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February 29, 2012

Successful Innovation Depends More on Will than on Intellect




(p. 9) The odysseys of [Lasseter, Catmull, Smith and Jobs], and of Pixar as a whole, bring to mind the observation of the maverick economist Joseph Schumpeter that successful innovation "is a feat not of intellect, but of will." Writing about the psychology of entrepreneurs in the early twentieth century, a rime when the subject was unfashionable, he believed few individuals are prepared for "the resistances and uncertainties incident to doing what has not been done before." Those who braved the risks of failure did so out of noneconomic as well as economic motives, among them "the joy of creating, of getting things done, or simply of exercising one's energy and ingenuity." In Pixar's case, at least, the resistances and uncertainties were abundant--as was the will.


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 28, 2012

Carnegie and Twain Opposed Roosevelt's Imperialism




HonorInDustBK2012-02-22.jpg










Source of book image: http://www.chinarhyming.com/wp-content/uploads/2012/01/51Hr-aIgESL._SL500_AA300_.jpg





Marxists and others on the left often claim that big business is the main force behind U.S. imperialism. Is it not ironic that the most imperialistic U.S. President was the anti-big-business "progressive" Teddy Roosevelt who was vehemently opposed by big businessman Andrew Carnegie?

Mark Twain is sometimes accused of insufficient sympathy with the downtrodden. Those who so accuse, misunderstand his message. He too opposed Roosevelt's war on the Filipinos.

(Carnegie and Twain's friendship is discussed in David Nasaw's biography of Carnegie.)



(p. 13) There was within the United States a strong and vocal anti-imperialist movement, which included former President Grover Cleveland, Andrew Carnegie and Mark Twain, but it struggled to tamp down the country's growing expansionist zeal, and to compete with the energy, tenacity and bulldog ambition of one man in particular: Theodore Roosevelt. Roosevelt, who in just six years rose meteorically from New York City police commissioner to president, nurtured a deep and unshakable contempt for what he called the "unintelligent, cowardly chatter for 'peace at any price.' " Not only had the "clamor of the peace faction" left him unmoved, Roosevelt wrote, it had served to strengthen his conviction that "this country needs a war."


. . .


Although Roosevelt moves in and out of Jones's narrative, disappearing for long stretches, he still manages to steal the spotlight, just as he does in every book in which he appears. When McKinley dragged his feet before sending troops to Cuba, Roosevelt sneered that the president had "no more backbone than a chocolate éclair." In the Department of the Navy, Roosevelt gleefully took over while his boss was on summer vacation, anointing himself the "hot weather secretary" and crowing to a friend that he was having "immense fun running the Navy." In Cuba, after choosing his regiment of Rough Riders from 23,000 applicants, he ordered his famous charge up Kettle Hill wearing a custom-made fawn-colored Brooks Brothers uniform with canary-yellow trim.



For the full review, see:

CANDICE MILLARD. "Looking for a Fight; At the Turn of the 20th Century, Theodore Roosevelt Set Out to Transform the United States into a Major World Power." The New York Times Book Review (Sun., February 19, 2012): 13.

(Note: ellipsis added.)

(Note: the online version of the article is dated February 17, 2012 and has the title "Looking for a Fight; A New History of the Philippine-American War.")



The book under review is:

Jones, Gregg. Honor in the Dust: Theodore Roosevelt, War in the Philippines, and the Rise and Fall of America's Imperial Dream. New York: New American Library, 2012.



The Nasaw book on Carnegie mentioned in my initial comments is:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






February 27, 2012

Big Data Opportunity for Economics and Business




(p. 7) Data is not only becoming more available but also more understandable to computers. Most of the Big Data surge is data in the wild -- unruly stuff like words, images and video on the Web and those streams of sensor data. It is called unstructured data and is not typically grist for traditional databases.

But the computer tools for gleaning knowledge and insights from the Internet era's vast trove of unstructured data are fast gaining ground. At the forefront are the rapidly advancing techniques of artificial intelligence like natural-language processing, pattern recognition and machine learning.

Those artificial-intelligence technologies can be applied in many fields. For example, Google's search and ad business and its experimental robot cars, which have navigated thousands of miles of California roads, both use a bundle of artificial-intelligence tricks. Both are daunting Big Data challenges, parsing vast quantities of data and making decisions instantaneously.


. . .


To grasp the potential impact of Big Data, look to the microscope, says Erik Brynjolfsson, an economist at Massachusetts Institute of Technology's Sloan School of Management. The microscope, invented four centuries ago, allowed people to see and measure things as never before -- at the cellular level. It was a revolution in measurement.

Data measurement, Professor Brynjolfsson explains, is the modern equivalent of the microscope. Google searches, Facebook posts and Twitter messages, for example, make it possible to measure behavior and sentiment in fine detail and as it happens.

In business, economics and other fields, Professor Brynjolfsson says, decisions will increasingly be based on data and analysis rather than on experience and intuition. "We can start being a lot more scientific," he observes.


. . .


Research by Professor Brynjolfsson and two other colleagues, published last year, suggests that data-guided management is spreading across corporate America and starting to pay off. They studied 179 large companies and found that those adopting "data-driven decision making" achieved productivity gains that were 5 percent to 6 percent higher than other factors could explain.

The predictive power of Big Data is being explored -- and shows promise -- in fields like public health, economic development and economic forecasting. Researchers have found a spike in Google search requests for terms like "flu symptoms" and "flu treatments" a couple of weeks before there is an increase in flu patients coming to hospital emergency rooms in a region (and emergency room reports usually lag behind visits by two weeks or so).


. . .


In economic forecasting, research has shown that trends in increasing or decreasing volumes of housing-related search queries in Google are a more accurate predictor of house sales in the next quarter than the forecasts of real estate economists. The Federal Reserve, among others, has taken notice. In July, the National Bureau of Economic Research is holding a workshop on "Opportunities in Big Data" and its implications for the economics profession.



For the full story, see:


STEVE LOHR. "NEWS ANALYSIS; The Age of Big Data." The New York Times, SundayReview (Sun., February 12, 2012): 1 & 7.

(Note: ellipses added.)

(Note: the online version of the article is dated February 11, 2012.)





February 26, 2012

In China the Rich and Creative Prepare to Vote with Their Feet




ShiKangBeijingMillionaire2012-02-22.jpg "Shi Kang, a millionaire writer living in Beijing, started thinking about emigrating after a long road trip last year around the U.S." Source of caption and photo: online version of the WSJ article quoted and cited below.


(p. A1) BEIJING--This time last year, Shi Kang considered himself a happy man.

Writing 15 novels had made him a millionaire. He owned a luxury apartment and a new silver Mercedes. He was so content with his carefree life in Beijing that he never even traveled overseas.

Today, a year later, Mr. Shi is considering emigrating to the U.S.--one of a growing number of rich Chinese either contemplating leaving their homeland or already arranging to do it.


. . .


(p. A12) A survey published in November found that 60% of about 960,000 Chinese people with assets over 10 million yuan ($1.6 million) were either thinking about emigrating or taking steps to do so. The U.S. was the top destination, followed by Canada, Singapore and Europe, according to the survey by the state-run Bank of China and Hurun Report, which analyzes trends among China's wealthy.


. . .


Mr. Su was no dissident, though. Like many of his generation, he turned his attention to getting rich. Today, at 46, Mr. Su runs his own aerospace technology company and estimates his own net worth, including the various properties he owns, at around 80 million yuan, or close to $13 million.

His main reason for leaving, he says, is the business environment. "The government has too much power," he says. "Regulations here mean that businessmen have to do a lot of illegal things. That gives people a real sense of insecurity." He said four of his distributors have also applied for investment immigration to Canada.


. . .


"The problem is that government power is too great," Mr. Su says. "When the economy is going up, they think that everything they are doing is right." If they don't change, he worries, "another revolution will come soon."


. . .


The current migrant wave is different in that they are escaping neither poverty nor political unrest--and many say they are leaving for good. The Hurun survey showed that the average respondent had 60 million yuan in assets and was 42, old enough to remember the 1989 Tiananmen crackdown, but young enough to have learned how to prosper in a market economy.

Deng Jie fits the profile. Twenty-seven years ago, in the fledgling years of China's market reforms, he began his career in a state-run ceramics factory in Beijing, sharing a cramped dormitory with colleagues and earning 50 yuan a month (about $13 in those days).

Today, at 48, he runs his own chemical pigments business and lives with his wife and daughter in one of the three luxury apartments he owns. In dollar terms, he is a millionaire several times over. His properties alone have appreciated by 800% in a decade.

Yet the hope he felt for his country in the 1980s, he says, has "been doused with bucket after bucket of cold water." He cited a host of concerns, including rampant corruption among the officials he deals with, and new labor regulations that he says have made his work force too costly and demanding.

"I'm representing a lot of other people like me," he says. "We used to want to contribute to the nation. But now we just feel so disappointed. China cannot continue like this. It has to change."



For the full story, see:

JEREMY PAGE. "Plan B for China's Wealthy: Moving to the U.S., Europe." The Wall Street Journal (Thurs., FEBRUARY 22, 2012): A1 & A12.

(Note: ellipses added.)



ChineseEB5visaApplicationGraph.jpg














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










February 25, 2012

How Pixar Vision Was Made Real




(p. 8) . . . Pixar's story was anything but preordained. It is a triple helix of artistic, technological, and business struggles, and it is a study in the tremendously uncertain and contingent nature of artistic, technological, and business success. It illustrates how professional prestige and social status flow into each other, and how a small organization can magnify its power by deploying them as an economic force. It shows how small things, done well, can lead to big things. It is the story of a small group of individuals who started with a shared ambition to create a new way of telling stories--within a virtual world of mathematical constructions--and who traveled a long and circuitous road until their vision became a reality.


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 24, 2012

Manifesto for a Rising Standard of Living




AbundanceBK2012-02-22.jpg











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







(p. A13) Mr. Diamandis is the chairman and chief executive of the X Prize Foundation and the founder of more than a dozen high-tech companies. With his journalist co-author, he has produced a manifesto for the future that is grounded in practical solutions addressing the world's most pressing concerns: overpopulation, food, water, energy, education, health care and freedom. The authors suggest that "humanity is now entering a period of radical transformation where technology has the potential to significantly raise the basic standard of living for every man, woman, and child on the planet."


. . .


Predictions of a rosy future have a way of sounding as unrealistic as end-is-nigh forecasts. But Messrs. Diamandis and Kotler are not just dreamers. They lay out a plausible road map, discussing, among other things, the benefits of do-it-yourself tinkering--like the work by geneticist J. Craig Venter in beating the U.S. government in the race to sequence the human genome--and the growing willingness of techno-philanthropists like Bill Gates to tackle real-world problems.

The biggest hurdles, however, are not scientific or technological but political. There are still too many corrupt dictators and backward-looking governments keeping millions in penury. But as we have seen lately, the misruled have a way of throwing off despotic governments. With ever more people reaching for freedom, countless millions are tacitly embracing the Diamandis motto: "The best way to predict the future is to create it yourself."



For the full review, see:

MICHAEL SHERMER. "BOOKSHELF; Defying the Doomsayers; Abundance" argues that growing technologies have the potential not only to spread information but to solve some of humanity's most vexing problems." The Wall Street Journal (Thurs., FEBRUARY 22, 2012): A13.

(Note: ellipsis added.)


The book being reviewed is:

Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.







February 23, 2012

"The Government Is a Crappy Venture Capitalist"




(p. A13) Like the mythical monster Hydra--who grew two heads every time Hercules cut one off--President Obama, in both his State of the Union address and his new budget, has defiantly doubled down on his brand of industrial policy, the usually ill-advised attempt by governments to promote particular industries, companies and technologies at the expense of broad, evenhanded competition.

Despite his record of picking losers--witness the failed "clean energy" projects Solyndra, Ener1 and Beacon Power--Mr. Obama appears determined to continue pushing his brew of federal spending, regulations, mandates, special waivers, loan guarantees, subsidies and tax breaks for companies he deems worthy.

Favoring key constituencies with taxpayer money appeals to politicians, who can claim to be helping the overall economy, but it usually does far more harm than good. It crowds out valuable competing investment efforts financed by private investors, and it warps decisions by bureaucratic diktats susceptible to political cronyism. Former Obama adviser Larry Summers echoed most economists' view when he warned the administration against federal loan guarantees to Solyndra, writing in a 2009 email that "the government is a crappy venture capitalist."



For the full commentary, see:

MICHAEL J. BOSKIN. "OPINION; Washington's Knack for Picking Losers; Former Obama adviser Larry Summers warned the administration against federal loan guarantees to Solyndra, writing in a 2009 email that 'the government is a crappy venture capitalist'." The Wall Street Journal (Weds., FEBRUARY 15, 2012): A13.







February 22, 2012

Adipotide Kills Fat Cells in Obese Mice and Monkeys




AdipotideObesityGraphic2012-02-05.jpg











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


(p. A6) A drug that kills a type of fat cell by choking off its blood supply caused significant weight loss in obese monkeys, potentially setting the stage for a new pharmaceutical approach to attacking obesity, according to a study released Wednesday.

After four weeks of treatment, obese monkeys given daily injections of the drug, called adipotide, lost an average of 11% of their body weight. They also had big reductions in waist circumference and body-mass index and, importantly, striking improvement in their ability to process insulin, researchers said. The drug had no effect on weight when given to lean monkeys.

Results of the study, performed at M.D. Anderson Cancer Center in Houston and published online by the journal Science Translational Medicine, confirmed a 2004 report from the same research team showing marked weight loss in mice treated with the agent.


. . .


The researchers' 2004 paper showing a 30% weight loss in obese mice drew skepticism. Randy J. Seeley, director of the diabetes and obesity center at the University of Cincinnati, figured destroying white fat cells would make animals--and people--sick. But his own lab eventually replicated the mouse study, using rats instead, and now he is intrigued.

"This is really new stuff," Dr. Seeley said of the latest results. "There's no way to know if this will become a therapy or not, but at least it opens up a new way to think about therapies, and we have not had a lot of those." He isn't involved with the research.



For the full story, see:

RON WINSLOW. "Drug Offers Hope in Obesity Fight; Treatment Targeting Fat Cells Caused Significant Weight Loss in Monkeys; Human Trials to Begin Soon." The Wall Street Journal (Thurs., November 10, 2011): A6.

(Note: ellipsis added.)

(Note: the last two sentences quoted above appeared in the online, but not the print, version of the article.)




ObeseMonkeyLostWeight2012-02-06.jpg "One of the monkeys used in the study. Obese monkeys lost an average of 11% of their body weight after four weeks of treatment." Source of caption and photo: online version of the WSJ article quoted and cited above.






February 21, 2012

"The Patience of Jobs"




(p. 7) Steve Jobs was missing from the scene of the meeting, though he would soon be Disney's largest individual shareholder (the acquisition was a stock-for-stock trade) and the newest member of Disney's board. Lasseter was right about his money; Jobs had driven a hard bargain in buying Lucas's Computer Division for five million dollars (not ten million, as is sometimes reported), but as it turned out, he put ten times that amount into the company over the course of a decade to keep it afloat. Few other investors would have had the patience of Jobs.


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 20, 2012

Nasar Gives Compelling Portrait of Joseph Schumpeter and His Vienna




Grand-PursuitBK2012-02-05.jpg














Source of book image: http://luxuryreading.com/wp-content/uploads/2011/10/grand-pursuit.jpg





(p. C31) Ms. Nasar gives us Belle Époque Vienna -- infatuated with modernity and challenging London in the race to electrify with new telephone service, state-of-the-art factories and power-driven trams -- and then a devastating picture of Vienna at the end of World War I: war veterans loitering outside restaurants waiting for scraps, and desperate members of a middle class that saw inflation wipe out all its savings trading a piano for a sack of flour, a gold watch chain for a few sacks of potatoes.


. . .


Among the more compelling portraits in this volume is that of Joseph Alois Schumpeter, the brilliant European economist who argued that the distinctive feature of capitalism was "incessant innovation" -- a "perennial gale of creative destruction" -- and who identified the entrepreneur as the visionary who could "revolutionize the pattern of production by exploiting an invention" or "an untried technological possibility."



For the full review, see:

MICHIKO KAKUTANI. "BOOKS OF THE TIMES; The Economist's Progress: Better Living Through Fiscal Chemistry." The New York Times (Fri., December 2, 2011): C31.

(Note: ellipsis added.)

(Note: the online version of the article is dated December 1, 2011.)







February 19, 2012

Economic Freedom and Growth Depend on Protecting the Right to Rise




(p. A19) Congressman Paul Ryan recently coined a smart phrase to describe the core concept of economic freedom: "The right to rise."

Think about it. We talk about the right to free speech, the right to bear arms, the right to assembly. The right to rise doesn't seem like something we should have to protect.

But we do. We have to make it easier for people to do the things that allow them to rise. We have to let them compete. We need to let people fight for business. We need to let people take risks. We need to let people fail. We need to let people suffer the consequences of bad decisions. And we need to let people enjoy the fruits of good decisions, even good luck.

That is what economic freedom looks like. Freedom to succeed as well as to fail, freedom to do something or nothing. . . .


. . .


But when it comes to economic freedom, we are less forgiving of the cycles of growth and loss, of trial and error, and of failure and success that are part of the realities of the marketplace and life itself.


. . .


. . . , we must choose between the straight line promised by the statists and the jagged line of economic freedom. The straight line of gradual and controlled growth is what the statists promise but can never deliver. The jagged line offers no guarantees but has a powerful record of delivering the most prosperity and the most opportunity to the most people. We cannot possibly know in advance what freedom promises for 312 million individuals. But unless we are willing to explore the jagged line of freedom, we will be stuck with the straight line. And the straight line, it turns out, is a flat line.



For the full commentary, see:

JEB BUSH. "OPINION; Capitalism and the Right to Rise; In freedom lies the risk of failure. But in statism lies the certainty of stagnation." The Wall Street Journal (Mon., December 19, 2011): A19.

(Note: ellipses added.)







February 18, 2012

Paul Allen Uses Microsoft Profits for Bold Private Space Project




StratolaunchSpacePlane2012-02-05.jpgSource of graphic: online version of the WSJ article quoted and cited below.



(p. B1) Microsoft Corp. co-founder Paul Allen indicated he is prepared to commit $200 million or more of his wealth to build the world's largest airplane as a mobile platform for launching satellites at low cost, which he believes could transform the space industry.

Announced Tuesday, the novel, high-risk project conceived by renowned aerospace designer Burt Rutan seeks to combine engines, landing gears and other parts removed from old Boeing 747 jets with a newly created composite craft from Mr. Rutan and a powerful rocket to be built by a company run by Internet billionaire and commercial-space pioneer Elon Musk.

Dubbed Stratolaunch and funded by one of Mr. Allen's closely held entities, the venture seeks to meld decades-old airplane technology with cutting-edge booster-rocket designs in an unprecedented way to assemble a hybrid that would offer the first totally privately funded space transportation system.



For the full story, see:

ANDY PASZTOR And DIONNE SEARCEY. "Paul Allen, Supersizing Space Flight; Billionaire's Novel Vision Has Wingspan Wider Than a Football Field, Weighs 1.2 Million Pounds." The Wall Street Journal (Weds., December 5, 2011): B1 & B5.







February 17, 2012

"What Success Had Brought Him, . . . , Was Freedom"




(p. 5) The success of Pixar's films had brought him something exceedingly rare in Hollywood: not the house with the obligatory pool in the backyard and the Oscar statuettes on the fireplace mantel, or the country estate, or the vintage Jaguar roadster--although he had all of those things, too. It wasn't that he could afford to indulge his affinity for model railroads by acquiring a full-size 1901 steam locomotive, with plans to run it on the future site of his twenty-thousand-square-foot mansion in Sonoma Valley wine country. (Even Walt Dìsney's backyard train had been a mere one-eighth-scale replica.)

None of these was the truly important fruit of Lasseter's achievements. What success had brought him, most meaningfully, was freedom. Having created a new genre of film with his colleagues at Pixar, he had been able to make the films he wanted to make, and he was coming back to Disney on his own terms.



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: ellipsis in title was added.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 16, 2012

"Human Progress Is Built on Man's Desire to Correct His Mistakes"




ChinaInTenWordsBK2012-02-04.jpg











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








(p. A17) Yu Hua is one of China's most acclaimed novelists, hugely popular in his own country and the recipient of several international literary prizes. He brings a novelist's sensibility to "China in Ten Words," his first work of nonfiction to be published in English. This short book is part personal memoir about the Cultural Revolution and part meditation on ordinary life in China today. It is also a wake-up call about widespread social discontent that has the potential to explode in an ugly way.


. . .


Mr. Yu argues that corruption infects every aspect of modern Chinese society, including the legal system. Historically, Chinese peasants with grievances could go to the capital and petition the emperor for redress. Today, Mr. Yu writes, millions--yes, millions--of desperate citizens flock to Beijing each year hoping to find an honest official who will dispense justice where the law has failed them at home. What will happen when they discover that their leaders at the national level are just as corrupt as those at the local level?

The violence and deprivations of the Cultural Revolution are by now well known, but Mr. Yu's reminiscences add color and texture to what the world has learned in recent years about that lost decade. The youthful Yu Hua is something of a wise guy and a schemer, pitting himself against bureaucratic inanities. It is sometimes impossible to know whether to laugh or cry.


. . .


As awful as the Cultural Revolution was, in Mr. Yu's telling its horrors sometimes pale next to those of the present day. The chapter on "bamboozle" describes how trickery, fraud and deceit have become a way of life in modern China. "There is a breakdown of social morality and a confusion in the value system of China today," he states. He writes, for example, about householders around the country who are evicted from their homes on the orders of unscrupulous, all-powerful local officials.

Mr. Yu's portrait of contemporary Chinese society is deeply pessimistic. The competition is so intense that, for most people, he says, survival is "like war." He has few hopeful words to offer, other than to quote the ancient philosopher Mencius, who taught that human progress is built on man's desire to correct his mistakes. Meanwhile, he writes, "China's pain is mine."



For the full review, see:

MELANIE KIRKPATRICK. "BOOKSHELF; Cultural Lexicon; People, leader, reading, revolution, disparity, copycat and bamboozle--some words that serve as a springboard for critiques of China." The Wall Street Journal (Weds., December 7, 2011): A17.

(Note: ellipses added.)


The book under review is:

Yu, Hua. China in Ten Words. New York: Pantheon Books, 2011.






February 15, 2012

Married Batters Paid More than Equally Good Bachelor Batters




(p. C4) Many studies have found that married men earn more than their single peers, but whether they're actually more productive is harder to answer. To settle the question, researchers looked to baseball.

They took a random sample of nearly 3,500 pro hitters, from 1871 through 2007, comparing their batting averages and other statistics with their salaries (as revealed in MLB archives and other sources). Until 1975, when the market for players became freer, there was no link between marriage, productivity and earnings. After 1975, there was some evidence that hitters who begin their careers in the bottom third of the ability spectrum gained a handful of points in batting average when they married, and a bit of salary, but the evidence was statistically weak.



For the full summary, see:

Christopher Shea. "Marriage Moneyball." The Wall Street Journal (Sat., NOVEMBER 5, 2011): C4.


The paper summarized is:

Cornaglia, Francesca, and Naomi E. Feldman. "Productivity, Wages, and Marriage: The Case of Major League Baseball." CEP Discussion Paper # 1081, September 2011.






February 14, 2012

Marco Rubio's Parents Worked Hard so He Could Do Something He Loves




RubioMarco2012-02-04.jpg


Marco Rubio. Source of photo: online version of the NYT article quoted and cited below.




(p. 10) Your parents came to Miami from Cuba in the 1950s. Your dad became a bartender, and your mom worked as a hotel maid, among other jobs. Was it always clear that you wouldn't follow them into a service job?

The service industry is hard, honorable work, but early on my parents drove it into us that a job is what you do to make a living; a career is when you get paid to do something that you love. They had jobs so I could have a career.


. . .


Koch Industries, Goldman Sachs and Morgan Stanley are among your top career campaign contributors. What do you say to people who believe that they're investing in you so that you'll push to overhaul the tax code to their benefit?

People buy into my agenda. I don't buy into anyone's agenda. I tell people what I stand for, and the things I've stood for were the same at the very beginning, when none of those people were giving me money.



For the full interview, see:

ANDREW GOLDMAN, interviewer. "TALK; Marco Rubio Won't Be V.P." The New York Times Magazine (Sun., January 29, 2012): 10.

(Note: ellipsis added; bold in original.)

(Note: the online version of the interview has the date January 26, 2012.)






February 13, 2012

Even Krugman Worries that China Faces "Economic Crisis"




China's economy is often touted as an exemplar of the success of government stimulus policies at promoting economic growth. So it is worth noting when a Nobel-Prize-winning international economist and advocate of government stimulus policies worries that in China:


(p. A25) . . . the bubble is bursting -- and there are real reasons to fear financial and economic crisis.


. . .


I've been reluctant to weigh in on the Chinese situation, in part because it's so hard to know what's really happening. All economic statistics are best seen as a peculiarly boring form of science fiction, but China's numbers are more fictional than most. I'd turn to real China experts for guidance, but no two experts seem to be telling the same story.

Still, even the official data are troubling -- and recent news is sufficiently dramatic to ring alarm bells.


. . .


Real estate investment has roughly doubled as a share of G.D.P. since 2000, accounting directly for more than half of the overall rise in investment. And surely much of the rest of the increase was from firms expanding to sell to the burgeoning construction industry.

Do we actually know that real estate was a bubble? It exhibited all the signs: not just rising prices, but also the kind of speculative fever all too familiar from our own experiences just a few years back -- think coastal Florida.


. . .


For what it's worth, statements about economic policy from Chinese officials don't strike me as being especially clear-headed. In particular, the way China has been lashing out at foreigners -- among other things, imposing a punitive tariff on imports of U.S.-made autos that will do nothing to help its economy but will help poison trade relations -- does not sound like a mature government that knows what it's doing.

And anecdotal evidence suggests that while China's government may not be constrained by rule of law, it is constrained by pervasive corruption, which means that what actually happens at the local level may bear little resemblance to what is ordered in Beijing.



For the full commentary, see:

PAUL KRUGMAN. "Will China Break?" The New York Times (Mon., December 19, 2011): A25.

(Note: ellipses added.)

(Note: the online version of the story is dated December 18, 2011.)





February 12, 2012

Pixar as a Case Study on Innovative Entrepreneurship




Pixar-TouchBK2012-02-05.jpg














Source of book image: http://murraylibrary.org/2011/09/the-pixar-touch-the-making-of-a-company/





Toy Story and Finding Nemo are among my all-time-favorite animated movies. How Pixar developed the technology and the story-telling sense, to make these movies is an enjoyable and edifying read.

Along the way, I learned something about entrepreneurship, creative destruction, and the economics of technology. In the next couple of months I occasionally will quote passages that are memorable examples of broader points or that raise thought-provoking questions about how innovation happens.


Book discussed:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.






February 11, 2012

Jobless Rate Appears Lower as Aging Population Leaves Labor Force




(p. A4) As more baby boomers leave the job market, the participation rate should continue to decline--a group of economists at the Federal Reserve projected in 2006 that it would fall to 62.5% by 2015. While that suggests the economy won't need to create as many jobs to bring down the unemployment rate, said Barclays Capital economist Dean Maki, the downside is that it won't have as large a work force to power it along and pay for the needs of an aging population.

"If you have a greater fraction of the population not working, that will make it harder to pay for costs that will be ballooning," he said.



For the full story, see:

JUSTIN LAHART. "Aging Population Eases Jobless Rate." The Wall Street Journal (Sat., November 5, 2011): A4.








February 10, 2012

Creative Destruction Helps Us Be Well




CreativeDestructionOfMedicine2012-02-04.jpg










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








Dr. Eric Topol's credible and thought-provoking comments on the over-use of stents appeared in entries in this blog in August 2006 and in December 2006.



(p. A15) "The U.S. government has been preoccupied with health care 'reform,' but this refers to improving access and insurance coverage and has little or nothing to do with innovation," even though, as Dr. Topol notes, adopting new approaches would improve care and lower costs. . . .


. . .


"The Creative Destruction of Medicine"--an allusion to economist Joseph Schumpeter's description of "creative destruction" as an engine of business innovation--is a venture capitalist's delight, describing dozens of medical technologies that show great promise. The book also provides colorful anecdotes about Dr. Topol's own sampling of these products, as both a doctor and stand-in patient.


. . .


. . . , full adoption of the new tools will require the Food and Drug Administration to alter the way it evaluates products. The FDA, he says, should allow the testing of drugs on patients who are selected for their prospect of deriving a benefit. Right now, the FDA usually requires drugs to be tested in a scattershot fashion on large populations. With drugs being tested on cancer patients, he notes, the "FDA insists on a body count to be able to quantify how much and how long the new drug improves survival"--even though diagnostic markers can sometimes reveal in advance which patients are unlikely to gain a benefit.

Dr. Topol worries that doctors will resist technologies that empower patients because the tools will also diminish the doctors' gatekeeper role. The American Medical Association, for example, battled firms that provide genetic information directly to patients. "This arrangement ultimately appears untenable," the author writes, "and eventually there will need to be full democratization of DNA for medicine to be transformed."



For the full review, see:

SCOTT GOTTLIEB. "BOOKSHELF; Digital Doctoring; It's hard to fake sleep to avoid your spouse's bedtime chatter when a 'Zeo clock' is displaying your real-time brain waves." The Wall Street Journal (Fri., February 3, 2012): A15.

(Note: ellipses added.)

(Note: the online version of the review has the title "BOOKSHELF; Digital Doctoring; The digital revolution can spur unprecedented advances in the medical sciences, argues Eric Topol in "The Creative Destruction of Medicine".")



The book under review is:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.






February 9, 2012

Euro Haiku




Welfare states' debt due
Ratings downgrades, states default
Euro muddles through


Arthur Diamond





The haiku above was my entry in response to the haiku challenge in the Kauffman Foundation's First Quarter 2012 survey "of top economics bloggers." The haiku challenge was: "The euro is troubled, so what is its fate in 2012 and/or what should policymakers do?"

The results of the Q1 2012 survey can be found at: http://www.kauffman.org/uploadedFiles/econ_bloggers_outlook_q1_2012.pdf






February 8, 2012

Stem Cell Therapy for Dry Macular Degeneration




SchwartzStevenRetinaSpecialist2012-01-30.jpg

"Dr. Steven Schwartz, a retina specialist at the University of California, Los Angeles, conducted the trial with two patients." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. B7) LOS ANGELES -- A treatment for eye diseases that is derived from human embryonic stem cells might have improved the vision of two patients, bolstering the beleaguered field, researchers reported Monday.

The report, published online in the medical journal The Lancet, is the first to describe the effect on patients of a therapy involving human embryonic stem cells.


. . ..


Both patients, who were legally blind, said in interviews that they had gains in eyesight that were meaningful for them. One said she could see colors better and was able to thread a needle and sew on a button for the first time in years. The other said she was able to navigate a shopping mall by herself.


. . .


. . . , researchers at Advanced Cell Technology turned embryonic stem cells into retinal pigment epithelial cells. Deterioration of these retinal cells can lead to damage to the macula, the central part of the retina, and to loss of the straight-ahead vision necessary to recognize faces, watch television or read.

Some 50,000 of the cells were implanted last July under the retinas in one eye of each woman in operations that took about 30 minutes.

One woman, Sue Freeman, who is in her 70s, suffered from the dry form of age-related macular degeneration, a leading cause of severe vision loss in the elderly.




For the full story, see:

ANDREW POLLACK. "Stem Cell Treatment for Eye Diseases Shows Promise." The New York Times (Thurs., January 26, 2012): B7.

(Note: ellipses added.)

(Note: the online version of the article was dated January 25, 2012.)



FreemanSueVisionImproved2012-01-30.jpg

"Sue Freeman said her vision improved in a meaningful way after the treatment, which used embryonic stem cells." Source of caption and photo: online version of the NYT article quoted and cited above.








February 7, 2012

The Tasmanian Technological Regress: "Slow Strangulation of the Mind"




(p. 78) The most striking case of technological regress is Tasmania. Isolated on an island at the end of the world, a population of less than 5,000 hunter-gatherers divided into nine tribes did not just stagnate, or fail to progress. They fell steadily and gradually back into a simpler toolkit and lifestyle, purely because they lacked the numbers to sustain their existing technology. Human beings reached Tasmania at least 35,000 years ago while it was still connected to Australia. It remained connected - on and off - until about 10,000 years ago, when the rising seas filled the Bass Strait. Thereafter the Tasmanians were isolated. By the time Europeans first encountered Tasmanian natives, they found them not only to lack many of the skills and tools of their mainland cousins, but to lack many technologies that their own ancestors had once possessed. They had no bone tools of any kind, such as needles and awls, no cold-weather clothing, no fish hooks, no hafted tools, no barbed spears, no fish traps, no spear throwers, no boomerangs. A few of these had been invented on the mainland after the Tasmanians had been isolated from it - the boomerang, for instance - but most had been made and used by the very first Tasmanians. Steadily and inexorably, so the archaeological history tells, these tools and tricks were abandoned. Bone tools, for example, grew simpler and simpler until they were dropped altogether about 3,800 years ago. Without bone tools it became impossible to sew skins into clothes, so even in the bitter winter, the Tasmanians went nearly naked but for seal-fat grease smeared on their skin and wallaby pelts over their shoulders. The first Tasmanians caught and ate plenty of fish, but by the time of Western contact they not only ate no fish (p. 79) and had eaten none for 3,000 years, but they were disgusted to be offered it (though they happily ate shellfish).

The story is not quite that simple, because the Tasmanians did invent a few new things during their isolation. Around 4,000 years ago they came up with a horribly unreliable form of canoe-raft, made of bundles of rushes and either paddled by men or pushed by swimming women (!), which enabled them to reach offshore islets to harvest birds and seals. The raft would become waterlogged and disintegrate or sink after a few hours, so it was no good for re-establishing contact with the mainland. As far as innovation goes, it was so unsatisfactory that it almost counts as an exception to prove the rule. The women also learnt to dive up to twelve feet below the water to prise clams off the rocks with wooden wedges and to grab lobsters. This was dangerous and exhausting work, which they were very skilled at: the men did not take part. So it was not that there was no innovation; it was that regress overwhelmed progress.

The archaeologist who first described the Tasmanian regress, Rhys Jones, called it a case of the 'slow strangulation of the mind', which perhaps understandably enraged some of his academic colleagues. There was nothing wrong with individual Tasmanian brains; there was something wrong with their collective brains. Isolation - self-sufficiency - caused the shrivelling of their technology. Earlier I wrote that division of labour was made possible by technology. But it is more interesting than that. Technology was made possible by division of labour: market exchange calls forth innovation.



Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





February 6, 2012

Reagan: "I Wasn't a Great Communicator, but I Communicated Great Things"




Today (2/6/2012) is Ronald Reagan's 101st birthday.



(p. A15) Jim Baker, his first and great chief of staff, and his friend, remembered the other day the atmosphere of merriness around Reagan, the constant flow of humor.

But there was often a genial blackness to it, a mordant edge. In a classic Reagan joke, a man says sympathetically to his friend, "I'm so sorry your wife ran away with the gardener." The guy answers, "It's OK, I was going to fire him anyway." Or: As winter began, the young teacher sought to impart to her third-graders the importance of dressing warmly. She told the heart-rending story of her little brother, a fun-loving boy who went out with his sled and stayed out too long, caught a cold, then pneumonia, and days later died. There was dead silence in the schoolroom as they took it in. She knew she'd gotten through. Then a voice came from the back: "Where's the sled?"

The biggest misunderstanding about Reagan's political life is that he was inevitable. He was not. He had to fight for every inch, he had to make it happen.


. . .


He didn't see himself as "the great communicator." It was so famous a moniker that he could do nothing but graciously accept the compliment, but he well understood it was bestowed in part by foes and in part to undercut the seriousness of his philosophy: "It's not what he says, it's how he says it." He answered in his farewell address: "I never thought it was my style or the words I used that made a difference: it was the content. I wasn't a great communicator, but I communicated great things." It wasn't his eloquence people supported, it was his stands--opposition to the too-big state, to its intrusions and demands, to Soviet communism. Voters weren't charmed, they were convinced.



For the full commentary, see:

PEGGY NOONAN. "Ronald Reagan at 100; Being a good man helped him become a great one." The Wall Street Journal (Sat., February 5, 2011): A15.

(Note: ellipsis added.)





February 5, 2012

Study Finds Lack of Control at Office Is Deadly for Men




(p. C12) . . . Israeli scientists found that the factor most closely linked to health was the support of co-workers: Less-kind colleagues were associated with a higher risk of dying. While this correlation might not be surprising, the magnitude of the effect is unsettling. According to the data, middle-age workers with little or no "peer social support" in the workplace were 2.4 times more likely to die during the study.

But that wasn't the only noteworthy finding. The researchers also complicated longstanding ideas about the relationship between the amount of control experienced by employees and their long-term health. Numerous studies have found that the worst kind of workplace stress occurs when people have little say over their day. These employees can't choose their own projects or even decide which tasks to focus on first. Instead, they must always follow the orders of someone else. They feel like tiny cogs in a vast corporate machine.

Sure enough, this new study found that a lack of control at the office was deadly--but only for men. While male workers consistently fared better when they had some autonomy, female workers actually fared worse. Their risk of mortality was increased when they were put in positions with more control.

While it remains unclear what's driving this unexpected effect, one possibility is that motherhood transforms control at the office--normally, a stress reducer--into a cause of anxiety. After all, having a modicum of control means that women must constantly navigate the tensions between work and family. Should they stay late at their job? Or go home and help take care of the kids? This choice is so stressful that it appears to increase the risk of death.



For the full summary, see:

JONAH LEHRER. "HEAD CASE; Your Co-Workers Might Be Killing You; Hours don't affect health much--but unsupportive colleagues do." The Wall Street Journal (Sat., August 20, 2011): C12.

(Note: ellipsis added.)


The paper referred to in the quote from Lehrer's summary is:

Shirom, Arie, Sharon Toker, Yasmin Alkaly, Orit Jacobson, and Ran Balicer. "Work-Based Predictors of Mortality: A 20-Year Follow-up of Healthy Employees." Health Psychology 30, no. 3 (May 2011): 268-75.





February 4, 2012

BP Oil Spill Does Little Harm to Tuna




BluefinTuna2012-01-30.jpg











"The Gulf of Mexico's bluefin-tuna population is likely to be cut by less than 4% because of the BP oil spill." Source of caption and photo: online version of the WSJ article quoted and cited below.





(p. A6) Fears that last year's BP PLC oil spill would decimate the bluefin tuna that spawn in the Gulf of Mexico haven't played out, with the population of the prized fish likely to be cut by less than 4%, a federal study has concluded.

The oil from the biggest offshore spill in U.S. history covered about one-fifth of the habitat of the Gulf's recently hatched tuna, and scientists feared that could hammer the future population of the fish.

An analysis based on two different models by the National Oceanic and Atmospheric Administration, or NOAA, has concluded that the spill "will likely result in less than a 4% reduction in future spawning biomass" of bluefin tuna in the Gulf.


. . .


Russell Miget, an environmental and seafood quality specialist with Texas A&M University who wasn't associated with the research, said the tuna study squared with other data suggesting that the impact of the spill on marine life was "less than what people were concerned about at the time of the spill." Still, "fishery science is not an exact science," he said.



For the full story, see:

GAUTAM NAIK and NATHAN KOPPEL. "Bluefin Tuna Thrive Despite Oil Spill." The Wall Street Journal (Tues., December 6, 2011): A6.

(Note: ellipsis added.)

(Note: the online version of the article had the title "Bluefin Tuna Endure After Oil Spill.")






February 3, 2012

How to Slow Down Creative Destruction




(p. 356) This catallaxy will not go smoothly, or without resistance. Natural and unnatural disasters will still happen. Governments will bail out big corporations and big bureaucracies, hand them special favours such as subsidies or carbon rations and regulate them in such a way as to create barriers to entry, slowing down creative destruction. Chiefs, priests, thieves, financiers, consultants and others will appear on all sides, feeding off the surplus (p. 357) generated by exchange and specialisation, diverting the life-blood of the catallaxy into their own reactionary lives. It happened in the past. Empires bought stability at the price of creating a parasitic court; monotheistic religions bought social cohesion at the price of a parasitic priestly class; nationalism bought power at the expense of a parasitic military; socialism bought equality at the price of a parasitic bureaucracy; capitalism bought efficiency at the price of parasitic financiers.


Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





February 2, 2012

Kickstarter Helps Finance Projects




KickstarterProjects2012-01-29.jpg "The creators of the TikTok Watchband, left, and the Elevation Dock have raised far more money on Kickstarter than they initially sought." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. B1) Kickstarter is a "crowd-funding" site. It's a place for creative people to get enough start-up money to get their projects off the ground. The categories include music, film, art, design, food, publishing and technology. The projects seeking support might be recording a CD, putting on a play, producing a short film or developing a cool new tech product.

Suppose you're the one who needs money. You describe your project with a video, a description and a target dollar amount. Listing your project is free.

If the citizens of the Web pledge enough money to meet your target by the deadline you set, then you get your money and (p. B7) you proceed with your project. At that point, Kickstarter takes 5 percent, and you pay 3 to 5 percent to Amazon.com's credit card service.

If you don't raise the money by the deadline, the deal is off. Your contributors keep their money, and Kickstarter takes nothing.

But here's the part I had trouble understanding: These are not investments. If you make a pledge, you'll never see your money again, even if the play, movie or gadget becomes a huge hit. You do get some little memento of your financial involvement -- a T-shirt or a CD, for example, or a chance to preorder the gadget being developed -- but nothing else tangible. Not even a tax deduction.

Furthermore, you have no guarantee that the project will even see the light of day. All kinds of things happen between inspiration and production. People lose interest, get married, move away, have trouble lining up a factory. The whole thing dies, and it was all for nothing.

So why, I kept wondering, does anybody participate? Who would give money for so little in return?


. . .


I started reading about . . . projects. The one that seemed to be drumming up the most interest lately is called the Elevation Dock. It's just a charging stand for the iPhone, but wow, what a stand. It's exquisitely milled from solid, Applesque aluminum. You don't have to take your iPhone (or iPod Touch) out of its case to insert it into this dock. And the dock is solid enough that you can yank the phone out of it with one hand. The dock stays on the desk.


. . .

Other projects seeking your support: Jaja, a drawing stylus for iPad and Android tablets that's pressure-sensitive (makes fatter lines when you bear down harder); LED Side Glow Hats (baseball caps with illuminated brims for working in dark places); Eye3 (an inexpensive flying drone for aerial photography); and so on.

Not all of them will reach their financing goals (only 44 percent do). Even fewer will wind up on store shelves.

But in dark economic times, Kickstarter offers aspirational voyeurism: you can read about the big dreams of the little people. And you can give the worthy artists a small financial vote of confidence -- and enjoy the ride with them.



For the full story, see:

DAVID POGUE. "STATE OF THE ART; Embracing the Mothers of Invention." The New York Times (Thurs., January 26, 2012): B1 & B7.

(Note: ellipses added.)

(Note: the online version of the article was dated January 25, 2012.)






February 1, 2012

Evidence that IQ Is Half Nature and Half Nurture




(p. C4) Hardly any subject in science has been so politically fraught as the heritability of intelligence. For more than a century, since Francis Galton first started speculating about the similarities of twins, nature-nurture was a war with a stalemated front and intelligence was its Verdun--the most hotly contested and costly battle.

So would it not be rather wonderful if a scientific discovery came along that called a truce and calmed all the fury? I think this is about to happen. Call it the Goldilocks theory of intelligence: not too genetic, not too environmental--and proving that intelligence is impossible to meddle with, genetically.

The immediate cause of this optimism is a recent paper in Molecular Psychiatry, which confirms that genes account for about half of the difference in IQ between any two people in a modern society, but that the relevant genes are very numerous and the effect of each is very small.



For the full commentary, see:

MATT RIDLEY. "MIND & MATTER; A Truce in the War Over Smarts and Genes." The Wall Street Journal (Sat., August 20, 2011): C4.


The paper refereed to in the quote from Ridley's commentary is:

Davies, G., A. Tenesa, A. Payton, J. Yang, S. E. Harris, D. Liewald, X. Ke, S. Le Hellard, A. Christoforou, M. Luciano, K. McGhee, L. Lopez, A. J. Gow, J. Corley, P. Redmond, H. C. Fox, P. Haggarty, L. J. Whalley, G. McNeill, M. E. Goddard, T. Espeseth, A. J. Lundervold, I. Reinvang, A. Pickles, V. M. Steen, W. Ollier, D. J. Porteous, M. Horan, J. M. Starr, N. Pendleton, P. M. Visscher, and I. J. Deary. "Genome-Wide Association Studies Establish That Human Intelligence Is Highly Heritable and Polygenic." Molecular Psychiatry 16, no. 10 (October 2011): 996-1005.





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