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October 23, 2018

Growing Percent of Firms in Developed Countries Are Zombies




ZURICH--The number of profit-constrained "zombie" firms has risen sharply since the late 1980s, according to research published Sunday by the Bank for International Settlements, a sign of the lingering effects from ultralow interest rates since the financial crisis.

Zombie firms are generally defined as companies that can't service their debt from profits during an extended period. These types of companies, which first gained attention in Japan decades ago and have since gained prevalence in Europe, steer resources away from healthier parts of the economy, weighing on productivity and economic growth.

"The prevalence of zombie firms has ratcheted up since the late 1980s," according to a paper published Sunday by the Switzerland-based BIS, a consortium of central banks, in its quarterly review of financial market developments.

Under a broad definition--the ratio of earnings before interest and taxes to interest paid is less than one for three-straight years in companies more than 10-years old--the percentage of zombie companies rose from 2% in the late 1980s to 12% in 2016. The data used by the authors covered 14 developed economies including the U.S., Japan, Germany and France.

And they seem to stay that way for longer. The authors found that whereas in the late 1980s zombie firms had a 60% chance of staying in that condition the following year, the probability reached 85% in 2016. Low interest rates have helped these firms stay afloat by reducing their financial pressure to reduce debt.

"Lower rates boost aggregate demand and raise employment and investment in the short run. But the higher prevalence of zombies they leave behind misallocate resources and weigh on productivity growth," the authors wrote.



For the full story, see:


Brian Blackstone. "Rise of the Zombies: Ranks of Non-Viable Firms Up Sharply Since 1980s, Study Says; Low rates have helped these firms stay afloat by reducing their financial pressure to reduce debt." The Wall Street Journal (Sunday, Sept. 23, 2018 URL: https://www.wsj.com/articles/rise-of-the-zombies-ranks-of-non-viable-firms-up-sharply-since-1980s-study-says-1537718401?mod=searchresults&page=1&pos=2

(Note: at least as of Oct. 1, 2018, this article appears only to have been published online.)


The study published in BIS Quarterly Review, and mentioned above, is:

Banerjee, Ryan Niladri, and Boris Hofmann. "The Rise of Zombie Firms: Causes and Consequences." BIS Quarterly Review (Sept. 2018): 67-78.






October 22, 2018

Origin of False Memories




(p. A19) Memories are subject to serious flaws, given the limitations and imperfections of the biological and psychological processes of recording, retaining and recalling them. Memories aren't computer files with exacting recall and retrieval functions. They are often disassembled and stored in "packets" in multiple brain locations. People don't store the fine details of all daily experiences, because of neuron capacity limitations. Even important details can be missed or lost.

Hence the brain must be selective in which memories it stores and must condense them so that many details are left out. Many eyewitnesses and even victims of crimes don't take note of the facial features of gun-toting assailants or the make and color of getaway cars.


. . .


My colleague Elizabeth Loftus was able to "implant" false memories in a significant subset of laboratory subjects by showing them an official-looking poster of Disney characters, including Mickey Mouse and Bugs Bunny. Many subjects later remembered meeting Bugs Bunny on a childhood trip to Disneyland. Some of them even reported that Bugs had touched them inappropriately.

That was impossible. Bugs Bunny isn't a Disney character.



For the full commentary, see:

Richard B. McKenzie. "A Stumble Down Memory Lane; Like Kavanaugh's latest accuser, people often have 'gaps.' They don't always fill them with truth.." The Wall Street Journal (Tuesday, September 25, 2018): A19.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Sept. 24, 2018.)


The commentary quoted above is partly based on McKenzie's book:

McKenzie, Richard B. A Brain-Focused Foundation for Economic Science: A Proposed Reconciliation between Neoclassical and Behavioral Economics. Basingstoke, UK: Palgrave Macmillan, 2018..






October 21, 2018

"An Insular Fortress of Thought Coercion"




(p. A3) WASHINGTON--A day before Google's chief was set to meet with high-ranking Republicans, critics in a congressional hearing accused the internet giant and other tech firms of being "insular" and dismissive of the free-speech rights of conservatives.


. . .


At Thursday's House subcommittee hearing, Rep. Steve King (R., Iowa) warned that tech companies' alleged bias is beginning to be noticed by the public. "Americans are beginning to recognize this quiet trend in our society in which one group or another systemically silences another's beliefs with which they disagree," he said in his opening statement.

Harmeet Dhillon, an attorney representing a group of conservative Google employees claiming employment discrimination by the company, directed lawmakers to media reports concerning its alleged blacklisting of phrases, articles and websites, and the blocking of conservative YouTube videos.

"Big Tech has become an insular fortress of thought coercion and vindictive behavioral control," she said.



For the full story, see:

McKinnon, John D. "Tech Firms Face Political Bias Accusations." The Wall Street Journal (Wednesday, September 28, 2018): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date Sept. 27, 2018, and has the title "Tech Firms Face Bias Accusations at Congressional Hearing." The online version includes additional paragraphs, but the passages quoted above appear in both the online and print versions. The formatting above, follows the print version.)






October 20, 2018

Low Interest Rates Increased Zombie Firms After Economic Crisis of 2008





ZombieFirmsIncreaseGraph2018-10-03.png





















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














(p. A1) Italian clothing maker and retailer Stefanel SpA became famous for its knitted coats and cardigans.

Many economists, investors and bankers know Stefanel as something starkly different: a zombie company. It has posted an annual loss for nine of the last 10 years and restructured its bank debt at least six times, including several grace periods when Stefanel only had to pay interest on what it owed.

After booming during Italy's post-World War II expansion, Stefanel and its lumbering factories were overwhelmed by Spanish fast-fashion giant Zara and then battered by the economic slowdown that hit Italy in 2008.

Stefanel is still alive but staggering. So are hundreds of other chronically unprofitable, highly indebted companies being kept afloat with new infusions from lenders and shareholders, especially in Southern Europe.

Economists and central bankers say zombies undercut prices charged by healthier competitors, create artificial barriers to entry and prevent the flushing out of (p. A10) weak companies and bad loans that typically happens after downturns.

Now that the European economy is in growth mode, those zombies and their related debt problems could become a drag on the entire continent.

"The zombification of the corporate sector and banks [is] a risk for future living standards," Klaas Knot, a European Central Bank governor and the head of the Dutch central bank, said in an interview.


. . .


In some ways, zombie firms are an unintended side effect of years of easy money from the ECB, which rolled out aggressive stimulus policies, including negative interest rates, to support lending and growth. Those policies have been sharply criticized in some richer eurozone countries for making it easier for banks to keep struggling corporate borrowers alive.



For the full story, see:

Eric Sylvers and Tom Fairless. "Zombie Companies Haunt Europe's Economic Recovery." The Wall Street Journal (Thursday, November 16, 2017): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the article has the date Nov. 15, 2017, and the title "A Specter Is Haunting Europe's Recovery: Zombie Companies.")






October 19, 2018

Drug Middlemen Create "Perverse Incentive" for Higher List Prices




(p. B1) The Department of Health and Human Services is scrutinizing the system of rebates and discounts paid to middlemen as medicine flows from manufacturers to patients. Those middlemen, such as drug wholesalers, pharmacies, and pharmacy-benefit managers, are often compensated as a percentage of a drug's list price. That creates a perverse incentive for higher list prices throughout the system.


. . .


Pfizer , which made headlines earlier this month by pausing a slate of planned price increases due to White House criticism, sounds ready for reform. Chief Executive Ian Read on a conference call with analysts last week predicted that rebates are "going away" over the long term. Mr. Read added that the larger gaps between list and net prices amounted to a "subsidy" for companies in the drug supply chain and blamed those subsidies for the relatively weak sales of certain lower-priced versions of blockbuster drugs.



For the full commentary, see:

Charley Grant. " HEARD ON THE STREET; Skies Darken for Drug Middlemen." The Wall Street Journal (Wednesday, Aug. 8, 2018): B1.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Aug. 7, 2018.)







October 18, 2018

Visionary Manifesto for Driverless Cars




(p. A13) Not surprisingly, optimism leaps off the pages of Lawrence D. Burns's "Autonomy: The Quest to Build the Driverless Car--and How It Will Reshape Our World," a combination of memoir and visionary manifesto. In contrast to "the personally owned, gasoline-powered, human-driven vehicles that have dominated the last century," Mr. Burns writes, "we're transitioning to mobility services based on electric-powered and driverless vehicles, paid for by trip or through subscriptions." These services, he says, will get us around "safely and conveniently." Meanwhile, we will avoid the "hassles of car ownership" and the time lost in parking and pumping gas, not to mention the costs that having a car entails.


. . .


After leaving GM during its 2009 bankruptcy, Mr. Burns became an ever-more emphatic advocate for the reinvention of the automobile, soon teaming up with Mr. Urmson and other technology pioneers at Google. This front-row seat at the project that popularized autonomous cars informs some of the most lively parts of "Autonomy." At one point, a milestone goal is thought to be needed, with a payout bonus, so when Larry Page (Google's co-founder) says, "I want this thing on any street in California to drive one hundred percent autonomous," the Larry1K challenge is launched. The development of Waymo's "Firefly" low-speed driverless car takes longer than expected and teaches the Silicon Valley team a new respect for Detroit's skills. In turned out that "designing a vehicle was comparatively easy," Mr. Burns writes. What was difficult was " 'hardening' the vehicle's various components"--making every part work under every driving condition. This was "the process at which Detroit engineering talent excelled." A deal with Ford Motor Co. fails, but an investment banker and analyst, inspired by one of Mr. Burns's visionary papers, does join Ford on a driverless-car project. As Mr. Burns recounts, personality clashes eventually blew up Google's dream team and led to a lawsuit over intellectual-property theft against Uber, which had bought a driverless-trucking company founded by a Waymo veteran.



For the full review, see:

Edward Niedermeyer. "BOOKSHELF; Fast-Tracking A Driverless Car." The Wall Street Journal (Tuesday, August 28, 2018): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date Aug. 27, 2018, and has the title "BOOKSHELF; 'Autonomy' Review: Fast-Tracking a Driverless Car; A period of remarkable progress seems to be giving way to a host of challenges that can't be solved with engineering talent alone.")


The book under review, is:

Burns, Lawrence D., and Christopher Shulgan. Autonomy: The Quest to Build the Driverless Car--and How It Will Reshape Our World. New York: Ecco, 2018.






October 17, 2018

Natural Experiment on Consumer Effects of Net Neutrality




(p. A25) TORONTO -- The Federal Communications Commission is planning to jettison its network neutrality rules, and many Americans are distraught. Such a move, the Electronic Frontier Foundation warned, "invites a future where only the largest internet, cable and telephone companies survive, while every start-up, small business and new innovator is crowded out -- and the voices of nonprofits and ordinary individuals are suppressed."

Critics worry that getting rid of neutrality regulation will lead to a "two-tier" internet: Internet service providers will start charging fees to websites and apps, and slow down or block the sites that don't pay up. As a result, users will have unfettered access to only part of the internet, with the rest either inaccessible or slow.

Those fears are vastly overblown.


. . .


So why am I not worried? I worked for a telecommunications company for 25 years, and whatever one may think about corporate control over the internet, I know that it simply is not in service providers' interests to throttle access to what consumers want to see. Neutral broadband access is a cash cow; why would they kill it?


. . .


The good news is that we will soon have a real-world experiment to show who is right and who is wrong. The United States will get rid of its rules, and the European Union and Canada will keep their stringent regulations. In two years, will the American internet be slower, less innovative and split into two tiers, leaving Canadians to enjoy their fast and neutral net?

Or, as I suspect, will the two markets remain very similar -- proving that this whole agonized debate has been a giant waste of time? Let's check back in 2019.



For the full commentary, see:

Ken Engelhart. "Losing Net Neutrality: Nothing to Be Afraid Of." The New York Times (Tuesday, Dec. 5, 2017): A25.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Dec. 4, 2017, and has the title "Why Concerns About Net Neutrality Are Overblown." The online version says that the New York edition ran the commentary on p. A27, instead of the A25 page on which it appeared in my National Edition copy.)







October 16, 2018

Wrecking Ball for Bureaucracy That "Is Killing the Country"




(p. B4) America's big tech companies are facing some of their toughest political challenges as they flirt with or surpass trillion-dollar valuations. Before lawmakers try to rein them in, Reid Hoffman argues government officials better be careful what they wish for.

Mr. Hoffman was chief operating officer of PayPal while it was still a small payments startup before he co-founded the professional social-network LinkedIn.


. . .


WSJ: You're vociferously opposed to President Trump and even commissioned an anti-Trump card game. Does Silicon Valley have a problem with liberal bias?

Mr. Hoffman: I do think that there is a reflexive bias to liberalism that causes discomfort. I think you have that kind of left bias within the Silicon Valley culture, too, which is, "I'm so convinced that's idiotic, I'm not listening to anything about it." And that's the problem. The problem is not actively listening. But that's human. It's not only here. Part of the reason [for strong negative reactions] to Trump is the flat-out lies.

WSJ: When you talk politics with Peter Thiel, PayPal's co-founder and a well-known Trump supporter, what are those conversations like?

Mr. Hoffman: He's a friend of mine, but we've disagreed about politics since we were college undergraduates. One thing we argue about is how much does Trump lie? I've been trying to advance him the case that there's always been some lying around politicians, but Trump is one or two orders of magnitude worse than ever before. He says Obama is a bigger liar than Trump--based on, for example, the claim that under Obamacare you'd be able to spend as much time with your primary doctor as you did before Obamacare.

Peter thinks that the bureaucracy is killing the country and that you need a wrecking ball to shake it up, and maybe Trump is the only wrecking ball you get. His pro-Trump arguments are that someone needed to stand up to China. Trump at least is, [while] everyone else gave it lip service.



For the full interview, see:

Rolfe Winkler, interviewer. "A Silicon Valley Warning." The Wall Street Journal (Thursday, Sept. 27, 2018): B4.

(Note: ellipsis added; bolded and bracketed words in original.)

(Note: the online version of the interview has the date Sept. 26, 2018, and the title "LinkedIn's Co-Founder Warns of Perils in Regulating Big Tech." The last question and answer quoted above, is included in the online, but not the print, version of the interview.)






October 15, 2018

Free Trade Benefits Harley-Riding Econometricians (and All Other Consumers Too)




Roughly 40 years ago, I completed a very useful econometrics course at the University of Chicago taught by the author of the commentary quoted below. Life is hard to predict, with or without econometrics. Who could have predicted that Eddie Lazear would end up on a Harley?



(p. A15) When I served in the George W. Bush administration, a group of Harley-Davidson -riding cabinet members and White House principals led the 2008 Memorial Day Rolling Thunder motorcycle parade. I own a 100th Anniversary Year Road King Classic. I am disappointed to see President Trump singling out the iconic American motorcycle company for harassment--a precedent that could inflict long-run damage on the U.S. economy.


. . .


Mr. Trump may genuinely believe his trade tactics will pressure other countries to reduce their tariffs, resulting in freer trade overall. This is unlikely. In the meantime his policies impose steep costs on American firms, like Harley-Davidson, and the people who want to buy from them. The best way to get others to buy American is to produce high-quality goods inexpensively. Those American products that do well abroad, Harley-Davidson motorcycles among them, succeed because consumers value them, not because tariffs and trade-war threats force them to buy American.



For the full commentary, see:

Edward Lazear. "Keep Your Tariffs off My Harley." The Wall Street Journal (Tuesday, Aug. 28, 2018): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Aug. 27, 2018.)







October 14, 2018

"I'm Alive and That's an Extremely Good Thing"




(p. A4) HONG KONG -- When Bill Jaynes realized water was rushing into the plane, he started to panic.

Mr. Jaynes, a Micronesian journalist, was aboard a plane set to land on Weno, the tiny Pacific island that is part of the Federated States of Micronesia.

"I thought we landed hard until I looked over and saw a hole in the side of the plane and water was coming in," he said in a Facebook video, describing the landing of a Boeing 737-800 flown by Air Niugini at Chuuk International Airport on Friday morning [September 28, 2018]. "And I thought, well, this is not, like, the way it's supposed to happen."

But then help suddenly arrived -- from a flotilla of local boats that rushed to the plane, which landed short of the runway in the Chuuk lagoon, and all 47 passengers aboard the aircraft were evacuated, according to early statement from the airline.

"It's just surreal," said Mr. Jaynes, managing editor of The Kaselehlie Press, a newspaper on Pohnpei, another Micronesian island.

Matthew Colson, a Baptist missionary who lives on Weno, recorded the rescue effort and posted his interview with Mr. Jaynes on Facebook. He said the locals who rushed their boats to the scene were fisherman and construction workers, all locals.


. . .


Mr. Jaynes, reflecting on the experience, said, "I'm alive and that's an extremely good thing."



For the full story, see:

Austin Ramzy. "When a Plane Crashed in the Pacific, Fishing Boats Came to the Rescue." The New York Times (Saturday, Sept. 28, 2018): A4.

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

(Note: the online version of the story has the date Sept. 27, 2018, and has the title "'Their Plane Was Set to Land. The Water Rushed In. Then, the Boats Came.")


The passages quoted above, provide one more example of one of the main messages of:

Ripley, Amanda. The Unthinkable: Who Survives When Disaster Strikes - and Why. New York: Crown Publishers, 2008.






October 13, 2018

Higher Minimum Wages Increase Automation of Routine Tasks




(p. A11) Over the past few years, San Francisco in particular, and California in general, has increased the cost to hire and train employees at risk of being automated. The minimum wage will rise to $15 an hour in San Francisco in 2018. The rest of California will get there four years later. On top of San Francisco's hourly wage mandate are requirements for health care, paid leave and employee scheduling.

These added costs give employers with already slim profit margins a strong incentive to automate or embrace self-service. In an interview with Forbes, the founder of a delivery robot company linked his product's value proposition to a rising minimum wage: "At something like $10 per delivery, the majority of citizens will not use [human delivery]. It's too expensive."

The empirical evidence supports the anecdotes: An August [2017] study published by the National Bureau of Economic Research linked a rising minimum wage to an increase in unemployment for workers in jobs that require a large number of routine tasks. The authors reported that it wasn't just service-industry jobs at risk. A rising minimum wage also had a negative effect on job opportunities for older, less-skilled employees in manufacturing.



For the full commentary, see:

Michael Saltsman. "CROSS COUNTRY; San Francisco's Problem Isn't Robots; It's the $15 Wage Floor; The city fears automation will replace workers--but its own policies make low-value jobs illegal." The Wall Street Journal (Saturday, Nov. 25, 2017): A11.

(Note: bracketed year added.)

(Note: the online version of the commentary has the date Nov. 24, 2017.)


The later published version of the National Bureau of Economic Research study mentioned above, is:

Lordan, Grace, and David Neumark. "People Versus Machines: The Impact of Minimum Wages on Automatable Jobs." Labour Economics 52 (June 2018): 40-53.






October 12, 2018

Closed Malls Repurposed as Distribution Centers




(p. B6) The pressure for speedy online package delivery is prompting companies to look for distribution facilities closer to residential areas or highways.

Some of the best locations, it turns out, are dead malls.

Warehouse landlords say they like former malls because the shopping centers occupy swaths of space relatively close to where consumers live or near main highways.

But it isn't easy to convert a mall into logistics space quickly. Developers say it takes a community ready to accept that the mall has failed as well as understanding that there are viable job opportunities in logistics real estate.



For the full story, see:

Esther Fung. "The Best Location for New Warehouse Is Often an Old Mall." The Wall Street Journal (Wednesday, Aug. 9, 2017): B6.

(Note: the online version of the article has the date Aug. 8, 2017, and the title "The Best Place for a New Warehouse? An Old Mall.")






October 11, 2018

Communism Is "the Greatest Catastrophe in Human History"




(p. A17) Armed Bolsheviks seized the Winter Palace in Petrograd--now St. Petersburg--100 years ago this week and arrested ministers of Russia's provisional government. They set in motion a chain of events that would kill millions and inflict a near-fatal wound on Western civilization.


. . .


The victims include 200,000 killed during the Red Terror (1918-22); 11 million dead from famine and dekulakization; 700,000 executed during the Great Terror (1937-38); 400,000 more executed between 1929 and 1953; 1.6 million dead during forced population transfers; and a minimum 2.7 million dead in the Gulag, labor colonies and special settlements.

To this list should be added nearly a million Gulag prisoners released during World War II into Red Army penal battalions, where they faced almost certain death; the partisans and civilians killed in the postwar revolts against Soviet rule in Ukraine and the Baltics; and dying Gulag inmates freed so that their deaths would not count in official statistics.

If we add to this list the deaths caused by communist regimes that the Soviet Union created and supported--including those in Eastern Europe, China, Cuba, North Korea, Vietnam and Cambodia--the total number of victims is closer to 100 million. That makes communism the greatest catastrophe in human history.



For the full commentary, see:

David Satter. "100 Years of Communism--and 100 Million Dead; The Bolshevik plague that began in Russia was the greatest catastrophe in human history." The Wall Street Journal (Tuesday, Nov. 7, 2017): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Nov. 6, 2017.)






October 10, 2018

"Wishing Only for More Time"




(p. A20) Walter Mischel, whose studies of delayed gratification in young children clarified the importance of self-control in human development, and whose work led to a broad reconsideration of how personality is understood, died on Wednesday [September 12, 2018] at his home in Manhattan.


. . .


In a series of experiments at Stanford University beginning in the 1960s, he led a research team that presented preschool-age children with treats -- pretzels, cookies, a marshmallow -- and instructed them to wait before indulging themselves. Some of the children received strategies from the researchers, like covering their eyes or reimagining the treat as something else; others were left to their own devices.

The studies found that in all conditions, some youngsters were far better than others at deploying the strategies -- or devising their own -- and that this ability seemed to persist at later ages. And context mattered: Children given reason to distrust the researchers tended to grab the treats earlier.


. . .


For the wider public, it would be the marshmallow test. In the late 1980s, decades after the first experiments were done, Dr. Mischel and two co-authors followed up with about 100 parents whose children had participated in the original studies. They found a striking, if preliminary, correlation: The preschoolers who could put off eating the treat tended to have higher SAT scores, and were better adjusted emotionally on some measures, than those who had given in quickly to temptation.

The paper was cautious in its conclusions, and acknowledged numerous flaws, including a small sample size. No matter. It was widely reported, and a staple of popular psychology writing was born: If Junior can hold off eating a marshmallow for 15 minutes in preschool, then he or she is headed for the dean's list.


. . .


In 2014, Dr. Mischel published his own account of the experiment and its reception, "The Marshmallow Test: Mastering Self-Control."

In at least one serious replication attempt, scientists failed to find the same results. Still, there is general agreement that self-discipline, persistence, grit -- call it what you like -- is a good predictor of success in many areas of life.


. . .


"I am glad that at the choice point at 18 I resisted going into my uncle's umbrella business," he wrote in the autobiographical essay. "The route I did choose, or stumbled into, still leaves me eager early each morning to get to work in directions I could not have imagined at the start, wishing only for more time, and not wanting to spend too much of it looking back."



For the full obituary, see:


Benedict Carey. "Walter Mischel, 88, Marshmallow Test Creator, Dies." The New York Times (Saturday, Sept. 15, 2018): A20.

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

(Note: the online version of the obituary has the date Sept. 14, 2018, and has the title "Walter Mischel, 88, Psychologist Famed for Marshmallow Test, Dies'.")


Mischel's book on delayed gratification, is:

Mischel, Walter. The Marshmallow Test: Mastering Self-Control. New York: Little, Brown and Company, 2014.






October 9, 2018

"No Clear Path" for AI to Match Humans in "Broad, Integrated, Flexible and Robust Understanding of the World"




The author of the comments quoted below is a Duke University Professor of Computer Science.



(p. A15) For those not working in AI, it can be difficult to interpret achievements in the field.


. . .


. . . the AI system solves problems in a very different way than humans.


. . .


Tasks that require responding to the same kind of standardized input over and over, with a clear measure of success, are a natural fit. Such tasks range from the diagnosis of medical images to flipping burgers. On the other hand, jobs that are messy and unpredictable and require an understanding of people and the broader world--I like to think of kindergarten teachers--will likely remain safe for a long time.

Much progress has been made in AI in a short time, so future breakthroughs are not unthinkable. For now, humans remain unsurpassed in their broad, integrated, flexible and robust understanding of the world.


. . .


. . . currently there is no clear path toward building such systems.



For the full commentary, see:

Vincent Conitzer. "Natural Intelligence Still Has Its Advantages; AI is disruptive, but it hasn't rendered humanity obsolete." The Wall Street Journal (Wednesday, Aug. 29, 2018): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Aug. 28, 2018.)






October 8, 2018

Automation Predicted to Destroy 19 Million Old Jobs and Create 21 Million New Jobs




(p. B5) At least 21 new job categories may soon emerge from technological and other societal changes, says a new report from IT-services and consulting firm Cognizant Technology Solutions Corp.

With titles such as "genetic diversity officer," "virtual store sherpa" and "personal memory curator," these roles aren't science fiction, the study's authors argue. Rather, they are identified as jobs many employers will have to fill within the next decade.

"It's easier to understand what types of jobs are going to go away," says Ben Pring, director of Cognizant's Center for the Future of Work, . . .   The idea behind the report, he says, was "to craft a credible narrative of what we're going to gain."


. . .


Mr. Pring and his colleagues say the dawning age of intelligent machines won't be without painful upheaval: They estimate about 19 million positions in the U.S. will be automated out of existence in the next 15 years, while employers create some 21 million new roles. At the same time, the majority of existing ones will likely be enhanced. "Work will change, but it won't go away," Mr. Pring says.



For the full story, see:

Vanessa Fuhrmans. "A Future Without Jobs? Think Again." The Wall Street Journal (Thursday, November 16, 2017): B5.

(Note: ellipses added.)

(Note: the online version of the story has the date Nov. 15, 2017, and has the title "How the Robot Revolution Could Create 21 Million Jobs.")


The Cognizant report, mentioned above, is:

Pring, Ben, Robert H. Brown, Euan Davis, Manish Bahl, and Michael Cook. "21 Jobs of the Future: A Guide to Getting - and Staying - Employed for the Next 10 Years." Teaneck, NJ: Cognizant's Center for the Future of Work, Nov. 15, 2017.






October 7, 2018

"Much Less" Poverty in U.S. Now Than 30 Years Ago




(p. A15) Instead of focusing on reported incomes, our work measures poverty based on consumption: what food, housing, transportation and other goods and services people are able to purchase. This approach, which captures the effect of noncash programs and accounts for the known bias in the CPI-U, demonstrates clearly that there is much less material deprivation than there was decades ago.

Other indicators support this finding. According to the American Housing Survey, the poorest 20% of Americans live as the middle class did a generation ago as measured by the square footage of their homes, the number of rooms per person, and the presence of air conditioning, dishwashers and other amenities. In terms of housing problems like peeling paint, leaks and plumbing issues, today's poor haven't quite matched the living standards of the 1980s middle class, but they are getting close.



For the full commentary, see:

Bruce D. Meyer and James X. Sullivan. "Hardly Anyone Wants to Admit America Is Beating Poverty; The White House tells the truth, but partisans on both sides are wedded to the idea of failure." The Wall Street Journal (Tuesday, Aug. 7, 2018): A15.

(Note: the online version of the commentary has the date Aug. 6, 2018.)






October 6, 2018

Hershey Gave the World Chocolate Candy and a Single, Very Rich, Residential School




(p. A19) In the early 20th century, Milton Hershey transformed chocolate from a luxury good to a working-class staple. It made him a fortune, which he used to establish Hershey, Pa.--a model company town 100 miles west of Philadelphia and the self-proclaimed "sweetest place on earth." He also established an orphanage, the Milton Hershey School, to provide housing and education primarily for children from the area.


. . .


Other early-20th-century philanthropists, such as Andrew Carnegie and John D. Rockefeller, left behind massive general-purpose foundations that underwrote experiments in medicine, science and higher education, Mr. Kurie observes, while Hershey "gave us chocolate candy and a single residential school in south-central Pennsylvania that remains little known outside the region."


. . .


. . . , [Mr. Kurie] suggests that the trust can be viewed as a model of philanthropic responsibility, even by institutions without a devoutly local focus. Mr. Kurie's most significant contribution here is to draw attention to philanthropy's "external stakeholders," those people and organizations "who are neither agents nor subjects of philanthropy but who are, for better or worse, caught up in its activities." He demonstrates how a philanthropic institution can continue to reflect a founder's vision while shaping and being shaped by the community that grows up around it, one whose bonds can often be bittersweet.



For the full review, see:

Benjamin Soskis. BOOKSHELF; A Man, a Brand, a School, a Town." The Wall Street Journal (Monday, March 26, 2018): A19.

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

(Note: the online version of the review has the date March 25, 2018, and has the title "BOOKSHELF; 'In Chocolate We Trust' Review: A Man, a Brand, a School, a Town.")


The book under review, is:

Kurie, Peter. In Chocolate We Trust: The Hershey Company Town Unwrapped. Philadelphai, PA: University of Pennsylvania Press, 2018.






October 5, 2018

Kilby Invented Transistor While Flouting Mandated Summer Vacation




(p. A15) Sixty years. But how much longer? In 1958 Jack St. Clair Kilby--from Great Bend, Kan.--created one of the greatest inventions, a great bend, in the history of mankind. Kilby recently had started at Texas Instruments as an electrical engineer. Most everyone left on a mandated summer break, but he stayed in the lab and worked on combining a transistor, capacitor and three resistors on a single piece of germanium. On Sept. 12, he showed his boss his integrated circuit. At a half-inch long and not very wide, it had ugly wires sticking out, resembling an upside-down cockroach glued to a glass slide.


. . .


Brace yourself. When Moore's Law finally gives up the ghost, productivity and economic growth will roll over too--unless. The world needs another Great Bend, another Kilbyesque warp in the cosmos, to drive the economy.


. . .


Let's hope the next Jack Kilby skipped this summer's vacation.



For the full commentary, see:

Kessler, Andy. "INSIDE VIEW; The Chip That Changed the World; Jack Kilby built the first integrated circuit 60 years ago. We need a new Moore's Law." The Wall Street Journal (Monday, Aug. 27, 2018): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Aug. 26, 2018.)






October 4, 2018

To Bacharach, Retiring from Music "Is Like Dying"




(p. 6B) NEW YORK (AP) -- At age 90, Burt Bacharach hasn't lost faith in the power of music.

"Music softens the heart, makes you feel something if it's good, brings in emotion that you might not have felt before," he said. "It's a very powerful thing if you're able to do to it, if you have it in your heart to do something like that."


. . .


Bacharach says he has no plans to stop writing or performing. He contributes music to a new album by Elvis Costello, a longtime admirer with whom Bacharach has worked with before, and he continues to tour.

"You can throw up your hands and say, 'I can't do this anymore,' but it's what I do. I'm not just going to stop and retire, that is like dying, you know."



For the full story, see:

AP. "School shootings inspire song by Bacharach, 90." Omaha World-Herald (Tuesday, September 28, 2018): 6B.

(Note: ellipsis added.)






October 3, 2018

"Regulatory Humility" Enabled 4G "Entrepreneurial Brilliance"




(p. A15) America dominated 4G because the government largely got out of the way of risk-takers. U.S. regulators, unlike their European counterparts, didn't try to mandate technical standards or require forced sharing of their wireless networks with competitors. Regulatory humility produced one of the greatest explosions of entrepreneurial brilliance in human history, the mobile internet.

Today the FCC is helping speed 5G deployment by modernizing regulations. Last December it removed utility-style regulations placed on wireless broadband by the Obama administration. On Sept. 26, it pre-empted localities from charging outrageous fees for 5G deployment. It is also gearing up to auction more spectrum in November to help connect the Internet of Things. Tax reform and the Trump administration's broader deregulatory agenda have also created a more business-friendly environment.

But more should be done. Antitrust officials should update their definitions of markets to give more clarity to 5G entrepreneurs. As T-Mobile and Sprint argue in their merger filings, 5G and free Wi-Fi will compete head-to-head with cable broadband for in-home use.

Regulators also need to recognize that as 5G emerges, old categories are becoming scrambled. Consumers don't necessarily know, or care, if their content comes from an online provider, a broadcaster, a cable channel or a "tech" company, so long as they can get it on their phone or tablet. Regulations must allow companies to invest, innovate, and merge in this new ecosystem.



For the full commentary, see:

Robert M. McDowell. "To Boost 5G, Keep the Industry Free." The Wall Street Journal (Friday, Sept. 28, 2018): A15.

(Note: the online version of the commentary has the date Sept. 27, 2018.)






October 2, 2018

If She Could Choose Her Father, Lisa Brennan-Jobs Would Choose Steve Jobs




(p. A13) The house that Steve Jobs built had many mansions. One of them was a vast Spanish-style confection with soaring white arches. Majestic and crumbling, it sat on seven acres in the town of Woodside near Palo Alto, Calif. Inside there was an elevator, a ballroom and a church organ. Otherwise it was mostly empty. Jobs's daughter Lisa was 9 when she began to spend overnights with him there on Wednesdays in the mid-1980s while her mother went to art school in Oakland.

Both the mansion and her father, whom the little girl barely knew, were scary and awe-inspiring, filling her with "a kind of ecstatic expectation," as Lisa Brennan-Jobs writes in her memoir "Small Fry."


. . .


For all the emotional injury Ms. Brennan-Jobs describes in her book, there are no villains. She portrays her father as a damaged person who in turn inflicted suffering on others. "There was a thin line between civility and cruelty in him, between what did and what did not set him off," she writes. When he was not belittling her as if she were a delinquent employee, he could be spontaneously tender. "Hey, Small Fry, let's blast," Jobs would say as he arrived to take her roller skating on random weekends. "We're livin' on borrowed time." She learned to navigate around his poisonous moods and not to trust too much in his moments of grace.

Nor are there any heroes here, though there are acts of heroism. Chrisann Brennan's dedication to Lisa's care was ironclad over the years as she struggled to support them both. Mona Simpson made helpful interventions on Lisa's behalf, and Laurene Powell, who married Jobs in 1991, did what she could to include the child in her household. Lisa's longtime psychiatrist became a trustworthy father figure, as did a sympathetic neighbor. Painful though this childhood was, it was not without a stumbling kind of love. Ms. Brennan-Jobs knows this, and works to forgive. About her parents she admits that, given the opportunity, "I would choose them again."



For the full review, see:

Donna Rifkind. "BOOKSHELF; Coming of Age in Silicon Valley." The Wall Street Journal (Friday, Sept. 7, 2018): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 6, 2018, and has the title "BOOKSHELF; 'Small Fry' Review: Coming of Age in Silicon Valley.")


The book under review, is:

Brennan-Jobs, Lisa. Small Fry: A Memoir. New York: Grove Press, 2018.






October 1, 2018

Fashion Designers Catch Up with Arthur Diamond on Pockets




After decades of wearing shirts with two to four pockets, and cargo pants with many pockets, I am gratified to finally be vindicated as a fashion-forward trendsetter.



(p. D1) IN 1901, Levi's gave its famous 501 jean its famous fifth pocket. It wasn't, as many assume, the teensy pocketwatch slot above the right front pocket--that had been there since the jean's beginnings in 1879--but rather the back left pocket. That unassuming addition granted generations of men (and eventually women) double the rear-end real estate in which to stash bifolds, bandannas, crumpled bar receipts and, of course, awkward hands. For a mere sliver of space, it marked a revolution in clothing.

These days, our relationship to pockets is undergoing a similar sea change. Whereas Levi's took a subtle approach, menswear designers are now stitching pockets on garments with the abandon of Jackson Pollock flinging paint on canvas. No longer an afterthought or mundane change-holder, pockets are the defining component of many designs.



For the full story, see:

Jacob Gallagher. "Pick Pockets." The Wall Street Journal (Saturday, Sept. 8, 2018): D1-D2.

(Note: the online version of the story has the date Sept. 6, 2018, and has the title "Think Your Clothes Have Enough Pockets? Think Again.")






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