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March 31, 2007

UNO Economics RA Talks Personal Finance

McGrathMollyPersonalFinance.jpg   Molly McGrath.  Soure of photo:  online version of the Omaha World-Herald article cited below.


Molly was one of our Research Assistants last year in the UNO economics department: 


(p. 1D)  Miss Nebraska Molly McGrath has driven more than 25,000 miles since being crowned in June, mostly to schools as she talks about personal finance issues like avoiding debt and using money as a tool to realize dreams.

"There is a drastic need for economic and financial education with all people, but especially in low-income communities and especially among our youth," McGrath told about a dozen people at a recent meeting of the Rotary Club of Omaha-North.

McGrath knows about making ends meet. Her parents could not help her pay for college, so she has used more than $20,000 in scholarships won through the Miss America program. She also cleaned toilets, dorm rooms and apartments as she earned her undergraduate degree at New York University in New York.

"I was known right away at NYU as the girl from Nebraska," McGrath said. "And after I started this cleaning business I was known as the girl from Nebraska who cleans toilets."


For the full story, see: 

JOE RUFF.  "Miss Nebraska teaches dollars and sense."  Omaha World-Herald  (Monday, February 26, 2007):  1D & 2D.


March 30, 2007

For New Orleans "a Dwindling Chance at Redemption"

   Dylan Langlois (facing camera) and his fiancé Kasandra Larsen telling a friend goodbye before they leave New Orleans.  Source of photo:  online version of the NYT article cited below.


NEW ORLEANS, Feb. 15 — After nearly a decade in the city of their dreams, Kasandra Larsen and her fiancé, Dylan Langlois, climbed into a rented moving truck on Marais Street last Sunday, pointed it toward New Hampshire, and said goodbye.

Not because of some great betrayal — they had, after all, come back after losing everything in Hurricane Katrina — but a series of escalating indignities: the attempted carjacking of a pregnant friend; the announced move to Nashville by Ms. Larsen’s employer; the human feces deposited on their roof by, they suspect, the contractors next door; the two burglaries in the space of a week; and, not least, the overnight wait for the police to respond.

A year ago, Ms. Larsen, 36, and Mr. Langlois, 37, were hopeful New Orleanians eager to rebuild and improve the city they adored. But now they have joined hundreds of the city’s best and brightest who, as if finally acknowledging a lover’s destructive impulses, have made the wrenching decision to leave at a time when the population is supposed to be rebounding.

Their reasons include high crime, high rents, soaring insurance premiums and what many call a lack of leadership, competence, money and progress. In other words: yes, it is still bad down here. But more damning is what many of them describe as a dissipating sense of possibility, a dwindling chance at redemption for a great city that, even before the storm, cried out for great improvement.


For the full story, see: 

SHAILA DEWAN.  "Fed-Up New Orleans Residents Are Giving Up."  The New York Times (Fri., February 16, 2007):  A1 & A17.

      Kasandra Larsen cleans up before she and Dylan Langlois depart New Orleans.  Source of photo:  online version of the NYT article cited above.


March 29, 2007

Medical Insurance Battle Wastes $20 Billion a Year

AthenahealthRevenueGraph.gif   Source of graph:  online version of the WSJ article cited below.


(p. A1)  Four years ago, Paluxy Valley Physicians of Glen Rose, Texas, was struggling to recoup more than $500,000 in denied or unpaid claims from insurers. Two of its eight doctors left the practice, while three others had to borrow $100,000 to keep it afloat.

To turn things around, the medical practice turned to Boston-based athenahealth Inc., one of the biggest of hundreds of companies in a lucrative niche: helping doctors wring payments from health plans. Athenahealth's software flagged and corrected the complex coding for thousands of claims, preventing them from getting hung up in insurers' Byzantine rules. Today, Paluxy Valley has whittled its claims outstanding to $179,000 and repaid the bank loan. No longer in a revenue crunch, its doctors have stopped moonlighting in the emergency room to make money.

"The insurers outcode us, they outsmart us and they have more manpower," says Shari Reynolds, the administrator at Paluxy Valley, which pays athenahealth a little over 3% of the $2.5 million it collects annually from insurers. "Now at least we have a fighting chance." 

Doctors increasingly complain that the insurance industry uses complex, opaque claims systems to confound their efforts to get paid fairly for their work. Insurers say their systems are designed to counter unnecessary charges and help keep down soaring health-care costs. Like many tug-of-wars over the health-care money pot, the tension has spawned a booming industry of intermediaries.

It's called "denial management." Doctors, clinics and hospitals are investing in software systems costing them each hundreds of thousands of dollars to help them navigate insurers' systems and head off denials. They're also hiring legions of firms that dig through past claims in search of shortchanged payments and tussle with insurers over rejected charges. "Turn denials into dollars," promises one consultant's online advertisement.

The imbroglio is costing medical providers and insurers around $20 billion -- about $10 billion for each side -- in unnecessary administrative expenses, according to a 2004 report by the Center for Information Technology Leader-(p. A18)ship, a nonprofit health-technology research group based in Boston.


For the full story, see: 

VANESSA FUHRMANS.  "BILLING BATTLE; Fights Over Health Claims Spawn a New Arms Race; Insurers and Doctors Try for Upper Hand; Firms Help Both Sides."  The Wall Street Journal  (Weds., February 14, 2007):  A1 & A18.

(Note:  I noticed some minor differences between the titles and texts of the print and online versions.  My excerpt gives the online version.) 


March 28, 2007

"Work Hard at Work Worth Doing"

We went to see "The Bridge to Tarabithia" this afternoon (2/25/07), which I thought was a sad, but good, movie aimed at older children, but with enough plot and enough characters to care about, to be of interest to adults too.

I heard a quote in the movie that I liked and I don't remember having heard before.  It's source was given as Teddy Roosevelt, who is not one of my favorite presidents, because of his efforts to increase the size and power of government.  But he wasn't all bad, and he sometimes spoke well:


Far and away the best prize that life offers is the chance to work hard at work worth doing.


Theodore Roosevelt, Speech in New York, September 7, 1903 [26th president of US (1858 - 1919)]


Source of quote, and information about quote: http://www.quotationspage.com/quote/2056.html


March 27, 2007

Beaver Returns to Bronx: More Evidence of Environmental Improvement

          A beaver whose discoverers call "José" is the first beaver to make a home in the Bronx in 200 years.  Source of photo:  online version of the NYT article quoted and cited below. 


(p. A12) A crudely fashioned lodge perched along the snow-covered banks of the Bronx River — no more than a mound of twigs and mud strewn together in the shadow of the Bronx Zoo — sits steps away from an empty parking lot and a busy intersection.

Scientists say that the discovery of this cone-shaped dwelling signifies something remarkable: For the first time in two centuries, the North American beaver, forced out of town by agricultural development and overeager fur traders, has returned to New York City.

The discovery of a beaver setting up camp in the Bronx is a testament to both the animal’s versatility and to an increasingly healthy Bronx River.


For the full story, see:

O'CONNOR, ANAHAD. "After 200 Years, a Beaver Is Back in New York City."   The New York Times  (Fri., February 23, 2007):  A21.


March 26, 2007

Bush Should Take Lab Coat Off

Decisions about which new technologies to develop should be left to the market, not the government.  One reason is that markets generally make the more efficient choice.  Another reason is that when technological risks are taken in the market, they are taken with voluntary private money; when risks are taken by the government, they are taken with your money that has been coerced from you through taxation.

With all due respect, President Bush should take the lab coat off. 


(p. A16) FRANKLINTON, N.C., Feb. 22 — President Bush put on a white coat and visited a laboratory here Thursday to promote his goals for making alternative fuels from switch grass, woodchips and other plant waste.

After touring the laboratory, which is developing enzymes to make cellulosic ethanol, fuel distilled from plant byproducts, Mr. Bush spoke buoyantly about new technologies that may reduce the nation’s thirst for foreign oil.


For the full story, see: 

EDMUND L. ANDREWS.  "Bush Makes a Pitch for Amber Waves of Homegrown Fuel."  The New York Times  (Fri., February 23, 2007):  A16. 


March 25, 2007

Instead of Shrugging, Atlas Sometimes Moves to the United States


VenezuelaProfessionalsExitGraph.gif   Source of graphic:  online version of the WSJ article quoted and cited below.


(p. A10)  CARACAS, Venezuela -- Oil-rich Venezuela has experienced the kind of economic boom in recent years that should be flush with job opportunities. But an increasing number of professionals, many of them from the oil industry, are looking abroad for work, driven away by President Hugo Chávez's effort to extend state control over the economy, and by inflation verging on 20%.

Since his re-election in December, Mr. Chávez has pursued an agenda of "21st Century Socialism," painting a future of "communal cities" and state-run cooperatives dedicated to production, not profit.

. . .

Still, at the U.S. Embassy call center for visas in Caracas, the lines have been jammed since Mr. Chávez announced in early January the nationalization of the electricity industry and Venezuela's largest telecommunications firm. "It doubled practically overnight," said a U.S. diplomat.

The number of Venezuelans receiving U.S. legal permanent residence more than doubled from 2000 to 2005, when 10,870 got their green cards. In that period the overall number of green cards increased by a third. During that period the number of Venezuelan-born U.S. residents increased 42%, to 151,743, according to the U.S. Census Bureau.

. . .

Any opposition-minded oil workers still left at PdVSA face a difficult environment. During the presidential campaign last year, PdVSA President Rafael Ramirez told company executives to join Mr. Chávez's political movement or hit the road. In 2003, Mr. Chávez sacked around 20,000 PdVSA staffers -- about half the company's work force -- for walking off the job, calling them "terrorists." A majority of them were the managers, accountants and field engineers who turned the state oil venture into a world-class oil company during a period of robust expansion in the 1990s.

Many found work elsewhere, including in Mexico, Canada and Saudi Arabia, at a time of high demand for experienced oil workers.

The lost expertise has taken a toll on PdVSA, the country's largest single employer. Its share of the global market for crude oil supply is shrinking, and accidents and outages are on the rise. Analysts say the cost to PdVSA of producing a barrel of oil has nearly doubled in the past five years to more than $4.50.


For the full story, see: 

PETER MILLARD.  "Professionals Exit Venezuela; Chávez's Grip on Power Drives Out Oil Experts; Support Hugo or You Go."  The Wall Street Journal  (Thurs., February 15, 2007):  A10.

(Note:  ellipses added.)


March 24, 2007

Mugabe Eats Cake As He Ruins Zimbabwe Economy: More on Why Africa is Poor

   Tyrant Mugabe eats cake while his slaves starve.  Source of photo:  online version of the NYT article cited below.


JOHANNESBURG, Feb. 21 — President Robert G. Mugabe of Zimbabwe turned 83 on Wednesday to the strains of the song “God Bless President Mugabe” on state-controlled radio, along with an interview on state television, a 16-page paean to his rule in Harare’s daily newspaper and the prospect of a grand birthday party — costly enough to feed thousands of people for months, his critics argued — on Saturday.

Zimbabwe’s economy is so dire that bread vanished from store shelves across the country on Wednesday after bakeries shut down, saying government price controls were requiring them to sell loaves at a loss. The price controls are supposed to shield consumers from the nation’s rampant inflation, which now averages nearly 1,600 percent annually.

. . .

On Wednesday, The Herald, the state-managed newspaper, included in 16 pages of tributes to Mr. Mugabe an editorial calling him “an unparalleled visionary” and “an international hero among the oppressed and poor.”

. . .

“The guy is insensitive,” John Shiri, 41, a teacher at a primary school, told a local journalist. “There is no bread as we are talking, but he will be feasting and drinking with his family and hangers-on when there is no wheat in the country.”

. . .

Tawanda Mujuru, who runs a vegetable stall on Samora Machel Avenue in downtown Harare, said that she would be working in a factory if not for the failure of Mr. Mugabe’s economic policies.

“He has the guts to eat and drink when we are suffering like this,” she said. “Let him enjoy. Every dog has his day. We shall have our day.”


For the full story, see:

MICHAEL WINES.  "Mugabe Gets Ready to Eat Cake While Fellow Zimbabweans Can’t Find Bread on Shelves."  The New York Times  (Thurs., February 22, 2007):  A6.

(Note:  ellipses added.) 


March 23, 2007

Would Consumers Be Better Off with No Satellite Radio?

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


It appears as though the market for satellite radio may not be big enough for two firms to profitably survive, although one merged "monopoly" firm might survive.  But the antitrust government authorities appear to seriously be considering to forbid the merger. 

If they do so, they will be presuming to tell the consumer that she is better off with no satellite radio, than with one merged "monopoly" satellite radio.

Note the secondary issue of whether it's appropriate to call a merged company a "monopoly."  If the "industry" is defined as "satellite radio," then the merged company would be a monopoly.  If the "industry" is more broadly defined as "broadcast radio," which would include AM, FM, and internet stations, then the merged firm would be a long way from a monopoly.

But either way, the government should stay out of it.


(NYT, A1)  The nation’s two satellite radio services, Sirius and XM, announced plans yesterday to merge, a move that would end their costly competition for radio personalities and subscribers but that is also sure to raise antitrust issues.

The two companies, which report close to 14 million subscribers, hoped to revolutionize the radio industry with a bevy of niche channels offering everything from fishing tips to salsa music, and media personalities like Howard Stern and Oprah Winfrey, with few commercials. But neither has yet turned an annual profit and both have had billions in losses.

. . .

Questioned last month about a possible Sirius-XM merger, the F.C.C. chairman, Kevin J. Martin, initially appeared to be skeptical, but later said that if such a deal were proposed, the agency would consider it.

In a statement yesterday, Mr. Martin acknowledged that the F.C.C. rule could complicate a merger but said the commission would evaluate the proposal. “The hurdle here, however, would be high,” he said.

The proposed merger, first report-(p. C2)ed yesterday by The New York Post, promises to be a test of whether regulators will see a combination of XM and Sirius as a monopoly of satellite radio communications or whether they will consider other audio entertainment, like iPods, Internet radio and HD radio, to be competitors.

“If the only competition to XM is Sirius, then you don’t let the deal through,” said Blair Levin, managing director of Stifel Nicolaus & Company and a former F.C.C. chief of staff. But Mr. Blair said he expected the F.C.C. to approve the merger.


For the full NYT story, see:

RICHARD SIKLOS and ANDREW ROSS SORKIN.  "Merger Would End Satellite Radio’s Rivalry."  The New York Times  (Tues., February 20, 2007):  A1 & C2.

(Note:  ellipsis added.)  


(WSJ, p. A1)  But because XM and Sirius are the only two companies licensed by the Federal Communications Commission to offer satellite radio in the (p. A13) U.S., the deal is likely to face significant regulatory obstacles.

Broadcasters said yesterday that they will fight the proposed merger, and FCC Chairman Kevin Martin released an unusually grim statement saying that the two companies will face a "high" hurdle, since the FCC still has a 1997 rule on its books specifically forbidding such a deal which would need to be tossed. The transaction also requires the Justice Department's blessing.

Indeed, XM and Sirius may be rushing into a deal because they sense the regulatory terrain will only get tougher. People close to the matter said that the two companies acted because the climate is already changing with the election of a Democratic-controlled Congress. Future developments -- such as the possibility of a Democratic president -- could make it even harder for the proposed merger to pass muster.

In their strategy, the two companies may be subtly acknowledging the risks before them: By conceiving their deal as a merger of equals and declining to say which company name would emerge ascendant, they minimize the business risks should the deal fall through. If, for example, the combined company were to be dubbed Sirius, XM could be vulnerable to a decline in sales during a regulatory review period that could last a year. A person familiar with the negotiations said the two companies have set March 1, 2008, as their "drop-dead date," after which either side can walk away if approval is not granted.

The coming regulatory battle is likely to focus on the definition of satellite radio's market. The two companies are expected to argue that the rules established a decade ago, which require two satellite rivals to ensure competition, simply don't apply in today's entertainment landscape.

Since 1997, a host of new listening options have emerged, making the issue of choice in satellite radio less important for consumers. Executives cite a new digital technology called HD radio, iPod digital music players, Internet radio and music over mobile phones as competitors that didn't exist when the satellite licenses were first awarded.


For the full WSJ story, see:

SARAH MCBRIDE, DENNIS K. BERMAN and AMY SCHATZ.  "Sirius and XM Agree to Merge, Despite Hurdles For Regulators, Deal Pits Competition Concerns Against New Technology."  The Wall Street Journal  (Tues., February 20, 2007):  A1 & A13.

(Note:  ellipsis added.)


 SatteliteRadioSubscribersNYT.gif   Source of graphic on left:  online version of the NYT article cited above.  Source of graphic on right:  online version of the WSJ article cited above.


March 22, 2007

Bush Remembers Steadfast Washington

BushGeorgeWashingtonGeorge.jpg   Bush meets an actor playing the role of Washington at Mount Vernon on President's Day.  Source of photo:  online version of the NYT article cited below.


“With the advantage of hindsight, it is easy to take George Washington’s successes for granted,” Mr. Bush said after enumerating Washington’s achievements as commander of the Continental Army and later as president. But “America’s path to freedom was long and it was hard,” he continued, “and the outcome was never really certain.”

. . .

“I’m reading about George Washington still,” the president told reporters at a December news conference where he defended his Iraq policy. “My attitude is, if they’re still analyzing No. 1, 43 ought not to worry about it and just do what he thinks is right, and make the tough choices necessary.”

. . .

Mr. Bush spoke of General Washington’s “many challenges,” noting that the Continental Army “stood on the brink of disaster many times.” And he spoke of Washington’s resolute determination: “His will was unbreakable.”

The president spoke as well of a brief retirement at Mount Vernon between Washington’s return from the Revolutionary War and his presidency. Mr. Bush is already laying the groundwork for his own retirement with plans for a presidential library at Southern Methodist University, Laura Bush’s alma mater.

“All he wanted to do was return here to Mount Vernon and to be with his loving wife, Martha,” the 43rd president said of the first. “As he wrote with satisfaction to his friend Lafayette, ‘I am become a private citizen on the banks of the Potomac, and under the shadow of my own vine and my own fig tree.’ ”


For the full story, see: 

SHERYL GAY STOLBERG.  "Defending Nation’s Latest War, Bush Recalls Its First."  The New York Times   (Tues., February 20, 2007):  A16.

(Note:  ellipses added.)


March 21, 2007

Alternative Energy Sources Have Their Costs, Too; And Some of Them Are Environmental

   The location in Highland County, Virginia where 19 wind turbines are planned.  Source of photo:  online version of the NYT article cited below.


MONTEREY, Va. — Wes Maupin says he will move this spring to a 20-acre spread here in remote Highland County, a pastoral place where sheep outnumber people and where little has changed since his boyhood, when he fished the county’s mountain streams with his father.

Mr. Maupin, a 52-year-old former corrections worker, does have one misgiving, though. Like many others in Highland, known for its rustic heights as Virginia’s Switzerland, he finds no joy in the prospect that these blustery Allegheny ridges could soon become home to the state’s first wind farm: 19 wind turbines, each taller than the Statue of Liberty, its pedestal included.

“Any wind farm,” Mr. Maupin said, “would surely change the character of this county forever.”

. . .

. . . Randy Richardson, president of Highlanders for Responsible Development, a group that opposes the project, said people worried about noise pollution from the turbines’ blades and light pollution from the red strobes that would alert aircraft to the 400-foot-tall structures.


For the full story, see: 

PAMELA J. PODGER.  "In a Corner of Virginia's 'Switzerland,' a Division Over a Planned Wind Farm."  The New York Times  (Tues., February 13, 2007):  A17.

(Note:  ellipses added.)


 WindTurbineVirginiaMap.jpg   Source of map:  online version of the NYT article cited above.


March 20, 2007

Europe Plays Fair with Africa by Reducing Sugar Subsidies

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


For once, Europe bests the United States in consistently practicing free trade: 


BRUSSELS -- The developing world has been adamant that rich nations abandon farm subsidies in order to get a global trade deal both sides say they want. A flood of investment pouring into Southern Africa's sugar industry demonstrates why the poor countries won't back down on this demand.

The hundreds of millions of dollars being spent to ramp up African sugar production is a direct response to European Union plans to slash import duties and subsidies that for years have locked out farmers in developing countries.

The expansion shows how the EU's gradual opening of its farm sector can boost production in some developing countries, offer cheaper prices to European consumers and force inefficient EU producers to close.


For the full story, see: 

JOHN W. MILLER  "African Sugar Production Ramps Up EU Plan to Cut Tariffs Shows How Developing Nations Can Benefit."  The Wall Street Journal  (Sat., February 17, 2007):  A4.


March 19, 2007

Government is a Cause, Not a Cure, for Stranded Air Passengers

JetBluePassengersStuck.jpg   JetBlue passengers during the 8 and a half hours that they were stranded on the tarmac without being allowed to leave the plane on Weds., February 14th.  Source of photo:  online version of the WSJ article cited below.


To avoid stranding passengers for hours on the tarmac is not a 'passnger bill of rights,' but more rational (or fewer) FAA government work rules for airline crews: 


(p. D3)  Duty-time limits . . . can discourage pilots from taking planes back to gates. Federal rules give pilots a total work day of 16 hours, with only eight hours actually at the controls of an airplane. A pilot can't start a new flight with a scheduled time that would push over eight hours in the cockpit, but the pilot can continue any delayed flight up to the 16-hour limit.

If a flight goes back to the gate, it technically ends. So if the pilot is close to the eight-hour limit, he or she can't start a new flight to get the plane to its destination. But if the flight sits on the ramp without going back to the gate, the pilot gets the 16-hour window. 


For the full story, see: 

SCOTT MCCARTNEY. "THE MIDDLE SEAT; Stuck on a Plane: Why Nightmare Delays Happen; FAA Rules, Company Policies Prod Airlines to Wait It Out; Calling in the Red Cross."  The Wall Street Journal  (Tues., February 20, 2007):  D1 & D3.


 JetBluePlanes.jpg   JetBlue planes on Mon., February 19th at JFK airport.  Source of photo:  online version of the WSJ article cited above.


March 18, 2007

Environmentalists' Advocacy of Tire Reefs, Hurts the Environment

   Tire reef deposited in 1972 near the coast of South Florida will be expensive to remove.  Source of photo:  online verison of the NYT article quoted and cited below.


As we listen to the doom scenarios of environmentalists about global warming, we should ponder the evidence that, decades later, we sometimes learn that environmentalist proposals can be bad for the environment.  


(p. 23) “The really good idea was to provide habitat for marine critters so we could double or triple marine life in the area; it just didn’t work that way,” said Ray McAllister, a professor of ocean engineering at Florida Atlantic University who was instrumental in organizing the project. “I look back now and see it was a bad idea.”

. . .

Gov. Charlie Crist’s budget includes $2 million to help remove the tires. The military divers would work at no cost to the state by making it part of their training.

A monthlong pilot project is set for June. The full-scale salvage operation is expected to run through 2010 at a cost to the state of about $3.4 million.

. . .

“We’ve literally dumped millions of tires in our oceans,” said Jack Sobel, an Ocean Conservancy scientist. “I believe that people who were behind the artificial tire reef promotions actually were well-intentioned and thought they were doing the right thing. In hindsight, we now realize that we made a mistake.”


For the full story, see: 

"Tires Meant to Foster Sea Life Choke It Instead."  The New York Times, Section 1  (Sun., February 18, 2007):  23.

(Note:  ellipses added.)


March 17, 2007

Zimbabwe Official Says People Eat Field Mice as a "Delicacy": More on Why Africa is Poor

   Screen capture from CNN report "A Ruined Land," broadcast on December 19, 2006.


(CNN) -- Twelve-year-old Beatrice returns from the fields with small animals she's caught for dinner.

Her mother, Elizabeth, prepares the meat and cooks it on a grill made of three stones supporting a wood fire. It's just enough food, she says, to feed her starving family of six.

Tonight, they dine on rats.

"Look what we've been reduced to eating?" she said. "How can my children eat rats in a country that used to export food? This is a tragedy."   . . . 

This is a story about how Zimbabwe, once dubbed southern Africa's bread basket, has in six short years become a basket case. It is about a country that once exported surplus food now apparently falling apart, with many residents scrounging for rodents to survive.

According to the CIA fact book, which profiles the countries of the world, the Zimbabwean economy is crashing -- inflation was at least 585 percent by the end of 2005 -- and the nation now must import food.

Zimbabwe's ambassador to United States, Machivenyika Mapuranga, told CNN on Tuesday that reports of people eating rats unfairly represented the situation, adding that at times while he grew up his family ate rodents.

"The eating of the field mice -- Zimbabweans do that. It is a delicacy," he said. "It is misleading to portray the eating of field mice as an act of desperation. It is not."


For the full story, see: 

Jeff Koinange.  "Living off rats to survive in Zimbabwe."  CNN  POSTED: 3:40 p.m. EST, December 19, 2006.

(Note:  ellipsis added.)


RatsZimbabweDelicacy.jpg   Rats for dinner in Zimbabwe.  Source:  online CNN article cited above.


March 16, 2007

"Nuclear Energy is Suddenly Back on the Agenda"

   The Belguim windmill looks nice, but the electiricty is produced by the nuclear plant in the background.  Source of photo:  online version of the NYT article cited below.


The latest word on energy, from the 2006 World Economic Forum at Davos, Switzerland:


. . .  nuclear energy is suddenly back on the agenda — and not just here.  Spurred on by politicians interested in energy independence and scientists who specialize in the field of climate change, Germany is reconsidering a commitment to shut down its nuclear power plants.  France, Europe’s leading nuclear power producer, is increasing its investment, as is Finland.

At a time when industrialized countries are wrestling with how to curb carbon dioxide emissions, nuclear energy has one indisputable advantage: unlike coal, oil, natural gas, or even biological fuels, it emits no carbon dioxide. That virtue, in the view of advocates, is enough to offset its well-documented shortcomings.

“It has put nuclear back into the mix,” said Daniel C. Esty, director of the Center for Environmental Law and Policy at Yale University. “We’re seeing a new balancing of the costs and benefits.”


For the full commentary, see: 

MARK LANDLER. "Europe’s Embrace; With Apologies, Nuclear Power Gets a Second Look."  The New York Times, Section 4  (Sun., January 28, 2007):  3.

(Note:  ellipsis added.)



March 15, 2007

Immigrant Entrepreneurs Thrive in New York City

   Manuel and mother Mercedes of the entrepreneurial Miranda family, inspect the corn flatbread called "arepa."  Source of photo:  online version of the NYT article cited below.


Immigrant entrepreneurship contributes to the vitality and dynamism of New York and the nation.  Note the graphic at the bottom of this entry shows that employment increases in the same areas of the city in which immigrant entrepreneurship is thriving.   


Manuel A. Miranda was 8 when his family immigrated to New York from Bogotá. His parents, who had been lawyers, turned to selling home-cooked food from the trunk of their car. Manuel pitched in after school, grinding corn by hand for traditional Colombian flatbreads called arepas.

Today Mr. Miranda, 32, runs a family business with 16 employees, producing 10 million arepas a year in the Maspeth section of Queens. But the burst of Colombian immigration to the city has slowed; arepas customers are spreading through the suburbs, and competition for them is fierce. Now, he says, his eye is on a vast, untapped market: the rest of the country.

. . .

“Immigrants have been the entrepreneurial spark plugs of cities from New York to Los Angeles,” said Jonathan Bowles, the director of the Center for an Urban Future, a private, nonprofit research organization that has studied the dynamics of immigrant businesses that turned decaying neighborhoods into vibrant commercial hubs in recent decades. “These are precious and important economic generators for New York City, and there’s a risk that we might lose them over the next decade.”

A report to be issued by the center today highlights both the potential and the challenge for cities full of immigrant entrepreneurs, who often face language barriers, difficulties getting credit, and problems connecting with mainstream agencies that help businesses grow. The report identifies a generation of immigrant-founded enterprises poised to break into the big time — or already there, like the Lams Group, one of the city’s most aggressive hotel developers, or Delgado Travel, which reaps roughly $1 billion in annual revenues.

In Los Angeles, at least 22 of the 100 fastest-growing companies in 2005 were created by first-generation immigrants. In Houston, a telecommunications company started by a Pakistani man topped the 2006 list of the city’s most successful small businesses.

 But even in those cities and New York, where immigrant-friendly mayors have promoted programs to help small business, the report contends that immigrant entrepreneurs have been overlooked in long-term strategies for economic development.

. . .

Now, some children of the early influx are trying to build on their parents’ success — success that itself has increased the cost of doing business, by driving up rents and creating congestion.

One example is Jay Joshua, a Manhattan company that designs souvenirs and then has them manufactured in Asia and imported. Jay Chung, who arrived from South Korea in 1981 as a graduate student in design, started printing his computer-graphic designs for New York logos and peddling them to local T-shirt shops. His company is now one of the city’s leading suppliers of tourist items, from New York-loving coffee mugs to taxicab Christmas ornaments.

Mr. Chung’s son Joshua, 26, who was 3 when he immigrated, joined the company after studying business management in college, and recently helped land orders for a new line of Chicago souvenirs. But frustration mixes with pride when the Chungs, both American citizens now, discuss the company’s growth.

“It’s really hard to conduct a business over here as a wholesaler,” Mr. Chung said in the company’s West 27th Street showroom, chockablock with samples. “We get a ticket every 20 minutes, no matter what. We need more convenient places with less rent, less traffic.”

Thirty years ago their wholesale district was desolate. Now hundreds of Korean-American importers are there, said Jay Chung, who is a leader of the local Korean-American business association. They face a blizzard of parking tickets and high commercial rents — nearly $20,000 a month for 1,400 square feet, he said.


For the full story, see:

NINA BERNSTEIN. "Immigrant Entrepreneurs Shape a New Economy."  The New York Times  (Tues., February 6, 2007):  C13.

(Note:  the ellipses are added.)


The author of the New York Times article has contributed to a New York Times digital video clip that is based on the article and is entitled "Immigrant Entrepreneurs:  A Tour of One Bustling Ethnic Enclave."


 EntrepreneuvsJayJoshua.jpg   Entrepreneur father Jay and son Joshua own a firm that supplies New York City souveniers.  Source of photo:  online version of the NYT article cited above.


  Source of graph:  online version of the NYT article cited above.


March 14, 2007

Investments Increase in Electric Transmission

ElectricTransmissionGraph.gif   Source of graph:  online version of the WSJ article cited below.


U.S. utilities are significantly increasing their spending on new electricity-transmission lines, a trend that could ease choke points in the flow of power, enhance reliability and increase the potential for renewable energy.

The spending should put a dent in the chronic problem of underinvestment, a factor in the big 2003 blackout that left 50 million people in the eastern U.S. and Canada in the dark.

. . .

American Electric Power created buzz in November when it announced it will partner with Berkshire Hathaway Inc.'s utility unit, MidAmerican Energy Holdings Co., to build more transmission lines in Texas. AEP is budgeting about $1 billion for Texas projects, some designed to serve wind power developers.

AEP has identified $9 billion in important transmission projects in its 11-state region, including $3 billion for a 550-mile line that would bring cheaper power to New Jersey from West Virginia. AEP Chairman Michael Morris said transmission projects "will begin to pay benefits to shareholders as early as 2007."

. . .

Some projects pay for themselves, in effect, by eliminating grid choke points that limit power flows. In Connecticut, a new high-voltage line to Norwalk from Danbury, cost $340 million but will produce immediate savings for consumers by allowing less costly power to flow into the area. That eliminates so-called congestion costs, or the difference between what it would cost to supply the need in the most economical way versus what it actually costs because transmission capacity is limited.


For the full story, see: 

REBECCA SMITH.  "Money on the Lines Utilities Invest in Transmission."  The Wall Street Journal (Tues., February 6, 2007):  A10.


March 13, 2007

"Free" Parking Has Hidden Costs

ParkingMeterRedwood2.jpg ParkingMeterRedwood1.jpg   Two views of the new parking meters in Redwood, California.  Source of photos:  online version of the WSJ article cited below.


Economists have long made the case that the solution to the parking crunch many cities face lies not in more free or cheap parking but in higher prices. The idea is that higher prices result in a greater churn -- and get more people on buses and subways -- which leads to more open spaces. But this notion has often run up against city planners and retailers arguing that cheap and plentiful parking results in more commerce and, thus, higher sales taxes and a vibrant economy.

Now, in places like Redwood City, some officials are finally listening. One reason is that after decades of losing people to the suburbs, many city centers are swelling again. Many of these new residents are bringing cars with them, creating the kind of traffic that makes them yearn for the suburbs again.

One of the most influential of the parking gurus is Donald Shoup, a professor at the University of California, Los Angeles who commutes on a bicycle. Since the publication in 2005 of Mr. Shoup's "The High Cost of Free Parking," he has become something of a celebrity at academic gatherings and parking-industry meetings. Lines form at his book signings. "He's a parking rock star," says Paul White, of Transportation Alternatives, a New York group that advocates for pedestrians and bicycles.

. . .  

Dan Zack, downtown development coordinator for Redwood City, has bought in. A few years ago, his boss presented him with a problem. "He said, 'We're adding a million visitors every year, but only 600 new parking spots -- make it work,' " Mr. Zack recalls. After visiting neighboring cities and reading books like "The Dimensions of Parking," Mr. Zack was handed an article by Mr. Shoup.

The city recently raised rates to 75 cents for some prime downtown spots that had been free, and ditched its one-hour time limits, so cars can prepay for as long as they'd like. The move has helped steer more cars to underutilized parking garages away from the main drag.

. . .  

San Francisco, perhaps more than any other city, shows how radically some cities are rethinking their parking. The city is one of the toughest places to find a meter spot in all of America, and there have been a spate of attacks by angry drivers, against parking enforcement officers. One block near the popular Fisherman's Wharf has average stays of four hours -- even though there's a two-hour time limit -- and some spots are filled for days at a time.

Recently, the city hired a company to lay hundreds of 4-inch-by-4-inch sensors along the streets in some areas. The sensors, which resemble reflectors, have recorded some 250,000 "parking events" across 200 parking spots. City planners can now tell you which spots are occupied the longest and how traffic flow affects parking supplies.

If the sensors get a wider rollout, the city has floated a number of ideas. When there's a Giants baseball game at AT&T Park, the city could temporarily charge about the same as private lots near the stadium. The ground sensors are also connected to the Internet wirelessly, which creates the possibility that parking enforcement officers equipped with PDAs could get real-time information on parking violations beamed to them. It also means consumers could get information on which parking spots are open.


For the full story, see: 

CONOR DOUGHERTY.  "The Parking Fix; Free-market economists are overhauling a frustration of American life -- and erasing what may be one of the last great urban bargains."   The Wall Street Journal  (Sat., February 3, 2007):  P1 & P5.

(Note:  ellipses added.) 


 ParkingSensorsSanFancisco.jpg ParkingMeterInternet.jpg  Sensors such as the one embedded in the San Francisco street on the left, could eventually be used to help track parking violators, as imagined in the fictional picture on the right.  Source of photos:  online version of the WSJ article cited above.


March 12, 2007

In Praise of Microsoft

   A PC screen displaying one of the wallpaper options from Microsoft's Vista operating system.  Source of photo:  online version of the NYT article cited below.


I know what Microsoft wants. I know because I have been exploring its new operating system, Vista, which was released last week after five years of false starts, persistent bugs and great expectations. I also know because after spending three weeks building a computer from scratch to test out Vista, piecing the PC together from parts bought online, I want the same thing. What we want is to eliminate the PC altogether, to dismantle that box of green circuit boards and crammed-in wires, to break through even the most glorious flat-screen monitor and open up a new ... vista.

That’s why the operating system has its name, of course, and why the screen images it includes show exotic landscapes with skies lit by sunset or sunrise or aurora borealis displays.

. . .

Apple had it easy: it kept its PC box closed, maintaining control over the hardware so it would perfectly suit its software. But Microsoft faced hundreds of thousands of boards, drives and chips like those I had spread out before me a few weeks ago, all of differing technological vintages, made by hundreds of companies with wildly different goals. Microsoft has taken these objects, along with the many thousands of PC programs now sold, and tried to create a system that would overlook their dizzying differences, bind them to a coherent vision and force them, in all their variety, to leave techne behind for the uncharted possibilities of magic. 


For the full commentary, see: 

EDWARD ROTHSTEIN.  "CONNECTIONS; Techie’s Cyber Odyssey: Magic in Bits and Bolts."  The New York Times  (Weds., February 7, 2007):  B1 & B7.  

(Note:  ellipsis added.)


    In the Vista operating system, the user can shuffle through open windows almost like a deck of cards.  Source of image:  online version of the NYT article cited above.


March 11, 2007

Job Market Resilience: Going to the Dogs

LoguePatrickRealEstate.jpg  Patrick Logue the former real estate agent and current dog trainer.  Source of photo:  online version of the WSJ article cited below.


Selling homes has turned into a dog-eat-dog business, so Patrick Logue decided to work with some friendlier canines.

Mr. Logue quit his job as a real-estate agent near Fort Myers, Fla., in December. Then he set up shop as a franchisee of the dog-training chain Bark Busters. So far, he says, "I have zero regrets."

. . .

Mr. Logue, a 34-year-old former golf pro, became an agent for the Assist-2-Sell franchise chain in the Fort Myers area about three years ago. He says his commission income was nearly $100,000 in his first year and $180,000 in his second. Then it plunged to $40,000 last year. "Nothing was selling," he says.


For the full story, see:

JAMES R. HAGERTY and ANJALI ATHAVALEY.  "Amid Slump, Real-Estate Agents Hang Up Their Blazers; Housing Downturn Leads To an Industry Shakeout; Seeking Alternative Careers."  The Wall Street Journal  (Weds., February 7, 2007):  B6. 

(Note:  ellipsis added.)


March 10, 2007

Many Muslim Newcomers Did Not Embrace Dutch Tolerance

   Source of book image:  http://images.barnesandnoble.com/images/12210000/12213853.jpg


Two key moments in Ms. Hirsi Ali's life stand out. One is her arrival in the West, a moment she considers to be her "real birthday." On the day her husband shows up at the refugee camp in Holland to claim his rights, Ms. Hirsi Ali finds that she can say "no" to a man stronger than she is, thanks to the protection of a democratic state, a protection made visible, in this case, by the presence of Dutch policemen. She thus experienced an imperative that to most of us is a mere abstraction: Individual freedom needs the rule of law.

The second pivotal moment in her life, Ms. Hirsi Ali says, was the 9/11 terrorist attack on the U.S. She understood what drove Mohamed Atta and his co-hijackers; she once shared their values and had known people like them in the Muslim Brotherhood. "Every devout Muslim who aspired to practice genuine Islam," she writes, "even if they didn't actively support the attacks, they must have at least approved of them." With 9/11, Ms. Hirsi Ali's religious doubts erupted into defiance of what she had known while growing up.

From that day onward, Ms. Hirsi Ali became a public voice in the Dutch post-9/11 debates. Eloquently, she made bruising, sometimes inflammatory, arguments. Islam was backward, she said, and needed its Voltaire. She declared that, considered by modern standards, the Prophet was a "pervert" because he had married a 9-year-old girl. Elected an MP for the market-oriented VVD Party in 2003, she became a politician in the grand, passionate style, breaking with Dutch habits of consensus and accommodation.

A nation of 16 million people, with a Muslim minority of about one million (mostly Moroccan and Turkish immigrants), the Netherlands was at the time (and is still) trapped by its carefully nurtured sense of tolerance and hospitality. The trouble was that its newcomers did not necessarily embrace tolerance, women's rights, free speech and other core Dutch values. Ms. Hirsi Ali knew that she was courting danger by openly addressing such concerns. Nonetheless, she pushed ahead and began working with director Theo van Gogh on "Submission," the film about the mistreatment of Muslim women. When van Gogh was murdered on Nov. 2, 2004, the police found a knife stuck in his body -- the weapon was holding in place a letter threatening Ms. Hirsi Ali.


For the full review, see: 

LUUK VAN MIDDELAAR.  "BOOKS; Out of Europe How a prominent African refugee confronted Islam -- then fled to the U.S."  The Wall Street Journal  (Sat., February 3, 2007):  P12.


Reference to the book: 

Ayaan Hirsi Ali.  INFIDEL.  Free Press, 2007.  (353 pages, $26) 


March 9, 2007

Omaha Public Schools' Attack on Other Districts Costs $12 Million in Lawyer Fees

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


(p. 1A)  Who's winning in the Omaha-area disputes about school finances and boundaries?.

So far, it looks like the lawyers.

Taxpayers have shelled out $12 million to private lawyers hired to handle those matters for Omaha-area school districts and the State of Nebraska, a World-Herald study found.

Nearly all of that has been paid during the past 31/2 years to two Omaha firms: Baird Holm, hired by the Omaha Public Schools, and Fraser Stryker, which was hired by the state and separately by the suburban districts.

The money has been spent on three interconnected items:

• The OPS lawsuit against the state's school funding system, which accounts for most of the $12 million.

• The Omaha district's effort, now on hold, to take over its suburban neighbors.

• And fallout from the Legislature's 2006 law that would break apart OPS and create a two-county "learning community" for the Omaha metro area.

The $12 million doesn't include lobbying costs or staff time for the three matters. And it doesn't include millions of dollars the districts paid lawyers during the same period for routine legal work.

The three items have fueled a stunning increase in OPS payments to lawyers. The district now pays about $400,000 a month in legal fees - four times what it (p. 2A) paid five years ago.

"This seems to me to be crazy," said State Sen. Ron Raikes of Lincoln, who introduced a bill this year aimed at curbing school districts' spending on legal fees.

"These are legal fees, paid pretty much by taxpayers, for a school district to conduct a legal war against another school district or against the state," said Raikes, who heads the Legislature's education committee.


For the full story, see:

PAUL GOODSELL.  "Lawyers reap OPS windfall; District, state actions cost taxpayers $12 million, so far."   OMAHA WORLD-HERALD  (Sunday, March 4, 2007):  1A & 2A.

(Note:  the online version had the somewhat different title:  "OPS legal fees cost taxpayers $12 million, so far.")


March 8, 2007

Communists Import Giant Rabbits to End Starvation in North Korea


Apparently the North Korean Communist government's plan to end starvation in North Korea, is to import and breed giant German rabbits.  If they were really serious, they would do better by respecting property rights, and embracing the free market.


EBERSWALDE, Germany -- Few people raise bigger bunny rabbits than Karl Szmolinsky, who has been producing long-eared whoppers since 1964.  His favorite breed, German gray giants, are the size of a full-grown beagle and so fat they can barely hop.

Last year, after the retired chauffeur entered some of his monsters in an agricultural fair, word of his breeding skills spread to the North Korean Embassy in Berlin.  Diplomats looked past the cute, furry faces with the twitching noses and saw a possible solution to their nation's endemic food shortage:  an enormous bunny in every Korean pot.

The North Koreans approached Szmolinsky in November and asked whether he'd advise them on how to start a rabbit breeding program to help "feed the population," the 67-year-old pensioner recalled in an interview at his home in Eberswalde, an eastern German town a few miles from the Polish border.  Sympathetic to the Koreans' plight, he agreed to sell some of his best stock at a steep discount and volunteered to travel to the hermetic nation as a consultant.

. . .

In December, Szmolinsky stuffed six of his rabbits into modified dog carriers and took them to the airport in Berlin, where they boarded a flight for Pyongyang, via Frankfurt, Germany, and Beijing.  Robert, a 23-pounder, was the largest of the bunch, which included four female rabbits and one other male carefully selected for their breeding potential.

How, exactly, the Democratic People's Republic of Korea intends to parlay the small herd of German Flopsies into hunger relief for its 23 million citizens is unclear.


For the full story, see: 

Craig Whitlock.  "A Colossal Leap of Faith In Fight Against Famine North Koreans See Potential in German Breeder's Giants."  The Washington Post  (Friday, February 2, 2007):  A10.

(Note:  ellipsis added.)


 RabbitGiantGerman.jpg   A giant German rabbit.  Source of photo:  http://www.spiegel.de/img/0,1020,774187,00.jpg


March 7, 2007

In Health Care "the U.S. is a Model of Inefficiency"

HealthcareSpendingG7graph.gif   Source of graph:  online version of the WSJ article cited below.


When it comes to managing its citizens' health, the U.S. is a model of inefficiency.

Recently released figures from the U.S. Centers for Medicare and Medicaid Services show that in 2005, the U.S. health-care tab came to 16% of gross domestic product, more than any other country. France spends 10.5% of its GDP on health care, according to the Organization for Economic Cooperation and Development, while Japan spends 8%.

Americans don't seem to be getting much for the money. In both France and Japan, the average life expectancy is higher than in the U.S., and the infant mortality rate is lower. This is true in most other OECD countries, so green tea and red wine don't explain it all.

This is a drag on U.S. companies, raising their costs, pulling money out of consumer pockets and giving overseas firms a competitive edge.


For the full commentary, see: 

JUSTIN LAHART.  "AHEAD OF THE TAPE; Rethinking Health Care And the GDP." The Wall Street Journal (Thurs., January 25, 2007):  C1.


March 6, 2007

The New York Times Bests the Wall Street Journal at Business


We had a major winter storm in Omaha on Thurs., March 1st.  Schools were closed on Thursday and again on Friday.  Throughout the storm, the Omaha World-Herald got a paper delivered every day. 

The New York Times missed Thurs. and Fri., (there is no Saturday delivery).  The Wall Street Journal missed Thurs., Fri., and Sat.

The main difference is that in the end, the New York Times made good on eventually delivering me all the papers that I had paid for.

After a half hour wait to get through to a customer service person, the Wall Street Journal told me that they could not get me copies of the Thursday and Saturday papers.  They were all out, and I "should go to the library."  (During the long wait, every couple of minutes, an automated voice would come on to tell me how important my call was to them---if the call is so important, why don't they hire enough people so that customers don't have to wait for a half hour?)

The weather problem was not a secret.  Wouldn't a good business anticipate publicly known problems, and have a contingency plan for dealing with them?  Wouldn't they increase their production in order to be able to make good on the papers their logistical operation was incompetent to deliver?  Even if they did not have a clue at the beginning of the storm, couldn't they have acquired a clue by Saturday, three days into the storm?

If the Omaha World-Herald can deliver, and the New York Times can make good when it can't deliver, then the Wall Street Journal should be able, at least, to do as well as the New York Times.  The Wall Street Journal insults its customers when it tells them to "go to the library." 

It's no way for the nation's leading business newspaper to run its own business.


March 5, 2007

Mugabe's Hyperinflation Destroys Zimbabwe Economy: More on Why Africa is Poor


The article excerpted below does a good job of sketching some of the effects of  hyperinflation on the people of Zimbabwe.  But it does little to illuminate the cause.  As Milton Friedman definitively demonstrated, inflation is caused by government printing too much money.  Mugabe and other tyrants are motivated to print too much money so they will have more money to spend, without having to raise taxes.  The ploy seems to work for a little while sometimes, but in the end it results in inflation.

Gideon Gono is the governor of Zimbabwe's central bank.  Note Mr. Gono's display of chutzpah in his blaming the people for inflation, and note the wonderful just symbolism of the power black out that cut off Mr. Gono's speech. 

(It almost sounds like an outtake from Atlas Shrugged.)


(p. A1)  JOHANNESBURG, Feb. 6 — For close to seven years, Zimbabwe’s economy and quality of life have been in slow, uninterrupted decline. They are still declining this year, people there say, with one notable difference: the pace is no longer so slow.

Indeed, Zimbabwe’s economic descent has picked up so much speed that President Robert G. Mugabe, the nation’s leader for 27 years, is starting to lose support from parts of his own party.

In recent weeks, the national power authority has warned of a collapse of electrical service. A breakdown in water treatment has set off a new outbreak of cholera in the capital, Harare. All public services were cut off in Marondera, a regional capital of 50,000 in eastern Zimbabwe, after the city ran out of money to fix broken equipment. In Chitungwiza, just south of Harare, electricity is supplied only four days a week.

. . .

In the past eight months, “there’s been a huge collapse in living standards,” Iden Wetherell, the editor of the weekly newspaper Zimbabwe Independent said in a telephone interview, “and also a deterioration in the infrastructure — in standards of health care, in education. There’s a sort of sense that things are plunging.”

. . .

(p. A6)  The trigger of this crisis — hyperinflation — reached an annual rate of 1,281 percent this month, and has been near or over 1,000 percent since last April. Hyperinflation has bankrupted the government, left 8 in 10 citizens destitute and decimated the country’s factories and farms.

. . .

The central bank’s latest response to these problems, announced this week, was to declare inflation illegal.  From March 1 to June 30, anyone who raises prices or wages will be arrested and punished.  Only a “firm social contract” to end corruption and restructure the economy will bring an end to the crisis, said the reserve bank governor, Gideon Gono.

The speech by Mr. Gono, a favorite of Mr. Mugabe, was broadcast nationally.  In downtown Harare, the last half was blacked out by a power failure.


For the full story, see: 

MICHAEL WINES.  "As Inflation Soars, Zimbabwe Economy Plunges."  The New York Times  (Weds., February 7, 2007):  A1 & A6.

(Note:  ellipses in original.)


For a lot of evidence on what causes inflation, see:

Friedman, Milton, and Anna Jacobson Schwartz.  A Monetary History of the United States, 1867-1960. Princeton:  Princeton University Press, 1963.


March 4, 2007

German Brain Drain

   Engineer Benedikt Thoma is moving his family to Canada from Germany for a brighter future.  Source of photo:  online verion of the NYT article cited below.


ESCHBORN, Germany, Feb. 3 — Benedikt Thoma recalls the moment he began to think seriously about leaving Germany. It was in 2004, at a New Year’s Day reception in nearby Frankfurt, and the guest speaker, a prominent politician, was lamenting the fact that every year thousands of educated Germans turn their backs on their homeland.

“That struck me like a bolt of lightning,” said Mr. Thoma, 44, an engineer then running his family’s elevator company. “I asked myself, ‘Why should I stay here when the future is brighter someplace else?’ ”

In December, as his work with the company became an intolerable grind because of labor disputes, Mr. Thoma quit and made plans to move to Canada. In its wide-open spaces he hopes to find the future that he says is dwindling at home. As soon as he lands a job, Mr. Thoma, his wife, Petra, and their two teenage sons will join the ranks of Germany’s emigrants.

There has been a steady exodus over the years, but it has recently become Topic A in a land already saddled with one of the most rapidly aging and shrinking populations of any Western nation. With evidence that more professionals are leaving now than in past years, politicians and business executives warn about the loss of their country’s best and brightest.

. . .

. . . , there is plenty of anecdotal evidence that Germany has become less attractive for people in fields like medicine, academic research and engineering. Those who leave cite chronic unemployment, a rigid labor market, stifling bureaucracy, high taxes and the plodding economy — which, though better recently, still lags behind that of the United States.

. . .

In Mr. Thoma’s view, the root of the problem is [that] . . . Germany, . . . , has a “blockage” in its society.

“Germans are so complacent,” he said, sitting at the dining table in his neat-as-a-pin home here. “They don’t want to change anything. Everything is discussed endlessly without ever reaching a solution.”

As an example he cites the stalemate between his family’s firm and its 89 employees. After the firm became unionized, he said, the two sides began bickering over wages and working conditions.

With much of his 80-hour workweeks eaten up by those disputes, Mr. Thoma said he had developed high blood pressure and other ailments. He told his brothers he was burned out and ready to leave. 


For the full story, see:

MARK LANDLER.  "Germany Agonizes Over a Brain Drain."  The New York Times  (Tues., February 6, 2007):  A10.

(Note:  ellipses added.)


     Source of graphic:  online verion of the NYT article cited above.


March 3, 2007

Rock Icon Abandons France Because of High Taxes

   French rock icon Johnny Hallyday.  Source of photo: http://hosted.ap.org/photos/6/6b7deb53-a318-477d-90b7-fb5abe488774-big.jpg


In the dark of winter, the French rock 'n' roll icon Johnny Hallyday has abandoned France to settle in a snow-dusted mountain chalet, joining a scattered flock of superrich tax refugees in serene Switzerland.

Numbering about 3,700, according to Swiss statistics, these millionaire and billionaire exiles are variously coveted and resented in Switzerland, where local governments are competing in what critics scorn as a fierce race to the bottom to lure wealthy foreigners with individually negotiated tax breaks.

''I'm sick of paying, that's all,'' Mr. Hallyday, 63, said in a rebellious outburst to the celebrity magazine Paris Match, which devoted eight pages to his departure. ''I believe that after all the work I have done over nearly 50 years, my family should be able to live in some serenity. But 70 percent of everything I earn goes to taxes.''

The notion of a French symbol decamping to a newly renovated refuge in the town of Gstaad had an incendiary effect on French politics, prompting President Jacques Chirac to express restrained regrets about the rocker's actions.


For the full story, see: 

DOREEN CARVAJAL.  "Swiss Tax Deals Lure the Superrich, but Are They Fair?"  The New York Times, Section 1  (Sun., January 14, 2007):   - B11.


 HallydaySwissChalet.jpg   Hallyday's chalet in Gstaad, Switzerland.  Source of photo: http://www.20minutes.fr/articles/2006/12/20/20061220-people-A-Gstaad-le-chalet-de-Johnny-fait-etrique-pour-une-rock-star.php


March 2, 2007

"Market Research Rarely Reveals New Insights"

   Source of book image:   http://images-eu.amazon.com/images/P/1591396190.01.LZZZZZZZ.jpg


(p. 69)  Competition in an industry tends to converge not only on an accepted notion of the scope of its products and services but also on one of two possible bases of appeal.  Some industries compete (p. 70) principally on price and function largely on calculations of utility; their appeal is rational.  Other industries compete largely on feelings;  their appeal is emotional.

Yet the appeal of most products or services is rarely intrinsically one or the other.  Rather it is usually a result of the way companies have competed in the past, which has unconsciously educated consumers on what to expect.  Companies' behavior affects buyers' expectations in a reinforcing cycle.  Over time, functionally oriented industries become more functionally oriented; emotionally oriented industries become more emotionally oriented.  No wonder market research rarely reveals new insights into what attracts customers.  Industries have trained customers in what to expect.  When surveyed, they echo back:  more of the same for less.



Kim, W. Chan, and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Boston: Harvard Business School Press, 2005.




March 1, 2007

Al Gore "Deserves a Gold Statue for Hypocrisy"

  Al Gore's energy consuming mansion.  Source of photo: http://thelede.blogs.nytimes.com/2007/02/28/an-inconveniently-easy-headline-gores-electric-bills-spark-debate/


Here is the full text of a 2/26/07 press release from the Tennessee Center for Policy Research that has rightly received a lot of attention from the mainstream media and from the blogosphere:


Al Gore’s Personal Energy Use Is His Own “Inconvenient Truth”

Gore’s home uses more than 20 times the national average

Last night, Al Gore’s global-warming documentary, An Inconvenient Truth, collected an Oscar for best documentary feature, but the Tennessee Center for Policy Research has found that Gore deserves a gold statue for hypocrisy.

Gore’s mansion, located in the posh Belle Meade area of Nashville, consumes more electricity every month than the average American household uses in an entire year, according to the Nashville Electric Service (NES).

In his documentary, the former Vice President calls on Americans to conserve energy by reducing electricity consumption at home.

The average household in America consumes 10,656 kilowatt-hours (kWh) per year, according to the Department of Energy. In 2006, Gore devoured nearly 221,000 kWh—more than 20 times the national average.

Last August alone, Gore burned through 22,619 kWh—guzzling more than twice the electricity in one month than an average American family uses in an entire year. As a result of his energy consumption, Gore’s average monthly electric bill topped $1,359.

Since the release of An Inconvenient Truth, Gore’s energy consumption has increased from an average of 16,200 kWh per month in 2005, to 18,400 kWh per month in 2006.

Gore’s extravagant energy use does not stop at his electric bill. Natural gas bills for Gore’s mansion and guest house averaged $1,080 per month last year.

"As the spokesman of choice for the global warming movement, Al Gore has to be willing to walk the walk, not just talk the talk, when it comes to home energy use,” said Tennessee Center for Policy Research President Drew Johnson.

In total, Gore paid nearly $30,000 in combined electricity and natural gas bills for his Nashville estate in 2006.


Source of the press release:




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