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April 30, 2009

Charles Wolf's Main Cancer Regret: "I'm Not There for the Market Open"

WolfCharles2009-2-15.jpg "Charles Wolf with laptop and Archie, in his house near Denver last spring." Source of the caption and the photo: online version of the WSJ article quoted and cited below.

(p. C5) He was irked when a cancer recurrence last year required him to resume morning radiation treatments, partly because that took him away from the market. "What kills me more than anything else is that I'm not there for the market open," he said.

For the full obituary, see:

E.S. BROWNING. "Wolf Loses Battle With Cancer; Disease Didn't Affect His Investing Success; Model Patient." The Wall Street Journal (Thurs., JANUARY 29, 2009): C5.

April 29, 2009

World Astonished that an American Tradesman Tamed Lightning

(p. 24) Within five years of his speculative note to Collinson, lightning rods had become a common sight on church steeples throughout Europe and America. Franklin's biographer Carl Van Doren aptly describes the astonishment that greeted these events around the world: "A man in Philadelphia in America, bred a tradesman, remote from the learned world, had hit upon a secret which enabled him, and other men, to catch and tame the lightning, so dread that it was still mythological."


Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

April 28, 2009

"Public Money Was Being Used to Rehab a House, and Later to Demolish It"

GadboisKarenNewOrleansGadfly.jpg "Karen Gadbois,a New Orleans activist, has helped expose corruption within a federally funded program designed to help rebuild the city." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A13) But Ms. Gadbois has a dangerous affection for the city's shotgun houses and Creole cottages in a place where so much is falling down. She is the daughter of a plaster lather -- a textile artist herself, and wife of a painter -- and she cannot let the sagging porches and ragged cornices go. They have turned her into a full-time activist.

Lists of homes to which things are going to be done -- there are many in post-Hurricane Katrina New Orleans, where nearly 60 percent of the dwellings were damaged in the storm -- are red meat for Ms. Gadbois. But this time she did not even need to leave her own house, a rambling, cheerfully messy raised green cottage in the Carrollton section (it took on four feet of water in the hurricane) to know something was terribly wrong with the list of houses NOAH claimed to work on.

"It wasn't even that the house didn't exist; the whole block didn't exist," Ms. Gadbois recalled. "Something's not right here. We saw properties that had supposedly been remediated by NOAH coming up to be declared imminent health threats, and then demolished."

It galled her, she said, that public money was being used to rehab a house, and later to demolish it, often by agencies sharing the same office space.

For the full story, see:

ADAM NOSSITER. "Amid Ruined New Orleans Neighborhoods, a Gadfly Buzzes." The New York Times (Weds., August 13, 2008): A14.

April 27, 2009

The Most Fertile Margins of the Economy Are Always in People's Minds

(p. 151) The most fertile margins of the economy are always in people's minds: thoughts and plans and projects yet unborn to business. The future emerges centrifugally and at first invisibly, on the fringes of existing companies and industries. The fastest-growing new firms often arise through defections of restive managers and engineers from large corporations or through the initiatives of (p. 152) immigrants and outcasts beyond the established circles of commerce. All programs that favor established companies, certified borrowers, immobile forms of pay, pensions, and perquisites, institutionally managed savings and wealth, against mobile capital, personal earnings, disposable savings, and small business borrowing, tend to thwart the turbulent, creative, and unpredictable processes of innovation and growth.


Gilder, George. Recapturing the Spirit of Enterprise: Updated for the 1990s. updated ed. New York: ICS Press, 1992.

April 26, 2009

Rhee Offers DC Teachers Higher Pay If They Give Up Tenure


"Michelle Rhee, second from left, with faculty and staff members of Washington schools last month at an awards ceremony." Source of the caption and photo: online version of the NYT article quoted and cited below.

(p. A1) WASHINGTON -- Michelle Rhee, the hard-charging chancellor of the Washington public schools, thinks teacher tenure may be great for adults, those who go into teaching to get summer vacations and great health insurance, for instance. But it hurts children, she says, by making incompetent instructors harder to fire.

So Ms. Rhee has proposed spectacular raises of as much as $40,000, financed by private foundations, for teachers willing to give up tenure.

Policy makers and educators nationwide are watching to see what happens to Ms. Rhee's bold proposal. The 4,000-member Washington Teachers' Union has divided over whether to embrace it, with many union members calling tenure a crucial protection against arbitrary firing.

. . .

Ms. Rhee has not proposed abolishing tenure outright. Under her proposal, each teacher would choose between two compensation plans, one called green and the other red. Pay for teachers in the green plan would rise spectacularly, nearly doubling by 2010. But they would need to give up tenure for a year, after which they would need a principal's recommendation or face dismissal.

For the full story, see:

SAM DILLON. "A School Chief Takes On Tenure, Stirring a Fight." The New York Times (Thurs., November 13, 2008): A1 & A19.

(Note: ellipsis added.)

April 25, 2009

God's "Perverse Appetite for Burning Down the Buildings Erected in His Honor"

(p. 22) Humans had long recognized that lighting had a pro-(p. 23)pensity for striking the tallest landmarks in its vicinity, and so the exaggerated height of church steeples--not to mention their flammable wooden construction--presented a puzzling but undeniable reality: the Almighty seemed to have a perverse appetite for burning down the buildings erected in His honor.


Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

April 24, 2009

Government Elevator Inspectors Vote with Their Feet for the Private Sector


"The chief inspection official, Charles Miraglia, works on the side for at least one private elevator company." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A27) More than a dozen members of the New York Housing Authority's elevator staff -- including the official who directs all safety inspections -- also work second jobs for private companies in the elevator industry, according to interviews and city records.

The employees, including three managers and nearly half the inspection staff, say their second jobs do not conflict with their duties maintaining the 3,300 elevators in the authority's 2,600 buildings. Tenant complaints and inspection records indicate that the authority's elevators are among the worst maintained in the city.

All of the elevator staff members with second jobs, including the chief inspection official, Charles Miraglia, have received a waiver from the city's Conflicts of Interest Board, which ruled the second jobs did not present an ethical conflict. Each waiver was granted, the board said, based on the endorsement of the Housing Authority chairman, Tino Hernandez, and an assurance from the employee that the job would not interfere with his authority duties.

. . .

Criticism of the way the authority, the nation's largest public housing landlord, maintains its elevators intensified recently, after a 5-year-old boy died trying to escape a stalled elevator in an authority-owned building in Williamsburg, Brooklyn, on Aug. 19. The Brooklyn district attorney's office continues to investigate that accident.

. . .

Some of those who received waivers to work a second job said in interviews that they worked only part time, and always after hours or on weekends.

Scott T. Hayes, a longtime elevator consultant and inspector for building owners in the city, said 99 percent of all commercial and residential inspections take place during normal business hours, and almost never on weekends. "If a building super works till 4:30 or 5 o'clock and then they're off, and you show up at 6 o'clock and say I want to inspect the elevator, he'll throw you out of the building," Mr. Hayes said. "So I don't know what kind of work they could be doing. It doesn't make sense."

Mr. Miraglia earns $104,000 a year in his authority post and received his waiver to work outside jobs in August 2007, at a time when the authority's difficulties in inspecting elevators were already apparent.

For the full story, see:

RAY RIVERA. "Fixing Elevators: For the City, and on the Side." The New York Times (Tues., September 30, 2008): B1.

(Note: ellipses added.)

April 23, 2009

The Policy Agenda to Euthanize the Entrepreneur

(p. 151) The agenda is simple: the stealthy and unannounced euthanasia of the entrepreneur. It can be accomplished easily by following two seductive themes of policy: lowering tax and interest costs for large corporations and a few other favored institutions, while shifting the burden increasingly to individuals and families. By reducing corporate taxes, subsidizing corporate loans, sponsoring a wide range of favored borrowers, institutionalizing personal savings, and discreetly allowing taxes to rise on personal income, government can painlessly extinguish the disposable wealth of entrepreneurs.


Gilder, George. Recapturing the Spirit of Enterprise: Updated for the 1990s. updated ed. New York: ICS Press, 1992.

April 22, 2009

Environmentalists Abandon Science

In honor of "Earth Day," some thoughtful comments by a co-founder of Greenpeace:

(p. A23) In 1971 an environmental and antiwar ethic was taking root in Canada, and I chose to participate. As I completed a Ph.D. in ecology, I combined my science background with the strong media skills of my colleagues. In keeping with our pacifist views, we started Greenpeace.

But I later learned that the environmental movement is not always guided by science. As we celebrate Earth Day today, this is a good lesson to keep in mind.

At first, many of the causes we championed, such as opposition to nuclear testing and protection of whales, stemmed from our scientific knowledge of nuclear physics and marine biology. But after six years as one of five directors of Greenpeace International, I observed that none of my fellow directors had any formal science education. They were either political activists or environmental entrepreneurs. Ultimately, a trend toward abandoning scientific objectivity in favor of political agendas forced me to leave Greenpeace in 1986.

The breaking point was a Greenpeace decision to support a world-wide ban on chlorine. Science shows that adding chlorine to drinking water was the biggest advance in the history of public health, virtually eradicating water-borne diseases such as cholera. And the majority of our pharmaceuticals are based on chlorine chemistry. Simply put, chlorine is essential for our health.

My former colleagues ignored science and supported the ban, forcing my departure. Despite science concluding no known health risks - and ample benefits - from chlorine in drinking water, Greenpeace and other environmental groups have opposed its use for more than 20 years.

For the full commentary, see:

PATRICK MOORE. "Why I Left Greenpeace." The Wall Street Journal (Tues., April 22, 2008): A23.

April 21, 2009

An Intellectual Collaboration Beyond the Grave

There is something touchingly noble in this:

(p. 11) There is no direct evidence in the historical record, but it is entirely probable that it was the waterspout sighting that sent Priestley off on his quest to measure the temperature of the sea, trying to marshal supporting evidence for a passing conjecture his friend had made a decade before. Franklin had been dead for nearly four years, but their intellectual collaboration continued, undeterred by war, distance, even death.


Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

April 20, 2009

Houston Rejects Irrational Recycling Fad


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

(p. A13) HOUSTON -- While most large American cities have started ambitious recycling programs that have sharply reduced the amount of trash bound for landfills, Houston has not.

. . .

Landfill costs here are cheap. The city's sprawling, no-zoning layout makes collection expensive, and there is little public support for the kind of effort it takes to sort glass, paper and plastics. And there appears to be even less for placing fees on excess trash.

"We have an independent streak that rebels against mandates or anything that seems trendy or hyped up," said Mayor Bill White, . . .

For the full story, see:

ADAM B. ELLICK. "Houston Resists Recycling, and Independent Streak Is Cited." The Wall Street Journal (Tues., July 29, 2008): A13.

(Note: ellipses added.)

April 19, 2009

Why Disney Was a Better Artist than Picasso


Source of book image: http://ebooks-imgs.connect.com/ebooks/product/400/000/000/000/000/035/806/400000000000000035806_s4.jpg

(p. 275) The popularity of the creative arts, and the influence they exert, will depend ultimately on their quality and allure, on the delight and excitement they generate, and on demotic choices. Picasso set his faith against nature, and burrowed within himself. Disney worked with nature, stylizing it, anthropomorphizing it, and surrealizing it, but ultimately reinforcing it. That is why his ideas form so many powerful palimpsests in the visual vocabulary of the world in the early twenty-first century, and will continue to shine through, while the ideas of Picasso, powerful though they were for much of the twentieth century, will gradually fade and seem outmoded, as representational art returns to favor. In the end nature is the strongest force of all.


Johnson, Paul M. Creators: From Chaucer and Durer to Picasso and Disney. New York: HarperCollins, 2006.

(Note: I am grateful to John Devereux for telling me about Paul Johnson's views on Picasso and Disney.)

April 18, 2009

Economists Find TV Improved Children's Cognitive Ability


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

(p. A1) It didn't take long after America started tuning in to television that people started to worry about what it was doing to children. "When it offers a daily diet of Western pictures and vaudeville by the hour, television often seems destined to entertain the child into a state of mental paralysis," wrote The New York Times in 1949.

A generation later, the Scholastic Aptitude Test scores of college-bound teenagers had fallen significantly. A 1977 panel appointed by the College Entrance Examination Board suggested television bore some blame for the drop. Indeed, the decline began in the mid-1960s, just as the first students heavily exposed to TV took their SATs.

But University of Chicago Graduate School of Business economists Matthew Gentzkow and Jesse Shapiro aren't sure that TV has been all that bad for kids. In a paper published in the Quarterly Journal of Economics this year, they presented a series of analyses that showed that the advent of television might actually have had a positive effect on children's cognitive ability.

. . .

(p. A8) The economists . . . looked at results of a survey of 800 U.S. schools that administered tests to 346,662 sixth-grade, ninth-grade and 12th-grade students in 1965. Their finding: Adjusting for differences in household income, parents' educational background and other factors, children who lived in cities that gave them more exposure to television in early childhood performed better on the tests than those with less exposure.

The economists found that television was especially positive for children in households where English wasn't the primary language and parents' education level was lower. "We don't exactly know why that is, but a plausible interpretation is that the effect of television on cognitive development depends on what other kinds of activity television is substituting for," says Mr. Shapiro, 28.

For the full story, see:

JUSTIN LAHART. "A New View On TV; Economists Probe the Data on Television Watching And Find It's Not All Bad; Better Test Scores?" The Wall Street Journal (Sat., SEPTEMBER 6, 2008): A1 & A8.

(Note: ellipses added.)

If you are interesting in further reading that is in the same vein as the article above, consult:

Johnson, Steven. Everything Bad Is Good for You. New York: Riverhead Trade, 2006.

April 17, 2009

Coffee Facilitated the Age of Enlightenment

(p. 54) Coffee is a stimulant that has been clinically proven to improve cognitive function---particularly for memory-related tasks---during the first cup or two. Increase the amount of "smart" drugs flowing through individual brains, and the collective intelligence of the culture will become smarter, if enough people get hooked. Create enough caffeine-abusers in your society and you'll be statistically more likely to launch an Age of Reason. That may itself sound like the self-justifying fantasy of a longtime coffee-drinker, but to connect coffee plausibly to the Age of Enlightenment you have to consider the context of recreational drug abuse in seventeenth-century Europe. Coffee-drinkers are not necessarily smarter, in the long run, than those who abstain from caffeine. (Even if they are smarter for that first cup.) But when coffee originally arrived as a mass phenomenon in the mid-1600s,it was not seducing a culture of perfect sobriety. It was replacing alcohol as the daytime drug of choice. The historian Tom Standage writes in his ingenious A History of the World in Six Glasses:

The impact of the introduction of coffee into Europe during the seventeenth century was particularly noticeable since the most common beverages of the time, even at breakfast, were weak "small beer" and wine. . . . Those who drank coffee instead of alcohol began the day alert and stimulated, rather than relaxed and mildly inebriated, and the quality and quantity of work improved. . . . Western Europe began to emerge from an alcoholic haze that had lasted for centuries.


Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

(Note: ellipses in original.)

April 16, 2009

Unintended Consequences in Medicine

SalkInnoculatingSonAgainstPolio.jpg "Jonas Salk, right, inoculates his son against polio as his wife, left, looks on." Source of caption and photo: online version of the WSJ quoted and cited below.

(p. W9C) "The Polio Crusade" will stir many memories with its account of successful efforts to eradicate the disease whose fear factor, we're told, was second only to that of the atom bomb. (Monday 9-10 p.m. ET on PBS's "American Experience" series, but check local listings.) The documentary also tells less-familiar, and sometimes disturbing, stories about the birth of modern fund-raising techniques, and old testing techniques.

. . .

Since the virus is spread most effectively by mouth, or through contact with byproducts of the intestinal tract, the improved hygiene of the 20th century should have led to a decrease in polio infections. The opposite happened. First in Europe and then in America, a disease which had barely registered on the medical radar began to strike more and more people, culminating in a U.S. record of nearly 58,000 cases in 1952.

The explanation for this seemingly counterintuitive symbiosis between cleanliness and disease is astonishing, yet simple. In a germier age, newborns were likely to be exposed to the polio virus very early in life, when they still had immunity conferred by their mother in the womb. When improved hygiene pushed back the time of exposure to a later age, or even to adulthood, many people were by then defenseless.

For the full review, see:

NANCY DEWOLF SMITH. "TELEVISION; In a Time of Plague." The Wall Street Journal (Tues., JANUARY 30, 2009): W9C.

(Note: ellipsis added.)

April 15, 2009

Schramm Sees the Donor as the Only Real Stakeholder of a Foundation


Carl Schramm. Source of image: online version of the WSJ interview article quoted and cited below.

(p. A9) . . . who are the real stakeholders in foundations? Mr. Schramm can think of only one: the donor. "At Kauffman I think the trustees and I are very, very clear: We work for Mr. Kauffman," says Mr. Schramm, acknowledging that his boss passed away in 1993. Kauffman not only left extensive writings but also videotape of himself describing how he wanted the foundation to operate. Mr. Schramm says that one board member told him he was hired because he was the only candidate who had read Kauffman's book.

. . .

. . . within a year of taking over, Mr. Schramm began a serious overhaul of the foundation. He laid off about half of its 150-person staff and cut off funding to some of its biggest grantees, many in Kansas City. There was a public outcry from local nonprofits and from some former members of the board. One told the New York Times that "Carl doesn't seem to understand that there isn't an 'I' in team." It reached the point where Missouri's then attorney general, Jeremiah Nixon, launched an extensive investigation. He determined that Mr. Schramm had not led the foundation astray. What ultimately saved his job, says Mr. Schramm, were the detailed writings that Kauffman left before his death.

"What happened was not atypical in foundations. Often around 10 years after the death of the donor there's a moment of truth." People who were close to the donor will say, "Yes, he said that but he didn't mean that." Mr. Schramm concludes: "If there was one piece of advice I'd give to someone who was starting a foundation it is this: Think very, very hard of the long term and write down what you want your foundation to look like in 30 years or 40 years."

Despite the fact that the foundation's endowment has fallen by $722 million since the end of 2007, Mr. Schramm sees this as Kauffman's "moment." While "no one hopes for a recession," it's during economic crises that entrepreneurs "challenge companies that have gotten big and lazy." The downturn, he says, will even challenge Kauffman to "think about how we can do our work better, like every business." In fact, Mr. Schramm adds, "The only people immune from thinking hard in moments like this are in government."

For the full interview, see:

NAOMI SCHAEFER RILEY. "Opinion; THE WEEKEND INTERVIEW with Carl Schramm; Giving Capitalism Its Due." Wall Street Journal (Sat., APRIL 4, 2009): A9.

(Note: ellipses added.)

April 14, 2009

Steven Johnson's The Invention of Air


Source of book image: http://stevenberlinjohnson.typepad.com/photos/uncategorized/2008/09/10/invention_final_81908.jpg

Steven Johnson's The Ghost Map, about the determined entrepreneurial detective work that uncovered the cause of cholera, is one of my all-time favorite books, so I am now in the mode of reading everything else that Steven Johnson has written, or will write.

The most recent book, The Invention of Air, is not as spectacular as The Ghost Map, but is well-written on a thought-provoking topic. It focuses on Joseph Priestley's role in the American Revolution. Priestley is best known as an early chemist, but Johnson paints him as a poly-math whose science was of a piece with his philosophy, politics and his religion.

Johnson's broader point is that for many of the founding fathers, science was not a compartment of their lives, but part of the whole cloth (hey, it's my blog, so I can mix as many metaphors as I want to).

And the neat bottom line is that Priestley's method of science (and polity) is the same broadly empirical/experimental/entrepreneurial method that usually leads to truth and progress.

Along the way, Johnson makes many amusing and thought-provoking observations, such as the paragraphs devoted to his coffee-house theory of the enlightenment. (You see, coffee makes for clearer thinking than beer.)

The book:

Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

April 13, 2009

French Labor Holds Management Hostage---Literally

PolutnikNicolasFrenchHostage2009-04-10.jpg "French Caterpillar executive Nicolas Polutnik, center, with workers after his release Wednesday." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B1) PARIS -- Of the 22,000 workers Caterpillar Inc. plans to lay off this year, the French ones have perhaps the most radical tactic for negotiating their severance deals.

In an aggressive, and peculiarly French, negotiating strategy, they held their managers hostage. The workers detained the director of their plant and four other managers for about 24 hours this week. Workers released them only after the company agreed to resume talks with unions and a government mediator on how to improve compensation for workers who are being laid off.

. . .

Jérôme Pélisse, a sociologist, surveyed 3,000 companies in 2004 and found that 18 of them had experienced an executive detention in the prior three years.

For the full story, see:

DAVID GAUTHIER-VILLARS and LEILA ABBOUD. "In France, the Bosses Can Become Hostages." Wall Street Journal (Fri., APRIL 3, 2009): B1 & B5.

(Note: ellipsis added.)

April 12, 2009

Union Dynamited "True Industrial Freedom"


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

(p. A23) The turn-of-the-20th-century war of capital and labor is not even half-remembered now. But the glum slab of the Los Angeles Times building will remind anyone who cares to look. The antiunion rallying cry of "True Industrial Freedom" is carved deeply into its façade. Completed in 1935, the building is a cenotaph for the 21 nonunion pressmen and linotype operators who were blown up on an early October morning in 1910 and died in a storm of fire and collapsing masonry.

The dynamiting of the Los Angeles Times was, for Howard Blum in "American Lightning," the war's decisive engagement. After it, a national campaign of union-led terrorism was exposed; labor sympathizers who defended the bombers were proved to be gullible (if not dishonest); and the political force of American socialism was wrecked. Reputations were wrecked, too, principally that of Clarence Darrow, who was then a renowned labor lawyer.

. . .

In 1910, Los Angeles was a young boomtown aching for water and respectability. To the owner of the Los Angeles Times, Harrison Gray Otis, respectability included making sure that the city was uninfested by union labor. It was an era of deep enmity and suspicion between business and labor, when it was not uncommon for strikes to end in riots and death. Otis and the Times preached the open shop with such vehemence that it was almost inevitable that they would become targets of prounion wrath.

The dynamite conspiracy unraveled when a second, unexploded bomb in Los Angeles was found to match another bomb discovered a month earlier by a Burns operative in a rail yard in Peoria, Ill. Burns tied the evidence to a campaign of terror against the National Erectors Association, a union-busting alliance of builders. The target of the association's animus was the union shop in general and the Structural Iron Workers Union in particular. John McNamara was the union's secretary-treasurer. His brother James was a union agent. Their weapons against the association and its allies were nitroglycerine and dynamite.

For the full review, see:

D.J. WALDIE. "Bookshelf; Dynamite and Deadlines." The Wall Street Journal (Tues., SEPTEMBER 16, 2008): A23.

(Note: ellipsis added.)

The reference to the book under review, is:

Blum, Howard. American Lightning. New York: Crown Publishers, 2008.

April 11, 2009

FDR's "Mucking About in the Economy Crowded Out Private Investment"


"Men lining up for free dinner in New York in the early days of the Great Depression." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C1) In this interpretation Roosevelt is a well-meaning but misguided dupe who not only prolonged the Depression but also exacerbated it.

. . .

Amity Shlaes, a syndicated columnist who works at the Council on Foreign Relations, helped ignite this latest revisionist spurt with her 2007 book, "The Forgotten Man: A New History of the Great Depression."

"The deepest problem was the intervention, the lack of faith in the marketplace," she wrote, lumping Herbert Hoover and Roosevelt together as overzealous government meddlers.

. . .

(p. C7) Nonetheless, they argue that most of his mucking about in the economy crowded out private investment and antagonized the business world, and thus delayed recovery.

Unemployment remained high throughout the decade until World War II, Ms. Shlaes told conference attendees, because the uncertainty created by Roosevelt's continual tinkering paralyzed private investors.

When the federal government keeps changing the rules, it's like having Darth Vader in control, John H. Cochrane, a professor of finance at the University of Chicago Booth School of Business, said during a panel. "I have changed the deal," he intoned like Vader, the "Star Wars" villain. "Pray I don't change it any further."

. . .

"No episode in American history has been so misinterpreted as the Great Depression," declared Richard K. Vedder, an economist at Ohio University. By artificially keeping prices and wages high, he argued, both Hoover and Roosevelt prevented the economy from adjusting, which is why unemployment remained in double digits until the United States entered the war.

Anna Schwartz, who collaborated with Milton Friedman on a classic study of the Depression, and the Nobel Prize winner Robert E. Lucas Jr. argued that the idea of stimulating the economy with federal spending is a fairy tale. Government spending just crowds out private investment, they asserted; the money supply is the only thing that matters.

. . .

At the final panel, a questioner asked at what point on the 1930s timeline is the United States right now.

. . .

To Ms. Shlaes, the best analogy is 1937 -- "the depression within the Depression" -- when the unemployment rate shot back up to the middle and high teens after falling. "The economy wanted to recover," she said, but the government's interventions ended up paralyzing the business world.

. . .

Mr. Vedder playfully offered another analogy: the recession of 1920. Why was that slump, over and done with by 1922, so much shorter than the following decade's? Well, for starters, he said, President Woodrow Wilson suffered an incapacitating stroke at the end of 1919, while his successor, Warren G. Harding, universally considered one of the worst presidents in American history, preferred drinking, playing poker and golf, and womanizing, to governing. "So nothing happened," Mr. Vedder said.

Of course Mr. Vedder does not wish ill health -- or obliviousness -- on any chief executive. Still, in his view, when you're talking about government intervention in the economy, doing nothing is about the best you can hope for from any president.

For the full story, see:

PATRICIA COHEN. "New Deal Revisionism: Theories Collide." The New York Times (Sat., April 3, 2009): C1 & C7

(Note: ellipses added.)

The full reference on on Shlaes' excellent book, is:

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

April 10, 2009

Instead of Government Money, Benson "Just Wanted the Opportunity to Compete"


"Jim Benson" Source of caption and photo: online version of the WSJ obituary quoted and cited below.

(p. A10) "A number of people had told me they wanted to start space businesses," Mr. Huntress says, "but they always wanted government money. Jim said he didn't want any government money. He just wanted the opportunity to compete. That got my attention."

Mr. Benson, who died Oct. 10 at age 63 of a brain tumor, put it directly: "If we're going to space to stay, space has to pay."

He thought he'd found a business model. "We offer FedEx-like package delivery rides," he proclaimed in 1999. He imagined getting customers like NASA itself and the armed forces, as well as scientists and industry. Always looking for an angle, he also envisioned a more terrestrial use for his rockets: sending a package from San Jose, Calif., to Taipei in 20 minutes.

With organizational ability he developed at software start-ups in the 1980s, Mr. Benson assembled a team of mostly young engineers plus some NASA veterans and set to work. To avoid high development costs, he used off-the-shelf technologies and designs. He quickly landed several contracts, including one from the University of California at Berkeley for ChipSat, a small satellite built for carrying scientific instruments to study interstellar gas. It cost $7 million to build -- peanuts in space bucks -- and has continued to function since its 2003 launch.

For the full obituary, see:

STEPHEN MILLER. "REMEMBRANCES; Jim Benson (1945 - 2008); Rocket Man Ran a Proper Business, But Loftiest Plans Were Ill-Starred." The Wall Street Journal (Sat., OCTOBER 18, 2008): A10.

April 9, 2009

How Ayn Rand Matters Today

(p. A7) Ayn Rand died more than a quarter of a century ago, yet her name appears regularly in discussions of our current economic turmoil. Pundits including Rush Limbaugh and Rick Santelli urge listeners to read her books, and her magnum opus, "Atlas Shrugged," is selling at a faster rate today than at any time during its 51-year history.

. . .

Rand . . . noted that only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism -- and that so long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention -- and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.

Rand offered us a way out -- to fight for a morality of rational self-interest, and for capitalism, the system which is its expression. And that is the source of her relevance today.

For the full commentary, see:

YARON BROOK. "Is Rand Relevant?" Wall Street Journal (Sat., MARCH 14, 2009): A7.

(Note: ellipses added.)

April 8, 2009

"The Vast Inefficiencies of Public Sector Airports"

MidwayAirport2009-02-15.jpg "One aviation expert said the Midway deal was a way to overcome inefficiencies of public airports." Source of caption and photo: online version of the NYT article quoted and cited.

(p. A16) CHICAGO -- Midway Airport is poised to become the first large privately run hub airport in the country, officials said Tuesday, after an investment group bid $2.52 billion to win rights to a long-term lease.

. . .

An aviation expert at the Brookings Institution, Clifford Winston, said he saw the deal's attractiveness as helping to overcome "the vast inefficiencies of public sector airports."

"The Midway experiment is important," Mr. Winston said, "but it's only a tiny step."

For the full story, see:

SUSAN SAULNY. "In Chicago, Private Firm Is to Run Midway Airport." The New York Times (Weds., October 1, 2008): A16.

(Note: ellipsis added.)

April 7, 2009

Entrepreneurs Are the Main Source of Economic Growth

(p. 144) The reason the system of capitalism without capitalists is failing throughout most of Europe is that it misconceives the essential nature of growth. Poring over huge aggregations of economic data, economists see the rise to wealth as a slow upward climb achieved through the marginal productivity gains of millions of workers, through the slow accumulation of plant and machinery, and through the continued improvement of "human capital" by advances in education, training, and health. But, in fact, all these sources of growth are dwarfed by the role of entrepreneurs launching new companies based on new concepts or technologies. These gains generate the wealth that finances the welfare state, that makes possible the long-term investments in human capital that are often seen as the primary source of growth.


Gilder, George. The Spirit of Enterprise. 1 ed. New York: Simon and Schuster, 1984.

April 6, 2009

Experiments on Animal Genes Enthuses Longevity Researchers


"Charles Yogi, 89, a track & field athlete, is part of the Hawaii Lifespan Study." Source of caption and photo: online version of the WSJ story quoted and cited below.

(p. A18) Based on animal experiments, gerontologists believe that one key to a healthy, longer lifespan may be found in a few master genes that affect cellular responses to famine, drought and other survival stresses. The more active these genes are, the longer an organism seems to survive -- at least in the laboratory. Moreover, researchers are convinced that some genes may protect us against the risks of heart disease, diabetes, cancer and dementia.

. . .

Recent insights into the genetics of aging among simple organisms are stoking their enthusiasm. In January, for example, gerontologist Valter Longo at the University of Southern California reported that by altering two genes he made yeast that lived 10 times longer than normal. "We can really reprogram the lifespan of these organisms," he said. In March, scientists at the University of Washington identified 15 genes regulating lifespan in yeast and worms that resemble genes found in humans. At least three companies are working independently on potential therapies based on the discovery that life span in mammals may be regulated partly by genetically controlled enzymes called sirtuins.

For the full story, see:

ROBERT LEE HOTZ. "Secrets of the 'Wellderly'; Scientists Hope to Crack the Genetic Code of Those Who Live the Longest." The Wall Street Journal (Fri., SEPTEMBER 19, 2008): A18.

(Note: ellipsis added.)

April 5, 2009

New Orleans Was and Will Be: "Disorganized, Impoverished, Violent, Screwed Up, Corrupt"

Dan Baum's book has received some positive reviews, and sounds appealing. He admits to being a "partisan" of New Orleans, but note that even he knows that New Orleans' problems are primarily due to the people and institutions of New Orleans, and not primarily due to the weather or to George W. Bush.

Widely celebrated as one of those outsiders who gets New Orleans, the writer Dan Baum appeared at Octavia Books Tuesday night and found himself having to account for disparaging remarks he'd made about the city days before.

The crowd was at the bookstore to celebrate Baum's book, "Nine Lives: Death and Life in New Orleans," a book drawing lots of attention for its compassionate portrayal of New Orleans through the lives of nine residents chosen by the author.

But before much could be said about the book, Baum was asked about an interview that had been broadcast on NPR Marketplace. He had said so many good things about the city that host Kai Ryssdal asked him, "Do you worry that maybe you've been too captivated by New Orleans to see the destruction?"

Baum answered, "I'm a partisan. I'll admit it. I love the city. People ask me, 'What's going to happen to New Orleans?' And I say, look, you know I think that in 10 or 15 years New Orleans will be the disorganized, impoverished, violent, screwed up, corrupt city it was before the storm and that's really the way they want it."

Source is online version of:

"Author's gaffe hurts the ones he loves." Posted by Jarvis DeBerry, Columnist, The Times-Picayune February 22, 2009 1:00AM

April 4, 2009

Myhrvold Claims His Patent Purchases Benefit Small-Time Inventors

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

(p. A1) Millionaire Nathan Myhrvold, renowned in the computer industry as a Renaissance man, has a less lofty message for tech companies these days: Pay up.

Over the past few years, the former Microsoft Corp. executive has quietly amassed a trove of 20,000-plus patents and patent applications related to everything from lasers to computer chips. He now ranks among the world's largest patent-holders -- and is using that clout to press tech giants to sign some of the costliest patent-licensing deals ever negotiated.

. . .

(p. A21) Mr. Myhrvold says the fact he doesn't make actual products is irrelevant. He stresses that Intellectual Ventures helps small-time inventors by providing them with an aggressive buyer to sell their patents to.

Intellectual Ventures, which has about $5 billion under management, bears some similarities to a private-equity firm that operates investment funds for the benefit of investors. However, its largest fund has an unusual structure in which fund investors are also responsible for the lion's share of the fund's returns.

It works like this: Technology companies agree to pay patent-licensing fees to inoculate themselves against potential lawsuits by Intellectual Ventures. These fees are how the fund generates its returns. As part of the deal, though, these same companies also put up the cash Mr. Myhrvold uses to buy more patents, receiving an equity stake in the fund in return.

For the full story, see:

AMOL SHARMA and DON CLARK. "Tech Guru Riles the Industry By Seeking Huge Patent Fees." The Wall Street Journal (Weds., SEPTEMBER 17, 2008): A1 & A21.

(Note: ellipsis added.)


"Nathan Myhrvold's message for tech firms: Pay up." Source of caption and photo: online version of the WSJ article quoted and cited above.

April 3, 2009

"Capitalism without Capitalists"

(p. 131) . . . suffusing all the most visionary and idealistic prose of leftist economics is the same essential dream of the same static and technocratic destiny: capitalism without capitalists. Wealth without the rich, choice without too many things to choose, political and intellectual freedom without a vulgarian welter of individual money and goods, a social revolution every week or so without all this disruptive enterprise.


Gilder, George. The Spirit of Enterprise. 1 ed. New York: Simon and Schuster, 1984.

(Note: ellipsis added.)

April 2, 2009

Did Bourgeois Victorians, or Bloomsbury Rebels, Treat Servants Better?


Source of book image: http://images.barnesandnoble.com/images/27400000/27406153.jpg

(p. W14) Like Lytton Strachey, John Maynard Keynes and others in the Bloomsbury group, Woolf came from a well-to-do Victorian family living in a large house. When her family woke in the morning, the fires were already lit; while the family was out, the house was cleaned; when the family members arrived home, dinner was served. Part of Woolf's rebellion against her patrimony was trying to free herself from the limitations placed on the education of women, on their sexual freedom, on their earning power. But another part, as Ms. Light reminds us, was trying to free herself from the strictures of a bourgeois household. As soon as possible, Virginia and her sister, Vanessa, wore simpler clothes, refused to change for dinner, had slighter meals at irregular times and rejoiced in clutter.

It's not easy so to escape one's class, however. When the daughters of Leslie and Julia Stephen left home after their father's death in 1904, they took the household cook with them. And though they pursued busy bohemian lives thereafter -- routinely challenging the legacy of Victorian propriety even as they married and set up households of their own -- they preserved at least one assumption of privilege: They always had servants, whom they often passed around among themselves as their own needs and desires changed.

One of the ironies that emerges from Ms. Light's book is that Woolf's mother, a product of the Victorian age, treated her servants with both dignity and affection, and they were in turn devoted to her. Anybody who has read in Woolf's diaries and letters, however, knows that she can be a dreadful snob, and worse. The shocking extent of her acrimonious journal entries about Nellie Boxall, her cook of 18 years -- a "mongrel" and "rubbish," according to Woolf -- partly inspired Ms. Light's book.

For the full review, see:

ALEXANDRA MULLEN. "BOOKS; Review; The Brooms of Bloomsbury." The Wall Street Journal (Sat., SEPTEMBER 13, 2008): W14.

The book under review, see:

Light, Alison. Mrs. Woolf and the Servants. Bloomsbury Press, 2008.

April 1, 2009

No Fooling: Government Plants Dead Trees

(p. A25) Years ago, when I was a reporter, I remember getting a call from a woman in the Bronx who was screaming: "They're over on Moshulu Parkway planting dead trees!"

A city work crew was, sure enough, digging holes along the side of the street and carefully sticking in brown and dried-up pieces of foliage. The men claimed the trees had simply lost their leaves for the winter -- an explanation somewhat undermined by the fact that they were evergreens.

I'm telling you this because on Tuesday I was talking with a high-ranking Obama administration official about the stimulus plan. "There will be a dead tree planted, figuratively speaking," he said somberly. "That will happen."

For the full commentary, see:

GAIL COLLINS. "The Dead Tree Theory." The New York Times (Thurs., February 25, 2009): A25.

(Note: the online version is dated Feb. 26, and has some substantial differences from the midwest print edition version I have, though there are only minor differences in the brief passages quoted above, which agree with my print copy.)


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