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April 30, 2010

FDR's NRA Price-Fixing Helped Big Firms "Ruin" Little Firms

(p. 50) Among those damaged was Carl Pharis, the general manager of Pharis Tire and Rubber Company in Newark, Ohio. Pharis employed over one thousand people, mainly in the Newark area. His company grew because, in Pharis's words, "we would make the best possible rubber tire and sell it at the lowest price consistent with a modest but safe profit." He and his employees had survived the grim Great Depression years because they had lower prices, a good tire, and solid support in central Ohio from buyers who knew the company because it was local and because it priced its tires lower than the larger firms. As Pharis said, "It is obvious that they cannot make as good a tire as we make and sell it at the price at which we can sell at a profit:"

Then came the NRA with its high fixed prices for tires. As Pharis said, "Since the industry began to formulate a Code under the N. R. A., in June, 1933, we have at all times opposed any form of price-fixing. We believe it to be illegal and we know it to be oppressive." He added, "We quite understand that, if we were compelled to sell our tires at exactly the same price as they sell their tires, their great national consumer acceptance would soon capture our purchasers and ruin us. Since we have so little of this consumer publicity when compared with them, our only hope is in our ability (p. 51) to make as good or a better tire than they make and to sell it at a less[er] price. . . . "

Since Pharis and other small companies were no longer allowed to sell tires at discounted rates, Goodyear and Firestone "could go out just as they have gone out," Pharis noted, "and say to prospective customers that, since they had to pay the same price, it would be wiser if they bought the nationally advertised lines."

In a nutshell, Pharis put it this way: "The Government deliberately raised our prices up towards the prices at which the big companies wanted to sell, at which they could make a profit, . . . where more easily, with much less loss, they could come down and 'get us' and where, bound by N. R. A. decrees, we could not use lower prices, although we could have lowered them and still made a decent profit."

Pharis was on the verge of closing down and having to lay off all of his one thousand employees. His company, with its low prices and quality tires, could weather the Great Depression, but not the NRA. "If we were asking favors from the Government," Pharis concluded, "there would be little justice in our complaints. . . . And so, if the big fellows, with their too-heavy investments and high costs of manufacturing and selling, cannot successfully compete with us little fellows without Government aid, they should quit."


Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.

(Note: ellipses in original.)

April 29, 2010

New York City Would Creatively Adapt to Global Warming

NewYorkWaterfrontNewLandscape2010-04-26.jpg "Rising Currents: Projects for New York's Waterfront In this MoMA show, a model by Architecture Research Office marries a wholly new landscape to Lower Manhattan's streets." Source of caption and photo: online version of the NYT article quoted and cited below.

Much is in doubt about "global warming" including how much the globe will warm, and how fast, to what extent the benefits of global warming would balance the costs, and what actions (such as Nathan Myhrvold's creative plan) might be taken to counteract global warming.

But one certainty is that if governments leave innovative entrepreneurial capitalism alone, human creativity will find ways to adapt in order to increase the benefits and reduce the costs.

Few cities have displayed as much creative destruction in architecture as New York. (One book on New York architecture was even called The Creative Destruction of Manhattan"). The article quoted below describes some visions of how New York City might adapt to an increase in sea level that might result from global warming.

(p. C21) "Rising Currents: Projects for New York's Waterfront," a new show at the Museum of Modern Art, reflects a level of apocalyptic thinking about this city that we haven't seen since it was at the edge of financial collapse in the 1970s, a time when muggers roamed freely, and graffiti covered everything.

Organized by Barry Bergdoll, the Modern's curator of architecture and design, the show is a response to the effects that rising sea levels are expected to have on New York City and parts of New Jersey over the next 70 or so years, according to government studies. The solutions it proposes are impressively imaginative, ranging from spongelike sidewalks to housing projects suspended over water to transforming the Gowanus Canal into an oyster hatchery.

. . .

(p. C23) A general interest in re-examining parts of the urban fabric that we take for granted, like streets, piers and canals -- as opposed to the more familiar desire to create striking visual objects -- is one of the main strengths of the exhibition. A team led by Matthew Baird Architects, for example, has focused on a huge oil refinery in Bayonne, N.J., that, if current estimates hold, will be entirely under water before our toddlers have hit retirement age. Rather than taking the predictable and bland route of transforming the industrial site into a park, the team proposes a system of piers that would support bio-fuel and recycling plants, including one that would produce the building blocks for artificial reefs out of recycled glass.

Those large, multipronged objects, which the architects call "jacks," could be dumped off boats in strategically chosen locations, where their forms would naturally interlock to create artificial reefs once they settled at the bottom of the harbor. The jacks are magical objects, at once tough and delicate, and when you see examples of them from across the room at MoMA, their heavy legs and crushed glass surfaces make them look almost like buildings.

But here again, what's really commendable about the design is the desire to look deeper into how systems -- in this case, global systems, both natural and economic -- work. According to Mr. Baird's research, the melting of the ice cap could one day create a northern shipping passage that would make New York Harbor virtually obsolete. The manufacturing component of the design is meant as part of a broader realignment of the city's economy that anticipates that shift.

For the full story, see:

NICOLAI OUROUSSOFF. "Architecture Review; The Future: A More Watery New York." The New York Times (Fri., March 26, 2010): C21 & C23.

(Note: ellipsis added.)

(Note: The online version of the article is dated March 25, 2010 and has the title "Architecture Review; 'Rising Currents: Projects for New York's Waterfront'; Imagining a More Watery New York.")

The book I mention in my comments is:

Page, Max. The Creative Destruction of Manhattan, 1900-1940. Chicago: University of Chicago Press, 2000.

April 28, 2010

Government Quotas Raise U.S. Sugar Price from 17 Cents a Pound to 31 Cents a Pound

Every semester in my principles of microeconomics course, I show the students a wonderful old 60 Minutes segment on the U.S. government's sugar quotas program. I tell them, alas, that the policy is still the same. Below is recent evidence:

(p. C1) . . . , U.S. sugar farmers have successfully blocked efforts to significantly increase imports, assuring them of little price competition.

Restrictions on imports have caused American users to pay much more than the rest of the world for sugar. That gap recently blew out to its widest in a decade.

Mr. Vilsack's comments raised the prospect of increased demand for global sugar and drove prices up 2.7%, or 0.44 cent, to 16.98 cents a pound on ICE Futures U.S. Prices for U.S. domestic sugar dropped 2.1%, to 30.8 cents a pound. That narrowed the gap between the two to 13.82 cents a pound.

For the full story, see:

CAROLYN CUI and BILL TOMSON , ILAN BRAT. "USDA Says It May Relax Sugar Quotas For This Year." The Wall Street Journal (Weds., APRIL 14, 2010): C1 & C2.

(Note: ellipsis added.)

(Note: the title of the online version of the article is "USDA Says It May Relax Sugar Quotas.")

April 27, 2010

Technology Can Enable the Disabled

JonesEricProstheticFingers2010-04-26.jpg"Eric P. Jones demonstrating his new prosthetic fingers. They have helped him master movements other people take for granted, like pouring soda into a cup." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 4) ERIC JONES sat in a middle seat on a recent flight from the New York area to Florida, but he wasn't complaining. Instead, he was quietly enjoying actions that many other people might take for granted, like taking a cup of coffee from the flight attendant or changing the channel on his video monitor.

These simple movements were lost to Mr. Jones when the fingers and thumb on his right hand were amputated three years ago. But now he has a prosthetic replacement: a set of motorized digits that can clasp cans, flimsy plastic water bottles or even thin slips of paper.

"Pouring a can of soda into a cup -- that is a mundane daily action for most people, but to me it is a very big deal," said Mr. Jones, who lives with his family in Mamaroneck, N.Y. "I slip my bionic fingers on like a glove, and then I have five moveable fingers to grasp things. It's wonderful to have regained these functions."

Mr. Jones's prosthesis, called ProDigits, is made by Touch Bionics in Livingston, Scotland. The device can replace any or all fingers on a hand; each replacement digit has a tiny motor and gear box mounted at the base. Movement is controlled by a computer chip in the prosthesis.

For the full story, see:

ANNE EISENBERG. "Novelties; Grabbing Gracefully, With Replacement Fingers." The New York Times, SundayBusiness Section (Sun., April 9, 2010): 4.

(Note: ellipses added.)

April 26, 2010

Much of the Value of "Chinese" Imports is Added Outside of China

(p. A17) In a 2006 paper, Stanford University economist Lawrence Lau found that Chinese value-added accounted for about 37% of the total value of U.S. imports from China. In 2008, using a different methodology, U.S. International Trade Commission economist Robert Koopman, along with economists Zhi Wang and Shang-jin Wei, found the figure to be closer to 50%. In other words, despite all the hand-wringing about the value of imports from China, one-half to nearly two thirds of that value is not even Chinese. Instead, it reflects the efforts of workers and capital in other countries, including the U.S. In overstating Chinese value by 100% to 200%, the official U.S. import statistics are a poor proxy for job loss.

Seldom noted in the union-controlled discussion of trade on Capitol Hill is that the jobs of large numbers of American workers depend on imports from China. The proliferation of transnational production and supply chains has joined higher-value-added U.S. manufacturing, design, and R&D activities with lower-value manufacturing and assembly operations in China.

According to a widely cited 2007 study by Greg Linden, Kenneth L. Kraemer and Jason Dedrick of the University of California, Irvine, each Apple iPod costs $150 to produce. But only about $4 of that cost is Chinese value-added. Most of the value comes from components made in other countries, including the U.S. Yet when those iPods are imported from China, where they are snapped together, the full $150 is counted as an import from China, adding to the trade deficit and inflating EPI's job-loss figures.

In reality, those imported iPods support thousands of U.S. jobs up the value chain--in engineering, design, finance, manufacturing, marketing, distribution, retail and elsewhere. A 25% tariff on imports from China would penalize the non-Chinese companies and workers who create most of the iPod's value.

For the full commentary, see:

DANIEL IKENSON. "China Trade and American Jobs; Studies suggest that one-half to two-thirds of the value of 'Chinese' imports is added in other countries, including the U.S." The Wall Street Journal (Fri., APRIL 2, 2010): A17.

April 25, 2010

Folsom Shows How FDR Lied, Bought Votes and Deepened the Depression


Source of book image: http://mises.org/misesreview_detail.aspx?control=347

FDR has never been one of my heroes. But in the last few years, I have read two books that have revealed him to have been much worse than I expected. In earlier posts, I have praised Amity Shlaes' The Forgotten Man.

Here I praise Burt Folsom's New Deal or Raw Deal?

Folsom documents how the economic policies of Roosevelt lengthened and deepened the Great Depression.

But what I think I will remember most about the book, is the example after example of how FDR lied to both friend and foe; and the example after example of how FDR used government spending programs to buy votes.

I found this book very unpleasant. Rather than listen to another chapter in the car, I sometimes found myself playing music.

But we need to read this book. We need to know what really happened, so we can guard against it happening again.

In the next few weeks, I will quote a few of the more memorable and significant passages in Folsom's book.

Book discussed:

Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.

April 24, 2010

Liberal Democrat Hesburgh Condems Obama Administration's Killing School Vouchers

My Chicago professor Milton Friedman proposed educational vouchers in Capitalism and Freedom, a great book based on lectures that Friedman delivered several decades ago at Wabash College at the invitation of my first economics professor, Ben Rogge.

Friedman's belief was that parents generally care about their children, and will seek a good education for them, if provided the means to choose among credible alternatives.

Special interests are arrayed against this idea, but that does not mean that Friedman was wrong.

Another distinguished educator who supports vouchers (see below) is Father Hesburgh, who for many years was President of Notre Dame in my hometown of South Bend, Indiana.

(p. A19) If Martin Luther King Jr. told me once, he told me a hundred times that the key to solving our country's race problem is plain as day: Find decent schools for our kids. So I was especially heartened to hear Education Secretary Arne Duncan repeatedly call education the "civil rights issue of our generation." Millions of our children--disproportionately poor and minority--remain trapped in failing public schools that condemn them to lives on the fringe of the American Dream.

. . .

. . . , I was deeply disappointed when Sen. Richard Durbin (D., Ill.) successfully inserted a provision in last year's omnibus spending bill that ended one of the best efforts to give these struggling children the chance to attend a safe and decent school.

That effort is called the Opportunity Scholarship program. Since 2004 it has allowed thousands of children in Washington, D.C., to escape one of the worst public school systems in the nation by providing them with scholarships of up to $7,500.

Despite its successes, it is now closing down. On Tuesday the Senate voted against a measure introduced by Sen. Joseph Lieberman (I., Conn.) that would have extended the program. Throughout this process Mr. Duncan's Education Department and the White House raised no protest.

. . .

I know that some consider voucher programs such as the Opportunity Scholarships a right-wing affair. I do not accept that label. This program was passed with the bipartisan support of a Republican president and Democratic mayor. The children it serves are neither Republican nor Democrat, liberal or conservative. They are the future of our nation, and they deserve better from our nation's leaders.

I have devoted my life to equal opportunity for all Americans, regardless of skin color. I don't pretend that this one program is the answer to all the injustices in our education system. But it is hard to see why a program that has proved successful shouldn't have the support of our lawmakers. The end of Opportunity Scholarships represents more than the demise of a relatively small federal program. It will help write the end of more than a half-century of quality education at Catholic schools serving some of the most at-risk African-American children in the District.

I cannot believe that a Democratic administration will let this injustice stand.

For the full commentary, see:

THEODORE M. HESBURGH. "A Setback for Educational Civil Rights; I cannot believe that a Democratic administration will let this injustice of killing D.C. vouchers stand." The Wall Street Journal (Thurs., MARCH 18, 2010): A19.

(Note: ellipses added.)

(Note: the online version of the article was dated MARCH 17, 2010.)

Reference to the Friedman book mentioned above:

Friedman, Milton. Capitalism and Freedom. Chicago: The University of Chicago Press, 1962.

April 23, 2010

April 22nd Was Tenth Anniversary of Democrats' Infamous Betrayal of Elian Gonzalez

GonzalezElianSeizedOn2000-04-22.jpg"In this April 22, 2000 file photo, Elian Gonzalez is held in a closet by Donato Dalrymple, one of the two men who rescued the boy from the ocean, right, as government officials search the home of Lazaro Gonzalez, early Saturday morning, April 22, 2000, in Miami. Armed federal agents seized Elian Gonzalez from the home of his Miami relatives before dawn Saturday, firing tear gas into an angry crowd as they left the scene with the weeping 6-year-old boy." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.

Yesterday (April 22, 2010) was the tenth anniversary of one of the darkest days in American history---when the Clinton Administration seized a six year old child in order to force him back into the slavery that his mother had died trying to escape.

(p. 7A) MIAMI (AP) - When federal agents stormed a home in the Little Havana community, snatched Elian Gonzalez from his father's relatives and put him on a path back to his father in Cuba, thousands of Cuban-Americans took to Miami's streets. Their anger helped give George W. Bush the White House months later and simmered long after that.

. . .

Elian was just shy of his sixth birthday when a fisherman found him floating in an inner tube in the waters off Fort Lauderdale on Thanksgiving 1999. His mother and others drowned trying to reach the U.S.

Elian's father, who was separated from his mother, remained in Cuba, where he and Fidel Castro's communist government demanded the boy's return.

Elian was placed in the home of his great-uncle, Lazaro Gonzalez, while the Miami relatives and other Cuban exiles went to court to fight an order by U.S. immigration officials to return him to Cuba. Janet Reno, President Bill Clinton's attorney general and a Miami native, insisted the boy belonged with his father.

When talks broke down, she ordered the raid carried out April 22, 2000, the day before Easter. Her then-deputy, current U.S. Attorney General Eric Holder, has said she wept after giving the order.

Associated Press photographer Alan Diaz captured Donato Dalrymple, the fisherman who had found the boy, backing into a bedroom closet with a terrified Elian in his arms as an immigration agent in tactical gear inches away aimed his gun toward them. The image won the Pulitzer Prize and brought criticism of the Justice Department to a frenzy.

. . .

The Cuban government, which tightly controls media access to Elian and his father, said neither is willing to give an interview. A government representative agreed to forward written questions from the AP to Elian, but there has been no response.

Pepe Hernandez, president of the Cuban American National Foundation, said his group predicted in 2000 that Elian would become a prop for the Castro government if he were returned. It was one reason, he said, the group fought for him to be kept in the U.S. and would do it again today, although behind the scenes to avoid negative publicity for the Cuban-American community.

"We knew what this kid was going to be subjected to," Hernandez said. "And time has proven us right."

For the full story, see:

JENNIFER KAY and MATT SEDENSKY. "10 years later, few stirred by Elian Gonzalez saga." Omaha World-Herald (Thurs., April 22, 2010): 7A.

(Note: ellipses added.)

(Note: the online version of the article is dated April 21, 2010 and has the title "10 years after Elian, US players mum or moving on.")

April 22, 2010

"By Far the Greatest Pollution Crisis the Earth Has Ever Endured"

(p. 79) While oxygen is the third most common element in the universe, we know that free oxygen was exceedingly rare in the Earth's initial atmosphere, until roughly two billion years ago, when an ancestor of modern cyanobacteria hit upon a photosynthetic process that used the energy from the sun to extract hydrogen from the abundant supply of water on the planet. That metabolic strategy was spectacularly successful--the organism quickly covered the surface of the planet--but it had a pollution problem: it expelled free oxygen as a waste product. During this period, now known as the Proterozoic, the oxygen content of the atmosphere exploded from 0.0001 percent to 3 percent, beginning its long march to the current levels of 21 percent. (Even today, Earth's atmosphere is actually dominated by nitrogen, which makes up 78 percent of its overall volume: other gases. like argon and carbon dioxide, constitute less than a single percent.) The massive increase of oxygen in the atmosphere triggered what has been called "by far the greatest pollution crisis the earth has ever endured," destroying countless microbes for whom the cocktail of sunlight and oxygen was deadly.

In time, though, organisms evolved that thrived in an oxygen-heavy environment. We are their descendants.


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

April 21, 2010

Genetically Modified Crops Provide Benefits, Scientists Say

GeneticallyModifiedCornSeed2010-04-19.jpg"A Missouri corn and soybean farmer with a sample of BioTech seed corn." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B3) The report is described as the first comprehensive assessment of the impact of genetically modified crops on American farmers, who have rapidly adopted them since their introduction in 1996. The study was issued by the National Research Council, which is affiliated with the National Academy of Sciences and provides advice to the nation under a Congressional charter.

The report found that the crops allowed farmers to either reduce chemical spraying or to use less harmful chemicals. The crops also had lower production costs, higher output or extra convenience, benefits that generally outweighed the higher costs of the engineered seeds.

"That's a long and impressive list of benefits these crops can provide, and have provided to adopting farmers," David E. Ervin, the chairman of the committee that wrote the report, said on Tuesday during a webcast news conference from Washington.

For the full story, see:

ANDREW POLLACK. "Study Finds Benefits of Genetically Modified Crops But Warns of Overuse." The New York Times (Thurs., April 14, 2010): B3.

(Note: the online version of the article was dated April 13, 2010 and has the very different title "Study Says Overuse Threatens Gains From Modified Crops.")

April 20, 2010

"We Don't Lie Out Here; We Just Remember Big"

(p. W11) Americans love a winner and they remember what they want to remember, and so let us now remember the Central Overland California & Pike's Peak Express Co.--known from the day it began 150 years ago on April 3, 1860, as the Pony Express.

We remember the Pony Express as one of the most enduring and endearing of American stories, a tale of the frontier, a story of bold entrepreneurs, daring young horsemen, true riders of the purple sage and all that. In truth, the venture hemorrhaged money from day one, was doomed by technology (another particularly American story), lasted a mere 78 weeks, ruined its backers and then disappeared into what historian Bernard DeVoto called "the border land of fable." Across the wide Missouri, fact and fantasy collided and the Pony Express became "a tale of truth, half-truth and no truth at all," as another historian observed.

. . .

The service was shut down in the flash of a telegrapher's key when the transcontinental telegraph was completed in October 1861. The records of the business, if there were any records, were lost. That would prove liberating for later chroniclers.

. . .

If the Pony Express continues to thrill and baffle us, consider the words of an old horseman in western Nebraska who advised me when I expressed some concerns about the pedigree of this yarn. "We don't lie out here," he explained kindly. "We just remember big."

For the full commentary, see:

CHRISTOPHER CORBETT. "Real (and Fake) Hoofbeats of the Pony Express." The Wall Street Journal (Fri., APRIL 2, 2010): W11.

(Note: ellipses added.)

April 19, 2010

Underwater Power Cables Maximize Profits and Improve Environment

TransBayCableSanFrancisco2010-04-17.jpg"Laying line in San Francisco for the Trans Bay Cable project, which submerged 33 miles of cable." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) Generating 20 percent of America's electricity with wind, as recent studies proposed, would require building up to 22,000 miles of new high-voltage transmission lines. But the huge towers and unsightly tree-cutting that these projects require have provoked intense public opposition.

Recently, though, some companies are finding a remarkably simple answer to that political problem. They are putting power lines under water, in a string of projects that has so far provoked only token opposition from environmentalists and virtually no reaction from the larger public.

. . .

(p. B7) . . . , the underwater approach solves some intractable problems. In San Francisco, for example, old power plants that burn natural gas are about to be retired because a new transmission company has succeeded in running a line 33 miles across the San Francisco Bay.

Mr. Stern said his company's Neptune Cable, which runs from Sayreville, N.J., to Levittown, N.Y., on Long Island, now carries 22 percent of Long Island's electricity. His company is trying to complete a deal for a cable that would run from Ridgefield, N.J., to a Consolidated Edison substation on West 49th Street in Manhattan.

Those two cables were not motivated primarily by environmental goals -- they are meant to connect cheap generation to areas where power prices are high. Mr. Stern's company, PowerBridge, is now considering two renewable energy projects, however. One cable would connect proposed wind farms on the Hawaiian islands of Molokai and Lanai to the urban center on Oahu, and another would bring wind power from Maine along the Atlantic coast to Boston.

For the full story, see:

MATTHEW L. WALD. "A Power Line Runs Through It; Underwater Cable an Alternative to Electrical Towers." The New York Times (Weds., March 17, 2010): B1 & B7.

(Note: ellipses added.)

(Note: the online version is dated March 16, 2010 and has the shorter title "Underwater Cable an Alternative to Electrical Towers.")

April 18, 2010

Britannica Imitates Wikipedia

(p. 209) Britannica had already launched a project called WebShare in April 2008, which was described as "A special program for web publishers, including bloggers, webmasters, and anyone who writes for the Internet. You get complimentary access to the Encyclopaedia Britannica online and, if you like, an easy way to give your readers background on the topics you write about with links to complete Britannica articles." This was a rather radical move, obviously trying to vie with Wikipedia's emergence as one of the most linked-to resources on the Internet.

But the latest initiative was something quite astonishing, as Britannica was now inviting users to be part of the team of content creators:

To elicit their participation in our new online community of scholars, we will provide our contributors with a reward system and a rich online home that will enable them to promote themselves, their work, and their services. . . . Encyclopaedia Britannica will allow those visitors to suggest changes and additions to that content.


Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World's Greatest Encyclopedia. New York: Hyperion, 2009.

(Note: ellipsis in original.)

April 17, 2010

Web Site Dares to Satarize Chávez

RavellGrazianiVenezuelaSatire2010-04-17.jpg"Juan Andrés Ravell and Oswaldo Graziani two of the creators of the Web site El Chigüire Bipolar, or Bipolar Capybara, at their office in Caracas, Venezuela. They drew inspiration from American shows like "The Colbert Report" and Web sites like The Onion." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 8) CARACAS, Venezuela -- This may be a perilous time to operate a Web site focused on politics here, given President Hugo Chávez's recent push for new controls of Internet content. But one plucky Venezuelan satirical site is emerging as a runaway success in Latin America as it repeatedly skewers Mr. Chávez and a host of other leaders.

Named in honor of the capybara, the Labrador retriever-sized rodent that Venezuelans are fond of hunting and eating, the 2-year-old Web site, El Chigüire Bipolar, or Bipolar Capybara, is rivaling or surpassing in page views leading Venezuelan newspapers like the Caracas daily El Nacional.

The rise of Chigüire Bipolar, which has already drawn the wrath of state-controlled media here, and a handful of other popular Venezuelan sites focused on politics is taking place within a journalistic atmosphere here that international press groups say is marked increasingly by fear, intimidation and self-censorship.

. . .

Mr. Ravell and Mr. Graziani, who earn a living as freelance television producers and scriptwriters, finance Chigüire Bipolar out of their own pockets and with a meager revenue stream from advertising and sale of T-shirts printed with their logo.

They produce the site with a third Venezuelan partner based in Miami, Elio Casale, in a chaotic flurry of e-mail, instant-messaging and BlackBerry text messages.

"We don't actually talk to each other that much," Mr. Ravell said.

In an interview, Mr. Ravell said he remained hopeful that Chigüire Bipolar was opening the way for more multifaceted debate in Venezuela instead of representing a final burst of expressive ebullience online in a scenario in which Mr. Chávez might succeed in exerting control over a medium that until now has largely escaped his sway.

"Satire," he said, "always evolves to resist the attempts to extinguish it."

For the full story, see:

SIMON ROMERO. "A Satirical Site Skewers Chávez and Politics." The New York Times, First Section (Sun., March 21, 2010): 8.

(Note: ellipsis added.)

(Note: the online version is dated March 20, 2010 and has the title "A Satirical Site Skewers Chávez and Politics.")

April 16, 2010

L.A. 5% Electric Rate Increase to Pay for Uneconomical Solar Subsidies

(p. A17) . . . , the Los Angeles Department of Water and Power, the largest municipal utility in the United States, is poised to pass a roughly 5 percent rate increase on electricity use. The proceeds would be earmarked for renewable energy purchases and programs, including one that would repay people or businesses that use solar panels to contribute to the power grid.

. . .

The money would also be used to help pay for what is known as a feed-in tariff, under which the utility will pay a set rate for electricity from customers who install solar panels.

. . .

But "feed-in tariffs for solar power is not good use of money," Professor Borenstein said. "Solar power at the residential level is not close to economical. There are many things you should do before you subsidize it."

Californians have been squeezed by high unemployment and fee increases, and Los Angelenos may not cotton easily to a rate increase.

"Californians are environmentally conscious," said Dan Schnur, the director of the Jesse M. Unruh Institute of Politics at the University of Southern California. "But much less so if it causes them economic difficulty."

For the full story, see:

JENNIFER STEINHAUER. "Los Angeles Electric Rate Linked to Solar Power." The New York Times (Thurs., March 11, 2010): A17.

(Note: ellipses added.)

(Note: the online version of the article is dated March 10, 2010.)

April 15, 2010

Taxpayers Taking a Haircut as States "Scramble" to Find Something New to Tax

HaircutTaxpayer2010-04-05.jpg"A LITTLE OFF THE TOP; Michigan residents may have to pay a 5.5 percent tax for haircuts. States across the nation are considering similar taxes on services to solve their budget problems." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) In the scramble to find something, anything, to generate more revenue, states are considering new taxes on virtually everything: garbage pickup, dating services, bowling night, haircuts, even clowns.

"It's hard enough doing what we do," grumbled John Luke, a plumber in the Philadelphia suburbs. His services would, for the first time, come with an added tax if the governor has his way.

Opponents of imposing taxes on services like funerals, legal advice, helicopter rides and dry cleaning argue that this push comes as businesses are barely clinging to life and can ill afford to see customers further put off by new taxes. This is especially true, they say, in states like Michigan and Pennsylvania, where some of the most sweeping proposals are being considered this spring.

But this is also a period of economic gloom for states. Pension funds are in the red, federal stimulus help will soon vanish, and revenues from traditional sources like income and property taxes are slumping ever lower, with few elected officials willing to risk voter wrath by raising them.

. . .

(p. 20) But from coast to coast, desperate governments are looking to tap into new revenue streams.

In Nebraska, a lawmaker has introduced a bill to tax armored car services, farm equipment repairs, shoe shines, taxidermy, reflexology and scooter repairs. In Kentucky, Jim Wayne, a state representative, and some fellow Democrats are proposing taxing high-end services: golf greens fees, limousine and hot-air-balloon rides, and private landscaping.

In June, voters in Maine will decide whether to accept a state overhaul of its tax system that would newly tax services like tailor alterations, blimp rides, and entertainment provided by clowns, comedians and jugglers.

For the full story, see:

MONICA DAVEY. "States Seeking Cash Hope to Expand Taxes to Services." The New York Times, First Section (Sun., ed: March 28, 2010): 1 & 20.

(Note: ellipsis added.)

(Note: the online version of the article is dated March 27, 2010, and has the title "States Seeking Cash Hope to Expand Taxes to Services.")

ServicesTaxedGraph2010-04-05.jpg Source of graph: online version of the NYT article quoted and cited above.

April 14, 2010

Highly Reputed Academic Science Journal Found Similar Error Rates in Britannica and Wikipedia

(p. 208) Wikipedia was already highly regarded, anecdotally, but it got a glowing evaluation from the prestigious Nature magazine in December 2005, when it concluded that Wikipedia "comes close" to Britannica in the quality of its science articles. "Our reviewers identified an average of four errors in each Wikipedia article, and three in each Britannica article."

The news came as a bit of a surprise. Many folks felt Wikipedia did better than they'd have thought, and Britannica did, well, worse than they expected. The result of the study was hotly debated between Nature and Britannica, but to most Wikipedians it was a vindication. They knew that Wikipedia was a minefield of errors, but to be in such close proximity in quality to a traditionally edited encyclopedia, while using such a grassroots process, was the external validation they had been waiting for.

Britannica wasn't pleased with the methodology, and posted a rebuttal with this criticism: "Almost everything about the journal's investigation, from the criteria for identifying inaccuracies to the discrepancy between the article text and its headline, was wrong and misleading." Nature and Britannica exchanged barbs and rebuttals, but in the end, the overall result seemed clear.

"The Nature (sic) article showed that we are on the right track with our current methods. We just need better ways to prevent the display of obvious vandalism at any time," wrote longtime Wikipedian Daniel Mayer on the mailing list.


Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World's Greatest Encyclopedia. New York: Hyperion, 2009.

(Note: italics in original.)

April 13, 2010

Warren Buffett and Ted Turner Did OK After Harvard Rejections


"Ted Turner, Entrepreneur. Rejected by Princeton and Harvard. 'I want to be sure to make this point: I did everything I did without a college degree.'" Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. D1) Few events arouse more teenage angst than the springtime arrival of college rejection letters. With next fall's college freshman class expected to approach a record 2.9 million students, hundreds of thousands of applicants will soon be receiving the dreaded letters.

Teenagers who face rejection will be joining good company, including Nobel laureates, billionaire philanthropists, university presidents, constitutional scholars, best-selling authors and other leaders of business, media and the arts who once received college or graduate-school rejection letters of their own.

. . .

Mr. Buffett regards his rejection at age 19 by Harvard Business School as a pivotal episode in his life. Looking back, he says Harvard wouldn't have (p. D2) been a good fit. But at the time, he "had this feeling of dread" after being rejected in an admissions interview in Chicago, and a fear of disappointing his father.

As it turned out, his father responded with "only this unconditional love...an unconditional belief in me," Mr. Buffett says. Exploring other options, he realized that two investing experts he admired, Benjamin Graham and David Dodd, were teaching at Columbia's graduate business school. He dashed off a late application, where by a stroke of luck it was fielded and accepted by Mr. Dodd. From these mentors, Mr. Buffett says he learned core principles that guided his investing. The Harvard rejection also benefited his alma mater; the family gave more than $12 million to Columbia in 2008 through the Susan Thompson Buffett Foundation, based on tax filings.

. . .

Rejected once, and then again, by business schools at Stanford and Harvard, Scott McNealy practiced the perseverance that would characterize his career. A brash economics graduate of Harvard, he was annoyed that "they wouldn't take a chance on me right out of college," he says. He kept trying, taking a job as a plant foreman for a manufacturer and working his way up in sales. "By my third year out of school, it was clear I was going to be a successful executive. I blew the doors off my numbers," he says. Granted admission to Stanford's business school, he met Sun Microsystems co-founder Vinod Khosla and went on to head Sun for 22 years.

. . .

Time puts rejection letters in perspective, says Ted Turner. He received dual rejections as a teenager, by Princeton and Harvard, he says in an interview. The future America's Cup winner attended Brown University, where he became captain of the sailing team. He left college after his father cut off financial support, and joined his father's billboard company, which he built into the media empire that spawned CNN. Brown has since awarded him a bachelor's degree.

Tragedies later had a greater impact on his life, he says, including the loss of his father to suicide and his teenage sister to illness. "A rejection letter doesn't even come close to losing loved ones in your family. That is the hard stuff to survive," Mr. Turner says. "I want to be sure to make this point: I did everything I did without a college degree," he says. While it is better to have one, "you can be successful without it."

For the full story, see:

SUE SHELLENBARGER. "Before They Were Titans, Moguls and Newsmakers, These People Were . . . Rejected; At College Admission Time, Lessons in Thin Envelopes." The Wall Street Journal (Weds., MARCH 24, 2010): D1 & D2.

(Note: ellipses added.)


"Warren Buffett, Chairman of Berkshire Hathaway Inc. After Harvard Business School said no, everything 'I thought was a crushing event at the time, has turned out for the better.'" Source of caption and photo: online version of the WSJ article quoted and cited above.

April 12, 2010

Speculators Absorb Risk Others Do Not Want to Bear and They Make Prices More Accurate

(p. A19) Speculators earn a profit by absorbing risk that others don't want. Without speculators, investors would find it difficult to quickly hedge or sell their positions.

Speculators also provide us with information about the fundamental values of investments. When the fundamentals appear favorable, they buy. Otherwise, they sell. If their forecasts are correct, they profit. This causes prices to more accurately forecast an investment's value, spreading useful information.

For the full commentary, see:

DARRELL DUFFIE. "In Defense of Financial Speculation; It is not the same thing as market manipulation." The Wall Street Journal (Weds., FEBRUARY 24, 2010): A19.

April 11, 2010

Quants Confused Mathematical Models and Reality


Source of book image: http://seekingalpha.com/article/188632-the-quants-review-when-the-money-grid-went-dark

(p. 7) The virtually exclusive use of mathematical models, Mr. Patterson says, was what separated the younger cohorts of quants from their Wall Street forebears. Unlike Warren Buffett or Peter Lynch, the quants did not focus on so-called market fundamentals like what goods or services a particular company actually produced. Seldom if ever did they act on old-fashioned gut instinct. Instead, they focused on factors like how cheap a stock was relative to the rest of the market or how quickly its price had risen or fallen.

Therein was the quants' flaw, according to Mr. Patterson. Pioneers like Mr. Thorp understood that while the math world and the financial world have much in common, they aren't always in sync. The quant traders' model emphasized the most likely moves a stock or bond price could make. It largely ignored the possibility of big jolts caused by human factors, especially investor panics.

"The model soon became so ubiquitous that, hall-of-mirrors-like, it became difficult to tell the difference between the model and the market itself," Mr. Patterson declares.

Move ahead to August 2007 and beyond, when markets swooned on doubts about subprime mortgages. Stocks that the model predicted were bound to go up went sharply down, and vice versa. Events that were supposed to happen only once in 10,000 years happened three days in a row.

For the full review, see:

HARRY HURT III. "Off the Shelf; In Practice, Stock Formulas Weren't Perfect." The New York Times, SundayBusiness Section (Sun., February 21, 2010): 7

(Note: the online version of the article is dated February 20, 2010.)

The reference to Patterson's book, is:

Patterson, Scott. The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It. New York: Crown Business, 2010.

April 10, 2010

"The GodKing Drives a Hyundai"

(p. 176) As an homage to Wales's sticking with a low-key style, the community adopted the saying "The GodKing (sic) drives a Hyundai," making fun of his humble Korean-made car, a brand known more for frugality than flash.


Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World's Greatest Encyclopedia. New York: Hyperion, 2009.

April 9, 2010

Huge Greenhouses Dependably Yield a Variety of Ripe Tomatoes Even in Winter

TomatoGreenhouseWinterMaineInside2010-04-04.JPG"Some of the more than 500,000 plants at Backyard Farms at its Maine greenhouse." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. D1) AN icy mixture of rain and sleet fell on the glass roof of Greenhouse Two at Backyard Farms here, but as its big blue door slid open and the warm, green, celery smell of tomato plants wafted out, it was summer.

When it was built three years ago, the company's first 24-acre greenhouse in Madison was already the largest building in Maine. This second connected greenhouse, completed last year, brought the total area under glass to some 42 acres, or roughly the size of 32 football fields. Even in the depths of winter, a million tomatoes ripen indoors to harvest each week, snipped from their vines by workers in T-shirts and shorts.

. . .

Once, if you wanted tomatoes out of season, you mainly had to settle for hard pink ones picked green in the fields of Florida or Mexico and shipped by truck. Commercial greenhouses could do better, but they were a niche market.

Backed by consumer demand for fresh tomatoes year round, the indoor acreage devoted to growing tomatoes has become nearly six times as large since the early 1990s, said Roberta Cook, a marketing economist who helped write what many in the industry consider to be the definitive report on greenhouse tomatoes in 2005.

Those tough pink ones are still good and cheap enough for most fast food restaurants and the food service industry, which buy about half the fresh tomatoes sold in the United States. But with shoppers willing to pay a pre-(p. D5)mium -- even $4 to $5 a pound -- for red vine-ripened ones with more flavor, greenhouse tomatoes now represent more than half of every dollar spent on fresh tomatoes in American supermarkets, according to figures from the Perishables Group, a market research firm in Chicago.

. . .

Advances in genetics have allowed breeders to cross-pollinate precisely for control over specific attributes like size, color, disease resistance, firmness for shipping and levels of acids and sugars, the balance of which accounts for the bulk of a tomato's flavor. Too little sugar turns fruit tart. Too little acid turns it bland. Too little of both leaves tomatoes with little flavor.

As tomatoes ripen on the vine they develop more of those sugars and acids and other flavor elements. But most of the major farms growing tomatoes that are sold fresh year round are in areas where the climate is more hospitable to varieties best picked green.

By creating their own climate -- whether in Arizona, Maine or Canada -- greenhouses allow growers to pick and ship tomatoes only when they're ripe.

For the full story, see:

CHRIS LADD. "Endless Summer, Even in Maine." The New York Times (Weds., March 31, 2010): D1 & D5.

(Note: ellipses added.)

(Note: the online version of the article is dated March 30, 2010, and has the title "Giant Greenhouses Mean Flavorful Tomatoes All Year.")

TomatoGreenhouseWinterMaine2010-04-04.JPG"Even as snow falls outside, workers harvest tomatoes year-round at Backyard Farms in Madison, Maine. About 200 of them tend a half-million plants under 42 acres of glass, roughly the same amount of floorspace as in the Chrysler Building." Source of caption and photo: online version of the NYT article quoted and cited above.

April 8, 2010

If We Want More Jobs, We Need More (Steve) Jobs

(p. A19) Mr. Obama and his advisers need to grasp this essential fact: Entrepreneurs are not just a cute little subsector of the American economy. They are the whole game. They will give us tomorrow's Apples and the multiplier effect of small businesses and exciting new jobs that go with them. Entrepreneurs are necessary to keep our large multinationals on their toes. It's no coincidence that the entrepreneurial flowering of the 1970s forced a managerial revolution in large companies during the 1980s and 1990s. Without Steve Jobs, there would have been no Lou Gerstner to reinvent IBM in the '90s. Entrepreneurs like Steve Jobs make everyone better.

For the full story, see:

RICH KARLGAARD. "Apple to the Rescue?" The Wall Street Journal (Thurs., JANUARY 28, 2010): A19.

April 7, 2010

Smaller, Compact Design Makes Nuclear Reactor Cheaper, Safer and Quicker to Build and Expand

NuclearReactorSmall2010-04-03.jpgSource of graphic: online version of the WSJ article quoted and cited below.

(p. A1) A new type of nuclear reactor--smaller than a rail car and one tenth the cost of a big plant--is emerging as a contender to reshape the nation's resurgent nuclear power industry.

Three big utilities, Tennessee Valley Authority, First Energy Corp. and Oglethorpe Power Corp., on Wednesday signed an agreement with McDermott International Inc.'s Babcock & Wilcox subsidiary, committing to get the new reactor approved for commercial use in the U.S.

. . .

The smaller Babcock & Wilcox reactor can generate only 125 to 140 megawatts of power, about a tenth as much as a big one. But the utilities are betting that these smaller, simpler reactors can be manufactured quickly and installed at potentially dozens of existing nuclear sites or replace coal-fired plants that may become obsolete with looming emissions restrictions.

"We see significant benefits from the new, modular technology," said Donald Moul, vice president of nuclear support for First Energy, an Ohio-based utility company.

He said First Energy, which operates four reactors at three sites in Ohio and Pennsylvania, has made no decision to build any new reactor and noted there's "a lot of heavy lifting to do to get this reactor certified" by the NRC for U.S. use.

. . .

(p. A16) One of the biggest attractions, however, is that utilities could start with a few reactors and add more as needed. By contrast, with big reactors, utilities have what is called "single-shaft risk," where billions of dollars are tied up in a single plant.

Another advantage: mPower reactors will store all of their waste on each site for the estimated 60-year life of each reactor.

. . .

. . . , some experts believe that if the industry embraces small reactors, nuclear power in the U.S. could become pervasive because more utilities would be able to afford them.

"There's a higher likelihood that there are more sites that could support designs for small reactors than large ones," said David Matthews, head of new reactor licensing at the Nuclear Regulatory Commission.

. . .

Experts believe small reactors should be as safe, or safer, than large ones. One reason is that they are simpler and have fewer moving parts that can fail. Small reactors also contain a smaller nuclear reaction and generate less heat. That means that it's easier to shut them down, if there is a malfunction.

"With a large reactor, the response to a malfunction tends to be quick, whereas in smaller ones, they respond more slowly" which means they're somewhat easier to control, said Michael Mayfield, director of the advanced reactor program at the Nuclear Regulatory Commission. Once on site, each reactor would be housed in a two-story containment structure that would be buried beneath the ground for added security. They would run round the clock, stopping to refuel every five years instead of 18 to 24 months, like existing reactors.

Jack Baker, Energy Northwest's head of business development, says he was initially skeptical about small reactors because of the "lack of economies of scale." But he says he now thinks small reactors "could have a cost advantage" because their simpler design means faster construction and "you don't need as much concrete, steel, pumps and valves."

"They have made a convert of me," he says.

Babcock & Wilcox's roots go back to 1867 and it has been making equipment for utilities since the advent of electrification, even furnishing boilers to Thomas Edison's Pearl Street generating stations that brought street lighting to New York City in 1882.

Based in Lynchburg, Va., the company has been building small reactors for ships since the 1950s. In addition to reactors for U.S. Navy submarines and aircraft carriers, it built a reactor for the USS NS Savannah, a commercial vessel which is now a floating museum in Baltimore harbor. It also built eight big reactors, in the past construction cycle, including one for the ill-fated Three Mile Island plant.

When a U.S. nuclear revival looked imminent, the company debated what role it could play.

"Instead of asking, 'How big a reactor could we make?,' this time, we asked, 'What's the largest thing we could build at our existing plants and ship by rail?' " said Christofer Mowry, president of Modular Nuclear Energy LLC, Babcock's recently created small-reactor division. "That's what drove the design."

For the full story, see:

REBECCA SMITH. "Small Reactors Generate Big Hopes ." The Wall Street Journal (Thurs., Feb. 18, 2010): A1 & A16.

(Note: ellipses added.)


Source of graph: online version of the WSJ article quoted and cited above.

April 6, 2010

"Coase's Penguin" and the Motives for "Commons-Based Peer Production"

(p. 108) Noted Yale law professor Yochai Benkler has a theory. In a widely circulated and famous essay on the Internet called "Coase's Penguin," he offered his thinking on why people participate in efforts such as Linux and other "free" projects. There was already a culture, before Wikipedia, of folks donating their time, effort, and skills to the collective good for no monetary gain or immediate compensation. Benkler observed this part of the hacker ethos and was curious to know what the common thread was.

He dubbed it "commons-based peer production." It's a fancy moniker for the phenomenon of people working together toward the same end--creating computer code or content that is free to be copied, distributed, used, and modified by others.

Benkler believes the Internet and the "free culture" movement have allowed individuals to connect and combine their efforts in ways unprecedented in history. The legal academic is not shy to combine scholarship outside his area of training by drawing on economics, sociology, and technology to form his theory.

According to Benkler, if monetary rewards and the creation of corporate firms have been the accepted driving force for human innovation and progress, there has to be something else driving volunteers in Linux, Wikipedia, and other "free" projects that have become so pervasive and monumental in the digital age.

He asserts the motivation comes from two main things other than money: the "socio-psychological" reward of interacting with others, and the "hedonic" personal gratification of the task.

Wikipedia's magic occurs when these two things come together. One person's personal affection and indulgence---mapmaking, grammar checking, baseball statistics, history of stamps---easily finds a home in Wikipedia's amalgam of topics, where it also feeds into and inspires activities by others.


Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World's Greatest Encyclopedia. New York: Hyperion, 2009.

April 5, 2010

Daniel Pink on What Motivates Workers to Work Well


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

Daniel Pink's Free Agent Nation was a provocative account of how the entrepreneur benefits from being an entrepreneur. I enjoyed the book, and reference it frequently.

I have not had a chance to read Pink's recent Drive, but hope to do so soon.

(p. A17) Science, Mr. Pink says, has shown that we are motivated as much intrinsically, by the sheer joy and purpose of certain activities, as extrinsically, by rewards like pay raises and promotions.

The science that Mr. Pink is referring to rests largely on the work of Edward Deci and Richard Ryan at the University of Rochester and Mihaly Csikszentmihalyi at Claremont Graduate University. These three researchers have found that we do our best work when motivated from within, when we have control over our time and decisions and when we feel a deep sense of purpose. Under such conditions, we can achieve real mastery over whatever it is that we do.

The modern workplace, Mr. Pink laments, is too often set up to deny us this opportunity. Firms that hope to optimize efficiency by making their employees clock in and out, attend compulsory meetings, and receive pay for performance are de-motivating through excessive control. What they should be doing, he argues, is giving workers the chance to do their best work by granting them more autonomy and helping them to achieve the mastery that may come with it.

Mr. Pink cites an Australian software firm, Atlassian, that allows its programmers 20% of their time to work on any software problem they like, provided it is not part of their regular job. The programmers turn out to be much more efficient with that 20% of their time than they are with their regular work hours. Atlassian credits the 20% with many of its innovations and its high staff retention. Companies as large as Google and 3M have similar programs that have produced everything from Google News to the Post-It note.

. . .

. . . : Beyond serving our basic needs, money doesn't buy happiness. We need a greater purpose in our lives. Our most precious resource is time. We respond badly to conditions of servitude, whether the lash of the galley master or the more subtle enslavement of monthly paychecks, quarterly performance targets and the fear of losing health insurance. Work that allows us to feel in control of our lives is better than work that does not.     . . . , these lessons are worth repeating, and if more companies feel emboldened to follow Mr. Pink's advice, then so much the better.

For the full review, see:

PHILIP DELVES BROUGHTON. "More Than a Paycheck; Workers are more efficient, loyal and creative when they feel a sense of purpose--when work has meaning." The Wall Street Journal (Tues., Feb. 2, 2010): A17.

(Note: ellipses added.)

(Note: the online version of the review is dated Feb. 5, 2010.)

April 4, 2010

Philosopher Duped by Hoax Because He Failed to Consult Wikipedia

(p. A4) PARIS -- For the debut of his latest weighty title, "On War in Philosophy," the French philosopher Bernard-Henri Lévy made the glossy spreads of French magazines with his trademark panache: crisp, unbuttoned white Charvet shirts, golden tan and a windswept silvery mane of hair.

But this glamorous literary campaign was suddenly marred by an absolute philosophical truth: Mr. Lévy backed up the book's theories by citing the thought of a fake philosopher. In fact, the sham philosopher has never been a secret, and even has his own Wikipedia entry.

In the uproar that followed over the rigors of his research, Mr. Lévy on Tuesday summed up his situation with one e-mailed sentence: "My source of information is books, not Wikipedia."

For the full story, see:

DOREEN CARVAJAL. "Philosopher Left to Muse on Ridicule Over a Hoax." The New York Times (Weds., February 10, 2010): A4.

(Note: the online version of the article is dated February 9, 2010.)

April 3, 2010

"We're Taking Care of the Streets, Just in Case They Try to Rob Us"

SilvaJaimeStickProtectStreet2010-03-17.jpg"Jaime Silva, 10, wielded a stick with a nail on the end in Los Ángeles, Chile, "just in case they try to rob us," he said." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A16) LOS ÁNGELES, Chile -- At night, residents huddle around bonfires and guard their streets with torches and sticks, ready to repel outsiders who might try to break into their darkened homes.

Elsewhere, the military and the federal police enforce nighttime curfews, guard the entrances to supermarkets and monitor gasoline rationing to make sure no one gets more than his share.

As darkness settled in and the curfew took effect on Wednesday, residents on the outskirts of Los Ángeles began placing wooden barriers in front of their streets and picking up weapons to protect against armed bandits they said were taking advantage of the chaos to steal from their homes.

"We're taking care of the streets, just in case they try to rob us," said Jaime Silva, 10, as he wielded a thick stick with a nail on the end.

Nearby, his mother looked on, her arms crossed, watching her son and other boys as they stood guard behind the barrier.

"We're trying to take care of the little we have here," said the mother, Ana Beroiz, 34, noting that there had been robberies in other parts of town. "We're here all night, first the mothers and then the fathers."

For the full story, see:

ALEXEI BARRIONUEVO. "Fears of Lawlessness Prompt Show of Force in Chile." The New York Times (Thurs., March 4, 2010): A16.

(Note: the online version of the article is dated March 3, 2010.)

April 2, 2010

"Expert Scholarship" Versus "People of Dubious Background"

(p. 71) The acknowledgment, by name, of volunteers in the preface sections of the OED is akin to Wikipedia's edit history, where one can inspect who contributed to each article. Some Oxford contributors were professors, some royalty, but most were ordinary folks who answered the call. Winchester, in The Professor and the Madman: A Tale of Murder, Insanity, and the Making of the Oxford English Dictionary, tells the story of the "madman" William Chester Minor, a U.S. Civil War survivor whose "strange and erratic behavior" resulted in him shooting an "innocent working man" to death in the street in Lambeth. He was sent to Broadmoor asylum for criminal lunatics. He discovered the OED as a project around 1881, when he saw the "Appeal for Readers" in the library, and worked for the next twenty-one years contributing to the project, receiving notoriety as a contributor "second only to the contributions of Dr. Fitzedward Hall in enhancing our illustration of the literary history of individual words, phrases and constructions." Minor did something unusual in not just sending submissions, but having his own cataloging system such that the dictionary editors could send a postcard and "out the details flowed, in abundance and always with unerring accuracy." Until Minor and Murray met in January 1891, no one working with (p. 72) the OED knew their prolific contributor was a madman and murderer housed at Broadmoor.

As we will see in later chapters, a common question of the wiki method is whether one can trust information created by strangers and people of dubious background. But the example of the OED shows that using contributors rather than original expert scholarship is not a new phenomenon, and that projects built as a compendium of primary sources are well suited for harnessing the power of distributed volunteers.


Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World's Greatest Encyclopedia. New York: Hyperion, 2009.

(Note: italics in original.)

April 1, 2010

"Real Innovation in Technology Involves a Leap Ahead"

iPad2010-03-16.jpg"GAME CHANGER? After months of anticipation, Apple unveiled its iPad tablet computer last week." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) The more, the better. That's the fashionable recipe for nurturing new ideas these days. It emphasizes a kind of Internet-era egalitarianism that celebrates the "wisdom of the crowd" and "open innovation." Assemble all the contributions in the digital suggestion box, we're told in books and academic research, and the result will be collective intelligence.

Yet Apple, a creativity factory meticulously built by Steven P. Jobs since he returned to the company in 1997, suggests another innovation formula -- one more elitist and individual.

This approach is reflected in the company's latest potentially game-changing gadget, the iPad tablet, unveiled last week. It may succeed or stumble but it clearly carries the taste and perspective of Mr. Jobs and seems stamped by the company's earlier marketing motto: Think Different.

. . .

(p. 6) Great products, according to Mr. Jobs, are triumphs of "taste." And taste, he explains, is a byproduct of study, observation and being steeped in the culture of the past and present, of "trying to expose yourself to the best things humans have done and then bring those things into what you are doing."

His is not a product-design philosophy steered by committee or determined by market research. The Jobs formula, say colleagues, relies heavily on tenacity, patience, belief and instinct. He gets deeply involved in hardware and software design choices, which await his personal nod or veto. Mr. Jobs, of course, is one member of a large team at Apple, even if he is the leader. Indeed, he has often described his role as a team leader. In choosing key members of his team, he looks for the multiplier factor of excellence. Truly outstanding designers, engineers and managers, he says, are not just 10 percent, 20 percent or 30 percent better than merely very good ones, but 10 times better. Their contributions, he adds, are the raw material of "aha" products, which make users rethink their notions of, say, a music player or cellphone.

"Real innovation in technology involves a leap ahead, anticipating needs that no one really knew they had and then delivering capabilities that redefine product categories," said David B. Yoffie, a professor at the Harvard Business School. "That's what Steve Jobs has done."

For the full commentary, see:

STEVE LOHR. "The Apple in His Eye." The New York Times, Week in Review Section (Sun., MARCH 4, 2010): 1 & 6.

(Note: ellipsis added.)

(Note: the online version of the article is dated January 29, 2010 and had the title "Steve Jobs and the Economics of Elitism.")


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