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July 31, 2015

George Bailey Wanted to Make Money, But He Wanted to Do More than Just Make Money




(p. 219) Actually, it's not so strange. The norm for bankers was never just moneymaking, any more than it was for doctors or lawyers. Bankers made a livelihood, often quite a good one, by serving their clients-- the depositors and borrowers-- and the communities in which they worked. But traditionally, the aim of banking-- even if sometimes honored only in the breach-- was service, not just moneymaking.

In the movie It's a Wonderful Life, James Stewart plays George Bailey, a small-town banker faced with a run on the bank-- a liquidity crisis. When the townspeople rush into the bank to withdraw their money, Bailey tells them, "You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here." He goes on. "Your money's in Joe's house. Right next to yours. And in the Kennedy house, and Mrs. Backlin's house, and a hundred others. Why, you're lending them the money to build, and they're going to pay you back, as best they can.... What are you going to do, foreclose on them?"

No, says George Bailey, "we've got to stick together. We've got to have faith in one another." Fail to stick together, and the community will be ruined. Bailey took all the money he could get his hands on and gave it to his depositors to help see them through the crisis. Of course, George Bailey was interested in making money, but money was not the only point of what Bailey did.

Relying on a Hollywood script to provide evidence of good bankers is at some level absurd, but it does indicate something valuable about society's expectations regarding the role of bankers. The norm for a "good banker" throughout most of the twentieth century was in fact someone who was trustworthy and who served the community, who was responsible to clients, and who took an interest in them.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

(Note: italics in original.)






July 30, 2015

Institutional Improvements Can Sometimes Be Designed, Rather than Only Spontaneous




A distinguished school of libertarian and neo-Austrian economic thought argues, following F.A. Hayek, that institutional improvements only arise from spontaneous order, and never from conscious design. There is something to their argument, but the designs of Alvin Roth provide counter-examples.


(p. A13) Mr. Roth's work has been to discover the most efficient and equitable methods of matching and implement them in the world. He writes with verve and style, describing many market malfunctions--from aboriginal tribes in Australia arranging marriages for children not yet born to judges bending every rule in the book to hire law clerks years before they have graduated from law school--and how we ought to think about them.

Mr. Roth's approach contrasts with standard debates over free markets versus government regulation. We want markets to be thick, quick, timely and trustworthy, but without careful design markets can become thin, slow, ill-timed and dangerous for the honest. The solution to these problems is unlikely to be regulation legislated from on high. Instead what Mr. Roth practices is nuanced market design created mostly by market participants. Mr. Roth found, for example, that even though the problems in the market for gastroenterologists and law clerks looked the same (hiring started years before schooling ended), the solutions had to be subtly different because of differences in culture, history and norms.



For the full review, see:

ALEX TABARROK. "BOOKSHELF; The Designer of Markets; In some markets, price isn't the determining factor. You can choose to go to Harvard, but Harvard has to choose to accept you first." The Wall Street Journal (Tues., JUNE 16, 2015): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date JUNE 15, 2015, and has the title "BOOKSHELF; Matchmaker, Make Me a Market; In some markets, price isn't the determining factor. You can choose to go to Harvard, but Harvard has to choose to accept you first.")


The book under review is:

Roth, Alvin E. Who Gets What -- and Why: The New Economics of Matchmaking and Market Design. New York: Houghton Mifflin Harcourt Publishing Co., 2015.






July 29, 2015

How Home Solar Panel Subsidies Increase Inequality




(p. A13) Well-meaning--but ill-conceived--federal, state and local tax incentives for rooftop solar give back between 30% and 40% of the installation costs to the owner as a tax credit. But more problematic are hidden rate subsidies, the most significant of which is called net metering, which is available in 44 states. Net metering allows solar-system owners to offset on a one-for-one basis the energy they receive from the electric grid with the solar power they generate on their roof.

While this might sound logical, it isn't. An average California resident with solar, for example, generally pays about 17 cents per kilowatt-hour for electric service when the home's solar panels aren't operating. When they are operating, however, net metering requires the utility to pay that solar customer the same 17 cents per kilowatt-hour. But the solar customer still needs the grid to back up his intermittent solar panels, and the utility could have purchased that same solar power from a utility-scale solar power plant for about five cents per kilowatt-hour.

This 12-cents-per-kwh cost difference amounts to a wealth transfer from average electric customers to customers with rooftop solar systems (who also often have higher incomes). This is because utilities collect much of their fixed costs--the unavoidable costs of power plants, transmission lines, etc.--from residential customers through variable-use charges, in other words, charges based on how much energy they use. When a customer with rooftop solar purchases less electricity from the utility, he pays fewer variable-use charges and avoids contributing revenue to cover the utility's fixed costs. The result is that all of the other customers have to pick up the difference.



For the full commentary, see:

BRIAN H. POTTS . "The Hole in the Rooftop Solar-Panel Craze; Large-scale plants make sense, but panels for houses simply transfer wealth from average electric customers." The Wall Street Journal (Mon., May 18, 2015): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 17, 2015.)






July 28, 2015

Mobile Tech Drives Social Revolution in Saudi Arabia




(p. 6) RIYADH, Saudi Arabia -- Life for many young Saudis is an ecosystem of apps.

Lacking free speech, they debate on Twitter. Since they cannot flirt at the mall, they do it on WhatsApp and Snapchat.

Young women who cannot find jobs sell food or jewelry through Instagram. Since they are banned from driving, they get rides from car services like Uber and Careem. And in a country where shops close for five daily Muslim prayers, there are apps that issue a call to prayer from your pocket and calculate whether you can reach, say, the nearest Dunkin' Donuts before it shuts.

Confronted with an austere version of Islam and strict social codes that place sharp restrictions on public life, young Saudis are increasingly relying on social media to express and entertain themselves, earn money and meet friends and potential mates.

That reliance on technology -- to circumvent the religious police, and the prying eyes of relatives and neighbors -- has accelerated since it first began with the spread of satellite television in the 1990s. Saudis in their 30s (and older) recall the days of unsanctioned courtship via BlackBerry Messenger.

But the scale of today's social media boom is staggering, with many of the country's 18 million citizens wielding multiple smartphones and spending hours online each day. Digital has not replaced face-to-face interaction, but it has opened the door to much more direct and robust communication, especially in a society that sharply segregates men and women who are not related.

The spread of mobile technology is driving nothing short of a social revolution in the lives of young people. In this rich but conservative kingdom that bans movie theaters, YouTube and Internet streaming have provided an escape from the censors and a window to the outside world. A young Shariah judge, for example, confided that he had watched all five seasons of "Breaking Bad."



For the full story, see:

BEN HUBBARD. "Young Saudis Find Freedom on Smartphones." The New York Times, First Section (Sun., MAY 24, 2015): 6 & 11.

(Note: the date of the online version of the story is MAY 22, 2015, and has the title "Young Saudis, Bound by Conservative Strictures, Find Freedom on Their Phones." )






July 27, 2015

To Maintain Enrollments Professors Are Often Pressured to Inflate Grades




(p. 198) Dedicated college professors demand that students do the difficult reading and writing necessary to become skillful in understanding the complexities of the world. But the university distributes resources like research funds and new faculty positions based in part on how many students populate classes and how positively students evaluate courses. How much do you simplify to keep up enrollment and keep resources flowing into your department?


Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.






July 26, 2015

"Nimble" Account of the Creative Destruction of the Music Industry




(p. C1) Stephen Witt's nimble new book, "How Music Got Free," is the richest explanation to date about how the arrival of the MP3 upended almost everything about how music is distributed, consumed and stored. It's a story you may think you know, but Mr. Witt brings fresh reporting to bear, and complicates things in terrific ways.

He pushes past Napster (Sean Fanning, dorm room, lawsuits) and goes deep on the German audio engineers who, drawing on decades of research into how the ear works, spent years developing the MP3 only to almost see it nearly become the Betamax to another group's VHS.


. . .


(p. C6) Even better, he has found the man -- a manager at a CD factory in small-town North Carolina -- who over eight years leaked nearly 2,000 albums before their release, including some of the best-known rap albums of all time. He smuggled most of them out behind an oversized belt buckle before ripping them and putting them online.

Mr. Witt refers to this winsome if somewhat hapless manager, Dell Glover, as "the most fearsome digital pirate of them all."


. . .


Into these two narratives Mr. Witt inserts a third, the story of Doug Morris, who ran the Universal Music Group from 1995 to 2011. At some points you wonder if Mr. Morris has been introduced just so the author can have sick fun with him.

The German inventors and Mr. Glover operate as if they unwittingly have voodoo dolls of this man. Every time they make an advance, and prick the music industry, there's a jump to Mr. Morris for a reaction shot, screaming in his corner office.


. . .


Mr. Witt covers a lot of terrain in "How Music Got Free" without ever becoming bogged down in one place for long. He is knowledgeable about intellectual property issues. In finding his reporting threads, he doesn't miss the big picture: He gives us a loge seat to the entire digital music revolution.

He is especially good on the arrival of iTunes and the iPod.



For the full review, see:

DWIGHT GARNER. "Books of The Times; That Download Has a Back Story." The New York Times (Tues., JUNE 16, 2015): C1 & C6.

(Note: ellipses added.)

(Note: the online version of the review has the date JUNE 15, 2015, and has the title "Books of The Times; Review: In 'How Music Got Free,' Stephen Witt Details an Industry Sea Change.")


The book under review is:

Witt, Stephen. How Music Got Free: The End of an Industry, the Turn of the Century, and the Patient Zero of Piracy. New York: Viking, 2015.






July 25, 2015

Computers Lack Intuition about How to Handle Novel Situations




(p. 11) It seems obvious: The best way to get rid of human error is to get rid of humans.

But that assumption, however fashionable, is itself erroneous. Our desire to liberate ourselves from ourselves is founded on a fallacy. We exaggerate the abilities of computers even as we give our own talents short shrift.


. . .


Human skill has no such constraints. Think of how Capt. Chesley B. Sullenberger III landed that Airbus A320 in the Hudson River after it hit a flock of geese and its engines lost power. Born of deep experience in the real world, such intuition lies beyond calculation. If computers had the ability to be amazed, they'd be amazed by us.


. . .


Computers break down. They have bugs. They get hacked. And when let loose in the world, they face situations that their programmers didn't prepare them for. They work perfectly until they don't.


. . .


We should view computers as our partners, with complementary abilities, not as our replacements.



For the full commentary, see:

NICHOLAS CARR. "Why Robots Will Always Need Us." The New York Times (Weds., MAY 20, 2015): 11.

(Note: ellipses added.)






July 24, 2015

Army Corps of Engineers Blamed for Hurricane Katrina




(p. 13) NEW ORLEANS -- Nearly 10 years on, one might assume that the case of Hurricane Katrina is closed.

That the catastrophic flooding of this city was caused not merely by a powerful storm but primarily by fatal engineering flaws in the city's flood protection system has been proved by experts, acknowledged by the United States Army Corps of Engineers and underscored by residents here to anyone who might suggest otherwise.

But the efforts to establish responsibility with ever more precision -- to ascertain just how many of those flaws were due to engineering, politics or money -- have not stopped.



For the full story, see:

CAMPBELL ROBERTSON and JOHN SCHWARTZ. "Decade After Katrina, Pointing Finger Firmly at Army Corps." The New York Times, First Section (Sun., MAY 24, 2015): 13 & 16.

(Note: the date of the online version of the story is MAY 23, 2015, and has the title "Decade After Katrina, Pointing Finger More Firmly at Army Corps.")






July 23, 2015

Some Learn in Order to Gain Competence, Others Learn to Gain Direct Rewards




(p. 184) Think about two different tennis pros giving you tennis lessons. The first pro says things like "good shot" and "good swing" all the time, to encourage you. The second one says "good swing" only when you make a good swing. If hearing "good swing" gives you a hedonic charge, then you will prefer the first instructor to the second (more gold stars, more encouragement). But if what gives you the charge is getting better at tennis, you will prefer the second instructor to the first. That's because the second instructor's feedback to you is much more informative than the first one's. You're not after "good swing" gold stars; you're after a better tennis game. So feedback is essential to the development of a complex skill-- whether it be empathy or a strong forehand. But he-(p. 185)donic feedback, in the form of incentives, is not. It may even be counterproductive, as in the case of instructor number one.

In schools, tests provide an extremely important source of feedback-- of information-- to the teacher and the student-- about how things are going. Tests, or something like them, often offer the best way to diagnose problems and correct them. So tests as a source of information are good and important. The problem is that in addition to providing information, tests provide outcomes that students, and their parents, and their teachers, want and like-- outcomes like approval, prizes, awards, honors, special privileges, and school ratings. The hedonic character of these outcomes is what gets students and teachers to orient their work to passing the tests, and to regard what they do in the classroom as merely instrumental, as merely a means to various rewarding ends.

There are important differences between children oriented to getting A's and children oriented to learning from their mistakes. Psychologist Carol Dweck and her associates have spent thirty years studying the incentive systems that govern the learning of children throughout the educational process. They have uncovered two fundamentally different approaches to learning in kids that can often lead to profound differences in how well kids learn. One group of kids has what Dweck has called performance goals; the other group has what she has called mastery goals. Children with performance goals are primarily interested in gaining favorable judgments of their competence. They want to do well on tests. They want social approval. They want awards. Children with mastery goals are primarily interested in increasing their competence rather than in demonstrating it. They want to encounter things that they can't do and to learn from their failures. As Dweck puts it, performance-oriented children want to prove their ability, while mastery-oriented children want to improve their ability. Children with performance goals avoid challenges. They prefer tasks that are well within the range of their ability. Children with mastery goals seek challenges. They prefer tasks that strain the limits of their ability. Children with performance goals respond to failure by giving up. Children (p. 186) with mastery goals respond to failure by working harder. Children with performance goals take failure as a sign of their inadequacy and come to view the tasks at which they fail with a mixture of anxiety, boredom, and anger. Children with mastery goals take failure as a sign that their efforts, and not they, are inadequate, and they often come to view the tasks at which they fail with the kind of relish that comes when you encounter a worthy challenge.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

(Note: italics in original.)






July 22, 2015

Woodrow Wilson Violated Free Speech




I viewed part of a CSPAN presentation on June 27, 2015 by Margaret MacMillan, based on her book The War that Ended Peace: The Road to 1914. (It was probably a rebroadcast.) The presentation seemed serious, well-informed, and judicious in trying to be fair and balanced to Woodrow Wilson. MacMillan is more sympathetic to Wilson than I am, but she made it quite clear that he enacted serious violations of free speech.


MacMillan's book is:

MacMillan, Margaret. The War That Ended Peace: The Road to 1914. New York: Random House, 2013.






July 21, 2015

Feds Paid New York Journalist to Not Grow Crops in Oregon




(p. 11) As for the foolishness of agricultural subsidies, until recently, the federal government paid me, a New York journalist, $588 a year not to grow crops in Oregon. I rest my case.


For the full commentary, see:

Nicholas Kristof. "Our Water-Guzzling Food Factory." The New York Times, SundayReview Section (Sun., MAY 31, 2015): 11.

(Note: the date of the online version of the commentary is MAY 30, 2015.)






July 20, 2015

Drinking Water Not Harmed by Fracking




(p. A13) Fracking isn't causing widespread damage to the nation's drinking water, the Obama administration said in a long-awaited report released Thursday.

The U.S. Environmental Protection Agency--after a four-year study that is the U.S. government's most comprehensive examination of the issue to date--concluded that hydraulic fracturing, as being carried out by industry and regulated by states, isn't having "widespread, systemic impacts on drinking water."



For the full story, see:

RUSSELL GOLD And AMY HARDER. "Fracking's Harm to Water Not Widespread, EPA Says." The Wall Street Journal (Fri., June 5, 2015): A5.

(Note: the date of the online version of the story is June 4, 2015, and has the title "Fracking Has Had No 'Widespread' Impact on Drinking Water, EPA Finds.")






July 19, 2015

Should Students Read to Learn, or to Get Gold Stars?




(p. 181) When a consultant tells teachers to concentrate on the bubble kids and ignore the kids who are most in need of help, something has gone wrong. And if gold stars turn reading from an adventure into a job, something has gone wrong. But what? The typical response to examples like these is not to blame incentives but to blame "dumb" incentives. The presumption is that "smart" incentives, or at least "smarter" incentives, will do the job.

This is a mistake. In many situations, for many activities, no incentives are smart enough. Teachers like Deborah Ball and Mrs. Dewey spend their day figuring out how much time to spend with each student and how to tailor what they teach to each student's particular strengths and weaknesses. They are continually balancing conflicting aims-- to treat all students equally, to give the struggling students more time, to energize and inspire the gifted students. Along comes the incentive to bring up the school's test scores, and all the nuance and subtlety of Mrs. Dewey's moment-by-moment decisions go out the window. And what "smarter" incentive is going to replace judgment in making sensitive choices in a complex and changing context like a classroom?

Or what, exactly, would you incentivize to encourage hospital custodian Luke to seek the kind and empathetic response to the distraught father who wanted his son's room cleaned? Incentives are always based on meeting some specific, measurable criterion: read more books; raise more test scores; wash more floors. Left to his own devices, Luke asks himself, "What can I do to be caring?" and because he has moral skill, he comes up with a good answer. With "caring" incentivized, Luke (p. 182) might ask, "What do I have to do to get a raise or a bonus?" "Reclean the room" might be a right answer. "Look sympathetic" might be a right answer. "Be caring" surely is not. Aristotle thought that good
people do the right thing because it is the right thing. Doing the right thing because it's the right thing unleashes the nuance, flexibility, and improvisation that moral challenges demand and moral skill enables. Doing the right thing for pay shuts down the nuance and flexibility.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

(Note: italics in original.)






July 18, 2015

Conflict-of-Interest Politics Reduces Medical Collaboration with Industry and Slows Down Cures




(p. A15) The reality of modern medicine, Dr. Stossel argues, is that private industry is the engine of innovation, with productivity and new advances dependent on relationships between commercial interests and academic and research medicine. Companies, not universities or research with federal funding, run 85% of the medical-products pipeline. "We all inevitably have conflicts all the time. You only stop having conflicts when you're dead. The only conflict-free situation is the grave," he says.

The pursuit of the illusion "to be pure, to be priestly, to be supposedly uncorrupted by the profit motive," Dr. Stossel says, often has the effect of banishing or else discounting the expertise of the people who know the most but whose integrity and objectivity are allegedly compromised by industry ties. What ought to matter more, he adds, is simply "Results. Competence. LeBron James--it's putting the ball in the basket."


. . .


Zero-tolerance conflict-of-interest editorial policies, Dr. Stossel says, suppress and distort debate by withholding positions of authority. "If you have an industry connection, if you really understand the topic, you can't say anything," he notes. "If you're an editor, and you have an ideological predilection, you have all this power and you can say anything you want."

Dr. Stossel is equally scorching about the drug and device companies and their trade organizations, which he says drift around like Rodney Dangerfield, complaining they don't get no respect. They prefer not to be confrontational, they rarely fight back against the conflict-of-interest scolds. "They're laying responsibility by default to the patients, the people who actually have a first-hand connection to whatever the disease is: 'Goddammit, I want a cure.' "

Which is the larger point: The to-and-fro between publications not meant for lay readers can seem arcane, but the product of conflict-of-interest politics is fewer cures and new therapies. The predisposition against selling out to industry is pervasive, while reputations can be ruined overnight when researchers find themselves in a page-one exposé or hauled before Congress, even if there is no evidence of misconduct or bias.

Better, then, to conform in the cloisters than risk offending the conflict-of-interest orthodoxy--or translating some basic-research insight into a new treatment for patients. Dr. Rosenbaum reports: "The result is a stifling of honest discourse and potential discouragement of productive collaborations. . . . More strikingly, some of the young, talented physician-investigators I spoke with expressed worry about how any industry relationship would affect their careers."


. . .


'Pharmaphobia"--part polemic, part analytic investigation, a history of medicine and a memoir--deserves a wide readership. . . . "I'd rather get a conversation started with people who are smarter than I am about how complicated and granular and nuanced and unpredictable discovery is. Let's not slow it down."



For the full interview, see:

JOSEPH RAGO. "The Weekend Interview with Tom Stossel; A Cure for 'Conflict of Interest' Mania; A crusading physician says medical progress is hampered by a holier-than-thou 'moralistic bullying.'." The Wall Street Journal (Sat., June 27, 2015): A15.

(Note: ellipses added.)

(Note: the online version of the interview has the date June 26, 2015, and has the title "A Cure for 'Conflict of Interest' Mania; A crusading physician says medical progress is hampered by a holier-than-thou 'moralistic bullying.'.")


The book mentioned in the interview, is:

Stossel, Thomas P. Pharmaphobia: How the Conflict of Interest Myth Undermines American Medical Innovation. Lanham, MS: Rowman & Littlefield Publishers, 2015.






July 17, 2015

Environment Experts Admit Obama Policies Are Expensive, Ineffective and May Make Environment Worse




(p. B1) Is the American approach to combating climate change going off the rails?

Last year, President Obama set a goal of reducing carbon emissions by as much as 28 percent from 2005 levels by 2025, only 10 years from now.

Now, environmental experts are suggesting that some parts of the strategy are, at best, a waste of money and time. At worst, they are setting the United States in the wrong direction entirely.

That is the view of some of the world's top environmental organizations, including Greenpeace, Friends of the Earth and the Sierra Club. On Tuesday, they argued in a letter to the White House that allowing the burning of biomass to help reduce consumption of fossil fuels in the nation's power plants, as proposed by the Environmental Protection Agency, would violate the Clean Air Act.

It's also the view of economists from the University of Chicago and the University of California, Berkeley, who on Tuesday released the disappointing results of a field test of the federal Weatherization Assistance Program, the government's largest effort to improve residential energy efficiency.

It turns out that burning biomass -- wood, mainly -- for power produces 50 percent more CO2 than burning coal. And even if new forest growth were to eventually suck all of it out of the atmosphere, it would take decades -- perhaps more than a century -- to make up the difference and break even with coal.

One study commissioned by the state of Massachusetts concluded that the climate impacts of burning wood were worse than those for coal for 45 years, and (p. B8) worse than for natural gas for about 90 years. Humans do not have that kind of time.

The energy efficiency push has a different problem: It is much too expensive. The weatherization improvements cost more than twice as much as households' energy savings. Even after including the broad social benefits from less pollution, it was still a bad deal. Indeed, the program spent $329 per ton of CO2 it kept out of the air, some eight times as much as the administration's estimate of the social cost of damages caused by carbon.

These are not small setbacks. Most of the scenarios that keep the rise in global temperatures under a 2 degree Celsius ceiling, the point at which scientists fear the risk of climate upheaval rises significantly, rely heavily on bioenergy, including biomass for power generation and other biofuels, which face similar problems.



For the full commentary, see:

Eduardo Porter. "ECONOMIC SCENE; Climate Change Calls for Science, Not Hope." The New York Times (Sun., JUNE 24, 2015): B1 & B8.

(Note: the date of the online version of the commentary is JUNE 23, 2015, and has the title "ECONOMIC SCENE; Climate Change Calls for Science, Not Hope.")


The letter to the Obama administration from many environmental organizations, including Friends of the Earth, Greenpeace and the Sierra Club, is:

http://www.pfpi.net/wp-content/uploads/2015/06/Groups-bioenergy-letter-to-OMB-6-23-15.pdf


The research mentioned above by economists from Berkeley and the University of Chicago, is:

Fowlie, Meredith, Michael Greenstone, and Catherine Wolfram. "Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program." Working Paper, The Becker-Friedman Institute for Research in Economics, The University of Chicago, June 2015.


The research mentioned above that was commissioned by the state of Massachusetts, is:

Walker, Thomas , Dr. Peter Cardellichio, Andrea Colnes, Dr. John Gunn, Brian Kittler, Bob Perschel, Christopher Recchia, and Dr. David Saah. "Biomass Sustainability and Carbon Policy Study, Executive Summary." Manomet, MA: Manomet Center for Conservation Sciences, June 2010.






July 16, 2015

Fate of Plays Is Decided by Seven Middle-Aged Critics "Who Hated Mickey Mouse When They Were Kids"




(p. B1) Some playgoers don't care for theatrical inside baseball, but if, like me, you love to peer through a peephole at the craziness of show folk, you'll find "Light Up the Sky" hard to resist.


. . .


I especially like this sideswipe at drama critics: "What do I need with the theater--a cockamamie business where you get one roll of the dice from seven middle-aged men on the aisle who hated Mickey Mouse when they were kids."



For the full review, see:

TERRY TEACHOUT. "'Why So Serious?" The Wall Street Journal (Fri., MAY 29, 2015): D7.

(Note: the date of the online version of the review is May 27, 2015, and has the title "'Light Up the Sky' Review: Why So Serious?")






July 15, 2015

artdiamondblog.com Is 10 Years Old Today




artdiamondblog is 10 years old today. I mainly aim to highlight important evidence, examples, and ideas. I am working to pull some of these together into a book about how the world can be improved by allowing entrepreneurs to innovate. I appreciate my loyal readers, most loyally my former student Aaron Brown.






July 14, 2015

Intel Entrepreneur Gordon Moore Was "Introverted"




(p. A11) "In the world of the silicon microchip," [Thackray, Brock and Jones] write, "Moore was a master strategist and risk taker. Even so, he was not especially a self-starter." Mr. Moore possesses many of the stereotypical character traits of an introverted Ph.D. chemist: working for hours on his own, avoiding small talk and favoring laconic statements. Indeed, as a manager he often avoided conflict, even when a colleague's errors persisted in plain sight.


. . .


After two leadership changes at Fairchild in 1967 and 1968, which unsettled its talented employees, Mr. Moore departed to help found a new firm, Intel, with a fellow Fairchild engineer, the charming and brilliant Robert Noyce (another of the "traitorous eight"). They also brought along a younger colleague, the confrontational and hyper-energetic Andy Grove. Each one of the famous triumvirate would serve as CEO at some point over the next three decades.



For the full review, see:

SHANE GREENSTEIN. "BOOKSHELF; Silicon Valley's Lawmaker; What became Moore's law first emerged in a 1965 article modestly titled 'Cramming More Components Onto Integrated Circuits'." The Wall Street Journal (Tues., May 26, 2015): A11.

(Note: ellipsis, and bracketed names, added.)

(Note: the online version of the review has the date May 25, 2015.)


The book under review is:

Thackray, Arnold, David C. Brock, and Rachel Jones. Moore's Law: The Life of Gordon Moore, Silicon Valley's Quiet Revolutionary. New York: Basic Books, 2015.






July 13, 2015

Banks Used "Regulatory Arbitrage" to Rent Seek at Taxpayers' Expense




(p. 21) Between 2009 and 2011, a group of economists at New York University's Stern School of Business published an influential series of reports and books that sought to explain what, exactly, happened during the financial crisis. The depth of the inquiry was notable because the school is generally thought of as a Wall Street-friendly training ground for future bankers. One of the most striking findings was that between 1980 and 2000, the large banks in America had significantly moved away from productivity ­enhancement and toward rent-­seeking.

For the reports' principal authors, Matthew Richardson and Viral Acharya, the evidence of this shift came from careful study of the various ways that banks have legally evaded regulation of their capital requirements. A fundamental tenet of bank regulation is that banks shouldn't borrow too much, because being overleveraged makes them vulnerable to collapse. But banks can most easily make huge profits if they borrow huge amounts, and they tend to pursue unsafe levels of borrowing. Then, the authors observed, they use their power as essential tools in an economy to negotiate bailouts from the government, forcing taxpayers to guarantee their losses. Richardson and Acharya showed that it was precisely because our banking regulations were so extensive and complex that banks were able to seek rents. They called this "regulatory arbitrage," a term that means banks have harnessed regulation and turned it into a powerful business tool.



For the full commentary, see:

ADAM DAVIDSON. "Wall Street Is Using the Power of Dodd-Frank Against Itself." The New York Times Magazine (Sun., May 31, 2015): 18 & 20-21.

(Note: ellipsis added.)

(Note: the date of the online version of the commentary is MAY 27, 2015, and has the title "Wall Street Is Using the Power of Dodd-Frank Against Itself.")


One of the relevant papers by Acharya and Richardson is:

Acharya, Viral V., and Matthew Richardson. "Causes of the Financial Crisis." Critical Review 21, no. 2-3 (2009): 195-210.






July 12, 2015

Seeking Free Speech in China




(p. B1) A few years ago, the Chinese writer Murong Xuecun had the kind of career most novelists dream about. His eight books had sold two million copies in China, and he had amassed more than eight million social media followers.

But in 2011, he decided to stop publishing. He was afraid of running afoul of Chinese censors, and was even more concerned about the self-censorship that had crept into his work. Now he wishes he had never published some of his earlier books, which tiptoed around political issues.

"When I look back on them, I feel ashamed of myself," said Mr. Murong, 41, who lives in Beijing and whose real name is Hao Qun.

Mr. Murong was among a handful of writers who gathered on the steps of the New York Public Library on Wednesday night to protest the limits on free speech and expression in China. The gathering, organized by the PEN American Center, was prompted by the presence of a large delegation of Chinese publishers at BookExpo America, a major publishing trade event taking place in Manhattan this week.



For the full story, see:

ALEXANDRA ALTER. "A Mixed Message From China." The New York Times (Fri., MAY 29, 2015): B1 & B6.

(Note: the date of the online version of the story is MAY 28, 2015, and has the title "China's Publishers Court America as Its Authors Scorn Censorship.")






July 11, 2015

Canny Outlaws in Education and at Hogwarts




(p. 174) Interestingly, the union members in some of the schools run by Green Dot Public Schools, a charter school group with a solid educational track record, did not boycott the benchmark tests. The reason that they refused is revealing. Green Dot's exams are created by a panel of teachers from its schools and are regularly reviewed for effectiveness and modified by the teachers. The tests have more credibility with the teachers than the tests for the rest of the district's schools, which are written by an outside company, imposed from above, and don't mesh with year-round schedules.

The quiet resistance of canny outlaws and the vocal protests of others are signs that teachers dedicated to preserving and encouraging discretion and wise judgment are not going quietly into the night. These teachers are not people who simply rebel at rules or who are just committed to their own ways of doing things. They are committed to the aims of teaching, a practice whose purpose is to educate students to be knowledgeable, thoughtful, reasonable, reflective, and humane. And they are brave enough to act on these commitments, taking the risks necessary to find ways around the rules. We suspect that many of our readers are canny outlaws themselves or know people who are: practitioners who have the know-how and courage to bend or sidestep for-(p. 175)mulaic procedures or rigid scripts or bureaucratic requirements in order to accomplish the aims of their practice. We admire canny outlaws in the stories we tell ourselves about such people and even in some of our children's stories. We read the Harry Potter tales to them because Harry, Ron, and Hermione are canny outlaws who gain the guts and skill to break school rules and stand up to illegitimate power in order to do the right thing to achieve the aims of wizardry, indeed to save the practice itself.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.






July 10, 2015

Insights More Likely When Mood Is Positive and Distractions Few





If insights are more likely in the absence of distractions, then why are business executives so universally gung-ho on imposing on their workers the open office space layouts that are guaranteed to maximize distractions?



(p. C7) We can't put a mathematician inside an fMRI machine and demand that she have a breakthrough over the course of 20 minutes or even an hour. These kinds of breakthroughs are too mercurial and rare to be subjected to experimentation.

We are, however, able to study the phenomenon more generally. Enter John Kounios and Mark Beeman, two cognitive neuroscientists and the authors of the "The Eureka Factor." Messrs. Kounios and Beeman focus their book on the science behind insights and how to cultivate them.

As Mr. Irvine recognizes, studying insights in the lab is difficult. But it's not impossible. Scientists have devised experiments that can provoke in subjects these kinds of insights, ones that feel genuine but occur on a much smaller scale.


. . .


The book includes some practical takeaways of how to improve our odds of getting insights as well. Blocking out distractions can create an environment conducive to insights. So can having a positive mood. While many of the suggestions contain caveats, as befits the delicate nature of creativity, ultimately it seems that there are ways to be more open to these moments of insight.



For the full review, see:

SAMUEL ARBESMAN. "Every Man an Archimedes; Insights can seem to appear spontaneously, but fully formed. No wonder the ancients spoke of muses." The Wall Street Journal (Sat., May 23, 2015): C7.

(Note: ellipsis added.)

(Note: the online version of the review has the date May 22, 2015.)


The book under review, is:

Kounios, John, and Mark Beeman. The Eureka Factor: Aha Moments, Creative Insight, and the Brain. New York: Random House, 2015.






July 9, 2015

Physicists Accepting Theories Based on Elegance Rather than Evidence




(p. 5) Do physicists need empirical evidence to confirm their theories?


. . .


A few months ago in the journal Nature, two leading researchers, George Ellis and Joseph Silk, published a controversial piece called "Scientific Method: Defend the Integrity of Physics." They criticized a newfound willingness among some scientists to explicitly set aside the need for experimental confirmation of today's most ambitious cosmic theories -- so long as those theories are "sufficiently elegant and explanatory." Despite working at the cutting edge of knowledge, such scientists are, for Professors Ellis and Silk, "breaking with centuries of philosophical tradition of defining scientific knowledge as empirical."

Whether or not you agree with them, the professors have identified a mounting concern in fundamental physics: Today, our most ambitious science can seem at odds with the empirical methodology that has historically given the field its credibility.



For the full commentary, see:

ADAM FRANK and MARCELO GLEISER. "Gray Matter; A Crisis at the Edge of Physics." The New York Times, SundayReview Section (Sun., JUNE 7, 2015): 5.

(Note: ellipsis added.)

(Note: the date of the online version of the commentary is JUNE 5, 2015, and has the title "A Crisis at the Edge of Physics.")


The controversial Nature article, mentioned above, is:

Ellis, George, and Joe Silk. "Scientific Method: Defend the Integrity of Physics." Nature 516, no. 7531 (Dec. 18, 2014): 321-23.






July 8, 2015

Not Clear If Net Neutrality Is Good for Consumers




(p. B2) Of course, government antitrust and communications policy is supposed to benefit consumers, not any individual company or group of companies. "It's fair to say Netflix has gotten something of a free pass," said Scott Hemphill, visiting professor of antitrust and intellectual property at New York University School of Law. "This open Internet principle that's in ascendance is certainly good for Netflix. It's harder to say it's good for consumers."

. . .


Despite Netflix's arguments that it shouldn't have to pay fees to a broadband provider, that proposition is hardly self-evident. The fees Netflix so fiercely opposes are analogous to those found in many industries, such as credit cards, where both consumers and merchants pay the credit card companies. "It's hard to say if these fees are good or bad for consumers," Professor Hemphill said.



For the full story, see:

JAMES B. STEWART. "Common Sense; Netflix's Invisible Hand In Policy and Mergers." The New York Times (Fri., MAY 29, 2015): B2-B3.

(Note: ellipsis added.)

(Note: the date of the online version of the story is MAY 28, 2015, and has the title "Her Majesty's Jihadists" which was also the title used on the cover, but not at the start of the actual article on p. 42, which has the title "Common Sense; How Netflix Keeps Finding Itself on the Same Side as Regulators.")






July 7, 2015

Too Many Rules Results in "Adherence Instead of Audacity"




(p. 159) . . . Wong found a distinct downside to this division of labor. "Put all the directed requirements together and the life of a company commander is spent executing somebody else's good ideas." Too many rules and requirements "removes all discretion" and stifles the development of flexible officers, resulting in "reactive instead of proactive thought, compliance instead of creativity, and adherence instead of audacity." These are not the kinds of officers the army needs in unpredictable and quickly changing situations where specific orders are absent and military protocol is unclear. The army is creating cooks, says Wong, leaders who are "quite adept at carrying out a recipe," rather than chefs who can "look at the ingredients available to them and create a meal." Wong found a number of top brass who agreed. Retired General Wesley Clark observed that senior army leaders have "gone too far in over-planning, over-prescribing, and over-controlling." The consequence, according to retired General Frederick Kroesen, is that "initiative is stymied, and decision making is replaced by waiting to be told.... There is no more effective way to destroy the leadership potential of young officers and noncommissioned officers than to deny them opportunities to make decisions appropriate for their assignments."

The same thing can be said about public school teachers.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

(Note: first ellipsis added; second in original.)






July 6, 2015

Competition between Greek City-States "Led to Specialization and Innovation"




(p. C8) Mr. Ober's approach is theoretical, not narrative-driven. When he does discuss the specifics of classical history, in the second half of the book, he does so largely to support the theses he has developed in the first half about the key causes of Greece's rise.

These causes, in Mr. Ober's view, derived from the competitive world of small, self-governing city-states that emerged in Greece starting around 800 B.C. Competition between states led to specialization and innovation, as exemplified by the high-grade ceramics industry at Athens, and to a spirit of "rational cooperation" among the members of each polity (think of those ants). Within each state, self-governance created what Mr. Ober terms "rule egalitarianism": a sense of fairness and security that "encouraged investment in human capital and lowered transaction costs." The result was a rise not only in standards of living but also in civic pride, technological progress and refinement of artisanship.


. . .


It's no accident that Mr. Ober's terminology overlaps with the language of modern economics--"creative destruction" is a phrase he uses frequently. He wants to encourage comparisons between ancient Greece and the modern West. They offer two examples of "political and economic exceptionalism," featuring both pluralistic government and the rapid growth of wealth.



For the full review, see:

James Romm. "Greeks and Their Gifts; Competition among self-governing city-states led to specialization, innovation and cooperation." The Wall Street Journal (Sat., May 23, 2015): C8.

(Note: ellipsis added.)

(Note: the online version of the review has the date May 22, 2015.)


The book under review, is:

Ober, Josiah. The Rise and Fall of Classical Greece. Princeton, NJ: Princeton University Press, 2015.






July 5, 2015

"You Can't Get Married if You're Dead"




(p. A15) On Friday my phone was blowing up with messages, asking if I'd seen the news. Some expressed disbelief at the headlines. Many said they were crying.

None of them were talking about the dozens of people gunned down in Sousse, Tunisia, by a man who, dressed as a tourist, had hidden his Kalashnikov inside a beach umbrella. Not one was crying over the beheading in a terrorist attack at a chemical factory near Lyon, France. The victim's head was found on a pike near the factory, his body covered with Arabic inscriptions. And no Facebook friends mentioned the first suicide bombing in Kuwait in more than two decades, in which 27 people were murdered in one of the oldest Shiite mosques in the country.

They were talking about the only news that mattered: gay marriage.


. . .


The barbarians are at our gates. But inside our offices, schools, churches, synagogues and homes, we are posting photos of rainbows on Twitter. It's easier to Photoshop images of Justice Scalia as Voldemort than it is to stare evil in the face.

You can't get married if you're dead.



For the full commentary, see:

BARI WEISS. "Love Among the Ruins; Hurrah for gay marriage. But why do supporters save their vitriol for its foes instead of the barbarians at our gates?" The Wall Street Journal (Sat., June 27, 2015): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date June 26, 2015.)







July 4, 2015

Youth Become Jihadists to Do Something Important in the World




(p. 42) Maher, a 33-year-old historian of medium height and medium build with a neatly trimmed beard, is an expert on Salafi jihadism.


. . .


(p. 47) "If I had been 30 years older, I probably would have become a Communist," Maher went on. "And even now, when I meet some of my friends who also used to be in Tahrir, we all agree that, yes, if we were 10 years younger, we'd probably be off fighting in Syria or Iraq. Can you imagine, a 20-year-old kid whose peers are getting drunk, obsessed with finding a girlfriend, as opposed to doing something in Syria or Iraq that, within an hour, gets a response from the president of the United States? Obama doesn't know what a 25-year-old manager at Primark does, but if he goes to Syria and becomes involved with the Islamic State, he goes from being the manager of a second-rate clothing store to someone giving headaches to the president of the United States."



For the full story, see:

MARY ANNE WEAVER. "Why Do They Go?" The New York Times Magazine (Sun., APRIL 19, 2015): 42-47 & 58-60.

(Note: ellipsis added.)

(Note: the date of the online version of the story is APRIL 14, 2015, and has the title "Her Majesty's Jihadists" which was also the title used on the cover, but not at the start of the actual article on p. 42, which has the title "Why Do They Go?")






July 3, 2015

Officers Used to Learn from Trial and Error in Training Their Units




(p. 156) In the army, wartime experience is considered the best possible teacher, at least for those who survive the first weeks. Wong found another good one--the practice junior officers get while training their units. The decisions these officers have to make as teachers help develop the capacity for the judgment they will need on the battlefield. But Wong discovered that in the 1980s, the army had begun to restructure training in ways that had the opposite results.

Traditionally, company commanders had the opportunity to plan, (p. 157) execute, and assess the training they gave their units. "Innovation," Wong explained, "develops when an officer is given a minimal number of parameters (e.g., task, condition, and standards) and the requisite time to plan and execute the training. Giving the commanders time to create their own training develops confidence in operating within the boundaries of a higher commander's intent without constant supervision." The junior officers develop practical wisdom through their teaching of trainees, but only if their teaching allows them discretion and flexibility. Just as psychologist Karl Weick found studying firefighters, experience applying a limited number of guidelines teaches soldiers how to improvise in dangerous situations.

Wong's research showed that the responsibility for training at the company level was being taken away from junior officers. First, the time they needed was being eaten away by "cascading requirements" placed on company commanders from above. There was, Wong explained, such a "rush by higher headquarters to incorporate every good idea into training" that "the total number of training days required by all mandatory training directives literally exceeds the number of training days available to company commanders. Company commanders somehow have to fit 297 days of mandatory requirements into 256 available training days." On top of this, there were administrative requirements to track data on as many as 125 items, including sexual responsibility training, family care packets, community volunteer hours, and even soldiers who had vehicles with Firestone tires.

Second, headquarters increasingly dictated what would be trained and how it would be trained, essentially requiring commanders "to follow a script." Commanders lost the opportunity to analyze their units' weaknesses and plan the training accordingly. Worse, headquarters took away the "assessment function" from battalion commanders. Certifying units as "ready" was now done from the top.

The learning through trial and error that taught officers how to improvise, Wong found, happens when officers try to plan an action, (p. 158) then actually execute it and reflect on what worked and what didn't. Officers who did not have to adhere to strict training protocols were in an excellent position to learn because they could immediately see results, make adjustments, and assess how well their training regimens were working. And most important, it was this kind of experience that taught the commanders how to improvise, which helped them learn to be flexible, adaptive, and creative on the battlefield. Wong was concerned about changes in the training program because they squeezed out these learning experiences; they prevented officers from experiencing the wisdom-nurturing cycle of planning, executing the plan, assessing what worked and didn't, reevaluating the original plan, and trying again.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

(Note: italics in original.)






July 2, 2015

Video Games Tap into an Ancient Way to Process the World




(p. 30) "What looks like escapist fun is actually deep concentration," [Greg Toppo] says of the increasingly sophisticated video games that now occupy a major role in popular culture. "What looks like a 21st-century, flashy, high-tech way to keep kids entertained is in fact a tool that taps into an ancient way to process, explore and understand the world."


. . .


As the parent of a young child, I began "The Game Believes in You" thinking of video games as a kind of menace. I finished it believing that games are one of the most promising opportunities to liberate children from the damaging effects of schools that are hostile to fun.



For the full review, see:

KEVIN CAREY. "THE SHORTLIST; Education." The New York Times Book Review (Sun., APRIL 19, 2015): 30.

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

(Note: the online version of the review has the date APRIL 17, 2015.)


The book under review, is:

Toppo, Greg. The Game Believes in You: How Digital Play Can Make Our Kids Smarter. New York: Palgrave Macmillan Trade, 2015.






July 1, 2015

"Secure in the Knowledge that She Has Other Opportunities"




(p. A11) . . . , Professor Higgins notes that it is Eliza's "curbstone English that will keep her in the gutter to the end of her days." He boasts that with a few months under his instruction, she could get a job "as a lady's maid or a shop's assistant."

The next morning, Eliza appears at Professor Higgins's doorstep to hire him to teach her English because she wants to be "a lady in a flow'r shop, 'stead of sellin' at the corner of Tottenham Court Road." He accepts.

Note the assumptions. Eliza didn't place her hope in new regulations for street-side flower mongering. For Eliza, upward mobility was about acquiring the skills she needed to get ahead, in this case proper English and the manners that went with it.


. . .


In the end, the only real leverage a worker has over a boss is her ability to tell him where to get off--secure in the knowledge that she has other opportunities. Which is exactly what Eliza Doolittle does at the end, when she's acquired the English and manners that mean she no longer has to put up with the bullying of Professor Henry Higgins.



For the full commentary, see:

WILLIAM MCGURN. "MAIN STREET; Audrey Hepburn Teaches Economics; Progressives rushing to help New York nail-salon workers should rent a copy of 'My Fair Lady'." The Wall Street Journal (Tues., May 26, 2015): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 25, 2015.)







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