« October 2007 | Main | December 2007 »


November 30, 2007

Evidence that Bush's Iraq Surge is Working


 

  "LOVE PREVAILS. A bride and groom, surrounded by friends and a band, dressed for their wedding photos last week in Baghdad."  Source of caption and photo:  online version of the NYT article quoted and cited below. 

 

(p. A1)  BAGHDAD, Nov. 19 — Five months ago, Suhaila al-Aasan lived in an oxygen tank factory with her husband and two sons, convinced that they would never go back to their apartment in Dora, a middle-class neighborhood in southern Baghdad.

Today she is home again, cooking by a sunlit window, sleeping beneath her favorite wedding picture. And yet, she and her family are remarkably alone. The half-dozen other apartments in her building echo with emptiness and, on most days, Iraqi soldiers are the only neighbors she sees.

“I feel happy,” she said, standing in her bedroom, between a flowered bedspread and a bullet hole in the wall. “But my happiness is not complete. We need more people to come back. We need more people to feel safe.”

Mrs. Aasan, 45, a Shiite librarian with an easy laugh, is living at the far end of Baghdad’s tentative recovery. She is one of many Iraqis who in recent weeks have begun to test where they can go and what they can do when fear no longer controls their every move.

The security improvements in most neighborhoods are real. Days now pass without a car bomb, after a high of 44 in the city in February. The number of bodies appearing on Baghdad’s streets has plummeted to about 5 a day, from as many as 35 eight months ago, and suicide bombings across Iraq fell to 16 in October, half the number of last summer and down sharply from a recent peak of 59 in March, the American military says.

As a result, for the first time in nearly two years, people are moving with freedom around much of this city. In more than 50 interviews across Baghdad, it became clear that while there were still no-go zones, more Iraqis now drive between Sunni and Shiite areas for work, shopping or school, a few even after dark. In the most stable neighborhoods of Baghdad, some secular women are also dressing as they wish. Wedding bands are playing in public again, and at a handful of once shuttered liquor stores customers now line up outside in a collective rebuke to religious vigilantes from the Shiite Mahdi Army.

Iraqis are clearly surprised and relieved to see (p. A8) commerce and movement finally increase, five months after an extra 30,000 American troops arrived in the country.

 

For the full story, see: 

DAMIEN CAVE and ALISSA J. RUBIN.  "As Security Improves, Baghdad Starts to Exhale."  The New York Times   (Tues., November 20, 2007):  A1 & A8.

(Note:  the slightly different online title was "Baghdad’s Weary Start to Exhale as Security Improves.")

 

 

"COMMERCE RETURNS. A Baghdad market, shut by violence, recently reopened."  Source of caption and photo:  online version of the NYT article quoted and cited above. 

 




November 29, 2007

Let the Evidence Decide if the Mapinguary is Myth or Real


 

   A statue of the mapinguary in Rio Branco, Brazil.  Source of the photo:  online version of the NYT article quoted and cited below. 

 

RIO BRANCO, Brazil — Perhaps it is nothing more than a legend, as skeptics say. Or maybe it is real, as those who claim to have seen it avow. But the mere mention of the mapinguary, the giant slothlike monster of the Amazon, is enough to send shivers down the spines of almost all who dwell in the world’s largest rain forest.

The folklore here is full of tales of encounters with the creature, and nearly every Indian tribe in the Amazon, including those that have had no contact with one another, have a word for the mapinguary (pronounced ma-ping-wahr-EE). The name is usually translated as “the roaring animal” or “the fetid beast.”

. . .  

The giant ground sloth, Megatherium, was once one of the largest mammals to walk the earth, bigger than a modern elephant. Fossil evidence is abundant and widespread, found as far south as Chile and as far north as Florida. But the trail stops cold thousands of years ago.

“When you travel in the Amazon, you are constantly hearing about this animal, especially when you are in contact with indigenous peoples,” said Peter Toledo, an expert on sloths at the Goeldi Institute. “But convincing scientific proof, in the form of even vestiges of bones, blood or excrement, is always lacking.”

Glenn Shepard Jr., an American ethnobiologist and anthropologist based in Manaus, said he was among the skeptics until 1997, when he was doing research about local wildlife among the Machiguenga people of the far western Amazon, in Peru. Tribal members all mentioned a fearsome slothlike creature that inhabited a hilly, forested area in their territory.

Dr. Shepard said “the clincher that really blew me away” came when a member of the tribe remarked matter of factly that he had also seen a mapinguary at the natural history museum in Lima. Dr. Shepard checked; the museum has a diorama with a model of the giant prehistoric ground sloth.

“At the very least, what we have here is an ancient remembrance of a giant sloth, like those found in Chile recently, that humans have come into contact with,” he said. “Let me put it this way: Just because we know that mermaids and sirens are myths doesn’t mean that manatees don’t exist.”

Even so, the mystery of the mapinguary is likely to continue, as is the search.

“There’s still an awful lot of room out there for a large sloth to be roaming around,” Dr. Shepard said.

 

For the full story, see: 

LARRY ROHTER.  "A Huge Amazon Monster Is Only a Myth. Or Is It?"  The New York Times, Section 1  (Sun., July 8, 2007):  3. 

(Note:  ellipsis added.)

 

Some scientists believe that the mapinguary may be based on actual sightings of a real creature related to the Megarium, two of whom are depicted above.  Source of the photo:  online version of the NYT article cited above. 

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

 




November 28, 2007

Communist China's "Greatest Folly": Renewable Energy Dam


 

  "Liu Jun leaving his home in Miaohe, China, near the Three Gorges Dam.  All of the village's residents are being relocated."  Source of caption:  p. A1 of print version of the NYT article quoted and cited below.  Source of photo:  online version of the NYT article quoted and cited below. 

 

(p. A1)  JIANMIN VILLAGE, China — Last year, Chinese officials celebrated the completion of the Three Gorges Dam by releasing a list of 10 world records. As in: The Three Gorges is the world’s biggest dam, biggest power plant and biggest consumer of dirt, stone, concrete and steel. Ever. Even the project’s official tally of 1.13 million displaced people made the list as record No. 10.

Today, the Communist Party is hoping the dam does not become China’s biggest folly. In recent weeks, Chinese officials have admitted that the dam was spawning environmental problems like water pollution and landslides that could become severe. Equally startling, officials want to begin a new relocation program that would be bigger than the first.

The rising controversy makes it easy to overlook what could have been listed as world record No. 11: The Three Gorges Dam is the world’s biggest man-made producer of electricity from renewable energy.

. . .

(p. A12)  The Communist Party leaders who broke ground on the Three Gorges project in 1994 had promised that China could build the world’s biggest dam, manage the world’s biggest human resettlement and also protect the environment.

. . .

(p. A13)  In the isolated mountain villages above the reservoir, farmers have heard nothing about a new resettlement plan. For many farmers, the immediate concern is the land beneath their feet. Landslides are striking different hillsides as the rising water places more pressure on the shoreline, local officials say.  . . .

. . .

Around daybreak on June 22, Lu Youbing awoke to the screams of her brother-in-law and the sickening sensation of the earth collapsing. Her mountain farmhouse in Jianmin Village buckled as a landslide swept it downhill. In all, 20 homes were demolished. Five months later, Ms. Lu is living in a tent, fending off rats and wondering where her family can go.

“We have nothing left,” she said. “Not a single thing.”

Winter is approaching, and she is trying to block out cold air — and rats — by pinning down the tent flaps with rocks. Villagers have been told that more landslides are possible. Ms. Lu lives with her second husband and their two children. They are too poor to buy an apartment in the city or to build a new home on higher ground. Local officials gave them the tent. Villagers have donated clothes.

The tents are pitched on the only available flat land — a terrace with a monument celebrating efforts by local officials to improve the environment.

“We don’t know about winter,” she said. “This is the only option we have. What else can we do?”

 

For the full story, see:

JIM YARDLEY.  "At China's Dams, Problems Rise With Water."   The New York Times  (Mon., November 19, 2007):  A1, A12-A13. 

(Note:  ellipses added.)

(Note:  online the title of the article is "Chinese Dam Projects Criticized for Their Human Costs.")

 

   "The Three Gorges Dam is projected as an anchor in a string of hydropower “mega-bases” planned for the middle and upper reaches of the Yangtze River."  Source of caption and photo:  online version of the NYT article quoted and cited above.

 




November 27, 2007

Accepting an 80% Pay Cut for a Chance to Defy Death


 

   David Sinclair (left) and Christoph Westphal (right).  Source of photo:  online version of the NYT article cited below.

 

Humans are often risk-averse, but are also often willing to accept greater risk, in the pursuit of a really important goal. 

 

SIRTRIS PHARMACEUTICALS wants to sell you the elixir of youth. Yet the company’s founders are neither cranks nor quacks, but include a well-regarded Harvard scientist and a serial entrepreneur. 

Imagine a pill, derived from a compound found in something as benign as red wine, that treated the most feared and debilitating diseases of aging: illnesses like diabetes, neurodegenerative conditions like Alzheimer’s and Parkinson’s, and many forms of cancer. Imagine, furthermore, that this pill had no injurious side effects. Imagine, finally, that the pill’s only side effect conferred what human beings have always wanted: an increase in life span. That’s what Sirtris wants to create.

. . .

Mr. Sinclair, who at the relatively youthful age of 37 is already renowned for his investigations into how we grow old, discovered in 2003 that a molecular compound called resveratrol, found in red wine and other plant products, extends the life span of mice by as much as 24 percent and the life span of other animals, such as flies and fish, by as much as 59 percent.

Dr. Westphal, a self-described “geek” who relaxes by reading papers in academic journals like Nature and Science, was stunned by Mr. Sinclair’s discovery, and visited him in his lab to discuss the implications for drug development. The two soon decided to start a company.

“I figured if there’s going to be one chance that I’d take an 80 percent pay cut to be the C.E.O. of a company rather than general partner in a venture firm, then this was it,” Dr. Westphal, 39, told me when I visited Sirtris’s offices in Cambridge, Mass. “If we’re right on this one, everyone’s going to want to take these drugs and they’re going to treat many of the major diseases of Western society.”

. . .

“Nobody knows why we age,” Mr. Sinclair explained to me. “We’re working on genes that increase fitness and defenses against diseases. The body mounts those defenses when it’s under adversity. Caloric restriction is one of those triggers and the molecules we’re developing are also one of those triggers.”

Dr. Westphal and Mr. Sinclair stress that they are not working to “cure” aging, a condition that, so far at least, is common to all humanity and that most physicians do not consider a disease. “Curing aging is not an endpoint the federal drug agency would recognize,” Dr. Westphal says dryly. Instead, both men say, they are working to ameliorate the diseases of aging.

While Mr. Sinclair has bragged that resveratrol is as “close to a miraculous molecule as you get,” much uncertainty surrounds his research and the commercialization of his discovery faces many challenges.

. . .

Sirtris hopes to have its first drugs in commercial production by 2012 or 2013. While that may seem far off, it’s wonderfully fast for the biopharmaceutical industry, where development is onerously slow, difficult and uncertain.

This speed of research and development owes much to Dr. Westphal’s energy and Mr. Sinclair’s ambition.

“For as long as I can remember, I’ve wanted to develop drugs that combat diseases of aging,” Mr. Sinclair says. “As soon as I realized I was mortal, I started to worry. I set a goal to see if we could make drugs that would target the diseases of aging in my lifetime. I didn’t know it would be possible at all — and I didn’t know it would happen so quickly.”

 

For the full story, see: 

JASON PONTIN.  "SLIPSTREAM; An Age-Defying Quest (Red Wine Included)."  The New York Times, Section 3  (Sun., July 8, 2007):  3.

(Note:  ellipses added.)

 




November 26, 2007

FDA Hurts Consumers with New Burdens on Small Firms Making Proven Drugs


 

  "Larry Blansett, chief executive of the Blansett Pharmacal Company, sells a wide range of what he calls legacy drugs."  Source of caption and photo:  online version of the NYT article cited below.

 

(p. C1)  In the 1970s, Larry Blansett was producing a wide array of prescription cough syrups, antihistamine tablets and pain killers at the company he co-founded, UAD Laboratories. But the Food and Drug Administration was not keeping a close watch.

Mr. Blansett continues to sell the same range of products at his latest venture, the Blansett Pharmacal Company, which employs about 90 people in North Little Rock, Ark. “We grew gradually at first, but are now a national company,” he said.

Now, however, the F.D.A. has begun to crack down on the thousands of drugs that have never had to go through the agency’s stringent approval process, many of them made by small companies like Blansett Pharmacal. And those companies are crying foul.

. . .

Perry Cole, executive director of the Branded Pharmaceutical Association, . . .  said these drugs — the makers call them legacy drugs and define them as (p. C5) drugs that have been prescribed for at least 25 years and have gained a history for safety and efficacy — were far safer than many prescription drugs of recent vintage, like Viagra, which he said had been associated with hundreds of premature deaths.

. . .

The agency began its campaign against the makers of unapproved drugs in June 2006, and immediately began ordering companies that made products that it deemed potentially hazardous to file new drug applications or take them off the market.

In December, for example, it told firms to stop making unapproved products containing quinine, which has been used since the 1600s to treat malaria. The one company that made an approved quinine product, Qualaquin, was the Mutual Pharmaceutical Company of Philadelphia, and the F.D.A’s action, in effect, granted Mutual a temporary monopoly.

 

For the full story, see:

BRENT BOWERS. "Small Business; A Headache for Small Drug Makers."  The New York Times (Thurs., October 18, 2007): C1 & C5.

(Note:  ellipses added.)

 




November 25, 2007

77,000 Die from Lack of Tort Reform


 

   Source of report cover image:  http://www.pacificresearch.org/pub/sab/entrep/2007/Jackpot_Justice/index.html

  

(p. A18)  How does the legal system extract such an astounding amount from our economy? We applied the rent-seeking theory of transfers from economic science to pick up where past studies -- including the highly regarded Tillinghast-Towers Perrin study -- leave off. We began by examining the static costs of litigation -- including annual damage awards, plaintiff attorneys' fees, defense costs, administrative costs and deadweight costs from torts such as product liability cases, medical malpractice litigation and class action lawsuits. The annual static costs, $328 billion per year, are well in excess of previous Tillinghast estimates.

But $328 billion is only the beginning. After all, litigation doesn't just transfer wealth, it also changes behavior, and often in economically unproductive ways. Any true estimate of the costs of America's tort system must also include these dynamic costs of litigation -- the impact on research and development spending, the costs of defensive medicine and the related rise in health-care spending and reduced access to health care, and the loss of output from deaths due to excess liability.

. . .

Based on data from previous studies, we determined that more than 77,000 people would have been alive today and contributing to the workforce, but are not because of a failure to enact comprehensive tort reforms in the states. The cost of foregone output from these lost workers is more than $7 billion each year.

What we're left with, then, are annual dynamic costs of $537 billion resulting from our litigation system. Add that to the static costs of $328 billion and you arrive at the total of over $865 billion per year.

 

For the full commentary, see: 

LAWRENCE J. MCQUILLAN and HOVANNES ABRAMYA.  "The Tort Tax."  The Wall Street Journal (Tues., March 27, 2007):  A18.

(Note:  ellipsis added.)

 

McQuillan, Abryamyan, along with Anthony P. Archie, have co-authored a report entitled Jackpot Justice: The True Cost of America's Tort System that elaborates on many of the issues sketched in the commentary excerpted above  You can download a free PDF copy at:  http://www.pacificresearch.org/pub/sab/entrep/2007/Jackpot_Justice/Jackpot_Justice.pdf

 




November 24, 2007

Cost of Government Grew by 20% Since 1975


 

TaxesIncreaseGraph.gif   Source of graph:  online version of the NYT article quoted and cited below.

 

(p. C3)  After dipping briefly in the first years of this decade, taxes are growing again around the world, the Organization for Economic Cooperation and Development said yesterday.

Taxes in 2005 equaled the previous peak year of 2000, the organization said, when by one measure 36.2 percent of gross domestic product in 30 industrial countries, including the United States, went to taxes at all levels of government.

The organization, which is based in Paris, said that when final figures are in for 2006, they will most likely show a new peak.

The report defines taxes as “compulsory, unrequited payments to general government.”

The cost of government has risen by about 20 percent since 1975, when taxes accounted for less than 30 percent of the gross domestic product of the organization’s member countries.

. . .

Taxes in the United States — from the federal income tax and Social Security tax to local property levies — rose to 28.2 percent in 2006, from 25.6 percent of gross domestic product in 1975, the O.E.C.D. said. It reported that American taxes peaked at 29.9 percent in 2000, slipped to 26 percent in 2004 and then began rising again, a finding consistent with recent statistical tables released by the Internal Revenue Service.

 

For the full story, see: 

DAVID CAY JOHNSTON.  "Taxes in Developed Nations Reach 36% of Gross Domestic Product."  The New York Times   (Thurs., October 18, 2007):  C3.

(Note:  ellipsis added.)

 




November 23, 2007

Motorola Hurt By Failing to Leapfrog Itself


 

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

 

Clayton Christensen, in a series of books, has highlighted why it is difficult for a successful incumbent to prepare a successor for its own winning product.  The Motorola case below is another example.

Note, though, that Motorola's failure is not the understandable one of failing to prepare what Christensen calls a "disruptive innovation."  If the story below is right, it is a case of the less understandable failure to continue to deliver with what Christensen calls "sustaining innovation."

 

(p. A1)  A year ago, Motorola Inc. appeared headed for a third straight year of rich profits under Chief Executive Ed Zander, driven by its hit cellphone the Razr. "A lot of you are always asking what is after the Razr," Mr. Zander said in an April 2006 conference call after another quarter of 30%-plus growth. "I say more Razrs."

But behind the scenes, Motorola was working furiously to get a successor phone to market by the second half of 2006, according to people familiar with the matter. When it failed to do so, profit margins on handsets narrowed and the company swung to a loss. Key executives left. And as the stock slid, activist investor Carl Icahn built up a position and began campaigning for a board seat to address what he called Motorola's "operational problems."

Motorola's travails illustrate the risks for a company that rides high with a big consumer hit. Amid its success with the Razr, it fell behind on developing a phone with the next generation of technology. Missing a beat is especially hazardous in cellphones, where it can take two to three years to develop a new line.

. . .

(p. A14)  As the Razr grew hot, some former designers and engineers say Motorola repeated mistakes it had made a decade earlier with another big hit, the compact flip-top phone known as the StarTAC. That phone was a huge seller, but it also was an analog phone, and its popularity blinded the company to an industry shift to digital technology. Similarly, while Motorola was selling countless Razrs, competitors were hard at work on more sophisticated products for 3G networks.

Motorola put engineers and designers who could have been working on new products on the Razr and its derivatives, some former executives say. "All resources went to feeding the beast," says a former Motorola designer. "Suddenly, you created this thing that requires a lot of energy and attention." Other former executives dispute that the focus on the Razr diverted work from other products and contend Motorola was right to ride the still-popular Razr as long as possible.

 

For the full story, see: 

CHRISTOPHER RHOADS and LI YUAN.  "DROPPED CALL; How Motorola Fell A Giant Step Behind; As It Milked Thin Phone, Rivals Sneaked Ahead On the Next Generation."   The Wall Street Journal  (Fri., April 27, 2007):  A1  & A14. 

(Note:  ellipsis added.)

 

The most complete source of Christensen's theory and examples is:  

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

 

ZanderEdMotorolaCEO.gif  Motorola CEO.  Source of image:  online version of the WSJ article cited above.

 




November 22, 2007

New Farm Bill Is Sweet for Sugar Industry, but Sour for Sugar Consumers


 

  "Sugar being processed at the Louisiana Sugar Cooperative mill in St. Martinville, La."  Source of caption and photo:  online version of NYT article quoted and cited below. 

 

(p. C1)  A little-noticed provision in the new farm bill working its way through Congress would oblige the Agriculture Department to buy surplus domestic sugar caused by the expected influx of Mexican sugar next year. Then the government would sell it, most likely at a steep discount, to ethanol producers to add to their fermentation tanks. The Bush administration is fighting the measure.

Sugar producers say the cost would be relatively low and the plan would help keep prices at a level they consider fair. As a side benefit, the deal would allow the nation to produce more ethanol to mix with gasoline, displacing some foreign oil, they say.

But ethanol producers are unenthused. And the plan is drawing fire from opponents of agricultural subsidies and from longtime critics of the sugar in- (p. C4) dustry, who complain that producers already have one of the best deals in American agriculture.

“It’s a tax burden without a benefit that distorts both the ethanol market and the food-ingredient market,” said Richard E. Pasco, counsel for the Sweetener Users Association, a lobby group for food companies that use sugar. “And guess who will pay the price? Taxpayers and consumers.”

. . .

The measure would be grafted onto an existing sugar policy so complex that even many farmers have trouble understanding it. The government limits the supply of sugar through production quotas and import restrictions, and it uses financial mechanisms to set an effective price floor.

The system does not cost taxpayers money directly, a point of pride for the industry. But it costs consumers money in the form of higher sugar prices. The system has been subjected to withering criticism for decades, but the sugar lobby has clout on Capitol Hill. Sugar producers donated $2.7 million in campaign contributions to House and Senate incumbents in 2006, more than any other group of food growers, according to the Center for Responsive Politics, a Washington group.

The new farm bill would retain much of the existing system, which sugar producers defend on the ground that virtually every country with a domestic sugar industry has strong protections. But it would add more guarantees, including one that would assure American producers 85 percent of the market no matter how much sugar comes in from abroad.

 

For the full story, see: 

CLIFFORD KRAUSS.  "Seeing Sugar's Future in Fuel."  The New York Times   (Thurs., October 18, 2007):  C1 & C4.

(Note:  ellipsis added.)

 

SugarFarmingMap.jpg   Source of graphic:  online version of NYT article cited above.

 




November 21, 2007

Hong Kong Dim Sum Lovers Rebuke Government


 

     "Wong Yuen enjoying breakfast at a Hong Kong restaurant. The government, he says, "shouldn't be telling anyone how dim sum should be served.""   Source of caption and photo:  online version of the NYT article quoted and cited below.

 

Longtime dim sum lovers are indignant.

"The government is putting its thumb on every part of citizens' lives, and it shouldn't be telling anyone how dim sum should be served," said Wong Yuen, a retired mechanic and truck driver who says he has eaten dim sum every morning for the last two decades. "People can make their own decisions. If it's unhealthy, they can eat less. They don't need the government to tell them."

 

For the full story, see: 

KEITH BRADSHER.  "HONG KONG JOURNAL; Dim Sum Under Assault, and Devotees Say 'Hands Off'."  The New York Times  (Thurs., April 28, 2005):  A4.

 




November 20, 2007

Doctors Seek New Business Models to Avoid Paperwork and Insurance Regulation


 

   "Dr. Steven Meed works for Sickday Medical House Calls, a service in Manhattan."  Source of caption and photo:  online version of the NYT article quoted and cited below.

 

“We have that perfect storm. The current system doesn’t work well for patients or physicians,” said Dr. Rick Kellerman, a doctor who works in Wichita, Kan., and is president of the American Academy of Family Physicians. "More doctors are coming up with new home business practice models. They’re exasperated with paperwork and insurance regulation.”

The demand for primary care physicians outweighs the supply in many cities, so patients can wait weeks, and even months, for appointments, and hospital emergency rooms are becoming overloaded with nonemergency cases. Health insurance premiums, meanwhile, have continued to rise.

Some doctors are doing things like taking only house-call appointments or operating “micropractices” in which they work without front-office staff and nurses and see their patients in a smaller one-room office, Dr. Kellerman said.

When making house calls, “you get paid,” said Dr. Steven Meed, one of eight New York physicians working for Sickday Medical House Calls, which started last year and serves patients in Manhattan. “The paperwork overhead is kept at a minimum, the fee is fixed and it’s not going to be reduced.”

 

For the full story, see:

JENNIFER ALSEVER. "SPENDING; Retro Medicine: Doctors Making House Calls (for a Price)."  The New York Times, SundayBusiness Section  (Sun., September 23, 2007):  6.

 

MeedStevenHouseCalls2.jpg  "He took the subway, top, to travel to the apartment of a patient, Kayla McDermott, who had a sore throat."  Source of caption and photos:  online version of the NYT article cited above.

 




November 19, 2007

Incentives for Organ Donations Would Save Lives


 

SatelSally.jpg    Sally Satel is a medical doctor and a resident scholar at the Amerrican Enterprise Institute.  Source of photo:  http://www.aei.org/publications/filter.all,pubID.25785/pub_detail.asp

 

(p. A12)  At the annual meeting of The American Society of Transplant Surgeons this winter a straw poll revealed that 80 to 85% were in favor of studying incentives for living donors, according to society president Arthur Matas. In 2003, the American Medical Association testified on behalf of legislation that would have permitted pilot studies of incentives for deceased organs.

The public seems receptive as well, according to a new Gallup poll on attitudes toward donation of organs after death. The most striking results were among 18 to 34 year olds wherein an impressive 34% said that incentives would make them "more likely" to donate while 6% said less likely.  . . .

. . .

The idea of combining organ donation with material gain can make people queasy. Yet the mix of financial and humanitarian motives is commonplace. No one objects, for example, to a tax credit for charitable contributions--a financial incentive to complement the "pure" motive of giving to others. The great teachers who enlighten us and the doctors who heal us inspire no less gratitude because they are paid. An increase in the supply of kidneys will ameliorate suffering and prevent needless death. This is more important than whether an organ has been given freely or for material gain.  . . .

 

For the full commentary, see: 

Satel, Sally.  "Doing Well By Doing Good."  The Wall Street Journal  (Fri, March 16 2007):  A12.

(Note:  ellipses added.)

 




November 18, 2007

The Internet Adds Value for Restaurant Consumers and Efficiency for Restaurant Owners


 

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

 

(p. C1)  SAN FRANCISCO, June 17 — Town Hall, one of the busiest restaurants in this food-crazed city, seems the very model of old-fashioned dining. Patrons who arrive to claim their reserved seats are greeted by a hostess who consults a piece of paper with the day’s reservations and leads her guests to the appointed table.  

But upstairs, in the restaurant’s office, a different scene is playing out. In a veritable mission-control setting, a reservationist answers eight phone lines while seated in front of two computers that log reservations and hold an archive of past and future electronic bookings.

The software also reveals the idiosyncrasies of thousands of guests. The restaurant staff knows in advance, for instance, that a regular always insists on a table under a particular piece of artwork. They know about another person’s request for kosher food — but only when dining in certain company. And there is the guest so reliably late that staff members know to add 45 minutes to the reservation time.

After decades of relying on telephones to book tables, and piles of index cards — or a maitre d’hotel’s memory — to collect information about diners and their quirks, the restaurant business has finally gone unabashedly high-tech.

Technology may not make it any easier for diners to get a reservation at the most sought-after spots, like the French Laundry in Yountville, Calif., or Babbo in New York City. But the perseverance of a San Francisco-based company called OpenTable, which has come to dominate the business of online restaurant reservations, is making it much easier for restaurants to manage reservations and improve customer service.

. . .

(p. C5)  Making a reservation through OpenTable costs the diner nothing. And it reduces the inconvenience. Say you want a table on short notice at a busy Manhattan restaurant — Danny Meyer’s Union Square Cafe. Placing a phone call there usually requires calling during business hours, enduring loud jazz for hold music, and talking with a reservationist for a while before finding an acceptable time. OpenTable might give you the same results, but it will do the work in 10 seconds.

. . .

Many of the restaurants discovered that they had to surrender to the automation because their popularity suffered if they did not.

“It was a long, long time before that was proven,” said Bill Gurley, a Silicon Valley venture capitalist whose company, Benchmark, has invested $21.6 million in OpenTable over the years.

It took three years for OpenTable to seat its one-millionth diner. But now, the company seats two million diners every month. And Zagat, the restaurant rating service, has adopted OpenTable for reservations made through its site, zagat.com

  

For the full story, see: 

KATIE HAFNER.  "Restaurant Reservations Go Online."  The New York Times   (Mon., June 18, 2007):  C1 & C5.

(Note:  ellipses added.)

 

   "Doug Washington, left, and Mitchell Rosenthal are partners in Salt House in San Francisco, one of 7,000 restaurants using OpenTable."  Source of caption and photo:  online version of the NYT article cited above.

 




November 17, 2007

"Musing on the Sameness of Princes and Paupers"


 

   King Edward's suite is enjoyed by Münster, Germany resident Henriette Heussner.  Source of photo:  online version of the NYT article quoted and cited below.

 

(p. A4) MARIANSKE LAZNE, Czech Republic — Anybody with a little cash in this quaint and quiet spa town can take a bath fit for a king.

Edward VII of Britain visited this bucolic corner of Bohemia six times during his short reign and each time took a bath in the Royal Cabin, as his private bathroom at the Nove Lazne hotel is still called. For about $45, you can, too.

. . .

King Edward’s Royal Cabin, a spacious Turkish-bath-style suite, is outfitted with a metal alloy tub and a medieval-looking oaken chair that serves as a toilet and a scale.

. . .

The windows are as delicately painted as a church’s stained glass, and the walls richly decorated with a tropical mural, just as they were in Edwardian days. Angels wearing miters look down from the ceiling.

Lying in the bath, staring up at the same blue parrot that King Edward surely contemplated on the opposite wall, one cannot help musing on the sameness of princes and paupers and those who are somewhere in between.

Tiny bubbles like the carbonation on a soda straw collect on the skin, and larger bubbles percolate around the bather, producing a peculiarly pleasant sensation.

An archaic water heater in a corner of the room clanks contentedly, keeping the bath at what the hotel staff call an “optimal” 97 degrees. The smell of the water is sulfuric and slightly metallic.

Much history and many baths have passed since the king bathed here. In the end, everyone grabs the same metal handle that he did to hoist himself up and out of the tub.

 

For the full story, see: 

CRAIG S. SMITH.  "MARIANSKE LAZNE JOURNAL; This Year at Marienbad, They’re Still Taking the Waters."  The New York Times  (Tues., July 3, 2007):  A4.

(Note:  ellipses added.)

 

CzechMap.jpg   Source of maps:  online version of the NYT article cited above.

 




November 16, 2007

"India is Outsourcing Outsourcing"


 

   "Infosys employs workers in Brno, Czech Republic."   Source of caption and photo:  online version of the NYT article quoted, and cited, below.

 

(p. A1)  MYSORE, India — Thousands of Indians report to Infosys Technologies’ campus here to learn the finer points of programming. Lately, though, packs of foreigners have been roaming the manicured lawns, too.

Many of them are recent American college graduates, and some have even turned down job offers from coveted employers like Google. Instead, they accepted a novel assignment from Infosys, the Indian technology giant: fly here for six months of training, then return home to work in the company’s American back offices.

India is outsourcing outsourcing.

One of the constants of the global economy has been companies moving their tasks — and jobs — to India. But rising wages and a stronger currency here, demands for workers who speak languages other than English, and competition from countries looking to emulate India’s success as a back office — including China, Morocco and Mexico — are challenging that model.

Many executives here acknowledge that outsourcing, having rained most heavily on India, will increasingly sprinkle tasks around the globe. Or, as Ashok Vemuri, an Infosys senior vice president, put it, the future of outsourcing is “to take the work from any part of the world and do it in any part of the world.”

. . .

(p. A14)  Such is the new outsourcing: A company in the United States pays an Indian vendor 7,000 miles away to supply it with Mexican engineers working 150 miles south of the United States border.

In Europe, too, companies now hire Infosys to manage back offices in their own backyards. When an American manufacturer, for instance, needed a system to handle bills from multiple vendors supplying its factories in different European countries, it turned to the Indian company. The manufacturer’s different locations scan the invoices and send them to an office of Infosys, where each bill is passed to the right language team. The teams verify the orders and send the payment to the suppliers while logged in to the client’s computer system.

More than a dozen languages are spoken at the Infosys office, which is in Brno, Czech Republic.

 

For the full story, see: 

ANAND GIRIDHARADAS.  "Outsourcing Comes Full Circle As India Starts to Export Jobs."  The New York Times   (Tues., September 25, 2007):  A1 & A14.

(Note:  the somewhat different title of the online version was:  "Outsourcing Works So Well, India Is Sending Jobs Abroad.")

 




November 15, 2007

U.S. Jobs Moving "Up the Occupational Chains" to Work that "Is Not as Rules-Based"


 

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

 

(p. C1)  Jeffrey Taft is a road warrior in the global high-technology services economy, and his work shows why there are limits to the number of skilled jobs that can be shipped abroad in the Internet age.

Each Monday, Mr. Taft awakes before dawn at his home in Canonsburg, Pa., heads for the Pittsburgh airport and flies to Houston for the week.

He is one of dozens of I.B.M. services employees from around the country who are working with a Texas utility, CenterPoint Energy, to install computerized electric meters, sensors and software in a “smart grid” project to improve service and conserve energy.

Mr. Taft, 51, is an engineer fluent in programming languages and experienced in the utility business. Much of his work, he says, involves being a translator between the different vernaculars and cultures of computing and electric power, as he oversees the design and building of software tailored for utilities. “It takes a tremendous amount of face-to-face work,” he said.

What he does, in short, cannot be done overseas. But some of the programming work can be, so I.B.M. employees in India are also on the utility project team.

The trick for companies like I.B.M. is to figure out what work to do where, and, more important, to keep bringing in the kind of higher-end work that needs to be done in this country, competing on the basis of specialized expertise and not on price alone.

The debate continues over how much skilled work in the vast service sector of the American economy can migrate offshore to lower-cost nations like India. Estimates of the number of services jobs potentially at (p. C4) risk, by economists and research organizations, range widely from a few million to more than 40 million, which is about a third of total employment in services.

Jobs in technology services may be particularly vulnerable because computer programming can be described in math-based rules that are then sent over the Internet to anywhere there are skilled workers. Already, a significant amount of basic computer programming work has gone offshore to fast-growing Indian outsourcing companies like Infosys, Wipro and Tata Consultancy Services.

To compete, companies like I.B.M. have to move up the economic ladder to do more complicated work, as do entire Western economies and individual workers. “Once you start moving up the occupational chains, the work is not as rules-based,” said Frank Levy, a labor economist at the Massachusetts Institute of Technology. “People are doing more custom work that varies case by case.”

In the field of technology services, Mr. Levy said, the essential skill is “often a lot more about business knowledge than it is about software technology — and it’s a lot harder to ship that kind of work overseas.”

 

For the full story, see: 

STEVE LOHR.  "At I.B.M., a Smarter Way to Outsource."  The New York Times   (Thurs., July 5, 2007):  C1 & C4. 

 

Levy has co-authored a book that is relevant to the example and issues raised in the article.  See:

Levy, Frank, and Richard J. Murnane.  The New Division of Labor: How Computers Are Creating the Next Job Market.  Princeton, NJ:  Princeton University Press, 2004.

 

   IBM engineer Jeffrey Taft (blue shirt) has "local" knowledge of the connection between computer programming and the electric utility business.  Here he is on-site in Houston at the offices of CenterPoint Energy.  Source of graphic:  online verion of the NYT article cited above.

 




November 14, 2007

Religiosity Inversely Related to Per Capita GDP


 

  Source of graph:  Pew Global Attitudes Project report summary cited below.

 

I ran across the graph above while looking for other information at the Pew site.  The graph is consistent with my belief that science contributes to economic prosperity, and that science and religion are in conflict. 

But of course many questions can be raised, such as:  how did they measure religiosity? 

Here is there answer to that question:

Religiosity is measured using a three-item index ranging from 0-3, with "3" representing the most religious position. Respondents were given a "1" if they believe faith in God is necessary for morality; a "1" if they say religion is very important in their lives; and a "1" if they pray at least once a day.

 

Source: 

"World Publics Welcome Global Trade -- But Not Immigration."  Pew Global Attitudes Project, a project of the PewResearchCenter Released: 10.04.07 dowloaded from: http://pewglobal.org/reports/display.php?ReportID=258

 




November 13, 2007

In Cuba, to Survive "You Have to Resort to the Black Market"


 

Lady Liberty is rightly aghast at life in Havana.  Source of photo:  online version of the NYT article cited below.

 

My friend Luis Locay has warned me in the past to be sceptical of articles that express optimism about Raul Castro being a friend of the free market.  One such article is excerpted below.  (I am hoping Luis is wrong.) 

 

Raúl Castro has taken several small but meaningful steps over the last year that suggest that he wants to open up Cuban society and perhaps move to a market-driven system, without ceding one-party control, not unlike what has happened in China. During the 1990s, he supported limited private enterprise and foreign investment, reforms his brother reversed four years ago.

. . .

On the economic front, Raúl Castro has allowed the importation of televisions and video disc players. He has told the police to let pirate taxis operate without interference. He pledged to spend millions to refurbish hotels, marinas and golf courses. He even ordered one of the state newspapers to investigate the poor quality of service at state-controlled bakeries and other stores.

Perhaps his most important step, however, was to pay the debts the state owed to private farmers and to raise the prices the state pays for milk and meat. Cubans still live on rations and cope with chronic shortages of staples like beef. Salaries average about $12 a month, and most people spend three-quarters of their income on food, according to a study by Armando Nova González, an economist at the Center for the Study of the Cuban Economy in Havana.

“What a person makes is not enough to live on,” said Jorge, a museum guard who asked that his last name not be used because he feared persecution. “You have to resort to the black market to get along. No, not just to get along, to survive.” He said he and his wife together made about $30 a month, just enough to support their family of four.

But Raúl Castro has disappointed many Cubans who had expected significant changes once he took power. He has always deferred to his brother, and he seems to lack the political power to take major actions until Fidel either gives up total control or dies, experts on Cuba said.

 

For the full story, see:

JAMES C. McKINLEY, Jr.  "Cuba’s Revolution Now Under Two Masters."  The New York Times  (Fri., July 27, 2007):  A3.

 

 

  The top photo shows Raúl Castro giving the annual speech celebrating the Cuban revolution.  (Fidel Castro became ill after the previous year's speech.)  The lower photo shows the reaction to Raúl's speech from the crowd.

 




November 12, 2007

Strong Global Support for Free Markets


 

FreeMarketsPositiveViewTable.gif   Source of table:  "World Publics Welcome Global Trade -- But Not Immigration." Pew Global Attitudes Project, a project of the PewResearchCenter. Released: 10.04.07 dowloaded from: http://pewglobal.org/reports/display.php?ReportID=258

 

(p. A10) WASHINGTON, Oct. 4 — Buoyed and battered by globalization, people around the world strongly view international trade as a good thing but harbor growing concerns about its side effects: threats to their cultures, damage to the environment and the challenges posed by immigration, a new survey indicates.

In the Pew Global Attitudes Project survey of people in 46 countries and the Palestinian territories, large majorities everywhere said that trade was a good thing. In countries like Argentina, which recently experienced trade-based growth, the attitude toward trade has become more positive.

But support for trade has decreased in recent years in advanced Western countries, including Germany, Britain, France and Italy — and most sharply in the United States. The number of Americans saying trade is good for the country has dropped by 19 percentage points since 2002, to 59 percent.

“G.D.P. growth hasn’t been as dramatic in these places as in Latin America or Eastern Europe,” said Andrew Kohut, president of the Pew Research Center, referring to gross domestic product, the total value of the goods and services produced in a country. “But worldwide, even though some people are rich and some are poor, support for the basic tenet of capitalism is pretty strong.”

 

For the full story, see: 

BRIAN KNOWLTON. "Globalization, According to the World, Is a Good Thing. Sort Of."  The New York Times   (Fri., October 5, 2007):  A10. 

 




November 11, 2007

Unintended Consequences of Health Privacy Law


 

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

 

(p. A1)  An emergency room nurse in Palos Heights, Ill., told Gerard Nussbaum he could not stay with his father-in-law while the elderly man was being treated after a stroke. Another nurse threatened Mr. Nussbaum with arrest for scanning his relative’s medical chart to prove to her that she was about to administer a dangerous second round of sedatives.

The nurses who threatened him with eviction and arrest both made the same claim, Mr. Nussbaum said: that access to his father-in-law and his medical information were prohibited under the Health Insurance Portability and Accountability Act, or Hipaa, as the federal law is known.

Mr. Nussbaum, a health care and Hipaa consultant, knew better and stood his ground. Nothing in the law prevented his involvement. But the confrontation drove home the way Hipaa is misunderstood by medical professionals, as well as the frustration — and even peril — that comes in its wake.

Government studies released in the last few months show the frustration is widespread, an unintended consequence of the 1996 law.

. . .

(p. A12)   

Most common are seat-of-the-pants decisions made by employees who feel safer saying “no” than “yes” in the face of ambiguity.

. . .

Ms. McAndrew said there was no way to know how often information was withheld. Of the 27,778 privacy complaints filed since 2003, the only cases investigated, she said, were complaints filed by patients who were denied access to their own information, the one unambiguous violation of the law.

Complaints not investigated include the plights of adult children looking after their parents from afar. Experts say family members frequently hear, “I can’t tell you that because of Hipaa,” when they call to check on the patient’s condition.

That is what happened to Nancy Banks, who drove from Bartlesville, Okla., to her mother’s bedside at Town and Country Hospital in Tampa, Fla., last week because Ms. Banks could not find out what she needed to know over the telephone.

Her 82-year-old mother had had a stroke. When Ms. Banks called her room she heard her mother “screaming and yelling and crying,” but conversation was impossible. So Ms. Banks tried the nursing station.

Whoever answered the phone was not helpful, so Ms. Banks hit the road. Twenty-two hours later, she arrived at the hospital.

But more of the same awaited her. She said her mother’s nurse told her that “because of the Hipaa laws I can get in trouble if I tell you anything.”

In the morning, she could speak to the doctor, she was told.

The next day, Ms. Banks was finally informed that her mother had had heart failure and that her kidneys were shutting down.

“I understand privacy laws, but this has gone too far,” Ms. Banks said. “I’m her daughter. This isn’t right.”

A hospital spokeswoman, Elena Mesa, was asked if nurses were following Hipaa protocol when they denied adult children information about their parents.

She could not answer the question, Ms. Mesa said, because Hipaa prevented her from such discussions with the press.

 

For the full story, see: 

JANE GROSS.  "Keeping Patients’ Details Private, Even From Kin."  The New York Times  (Tues., July 3, 2007):  A1 & A12.

(Note:  ellipses added.)

 

   After nurses refused to tell her what was wrong over the phone, Nancy Banks (left) drove 22 hours to find out that her mother Lourene Trusler (right) had had a stroke.  Source of photo:  online version of the NYT article cited above.

 




November 10, 2007

Texas Shows Tort Reform Works


 

   "Dr. Donald W. Patrick, executive director of the Texas Medical Board, with applications for medical licenses sent to it."  Source of caption and photo:  online version of the NYT article quoted, and cited, below. 

 

HOUSTON, Oct. 4 — In Texas, it can be a long wait for a doctor: up to six months.

That is not for an appointment. That is the time it can take the Texas Medical Board to process applications to practice.

Four years after Texas voters approved a constitutional amendment limiting awards in medical malpractice lawsuits, doctors are responding as supporters predicted, arriving from all parts of the country to swell the ranks of specialists at Texas hospitals and bring professional health care to some long-underserved rural areas.

The influx, raising the state’s abysmally low ranking in physicians per capita, has flooded the medical board’s offices in Austin with applications for licenses, close to 2,500 at last count.

“It was hard to believe at first; we thought it was a spike,” said Dr. Donald W. Patrick, executive director of the medical board and a neurosurgeon and lawyer. But Dr. Patrick said the trend — licenses up 18 percent since 2003, when the damage caps were enacted — has held, with an even sharper jump of 30 percent in the last fiscal year, compared with the year before.

“Doctors are coming to Texas because they sense a friendlier malpractice climate,” he said.

 

For the full story, see: 

RALPH BLUMENTHAL.  "After Texas Caps Malpractice Awards, Doctors Rush to Practice There."  The New York Times  (Fri., October 5, 2007):  A21.

 




November 9, 2007

Buying the Prius as an Advertisement of One's Political Correctness


 

PriusReasonsGraph.gif PriusSalesGraph.gif   Source of graphs:  online version of the NYT article cited below.

 

(p. A1)  A riddle: Why has the Toyota Prius enjoyed such success, with sales of more than 400,000 in the United States, when most other hybrid models struggle to find buyers?

One answer may be that buyers of the Prius want everyone to know they are driving a hybrid.

The Prius, after all, was built from the ground up as a hybrid, and is sold only as a hybrid. By contrast, the main way to tell that a Honda Civic, Ford Escape or Saturn Vue is a hybrid version is a small badge on the trunk or side panel.

The Prius has become, in a sense, the four-wheel equivalent of those popular rubber “issue bracelets” in yellow and other colors — it shows the world that its owner cares.

In fact, more than half of the Prius buyers surveyed this spring by CNW Marketing Research of Bandon, Ore., said the main reason they purchased their car was that “it makes a statement about me.”

Only a third of Prius owners cited that reason just three years ago, according to CNW, which tracks consumer buying trends.

“I really want people to know that I care about the environment,” said Joy Feasley of Philadelphia, owner of a green 2006 Prius. “I like that people stop and ask me how I like my car.”

 

For the full story, see: 

MICHELINE MAYNARD. "Say ‘Hybrid’ and Many People Will Hear ‘Prius’."   The New York Times (Weds, July 4, 2007):  A1 & A11.

 

   Peter Darnell describes himself as a "granola-crunching liberal."  He and his wife Karen (right) own a Prius.  Source of quote and photo:  online version of the NYT article cited above.

 




November 8, 2007

"Merchant Generator" Leads Nuclear Renaissance


 

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

 

(p. B1)  In a move that could mark the beginning of a nuclear-power revival, a New Jersey-based energy company today plans to submit an application to build and operate two new reactors. The request, the first submitted to the Nuclear Regulatory Commission in 31 years, comes from an unlikely source: NRG Energy Inc., a company that has never before built a nuclear plant.

The application -- for a two-reactor addition to the company's existing South Texas nuclear station -- could offer the first full test of the nuclear agency's new licensing process, which has been under development since the 1980s. The new process allows companies to submit a single application for a construction permit and conditional operating license, eliminating the risk that a firm could build a plant but not be allowed to run it.

. . .

(p. B2)  . . . , the industry has regained momentum, partly because other forms of power generation have continued to show significant flaws. Coal-fired plants undermine efforts to combat global warming. Many natural-gas-fired plants rely on a fuel with volatile prices. And renewable energy mostly comes from intermittent forces like wind, rain and sunlight.

This first application comes from a somewhat unlikely source; NRG is a so-called "merchant generator," a company that makes electricity and sells it on the open market. NRG has never built a nuclear plant, and because it doesn't own a utility, has no ratepayers to whom it could bill the estimated $5.5 billion to $6 billion expense.

"We're like the uncola," says David Crane, NRG chief executive in Princeton, N.J.

. . .

So far, it appears merchant generators think Texas provides the most promising market. Deregulation in that state has resulted in a sharp run up in wholesale power prices since 2004. A recent decision by Dallas-based TXU to abandon efforts to build eight coal-fired plants could result in shrinking electricity reserves in the coming years, creating an environment receptive to operators looking to bring large units online and sell such units' full output.

 

For the full story, see: 

REBECCA SMITH.  "Nuclear Energy's Second Act? Bid to Build Two New Reactors In Texas May Mark Resurgence; NRC Gears Up for Many More."  The Wall Street Journal  (Tues., September 25, 2007):  B1 & B2.

(Note:  ellipses added.)

 




November 7, 2007

Entrepreneur Venter Advances Toward Useful Control of Cells


 

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

 

Scientists at the institute directed by J. Craig Venter, a pioneer in sequencing the human genome, are reporting that they have successfully transplanted the genome of one species of bacteria into another, an achievement they see as a major step toward creating synthetic forms of life.

Other scientists who did not participate in the research praised the achievement, published yesterday on the Web site of the journal Science. But some expressed skepticism that it was as significant as Dr. Venter said.

His goal is to make cells that might take carbon dioxide out of the atmosphere and produce methane, used as a feedstock for other fuels. Such an achievement might reduce dependency on fossil fuels and strike a blow at global warming.

“We look forward to having the first fuels from synthetic biology certainly within the decade and possibly in half that time,” he said.

Richard Ebright, a molecular biologist at Rutgers University, said the transplantation technique, which leads to the transferred genome’s taking over the host cell, was “a landmark accomplishment.”

“It represents the complete reprogramming of an organism using only a chemical entity,” Dr. Ebright said.

Leroy Hood, a pioneer of the closely related field of systems biology, said Dr. Venter’s report was “a really marvelous kind of technical feat” but just one of a long series of steps required before synthetic chromosomes could be put to use in living cells.

 

For the full story, see: 

NICHOLAS WADE. "Pursuing Synthetic Life, Scientists Transplant Genome of Bacteria."  The New York Times   (Fri., June 29, 2007):  A1 & A18.

 

VenterCraig.jpg   J. Craig Venter.  Source of photo:  online version of the NYT article quoted and cited above.

 




November 6, 2007

Process Innovations Are Neglected, But Important


 

In discussing the process of creative destruction, Schumpeter mentioned both product and process innovations.  By far the greater attention has been given to product innovations.  But maybe process innovations deserve more attention than they have received:

 

Snazzy products are the stuff of legends, romanticized by “early adopters” and skewered by neo-Luddites. Yet while these products bring glory to companies, novel processes are often more important in keeping the cash registers ringing.

. . .

Consider the question of Google’s greatest business secret. Is it the algorithms behind its search tools? Or is it the way it organizes vast clusters of computers around the globe to answer queries so quickly? Perhaps predictably, Google won’t disclose the number of computers deployed in its vast information network (though outsiders speculate that the network has at least 450,000 computers).

I believe that the physical network is Google’s “secret sauce,” its premier competitive advantage. While a brilliant lone wolf can conceive of a dazzling algorithm, only a superwealthy and well-managed organization can run what is arguably the most valuable computer network on the planet. Without the computer network, Google is nothing.

Eric E. Schmidt, Google’s chief executive, appears to agree. Last year he declared, “We believe we get tremendous competitive advantage by essentially building our own infrastructures.”

Process innovations like Google’s computer network are often invisible to the public, and impossible to duplicate by rivals. Yet successful companies realize that maintaining competitive advantage depends heavily on sustaining process innovations.

 

For the full commentary, see: 

G. PASCAL ZACHARY. "PING; The Unsung Heroes Who Move Products Forward." The New York Times, SundayBusiness Section (Sun., September 30, 2007): 3.

(Note:  ellipsis added.)

 




November 5, 2007

Study Finds Much Smaller Increase in Income Volatility than Hacker Claims


 

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

 

WASHINGTON -- Weighing in on an intensifying debate on income insecurity, three economists -- including two from the Federal Reserve -- have found that American families today are more likely to experience big drops in their income than three decades ago.

Their analysis, however, finds far less volatility in family income than some recent studies.

The authors of the new study, Douglas Elmendorf of the Brookings Institution and senior Fed economists Karen Dynan and Daniel Sichel, caution against interpreting their findings as evidence that families face more risk of hardship than before. They note that financial innovation has given Americans more ways to maintain their spending when their incomes fall. (Read the full study.)

The study found that the volatility of household income rose 23% between the early 1970s and early 2000s. While small changes in family income are no more frequent, large changes in income -- more than 50% -- are.

The probability that a family will experience a decline in annual income of 50% or more, compared with their average income in the previous three years, rose to 1.8% in 1995 from 0.6% in 1973. After 1995, the probability dipped, and has risen back to 1.7%.

"The increase in volatility we document is not trivial," Mr. Elmendorf said in an interview. "Our work is quite consistent with being concerned about the level and increase in volatility of household income."

That said, "I don't think our results support the view that the world is dramatically more adverse for households," he added.

. . .

Yet research into the assumption that income volatility has increased has reached differing conclusions. Yale University political scientist and author Jacob Hacker, in a 2006 book titled "The Great Risk Shift," documents a fivefold increase in household-income volatility between the early 1970s and early 1990s. Mr. Hacker, who described himself as "thunderstruck" by the result, has written widely and testified to Congress on the subject. He couldn't be reached for comment.

By contrast, the Congressional Budget Office, using a different set of data, found that earnings volatility for individuals -- as opposed to households -- has changed little since the early 1980s.

But the authors argue that bigger swings in income need not force households to slash their spending. They cite preliminary findings from other research they have conducted that show financial innovation, such as easier borrowing against the value of a home, has helped to insulate family spending patterns from fluctuations in income.

 

For the full story, see: 

GREG IP.  "Incomes Suffer More Volatility Amid Heightening Risks, Families Find Ways to Cushion Blows."  The Wall Street Journal   (Fri., June 22, 2007):  A4.

(Note:  ellipsis added.)

 




November 4, 2007

New Nuclear Design Reduces Already-Low Risks, and Increases Efficiency


 

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

 

(p. C1)  WASHINGTON, Sept. 24 — In a bid to take the lead in the race to revive the nuclear power industry, an energy company will ask the federal Nuclear Regulatory Commission on Tuesday for permission to build two reactors in Texas.

It is the first time since the 1970s and the accident at Three Mile Island that an American power company has sought permission to start work on a new reactor to add to the existing array of operable reactors, which now number 104.

. . .

(p. C11)  NRG is planning to build the Advanced Boiling Water Reactor, which represents a relatively low-risk choice in an industry where few American companies have current experience with building a plant.  . . .

. . .

The new design has several innovations that are aimed at sharply reducing the risk of meltdown, a risk that is described by the industry and by regulators as very low in any case. Other innovations are supposed to reduce the time and cost of construction.

 

MATTHEW L. WALD.  "Approval Is Sought For Reactors."  The New York Times  (Tues., September 25, 2007):  C1 & C11.

(Note:  ellipses added.)

 




November 3, 2007

Not All World Views Can Be Accommodated


 

   1935 photos of painted Caduveo women from Claude Lévi-Strauss Structural Anthropology.  Source of photos:  online version of the NYT article cited below.

 

I remember in a philosophy class back in the 1970s, the philosopher Stephen Toulmin mentioning that he had once attended a conference with the famed anthropologist Claude Lévi-Strauss.  For a long while Lévi-Strauss sat in silence.  Finally he stirred himself to speak, and Toulmin wondered what wisdom the great man would pronounce. 

His comment was something like:  "It is hot in here.  Will someone open a window?" 

 

News of the death of the philosopher Richard Rorty on June 8 came as I was reading about a small Brazilian tribe that the French anthropologist Claude Lévi-Strauss studied in the 1930s. A strange accident, a haphazard juxtaposition — but for a moment this pragmatist philosopher and a fading tribal culture glanced against each other, revealing something unusual about the contemporary scene.

. . .

For Mr. Rorty, the importance of democracy is that it creates a liberal society in which rival truth claims can compete and accommodate each other. His pragmatism was postmodern, tolerant to a fault, its moral and progressive conclusions never appealing to a higher authority.

. . .

The Caduveo founding myth recounts that, lacking other gifts at the moment of creation, the tribe was given the divine right to exploit and dominate others.

. . .

But there was also something else about this tribe that drew Mr. Lévi-Strauss’s attention: “It was a society remarkably adverse to feelings that we consider as being natural.” Its members disliked having children. Abortion and infanticide were so common that the only way the tribe itself could continue was by adoption, and adoption — more properly called abduction — was traditionally implemented through warfare. The tribal disdain for nature extended into its active denigration of hair, agriculture, childbirth and even, perhaps, representational art.

. . .

In reasoning one’s way into pragmatism, in minimizing the importance of natural constraints and in dismissing the notion of some larger truth, the tendency is to assume that as different as we all are, we are at least prepared to accommodate ourselves to one another. But this is not something the Caduveo would necessarily have gone along with. Mr. Rorty’s outline of what he called “the utopian possibilities of the future” doesn’t leave much room for the kind of threat the Caduveo might pose, let alone other threats, still active in the world.

One tendency of pragmatism might be to so focus on the ways in which one’s own worldview is flawed that trauma is more readily attributed to internal failure than to external challenges. In one of his last interviews Mr. Rorty recalled the events of 9/11: “When I heard the news about the twin towers, my first thought was: ‘Oh, God. Bush will use this the way Hitler used the Reichstag fire.’ ”

If that really was his first thought, it reflects a certain amount of reluctance to comprehend forces lying beyond the boundaries of his familiar world, an inability fully to imagine what confrontations over truth might look like, possibly even a resistance to stepping outside of one’s skin or mental habits.

But in this too the Caduveo example may be suggestive. As Mr. Lévi-Strauss points out, neighboring Brazilian tribes were as hierarchical as the Caduveo but lacked the tribe’s sweeping “fanaticism” in rejecting the natural world. They reached differing forms of accommodation with their surroundings. The Caduveo, refusing even to procreate, didn’t have a chance. They survive now as sedentary farmers. Such a fate of denatured inconsequence may eventually be shared by absolutist postmodernism. The Caduveo’s ideas weren’t useful, perhaps. Some weren’t even true.

 

For the full commentary, see: 

EDWARD ROTHSTEIN.  "CONNECTIONS; Postmodern Thoughts, Illuminated by the Practices of a Premodern Tribe."  The New York Times   (Mon., June 18, 2007):  B3.

(Note:  ellipses added.)

 

 RortyRichard.jpg Levi-StraussClaude.jpg   Rorty on left; Lévi-Strauss on right.  Source of photos:  online version of the NYT article cited above.

 




November 2, 2007

Michael Powell Provides Support for the Capture Theory of Regulatory Agencies


 

The following brief story would seem highly compatible with the "Capture Theory of Regulatory Agencies" that is associated with the names of economist George Stigler, and historian Gabriel Kolko.  That theory suggests that regulatory agencies are frequently captured by the industries that they are intended to regulate.

One kind of evidence for the theory is that members of regulatory agency boards often are recruited from the industry, and often return to working for the industry after their terms are over.

 

The efforts of federal regulators to curtail cronyism on corporate boards have led to some odd outcomes. The case of Michael K. Powell, a new director of Cisco Systems, is a prime example. 

Mr. Powell, the former chairman of the Federal Communications Commission, happens to be a son of Colin Powell, the former secretary of state. Cisco happens to have paid the senior Mr. Powell more than $100,000 to deliver two speeches in 2005.

Under guidelines established by the Nasdaq stock market, that connection disqualifies the younger Mr. Powell as an independent director, so he cannot sit on the company’s audit, compensation or governance committees. But by the same definition, Richard M. Kovacevich, the chairman of Wells Fargo, is an independent director of Cisco, even though his company has promised to lend Cisco $120 million.

The difference is that Cisco’s line of credit is deemed too small a part of Wells Fargo’s overall business to present a conflict of interest, while the payments to the senior Mr. Powell exceeded the allowable annual limit of $100,000 to any family member of an independent director.

 

Source of story: 

PATRICK McGEEHAN.  "$100,000? Too High. $120 Million? Fine."  The New York Times, SundayBusiness Section (Sun., September 30, 2007):  2.

 

The key Kolko book is: 

Kolko, Gabriel. Railroads and Regulation, 1877-1916.  W. W. Norton & Company, 1970.

 




November 1, 2007

Pulling Teeth Slowly


 

   Source of book image:  http://mitpress.mit.edu/images/products/books/0262113023-f30.jpg

 

Many years ago, I read János Kornai's The Road to the Free Market, which gave Kornai's advice on how Eastern Europe could best make the transition from communism to the free market.  What I remember most from the book, is his discussion of whether it is more humane for the transition to be quick or gradual.  He answers the question by asking another:  if you need to have a tooth pulled, is it more humane for it to be pulled quickly or gradually?

 

(p. B15) . . .,  Mr. Kornai's books and lectures in Europe, North America and Asia established him as one of the leading scholars of socialist economics and an expert on the difficult transitions that many countries face when they move from socialism to a more democratic and capitalist system.   . . .

At one point in 1974, under the more relaxed rule of János Kádár, when Hungary was the "most cheerful barrack in the camp," Mr. Kornai and his wife decided to build their own home. Over the course of several months, they personally confronted the corruption, endemic shortages and shoddy construction materials that were so common in Eastern Europe. A year later, on a trip to India, Mr. Kornai was faced by idealistic young Maoists whose concern for the desperately poor reinforced their support for socialism. Mr. Kornai responded to them by arguing, as he puts it here, that "rationing systems that spread misery equally may assuage feelings of injustice for a while, but they will not solve anything."

 

For the full review, see:

JOSHUA RUBENSTEIN.  "BOOKS; Critic Behind the Curtain."  The Wall Street Journal  (Tues., January 30, 2007):  B15.

(Note: ellipses added.)

 

The book reviewed, is: 

János Kornai.  By Force of Thought.  (MIT Press, 461 pages, $40)

 

The earlier book by Kornai, that I read and liked, is:

Kornai, Janos. The Road to a Free Economy: Shifting from a Socialist System, the Example of Hungary. New York: W.W. Norton, 1990.

 




HP3D5006CropSmall.jpg






Most Popular Posts









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










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


View My Stats