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July 31, 2008

Policeman to Speeding Hoover: "Drive On, Brother"



In her eye-opening The Forgotten Man, Amity Shlaes shows that Herbert Hoover, while not the hero of the Great Depression, was hardly the consummate villain that politically correct legend has made him out to be.

The hapless, hated Hoover, after his electoral defeat by the real villain, FDR, drove the countryside seeking tranquility and direction. At one point, in the middle of a hot summer night, Hoover, with his son Allan, sped toward the cooler Palo Alto:

(p. 221) Hurtling down the highway, Hoover looked in the rearview mirror and saw a flashing red light gaining on him. Soon he could hear a siren. Dutifully, he pulled off the highway and fumbled for his license, handing it to the stern police officer. The patrolman looked at the license, then examined it more closely in the illumination of a headlight. Returning to the car window, he placed a foot on the running board and asked Hoover, "Tell me are you that guy?" The ex-president, with a slight grin, said, "Yes, I guess I'm that guy." The policeman then asked, "Well, does it make you feel any better to drive sixty miles an hour down this Valley Pike in the middle of the night?" Hoover reflected for a moment and replied, "Well, under the circumstances I think it does." The highway patrolman stepped back from the running board, looked Hoover in the eye, and with a wave of his arm said, "Drive on, brother."


Source:

Wert, Hal Elliott. Hoover the Fishing President: Portrait of the Private Man and His Life Outdoors. Mechanicsburg, PA: Stackpole Books, 2005.

The reference on Amity Shlaes's book, is:

Shlaes, Amity. The Forgotten Man: A New History of the Great Depression. New York: HarperCollins, 2007.




July 30, 2008

After Tort Reform, 7,000 M.D.s Have Gone to Texas




(p. A9) When Sam Houston was still hanging his hat in Tennessee in the 1830s, it wasn't uncommon for fellow Tennesseans who were packing up and moving south and west to hang a sign on their cabins that read "GTT" - Gone to Texas.

Today obstetricians, surgeons and other doctors might consider reviving the practice. Over the past three years, some 7,000 M.D.s have flooded into Texas, many from Tennessee.

Why? Two words: Tort reform.

In 2003 and in 2005, Texas enacted a series of reforms to the state's civil justice system. They are stunning in their success. Texas Medical Liability Trust, one of the largest malpractice insurance companies in the state, has slashed its premiums by 35%, saving doctors some $217 million over four years. There is also a competitive malpractice insurance industry in Texas, with over 30 companies competing for business. This is driving rates down.

The result is an influx of doctors so great that recently the State Board of Medical Examiners couldn't process all the new medical-license applications quickly enough. The board faced a backlog of 3,000 applications. To handle the extra workload, the legislature rushed through an emergency appropriation last year.



For the full commentary, see:


JOSEPH NIXON. "CROSS COUNTRY; Why Doctors Are Heading for Texas." The Wall Street Journal (Sat., May 17, 2008): A9.






July 29, 2008

Talking a Good Game is Little Correlated with Getting it Done



Bossidy and Charan's advice below on hiring managers fits with Christensen and Raynor's advice to hire managers who have had the right experiences, in preference to those who have the 'right stuff' (aka 'charisma').

(p. 119) In our experience, there's very little correlation between those who talk a good game and those who get things done come hell or high water. Too often the second kind are given short shrift. But if you want to build a company that has excellent discipline of execution, you have to select the doer.


Source:

Bossidy, Larry, Ram Charan, and Charles Burck. Execution: The Discipline of Getting Things Done. New York: Crown Business, 2002.




July 28, 2008

McCraw on Schumpeter



  Source of book image: http://reader2.com/wasp1028

I am in the process of writing a full-length review of McCraw's book for the annual Research in the History of Economic Thought and Methodology. Suffice it to say that McCraw's book is very useful and very interesting, and gets a lot right that is important. Most notably, McCraw appreciates that Schumpeter's central message is that innovation is what matters most about capitalism.

Source of book:

McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.




July 27, 2008

Solar Energy Costs Soar in Germany




(p. C1) Thanks to its aggressive push into renewable energies, cloud-wreathed Germany has become an unlikely leader in the race to harness the sun's energy. It has by far the largest market for photovoltaic systems, which convert sunlight into electricity, with roughly half of the world's total installations. And it is the third-largest producer of solar cells and modules, after China and Japan.


Now, though, with so many solar panels on so many rooftops, critics say Germany has too much of a good thing -- even in a time of record oil prices. Conservative lawmakers, in particular, want to pare back generous government incentives that support solar development. They say solar generation is growing so fast that it threatens to overburden consumers with high electricity bills.

. . .

(p. C7) At the heart of the debate is the Renewable Energy Sources Act. It requires power companies to buy all the alternative energy produced by these systems, at a fixed above-market price, for 20 years.

. . .

Christian Democrats, . . . , say the law has been too successful for its own good. Utilities, they note, are allowed to pass along the extra cost of buying renewable energy to customers, and there is no cap on the capacity that can be installed -- as exists in other countries to prevent subsidies from mushrooming.

At the moment, solar energy adds 1.01 euros ($1.69) a month to a typical home electricity bill, a modest surcharge that Germans are willing to pay. That will increase to 2.14 euros a month by 2014, according to the German Solar Energy Association.

But the volume of solar-generated energy is rising much faster than originally predicted, and critics contend that the costs will soar. Mr. Pfeiffer, the legislator, said solar power could end up adding 8 euros ($12.32) to a monthly electricity bill, which would alienate even the most green-minded. With no change in the law, he says, the solar industry will soak up 120 billion euros ($184 billion) in public support by 2015.



For the full story, see:

MARK LANDLER. "Solar Valley Rises in an Overcast Land." The New York Times (Fri., May 16, 2008): C1 & C7.

(Note: ellipses added.)





July 26, 2008

Acclaimed Playwrite David Mamet Endorses Free Market



MametDavid.gif






Source of image: online version of the WSJ commentary quoted and cited below.

(p. A18) The American playwright David Mamet wrote a piece for the Village Voice last week titled, "Why I Am No Longer a 'Brain-Dead Liberal.'" Mr. Mamet, whose characters famously use the f-word as a rhythmic device (I think of it now as the "Mamet-word"), didn't himself mince words on his transition. He was riding with his wife one day, listening to National Public Radio: "I felt my facial muscles tightening, and the words beginning to form in my mind: 'Shut the [Mamet-word] up.'" Been known to happen.

Toward the end of the essay, he names names: "I began reading not only the economics of Thomas Sowell (our greatest contemporary philosopher) but Milton Friedman, Paul Johnson, and Shelby Steele, and a host of conservative writers, and found that I agreed with them: a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism."


For the full commentary, see:

DANIEL HENNINGER. "WONDER LAND; David Mamet's Revision." The Wall Street Journal (Thurs., March 20, 2008): A18.




July 25, 2008

African Farmer-Entrepreneurs, and U.S. Companies, Creating Another Breadbasket



(p. A14) ARSI NEGELE, Ethiopia -- Babou Galgo, a 61-year-old farmer, proudly showed off his prized harvest from last season: two shiny gold medals from the regional and federal government and a slick certificate praising his "outstanding performance in increasing agriculture production and productivity."

What he had done was boost his corn yields on his small farm in southern Ethiopia an eye-popping sevenfold over the past several years. Even more impressive, he had boosted the well-being of his family as well: With the added income, they moved out of a traditional mud-brick tukul and into a brick and concrete house furnished with a refrigerator, television and DVD player, rare luxuries for a farmer in one of the world's poorest countries.

Indeed, not long ago, Mr. Galgo would have had no need for a refrigerator as meager yields had him struggling to feed his family. "It's the seeds," he says, noting the reason for his reversal of fortunes. "Hybrids."

Africa's nascent push to finally feed itself is turning the clock back to the early part of 20th-century America. It was in the 1930s and '40s when Iowa-based Pioneer Hi-Bred International popularized hybrid seeds in the U.S., swelling corn yields throughout the Midwest. Seven decades later, African farmers and U.S. companies are trying to recreate the same boom that turned America into the world's breadbasket, only this time in the harsh climate -- environmental and political -- of Ethiopia and greater Africa.

. . .

Farmer Galgo is ready for another upgrade. Sitting in his comfortable living room, beneath wall murals of Jesus and a peace dove, he tells Mr. Admassu, "I want to expand my land and buy a tractor. A big tractor, with a lot of power."



For the full story, see:


ROGER THUROW. "Agriculture's Last Frontier; African Farmers, U.S. Companies Try to Create Another Breadbasket With Hybrids." The Wall Street Journal (Tues., May 27, 2008): A14.

(Note: ellipsis added.)




July 24, 2008

CEO Michael Dell's Management Advice



DirectFromDellBK.jpg









Source of book image: http://ramz-thoughts.blogspot.com/2007/12/new-addition-to-my-book-shelf.html

I have had Direct from Dell on my 'to-read' list for years, and it finally made it to the top. The book has some interesting anecdotes, and some useful generalizations, but not as many as I had hoped.

In fairness, if I had read the book closer to its publication year, in 1999, maybe some of the observations would have seemed fresher, that today seem like stale clichés.

For example, it is clever to quote (p. 209) the hockey player Wayne Gretzky as saying that he doesn't skate to where the puck is; he skates to where it will be. And then apply the saying to business by advising that managers skate, not to where the profits currently are, but to where the profits will be in the future. Reading this in Dell's book did not excite me, because I had already read it in Christensen and Raynor. But Dell's book came out before Christensen and Raynor, and it's not a failing of the Dell book that I had read the Christensen and Raynor book first.

But some of what Dell writes, was a cliché even back in 1999. For example, it is a cliché that customers should matter; but simply saying 'listen to your customers' is not very useful. Sometimes customers are not very articulate about what they would value, and sometimes they need to be educated, and sometimes your current customers might not buy an innovation that other potential customers might love.

Christensen and Raynor in The Innovator's Solution, have emphasized the desirability of thinking about what job customers need to have done.

One useful bit of advice in Direct from Dell is that companies should segment themselves into different units to serve different kinds of customers. This might be a useful stratagem to make it easier to execute Christensen and Raynor's advice. (But it goes against another common dictum in management books: achieve economies by cutting out duplication and by achieving economies of scale.)

The book has some interesting examples and observations, but the signal to noise ratio is not as high as in the very best management books by former CEOs, such as in Andy Groves' Only the Paranoid Survive and in Jack Welch's Jack: Straight from the Gut.

References:

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

Dell, Michael. Direct from Dell: Strategies That Revolutionized an Industry. New York: HarperCollins Publishers, Inc., 1999.

Grove, Andrew S. Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company. New York: Bantam Books, 1999.

Welch, Jack. Jack: Straight from the Gut. New York: Warner Business Books, 2001.




July 23, 2008

Global Warming Would Result in FEWER Hurricanes



The NYT ran an article on Knutson's 2004 study that claimed that global warming would result in more hurricanes. But a search (on 6/19/08) of the online NYT database reveals no 2008 articles that include both "Knutson" and "global" in their content.

So apparently the NYT does not consider it newsworthy that Knutson's most recent research (see below) finds that global warming would result in fewer hurricanes.

WASHINGTON (AP) - Global warming isn't to blame for the recent jump in hurricanes in the Atlantic, concludes a study by a prominent federal scientist whose position has shifted on the subject.

Not only that, warmer temperatures will actually reduce the number of hurricanes in the Atlantic and those making landfall, research meteorologist Tom Knutson reported in a study released Sunday.

In the past, Knutson has raised concerns about the effects of climate change on storms. His new paper has the potential to heat up a simmering debate among meteorologists about current and future effects of global warming in the Atlantic.



For the full story, see:

"Study: Global warming not worsening hurricanes." MSN onllne Posted May 19, 2008 11:37 AM ET. Downloaded on 6/19/08 from: http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20080519&id=8664109

(Note: the AP article appeared in many outlets, including "Warming Absolved in Scientist's Altered View of Hurricane Frequency." Omaha World-Herald (Mon, May 19, 2008): 4A.)


The reference to the Knutson article is:

Knutson, Thomas, Joseph Sirutis, Stephen Garner, Gabriel Vecchi, and Isaac Held. "Simulated Reduction in Atlantic Hurricane Frequency under Twenty-First-Century Warming Conditions." Nature Geoscience 1 (2008): 359-64.




July 22, 2008

Business Model More Effective than Charity at Helping Poor



YunusMuhammadSubprimeLender.jpg






Nobel-Peace-Prize-winning economist Muhammad Yunus. Source of image: online version of the WSJ article quoted and cited below.

(p. A9) In his new book, "Creating a World Without Poverty," Mr. Yunus . . . defines social business as "cause-driven" rather than profit-driven. And yet, it is not a charity: Its owners are entitled to recoup their investments, and the social business must recover its full costs, or more, even as it concentrates on creating products or services that provide a social good. It does this by charging a fee for its products and services. (One example: a business that manufactures and sells low-priced, nutritious food products to underfed children. Grameen America is also a social business.)

Mr. Yunus freely acknowledges that the free market has done a great deal for the poor. "I didn't say that what is there is wrong. I said the structure was not complete. One piece was missing. We couldn't express within the business world all the things we want to do for others."

He argues that in today's world, people whose main ambition is to help those in need tend to be pushed into philanthropy, which isn't always the most efficient way to bring about change. In philanthropy, he says, the "dollar has only one life, you can use it once . . . social business dollar has endless life, it recycles. And you build institutions." He continues, "when it's an institution you bring creativity into it. You bring innovations into it. You bring continuity into it."

Mr. Yunus argues that it's extremely difficult to bring efficiency to charity. But "the moment you bring in a business model, immediately you become concerned about the cost, about the revenue, the sustainability, the surplus generation, how to bring more efficiency, how to bring new technology, how to redesign, each year you review the whole thing . . . charity doesn't have that package."



For the full article, see:

EMILY PARKER. "THE WEEKEND INTERVIEW with Muhammad Yunus; Subprime Lender." The Wall Street Journal (Sat., March 1, 2008): A9.

(Note: first ellipsis added; other ellipses in original.)




July 21, 2008

Free Trade Defended By Democratic Leadership Council Founder



(p. A15) Where are the pro-trade Democrats? America won't increase middle-class incomes and create jobs without them.

. . .

History proves that expanding trade and productivity help create growth. We learned that the hard way when the Smoot-Hawley tariff helped crush trade and exacerbate the Great Depression. Conversely, we have seen trade drive the economy during the great expansions of the 1960s and 1990s.

. . .

Trade gives poor people around the globe the opportunity to build a brighter future. During the Clinton administration, new trade programs like the African Growth and Opportunity Act helped key regions in the world succeed, while American workers stood to gain.

I helped found the Democratic Leadership Council in the wake of Walter Mondale's 49-state defeat in 1984, and we have always supported expanded trade. We still have a ways to go to win that argument in the Democratic Party. But the record is clear. Over the past 20 years, our party has grown stronger when we've been willing to do the right thing on the toughest issues, from putting the nation's fiscal house in order to overhauling a broken welfare system that trapped millions in poverty.



For the full commentary, see:

AL FROM. "Confessions of a Pro-Trade Democrat." The Wall Street Journal
(Mon., June 9, 2008): A15.

(Note: ellipses added.)




July 20, 2008

More Europeans Leading Stagnant, Stunted Lives



RomeFamilyAngst.jpg "Gianluca Pompei, Francesca Di Pietro and son, Mario, 2, shopping in Rome. They have cut spending on entertainment." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C1) LES ULIS, France -- When their local bakery in this town south of Paris raised the price of a baguette for the third time in six months, Anne-Laure Renard and Guy Talpot bought a bread maker. When gasoline became their biggest single expense, they sold one of their two cars.

Their combined annual income of 40,000 euros, about $62,500, lands Ms. Renard, a teacher, and Mr. Talpot, a postal worker, smack in the middle of France's middle class. And over the last year, prices in France have risen four times as fast as their salaries.

At the end of every month, they blow past their bank account's $900 overdraft limit, plunging themselves deeper into a spiral of greater resourcefulness and regret.

"In France, when you can't afford a baguette anymore, you know you're in trouble," Ms. Renard said one recent evening in her kitchen, as her partner measured powdered milk for their 13-month-old son, Vincent. "The French Revolution started with bread riots."

The European dream is under assault, as the wave of inflation sweeping the globe mixes with this continent's long-stagnant wages. Families that once enjoyed Europe's vaunted quality of life are pinching pennies to buy necessities, and cutting back on extras like movies and vacations abroad.

Potentially more disturbing -- especially to the political and social order -- are the millions across the continent grappling with the realization that they may have lives worse, not better, than their parents.



For the full story, see:

CARTER DOUGHERTY and KATRIN BENNHOLD. "Squeezed in Europe; For Middle-Class, Stagnant Wages and a Stunted Lifestyle." The New York Times (Thurs., May 1, 2008): C1 & C8.

(Note: the online version of the title is "For Europe's Middle-Class, Stagnant Wages Stunt Lifestyle." )


TalptRenardFrenchFamily.jpg



"Anne-Laure Renard, a teacher, and Guy Talpot, a postal worker, sold one car and bought a bread maker to cut expenses. Prices have risen four times as fast as salaries in France in the last year." Source of caption and photo: online version of the NYT article quoted and cited above.




July 19, 2008

Chavez Nationalizes Cement in Venezuela



(p. A13) Venezuela said it will take majority stakes in the local units of Cemex SAB, Lafarge SA and Holcim Ltd. as it divulges the first details of a nationalization plan that will affect the world's biggest cement producers.

The nationalization, announced last week, is designed to deflect criticism that the socialist government of Hugo Chávez isn't delivering on its promises of new housing and other infrastructure projects, experts said.

"The Venezuelan state will take control of these companies. We told them all three will be subject to this [nationalization] measure," Oil Minister Rafael Ramirez said on state television.

. . .

Mr. Chávez's nationalizations have resulted in efficiency declines in the past. For instance, Venezuelan oil production has fallen since major foreign oil-field operators were nationalized.



For the full story, see:

JOEL MILLMAN, RAUL GALLEGOS and DARCY CROWE. "Venezuela Will Take Control of Top Cement Producers." The Wall Street Journal (Tues., April 8, 2008): A13.

(Note: ellipsis added.)

(Note: the title of the online version is "Venezuela Will Take Control of Top Cement Producers.")




July 18, 2008

Global Warming Alarmists "Want Us to Sacrifice Liberty"



KlausVaclavCzechPresident.jpg








President of the Czech Republic, Vaclav Klaus. Source of photo: online version of the WSJ article quoted and cited below.

In addition to his insights into global warming, Vaclav Klaus is an advocate of the work of Joseph Schumpeter.

(p. A9) Mr. Klaus is . . . interested in the politics of global warming. He has written a book, tentatively titled "Blue, Not Green Planet," published in Czech last year and due out in English translation in the U.S. this May. The main question of the book is in its subtitle: "What is in danger: climate or freedom?"

He likens global-warming alarmism to communism, which he experienced first-hand in Cold War Czechoslovakia, then a Soviet satellite. While the communists argued that we must all sacrifice some freedom in pursuit of "equality," the "warmists," as Mr. Klaus calls them, want us to sacrifice liberty -- especially economic liberty -- to prevent a change in climate. In both cases, in Mr. Klaus's view, the costs of achieving the goal, and the impossibility of truly doing so, argue strongly against paying a price of freedom.

. . .

In Europe, Mr. Klaus has the reputation of a firebrand, if not a loose cannon. This is a president, after all, who calls global warming "alarmism" a "radical political project" based in a form of "Malthusianism" that is itself grounded on a "cynical approach [by] those who themselves are sufficiently well-off."

"It is not about climatology," he insists. "It is about freedom."



For the full article, see:

BRIAN M. CARNEY. "The Weekend Interview with Vaclav Klaus; The Contrarian of Prague." The Wall Street Journal (Sat., March 8, 2008): A9.

(Note: ellipsis added.)




July 17, 2008

Starbucks Hypocritically Censors Its Customers



(p. A12) Laissez-faire. It's a policy that made Starbucks vastly successful. But don't try to put that phrase on a customized Starbucks Card.

The cards are supposed be personalized to reflect customers' tastes and uniqueness. They are available in a range of colors, often given as gifts and used by regular customers who prefer to prepay for their java.

But when my friend Roger Ream, president of the Fund for American Studies, received a Starbucks gift card for Christmas, he found there was a limit to how personalized a card could be. His card required him to customize it on the company's Web site. So he went to the site and requested that the phrase "Laissez Faire" be printed on his card. A few days later he was informed that the company couldn't issue such a card because the wording violated company policy.

. . .

Maybe Starbucks considers the phrase inappropriate because it's "overtly political commentary"? Certainly my friend regards it as a firm statement of political philosophy.

And so, at my suggestion, my friend went back to the Web site and asked that his card be issued with the phrase "People Not Profits." Bingo! Starbucks had no problem with that phrase, and the card arrived in a few days.

I wondered just what the company's standards were. If "laissez-faire" is unacceptably political, how could the socialist slogan "people not profits" be acceptable?

. . .

Starbucks has prospered mightily in a free economy. For the most recent fiscal year, the company earned $672.6 million on revenue of $9.4 billion, a very healthy profit. And these days, in the wake of a California Superior Court judge's order that the company repay $100 million in back tips that were shared by shift supervisors, Starbucks honchos just might like a little less government intervention in their affairs and a little more laissez-faire.



For the full commentary, see:

DAVID BOAZ. "Starbucks and 'Laissez Faire'." The Wall Street Journal
(Mon., April 7, 2008): A12.

(Note: ellipses added.)




July 16, 2008

Argentine Taxes "Killing Their Incentives"



ArgentinaMarchettiPresidentCigraGroup.jpg "Marcelo Marchetti, president of Cigra group." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 6) WENCESLAO ESCALANTE, Argentina -- When the government decided in March to raise taxes on farmers' profits, it set off a rural revolt in Argentina. For three weeks enraged farmers blocked roads nationwide, paralyzing grain and meat sales and causing food shortages.

. . .

The farmers say they are concerned not only about profits, though the steeper taxes have cut into them. They also say Mrs. Kirchner's policies are threatening to reverse one of the great agricultural booms in Argentina's history and to snuff out a technological and entrepreneurial revolution that has made the country a leading food source in a world racked by hunger and rising food prices.

"We have an enormous historic opportunity to grow as a country, but the government wants to punish a sector that should continue to be an engine of growth," said Marcelo Marchetti, 39. "The world has opened its doors to us, and here we are fighting among ourselves."

. . .

An emergency law passed in 2002, in the midst of an economic crisis, has allowed the Kirchner government to create export taxes and keep the revenues away from governors and mayors. The Kirchners have used the doling out of those revenues to maintain political control over the provinces, which were critical to Mrs. Kirchner's election.

. . .

In Wenceslao Escalante, the Marchetti brothers, who both studied accounting in college, said the government's policies were killing their incentives to produce more. A decade ago they formed their company, Cigra, investing in the latest seed technology and farm equipment, and later buying $400,000 grain harvesters with global positioning systems.

Seven years ago the brothers expanded north into Chaco and Santiago del Estero, provinces where the land was thought to be too dry to support corn and soybeans. Today, with more advanced seeds and better crop rotation, it is considered the frontier for Argentine agriculture. But production there is threatened by declining profitability.

As the government has taken more from the farmers, international prices for the supplies to produce their crops, including fertilizers and seeds, have been rising faster than the prices of the commodities, Marcelo Marchetti said. The price of phosphorus, for example, has nearly tripled since last year, he said.

Suddenly the future seems cloudier. The brothers have decided not to make any investments over the next year.

"Everything is on hold," Mr. Marchetti said.



For the full story, see:

ALEXEI BARRIONUEVO. "In Argentina's Grain Belt, Farmers Revolt Over Taxes." The New York Times, Section 1 (Sun., April 27, 2008): 6.

(Note: ellipses added.)

ArgentinaButcherShop.jpg "At a butcher shop in Buenos Aires, supplies were down during strikes by farmers in rural towns like Wenceslao Escalante." Source of caption and photo: online version of the NYT article quoted and cited above.




July 15, 2008

Today artdiamondblog.com is Three Years Old


 

I have previously discussed my rationales for blogging, in the brief initial entry to my blog, and in the blog entry celebrating the second anniversary of the blog.

Many human activities have multiple motives, and blogging is no exception.  Today I want to focus on a secondary, but important motive for maintaining artdiamondblog.com.

A few decades ago, when I was a graduate student at the University of Chicago, I was wise (or fortunate) enough to participate in a voluntary, non-credit, informal seminar offered by Deirdre McCloskey on research and (mainly) writing in economics.  The advice expressed in the seminar was eventually expanded and refined in McCloskey's wonderful essay "On Economical Writing."

One of the bits of advice in McCloskey's essay is that in the research phase, it is useful to carry around some 4 by 6 cards on which to write quotes, and thoughts, related to the research.  Good ideas would not be lost to failed memory, and in the latter stages, the card format lent itself to organization and re-organization.

I embraced this advice with over-the-top enthusiasm, not only purchasing a bunch of 4 by 6 cards, but even purchasing them in several different colors.  (I may have already been primed for this advice by my days of carrying boxes of index card evidence around, when I was on the Riley High School debate team.)

Of course all this was before the days of the personal computer.  I still carry around little note pads for the times when inspiration hits without closeness to keyboard.  But most of the time, a keyboard is handy.  There are software programs, such as Microsoft's useful "OneNote" in which one can add notes, and organize them, in a private fashion.  And I often use OneNote.  But often it occurs to me that a quote or thought that seems useful to me in my research, might also be useful to someone else in their's. 

The cost of putting such a quote or thought on my blog is only very slightly higher than the cost of putting it down on OneNote, so I often bear the slight cost, with the hope, in the spirit of Albert Jay Nock, that some unknown member of "the remnant" will put the quote or thought to creative good use.

 

"You do not know and will never know who the Remnant are, or where they are, or how many of them there are, or what they are doing or will do.  Two things you know, and no more: first, that they exist; second, that they will find you."


Source: 

Nock, Albert Jay. "Isaiah's Job." Atlantic Monthly, March 1936.

 




July 14, 2008

"Innovation Has Helped Lift Untold Numbers Out of Poverty"



ProductivityRevolutionGraphic.gif Source of graph: online version of the WSJ article quoted and cited below.

(p. A23) . . . the impact of our technological innovation has helped lift untold numbers out of poverty.

This technology has created massive amounts of change. Like the Industrial Revolution before it, the current transformation is anything but pain-free. It's what Joseph Schumpeter called creative destruction. Google, Craigslist and Microsoft have been prospering. General Motors, United Airlines and the New York Times have not. In the midst of layoffs in the newsroom, it's hard to see anything good happening in the rest of the economy.



For the full commentary, see

BRIAN WESBURY. "Change We Can Believe In Is All Around Us." The Wall Street Journal (Weds., June 11, 2008): A23.

(Note: ellipsis added.)




July 13, 2008

"Theory" Said Gene Sequencing Technique Was "Impossible"



In the book The Genome War, the story is told about how the leading theorist proved the impossibility of the gene sequencing technique. It was the Venter group that gave it a try and proved it could work. This story is similar to the one about theory saying that what Marconi was trying, was impossible. (See: Larson, 2006.)

Rosenberg and Birdzell (1986) discuss the case that theory had proven how solid objects fall. But Galileo's experiments proved them wrong. This established the primacy of experiment and evidence, over theory.

When governments decide, they usually do what is safe, which is to follow current theory (or in rare cases, they pick Lysenko).

The entrepreneurial system, takes advantage of the tacit individual knowledge that is out there, but not yet theoretically defensible, and allows it to percolate to success.

References:

Larson, Erik. Thunderstruck. New York: Crown, 2006.

Rosenberg, Nathan, and L.E. Birdzell, Jr. How the West Grew Rich: The Economic Transformation of the Industrial World. New York: Basic Books, 1986.

Shreeve, James. The Genome War: How Craig Venter Tried to Capture the Code of Life and Save the World. 1st ed. New York: Alfred A. Knopf, 2004.




July 12, 2008

Air Conditioning Makes Life Better



SteinBenAirConditioner.jpg Source: screen capture from video clip referenced below.

Ben Stein commenting during CBS's "Sunday Morning" on July 6, 2008, delivered a wonderful tribute to the benefits of air conditioning.

The clip can be viewed at:

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=4235362n


AirConditionerChildren.jpg Source: screen capture from video clip referenced above.




July 11, 2008

University of Nebraska Foundation Contributes to Racial Discrimination



Some of us believe that the government should not discriminate on the basis of race, gender, or religion. Unfortunately, governments in the past and present have sometimes mandated or practiced discrimination. Examples from the past would include the Jim Crow laws that mandated racial discrimination against Afro-Americans.

A present example would be the mis-named "affirmative action" laws that mandate racial discrimination against whites.

In the article quoted below, note who has taken a stand on which side of this issue.

Is it appropriate for the University of Nebraska Foundation to be donating $25,000 to support the continuation of racial discrimination?

Note also the opposing positions of two 2006 Republican candidates for Senate: David Kramer is leading the drive to continue racial discrimination, while Pete Ricketts is contributing to ending racial discrimination.

(p. 1A) LINCOLN -- Leaders of the Nebraska Civil Rights Initiative called their anti-affirmative-action push one of the most successful petition drives in recent state history. But it's not yet known whether their proposed ban will go before voters in November.

"The citizens demand the opportunity to vote on the use of race and gender preferences and discrimination in state hiring, state contracts and state education," said Marc Schniederjans, treasurer of the group that said it submitted more than 167,000 signatures Thursday.

. . .

David Kramer, spokesman for the opposition group Nebraskans United, said he wasn't disheartened by the number of petition signatures or over the prospect that petition organizers said they planned to submit more signatures today.

. . .

(p. 2A) Connerly's American Civil Rights Coalition provided $370,750 of the $467,250 raised by the Nebraska petition group as of June 25. According to state records, the next largest donors were Paul Singer, a New York businessman, $50,000; William Grewcock, a former executive with Peter Kiewit Sons Inc., $25,000; and failed GOP U.S. Senate candidate Pete Ricketts, $25,000.

For Nebraskans United, the largest donations toward that group's $308,167 war chest have come from Omaha billionaire Warren Buffett, $50,000; philanthropist Richard Holland, $50,000; Dianne Lozier, Lozier corporate counsel, $50,000; Wallace Weitz, president of an Omaha-based mutual fund management company, $50,000; the Greater Omaha Chamber of Commerce, $36,250; the University of Nebraska Foundation, $25,000; and the Nebraska State Education Association, $25,000.



For the full story, see:

MARTHA STODDARD. "Petitions Turned In; Fight Far from Over." Omaha World-Herald (Fri., July 4, 2008): 1A-2A.

(Note: ellipses added.)

(Note: the online title of the article is "Anti-affirmative-action petitions turned in; verifying to begin.")




July 10, 2008

How the Government Caused the Dust Bowl



(p. A9) Washington never learns from its mistakes. In "The Worst Hard Time," Timothy Egan notes how federal price supports encouraged farmers in World War I to plow up millions of acres of dry grasslands and plant wheat. When the price of wheat crashed after the war, the denuded land lay fallow; then it blew away during the droughts of the 1930s, turning a big chunk of America into a Dust Bowl.


For the full commentary, see:


Ernest S. Christian and Gary A. Robbins. "Stupidity and the State." The Wall Street Journal. (Eastern edition). (Sat., June 7, 2008): A9.




July 9, 2008

Economists' Statement on McCain Economic Plan (that I Signed)



I agreed to have my name added to the "Economist's Statement" below, which was released to the press on Mon., July 7th. My general view is that free markets encourage morality, free choice, efficiency, and innovation; and that John McCain is much more likely to adopt free market policies than is Barack Obama.

Economists' Statement:

We enthusiastically support John McCain's economic plan. It is a comprehensive, pro-growth, reform agenda. The reform focuses on the real economic problems Americans face today and will face in the future. And it builds on the core economic principles that have made America great.

His plan would control government spending by vetoing every bill with earmarks, implementing a constitutionally valid line-item veto, pausing non-military discretionary government spending programs for one year to stop their explosive growth and place accountability on federal government agencies.

His plan would keep taxes from rising, because higher tax rates are exactly the wrong policy to restore economic growth, especially at this time.

His plan would reduce tax rates by cutting the tax that corporations pay to 25 percent in line with other countries, by completely phasing out the alternative minimum tax, by increasing the exemption for dependents, by permitting the first-year expensing of new equipment and technology, and by making permanent a reformed tax credit for R&D.

His plan would also create a new and much simpler tax system and give Americans a free choice of whether to pay taxes under that simple system or the current complex and burdensome income tax.

His plan would open new markets for American goods and services and thereby create additional jobs for Americans by supporting good free trade agreements, such as the one with Colombia, and working with leaders around the world to avoid isolationism and protectionism. His plan would also reform education, retraining, and other assistance programs so they better help those displaced by trade and other changes in the economy. His plan addresses problems in the financial markets and housing markets by calling for increased transparency and accountability, by targeted assistance to deserving homeowners to refinance their mortgages, and by opposing so-called reform plans which would raise the costs of home-ownership in the future.

The above actions, as well as plans to address entitlement programs -- especially Social Security, Medicare and other government health care programs -- and his regulatory reforms -- especially in the area of health care -- constitute a broad and powerful economic agenda. Because of John McCain's experience working with the American people in all walks of life, with members of Congress on both sides of the aisle, and with leaders around the world, we are optimistic that these plans will become a reality and will create jobs and restore confidence and strong economic growth.

Economists Who Have Signed The Statement:

Burton Abrams, University of Delaware
James D. Adams, Rensselaer Polytechnic Institute
Douglas K. Adie, Ohio University
Richard Agnello, University of Delaware
William Albrecht, University of Iowa
Constantine Alexandrakis, University of Massachusetts at Dartmouth
William Alpert, University of Connecticut
Wayne Angell, Former Fed Governor
Fernando E. Alvarez, University of Chicago
Geoffrey T. Andron, Austin Community College
George R. Averitt, Purdue University North Central
Charles Baird, California State University, East Bay
Howard Beales, George W ashington University
Stacie E. Beck, University of Delaware
Gary Becker, University of Chicago
Donald Bellante, University of South Florida
Daniel K. Benjamin, Clemson University
John J. Bethune, Barton CollegeSanjai Bhagat, University of Colorado
Andrew G. Biggs, American Enterprise Institute
Robert G. Bise, Orange Coast College
Michael K. Block, University of Arizona
Donald Booth, Chapman University
Karl J. Borden, University of Nebraska
Michael Bordo, Rutgers University
George H. Borts, Brown University
Mich ael Boskin, Stanford University
Daniel P. Brandt III, Washington, D.C.
Ike Brannon, Department of the Treasury
David P. Brown, University of Wisconsin-Madison
Jeff Brown, University of Illinois at Urbana-Champaign
Joseph Brusuelas, Merk Investments
Phillip J. Bryson, Brigham Young University
Andrzej Brzeski, University of California, Davis
James Buchanan, George Mason University
Todd Buchholz, Two Oceans Management
Richard Burdekin, Claremont McKenna College
Richard V. Burkhauser, Cornell University
James B. Burnham, Duquesne University
Andr ew B. Busch, BMO Capital Markets
James L. Butkiewicz, University of Delaware
Mark Calabria, United States Senate
James Carter, Vienna, VA
Don Chance, Louisiana State University
Barry R. Chiswick, University of Illinois at Chicago
Bhagwan Chowdhry, UCLA
Richard Clarida, Columbia University
Candice Clark, Economic consultant
Kenneth W. Clarkson, University of Miami
Warren Coats, IMF, retired
John Cogan, Hoover Institution
Boyd D. Collier, Tarleton State University
Michael Connolly, University of Miami
Kathleen B. Cooper, Southern Methodist University
Joshua Coval, Harvard University
Ted Covey, McLean, Virginia
Nicole Crain, Lafayette College
W. Mark Crain, Lafayette College
Dan Crippen, Former CBO Director
Thomas D. Crocker, University of Wyoming
Robert L. Crouch, University of California, Santa Barbara
Mario J. Crucini, Vanderbilt University
Ward S. Curran, Trinity College
Coldwell Daniel III, The University of Memphis
Antony Davies, Duquesne University
Steven Davis, University of Chicago
Clarence R. Deitsch, Ball State University
Richard DeKaser, National City Corporation
Stephen J. Dempsey, University of Vermont
Christopher DeMuth, American Enterprise Institute
David B.H. Denoon, New York University
William G. Dewald, Ohio State University
Arthur M. Diamond Jr., University of Nebraska at Omaha
John Diamond, Rice University
David L. Dickinson, Appalachian State University
Francis X. Diebold, University of Pennsylvania
Jeffrey H. Dorfman, University of Georgia
Thomas J. Duesterberg, Manufacturers Alliance/MAPI
Parnell Duverger, Broward Community College
Isaac Ehrlich, SUNY at Buffalo
Martin Eichenbaum, Northwestern University
Jeffrey A. Eisenach, Criterion Economics
Michael A. Ellis, Kent State University
Joachim G. Elterich, University of Delaware
Kenneth Elzinga, University of Virginia
Stephen J. Entin, Institute for Research on the Economics of Taxation
T.W. Epps, University of Virginia
Michael G. Erickson, The College of Idaho
Paul Evans, Ohio State University
Dino Falaschetti, Hoover Institution
Frank Falero Jr., California State University
Susan K. Feigenbaum, University of Missouri, St. Louis
Martin Feldstei n, Harvard University
Eric Fisher, California Polytechnic State University
Arthur A "Trey" Fleisher III, Metro State College of Denver
James Forcier, University of San Francisco
William F. Ford, Middle Tenn. State U.
Michele Fratianni, Indiana University
Luke Froeb, Vanderbilt University
Kenneth C. Froewiss, NYU Stern School of Business
Diana Furchtgott-Roth, Hudson Institute
Timothy S. Fuerst, Bowling Green State University
Lowell Gallaway, Ohio University
B Delworth Gardner, Brigham Young University
Dave Garthoff, The University of Akron
Ilhan K. Geckil, Anderson Economic Group
Rick Geddes, Cornell University
Joseph A. Giacalone, St. John's University
Adam Gifford, California State University, Northridge
David Gillette, Truman State University
Micha Gisser, University of New Mexico
Amy Jocelyn Glass, Texas A&M University
Charles J. Goetz, The University of Virginia
Claudio Gonzalez-Vega, The Ohio State University
Lawrence Goodman, Bergen City, NJ
Barry K. Goodwin, North Carolina State University
Eric S. Graber, Independent Economist
Douglas H. Graham, The Ohio State University
J. Edward Graham, University of North Carolina Wilmington
Phil Gramm, Former U.S. Senator
Teresa Beckham Gramm, Rhodes College
Wendy Lee Gramm
William B. Green, Sam Houston State University
Kenneth Greene, Binghamton University
Paul Gregory, University of Houston
Earl Grinols, Baylor University
Gary Hansen, UCLA
Eric Hanushek, Hoover Institution
Stephen Happel, Arizona State University
James E. Hartley, Mount Holyoke College
Kevin Hassett, American Enterprise Institute
Joel W. Hay, University of Southern California
Jared E. Hazleton, Texecon: A Texas Economic Consulting Firm
Charles E. Hegji, Auburn University Montgomery
Robert H. Heidt, Indiana University School of Law
Harold M. Hochman, CUNY Graduate Center and Lafayette College
Robert J. Hodrick, Columbia Business School
Stuart G. Hoffman, The PNC Financial Services Group
Arlene Holen, Washington, D.C.
Mac R. Holmes, Troy University
Douglas Holtz-Eakin, John McCain 2008
C. Thomas Howard, University of Denver
E. Philip Howrey, University of Michigan
Glenn Hubbard, Columbia University
James L. Huffman, Lewis & Clark Law School
J. Christopher Hughen, University of Denver
E. Kingdon Hurlock, Calvert Investment Counsel
Stephen L. Jackstadt, University of Alaska, Anchorage
Joseph M. Jadlow, Oklahoma State University
Sherry L Jarrell, Wake Forest University
Michael C. Jensen, Harvard Business School
Dennis A. Johnson, University of South Dakota
Shane A. Johnson, Texas A&M University
Richard Just, University of Maryland
Tim Kane, Washington, D.C.
Steven Kaplan, University of Chicago Graduate School of Business
Alexander Katkov, Johnson and Wales University
Melissa Kearney, University of Maryland
Joe Kennedy, Arlington, Virginia
Lawrence W. Kenny, University of Florida
Calvin A. Kent, Marshall University
E. Han Kim, University of Michigan
Robert G. King, Boston University
Paul R. Koch, Olivet Nazarene University
Meir Kohn, Dartmouth College
James W. Kolari, Texas A&M University
Roger C. Kormendi, Kormendi/Gardner Partners
Marvin Kosters, American Enterprise Institute
Robert Krol, California State University, Northridge
Anne Krueger, Johns Hopkins University
Deepak Lal, University of Cal ifornia, Los Angeles
Douglas Lamdin, The University of Maryland, Baltimore County
Daniel L Landau, University of Connecticut
Richard La Near, Missouri Southern State University
Nicholas A. Lash, Loyola University
Don R. Leet, California State University, Fresno
Norman B. Lefton, Southern Illinois University at Edwardsville
Tom Lehman, Indiana Wesleyan University
Thomas M. Lenard, Technology Policy Institute
Noreen E. Lephardt, Marquette University
Adam Lerrick, Carnegie Mellon University and the American Enterprise Institute
Philip I. Levy, American Enterprise Institute
W. Cris Lewis, Utah State University
Andrew Light, Liberty University
Jane Lillydahl, University of Colorado at Boulder
Zheng Liu, Emory University
Luis Locay, University of Miami
John R. Lott Jr., University of Maryland
Lawrence W. Lovik, Alabama Policy Institute
Robert Lucas, University of Chicago
John Lunn, Hope College
R. Ashley Lyman, University of Idaho
Paul W. MacAvoy, Yale School of Management
Glenn MacDonald, Washington University in St. Louis
John Makin, American Enterprise Institute
Burton Malkiel, Princeton University
David Malpass, Encima Global LLC
Michael Marlow, California Polytechnic State University
Donald J. Marshall, Consulting Engineer and Economist
Aparna Mathur, American Enterprise Institute
Timothy Matthews, Kennesaw State University
John Matsusaka, University of Southern California
Bennett McCallum, Carnegie Mellon University
Paul W. McCracken, University of Michigan
Martin C. McGuire, University of California-Irvine
W. Douglas McMillin, Louisiana State University
Roger Meiners, University of Texas - Arlington
Will Melick, Kenyon College
Allan Meltzer, Ca rnegie Mellon University
John Merrifield, University of Texas at San Antonio
Paul Merski, Independent Community Bankers of America
Jim Mietus, Great Falls, VA
Todd Milbourn, Washington University in St. Louis
Geoffrey P. Miller, New York University Law School
James Miller, George Mason University and The Hoover Institution
William C. Miller, Pioneer Analytics LLC
David E. Mills, University of Virginia
Velma Montoya, National Council of Hispanic Women
Michael Moore, George Washington University
Charles Britt Moss, University of Florida
Robert Mundell, Columbia University
Tim Muris, George Mason University
David B. Mustard, University of Georgia
Richard F. Muth, Emory University
Anthony N. Negbenebor, Gardner-Webb University
Charles Nelson, University of Washington
Robert J. Newman, Louisiana State University
Michael P. Niemira, International Council of Shopping Centers
Tom O'Brien, University of Connecticut
Lee E. Ohanian, UCLA
June O'Neill, Baruch College, CUNY
Steve Parente, University of Minnesota
Randall Parker, East Carolina University
Douglas Patterson, Virginia Tech
Tim Perri, Appalachian State University
Mark J. Perry, University of Michigan-Flint
Tomas Philipson, University of Chicago
William Poole, University of Delaware
Michael E. Porter, Harvard Business School
Barry Poulson, University of Colorado Boulder
James Prieger, Pepperdine University
R. David Ranson, H. C. Wainwrigth & Co. Economics Inc.
Richard Rawlins, Missouri Southern State University
Martin A. Regalia, Gaithersburg, Maryland
Barrie Richardson, Centenary College
Christine P. Ries, Georgia Institute of Technology
Aldona Robbins, Fiscal Associates
Gary Robbins, Fiscal Associates
Kenneth Rogoff, Harvard University
Richard Roll, UCLA
Harvey Rosen, Princeton University
Larry L. Ross, University of Alaska, Anchorage
Robert Rossana, Wayne State University
Timothy P. Roth, The University of Texas at El Paso
Charles Rowley, George Mason University
Paul H. Rubin, Emory University
Roy Ruffin, University of Houston
Gary J. Santoni, Ball State University
T.R. Saving, Texas A&M University
Mike Schuyler, Institute for Research on the Economics of Taxation
Anna Schwartz, National B ureau of Economic Research
Loren C. Scott, Louisiana State University
Robert Haney Scott, California State University, Chico
Carlos Seiglie, Rutgers University
Richard Selden, University of Virginia
John Semmens, Laissez Faire Institute
Sol S. Shalit, University of Wisconsin
Alan Shapiro, University of Southern California
Judy Shelton
William F. Shughart II, The University of Mississippi
George Shultz, Hoover Institution
Jerome Siebert, University of California, Berkeley
John Silvia, Wachovia
Chuck Skipton, University of Tampa
Scott B. Smart, Indiana University
Amy Smith, Former OMB Chief Economist
James F. Smith, The University of North Carolina
Vernon Smith, Chapman University
Sean M. Snaith, University of Central Florida
Douglas Southgate, Ohio State University
Frank Spreng, McKendree University
Beryl W. Sprinkel, Retired
Stan Spurlock, Mississippi State University
George J. Staller, Cornell University
Craig A. Stephenson, Babson College
Houston Stokes, University of Illinois at Chicago
Courtenay C. Stone, Ball State University
Scott Sumner , Bentley College
James Sweeney, Stanford University
Richard Sweeney, Georgetown University
Robert Tamura, Clemson University
Clifford Tan, Stanford Center for International Development
John A. Tatom, Indiana State University
John Taylor, Stanford University
Paul Taylor, Vienna, VA
Teresa Tharp, Valencia Community College
Clifford F. Thies, Shenandoah University
Henry Thompson, Auburn University
Walter N. Thurman, North Carolina State University
Jerry G. Thursby, Georgia Institute of Technology
Robert D Tollison, Clemson University
William N. Trumbull, West Virginia University
Kamal Upadhyaya, University of New Haven
Charles W. Upton, Kent State University
Peter J Van Blokland, University of Florida
T. Norman Van Cott, Ball State University
Richard Vedder, American Enterprise Institute
George J. Viksnins, Georgetown University
J. Antonio Villamil, The Washington Economics Group
Richard E. Wagner, George Mason University
William B. Walstad, University of Nebraska-Lincoln
Murray Weidenbaum, Washington University in St. Louis
Marc D. Weidenmier, Claremont McKenna College
Finis We lch, Texas A&M University
James B. Whitaker, Centreville, VA
John Wicks, University of Montana
Wayne H. Winegarden, Arduin, Laffer & Moore Econometrics
Gary Wolfram, Hillsdale College
DeVo L. Yoho, Ball State University
Nancy A. Yonge, Smith Center for Private Enterprise
Paul J. Zak, Claremont Graduate University
Mokhlis Y. Zaki, Northern Michigan University
Mark Zandi, Malvern, PA
Arnold Zellner, University of Chicago
Kate Zhou, University of Hawaii
Joseph Zoric, Franciscan University of Steubenville
Benjamin Zycher, Manhattan Institute for Policy Research

* Affiliations are listed for identification purposes only.



The statement may be found online at:

http://www.johnmccain.com/Informing/News/PressReleases/Read.aspx?guid=c90681b9-5dfe-4de4-8057-ceedb30c228d





July 8, 2008

"Creaky Regulations . . . Act as a Brake on Innovation"







"Paul Metzger, holding the Handler, an anti-microbial device that helps users avoid touching surfaces that might carry germs." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C5) With so many people worried about getting sick -- whether from the common cold and flu or exotic new strains of antibiotic-resistant bacteria -- Paul and Jeffrey Metzger had every reason to hope that the germ-fighting key fob they invented would be a runaway hit.

Their device, known as the Handler, began selling last year online and in stores like Duane Reade pharmacies for about $11. It features a pop-out hook so germophobes can avoid touching A.T.M. keypads, door handles and other public surfaces where undesirable microbes may lurk. As added protection, the Handler's rubber and plastic surfaces are impregnated with tiny particles of silver to kill germs that land on the device itself.

But those little silver particles have run Maker Enterprises, the Metzger brothers' partnership in Los Angeles, into a big regulatory thicket. The Metzgers belatedly realized that the Environmental Protection Agency might decide that a 1947-era law that regulates pesticides would apply to antimicrobial products like theirs.

The agency ruled last fall that the law covered Samsung's Silvercare washing machine. Samsung was told it would have to register the machine as a pesticide, a potentially costly and time-consuming process, because the company claims the silver ions generated by the washer kill bacteria in the laundry.

The Metzgers halted production of their key fob while they sought legal guidance on how to avoid a similar fate.

Their quandary highlights a challenge facing the growing number of entrepreneurs who have ventured into nanotechnology, a field that gets its name from its reliance on materials so small their dimensions are measured in nanometers, or billionths of a meter.

. . .

"They don't really know how they want to register these particles," said Tracy Heinzman, a lawyer in Washington who deals frequently with the E.P.A. "There's no clear path forward."

More broadly, the limbo into which the Handler has tumbled shows how the limited resources of agencies like the E.P.A. can combine with creaky regulations to act as a brake on innovation. "The marketplace is always ahead of the E.P.A.," Ms. Heinzman said.


For the full story, see:

BARNABY J. FEDER. "Small Business; Fighting Germs and Regulators; Pesticide Rules May Apply to Tiny Particles That Kill Microbes." The New York Times (Thurs., March 6, 2008): C5.

(Note: the title of the online version was "Small Business; New Device for Germophobes Runs Into Old Law.")

(Note: ellipsis added.)


Handler.jpg





"Production of the Handler has ceased for the time being." Source of caption and photo: online version of the NYT article quoted and cited above.




July 7, 2008

"Become Pioneers of Leapfrog Technology"



Here is the latest entry in my continuing effort to document uses of the "leapfrog" concept in business and innovation. The entry below appears in a table entitled "Strategy Milestones" and is under the third of three column headings, which is entitled "Long Term (5+ Years)."

(p. 149) Become pioneers of leapfrog technology

Source:

Bossidy, Larry, Ram Charan, and Charles Burck. Execution: The Discipline of Getting Things Done. New York: Crown Business, 2002.

(Note: the quotation is presented as being Bossidy's.)




July 6, 2008

Bestsellers Rejected Many Times Before Acceptance



BookRejectionTable.gif



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

(p. W2) Leonard Mlodinow's book "The Drunkard's Walk: How Randomness Rules Our Lives" explores how chance controls the world. In one chapter, the author, who has a doctorate in theoretical physics from the University of California, Berkeley, and is a former writer for "Star Trek: The Next Generation," looks at the number of big-time writers whose early works were, at first, rejected by publishers. He mentions how authors such as Vladimir Nabokov and Sylvia Plath suffered rejection. "Many books destined for great success had to survive not just rejection, but repeated rejection," Mr. Mlodinow writes. "There exists a vast gulf of randomness and uncertainty between the creation of a great novel...and the presence of huge stacks of that novel...at the front of thousands of retail outlets." Below, some examples he cites of rejections for authors who went on to become famous.

For the full story, see:

Robert J. Hughes. "ADVISER; What's 'Happening'; CULTURAL FIGURES | Books; Randomness and Rejection." The Wall Street Journal (Fri., June 13, 2008): W2.

(Note: ellipses in original.)

DrunkardsWalkBK.jpg







Source of book image: http://ecx.images-amazon.com/images/I/41uQY8DkQ5L._SS500_.jpg




July 5, 2008

Sir Laurence Olivier Got Mad at Those Who Ridiculed Charlton Heston's Acting



(p. 5go!) "In 1985, I took a train to London from Royal Air Force Mildenhall (Base) with a couple of med techs and decided to check out some of the plays," Brodston recalled in his e-mail.

His theater date was a native Briton who had joined the U.S. Air Force.

"We came upon a play that had Charlton Heston in it, 'The Caine Mutiny Court Martial,'" Brodston remembered. "We couldn't afford the tickets, so they put us on the 'king's cuff' (standby tickets for students and servicemen)."

Just as the house lights were dimming, an older woman led Brodston and his companion up the steps to a private box because no one had claimed the seats.

"Be quiet and don't tell anyone," she furtively whispered because she wasn't supposed to give away box seats that normally fetch up to $300 each.

Two minutes into the play, the door at the rear of the box opened, and two people sat behind them. Engrossed in the play, Brodston and friend paid little attention.

"At intermission, we looked up and saw Lord Laurence Olivier and his wife, Joan Plowright, sitting behind us!"

. . .

In 1999, Brodston crossed paths with Plowright in New York, and she remembered the night they shared a box at the London theater.

"Larry used to get mad when people made fun of Chuck's acting," Plowright told Brodston. "He loved Chuck in 'Ben Hur' and that silly ape movie ('Planet of the Apes'). He and the children would watch those movies again and again."



For the full commentary, see:

BOB FISCHBACH. "Bob's Take on Cinema: A night of fine theater with Chuck, Larry." Omaha World-Herald (Thursday, June 12, 2008): 5go!.

(Note: ellipsis added.)




July 4, 2008

The Role of Private Enterprise in Sequencing the Human Genome



GenomeWarBK.jpg










Source of book image: http://www.genomenewsnetwork.org/articles/2004/02/20/genome_war.php

The race to decode the genome always seemed like an appealing test case of the relative efficiency of government versus private enterprise. But the results seem muddy because sometimes in the media the outcome has been described as a win for Craig Venter's private Celera corporation, and other times, as a tie.

For years I have wanted to learn more, and now I have finally done so by reading James Shreeve's fascinating The Genome War.

It is clear from the book that the entrance of Celera, greatly accelerated the government's own efforts to sequence the human genome. So one important lesson is that, no matter who "won the race, the consumer benefited from the entrance of a private competitor.

Also clear, is that Venter's group took advantage of public resources and results. Their primary zeal was for sequencing the genome, rather than for promoting private enterprise.

Regrettably, this is a common case: many entrepreneurs take the institutions of their economy as given, and make use of government when it suits their short-run objectives.

Officially the results were announced as a tie. But the main bone of contention had been over Celera's advocacy and use of the "whole genome shotgun" technique for sequencing the gene. The government group had attacked the method as impractical and unreliable.

The proof of who "won" in a deeper sense, was that after the contest was over, everyone, including the government, was using the "whole genome shotgun" technique.

Another lesson is that the usual scientific goal of immediately releasing findings, may actually reduce the information available to the public. If, as with the genome, the information is costly to obtain, allowing a period of proprietary ownership of the information, provides private entrepreneurs with the incentive to discover the information in the first place. Another case of unintended consequences: if we fully follow the alleged idealism of academic scientists, we will end up with less scientific knowledge, not more.

Reference to book:

Shreeve, James. The Genome War: How Craig Venter Tried to Capture the Code of Life and Save the World. 1st ed. New York: Alfred A. Knopf, 2004.

(Note: My comments are based on the whole book. A paragraph on pp. 366-367 is especially important.)




July 3, 2008

"Most Interview Processes Are Deeply Flawed"



(p. 129) Developing leaders begins with interviewing and assessing candidates. I'm not talking about overseeing the HR department and interviewing finalists; I'm talking about hands-on hiring. Most interview processes are deeply flawed. Some people interview well, and some people don't. A person who doesn't interview well may nonetheless be the best choice for the job. That's why it's so important to probe deeply, know what to listen for, and get supplemental data. It takes time and effort to drill down further, but it's always worth the trouble.


Source:

Bossidy, Larry, Ram Charan, and Charles Burck. Execution: The Discipline of Getting Things Done. New York: Crown Business, 2002.

(Note: the quotation is presented as being Bossidy's.)




July 2, 2008

The Radical Islamic Threat to Free Speech



AliAyaanHirsi2.jpg

"Marked for death: Ayaan Hirsi Ali." Source of caption and photo: online version of the WSJ commentary quoted and cited below.

(p. A15) Criticism of Islam, however, has led to violence and murder world-wide. Ayatollah Khomeini issued a fatwa calling for Muslims to kill Salman Rushdie over his 1988 book, "The Satanic Verses." Although Mr. Rushdie has survived, two people associated with the book were stabbed, one fatally. The 2005 Danish editorial cartoons lampooning the prophet Muhammad led to numerous deaths. Dutch director Theodoor van Gogh was killed in 2004, several months after he made the film "Submission," which described violence against women in Islamic societies. Ayaan Hirsi Ali, a former Dutch member of parliament who wrote the script for "Submission," received death threats over the film and fled the country for the United States.


The violence Dutch officials are anticipating now is part of a broad and determined effort by the radical jihadist movement to reject the basic values of modern civilization and replace them with an extreme form of Shariah. Shariah, the legal code of Islam, governed the Muslim world in medieval times and is used to varying degrees in many nations today, especially in Saudi Arabia.

Radical jihadists are prepared to use violence against individuals to stop them from exercising their free speech rights. In some countries, converting a Muslim to another faith is a crime punishable by death. While Muslim clerics are free to preach and proselytize in the West, some Muslim nations severely restrict or forbid other faiths to do so. In addition, moderate Muslims around the world have been deemed apostates and enemies by radical jihadists.


For the full commentary, see:

PETER HOEKSTRA. "Islam and Free Speech." The Wall Street Journal (Weds., March 26, 2008): A15.




July 1, 2008

The Method of Milton Friedman's Practice Was Better Than the Method of His Essay



The method of the Chicago School is often thought to be the method outlined in Friedman's famous essay "The Methodology of Positive Economics." It can be (and has been) persuasively argued that the actual methodology practiced by Friedman is broader, and more eclectic than that advocated in his early essay.

His practice continued to exemplify a kind of empiricism, but it was a kind of empiricism that included, not only 'rigorous' econometrics, but also economic history, case studies, and 'stylized facts.'

I believe that the method of Friedman's practice is sounder than the method of his essay. So it is unfortunate that the Institute founded in Friedman's name will probably only support those who practice the formal method of the essay.

(p. B5) The University of Chicago will announce Thursday that it plans to establish a center for economics honoring the late economist Milton Friedman.

The school plans to raise an endowment of $200 million to support the Milton Friedman Institute.

. . .

. . . his approach to economics embodies what has come to be known as the Chicago School. He defined that as "an approach that insists on the empirical testing of theoretical generalizations and that rejects alike facts without theory and theory without facts."

It is that approach, and the intellectual rigor that Mr. Friedman brought to it, that the Friedman Institute is meant to advocate, rather than any ideology, says Chicago economist Gary Becker, a Nobel Prize-winning former student of Mr. Friedman's who was on the faculty committee that recommended the institute.


For the full story, see:

JUSTIN LAHART. "University Plans Institute to Honor Milton Friedman." The Wall Street Journal (Thurs., May 15, 2008): B5.

(Note: ellipses added.)


The famous Friedman method essay is:

Friedman, Milton. "The Methodology of Positive Economics." In Essays in Positive Economics, 3-43. Chicago: University of Chicago Press, 1953.




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