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November 30, 2013

Google Surprised at Success of Chinese Cyberattack




(p. 268) Though the underlying issue of Google's China pullout was censorship, it was ironic that a cyberattack had triggered the retreat. Google had believed that its computer science skills and savvy made it a leader in protecting its corporate information. With its blend of Montessori naiveté and hubris that had served it so well in other areas, the company felt it could do security better. Until the China incursion, it appeared to be succeeding.


Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

(Note: italics in original.)






November 29, 2013

Kerosene Creatively Destroyed Whale Oil




WhaleOilLamps2013-10-25.jpg "The whale-oil lamps at the Sag Harbor Whaling and Historical Museum are obsolete, though at one time, whale oil lighted much of the Western world." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. 20) Like oil, particularly in its early days, whaling spawned dazzling fortunes, depending on the brute labor of tens of thousands of men doing dirty, sweaty, dangerous work. Like oil, it began with the prizes closest to home and then found itself exploring every corner of the globe. And like oil, whaling at its peak seemed impregnable, its product so far superior to its trifling rivals, like smelly lard oil or volatile camphene, that whaling interests mocked their competitors.

"Great noise is made by many of the newspapers and thousands of the traders in the country about lard oil, chemical oil, camphene oil, and a half-dozen other luminous humbugs," The Nantucket Inquirer snorted derisively in 1843. It went on: "But let not our envious and -- in view of the lard oil mania -- we had well nigh said, hog-gish opponents, indulge themselves in any such dreams."

But, in fact, whaling was already just about done, said Eric Jay Dolin, who . . . is the author of "Leviathan: The History of Whaling in America." Whales near North America were becoming scarce, and the birth of the American petroleum industry in 1859 in Titusville, Pa., allowed kerosene to supplant whale oil before the electric light replaced both of them and oil found other uses.


. . .


Mr. Dolin said the message for today was that one era's irreplaceable energy source could be the next one's relic. Like whaling, he said, big oil is ripe to be replaced by something newer, cleaner, more appropriate for its moment.



For the full story, see:

PETER APPLEBOME. "OUR TOWNS; Once They Thought Whale Oil Was Indispensable, Too." The New York Times, First Section (Sun., August 3, 2008): 20.

(Note: ellipses added.)

(Note: the online version of the story has the title, "OUR TOWNS; They Used to Say Whale Oil Was Indispensable, Too.")


Dolin's book is:

Dolin, Eric Jay. Leviathan: The History of Whaling in America. New York: W. W. Norton & Company, Inc., 2007.






November 28, 2013

Beer Was Safer than Water




(p. C24) . . . what would beer be without water? . . . New York City, at least until the opening of the Croton Aqueduct in 1842, had no clean, reliable source. In fact, since hops have a preservative quality, and brewing requires boiling, "beer was once considered safer to drink than water."


For the full review, see:

EDWARD ROTHSTEIN. "EXHIBITION REVIEW; A Tipple or Two? It Was Safer Than Water." The New York Times (Fri., May 25, 2012): C19 & C24.

(Note: ellipses added.)

(Note: the online version of the review has the date May 24, 2012.)






November 27, 2013

Former Botswana President Won Prize for Ceding Power




MogaeFestusBotswanaExPresident2013-10-25.jpg












"Festus G. Mogae, trained as an economist, was Botswana's president for two terms." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A10) JOHANNESBURG -- A foundation dedicated to celebrating and encouraging good government in Africa awarded its annual prize on Monday to Botswana's former president, Festus G. Mogae. He was honored for consolidating his nation's democracy, ensuring that its diamond wealth enriched its people and providing bold leadership during the AIDS pandemic.

Mr. Mogae, 69, a man with a modest style, will receive $5 million over the next 10 years and $200,000 per year thereafter for the rest of his life. Over the coming decade, the foundation may also grant another $200,000 a year to causes of Mr. Mogae's choice.

The award, the Mo Ibrahim Prize for Achievement in African Leadership, is bestowed by the Mo Ibrahim Foundation, named after its founder, a Sudanese billionaire.



For the full story, see:

CELIA W. DUGGER. "Botswana's Ex-President Wins Leadership Prize." The New York Times (Tues., October 21, 2008): A10.

(Note: the online version of the story has the date October 20, 2008.)







November 26, 2013

Nebraska Teenager Becomes the "George Clooney of YouTube"




(p. 263) Google also became more aggressive in connecting sponsors for popular videos. A paragon of YouTube's business model was "Fred," a video channel created by a Columbus, Nebraska, teenager named Lucas Cruikshank. The teen pretended to be a six-year-old kid named Fred Figglehorn in a series of two-minute videos. "Fred is the George Clooney of YouTube," says Hunter Walk. "He was the first one with a million subscribers. He uploads videos, and we put ads against them. Sometimes he sells product placement ads. Fred makes a million dollars a year. He just signed a movie deal." The Fred videos-- generally manic rants in which Cruikshank portrays a hyperactive, possibly brain-damaged child who speaks like one of Ross Bagdasarian's chipmunks-- often sported commercial messages for sponsors such as Samsung, the Food Channel, and Bratz on an overlay at the bottom of the window. Since he started in 2008, at age fourteen, Fred's (p. 264) YouTube videos have chalked up over half a billion viewings. Though Fred's success was solely a product of YouTube, people in the company never met the phenom. "We sent him a cake once," says Walk.

YouTube helped Fred's youthful creator not just by selling ads but by providing analytics, the same way it did for AdSense publishers. (This was a result of an initiative called the YouTube Insight project, developed by engineers in Google's Zurich center.) Such data helped creators learn what was working and where. "They're like, 'Oh my God, I'm big in the U.K.! I never knew I had a London following!'" says Walk. Superusers such as Cruikshank were so successful in exploiting YouTube's business initiatives that corporations such as Sony were studying their methodology and even paid some of them consultant fees to help them understand the digital world.



Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.






November 25, 2013

Malcolm Gladwell Has High Praise for Michael Lewis




GladwellMalcolmDrawing2013-10-27.jpg











"Malcolm Gladwell" Source of caption and image: online version of the NYT interview quoted and cited below.




I have found the two books that I have read by Michael Lewis to be very useful. But I have found the five books that I have read by Malcolm Gladwell to be full of wonderful and important examples and thought-provoking insights. So I am a bit surprised by the level of Gladwell's praise for Lewis. (Maybe the problem is that I have not yet read Moneyball or The Blind Side.)


(p. 8) What books, to your mind, bring together social science, business principles and narrative nonfiction in an interesting or innovative way?

. . . Bringing together social science and business principles is easy. Doing that and telling a compelling story is next to impossible. I think only Michael Lewis can do it well. His nonbusiness books like "The Blind Side," by the way, are even better. That book is as close to perfect as a work of popular nonfiction can be.



For the full interview, see:

"By the Book; Malcolm Gladwell; The author of "David and Goliath" compares Michael Lewis to Tiger Woods: "I'll never play like that. But it's good to be reminded every now and again what genius looks like." The New York Times Book Review (Sun., October 6, 2013): 8.

(Note: bold in original; ellipsis added.)

(Note: neither the print nor the online version of the interview identify the name of the interviewer.)

(Note: the online version of the interview has the date October 3, 2013, and has the title "Malcolm Gladwell: By the Book; The author of "David and Goliath" compares Michael Lewis to Tiger Woods: "I'll never play like that. But it's good to be reminded every now and again what genius looks like.")






November 24, 2013

Fed Regulations Are "a Wild Card" Since "Regulators Have a Lot of Leeway"




(p. 1D) The president of First National of Nebraska, the nation's largest privately held banking firm, said new federal regulatory and com­pliance efforts stand to cost the company as much as $30 million this year.

"It is a big uncertainty in the banking world," said Dan O'Neill, speaking Wednesday at the com­pany's annual meeting in Omaha. "They are not operating off of concrete rules. A lot of it is their interpretation."

The federal Consumer Fi­nancial Protection Bureau was formed as a result of the federal Dodd-Frank laws passed in 2010 after widespread bank failures and bailouts using taxpayer money.


. . .


The bureau, he said, worries banks because there is not a "clear body of rules" from which the regulator is operating in eval­uating the fairness of a bank's business practices. He said the agency's regulators have a lot of leeway in deciding what to do af­-(p. 2D)ter examining a bank; penalties for running afoul include fines.

"So it is a bit of a wild card," he said.



For the full story, see:

RUSSELL HUBBARD. "ANNUAL MEETING; First National Chief Says Regulatory Costs Mounting." Omaha World-Herald (Thurs., June 20, 2013): 1D-2D.

(Note: ellipsis added.)






November 23, 2013

"Engrossing, Brain-Tickling" Refutation of Al Gore's Global Warming Assertions




LomborgBjornCoolItDocumentary2010-10-25.jpg "The Danish economist Bjorn Lomborg in "Cool It," a documentary based on his book." Source of caption and photo: online version of the NYT review quoted and cited below.



(p. C8) Debunking claims made by "An Inconvenient Truth" and presenting alternative strategies, "Cool It" finally blossoms into an engrossing, brain-tickling picture as many of Al Gore's meticulously graphed assertions are systematically -- and persuasively -- refuted. (I was intrigued to hear Mr. Lomborg say, for instance, that the polar-bear population is more endangered by hunters than melting ice.)


. . .


. . . "Cool It" is all about the pep: playing down the talking heads and playing up the "git 'er done." If algae can suck up carbon dioxide and spit out oil, what on earth are we worrying about?



For the full review, see:

JEANNETTE CATSOULIS. "Global Warming and Common Sense." The New York Times (Fri., November 12, 2010): C8.

(Note: the online version of the review has the date November 11, 2010.)


The documentary is based on the book:

Lomborg, Bjørn. Cool It: The Skeptical Environmentalist's Guide to Global Warming. New York: Alfred A. Knopf, 2007.






November 22, 2013

Pretentious Studios Were Pushed Aside by Grounded Googlers




(p. 261) Kamangar didn't put a value judgment on the way the labels and studios worked but tried to crack their code, talking to executives, producers, agents, and managers. One day he happened to be in New York and was invited to meet with the CEO of Universal Music Group, Doug Morris. Kamangar was escorted by bodyguards to a private elevator and ushered to a fancy office high above the city. He couldn't help thinking of the contrast with Google, where you stumbled in and went to the microkitchen for coffee. Kamangar didn't dwell on the (p. 262) irony that it was the scruffy kids in shorts, munching energy bars and writing analytics programs, who were pushing aside the old power structure. While he put the pieces of YouTube together, though, he always kept in mind that he was documenting a traditional media system on the verge of collapse. He had to deal with the music world as it was but also plan for the way it would be after disruptions, which Google and YouTube were accelerating.


Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.






November 21, 2013

After Humans, Earth Would Quickly Revert to Its Pre-Human Condition




TheWorldWithoutUsBK2013-10-24.jpg

















Source of book image: http://upload.wikimedia.org/wikipedia/en/8/88/The_World_Without_Us_(US_cover).jpg




When I saw the mention of this book, quoted below, I thought it must be closely related to the 2008 History Channel program "Life Without Us" that I liked very much. Apparently the two overlap on the message that a post-human planet Earth would quickly return to its pre-human condition, but they differ in that the program does not share the book's anti-technology leitmotif.

The main take-away from the program, for me, was that environmentalists worry too much about the long-term damage that humans can do to the planet---for the most part, the planet is pretty resilient and can quickly return itself to something close to its pre-human condition.


(p. C10) Mr. Weisman's 2007 book, "The World Without Us," was a surprise best seller that imagined what would happen to the planet were all humans to suddenly disappear. Turns out that nature would in short order erase pretty much everything we've done.


Source:

MICHAEL SHERMER. "Menace to the Planet?" The Wall Street Journal (Sat., Oct. 5, 2013): C10.

(Note: the online version of the review has the date Oct. 4, 2013, and has the title "BOOKSHELF; Book Review: 'Ten Billion' by Stephen Emmott | 'Countdown' by Alan Weisman; While some worry a booming population doom the planet, in many Western countries there is now a birth dearth.")


The book mentioned is:

Weisman, Alan. The World without Us. New York: Thomas Dunne Books, 2007.






November 20, 2013

Companies Do Less R&D in Countries that Steal Intellectual Property





The conclusions of Gupta and Wang, quoted below, are consistent with research done many years ago by economist Edwin Mansfield.


(p. A15) China's indigenous innovation program, launched in 2006, has alarmed the world's technology giants more than any other policy measure since the start of economic reforms in 1978. A recent report from the U.S. Chamber of Commerce even went so far as to call this program "a blueprint for technology theft on a scale the world has not seen before."


. . .


A comparison with India is illustrative. India has no equivalent to indigenous innovation rules. The government also is content to allow companies to set up R&D facilities without any rules about sharing technology with local partners or the like.

These policy differences appear to have a significant influence on corporate behavior. Consider the top 10 U.S.-based technology giants that received the most patents from the U.S. Patent and Trademark Office (USPTO) between 2006 and 2010: IBM, Microsoft, Intel, Hewlett-Packard, Micron, GE, Cisco, Texas Instruments, Broadcom and Honeywell.

Half of these companies appear not to be doing any significant R&D work in China. Between 2006 and 2010, the U.S. PTO did not award a single patent to any China-based units of five out of the 10 companies. In contrast, only one of the 10 did not receive a patent for an innovation developed in India.



For the full commentary, see:

Anil K. Gupta and Haiyan Wang. "How Beijing Is Stifling Chinese Innovation." The Wall Street Journal (Thurs., September 1, 2011): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the title "Beijing Is Stifling Chinese Innovation.")


Mansfield's relevant paper is:

Mansfield, Edwin. "Unauthorized Use of Intellectual Property: Effects on Investment, Technology Transfer, and Innovation." In Global Dimensions of Intellectual Property Rights in Science and Technology, edited by M. E. Mogee M. B. Wallerstein, and R. A. Schoen. Washington, D.C.: National Academy Press, 1993, pp. 107-45.


Mansfield's research on this issue is discussed on pp. 1611-1612 of:

Diamond, Arthur M., Jr. "Edwin Mansfield's Contributions to the Economics of Technology." Research Policy 32, no. 9 (Oct. 2003): 1607-17.






November 19, 2013

Booker Bravely Boosted Bain




MurphyAndBookerMeetThePress2010-10-25.jpg "Cory A. Booker, right, the Democratic mayor of Newark, on "Meet the Press" with Mike Murphy, a Republican strategist. "Enough is enough," Mr. Booker said of attacks in the presidential race." Source of caption and photo: online version of the NYT article quoted and cited below.



Romney was criticized for his past association with Bain Capital which was criticized for its role in the process of creative destruction. Democrat Cory Booker, to his credit, defended Bain. (But to his discredit, he later went wobbly when fellow Democrats were appalled by his defense.)


(p. A15) Mayor Cory A. Booker of Newark, a prominent Democrat enlisted as a surrogate for President Obama's campaign, sharply criticized it on Sunday for attacking Mitt Romney's work at the private equity firm Bain Capital.

Mr. Booker, speaking on the NBC program "Meet the Press," made his comments in response to a television advertisement the president's campaign unveiled last week. It portrays Mr. Romney, the presumptive Republican presidential nominee, as someone who eliminated jobs for the sake of profits during his years running Bain Capital.

"I have to just say, from a very personal level, I'm not about to sit here and indict private equity," Mr. Booker said. "To me, it's just we're getting to a ridiculous point in America, especially that I know I live in a state where pension funds, unions and other people are investing in companies like Bain Capital. If you look at the totality of Bain Capital's record, they've done a lot to support businesses, to grow businesses. And this to me, I'm very uncomfortable with."



For the full story, see:

RAYMOND HERNANDEZ. "Newark Mayor Criticizes Obama's Ad." The New York Times (Mon., May 21, 2012): A15.

(Note: the online version of the article has the date May 20, 2012, and has the title "Surrogate for Obama Denounces Anti-Romney Ad.")






November 18, 2013

Google Was Lax in Killing Failed Projects




(p. 255) Oddly, whereas Google had built its data infrastructure to reroute around failure, it had no human infrastructure to deal with failed projects. "We didn't know which ones they were, because we never paused to ask ourselves that question," says Pichette. "The people working on that project know it's failing-- as senior management you have to say, 'Let's declare failure-- let's get the champagne out and kill this puppy. Then we can put you on stuff that's really cool and sexy.'" That had always been part of Google's philosophy, but whether from lack of rigor or just distraction, the company had been lax in actually issuing execution orders. One of the first puppies Pichette helped drown was a virtual-reality-style communications program called Lively.


Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.






November 17, 2013

Foreign Aid Frees Despots from Having to Seek the Consent of the Governed




TheGreatEscapeBK2013-10-24.jpg











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






(p. 4) IN his new book, Angus Deaton, an expert's expert on global poverty and foreign aid, puts his considerable reputation on the line and declares that foreign aid does more harm than good. It corrupts governments and rarely reaches the poor, he argues, and it is high time for the paternalistic West to step away and allow the developing world to solve its own problems.

It is a provocative and cogently argued claim. The only odd part is how it is made. It is tacked on as the concluding section of "The Great Escape: Health, Wealth, and the Origins of Inequality" (Princeton University Press, 360 pages), an illuminating and inspiring history of how mankind's longevity and prosperity have soared to breathtaking heights in modern times.


. . .


THE author has found no credible evidence that foreign aid promotes economic growth; indeed, he says, signs show that the relationship is negative. Regretfully, he identifies a "central dilemma": When the conditions for development are present, aid is not required. When they do not exist, aid is not useful and probably damaging.

Professor Deaton makes the case that foreign aid is antidemocratic because it frees local leaders from having to obtain the consent of the governed. "Western-led population control, often with the assistance of nondemocratic or well-rewarded recipient governments, is the most egregious example of antidemocratic and oppressive aid," he writes. In its day, it seemed like a no-brainer. Yet the global population grew by four billion in half a century, and the vast majority of the seven billion people now on the planet live longer and more prosperous lives than their parents did.



For the full review, see:

FRED ANDREWS. "OFF THE SHELF; A Surprising Case Against Foreign Aid." The New York Times, SundayBusiness Section (Sun., October 13, 2013): 4.

(Note: ellipsis added.)

(Note: the online version of the review has the date October 12, 2013.)



The book reviewed is:

Deaton, Angus. The Great Escape: Health, Wealth, and the Origins of Inequality. Princeton, N.J.: Princeton University Press, 2013.






November 16, 2013

Successful Entrepreneurs Focus Their Attention




(p. A31) Most successful people also have a phenomenal ability to consciously focus their attention. . . .

Control of attention is the ultimate individual power. People who can do that are not prisoners of the stimuli around them. They can choose from the patterns in the world and lengthen their time horizons. This individual power leads to others. It leads to self-control, the ability to formulate strategies in order to resist impulses. If forced to choose, we would all rather our children be poor with self-control than rich without it.

It leads to resilience, the ability to persevere with an idea even when all the influences in the world say it can't be done. A common story among entrepreneurs is that people told them they were too stupid to do something, and they set out to prove the jerks wrong.

It leads to creativity. Individuals who can focus attention have the ability to hold a subject or problem in their mind long enough to see it anew.



For the full commentary, see:

DAVID BROOKS. "Lost in the Crowd." The New York Times (Tues., December 16, 2008): A31.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date December 15, 2008.)






November 15, 2013

Income of Rich Is More Volatile than Income of Poor or Middle Class




VolatileIncomeAndSpendingGraph2013-10-25.jpgSource of graph: online version of the WSJ article quoted and cited below.



(p. C1) During the past three recessions, the top 1% of earners (those making $380,000 or more in 2008) experienced the largest income shocks in percentage terms of any income group in the U.S., according to research from economists Jonathan A. Parker and Annette Vissing-Jorgensen at Northwestern University. When the economy grows, their incomes grow up to three times faster than the rest of the country's. When the economy (p. C2) falls, their incomes fall two or three times as much.

The super-high earners have the biggest crashes. The number of Americans making $1 million or more fell 40% between 2007 and 2009, to 236,883, while their combined incomes fell by nearly 50%--far greater than the less than 2% drop in total incomes of those making $50,000 or less, according to Internal Revenue Service figures.


. . .


"High beta" is a term used in financial markets to describe a stock or asset that has exaggerated up and down swings with the market. Tech start-ups and casino stocks have high betas, for example. Yet studies show that today's rich have higher betas than many of the riskiest gambling stocks. Between 1947 and 1982, the beta of the top 1% was a modest 0.72, meaning that their incomes moved relatively in line with the rest of America. Between 1982 and 2007, their beta soared more than three-fold.

What created high-beta wealth? Economists aren't sure. The rise of the high-betas and the rise in inequality started at the same time, suggesting they have a common cause. Mr. Parker and Ms. Vissing-Jorgenssen cite new communication technologies that allow the best workers and products to be scaled over larger markets, thus making them more sensitive to economic changes. Others cite globalization and the rise of "winner-take-all" pay schemes.



For the full commentary, see:

ROBERT FRANK. "The Wild Ride of the 1%; The once-stable incomes of America's biggest earners now fluctuate dramatically from year to year. And as go the rich, so goes much of the economy." The Wall Street Journal (Sat., October 22, 2011): C1-C2.

(Note: ellipsis added.)


The Parker and Vissing-Jorgenssen paper is:

Parker, Jonathan A., and Annette Vissing-Jorgensen. "The Increase in Income Cyclicality of High-Income Households and Its Relation to the Rise in Top Income Shares." Brookings Papers on Economic Activity, no. 2 (Fall 2010): 1-70.






November 14, 2013

Google Gave YouTube Entrepreneurial Autonomy




(p. 250) But after the purchase [of YouTube], Google did something very smart. Almost as if acknowledging that overattention from the top had hobbled Google's original video effort, the company made a conscious decision not to integrate YouTube. "They were edgy and small, and we were getting big," says Drummond. "We didn't want to screw them up." (Google was also smarting from its $ 900 million acquisition of dMarc Broadcasting, a company dealing in radio advertising, which had not gone well. "They had tried more of a top-down approach with dMarc and considered that a disaster," says Hurley.) YouTube would keep its brand and even stay in the building it had recently occupied in San Bruno, a former headquarters of the Gap.


Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

(Note: bracketed words added.)






November 13, 2013

Greenspan's Epiphany: As Entitlements Rise, Savings Fall




TheMapAndTheTerritoryBK2013-10-24.jpg











Source of book image: http://s.wsj.net/public/resources/images/BN-AB661_bkrvgr_GV_20131021130523.jpg







(p. C11) In his new book "The Map and the Territory," to be released on Tuesday, Mr. Greenspan, 87, goes on a hunt for what has gone wrong in American politics and in the U.S. economy.


. . .


Mr. Greenspan's biggest revelation came one day about a year ago when he was playing with gross domestic savings numbers. What he found, to his surprise and initial skepticism, was that an increase in entitlements has closely corresponded to a decline in the country's savings. "We had this extraordinary increase in benefits, with each party trying to outbid the other," he says. "That practice has been eroding the country's flow of savings that's so critical in financing our capital investment." The decline in savings has been partly offset by borrowing from abroad, which brings us to our current foreign debt: "$5 trillion and counting," he says.


. . .


Studying the minutiae of the events leading to the financial crisis brought to mind some lessons from his famous friendship, from the 1950s on, with the late Objectivist philosopher Ayn Rand.


. . .


Mr. Greenspan then believed in analysis based mainly on hard science and empirical facts. Rand told him that unless he considered human nature and its irrational side, he would "miss a very large part of how human beings behaved." At the time they weren't discussing economics, but today he realizes the full impact of emotions and instincts on markets. He also has come to admire psychologist and Princeton University professor emeritus Daniel Kahneman's work applying psychological insights to economic theory, for which he won a Nobel Prize in 2002.


. . .


With his new book, Mr. Greenspan hopes to provide politicians and the public with a road map to avoid making the same mistakes again. His suggestions include reducing entitlements, embracing "creative destruction" by letting facilities with cutting-edge technology displace those with low productivity, and fixing the political system by encouraging bipartisanship.



For the full interview/review, see:

ALEXANDRA WOLFE, interviewer/reviewer. "WEEKEND CONFIDENTIAL; Alan Greenspan." The Wall Street Journal (Sat., Oct. 19, 2013): C11.

(Note: ellipses added.)

(Note: the online version of the interview/review has the date Oct. 18, 2013, and has the title "WEEKEND CONFIDENTIAL; Alan Greenspan: What Went Wrong; The former Fed chairman on where the economy went wrong, where he went wrong--and Ayn Rand.")



The book discussed is:

Greenspan, Alan. The Map and the Territory: Risk, Human Nature, and the Future of Forecasting. New York: Penguin Press, 2013.






November 12, 2013

How Adding Bike Lanes Increases Air Pollution




(p. A1) SAN FRANCISCO -- New York is wooing cyclists with chartreuse bike lanes. Chicago is spending nearly $1 million for double-decker bicycle parking.

San Francisco can't even install new bike racks.

Blame Rob Anderson. At a time when most other cities are encouraging biking as green transport, the 65-year-old local gadfly has stymied cycling-support efforts here by arguing that urban bicycle boosting could actually be bad for the environment. That's put the brakes on everything from new bike lanes to bike racks while the city works on an environmental-impact report.


. . .


Cars always will vastly outnumber (p. A15) bikes, . . . [Mr. Anderson] reasons, so allotting more street space to cyclists could cause more traffic jams, more idling and more pollution. Mr. Anderson says the city has been blinded by political correctness. It's an "attempt by the anti-car fanatics to screw up our traffic on behalf of the bicycle fantasy," he wrote in his blog this month.



For the full story, see:

PHRED DVORAK. "San Francisco Ponders: Could Bike Lanes Cause Pollution?; City Backpedals on a Cycling Plan After Mr. Anderson Goes to Court." The Wall Street Journal (Weds., Aug. 20, 2008): A1 & A15.

(Note: ellipses, and bracketed name, added.)






November 11, 2013

Creating Parking Spaces by Variable Meter Pricing Saves Time and Reduces Air Pollution and Double-Parking




SanFranciscoStreetParking2013-10-25.jpg "San Francisco is a city chronically plagued with a shortage of street parking. On a recent night in the North Beach neighborhood, the slow chase for a parking space was well under way." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A1) SAN FRANCISCO -- The maddening quest for street parking is not just a tribulation for drivers, but a trial for cities. As much as a third of the traffic in some areas has been attributed to drivers circling as they hunt for spaces. The wearying tradition takes a toll in lost time, polluted air and, when drivers despair, double-parked cars that clog traffic even more.

But San Francisco is trying to shorten the hunt with an ambitious experiment that aims to make sure that there is always at least one empty parking spot available on every block that has meters. The program, which uses new technology and the law of supply and demand, raises the price of parking on the city's most crowded blocks and lowers it on its emptiest blocks. While the new prices are still being phased in -- the most expensive spots have risen to $4.50 an hour, but could reach $6 -- preliminary data suggests that the change may be having a positive effect in some areas.



For the full commentary, see:

MICHAEL COOPER and JO CRAVEN McGINTY. "A Meter So Expensive, It Creates Parking Spots." The New York Times (Fri., March 16, 2012): A1 & A3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date March 15, 2012.)



MetersWithVariablePricing2013-10-25.jpg "San Francisco has installed sensors and new meters on some blocks to track where cars are parked and set prices accordingly." Source of caption and photo: online version of the NYT article quoted and cited above.






November 10, 2013

If Feds Stalled Skype Deal, Google Would Have Been "Stuck with a Piece of Shit"





Even just the plausible possibility of a government veto of an acquisition, can stop the acquisition from happening. The feds thereby kill efficiency and innovation enhancing reconfigurations of assets and business units.


(p. 234) . . . , an opportunity arose that Google's leaders felt compelled to consider: Skype was available. It was a onetime chance to grab hundreds of millions of Internet voice customers, merging them with Google Voice to create an instant powerhouse. Wesley Chan believed that this was a bad move. Skype relied on a technology called peer to peer, which moved information cheaply and quickly through a decentralized network that emerged through the connections of users. But Google didn't need that system because it had its own efficient infrastruc-(p. 235)ture. In addition, there was a question whether eBay, the owner of Skype, had claim to all the patents to the underlying technology, so it was unclear what rights Google would have as it tried to embellish and improve the peer-to-peer protocols. Finally, before Google could take possession, the U.S. government might stall the deal for months, maybe even two years, before approving it. "We would have paid all this money, but the value would go away and then we'd be stuck with a piece of shit," says Chan.


Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

(Note: ellipsis added.)






November 9, 2013

Entrepreneurial Spirit Values "Voyaging into the Unknown"




PhelpsEdmundWinner2006NobelPrize2013-10-24.jpg











"Edmund Phelps, winner of the 2006 Nobel Prize for economics." Source of caption and photo: online version of the WSJ review quoted and cited below.



(p. C7) Edmund Phelps's "Mass Flourishing" could easily be retitled "Contra-Corporatism," for at its heart this fine book is an attack on that increasingly common "third way" between capitalism and socialism. Mr. Phelps cogently argues that America's current economic woes reflect a reduction in the innovative dynamism that generates economic success and personal satisfaction. He places little hope in the Democratic Party, which "voices a new corporatism well beyond Franklin Roosevelt's New Deal or Lyndon Johnson's Great Society," or in Republicans in the thrall of "traditional values," who see "the good economy as mercantile capitalism plus social protection and social insurance." He instead yearns for legislative solons who "could usefully ask of every bill and regulatory directive: How would it impact the dynamism of our economy?"


. . .


The book eloquently discusses the culture of innovation, which can refer to both an entrepreneurial mind-set and the cultural achievements during an age of change. He sees modern capitalism as profoundly humanist, imbued with "a spirit that views the prospect of unanticipated consequences that may come with voyaging into the unknown as a valued part of experience and not a drawback."


. . .


In . . . [the] new corporatism, the state protects both organized labor and politically connected companies. and the state has acquired a "panoply of new roles," from regulations "aimed at shielding companies or workforces from competition" to lawsuits that "add to the diversion of income from earners to those receiving compensation or indemnification." It is as if "every person in a society is a signatory to an implicit contract" in which "no person may be harmed by others without receiving compensation." But protection against all conceivable harm also means protection against almost all change--and this is the death knell of dynamism and innovation.


. . .


But what is to be done? The author wants governments that are "aware of the importance of the role played by dynamism in a modern-capitalist economy," and he disparages both current political camps. He has a number of thoughtful ideas about financial-sector reform. He is no libertarian and even proposes a "national bank specializing in extending credit or equity capital to start-up firms"--not my favorite idea.



For the full review, see:

EDWARD GLAESER. "How to Unleash the Economy." The Wall Street Journal (Sat., Oct. 19, 2013): C7.

(Note: ellipses, and bracketed word, added.)

(Note: the online version of the review has the date Oct. 18, 2013, and has the title "BOOKSHELF; Book Review: 'Mass Flourishing' by Edmund Phelps; Innovative dynamism is the key to economic success and personal satisfaction, a Nobel-winner argues.")



The book under review is:

Phelps, Edmund S. Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change. Princeton, New Jersey: Princeton University Press, 2013.




Mass-FlourishingBK2013-10-24.jpg















Source of book image: http://blogs.reuters.com/great-debate/files/2013/08/Mass-Flourishing-cover.jpg









November 8, 2013

Not All Environmentalists Reject the Refrigerator




(p. D4) MANY environmentalists -- even many who think nothing of using recycled toilet paper or cut the thermostat to near-arctic levels -- see fridge-free living as an extreme choice or an impractical and excessive goal.

"The refrigerator was a smart advance for society," said Gretchen Willis, 37, an environmentally conscious mother of four in Arlington, Tex., who recently read about the practice on a popular eco-themed blog, thecrunchychicken.com, and was astounded.

"I never would have thought of it," Ms. Willis said, explaining that although she's committed to recycling and using fluorescent bulbs, she draws the line at any environmental practice that will result in great expense or inconvenience. Living without a refrigerator, she said, qualifies on both counts: she would have to buy more food in smaller quantities because of spoilage, prepare exact amounts because she couldn't refrigerate leftovers, and make daily trips to the grocery store.

"It's silly not to have one," she said, "considering what the alternative is: drinking up a gallon of milk in one day so it doesn't spoil."

Deanna Duke, who lives in Seattle and runs the site Ms. Willis visited, said that taking a stand for or against unplugging has become "a badge of honor" for those on either side. "It's either 'look how far I'm willing to go,' or 'look how far I'm not willing to go,' " she said. For her part, Ms. Duke may refrain from watering her lawn in an effort at conservation, but she's firmly in the pro-refrigerator camp. "I can't think of any circumstances, other than an involuntary extreme situation, that would make me unplug my fridge," she said. "The convenience factor is too high."


. . .


Marty O'Gorman, the vice president of Frigidaire, said an 18-cubic-foot Energy Star-rated Frigidaire refrigerator uses about 380 kilowatt-hours a year -- less than a standard clothes dryer -- and costs a homeowner $40, or about 11 cents a day.


. . .


. . . , Mr. O'Gorman said downsizing from a standard model to Frigidaire's smallest minifridge would result in only about $6 in energy savings over a year.

It's this sort of practical calculus that has led many who advocate sustainable living to view unplugging the fridge as a dubious practice. They point out that it is likely to result in more trips to the store (which burns more gas, for those who drive) and the purchase of food in smaller portions (thus more packaging).

"It's easy to look at your bill and say, 'I'm saving energy,' " Ms. Duke said. "But you need to look at the whole supply chain."



For the full story, see:

STEVEN KURUTZ. "Trashing the Fridge." The New York Times (Thurs., February 5, 2009): D1 & D4.

(Note: ellipses added.)

(Note: the online version of the story has the date February 4, 2009.)






November 7, 2013

Multimillionaire Entrepreneur Ek's Life Is Not Satisfying Without a Project




EkDanielSpotifyCEO2013-10-24.jpg














"Daniel Ek" Source of caption and photo: online version of the NYT article quoted and cited below.




(p. C11) As a 16-year-old computer geek, Daniel Ek applied for a job at Google but was turned down because he didn't have a college degree. "I was kind of upset about that," he says. "I was like, 'I'll show them--I'm going to create my own search engine!' "

That turned out to be harder than he thought, so instead he spent several years building an online advertising company in his native Sweden (and no, he never did finish college). In 2006, he sold the company's rights and related patents for over $2 million.

"Now I was 23 and a multimillionaire, but I didn't have anything to do," he said over lunch recently in midtown Manhattan. He became depressed. "You're supposed to be the happiest guy on the planet but...there's no reason why you're existing," he says. "I realized it's really, really fun for a while to go big and go to all of these nightclubs," but just spending money was not satisfying.

In search of a purpose, he came up with a new model for listening to music: Spotify, a digital streaming service that has made the music business look viable again.



For the full interview, see:

ALEXANDRA WOLFE. "Weekend Confidential: Daniel Ek." The Wall Street Journal (Sat., June 22, 2013): C11.

(Note: ellipsis in original.)

(Note: the online version of the interview has the date June 21, 2013.)







November 6, 2013

Steve Jobs Felt Betrayed by Google's Page and Brin




(p. 221) From all accounts, Jobs prided himself as a canny observer not only of business but also of human character, and he did not want to admit-- especially to himself--that he had been betrayed by the two young men he had been attempting to mentor. He felt the trust between the two companies had been violated. After increasingly contentious phone calls, in the summer of 2008, Jobs ventured to Mountain View to see the Android phone and personally judge the extent of the violation. He was reportedly furious. Not only did he believe that Google had performed a bait and switch on him, replacing a noncompeting phone with one that was very much in the iPhone mode, but he also felt that Google had stolen Apple's intellectual property to do so, appropriating features for which Apple had current or pending patents.

While Jobs could not stop Google from developing the Dream version of Android, he apparently was successful, at least in the first version of the Google phone, in halting its implementation of some of the multitouch gestures that Apple had pioneered. Jobs believed that Apple's patents gave it exclusive rights to certain on-screen gestures--the pinch and the swipe, for example. According to one insider, Jobs demanded that Google remove support of those gestures from Android phones. Google complied, even though those gestures, which allowed users to resize images, were tremendously useful for viewing web pages on handheld devices.



Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.






November 5, 2013

Entrepreneur Arik Achmon Stood Down Powerful Union to Keep His Company Alive




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Source of book image: http://www.seraphicpress.com/wp-content/uploads/2013/10/like-dreamers.jpg





(p. C2) Mr. Halevi, an American immigrant who has worked as a journalist and analyst in Jerusalem for 30 years, has created a textured, beautifully written narrative by focusing on seven men -- and they are all men -- . . . , who served in the paratroop brigade that conquered the Old City of Jerusalem in the 1967 war.


. . .


. . . , the men Mr. Halevi has chosen are compelling. One is Arik Achmon, a secular liberal from a kibbutz who helped transform Israel's failing statist economy into a thriving capitalist one. Mr. Achmon helped found the first private domestic airline in Israel. The story of how he stood down the once-powerful Histadrut trade union federation to keep his company alive illustrates the enormous changes that Israeli society has undergone in the past three decades.



For the full review, see:

ETHAN BRONNER. "BOOKS OF THE TIMES; 7 Paratroopers and Paths They Took Through an Israel at a Crossroads." The New York Times (Thurs., September 26, 2013): C2.

(Note: ellipses added.)

(Note: the online version of the review has the date September 25, 2013.)



The book under review is:

Halevi, Yossi Klein. Like Dreamers: The Story of the Israeli Paratroopers Who Reunited Jerusalem and Divided a Nation. New York: HarperCollins, 2013.



HaleviYossiKlein2013-10-24.jpg













"Yossi Klein Halevi." Source of caption and photo: online version of the NYT review quoted and cited above.







November 4, 2013

Better Batteries Would Be a General Purpose Technology (GPT)





Economists of technology have been thinking about General Purpose Technologies (GPT) for the last 10 years or so. As the name implies, a GPT is one where there are broad applications, and new applications are invented as the price of the GPT declines. My plausible guess is that a breakthrough in battery technology would be a very important GPT. The progress sketched below is probably not a breakthrough, but progress is good.


(p. C4) People take batteries for granted, but they shouldn't. All kinds of technological advances hinge on developing smaller and more powerful mobile energy sources.

Researchers at Harvard University and the University of Illinois are reporting just such a creation, one that happens to be no bigger than a grain of sand. These tiny but powerful lithium-ion batteries raise the prospect of a new generation of medical and other devices that can go where traditional hulking batteries can't.


. . .


Jennifer Lewis, a materials scientist at Harvard, says these batteries can store more energy because 3-D printing enables the stacking of electrodes in greater volume than the thin-film methods now used to make microbatteries.



For the full story, see:

DANIEL AKST. "R AND D: Batteries on the Head of a Pin." The Wall Street Journal (Sat., June 22, 2013): C4.

(Note: ellipsis added.)

(Note: the online version of the interview has the date June 21, 2013.)







November 3, 2013

Castro First Fired, and Then Jailed, Economist Chepe, Who Defended Capitalism




ChepeOscarEspinosaCubanEconomist2013-10-23.jpg "Oscar Espinosa Chepe in 2010." Source of caption and photo: online version of the NYT obituary quoted and cited below.



(p. B15) Oscar Espinosa Chepe, a high-ranking Cuban economist and diplomat who became a vocal critic of Fidel Castro in the 1990s but chose to remain in Cuba, despite enduring harassment and imprisonment, died on Monday [September 23, 2013] . . .


. . .


Mr. Espinosa Chepe (pronounced CHEH-pay) lost his job as an official of the National Bank of Cuba in 1996 after advocating the limited restoration of capitalist principles like the right to buy and sell one's home or start a business.

He then became a journalist, writing articles for American and Spanish-language Web sites in which he used statistical data to analyze Cuba's economic problems. In March 2003 he was one of 75 activists arrested as part of a government crackdown on dissent known as the Black Spring.


. . .


Mr. Espinosa Chepe, who joined Castro's revolutionary government in the early 1960s and was once head of the powerful Office of Agrarian Reform, had frequently clashed with fellow economic planners over policies he considered overly dogmatic.

His internal critique became increasingly adamant after 1991, when the loss of the Soviet Union's financial support began taking a devastating toll on the country's economy. But his proposals for change, many of which had already been adopted in former Soviet bloc states, were labeled counterrevolutionary, said Carmelo Mesa-Lago, a professor emeritus of economics and Latin American studies at the University of Pittsburgh and an expert on Cuban economic policies.



For the full obituary, see:

PAUL VITELLO. "Oscar Espinosa Chepe, Cuban Economist and Castro Critic, Dies at 72." The New York Times (Fri., September 27, 2013): B15.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the obituary has the date September 25, 2013.)






November 2, 2013

Google Used Auction Model to Allocate Internal Resources




(p. 202) Google's chief economist, Hal Varian, would later explain how it worked when new data centers open: "We'll build a nice new data center and say, 'Hey, Google Docs, would you move your machines over here?' And they say, 'Sure, next month.' Because nobody wants to go through the disruption of shifting. So I suggested we run an auction similar to what airlines do when they oversell a plane-- they keep offering bigger vouchers until enough customers are willing to give up their seats. In our case, we offer more machines in exchange for moving. One group might do it for fifty new ones, another for a hundred, and another won't move unless we give them three hundred. So we give them to the lowest bidder-- they get their extra capacity, and we get computation shifted to the new data center."

Google eventually devised an elaborate auction model for divvying up existing resources. In a paper entitled "Using a Market Economy to Provision Computer Resources Across Planet-wide Clusters," a group of Google engineers, along with a Stanford professor of management science and engineering, reported a project that essentially made Google's
computational resources into a silicon Wall Street. Supply and demand worked here not to fix stock prices but to place a value on resources. The system not only allowed projects at Google to get fair access to storage and computational cycles but identified shortages in computers, storage, and bandwidth. Instead of the Vickery auction used by AdWords, the system used an "ascending clock auction." At the beginning, the current price of each resource would be displayed, and Google engineers in competing projects could claim them at that price. The ideal outcome would ensure sufficient resources for everyone, in which case the auction stopped. Otherwise, the automated auctioneer would raise the prices for the next "time slot," and (p. 203) remaining competitors for those resources had to decide whether to bid higher. And so on, until the engineers not willing to stake their budgets on the most contested resources dropped out. "Hence," write the paper's authors, "the auction allows users to 'discover' prices in which all users pay/ receive payment in proportion to uniform resource prices."



Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.






November 1, 2013

Sound Economic Policies Benefit Africa More than Sachs' Profligate Interventions




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Source of book image: http://images.huffingtonpost.com/2013-09-02-TheIdealist.jpg





(p. A19) Nina Munk's new book, "The Idealist," is about the well-known economist Jeffrey Sachs and his "quest to end poverty," as the subtitle puts it.


. . .


The quest began in 2005, when Sachs, who directs the Earth Institute at Columbia University, started an ambitious program called the Millennium Villages Project. He and his team chose a handful of sub-Saharan African villages, where they imposed a series of "interventions" in such areas as agriculture, health and education.


. . .


With almost every intervention, she documents the chasm that exists between the villagers and those running the project. At one point, the Millennium Villages Project persuades the farmers in Ruhiira to grow maize instead of their traditional crop, called matoke. "The results were fantastic," she reports, a bumper crop. Except there were no buyers for the maize, so some of it wound up being eaten by rats. In Dertu, Sachs's staff decided it should set up a livestock market. It flopped. Efforts to convince villagers to start small businesses largely failed. The critical problem of getting clean water to the villages was enormously expensive.

Ultimately, reports Munk, Dertu was scaled back by the Millennium Villages Project while Ruhiira is today lauded as one of the project's most successful villages. "There is no question the lives of people in Ruhiira have been improved," Munk told me. "I've seen it." But she is dubious about what that means -- other than the fact that if you pump millions of dollars into an isolated African village, the villagers' lives will be better.


. . .


That things in Africa are getting better is undeniable. Child mortality is down, as is the number of people living in extreme poverty. In his book, "Emerging Africa," Steve Radelet, the former chief economist for the United States Agency for International Development, gives credit to such factors as more democratic governments, a new class of civil servants and businesspeople, and sounder economic policies. Sachs wants us to believe that the Millennium Villages Project has also helped show the way.

"The Idealist" makes it tough to believe it's the latter.



For the full review, see:

JOE NOCERA. "Fighting Poverty, and Critics." The New York Times (Tues., September 3, 2013): A19.

(Note: ellipses added.)

(Note: the online version of the review has the date September 2, 2013.)


The book under review is:

Munk, Nina. The Idealist: Jeffrey Sachs and the Quest to End Poverty. New York: Doubleday, 2013.


The Radelet book mentioned is:

Radelet, Steven. Emerging Africa: How 17 Countries Are Leading the Way. pb ed. Washington, D.C.: Center for Global Development, 2010.







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