Everyone in a successful company, from the CEO on down, has a stake in whatever the company is currently selling.  It does not naturally occur to anyone to find a way to undermine that creative destruction, and he was prepared to do the deed.  He wanted Silicon Graphics to operate in the same self-corrosive spirit.  (p. 66 of hb edition)


The reference to The New, New Thing is:

Lewis, Michael. The New New Thing: A Silicon Valley Story. New York: W. W. Norton & Company, 2000.

Christensen's most important book is:

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

December 20, 2006

"The Referee Should Not Be Too Quick With His Whistle"

I found the following wise comments while reading a short review of an old book by Edgar Monsanto Queeny, who followed his father as CEO of the Monsanto corporation, and who wrote a book called The Spirit of Enterprise which Schumpeter praised in a letter to Queeny.

(The abbreviation T.N.E.C. stands for the Temporary National Economic Committee, which I believe was an ad hoc congressional committee during part of F.D.R.'s presidency.)

Mr. Queeny does not give us a satisfactory analysis of the T.N.E.C. reports but his observations are always commonsensical and suggestive.  What emerges, and what is important, is that the positive Liberal State should not aim at too subtle a plan for freedom.  The referee should not be too quick with his whistle nor too ready to order players off the field.  The rules of the game may well allow for a little hurly-burly.  Economists like Professor Hutt, who are working out the rules of the game of free enterprise, deserve the highest praise.  But they should realize that refinement has its price as well as simplicity, and of the two simplicity costs the less.

Shenfield, A. A. "Review of the Spirit of Enterprise by Edgar M. Queeny." Economica 12, no. 48 (November 1945): 264.


The reference to Queeny's book is:

Queeny, Edgar M. The Spirit of Enterprise. New York: Charles Scribner's Sons, 1943.


December 19, 2006

Feynman: What Biology Needs is Not More Math, But to See Better at the Atomic Level

A very bright, and very mathematically competent, fellow, grants that math is not the source of all knowledge.  So is economics more like physics, or more like biology? 


(p. 124)  We have friends in other fields--in biology, for instance.  We physicists often look at them and say, "You know the reason you fellows are making so little progress?"  (Actually I don't know any field where they are making more rapid progress than they are in biology today.)  "You should use more mathematics, like we do."  They could answer us--but they're so polite, so I'll answer for them:  "What you should do in order for us to make more rapid progress is to make the electron microscope 100 times better."

What are the most central and fundamental problems of biology today?  They are questions like:  What is the sequence of bases in the DNA?  What happens when you have a mutation?  How is the base order in the DNA connected to the order of amino acids in the protein?  What is the structure of the RNA:  is it a single-chain or double-chain, and how is it related in its order of bases to the DNA?  What is (p. 125) the organization of the microsomes?  How are proteins synthesized?  Where does the RNA go?  How does it sit?  Where do the proteins sit?  Where do the amino acids go in?  In photosynthesis, where is the chlorophyll; how is it arranged; where are the carotenoids involved in this thing?  What is the system of the conversion of light into chemical energy?

It is very easy to answer many of these fundamental biological questions; you just look at the thing!  You will see the order of bases in the chain; you will see the structure of the microsome.  Unfortunately, the present microscope sees at a scale which is just a bit too crude.  Make the microscope one hundred times more powerful, and many problems of biology would be made very much easier.  I exaggerate, of course, but the biologists would surely be very thankful to you--and they would prefer that to the criticism that they should use more mathematics.



Feynman, Richard P.  The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman.  New York:  Perseus Books, 1999.


December 18, 2006

The Entrepreneur Versus the Government

A great story about Jim Clark, who founded Silicon Graphics:

(p. 46)  Just a few years back, before the Internet boom, Clark's house in Atherton had been surrounded by empty fields.  Now he was surrounded by new houses, many of them bigger than his own.  One morning he looked up from his kitchen table and saw the neighbors looking (p. 47) back.  He requested, and was denied, a permit to build a fence tall enough to screen them from his view.  The city of Atherton, California, had strict rules about fences, and the fence Clark wanted to build was declared too high.  So Clark built a hill, and put the fence on top of the hill.  It did not occur to him that there was anything unusual about this.

(page numbers above are from the Norton hardback edition; the full quote is on p. 31 of the paperback edition) 


The reference to the hardback edition, is: 

Lewis, Michael.  The New New Thing: A Silicon Valley Story.  New York:  W. W. Norton & Company, 2000.


December 17, 2006

Your Tax Dollars at Work: Government Protecting Us from Bling-Bling

DentalGrill.jpg  A dental grill, one form of the hip-hop jewelry sometimes called "bling-bling."  Source of image:  http://www.thesmokinggun.com/archive/0410062teeth1.html


If all you want for Christmas is to gild your front teeth, you may have to buy the bling-bling somewhere other than the Gold Plaza II kiosk at Crossroads Mall.

That's because an employee of that shop, Bhavin Dalal, faces a felony charge of practicing dentistry without a license.  He's accused of helping customers fit their teeth for glittering mouthpieces known as grills.

It's the first such case in Nebraska involving the hot hip-hop fashion accessory.  And Dalal and his attorney, James Martin Davis, plan to fight it tooth and nail.

Dalal entered a not guilty plea Friday in Douglas County Court.  Davis blasted the Nebraska Health and Human Services System for its investigation of Dalal and the charge that resulted.

"It's overzealousness on the part of a bunch of bureaucrats" who don't want people to wear grills, Davis said.


For the full story, see:

CHRISTOPHER BURBACH.  "Dental Grill Seller Feels State Law's Bite."  Omaha World-Herald  (Saturday, December 2, 2006):  1A & 2A. 

(Note:  the slightly different online title for the article is:  "State puts bite on grill seller")



December 16, 2006

"If Everyone Were Patient, There'd Be No New Companies"

NewNewThingBK.jpg Source of book image: http://www.austinchronicle.com/gyrobase/Issue/review?oid=oid%3A74686


Michael Lewis' book provides some interesting stories and insights into the important information technology (IT) entrepreneur, Jim Clark, who founded Silicon Graphics, and had a hand in many other IT startups, such as Netscape.

For example, here is more evidence against Buddhism; dissatisfaction drives improvement:

Impatience might be a social vice but, to Clark, it was a commercial virtue.  "If everyone was patient," he'd say, "there's be no new companies." (p. 42 of hardback edition; p. 26 of paperback edition)


The reference for the book is: 

Lewis, Michael. The New New Thing: A Silicon Valley Story. New York: W. W. Norton & Company, 2000.

December 15, 2006

Bush on Entrepreneurship

Source of book image: http://www.harpercollins.com/harperimages/isbn/large/8/9780060841638.jpg


At lunchtime today (11/27/06) I heard part of a C-Span broadcast of a Heritage Foundation event in which Carl J. Schramm gave a presentation based on his new book (see above). It sounded as though Schramm has some useful thoughts about the impact of entrepreneurship, and on how the institutions of higher education are very unentrepreneurial.

I smiled when Schramm mentioned that George W. Bush had once said that: "The problem with the French is that they don't know the meaning of the word "entrepreneur." To those who don't "get" the joke: it is another of those Bush-is-stupid jokes, based on the word "entrepreneur" being of French origins.

A web site devoted to "urban legends" identifies the Bush quote as one of these legends:

Yet another "George W. Bush is dumb" story has been taken up by those who like their caricatures drawn in stark, bold lines.  According to scuttlebutt that emerged in the British press in July 2002, President Bush, Britain's Prime Minister Tony Blair, and France's President Jacques Chirac were discussing economics and, in particular, the decline of the French economy.  "The problem with the French," Bush afterwards confided in Blair, "is that they don't have a word for entrepreneur."  

The source was Shirley Williams, also known as the Baroness Williams of Crosby, who claimed "my good friend Tony Blair" had recently regaled her with this anecdote in Brighton.

Lloyd Grove of The Washington Post was unable to reach Baroness Williams to gain her confirmation of the tale, but he did receive a call from Alastair Campbell, Blair's director of communications and strategy.  "I can tell you that the prime minister never heard George Bush say that, and he certainly never told Shirley Williams that President Bush did say it," Campbell told The Post.  "If she put this in a speech, it must have been a joke."


The main reference relied on by the Urban Legend web site for this entry, was: 

Grove, Lloyd. "The Reliable Source." The Washington Post. 10 July 2002 (p. C3).


The most obvious interpretation of the joke is that it is ridiculing W.  But, more subtly, it could be taken to be giving just a bit of a jab to the French too.  (Just because the French invented the word, doesn't mean that they couldn't have forgotten its meaning, through lack of use.)


The reference on the Schramm book is: 

Schramm, Carl J. The Entrepreneurial Imperative: How America's Economic Miracle Will Reshape the World (and Change Your Life). New York: Collins, 2006.


December 14, 2006

"Forgotten not for lack of importance, but for lack of theoretical frame-works"

A paper by current head of the President's Council of Economic Advisors, Ed Lazear, is significant for what it says near the end about economists forgetting facts, because the facts do not fit into current theory.

(p. 260)  Human capital theory is primarily a supply-side approach that focuses on the characteristics and skills of the individual workers.  It pays far less attention to the environments in which workers work.  As such, the human capital framework has led researchers to focus on one class of questions, but to ignore others.  Specifically, little attention has been paid to the jobs in which workers are employed. 

(p. 263) The fact that some jobs and some job characteristics are more likely to lead to promotions than other jobs is not surprising.  But the analysis suggests that other ways of thinking about wage determination, namely, through job selection, may have been unduly ignored in the past. 

. . .

Researchers have begun to make jobs rather than individuals the unit of analysis.  This change of focus can illuminate new issues and provide answers to questions that were once posed and forgotten.  The questions were forgotten not for lack of importance, but for lack of theoretical frame-works.  The theory is now developed and awaits confirmation in the data.


For the full paper, see:

Lazear, Edward P.  "A Jobs-Based Analysis of Labor Markets."  American Economic Review 85, no. 2 (May 1995):  260-265.

(Note:  elipsis added.)


December 13, 2006

Career Opportunities for Economists

  Econ major, and rap recording artist, Stat Quo.  So who says economists aren't cool?  Source of photo:  http://www.statquo.com/


According to Wikipedia, up and coming rap artist Stat Quo earned a 3.54 gpa, while majoring in economics at the University of Florida. How's that for refuting the stereotypes about economists?

See: http://en.wikipedia.org/wiki/Stat_Quo


December 12, 2006

"Smart People Can't Come Here"

Several years ago, I got up in the middle of the night to call the United States embassy in Beijing, in order to beg an embassy official to issue a visa to our best applicant for our open Research Assistant position.  He did not want to do so, solely on the grounds that she might not return to China.  The woman we wanted to hire had sky-high credentials by every measurable criterion, and based on letters of recommendation, was exceptional by the non-measurable criteria too. 

How bizarre is the immigration policy of the United States when we view it as a problem that such a person might honor us by wanting to stay in the United States?


PALO ALTO, Calif. - Some of technology's biggest names shared the stage at Stanford University last week to discuss the future of American innovation.

Yahoo co-founder Jerry Yang and Kleiner Perkins Caufield & Byers venture capitalist John Doerr were among the members of two panels at a technology summit at the university.

The third annual innovation summit, where industry leaders talked about emerging trends and government technology policy, was organized by TechNet, an advocacy group that lobbies on behalf of tech executives.

. . .  

The executives also lamented government policies limiting student and work visas, warning that this shuts out people like Google co-founder Sergey Brin and former Intel chief executive Andrew Grove.

"We have this crazy policy in the U.S. that says smart people can't come here. I think we all agree it makes absolutely no sense," Yang said. "Are people going to want to build a company in the U.S. . . . or in the new talent centers?"


For the full story, see: 

SAN JOSE MERCURY NEWS.  "Technology summit sees risks for U.S."  Omaha World-Herald  (Sunday, November 19, 2006):  7D.

(Note:  the ellipsis between paragraphs was added; the ellipsis in the Yang quote was in the original article.)


December 11, 2006

Playstation 3 Fails to Leapfrog Xbox 360

  If Schiesel's review is on-target, these shoppers, waiting to buy Playstation 3, may regret having camped-out at the store to be among the first to buy the new game platform.  Source of photo:  http://graphics8.nytimes.com/images/2006/11/17/business/15game1.650.jpg


(p. B1)  Howard Stringer, you have a problem.  Your company’s new video game system just isn’t that great.

Ever since Mr. Stringer took the helm last year at Sony, the struggling if still formidable electronics giant, the world has been hearing about how the coming PlayStation 3 would save the company, or at least revitalize it.  Even after Microsoft took the lead in the video-game wars a year ago with its innovative and powerful Xbox 360, Sony blithely insisted that the PS3 would leapfrog all competition to deliver an unsurpassed level of fun.

Put bluntly, Sony has failed to deliver on that promise.

Measured in megaflops, gigabytes and other technical benchmarks, the PlayStation 3 is certainly the world’s most powerful game console.  It falls far short, however, of providing the world’s most engaging overall entertainment experience.  There is a big difference, and Sony seems to have confused one for the other.

The PS3, which was introduced in North America on Friday with a hefty $599 price tag for the top version, certainly delivers gorgeous graphics.  But they are not discernibly prettier than the Xbox 360’s.  More important, the whole PlayStation 3 system is surprisingly clunky to use and simply does not provide many basic functions that users have come to expect, especially online.


For the full commentary, see:

SETH SCHIESEL.  "VIDEO GAMES; A Weekend Full of Quality Time With PlayStation 3."  The New York Times  (Mon., November 20, 2006):  B1 & B7.

(Note:  the bold has been added to "leapfrog.")


December 10, 2006

"Atlas May Actually Decide to Shrug"

(p. A16) During the recent off-year elections, the president repeatedly pointed to the booming economy and noted that his tax cuts were responsible.  With growth strong and unemployment low despite the ending of the stock-market bubble, terrorist attacks and the war in Iraq, he had every reason to be proud.  Moreover, both economic theory and the actual timing of the economic revival support his claims regarding the tax cuts.

That is why it is so odd that rumors swarm around Washington that the president may be willing to raise taxes as part of a "deal" on entitlement reform.  In particular, the rumors suggest the president might be willing to get rid of the provision that caps the income level used to compute Social Security taxes and benefits.  These rumors aren't without substance; last year the president would not rule out raising the cap when asked.

Doing so would raise the marginal tax rate on the entrepreneurs that Mr. Bush credits for having led the economic recovery by more than 10 percentage points.  The new effective rate would be five percentage points above the level when he took office.  Moreover, in 2011, the rate would go up a further 4.3 percentage points to an effective 53% marginal rate on entrepreneurial income.  The president would thus be not just raising taxes on entrepreneurs to well above the levels that prevailed in the Clinton administration, but to a rate higher than that which prevailed in the Carter administration.  Most of the improved incentives for entrepreneurship and work brought about under Reagan would be repealed.

. . .

Last year an entrepreneur similar to me would have paid federal taxes equal to 33.9% of total income.

. . .

Don't make it too tough on him, or Atlas may actually decide to shrug.


For the full commentary, see: 

LAWRENCE B. LINDSEY.  "Compromised."  Wall Street Journal  (Mon., November 20, 2006):  A16.

(Note:  the ellipses are added.) 


The last line of the commentary is a not-so-veiled allusion to: 

Rand, Ayn.  Atlas Shrugged.  New York:  Random House, 1957.

December 9, 2006

When Government Bets, It Bets with Your Money

   Source of graphic:  online version of the Omaha World-Herald article cited below.


When an entrepreneur takes a risk, she risks losing her own money; when the government takes a risk, it risks losing your money: 


(p. 1A)  Omaha taxpayers escaped paying for the Hilton Omaha this year, but they likely will have to come up with the money for some big bills before the hotel is paid off in 2032.

In April, city officials were almost euphoric.  They announced the city-owned convention hotel performed well enough that its owners, the taxpayers, wouldn't have to pony up the money to make the debt payments on the hotel this year.

But a recent audit of city finances reveals a much gloomier financial picture.

The audit raises questions about how the hotel that is connected to the Qwest Center Omaha will generate enough money to maintain its upscale look in the years to come.  The report also causes city officials to doubt whether expanding the hotel is realistic in the near future.

The Hilton's troubles come at the same time that five other hotels are proposed for downtown Omaha.  But those are not full-service, amenity-rich convention hotels that are costly to build and maintain.

Hilton Omaha mainly competes in a national market for convention business, and like Omaha as a whole, the Hilton has (p. 4A) found the convention market tougher than it expected.

Omaha borrowed nearly $103 million to build, equip and finance the state's largest and fanciest hotel.

Before the 450-room hotel opened in April 2004, the city projected net revenues would be $8.4 million in 2005.

But net revenues last year totaled just $4.6 million, according to the audit conducted for the city by KPMG.


For the full story, see: 

C. DAVID KOTOK.  "Taxpayers Likely to Pay Hilton Bills."  Omaha World-Herald (Sunday, November 19, 2006):  1A & 4A.

(Note:  The online version has a slightly different title:  "Taxpayer to get handed Hilton bills.")


December 8, 2006

"Nebraskans Preparing for the Imminent Arrival of Several Million New York Refugees"

(p. 12) HOUSING prices are falling on both coasts, and bubble panic is around the corner.  The financial magazines are already grabbing their readers by the throat and taunting them with headlines like:  ''U.S. Housing Crash Continues!'' ''Where Will Housing Prices Fall the Most?'' ''Is It Time to Cash Out?''

What if it is time to cash out?  Where do you go?  If you sell on either coast, then you need to find real estate somewhere that the housing bubble missed.  Guam?  American Samoa?  Wait, how about eastern Nebraska?  Downright frothless when it comes to housing:  the median home price here usually chugs along at the annual rate of inflation and never goes down (up 4 percent last year, up 22 percent over the last five years).

Before you recoil in horror at the thought of living in Omaha, a city of 414,000 souls, consider that this year Money magazine ranked it seventh of the nation's 10 best big cities to live in, ahead of New York City, which ranked 10th.  O.K., now you may recoil in horror.

These compelling statistics have Nebraskans preparing for the imminent arrival of several million New York refugees (victims of post-traumatic bubble anxiety disorder), who will need emergency real estate and housing triage services.


For the full commentary, see:

Richard Dooling.  "Sweet Home Omaha."  The New York Times, Section 4 (Sunday, October 29, 2006):  12.

December 7, 2006

Distinguished Physician: "I Hate Hospitals"

Dr. James Armitage is a leading lymphoma physician.  His honesty in the passage below, is refreshing.  But instead of it being viewed as a personality quirk of the physician, it should be viewed as one more reason to reform how our medical system is organized.


"I hate hospitals. I like working in them; I just don't like being a patient."


Armitage, as quoted in:

MICHAEL KELLY.  "Michael Kelly: Doc lacks patience for being a patient."  Omaha World-Herald  (Thursday November 16, 2006):    1B. 

December 6, 2006

Jeffrey Sachs "Has Apparently Spent More Time Studying the Economic Thinking of Salma Hayek than that of Friedrich"

  Salma Hayek.  Source of image: http://www.imdb.com/gallery/granitz/0273-spe/Events/0273-spe/hayek_sa.lma?path=pgallery&path_key=Hayek,%20Salma


(p. A18) Scientific American, in its November 2006 issue, reaches a "scientific judgment" that the great Nobel Prize-winning economist Friedrich Hayek "was wrong" about free markets and prosperity in his classic, "The Road to Serfdom."  The natural scientists' favorite economist -- Prof. Jeffrey Sachs of Columbia University -- announces this new scientific breakthrough in a column, saying "the evidence is now in."  To dispel any remaining doubts, Mr. Sachs clarifies that anyone who disagrees with him "is clouded by vested interests and by ideology."

This sounds like one of those moments in which the zeitgeist of mass confusion about national poverty, world poverty and prosperity comes together in one mad tragicomic brew.

. . .  

Mr. Sachs, who is currently best known for his star-driven campaign to end world poverty, has apparently spent more time studying the economic thinking of Salma Hayek than that of Friedrich. 

. . .

Mr. Sachs's empirical analysis purports to show that Nordic welfare states are outperforming those states that follow the "English-speaking" tradition of laissez-faire, like the U.K. or the U.S. Poverty rates are indeed lower in the Nordic countries, although the skeptical reader (probably an ideologue) might wonder if the poverty outcome in, say, the U.S., with its tortured history of a black underclass and its de facto openness to impoverished but upwardly mobile immigrants, is really comparable to that of Nordic countries.

Then there is the big picture, where those laissez-faire Anglophones in, first, the U.K. and, then, the U.S., just happened to have been the leaders of the ongoing global industrial revolution that abolished far more poverty over the past two centuries than a few modest Scandinavian redistribution schemes.  Mr. Sachs apparently thinks the industrial revolution was led by IKEA.  Lastly, let's hear from the Nordics themselves, who have been busily moving away from the social welfare state back toward laissez-faire.  According to the English-speaking ideologues that composed the Heritage Foundation/Wall Street Journal Index of Economic Freedom, Denmark, Finland and Sweden were all included in the 20 countries classified as "free" in 2006 (with Denmark actually ranked ahead of the U.S.).  Only Norway missed the cut -- barely.

Mr. Sachs is wrong that Hayek was wrong.  In his own global antipoverty work, he is unintentionally demonstrating why more scientists, Hollywood actors and the rest of us should go back and read "The Road to Serfdom" if we want to know what will not work to achieve "The End of Poverty."  Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history."


For the full commentary, see:

WILLIAM EASTERLY.  "Dismal Science."  Wall Street Journal  (Weds., November 15, 2006):  A18.

(Note:  ellipses added.) 


Hayek's courageous masterpiece is:

Hayek, Friedrich A. Von. The Road to Serfdom. Chicago: Univ of Chicago Press, 1944.


Easterly's great book on how to encourage economic development in poor countries, is:

Easterly, William. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Cambridge, MA: The MIT Press, 2002.

December 5, 2006

Global Warming May Finally Open Northwest Passage to Shipping


  "The Canadian Coast Guard icebreaker Amundsen met a plate of "new ice" on the Northwest Passage, but it was easily traversed."  Source of caption, and photo:  online version of the Washington Post article quoted and cited below.


ICEBREAKER CHANNEL, Northwest Passage -- The Amundsen's engines growl low, as if in warning.  The ship steals ahead; its powerful spotlights stab at fog thick with the lore of crushed ships and frozen voyagers.  Ice floes gleam from the void like the eyes of animals in the night.

The Canadian Coast Guard icebreaker Amundsen weaves in graceful slow motion through the ice pack, advancing through the legendary Northwest Passage well after the Arctic should be iced over and shuttered to ships for the winter.

The fearsome ice is weakened and failing, sapped by climate change.  Ultimately, this night's ghostly procession through Icebreaker Channel will be the worst the ship faces on its late-season voyage.  Much of the trip, crossing North America from west to east through the Northwest Passage, will be in open water, with no ice in sight.

The Amundsen is here to challenge the ice that has long guarded the legendary Northwest Passage across the roof of the Earth, and to plumb the scientific mysteries of an Arctic thawing from global warming.

A relentless climb of temperature -- 5 degrees in 30 years -- is shrinking the Arctic ice and reawakening dreams of a 4,000-mile shortcut just shy of the North Pole, passing beside the Arctic's beckoning oil and mineral riches.

"Shipping companies are going to think about this, and if they think it's worth it, they are going to try it," says the captain of the Amundsen, Cmdr. Alain Gariepy, 43.  "The question is not if, but when."


For full story, see: 

Doug Struck.  "Melting Arctic Makes Way for Man; Researchers Aboard Icebreaker Say Shipping Could Add to Risks for Ecosystem."  Washington Post  (Sunday, November 5, 2006):  A01.


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


December 4, 2006

FDA Hurdles Block Widespread Use of Baby-Saving Drug

(p. A1)  BOSTON -- Like thousands of children in the U.S., Maggie Leaver has short bowel syndrome.  These children can't absorb enough nutrients from food, and some need intravenous feedings to survive.

A baby's digestive system can adapt over time, but that may take months or years.  Many of these babies can't wait.  For reasons not fully understood, children put on intravenous nutrition may suffer liver damage.  Some require liver and small bowel transplants, risky procedures that don't always work.  Others die waiting for a transplant.

In July, in a paper in the scientific journal Pediatrics, researchers at Children's Hospital Boston reported on a small study that suggested a promising treatment.  They found that by switching from the standard intravenous formula to a different kind -- called Omegaven -- babies weren't progressing to liver failure.  Omegaven, used in Europe for adults, isn't approved in the U.S. and is considered experimental treatment.

"The kids aren't dying anymore," says Mark Puder, a pediatric surgeon who was lead investigator on the study.  "We think we have a good treatment."

But Dr. Puder's effort to get Omegaven widely used in babies has put him in an unusual conflict with the German company that developed the drug.  Fresenius Kabi AG, which makes Omegaven, says it isn't interested in bringing the drug to the U.S. market.  The company says it doesn't agree that Omegaven is the best drug for these babies and has a new product that it believes is better.

In 28 of 29 babies treated with Omegaven so far at Children's Hospital, Dr. Puder says they were able to stop further liver damage -- and damage that children already incurred seemed to improve.  Some babies who were switched to Omegaven rebounded enough that they were taken off the waiting list for an organ transplant.  At one point, Maggie Leaver's condition deteriorated so much that her surgeon thought she was going to die.  Now the 18-month-old is thriving at home in Hingham, Mass.

. . .

Mr. Ducker says the company's new product, called SMOFlipid, "presents a better option for pediatric feeding."  The company believes the new product does contain all the essential fatty acids babies need and can be used on its own.

Fresenius Kabi says it doesn't want to invest the resources required to test both products for approval by the U.S. Food and Drug Administration.  It hopes to eventually sell the new product in the U.S., Mr. Ducker says, although no timetable has been set and no trials are under way.

. . .

Because Omegaven is considered experimental in the U.S., if hospitals want to try it, they have to ask permission from the FDA for each individual patient.  The FDA has regulations that enable doctors to use experimental drugs in certain (p. A15) emergency situations.

If hospitals obtain the required permissions, they must then find a way to buy the drug on their own, since insurers typically won't cover Omegaven because it's experimental.  The cost can run from $50 to $100 a day per patient.  At Children's Hospital Boston, the surgical department has already spent close to $100,000 to buy Omegaven for babies.

. . .

Dr. Mooney says he wrestled almost from the beginning about whether to put Maggie on Omegaven. He knew about Dr. Puder's results, which he calls "amazingly great," but the number of children treated was still small.  He worried about adverse effects.  "It is so easy to get caught in the hype of new things," Dr. Mooney says.  Maggie was already fragile.  What if he put her on Omegaven, he says, "and there was a horrible side effect that could tip her over the edge?"

But when standard therapies failed, he felt "there was nothing else to do."  Given that the treatment is experimental, Dr. Mooney says he believes it was right to wait.  But he also feels Omegaven has made a difference.  "Five years ago, every single one of the kids taking Omegaven would be dead by now, Maggie included," he says.


For the full story, see:

MARCUS, AMY DOCKSER.  "Different Rx; A Doctor's Push For Drug Pits Him Against Its Maker; Dr. Puder Thinks Omegaven Is Best Option for Sick Babies; Company Prefers New Product Turnaround for Little Maggie."  Wall Street Journal  (Mon., November 13, 2006):  A1 & A15.

December 3, 2006

Cheap, Easy, Transparent Property Rights Institutions Are Key to Developing Long Tail

Chris Anderson points out that the main thing currently holding back the long tail, are legal restrictions in the form of clearing copyrights.  This is somewhat analogous to how the legal restrictions to starting up a small business, end up protecting the larger incumbent companies, a la Hernando de Soto's The Other Path

Figuring out how to quickly and cheaply process small intellectual property rights claims is the key.  The assumption that this could and would be done was an underpinning of Bill Gates' prediction of the key importance of content in his The Road Ahead.

If Gates' vision could be realized, it would provide the consumer much greater variety (and much closer matches between what is sought and what is found); and it would provide many more producers of content, the opportunity to support themselves through their productive activities.  (As opposed to the current situation where most such producers must produce as a part-time, labor-of-love, while they support themselves by their unrelated 'day job.')


Books mentioned:

Anderson, Chris. The Long Tail. New York: Hyperion, 2006.

Gates, Bill. The Road Ahead. New York: Viking Penguin, 1995.

Soto, Hernando de. The Other Path. New York: Harper and Row, 1989.


December 2, 2006

Microsoft's VX-6000 LifeCam Really Stinks

  Microsoft's VX-6000 LifeCam.  Source of image:  http://www.microsoft.com/presspass/images/gallery/hardware/WC6_Angle_Silver_lg.jpg


I posted this to Amazon.com, late on Thurs., Nov. 30, 2006:

I have spent a frustrating afternoon and evening trying to install the VX-6000 on a fully updated MS XP pro system. The install took forever, because every couple of minutes the install program couldn't find a needed file (if they need it, why not put it on the install CD?). So I had to browse my system and point them to where the file was (why couldn't they design the install program to search for the file instead of making me do it?). Finally I got a successful install, and then I was informed there was an updated version, and I needed to install that. So I went through the whole time-consuming process all over again, including the schtick about searching for the location of several files. Finally it again said I had installed the program successfully. So I rebooted my PC, and clicked on the Microsoft LifeCam icon. After cranking for awhile I get "initialization error". I try rebooting again---same error. So I type in "initialization error" in the search bar of the "help" section, and I get back "no topics found." So they sell me an expensive camera, run me ragged installing it, send me a repeated error message, and provide me no clue on what to do about it. (I guess now that Bill Gates is saving the world through philanthropy, nobody's left minding the shop?)


The final comment is probably a bit too snide or harsh.  Microsoft has always had the deserved reputation of letting some products out the door before they are ready.  E.g., the first couple of versions of Windows paled in comparison to the graphical-user-interface operating system that Apple was offering at the time.  And the CD that accompanied Bill Gates' The Road Ahead would not work on what was then Microsoft's premier operating system:  Windows NT.

Maybe these kind of glitches result from a conscious operating strategy that gives employees a lot of freedom to make their own decisions.  The upside can be speedy decisions, and creativity.  The downside can be glitches such as the VX-6000 LifeCam.  Taking the broad, professorial view, maybe overall, the upside justifies the downside.  Tom Peters endorses companies accepting this trade-off rather than adopting layered, rule-bound, slow, bureaucratic decision-making.  (See his:  Re-imagine!)

(But did I mention that the VX-6000 LifeCam really stinks?) 


The reference to the Peters book is:

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


December 1, 2006

We Will Always Want More Income

Karl Marx, John Maynard Keynes, and many others, have suggested that there is some level of income at which we will have enough, and want no more. 

David Friedman, in his price theory text, and others, have doubted this.  I am with the doubters.  I suspect that we sometimes think a certain amount of money would satiate us, because at some level way beyond our current income, it does not reward us to think too much about how we might spend so much money.

But if you are Rockefeller, and you see what good comes with founding universities, curing diseases, and the like, then you can easily imagine what good would come from even more money, even if, like Rockefeller, you are the richest person on the face of the earth.

In the discussion excerpted below, Robert Frank gives another argument for joining the doubters:  that as our income rises, so do our standards for quality.  (I think this argument is sound, but less important than the one sketched above.)  


When my wife and I were living in Paris a few years ago, we went out to dinner with well-to-do friends who were visiting from the United States.  The restaurant we chose had a good reputation and, by our standards, was not cheap.  But although my wife and I enjoyed our meals enormously, our friends found theirs disappointing.  I'm confident they were not trying to impress us or make us feel inferior.  By virtue of their substantially higher income, they had simply grown accustomed to a higher standard of cuisine.

. . .

By placing the desire to outdo others at the heart of his description of insatiable demands, Keynes relegated such demands to the periphery.  But the desire for higher quality has no natural limits.  Keynes and others were wrong to have imagined that a two-hour work week might someday enable us to buy everything we want.  That hasn't happened and never will.


For the full commentary, see: 

ROBERT H. FRANK.  "ECONOMIC SCENE; The More We Make, the Better We Want."  The New York Times  (Thurs., September 28, 2006):  C3.

(Note:  ellipsis added.)



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