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October 17, 2017

Inventor's Semiconductor Background Was Source of New, Safer Lithium Battery



(p. B1) SAN FRANCISCO -- Mike Zimmerman likes to shock his guests by using a hammer to drive a nail through a solid polymer lithium metal battery.

Nothing happens -- and that's a good thing.

Mr. Zimmerman's battery is a new spin on lithium-ion batteries, which are widely used in products from smartphones to cars. Today's lithium-ion batteries, as anyone who has followed Samsung's recent problems with flammable smartphones may know, can be ticking time bombs. The liquids in them can burst into flames if there is a short circuit of some sort. And driving a nail into one of them is definitely not recommended.

With that in mind, Mr. Zimmerman's demonstration commands attention.

His Woburn, Mass., start-up, Ionic Materials, is at the cutting edge of an effort to design safer batteries. The company is working on "solid" lithium polymer batteries that greatly reduce their combustible nature.

A solid lithium polymer metal battery -- when it arrives commercially -- will also allow electronics designers to be more creative, because they will be able to use a plasticlike material (the polymer) that allows smaller and more flexible packaging and requires fewer complex safety mechanisms.

"My dream is to create the holy grail of solid batteries," Mr. Zimmerman said.

After four years of development, he believes he is nearly there and hopes to begin manufacturing within the next two years. Ionic Materials is one of a new wave of academic and commercial research ef-(p. B4)forts in the United States, Europe and Asia to find safer battery technologies as consumers demand more performance from phones and cars.


. . .


Mr. Zimmerman's background is in the world of semiconductors; he worked at Bell Labs and then a company called Quantum Leap Packaging. Several university researchers who have worked with the company believe that has lead him to a technology that will be more manufacturable than competing polymer and ceramic battery technologies now being explored.

"What is so intriguing about Mike and his folks is they are using known production techniques borrowed from the semiconductor packaging industry," said Jay Whitacre, a Carnegie Mellon University physicist who was involved with Ionic Materials when it first started and who now is chief scientist at Aquion Energy, a maker of home storage and industrial batteries based in Mt. Pleasant, Pa.

The new progress has led a number of technologists in the field to believe that batteries may finally be getting out of their rut.

"We're in a golden age of new chemistry development which probably hasn't been seen in thirty or 40 years, since the last energy crisis," said Paul Albertus, a program manager at the Department of Energy's Advanced Research Projects Agency-Energy. "It's a pretty exciting time to be developing energy storage technology.



For the full story, see:

JOHN MARKOFF. "Creating a Safer Phone Battery (This One Won't Catch Fire)." The New York Times (Mon., DEC. 12, 2016): B1 & B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date DEC. 11, 2016, and has the title "Designing a Safer Battery for Smartphones (That Won't Catch Fire).")






October 16, 2017

Costs Rise in Single-Payer Health Countries



(p. A25) As Democrats and other policy makers debate the merits of Senator Sanders's proposal, here are a few important observations about international systems that they ought to consider.

First, a vanishingly small number of countries actually have single-payer systems. . . .


. . .


Some of the highest-rated international systems rely on private health insurers for most health care coverage -- Germany's, for example, is something like Obamacare exchanges for everyone, but significantly simpler and truly universal. The Netherlands and Switzerland have both moved recently to add more competition and flexibility to systems that were already built on the use of private insurers.

Second, single-payer countries have also failed to control rising health care costs. This is important, given that Mr. Sanders's proposal was released without a cost estimate or financing plan. For historical reasons, many other countries started with lower levels of health care spending than we did. Several analyses have shown that this has almost nothing to do with higher administrative costs or corporate profits in the United States and almost everything to do with the higher cost of health care services and the higher salaries of providers here.

Although they started at a lower base -- with, for example, doctors and nurses receiving lower salaries -- countries around the world have all struggled with rising costs. From 1990 to 2012, the United States' rate of health care cost growth was below that of many countries, including Japan and Britain. In 2015, the Organization for Economic Cooperation and Development warned that rising health care costs across all countries were unsustainable.behavior, more hotel rooms are available to individuals and families who need them most."

Third, it is simply untrue that single-payer systems produce a better quality of care across the board.



For the full commentary, see:

LANHEE J. CHEN and MICAH WEINBERG. "'Medicare for All' Is No Miracle Cure." The New York Times (Tues., Sept. 19, 2017): A25.

(Note: ellipses added.)

(Note: the online version of the commentary has the title "The Sanders Single-Payer Plan Is No Miracle Cure.")






October 15, 2017

Regulations Reduce Health Care Quality and Increase Health Care Cost



(p. A15) There are two million home health aides in the U.S. They spend more time with the elderly and disabled than anyone else, and their skills are essential to their clients' quality of life. Yet these aides are poorly trained, and their national median wage is only a smidgen more than $10 an hour.

The reason? State regulations--in particular, Nurse Practice Acts--require registered nurses to perform even routine home-care tasks like administering eyedrops. That duty might not require a nursing degree, but defenders of the current system say aides lack the proper training. "What if they put in the cat's eyedrops instead?" a health-care consultant asked me. In another conversation, the CEO of a managed-care insurance company wrote off home-care aides as "minimum wage people."

But aides could do more. With less regulation and better training, they could become as integral to health-care teams as doctors and nurses. That could improve the quality of care while saving buckets of money for everyone involved.


. . .


. . . the potential cost savings are considerable. There are 2.3 million Medicaid patients receiving long-term care at home. Imagine if even half of them replaced one hourlong nurse's visit a month with a stop by a trained aide. Assuming the nurse makes $35 an hour and the aide $15, that's an immediate savings of roughly $275 million a year.



For the full commentary, see:

Paul Osterman. "Why Home Care Costs Too Much; Regulations often require that nurses do simple tasks like administer eyedrops." The Wall Street Journal (Weds., Sept. 13, 2017): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Sept. 12, 2017.)


The commentary, quoted above, is related to the author's book:

Osterman, Paul. Who Will Care for Us? Long-Term Care and the Long-Term Workforce. New York: Russell Sage Foundation, 2017.






October 3, 2017

The "Grit" of the Successful Consists of "Passion and Perseverance"



(p. A11) Most people would think of John Irving as a gifted wordsmith. He is the author of best-selling novels celebrated for their Dickensian plots, including "The Cider House Rules" and "The World According to Garp." But Mr. Irving has severe dyslexia, was a C-minus English student in high school and scored 475 out of 800 on the SAT verbal test. How, then, did he have such a remarkably successful career as a writer?

Angela Duckworth argues that the answer is "grit," which she defines as a combination of passion and perseverance in the pursuit of a long-term goal. The author, a psychology professor at the University of Pennsylvania, has spent the past decade studying why some people have extraordinary success and others do not. "Grit" is a fascinating tour of the psychological research on success and also tells the stories of many gritty exemplars, . . .


. . .


Ms. Duckworth first realized the importance of grit as a teacher. Before she became an academic, she worked as a seventh-grade math teacher at a public school in New York. Some of her students were more inherently gifted with numbers than others. But not all of these capable students, to her surprise, got the best grades. Those who did weren't always "math people": For the most part, they were those who consistently invested more time and effort in their work.


Ms. Duckworth decided to become a research psychologist to figure out what explained their success. One of her first studies was of West Point cadets. Every year, West Point enrolls more than 1,000 students, but 20% of cadets drop out before graduation. Many quit in their first two months, during an intense training program known as Beast Barracks, or Beast. The most important factor in West Point admissions is the Whole Candidate Score, a composite measure of test scores, high-school rank, leadership potential and physical fitness. But Ms. Duckworth found that this score, which is essentially a measure of innate ability, did not predict who dropped out during Beast. She created her own "Grit Scale," scored using cadets' responses to statements like "I finish whatever I begin" or "New ideas and projects sometimes distract me from previous ones." Those who scored highest on the Grit Scale were the most likely to make it to the end of Beast.


. . .


Grit may be defined by strenuous effort, but what drives that work, Ms. Duckworth finds, is passion, and a great service of Ms. Duckworth's book is her down-to-earth definition of passion. To be gritty, an individual doesn't need to have an obsessive infatuation with a goal. Rather, he needs to show "consistency over time." The grittiest people have developed long-term goals and are constantly working toward them. "Enthusiasm is common," she writes. "Endurance is rare."



For the full review, see:


Emily Esfahani Smith. "BOOKSHELF; The Virtue of Hard Things; A study of Ivy League undergraduates showed that the smarter the students were, as measured by SAT scores, the less they persevered." The Wall Street Journal (Weds., May 4, 2016): A11.

(Note: ellipses added.)

(Note: the online version of the review has the date May 3, 2016.)


The book under review, is:

Duckworth, Angela. Grit: The Power of Passion and Perseverance. New York: Scribner, 2016.







October 2, 2017

Venezuelan Communist Economy Continues to Collapse



EmptyShelvesVenezuela2017-09-11.jpg"Empty cases and shelves in a grocery store in Cumaná, Venezuela, last year." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. 6) CARACAS, Venezuela -- Food shortages were already common in Venezuela, so Tabata Soler knew painfully well how to navigate the country's black market stalls to get basics like eggs and sugar.

But then came a shortage she couldn't fix: Suddenly, there was no propane gas for sale to do the cooking.

And so for several nights this summer, Ms. Soler prepared dinner above a makeshift fire of broken wooden crates set ablaze with kerosene to feed her extended family of 12.

"There was no other option," said Ms. Soler, a 37-year-old nurse, while scouting again for gas for her stove. "We went back to the past where we cooked soup with firewood."

Five months of political turmoil in Venezuela have brought waves of protesters into the streets, left more than 120 people dead and a set off a wide crackdown against dissent by the government, which many nations now consider a dictatorship.

An all-powerful assembly of loyalists of President Nicolás Maduro rules the country with few limits on its authority, vowing to pursue political opponents as traitors while it rewrites the Constitution in the government's favor.

But as the government tries to stifle the opposition and regain a firm grip on the nation, the country's economic collapse, nearing its fourth year, continues to gain steam, leaving the president, his loyalists and the country in an increasingly precarious position.


. . .


In one nine-day stretch in late July and early August, the price of the bolívar, the national currency, fell by half against the dollar on the black market, cutting earnings for people who make the minimum wage to the equivalent of just $5 per month.


. . .


"Bolívars are like ice cubes now," said Daniel Lansberg-Rodriguez, who leads the Latin America practice at Greenmantle, a macroeconomic advising firm, and teaches at Northwestern's Kellogg School of Management. "If you're going to go to the fridge and take one, it's something you have to use right now, because soon it's going to be gone."



For the full story, see:

ANA VANESSA HERRERO and NICHOLAS CASEY. "In Venezuela, That Empty Feeling." The New York Times, First Section (Sun., SEPT. 3, 2017): 6.

(Note: ellipses added.)

(Note: the online version of the story has the date SEPT. 2, 2017, and has the title "In Venezuela, Cooking With Firewood as Currency Collapses.")






October 1, 2017

Simple App Takes Entrepreneur from Rags to Riches



(p. B1) When Facebook bought WhatsApp for more than $19 billion in 2014, Jan Koum, a founder of the messaging company, arranged to sign a part of the deal outside the suburban social services center where he had once waited in line to collect food stamps.

Mr. Koum, like many in the tech industry, is an immigrant. He was a teenager when he and his mother moved to the San Francisco Bay Area in the early 1990s, in part to escape the anti-Semitic tide then sweeping his native Ukraine. As Mr. Koum later told Forbes, his mother worked as a babysitter and swept floors at a grocery store to survive in the new country; when she was found to have cancer, the family lived off her disability payments.

Tales of immigrant woe are not unusual in Silicon Valley. But Mr. Koum's story carries greater resonance because his app has quietly become a mainstay of immigrant life. More than a billion people regularly use WhatsApp, which lets users send text messages and make phone calls free over the internet. The app is particularly popular in India, where it has more than 160 million users, as well as in Europe, South America and Africa.


. . .


(p. B7) One of the secrets to WhatsApp's growth has been a focus on simplicity. The app is purposefully unflashy, and it does just a few things -- texts, voice calls and video calls. As a result, it is supremely easy to use even for people who are neophytes to digital technology. This is one reason immigrants find it so powerful; it has given them access to a wider set of relatives who might have shunned the social networks that came before.

Adoption of WhatsApp often follows a curious pattern -- older relatives often suggest it to younger ones, rather than the other way around.

"My aunt, who's in her late 70s, was the one who really pushed me to get on it," Ms. Reef said. Now, she said, she uses it nearly every day; lately she's even gotten her children to use it.



For the full commentary, see:

Manjoo, Farhad. "STATE OF THE ART; A Shared Lifeline for Millions of Migrants." The New York Times (Thurs., DEC. 22, 2016): B1 & B7.

(Note: eilipsis added.)

(Note: the online version of the commentary has the date DEC. 21, 2016, and has the title "STATE OF THE ART; For Millions of Immigrants, a Common Language: WhatsApp.")






September 30, 2017

Tech Startup Rejects Gig Economy



(p. 1) SEATTLE -- When Glenn Kelman became the chief executive of his online real estate start-up, he defied the tech industry's conventional wisdom about how to grow.

Instead of hiring independent contractors, he brought in full-time employees and put them on the payroll -- with benefits. That decision over a decade ago made Mr. Kelman and his company, Redfin, iconoclasts in the technology world.

Many tech start-ups lean on the idea of the "gig economy." They staff up rapidly with freelancers, who are both cheaper to hire (none of the insurance, 401(k) and other expenses) and more flexible (they can work as much or as little as needed). It's the model Uber has used to upend the taxi business.


. . .


Mr. Kelman argues that full-time employees allow him to offer better customer service. Redfin gives its agents salaries, health benefits, 401(k) contributions and, for the most productive ones, Redfin stock, none of which is standard for contractors. Redfin currently employs more than 1,000 agents.

Now with his company on a stronger footing, Mr. Kelman says he believes his approach has been vindicated. He has even (p. 5) become an informal counselor to other tech entrepreneurs exploring a shift to employees from contractors.


. . .


A number of technology companies have switched or are in the process of switching their contractors to employees for reasons similar to those of Redfin, including Shyp, a parcel shipping service; Luxe Valet, which offers a valet parking app; and Munchery, a food delivery service. Honor, an on-demand service for home health care professionals, is making the move to improve training.



For the full story, see:

NICK WINGFIELD. "A Start-Up Shies Away from Gig Economy." The New York Times, SundayBusiness Section (Sun., JULY 10, 2016): 1 & 5.

(Note: ellipses added.)

(Note: the online version of the story has the date JULY 9, 2016, and has the title "Redfin Shies Away From the Typical Start-Up's Gig Economy.")






September 27, 2017

Factory Workers Collaborate with Robots



(p. B1) MARION, Ohio--A new worker is charming the staff at Whirlpool Corp.'s plant here: a robot called Chappy.

Employees at the dryer factory say they have taken a shine to one-armed, programmable robots that have assumed some repetitive tasks, working in concert with their human colleagues. One, nicknamed after a worker whose rote duties it has inherited, snaps photographs to scan for defects.

"If I can get some help doing my job, I'm all for that," said Karen "Chappy" Beidler, who is now free to focus on checking and fixing wiring connections. "It's technology helping manpower--you can't beat it."



For the full story, see:

Andrew Tangel. "Latest Robots Lend an Arm." The Wall Street Journal (Weds., Nov. 9, 2016): B1 & B4.

(Note: the online version of the story has the date Nov. 8, 2016, and has the title "Latest Robots Lend a Helping Arm at Factories.")






September 22, 2017

47% Believe College Degree Will NOT Lead to Good Job



(p. A3) Americans are losing faith in the value of a college degree, with majorities of young adults, men and rural residents saying college isn't worth the cost, a new Wall Street Journal/NBC News survey shows.

The findings reflect an increase in public skepticism of higher education from just four years ago and highlight a growing divide in opinion falling along gender, educational, regional and partisan lines.


. . .


Overall, a slim plurality of Americans, 49%, believes earning a four-year degree will lead to a good job and higher lifetime earnings, compared with 47% who don't, according to the poll of 1,200 people taken Aug. 5-9. That two-point margin narrowed from 13 points when the same question was asked four years earlier.

Big shifts occurred within several groups. While women by a large margin still have faith in a four-year degree, opinion among men swung significantly. Four years ago, men by a 12-point margin saw college as worth the cost. Now, they say it is not worth it, by a 10-point margin.

Likewise, among Americans 18 to 34 years old, skeptics outnumber believers 57% to 39%, almost a mirror image from four years earlier.

Today, Democrats, urban residents and Americans who consider themselves middle- and upper-class generally believe college is worth it; Republicans, rural residents and people who identify themselves as poor or working-class Americans don't.



For the full story, see:

Josh Mitchell and Douglas Belkin. "Fewer Americans Value a College Degree, Poll Finds." The Wall Street Journal (Fri., SEPT. 8, 2017): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date SEPT. 7, 2017, and has the title "Americans Losing Faith in College Degrees, Poll Finds." The order of paragraphs was different in the online and print versions; the passages quoted above are from the online version.)






September 21, 2017

Students Learn More in Charter Schools



(p. A17) On Sept. 8, 1992, the first charter school opened, in St. Paul, Minn. Twenty-five years later, some 7,000 of these schools serve about three million students around the U.S. Their growth has become controversial among those wedded to the status quo, but charters undeniably are effective, especially in urban areas. After four years in a charter, urban students learn about 50% more a year than demographically similar students in traditional public schools, according to a 2015 report from Stanford's Center for Research on Education Outcomes.

The American cities that have most improved their schools are those that have embraced charters wholeheartedly. Their success suggests that policy makers should stop thinking of charters as an innovation around the edges of the public-school system--and realize that they simply are a better way to organize public education.

New Orleans, which will be 100% charters next year, is America's fastest-improving city when it comes to education. Test scores, graduation and dropout rates, college-going rates and independent studies all tell the same story: The city's schools have doubled or tripled their effectiveness in the decade since the state began turning them over to charter operators.


. . .


The teachers unions hate this model, because most charter schools are not unionized. But if someone discovered a vaccine to cure cancer, would anyone limit its use because hospitals and drug companies found it threatening?



For the full commentary, see:

David Osborne. "Charter Schools Are Flourishing on Their Silver Anniversary; The first one, in St. Paul, Minn., opened in 1992. Since then they've spread and proven their success." The Wall Street Journal (Fri., Sept. 8, 2017): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Sept. 7, 2017.)


The commentary, quoted above, is related to Osborne's book:

Osborne, David. Reinventing America's Schools: Creating a 21st Century Education System. New York: Bloomsbury USA, 2017.






September 19, 2017

Reducing Taxes and Regulations Can Boost Growth



(p. A2) The angst was on display this weekend at the annual conference of the American Economic Association, the profession's largest gathering. The conference is a showcase for agenda-setting research, a giant job fair for the nation's most promising young economists and, this year, the site of endless discussion about how to rebuild trust in the discipline.

Many academic economists have been champions of free trade and globalization, ideas under assault among rising populist movements in advanced economies around the world. The rise of President-elect Donald Trump, with his fierce rhetoric against elites, in particular, left many at this conference questioning their place in the world.

"The economic elite did many things to undermine their credibility while people's economic fortunes were taking a turn for the worse," said Steven Davis, an economist at the University of Chicago.


. . .


Stanford University's John Taylor and Columbia's Glenn Hubbard said Mr. Trump's plans to simplify the tax and regulatory codes could indeed boost the economy's growth. Both economists served in the past in the White House Council of Economic Advisers, long populated by academics who present at the AEA conference every January.

This year, academics are out in the cold. During the election The Wall Street Journal contacted every former member of the CEA, including those going back to President Richard Nixon. None had been tapped as an adviser to Mr. Trump's campaign, nor did any publicly endorse him.

The president-elect is "not particularly interested in hearing from the academic economist club," Mr. Davis said.



For the full story, see:

Josh Zumbrun. "Economists Grapple With Public Disdain." The Wall Street Journal (Mon., Jan. 9, 2017): A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date Jan. 8, 2017, and has the title "Top Economists Grapple With Public Disdain for Initiatives They Championed.")







September 17, 2017

Courageous Grover Cleveland Belongs in "Entitlement Reform Hall of Fame"



(p. A11) Mr. Cogan has just written a riveting, massive book, "The High Cost of Good Intentions," on the history of entitlements in the U.S., and he describes how in 1972 the Senate "attached an across-the-board, permanent increase of 20% in Social Security benefits to a must-pass bill" on the debt ceiling. President Nixon grumbled loudly but signed it into law. In October, a month before his re-election, "Nixon reversed course and availed himself of an opportunity to take credit for the increase," Mr. Cogan says. "When checks went out to some 28 million recipients, they were accompanied by a letter that said that the increase was 'signed into law by President Richard Nixon.' "

The Nixon episode shows, says Mr. Cogan, that entitlements have been the main cause of America's rising national debt since the early 1970s. Mr. Trump's pact with the Democrats is part of a pattern: "The debt ceiling has to be raised this year because elected representatives have again failed to take action to control entitlement spending."


. . .


Mr. Cogan conceived the book about four years ago when, as part of his research into 19th-century spending patterns, he "saw this remarkable phenomenon of the growth in Civil War pensions. By the 1890s, 30 years after it had ended, pensions from the war accounted for 40% of all federal government spending." About a million people were getting Civil War pensions, he found, compared with 8,000 in 1873, eight years after the war. Mr. Cogan wondered what caused that "extraordinary growth" and whether it was unique.

When he went back to the stacks to look at pensions from the Revolutionary War, he saw "exactly the same pattern." It dawned on him, he says, that this matched "the evolutionary pattern of modern entitlements, such as Social Security, Medicare, Medicaid, food stamps."


. . .


Who would feature in an Entitlement Reform Hall of Fame? Mr. Cogan's blue eyes shine contentedly at this question, as he utters the two words he seems to love most: Grover Cleveland. "He was the very first president to take on an entitlement. He objected to the large Civil War program and thought it needed to be reformed." Cleveland was largely unsuccessful, but was a "remarkably courageous president." In his time, Congress had started passing private relief bills, giving out individual pensions "on a grand scale. They'd take 100 or 200 of these bills on a Friday afternoon and pass them with a single vote. Incredibly, 55% of all bills introduced in the Senate in its 1885 to 1887 session were such private pension bills.".



For the full interview, see:

Tunku Varadarajan. "THE WEEKEND INTERVIEW with John F. Cogan; Why Entitlements Keep Growing, and Growing, and . . .." The Wall Street Journal (Tues., Sept. 9, 2017): A11.

(Note: ellipsis in title, in original; other ellipses added.)

(Note: the online version of the interview has the date Sept. 8, 2017, and has the title "THE WEEKEND INTERVIEW; Why Entitlements Keep Growing, and Growing, and . . ..".)


The Cogan book, mentioned above, is:

Cogan, John F. The High Cost of Good Intentions: A History of U.S. Federal Entitlement Programs. Stanford, CA: Stanford University Press, 2017.






September 16, 2017

GDP Neglects Benefits of New Goods



(p. A13) . . . [one] source of underestimation of growth is the failure to capture the benefit of new goods and services. Here's how the current procedure works: When a new product is developed and sold to the public, its market value enters into nominal gross domestic product. But there is no attempt to take into account the full value to consumers created by the new product per se.

Think about statins, the remarkable class of drugs that lower cholesterol and reduce deaths from heart attacks. By 2003 statins were the best-selling pharmaceutical product in history. The total dollar amount of statin sales was counted in GDP, but the government's measure of real income never included anything for improvements in health that resulted from statins--such as a one-third decrease in the death rate from heart disease among those over 65 between 2000 and 2007.

Or consider consumer electronics. New York University economist William Easterly recently tweeted an image of a 1991 RadioShack newspaper ad and noted that all the functions of the devices on sale--clock radio, calculator, cellphone, tape-recorder, compact-disk player, camcorder, desktop computer--are "now available on a $200 smartphone." The benefits to consumers from these advances don't show up in GDP.



For the full commentary, see:


Martin Feldstein. "We're Richer Than We Realize; The official economic statistics fail to account for quality improvements and new products." The Wall Street Journal (Sat., Sept. 9, 2017): A13.

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

(Note: the online version of the commentary has the date Sept. 8, 2017.)






September 15, 2017

When 4% Economic Growth Was Routine



(p. R3) Starting in 1983, when Ronald Reagan was in the middle of his first presidential term, the American economy reeled off three straight years of 4% growth. The economy went on to hit that politically important target in nine of the next 17 years. In fact, even as Mr. Bush ran for re-election, the economy actually was revving up after a two-year lull, though the surge came too late for voters to realize it.

Then, at the turn into a new millennium, that streak stopped. In the last 15 years, the American economy hasn't grown at a 4% annual rate even once.

But it isn't just the U.S. In the last 15 years, according to International Monetary Fund data, exactly one of the traditional seven major industrialized nations achieved annual economic growth of 4%, one time: Japan in 2010.

In sum, the kind of economic growth that used to be relatively routine in the industrialized world has become virtually extinct.

This low-growth era leaves political leaders facing two unsavory tasks. The first is to explain to unhappy voters why growth is so anemic, and the second is to convince them that they know what to do about it.



For the full commentary, see:

Gerald F. Seib. "Politicians Pine for Elusive Solution to Voters' Discontent: 4% Growth." The Wall Street Journal (Tues., Jan. 17, 2017): R3.

(Note: the online version of the commentary has the date Jan. 16, 2017.)







September 14, 2017

Lower 50% Have Largely Stagnated in Recent Decades



(p. B1) Even with all the setbacks from recessions, burst bubbles and vanishing industries, the United States has still pumped out breathtaking riches over the last three and half decades.

The real economy more than doubled in size; the government now uses a substantial share of that bounty to hand over as much as $5 trillion to help working families, older people, disabled and unemployed people pay for a home, visit a doctor and put their children through school.

Yet for half of all Americans, their share of the total economic pie has shrunk significantly, new research has found.

This group -- the approximately 117 million adults stuck on the lower half of the income ladder -- "has been completely shut off from economic growth since the 1970s," the team of economists found. "Even after taxes and transfers, there has been close to zero growth for working-age adults in the bottom 50 percent."


. . .


(p. B3) By 2014, the average income of half of American adults had barely budged, remaining around $16,000, while members of the top 1 percent brought home, on average, $1,304,800 or 81 times as much.

That ratio, the authors point out, "is similar to the gap between the average income in the United States and the average income in the world's poorest countries, the war-torn Democratic Republic of Congo, Central African Republic and Burundi."

The growth of incomes has probably increased a bit since 2014, the latest year for which full data exists, said Mr. Zucman, who, like Mr. Saez, also teaches at the University of California, Berkeley. But it is "not enough to make any significant difference to our long-run finding, and in particular, to affect the long-run stagnation of bottom-50-percent incomes."


. . .


Mr. Piketty, Mr. Saez and Mr. Zucman concluded that the main driver of wealth in recent years has been investment income at the top. That is a switch from the 1980s and 1990s, when gains in income were primarily generated by working.



For the full story, see:

PATRICIA COHEN. ""A Bigger Pie, but Uneven Slices; Research Shows Slim Gains for the Bottom 50 Percent." The New York Times (Weds., DEC. 7, 2016): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date DEC. 6, 2016, and has the title "A Bigger Economic Pie, but a Smaller Slice for Half of the U.S." The print article shares the title "A Bigger Pie, but Uneven Slices" with a commentary by Eduardo Porter. The Cohen article has the unique subtitle "Research Shows Slim Gains for the Bottom 50 Percent.")


The July 7, 2017 draft of Piketty, Saez and Zucman's working paper, mentioned above, is:

Piketty, Thomas, Emmanuel Saez, and Gabriel Zucman. "Distributional National Accounts: Methods and Estimates for the United States." Working Paper, July 6, 2017.






September 12, 2017

Warren Buffett: High-Tech Especially Hard to Predict



(p. 1D) Turns out that Warren Buffett spoke out in IBM's favor, sort of, 37 years ago when the government accused "Big Blue" of illegal
anti-competitive practices.


. . .


But Buffett was one of 87 witnesses who testified on behalf of the International Business Machines Corp. during the federal government's antitrust trial.


. . .


In his testimony, Buffett said he asked the Price, Waterhouse accounting firm to calculate the debt levels of 104 other computer-oriented companies that, according to federal prosecutors, were harmed by IBM's low prices and other alleged anti-competitive actions.

Buffett said his hypothesis was that the competing companies had trouble raising money to finance their growth because they had too much debt. The accounting analy-(p. 2D)sis, Buffett said in court, "bore that hypothesis out in a very conclusive manner."

So why didn't he buy IBM stock in 1980?

Because, he told the court, with high-tech companies it's "particularly difficult to have a clear view of a long-term future. ... High-technology companies are ones where both the product and the customer's use of it are (areas in which) I don't feel I have a full understanding."



For the full commentary, see:

Steve Jordon. "WARREN WATCH; What Buffett said in court about IBM in 1980." Omaha World-Herald (Sun., Jan 22, 2017): 1D-2D.

(Note: ellipses added.)

(Note: the online version of the commentary has the title "WARREN WATCH; What Warren Buffett said in court about IBM in 1980.")






September 11, 2017

Half of Today's 36-Year-Olds Earn Less Than Their Parents Did at Same Age



FadingAmericanDreamGraph2017-09-08.pngSource of graph: http://www.equality-of-opportunity.org/




(p. 2) These days, people are arguably more worried about the American dream than at any point since the Depression. But there has been no real measure of it, despite all of the data available. No one has known how many Americans are more affluent than their parents were -- and how the number has changed.

The beginnings of a breakthrough came several years ago, when a team of economists led by Raj Chetty received access to millions of tax records that stretched over decades. The records were anonymous and came with strict privacy rules, but nonetheless allowed for the linking of generations.

The resulting research is among the most eye-opening economics work in recent years.


. . .


After the research began appearing, I mentioned to Chetty, a Stanford professor, and his colleagues that I thought they had a chance to do something no one yet had: create an index of the American dream. It took them months of work, using old Census data to estimate long-ago decades, but they have done it. They've constructed a data set that shows the percentage of American children who earn more money -- and less money -- than their parents earned at the same age.

The index is deeply alarming. It's a portrait of an economy that disappoints a huge number of people who have heard that they live in a country where life gets better, only to experience something quite different.


. . .


About 92 percent of 1940 babies had higher pretax inflation-adjusted household earnings at age 30 than their parents had at the same age.


. . .


For babies born in 1980 -- today's 36-year-olds -- the index of the American dream has fallen to 50 percent: Only half of them make as much money as their parents did.



For the full commentary, see:

Leonhardt, David. "The American Dream, Quantified at Last." The New York Times, SundayReview Section (Sun., DEC. 11, 2016): 2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date DEC. 8, 2016.)


The Chetty co-authored paper mentioned above, is:

Chetty, Raj, David Grusky, Maximilian Hell, Nathaniel Hendren, Robert Manduca, and Jimmy Narang. "The Fading American Dream: Trends in Absolute Income Mobility since 1940." Science 356, no. 6336 (2017): 398-406.







September 10, 2017

Venture Capital Stars Invested in Over-Hyped "Symbol of Silicon Valley's Insular Excess"



(p. B2) MONTEREY, Calif. -- From the moment it started, Juicero stood out as a symbol of Silicon Valley's insular excess.

The company sold a $700 Wi-Fi-enabled juicer, trying to solve a problem that did not exist. It also raised some $120 million, and attracted a mountain of attention.

But on Friday, the company said it was shutting down operations -- joining the hordes of other Silicon Valley start-ups that could not deliver business results to match the hype.

Started by a health fanatic with a checkered history as an entrepreneur, Juicero devised an elaborate scheme to deliver small glasses of expensive cold pressed juice to kitchens around the country. The machine scanned codes printed on pouches of chopped produce to help assess the freshness of the contents inside. Doug Evans, the founder, hired engineers, food scientists and fashionable industrial designers to work alongside him.

The company was a particularly bold bid to capitalize on the hype around the so-called internet of things and interest in the juice business. Mr. Evans believed there was a legion of customers who, once they tasted his juice, would find it superior to the many varieties that can be bought at convenience stores, juice bars or even Walmart.

Top venture capital firms including Google's venture capital spinoff and Kleiner Perkins Caufield & Byers, as well as big companies like Campbell Soup, invested heavily in the company.



For the full story, see:


DAVID GELLES. "Start-Up That Sold $700 Juicer Shuts Down." The New York Times (Sat., SEPT. 2, 2017): B2.

(Note: the online version of the story has the date SEPT. 1, 2017, and has the title "Juicero, Start-Up With a $700 Juicer and Top Investors, Shuts Down." )






September 9, 2017

"Bankruptcies and Losses Concentrate the Mind on Prudent Behavior"



(p. A18) Allan H. Meltzer, an influential conservative economist who strongly opposed government bailouts and was credited with coining the anti-bailout slogan, "Capitalism without failure is like religion without sin," died on Monday in Pittsburgh. He was 89.


. . .

In books like "Why Capitalism?" (2012), Dr. Meltzer promoted the view that countries and investors should suffer the consequences of their mistakes, whether flawed fiscal measures or bad lending decisions.

In coining the slogan "Capitalism without failure is like religion without sin," he added another maxim: "Bankruptcies and losses concentrate the mind on prudent behavior."


. . .


In recent years Mr. Meltzer found a new interest in law and regulation. He and other scholars were working on a book, "Regulation and the Rule of Law."



For the full obituary, see:

ZACH WICHTER. "Allan H. Meltzer, Economist Averse to Bailouts, Dies at 89." The New York Times (Sat., MAY 13, 2017): A18.

(Note: ellipses added.)

(Note: the online version of the obituary has the date MAY 12, 2017, and has the title "Allan H. Meltzer, Conservative Economist, Dies at 89.")


Meltzer's book on capitalism, mentioned above, is:

Meltzer, Allan H. Why Capitalism? New York: Oxford University Press, 2012.






September 8, 2017

Cashless Toll Technology Enables Congestion Pricing in Manhattan



(p. A15) As debate about creating a toll system to limit traffic in the most congested parts of Manhattan heats up, a transformation in technology could make congestion pricing a far more realistic notion than when it was last proposed a decade ago.

By the end of the year, nine crossings around the city will employ an open-road, cashless collection system that does away with tollbooths, toll lanes and toll collectors. Instead, sensors and cameras installed both above the road and in the pavement itself will capture cars and trucks as they zip by at full speed - automatically charging the 90 percent of drivers with E-ZPass transponders, and billing the other 10 percent by mail.

A decade ago, when the Bloomberg administration first proposed congestion pricing, such tolling technology was in its infancy and not widely used. Now, it is in place in some 35 jurisdictions, and its deployment in New York is the most ambitious use of the technology in a complicated urban setting.

Gov. Andrew M. Cuomo, who had not shown any enthusiasm for congestion pricing, has embraced the idea of late as a way to raise billions of dollars for the city's ailing subway system. But Mayor Bill de Blasio has been steadfast in his opposition, and has instead pushed a plan to raise transportation funds by increasing taxes on wealthy New Yorkers.

Mr. Cuomo has yet to release a detailed congestion-pricing plan, but most schemes being discussed call for tolling vehicles to enter crowded parts of Manhattan, and doing so in a way that that does not slow the flow of traffic. By making toll-collecting all but invisible, Mr. Cuomo hopes congestion pricing will be more politically viable this time around.



For the full story, see:

MARC SANTORA. "Cashless Toll System Could Pave the Way for Manhattan Congestion Pricing." The New York Times (Sat., AUG. 26, 2017): A15.

(Note: the online version of the story has the date AUG. 25, 2017, and has the title "Open-Road Tolls Could Pave the Way for Manhattan Congestion Pricing.")






September 7, 2017

More Workers Benefit from Driverless Cars, Than Are Hurt



(p. A2) Self-driving vehicles have the potential to reshape a wide range of occupations held by roughly one in nine American workers, according to a new U.S. government report.

About 3.8 million people drive taxis, trucks, ambulances and other vehicles for a living. An additional 11.7 million workers drive as part of their work, including personal care aides, police officers, real-estate agents and plumbers. In all, that's roughly 11.3% of total U.S. employment based on 2015 occupational data, according to the analysis by three Commerce Department economists.

If businesses embrace autonomous vehicles on a large scale, workers in the first category are "more likely to be displaced" from their jobs, while workers in the latter group "may be more likely to benefit from greater productivity and better working conditions," wrote David Beede, Regina Powers and Cassandra Ingram in the report, released Friday.



For the full story, see:

Ben Leubsdorf. "Driverless Cars May Alter 1 in 9 Jobs." The Wall Street Journal (Tues., Aug 15, 2017): A2.

(Note: the online version of the story has the date Aug 14, 2017, and has the title "Self-Driving Cars Could Transform Jobs Held by 1 in 9 U.S. Workers.")


The report summarized in the passages quoted above, is:

Beede, David, Regina Powers, and Cassandra Ingram. "The Employment Impact of Autonomous Vehicles." ESA Issue Brief, #05-17, Aug. 11, 2017.






September 3, 2017

3-D Printing Promises Goods Quicker, Cheaper, More Local, and More Customized



(p. B3) With the rise of new technologies like smartphones and 3-D printers, fashion start-ups like Feetz are changing the ways goods are ordered, made and sold.

Like Ms. Beard, several founders of these companies don't have fashion backgrounds. Instead, they consider technology the answer to off-the rack, mass-produced goods, which are increasingly shunned by millennials. Consumers with hard-to-find sizes -- like petite, or big and tall -- will find shopping simpler.

Traditionally, manufacturing is the most expensive part of the retail supply chain. Creating goods in small batches is difficult and costly. Most are manufactured overseas, and shipping goods to the United States adds time and cost to the process. So even "fast fashion" can take about six weeks to hit store shelves.

The beauty of instant, customized fashion, experts say, is that goods can be made at a lower cost and more quickly -- yet in a personalized style.


. . .


These are still early days for 3-D printing, said Uli Becker, the former chief executive of Reebok and an investor in Feetz. The offerings are not very diversified, and they are limited to basic goods. And fabric cannot yet be printed.

But he sees great potential for 3-D printing. "You can start producing in America, for America," he said. "Production facilities can be in the same place where you sell products, which creates jobs."


. . .


"We're a technology company that creates T-shirts," said Walker Williams, 27, chief executive of Teespring, who started the company with Evan Stites-Clayton, a friend from Brown University. "The future of fashion is in smaller brands that have relationships with customers."



For the full story, see:

CONSTANCE GUSTKE. "ENTREPRENEURSHIP; With Analytics and 3-D Printers, a Faster Fashion Just for You." The New York Times (Thurs., SEPT. 15, 2016): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date SEPT. 14, 2016, and has the title "ENTREPRENEURSHIP; Your Next Pair of Shoes Could Come From a 3-D Printer.")






August 30, 2017

Higher-Paid Finance Jobs Moving from NYC and San Francisco to Phoenix, Salt Lake City, and Dallas



FinanceJobsMigrateFromNYCandSF2017-08-15.pngSource of graph: online version of the WSJ article quoted and cited below.




(p. B1) Traditional finance hubs have yet to recover all the jobs lost during the recession, but the industry is booming in places like Phoenix, Salt Lake City and Dallas. The migration has accelerated as investment firms face declining profitability and soaring real estate costs.


. . .


"San Francisco is a wonderful place, but unfortunately it's an expensive place from a real estate standpoint," said Brian McDonald, a senior vice president for Schwab. "So we had to identify other places where we could make things work."

While the finance industry has been relocating entry-level jobs since the late 1980s, today's moves are claiming higher-paid jobs in human resources, compliance and asset management, chipping away at New York City's middle class, said (p. B2) Kathryn Wylde, president and chief executive of the Partnership for New York City, a nonprofit that represents the city's business leadership.

"This industry isn't just a bunch of rich Wall Street guys," Ms. Wylde said. "It's a big source of employment that's disappearing from New York."



For the full story, see:

Asjylyn Loder. "Wall Street's New Frontier." The Wall Street Journal (Thurs., JULY 27, 2017): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date JULY 26, 2017, and has the title "Passive Migration: Denver Wins Big as Financial Firms Relocate to Cut Costs.")






August 29, 2017

Seattle Increase in Minimum Wage Results in Fewer Hours Worked, and Lower Incomes



(p. A13) By now you have read 15 articles on the Seattle minimum-wage fiasco. Since the city boosted its local minimum from $9.47 in 2014 to $13 last year (on its way to $15), a detailed investigation by University of Washington economists finds that beneficiaries actually saw their incomes fall by a net $125 a month because employers cut their hours.


. . .


The impetus came from people who don't actually earn the minimum wage--labor-union leaders and think-tankers and activist organizations.


. . .


Organizers look fondly to Denmark, where a McDonald's line worker receives $41,000 a year and five weeks of paid vacation. As the Atlantic put it two years ago, "Unionizing workers at McDonald's and other fast-food chains might be a long shot, but if it succeeds, it might help lift a million or more workers into the middle class (or at least into the lower middle class) and create a model for low-wage workers in other industries."

This sounds pretty but is misleading in a fundamental way. The workers a McDonald's franchise would hire at $15 an hour are different from those it would hire at $8.29, the average earned by a fast-food worker today.

Costs would go up. The industry would likely shrink, it would likely replace workers with automation, but it would still create jobs at $15 an hour for people whose productivity can justify $15 an hour. The people who work at McDonald's today, typically, would already be earning $15 an hour somewhere else if their productivity could justify $15 an hour.

Everybody needs to start somewhere, including the unskilled and those who lack a work history. Some need a job that doesn't demand much of them. They have other obligations. They accept less pay to maximize flexibility and freedom from responsibility. They don't plan to make a career of it. The fast-food industry in America is built on such people.



For the full commentary, see:

Holman W. Jenkins, Jr. "Seattle Aims at McDonald's, Hits Workers." The Wall Street Journal (Sat., July 1, 2017): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 30, 2017.)


The Seattle minimum wage paper, mentioned above, is:

Jardim, Ekaterina, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, and Hilary Wething. "Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle." National Bureau of Economic Research Working Paper Series, # 23532, June 2017.






August 28, 2017

"Splendid Tutorial" of Bitcoin, Distributed Ledgers, and Smart Contracts



(p. A13) 'The future is already here--it's just not very evenly distributed." The aphorism coined by novelist William Gibson explains why Andrew McAfee and Erik Brynjolfsson's tour of the technologies that are shaping the future of business, "Machine, Platform, Crowd: Harnessing Our Digital Future," contains sights that are already familiar and others that are not. This is a book for managers whose companies sit well back from the edge and who would like a digestible introduction to technology trends that may not have reached their doorstep--yet.


. . .


In the penultimate chapter, the authors present a splendid tutorial on things that are too new for most civilians to have gained a good understanding of--cryptocurrencies like Bitcoin, distributed ledgers, and smart contracts. The authors present the theoretical possibility that conventional contracts and the human handling of disputes could be rendered obsolete by dense networks of sensors in the physical world and extremely detailed contracts anticipating all contingencies so that machines alone can handle enforcement. But they show that computing power, however much it grows, seems unlikely to replace the human component for dispute resolution.



For the full review, see:

Randall Stross. "BOOKSHELF; The Future On Fast Forward; GE used 'crowdfunding' to gauge interest in a new ice maker. McDonald's has begun adding self-service ordering in all its U.S. locations.." The Wall Street Journal (Thurs., July 6, 2017): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date July 5, 2017.)


The book under review, is:

McAfee, Andrew, and Erik Brynjolfsson. Machine, Platform, Crowd: Harnessing Our Digital Future. New York: W. W. Norton & Company, 2017.






August 27, 2017

Some New Jobs Require Same Skills as Old Jobs Did



(p. B1) . . . many of the skills needed to do fading jobs are applicable to growing jobs.


. . .


(p. B2) A New York Times review of the activities and skills that jobs entail, based on the Labor Department's O*Net database, shows how much overlap there is between many seemingly dissimilar occupations. Service industry jobs, for example, require social skills and experience working with customers -- which also apply to sales and office jobs.


. . .


. . . , employers hire based on credentials that job applicants can't change -- a college degree or previous job title -- rather than assessing the skills an applicant has developed, said Mr. Auguste, who was an economic adviser in the Obama administration. He said the approach should instead be, "If you learned it at Harvard or Cal State Northridge or on the job as a secretary or in the Navy or as a volunteer, awesome."



For the full commentary, see:

CLAIRE CAIN MILLER and QUOCTRUNG BUI. "The Upshot; Old Skills, New Career." The New York Times (Fri., JULY 28, 2017): B1-B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date JULY 27, 2017, and has the title "The Upshot; Switching Careers Doesn't Have to Be Hard: Charting Jobs That Are Similar to Yours.")






August 25, 2017

A.I. "Continues to Struggle in the Real World"





The passages quoted below are authored by an NYU professor of psychology and neural science.



(p. 6) Artificial Intelligence is colossally hyped these days, but the dirty little secret is that it still has a long, long way to go. Sure, A.I. systems have mastered an array of games, from chess and Go to "Jeopardy" and poker, but the technology continues to struggle in the real world. Robots fall over while opening doors, prototype driverless cars frequently need human intervention, and nobody has yet designed a machine that can read reliably at the level of a sixth grader, let alone a college student. Computers that can educate themselves -- a mark of true intelligence -- remain a dream.

Even the trendy technique of "deep learning," which uses artificial neural networks to discern complex statistical correlations in huge amounts of data, often comes up short. Some of the best image-recognition systems, for example, can successfully distinguish dog breeds, yet remain capable of major blunders, like mistaking a simple pattern of yellow and black stripes for a school bus. Such systems can neither comprehend what is going on in complex visual scenes ("Who is chasing whom and why?") nor follow simple instructions ("Read this story and summarize what it means").

Although the field of A.I. is exploding with microdiscoveries, progress toward the robustness and flexibility of human cognition remains elusive. Not long ago, for example, while sitting with me in a cafe, my 3-year-old daughter spontaneously realized that she could climb out of her chair in a new way: backward, by sliding through the gap between the back and the seat of the chair. My daughter had never seen anyone else disembark in quite this way; she invented it on her own -- and without the benefit of trial and error, or the need for terabytes of labeled data.

Presumably, my daughter relied on an implicit theory of how her body moves, along with an implicit theory of physics -- how one complex object travels through the aperture of another. I challenge any robot to do the same. A.I. systems tend to be passive vessels, dredging through data in search of statistical correlations; humans are active engines for discovering how things work.



For the full commentary, see:

GARY MARCUS. "Gray Matter; A.I. Is Stuck. Let's Unstick It." The New York Times, SundayReview Section (Sun., JULY 30, 2017): 6.

(Note: the online version of the commentary has the date JULY 29, 2017, and has the title "Gray Matter; Artificial Intelligence Is Stuck. Here's How to Move It Forward.")






August 20, 2017

Inventor Haber and Entrepreneur Bosch Created "an Inflection Point in History"



(p. C7) . . . , Mr. Kean's narrative of scientific discovery jumps back and forth. The first episode narrated in detail is Fritz Haber and Carl Bosch's conversion of nitrogen into ammonia, the crucial step in producing artificial fertilizer, which Mr. Kean characterizes as "an inflection point in history" that in the 20th century "transformed the very air into bread." The process consumes 1% of the global energy supply, producing 175 million tons of ammonia fertilizer a year and generating half the world's food. Haber and Bosch both won Nobel Prizes but were subsequently tainted by their involvement in developing chlorine gas for the German military.

The book's middle section turns back the clock to steam power, the technology that launched the Industrial Revolution. James Watt was its master craftsman, though Mr. Kean confesses that, as "a sucker for mechanical simplicity," he regards Watt's pioneering engine, with its separate condenser, as "a bunch of crap cobbled together." A more elegant application of gases was Henry Bessemer's process for making steel, which used blasts of compressed air to make obsolete the laborious and energy-hungry mixing of liquid cast iron and carbon.



For the full review, see:

Mike Jay. "Adventures in the Atmosphere." The Wall Street Journal (Sat., July 22, 2017): C7.

(Note: ellipsis added.)

(Note: the online version of the review has the date July 21, 2017.)


The book under review, is:

Kean, Sam. Caesar's Last Breath: Decoding the Secrets of the Air Around Us. New York: Little, Brown and Company, 2017.






August 18, 2017

Russian Regulators Jail Entrepreneur for Innovating "Too Fast and Too Freely"



(p. A1) AKADEMGORODOK, Russia -- Dmitri Trubitsyn is a young physicist-entrepreneur with a patriotic reputation, seen in this part of Siberia as an exemplar of the talents, dedication and enterprise that President Vladimir V. Putin has hailed as vital for Russia's future economic health.

Yet Mr. Trubitsyn faces up to eight years in jail after a recent raid on his home and office here in Akademgorodok, a Soviet-era sanctuary of scientific research that was supposed to showcase how Mr. Putin's Russia can harness its abundance of talent to create a modern economy.

A court last Thursday [August 3, 2017] extended Mr. Trubitsyn's house arrest until at least October, which bars him from leaving his apartment or communicating with anyone other than his immediate family. Mr. Trubitsyn, 36, whose company, Tion, manufactures high-tech air-purification systems for homes and hospitals, is accused of risking the lives of hospital patients, and trying to lift profits, by upgrading the purifiers so they would consume less electricity.

Most important, he is accused of doing this without state regulators certifying the changes.

It is a case that highlights the tensions between Mr. Putin's aspirations for a dynamic private sector and his determination to enhance the powers of Russia's security apparatus. Using a 2014 law meant to protect Russians from counterfeit medicine, investigators from the Federal Security Service, the post-Soviet KGB, and other agencies have accused Mr. Trubitsyn of leading a criminal conspiracy to, essentially, innovate too fast and too freely.


. . .


(p. A9) Irina Travina, the founder of a software start-up and head of the local technology-business association, said Akademgorodok was "the best place in Russia," with "outstanding schools, low crime and a high concentration of very smart people."

But she said Mr. Trubitsyn's arrest had delivered a grave blow to the community's sense of security.

"In principle, anyone can fall into this situation," Ms. Travina said, praising Mr. Trubitsyn as a patriot because he had not moved abroad and had invested time and money in science education for local children. "It can happen to anybody," she added. "Everyone has some sort of skeleton in their closet. Maybe nothing big, but they can always find something to throw you in jail for."



For the full story, see:

ANDREW HIGGINS. "Russia Wants Innovation, but Jails Innovators." The New York Times (Thurs., AUG. 10, 2017): A1 & A9.

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

(Note: the online version of the story has the date AUG. 9, 2017, and has the title "Russia Wants Innovation, but It's Arresting Its Innovators.")






August 16, 2017

"Shannon's Principles of Redundancy and Error Correction"



(p. C7) There were four essential prophets whose mathematics brought us into the Information Age: Norbert Wiener, John von Neumann, Alan Turing and Claude Shannon. In "A Mind at Play: How Claude Shannon Invented the Information Age," Jimmy Soni and Rob Goodman make a convincing case for their subtitle while reminding us that Shannon never made this claim himself.


. . .


The only one of the four Information Age pioneers who was also an electrical engineer, Shannon was practical as well as brilliant.


. . .


Wiener's theory of information, drawing on his own background in thermodynamics, statistical mechanics and the study of random processes, was cloaked in opaque mathematics that was impenetrable to most working engineers.


. . .


"Before Shannon," Messrs. Soni and Goodman write, "information was a telegram, a photograph, a paragraph, a song. After Shannon, information was entirely abstracted." He derived explicit formulas for rates of transmission, the capacity of an ideal channel, ability to correct errors and coding efficiency that could be understood by anyone familiar with logarithms to the base 2.

Mathematicians use mathematics to understand things. Engineers use mathematics to build things. Engineers love logarithms as a carpenter loves a familiar tool. The electronic engineers who flooded into civilian life in the aftermath of World War II adopted Shannon's theory as passionately as they had avoided Wiener's, bringing us the age of digital machines.


. . .


Despite the progress of technology, we still have no clear understanding of how memories are stored in our own brains: Shannon's principles of redundancy and error correction are no doubt involved in preserving memory, but how does the process work and why does it sometimes fail? Shannon died of Alzheimer's disease in February 2001. The mind that gave us the collective memory we now so depend on had its own memory taken away.



For the full review, see:

George Dyson. "The Elegance of Ones and Zeroes." The Wall Street Journal (Sat., July 22, 2017): C7.

(Note: ellipses added.)

(Note: the online version of the review has the date July 21, 2017.)


The book under review, is:

Soni, Jimmy, and Rob Goodman. A Mind at Play: How Claude Shannon Invented the Information Age. New York: Simon & Schuster, 2017.






August 15, 2017

Code Schools Provide Intense 12 Week Training, and Jobs



(p. B1) Across the U.S., change is coming for the ecosystem of employers, educational institutions and job-seekers who confront the increasingly software-driven nature of work. A potent combination--a yawning skills gap, stagnant middle-class wages and diminished career prospects for millennials--is bringing about a rapid shift (p. B4) in the labor market for coders and other technical professionals.

Riding into the breach are "code schools," a kind of vocational training that rams students through intense 12-week crash courses in precisely the software-development skills employers need.



For the full commentary, see:

Christopher Mims. "Code-School Boot Camps Offer Fast Track to Jobs." The Wall Street Journal (Mon., Feb. 27, 2017): B1 & B4.

(Note: the online version of the commentary has the date Feb. 26, 2017, and has the title "A New Kind of Jobs Program for Middle America.")






August 14, 2017

Fanjul Sugar Family Donated to Inauguration and Now Seeks Sugar Price Protection



(p. B1) MEXICO CITY -- The sugar barons of Florida, Alfonso and José Fanjul, have been equal-opportunity political donors for decades, showering largess on the campaigns of Democrats and Republicans alike to ensure that lawmakers will protect the American sugar industry.

When Donald J. Trump was preparing to take office as president, the Fanjul brothers wrote another check. Among the contributors to Mr. Trump's inaugural festivities in January was Florida Crystals, a Fanjul-owned company that contributed half a million dollars.

The brothers most likely had more on their mind than a sumptuous ball. Led by the Fanjuls, large American sugar producers and refiners were eager for the new administration to tackle some business left unfinished by the Obama administration: an agreement to control imports of Mexican sugar.



For the full story, see:

ELISABETH MALKIN. "Sugar Talks May Hint at Trump's Approach to U.S.-Mexico Trade." The New York Times (Mon., June 5, 2017): B1-B2.

(Note: the online version of the story has the date June 4, 2017, and has the title "Sugar Talks May Hint at Trump Approach to U.S.-Mexico Trade.")






August 13, 2017

Petsitting Is Illegal Without a License



CorderoRaulPetsitterNYC2017-08-08.jpg"Raul Cordero with his Rhodesian ridgeback, Viuty. Mr. Cordero operates a dog-care business in East Harlem that appears to run afoul of city rules regarding the care of pets for pay in homes." Source of caption and photo: online version of the NYT article quoted and cited below.




(p. A18) Raul Cordero and his Rhodesian ridgeback, Viuty, often have canine houseguests overnight at their East Harlem home, part of Mr. Cordero's dog-care business, for which he carries special petsitter's insurance that costs about $800 a year.

Yet despite Mr. Cordero's efforts to do everything by the book, he was shocked to discover that his petsitting business -- and in fact, any of the ubiquitous, your-home-or-mine variety -- is against New York City's rules.

According to long-established but little-noticed regulations of the city's Department of Health and Mental Hygiene, anyone offering petsitting for pay must be licensed to board animals, and do so in a permitted kennel. Running such a kennel out of a home is not allowed in the city.


. . .


The newcomers are large, app-based pet-care businesses, with names like Wag and Rover, that operate in a similar style to Airbnb, enabling New Yorkers to open their apartments and dog beds as à la carte dog hostels.

. . . Rover and its ilk have run afoul of similar stipulations in places like California and Colorado, and John Lapham, Rover's general counsel, said that Rover was currently embroiled in similar concerns in several cities in New Jersey.


. . .


The department's rule "deprives dog owners of the most obvious, safe and affordable care," Mr. Lapham said.

"And it deprives sitters of the opportunity to make ends meet," he said.

Mr. Lapham noted that in New York City, babysitting, for example, is permitted, no license necessary.


. . .


. . . to Mr. Cordero, 27, regulating small-time dogsitters like him and his Rhodesian sidekick feels like government overreach. Petsitting "is like taking care of you own pet in your house," he said, adding: "So if you have a license, that means you are certified to feed a dog or a cat? That's crazy."



For the full story, see:

SARAH MASLIN NIR. "Paid Petsitting in Homes Is Illegal in New York. That's News to Some Sitters." The New York Times (Sat., JULY 22, 2017): A18.

(Note: ellipses added.)

(Note: the online version of the story has the date JULY 21, 2017.)






August 12, 2017

Employment Grows as Productivity Rises



(p. C3) In a recent paper prepared for a European Central Bank conference, the economists David Autor of MIT and Anna Salomons of Utrecht University looked at data for 19 countries from 1970 to 2007. While acknowledging that advances in technology may hurt employment in some industries, they concluded that "country-level employment generally grows as aggregate productivity rises."

The historical record provides strong support for this view. After all, despite centuries of progress in automation and recurrent warnings of a jobless future, total employment has continued to increase relentlessly, even with bumps along the way.

More remarkable is the fact that today's most dire projections of jobs lost to automation fall short of historical norms. A recent analysis by Robert Atkinson and John Wu of the Information Technology & Innovation Foundation quantified the rate of job destruction (and creation) in each decade since 1850, based on census data. They found that an incredible 57% of the jobs that workers did in 1960 no longer exist today (adjusted for the size of the workforce).

Workers suffering some of the largest losses included office clerks, secretaries and telephone operators. They found similar levels of displacement in the decades after the introduction of railroads and the automobile. Who is old enough to remember bowling alley pin-setters? Elevator operators? Gas jockeys? When was the last time you heard a manager say, "Take a memo"?


. . .


. . . , if artificial intelligence is getting so smart that it can recognize cats, drive cars, beat world-champion Go players, identify cancerous lesions and translate from one language to another, won't it soon be capable of doing just about anything a person can?

Not by a long shot. What all of these tasks have in common is that they involve finding subtle patterns in very large collections of data, a process that goes by the name of machine learning.


. . .


But it is misleading to characterize all of this as some extraordinary leap toward duplicating human intelligence. The selfie app in your phone that places bunny ears on your head doesn't "know" anything about you. For its purposes, your meticulously posed image is just a bundle of bits to be strained through an algorithm that determines where to place Snapchat face filters. These programs present no more of a threat to human primacy than did automatic looms, phonographs and calculators, all of which were greeted with astonishment and trepidation by the workers they replaced when first introduced.


. . .


The irony of the coming wave of artificial intelligence is that it may herald a golden age of personal service. If history is a guide, this remarkable technology won't spell the end of work as we know it. Instead, artificial intelligence will change the way that we live and work, improving our standard of living while shuffling jobs from one category to another in the familiar capitalist cycle of creation and destruction.



For the full commentary, see:

Kaplan, Jerry. "Don't Fear the Robots." The Wall Street Journal (Sat., June 22, 2017): C3.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 21, 2017.)


The David Autor paper, mentioned above, is:

Autor, David, and Anna Salomons. "Does Productivity Growth Threaten Employment?" Working Paper. (June 19, 2017).



The Atkinson and Wu report, mentioned above, is:

Atkinson, Robert D., and John Wu. "False Alarmism: Technological Disruption and the U.S. Labor Market, 1850-2015." (May 8, 2017).


The author's earlier book, somewhat related to his commentary quoted above, is:

Kaplan, Jerry. Artificial Intelligence: What Everyone Needs to Know. New York: Oxford University Press, 2016.






August 11, 2017

Toyota's Solid-State, Lithium-Ion Batteries Increase Electric Car Range



(p. B6) TOKYO--Toyota Motor Corp. believes it has mastered the technology and production process for a new lithium-ion battery that could slash charging time and double the range of electric vehicles, according to U.S. patent filings and one of the inventors.

On Tuesday [July 25, 2017] Toyota said that by the early 2020s it planned to sell cars equipped with solid-state batteries, which replace the damp electrolyte used to transport lithium ions inside today's batteries with a solid glass-like plate.

Behind Toyota's brief statement lay years of research aimed at solving issues that have long bedeviled batteries for electric cars. Current lithium-ion batteries can't be packed too tightly together because of fire risk. That is one reason electric cars tend to have limited range compared with traditional gasoline-powered cars.

With the solid-state battery, "you can improve the output and reduce the charge time--hopefully," said Ryoji Kanno, a professor at the Tokyo Institute of Technology. Prof. Kanno led a team including Toyota scientists that discovered the materials for the glass-like electrolyte.



For the full story, see:

McLain, Sean. "Toyota: Battery Can Make Electric Cars Go Farther." The Wall Street Journal (Fri., July 28, 2017): B6.

(Note: bracketed date, added.)

(Note: the online version of the story has the date July 27, 2017, and has the title "Toyota's Cure for Electric-Vehicle Range Anxiety: A Better Battery.")






August 10, 2017

Process Innovations Increase Access to Natural Resources



(p. B6) SUPERIOR, Ariz.--One of the world's largest untapped copper deposits sits 7,000 feet below the Earth's surface. It is a lode that operator Rio Tinto PLC wouldn't have touched--until now.


. . .


Advances in mining technology are making that possible--just as developments in oil and gas drilling heralded the fracking revolution. Now, using everything from sensors and data analytics to autonomous vehicles and climate-control systems, Rio aims to pull ore from more than a mile below ground, where temperatures can reach nearly 175 degrees Fahrenheit.

. . .


While a deep underground block-cave mine costs much more to develop, Rio says it can match the operating costs per ton of ore of a surface mine, partly because it is so mechanized.


. . .

As with the development of new hydraulic-fracturing and horizontal-drilling techniques to extract oil from shale-rock deposits, locating and extracting the copper successfully requires deployment of new technologies such as cheaper, more powerful sensors and breakthroughs in the use of data.


, , ,


Electrical gear buzzes constantly, and a network of pipes pumps water out of the shaft at the rate of 600 gallons a minute. A ventilation system cools the area to 77 degrees.

Over the next few years, Rio plans to deploy tens of thousands of electronic sensors, as well as autonomous vehicles and complex ventilation systems, to help it bring 1.6 billion tons of ore to the surface over the more than 40-year projected life of the mine.



For the full story, see:

Steven Norton. "Rio Digs Deeper for Copper." The Wall Street Journal (Thurs., June 8, 2017): B6.

(Note: ellipses added.)

(Note: the online version of the story has the date June 7, 2017, and has the title "Mining a Mile Down: 175 Degrees, 600 Gallons of Water a Minute.")






August 8, 2017

Disney Stories Give Happiness to the Poor



(p. 1B) If the arts community had been blossoming in north Omaha when Adrienne Brown-Norman was growing up there in the 1960s and '70s, she may never have moved to California and become a senior illustrator for Disney Publishing Worldwide.


. . .


"Of course, though, I would not ever have met Floyd."

That would be her husband, Floyd Norman, the now-legendary first African-American artist at Walt Disney Studios.

Floyd Norman, 82, began working for Disney in 1956 and was named a Disney Legend in 2007.


. . .


The Normans recently collaborated with legendary songwriter Richard Sherman ("Mary (p. 5B) Poppins") on a picture book called "A Kiss Goodnight."

The book tells the story of how the young Walt Disney was enchanted by fireworks and subsequently chose to send all of his Magic Kingdom guests home with a special kiss goodnight of skyrockets bursting overhead.


. . .


Walt Disney later picked Norman to join the team writing the script for "The Jungle Book." Disney had seen Norman's gags posted around the office and recognized a talented storyteller.

"I didn't think I was a writer, but the old man did," Norman said. "Then I realized that maybe I am good at this."

Norman named "The Jungle Book" as his favorite project, because he worked alongside Disney.


. . .


"What I learned from the old man was the technique of storytelling and what made a movie work," Norman said.

"I had an amazing opportunity to learn from the master. If you were in the room with Walt, it was for a reason. There are a lot of people who wanted to be in that room but didn't get an invitation."


. . .


One day at the studio the Normans recall pausing to watch the filming of "Saving Mr. Banks," the story of Disney's quest to acquire the rights to film "Mary Poppins." Norman had worked on the movie and was interested in seeing Tom Hanks' portrayal of his old boss.

"Tom Hanks rushed from his trailer in full costume to meet Floyd, shouting, 'Where is that famous animator?' " Brown-Norman said. "You don't expect a man like Tom Hanks to come running up. Then Tom wouldn't let us leave. He wanted to know more about Walt, and if he was getting it right."


. . .


"What I enjoy is the love of Disney that made so many people happy," [Floyd Norman] said. "Maybe they were poor. Maybe they were in a bad home, but they tell me Disney stories gave them an escape. They gave them happiness, and that's what I like."



For the full story, see:


Kevin Cole. "Legendary Animator Spread Love of Disney." Omaha World-Herald (Mon., Aug. 7, 2017): 1B & 5B.

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

(Note: the online version of the story has the title "During Native Omaha Days, Disney's Floyd Norman and Adrienne Brown-Norman reflect on careers.")


The book mentioned above, co-authored by Sherman (and illustrated by the Normans), is:

Sherman, Richard, and Brittany Rubiano. A Kiss Goodnight. Glendale, CA: Disney Editions, 2017.







August 7, 2017

Health Innovations Launch Where Regulations Are Few



(p. A15) One type of mobile device that is likely to appear first in the Far East and be widely adopted there is the digital stethoscope. This device is able to detect changes in pitch and soon will be able to detect asthma in children, pneumonia in the elderly, and, in conjunction with low-cost portable electrocardiographs, cardiopulmonary disease.


An additional advantage is that this part of the world--particularly India and Africa--has limited regulation, which makes it much easier to launch these kinds of health-care tools. In India and much of Africa, there are few government drug agencies or big insurance companies to throw up barriers.

Companies that make medical devices and their accompanying smartphone apps could establish themselves almost overnight. Then, once they have built a large, profitable base of users, they could consider jumping through the legal and regulatory hoops to bring the technology to developed countries.



For the full commentary, see:

Michael S. Malone. "Silicon Valley Trails in Medical Tech; With smartphones everywhere and little regulation, India and Africa are set to lead.." The Wall Street Journal (Mon., July 24, 2017): A15.

(Note: the online version of the commentary has the date July 23, 2017.)






August 6, 2017

How to Use Dyslexia and ADHD to Become a Better Leader



(p. R7) Leading a company without using email, reading memos or going to endless meetings sounds like a pipe dream. But it's a reality for Selim Bassoul, chief executive and chairman of Middleby Corp., the Elgin, Ill., kitchen-supply maker with such popular brands as Viking and Aga Rangemaster.

Mr. Bassoul, 60, has dyslexia and attention deficit hyperactivity disorder (ADHD), conditions that weren't diagnosed during his childhood in Lebanon, when he initially struggled in school. Years later, when he was a graduate student at Northwestern University's Kellogg School of Management, a professor suggested he get tested, he says.


. . .


WSJ: What are some ways that having dyslexia and ADHD affects your leadership style?

MR. BASSOUL: Dyslexia has forced me to be quite conceptual, because I'm not good with detail. I think in general rather than in specific [terms]. That allows me to step back and take in the big picture rather than get bogged down in details. Because of my weaknesses and handicaps, I've learned other ways to accomplish the same goal at faster speed.

As a dyslexic you have no choice but to rely on others for help with detail and tactical tasks. You become a great judge of character. You have to select the best team around you.

Then you have ADHD, which makes you restless but it can also be a huge motivator for action. It prompts you to go out of the office and into the field. You find yourself constantly on the front line. I don't like to be confined to the office. I hate meetings. I am constantly visiting customers, our field offices, our manufacturing plants. I know the operations of my customers better than them, which helps create solutions for them prior to them knowing what they need.



For the full interview, see:

Rachel Emma Silverman, interviewer. "How a Chief Executive with Dyslexia and ADHD Runs His Company." The Wall Street Journal (Weds., May 17, 2017): R7.

(Note: ellipses added. Bold and italics, in original. The italics question is from the WSJ interviewer.)

(Note: the online version of the interview has the date May 16, 2017, and has the title "How a CEO With Dyslexia and ADHD Runs His Company.")






August 5, 2017

Regulations, Not Robots, Cause Slower Job Growth



(p. A19) Some anxious forecasters project that robotics, automation and artificial intelligence will soon devastate the job market. Yet others predict a productivity fizzle. The Congressional Budget Office, for instance, expects labor productivity to grow at the snail's pace of 1.3% a year over the next decade, well below the historical average.

There's reason to reject both of these dystopian scenarios. Innovation isn't a zero-sum game. The problem for most workers isn't too much technology but too little. What America needs is more computers, mobile broadband, cloud services, software tools, sensor networks, 3-D printing, augmented reality, artificial intelligence and, yes, robots.

For the sake of explanation, let's separate the economy into two categories. In digital industries--technology, communications, media, software, finance and professional services--productivity grew 2.7% annually over the past 15 years, according to the findings of our report, "The Coming Productivity Boom," released in March. The slowdown is concentrated in physical industries--health care, transportation, education, manufacturing, retail--where productivity grew a mere 0.7% annually over the same period.

Digital industries have also experienced stronger job growth. Since the peak of the last business cycle in December 2007, hours worked in the digital category rose 9.6%, compared with 5.6% on the physical side. If health care is excluded, hours worked in physical jobs rose only 3%.

What is holding the physical industries back? It is no coincidence that they are heavily regulated, making them expensive to operate in and resistant to experimentation. The digital economy, on the other hand, has enjoyed a relatively free hand to invest and innovate, delivering spectacular and inexpensive products and services all over the world.

But more important, partially due to regulation, physical industries have not deployed information technology to the same extent that digital industries have.



For the full commentary, see:


Bret Swanson and Michael Mandel. "Robots Will Save the Economy; The problem today is too little technology. Physical industries haven't kept up." The Wall Street Journal (Mon., May 15, 2017): A19.

(Note: the online version of the commentary has the date May 14, 2017.)






August 4, 2017

Illegal Immigration Hurts Low-Wage U.S. Workers



(p. C1) Research published a decade after the Mariel boatlift, as well as more recent analyses, concluded that the influx of Cuban migrants didn't significantly raise unemployment or lower wages for Miamians. Immigration advocates said the episode showed that the U.S. labor market could quickly absorb migrants at little cost to American workers.

But Harvard University's George Borjas, a Cuban-born specialist in immigration economics, reached very different conclusions. Looking at data for Miami after the boatlift, he concluded that the arrival of the Marielitos led to a large decline in wages for low-skilled local workers.


. . .


(p. C2) Dr. Borjas, who left Cuba in 1962, when he was 12 years old, has long challenged the idea that immigration has few downsides. One of his studies in the early 2000s analyzed decades of national data to conclude that immigrants generally do push down wages for native workers, particularly high-school dropouts.

One Sunday morning in 2015, while working on his book, Dr. Borjas recalls, he decided to revisit the Mariel boatlift. He focused on U.S.-born high-school dropouts and applied more sophisticated analytical methods than had been available to Dr. Card a quarter-century earlier.

Dr. Borjas found a steep decline in wages for low-skilled workers in Miami in the years after the boatlift--in the range of 10% to 30%. "Even the most cursory reexamination of some old data with some new ideas can reveal trends that radically change what we think we know," he wrote in his initial September 2015 paper.


. . .


Dr. Borjas has spent decades swimming against the tide in his profession by focusing on immigration's costs rather than its benefits. He said that he sees a parallel to the way many economists look at international trade. Long seen as a positive force for growth, trade is now drawing attention from some economists looking for its ill effects on factory towns. "I don't know why the profession has this huge lag and this emphasis on the benefits from globalization in general without looking at the other side," Dr. Borjas said.


. . .


Dr. Borjas's research, including his recent work on Mariel, has found fans on the other side of the debate. When he testified at a Senate hearing in March 2016, then-Sen. Sessions welcomed his rebuttal to Dr. Card's paper. "That study, I could never understand it because it goes against common sense of [the] free market: greater supply, lower costs," Mr. Sessions said. "That's just the way the world works."


. . .


Dr. Borjas welcomes what he calls a more realistic approach to immigration under the Trump administration. "If you knew what the options are, who gets hurt and who wins by each of these options, you can make a much more intelligent decision rather than relying on wishful thinking," he said. "Which is what a lot of immigration, trade debates tend to be about--that somehow this will all work out, and everybody will be happy."



For the full commentary, see:

Ben Leubsdorf. "The Immigration Experiment." The Wall Street Journal (Sat., June 17, 2017): C1-C2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 16, 2017, and has the title "The Great Mariel Boatlift Debate: Does Immigration Lower Wages?")


The book by Borjas, mentioned in the passage quoted above, is:

Borjas, George J. We Wanted Workers: Unraveling the Immigration Narrative. New York: W. W. Norton & Company, 2016.






August 3, 2017

U.S. Has 250,000 Less Jobs Due to Obamacare



(p. A15) Democrats loudly complain that people will lose health insurance if the Affordable Care Act is repealed. They never mention those who lose jobs because the ACA remains.

The ACA includes a penalty on employers that fail to provide "adequate" insurance for full-time workers. Thanks to the ACA, hiring the 50th full-time employee effectively costs another $70,000 a year on top of the normal salary and benefits.


. . .


In partnership with the Mercatus Center at George Mason University, in March 2017 I was able to commission Hanover Research to survey small businesses nationwide regarding their hiring and compensation practices. The result was a sample of 745 small businesses, representing every major industry and together employing almost 50,000 people.


. . .

Many businesses, when they do not offer coverage, keep their payrolls just below 50 full-time employees and thereby narrowly escape the ACA's penalty. This pattern is not visible among businesses that offer coverage.

When we followed up, the businesses employing just fewer than 50 often said the ACA caused them to hire less and cut hours below the full-time threshold. The penalty caused payrolls to shrink or prevented them from growing.

Nationwide, we estimate the ACA-inspired practice of keeping payrolls below 50 has cost roughly 250,000 jobs. This does not count jobs lost when businesses close (we didn't survey closed businesses) or shrink because of other ACA incentives.



For the full commentary, see:


Casey B. Mulligan. "How Many Jobs Does ObamaCare Kill? We surveyed managers at small businesses and put the count at 250,000." The Wall Street Journal (Thurs., July 6, 2017): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 5, 2017.)






August 2, 2017

"90 Is the New 65"



(p. A15) In this era full of baby boomers caring for frail parents, we've seen plenty of documentaries, plays and memoirs about dementia, infirmity, loss. But in the HBO documentary "If You're Not in the Obit, Eat Breakfast," Carl Reiner and friends take up another side of the phenomenon of longer life spans: the many people in their later years who are still sharp and vigorous and engaged.

The film, . . . , doesn't pussyfoot around when setting its bar; no "life after 65" theme here. Mr. Reiner is interested in people 90 and above.


. . .


There is chagrin on occasion; no one likes the condescension that is often showered on people of this age.

"I think the culture stereotypes everything," Norman Lear says. "Because I'm 93 I'm supposed to behave a certain way. The fact that I can touch my toes shouldn't be so amazing to people." (Mr. Lear is now 94.)


. . .


. . . there is plenty of life yet in the population born before the Great Depression. Now the broader culture needs to consider how to change its preconceptions if 90 is the new 65.



For the full review, see:

NEIL GENZLINGER. "Life Goes On (The 90-and-Up Crowd." The New York Times (Fri., JUNE 5, 2017): C7.

(Note: ellipses added.)

(Note: the online version of the review has the date JUNE 4, 2017, and has the title "Review: 'If You're Not in the Obit, Eat Breakfast' Finds Vigor After 90.")






July 30, 2017

Workers Are Empowered, Not Threatened, by Robots



(p. A15) Most computer scientists agree that predictions about robots stealing jobs are greatly exaggerated. Rather than worrying about an impending Singularity, consider instead what we might call Multiplicity: diverse groups of people and machines working together to solve problems.

Multiplicity is not science fiction. A combination of machine learning, the wisdom of crowds, and cloud computing already underlies tasks Americans perform every day: searching for documents, filtering spam emails, translating between languages, finding news and movies, navigating maps, and organizing photos and videos.

Consider Google's search engine. It runs on a set of algorithms with input from a large number of human users who share valuable feedback every time they click on or skip over a link. The same is true for spam filters. Every time someone marks an email as spam or overrides a filter, it helps fine-tune the system for determining what is relevant.


. . .


Multiplicity is collaborative instead of combative. Rather than discourage the human workers of the world, this new frontier has the potential to empower them.



For the full commentary, see:

Ken Goldberg. "The Robot-Human Alliance; Call it Multiplicity: diverse groups of people and machines working together." The Wall Street Journal (Mon., June 12, 2017): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date June 11, 2017.)






July 22, 2017

Small, Obscure Firm Innovates to Keep Moore's Law Alive



(p. B1) VELDHOVEN, the Netherlands-- ASML Holding NV, a little-known company based next to corn fields here, may hold the answer to a question hanging over the global semiconductor industry: how to make chips do more while keeping them the same, compact size.

The industry's past prowess has been codified into what's been called Moore's Law, named after an observation Intel Corp. co-founder Gordon Moore first made in 1965. He postulated that chip makers could double the number of transistors in--and boost the performance of--a typical microprocessor every two years.

Last year, though, Intel Chief Executive Brian Krzanich warned that after decades of incredible leaps, that timeline was slipping closer to every 2.5 years. Some in the industry feared the eventual death of Moore's Law, a rule of thumb underpinning modern computing.

ASML believes its breakthrough technology can postpone the demise. "I'm not concerned yet about the next 10-plus years," said Hans Meiling, who oversees ASML's effort trying to solve this problem.

Many in the industry, including big backers like Intel itself and Samsung Electronics Co. , are hoping ASML can quicken the pace of innovation once again. With around 15,000 employees and €6.3 billion ($7.05 billion) in revenue last year, the company manufactures equipment that makes chips--specializing in a field called photolithography. Specifically, ASML uses light rays to essentially lay out billions of transistors--the brain cells of a chip--in a microprocessor.



For the full story, see:

Stu Woo and Maarten van Tartwijk. "Dutch Company Aims to Make Chips Do More." The Wall Street Journal (Mon., Oct. 3, 2016): B1 & B5.

(Note: the online version of the story has the title "Can This Little-Known Chip Company Preserve Moore's Law?")






July 18, 2017

"Startling" Chinese Government Report Faults Slow and Tepid Reform "Stalemate"



(p. B1) BEIJING -- China's ambitious plan to revamp its economy has bogged down. Flabby state conglomerates have thwarted attempts to whip them into commercial shape. Rules that treat millions of city-dwelling rural migrants like second-class citizens have barely budged.

Such criticisms are common from skeptical foreign economists who have long argued that President Xi Jinping's efforts to remake China's economy and fix pernicious social problems have been too slow and tepid.

But these withering findings on China's reforms come from a startling place: from within the government itself.

Just as striking, this unflattering report card from a Chinese state think tank -- published this month with little fanfare -- faults misconceived "top-level design" in policies, as well as local bureaucrats and state managers reluctant to change.


. . .


It concludes: "Reform has to some extent fallen into stalemate."

The report brings into focus a sharpening debate in China about economic priorities. Experts inside and outside China say the country's economy needs to be overhauled to continue growing fast enough to provide jobs and higher incomes for its people.


. . .


(p. B5) The new report, a 217-page study titled "The Reform Obstruction Phenomenon," was written by researchers from the Economic System and Management Institute of China's National Development and Reform Commission, which steers policy on industry, energy and many other sectors. The head of the commission, He Lifeng, and his deputy, Liu He, both have ties to Mr. Xi. But nothing in the report suggests that it had their blessing. The authors declined to be interviewed.



For the full story, see:

CHRIS BUCKLEY. "Still Waiting for Reforms." The New York Times (Tues., MARCH 28, 2017): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story has the date MARCH 27, 2017, and has the title "In Rare Move, Chinese Think Tank Criticizes Tepid Pace of Reform.")






July 16, 2017

Level 3 Failed, In Spite of a Well-Executed, Plausible Business Plan



Level3StockPricesGraph2017-06-09.jpgSource of graph: online version of the Omaha World-Herald article quoted and cited below.




(p. 1D) Thomas Dowd and hundreds of other Omahans soon will be digging out their Level 3 Communications Inc. stock records. • The reason: This week, Level 3 shareholders are voting to sell the company to Century Link Communications. • The sale marks the end of an investment saga that began 20 years ago with hopes of riches but ended with big losses for most shareholders, despite the efforts of some of Omaha's biggest names in business. • "It was a very bad experience," said Dowd, a retired attorney and former director of the Metropolitan Utilities District. "It's just one purchase at a time, and you think everything's going good and then, bam! Anyway, lesson learned." • Although his loss was "substantial," he said, it didn't disrupt his lifestyle, and he figures he's better off than shareholders who lost their retirement savings or other vital funds. He's still a Level 3 shareholder and will get some cash and Century Link shares in the sale, which is scheduled for September [2017].

(p. 4D) But it works out to about $4.43 for shares he bought years ago, some of them costing more than $100.


. . .


On March 20, 2000, someone sold and someone bought Level 3 shares for $132.25, a price that made the company's publicly traded stock worth nearly $20 billion. By 2002, the price had nearly collapsed, putting most shareholders into the red.

Level 3 might have an information highway, but its toll system wasn't collecting enough to earn a profit. It was clear that the nation had a "bandwidth glut," a huge overcapacity of fiber networks.

Level 3 had installed its network, at an eventual cost of $14 billion, and could cheaply add more lines by stringing extra cable through its conduits.

But others had built networks, too, and the demand for bandwidth wasn't growing as Crowe had hoped. Researchers also found ways to send more data along existing fibers, meaning greater capacity along existing lines.

Most of the new fiber networks were unused, or "dark." Only a fraction of fibers in the buried bundles were "lit" by the light waves that carried digital communications and brought in revenue for companies like Level 3.

The supply of fiber far outran the demand, and Level 3's losses mounted, along with its stock price. Investors lost confidence that the company would begin making profits anytime soon. In fact, that didn't happen until 2014.


. . .


Dowd, the retired attorney, said he held onto the shares because it didn't seem worthwhile to sell at the lower prices and he figured someone would buy the company and he would get some of his money back.

"I always thought Walter Scott was going to pull a rabbit out of the hat," he said. "He never did."



For the full story, see:

STEVE JORDON. "END OF THE LINE FOR LEVEL 3; Omaha-born company, which laid fiber-optic cable, will cease to exist." Omaha World-Herald (Sun., March 12, 2017): 1D & 4D.

(Note: ellipses added.)






July 14, 2017

Equal Opportunity Gene Innovation



(p. R4) Kian Sadeghi has postponed homework assignments, sports practice and all the other demands of being a 17-year-old high-school junior for today. On a Saturday afternoon, he is in a lab learning how to use Crispr-Cas9, a gene-editing technique that has electrified scientists around the world--. . .


. . .


Crispr-Cas9 is easier, faster and cheaper than previous gene-editing techniques.


. . .


A do-it-yourself Crispr kit with enough material to perform five experiments gene-editing the bacteria included in the package is available online for $150. Genspace, the Brooklyn, N.Y., community lab where Mr. Sadeghi is learning how to use Crispr to edit a gene in brewer's yeast, charges $400 for four intensive sessions. More than 80 people have taken the classes since the lab started offering them last year.


. . .


In the workshop, if the participants correctly edit the gene in brewer's yeast, the cells will turn red. In between the prep work, the classmates swap stories on why they are there. Many have personal Crispr projects in mind and want to learn the technique.

Kevin Wallenstein, a chemical engineer, takes a two-hour train ride to the lab from his home in Princeton, N.J. Crispr is a hobby for him, he says. He wants to eventually use it to edit a gene in an edible fruit that he prefers not to name, to restore it to its historical color. "I always wondered what it would look like," he says.

At the workshop, Mr. Wallenstein shares his Crispr goal with Will Shindel, Genspace's lab director. Mr. Shindel is enthusiastic; he has started his own Crispr project, a longtime dream to make a spicy tomato. Both men say they aren't looking to commercialize their ideas--but they would like to eat what they create someday, if they get permission from the lab. "I'm doing it for fun," Mr. Shindel says.

When Mr. Sadeghi first wanted to try Crispr, the teenager emailed 20 scientists asking if they would be willing to let him learn Crispr in their labs. Most didn't respond; those that did turned him down. So he did a Google search and stumbled upon Genspace. When he shared the lead with his science teacher at the Berkeley Carroll School in Brooklyn, Essy Levy Sefchovich, she agreed to take the course with him.

When Mr. Shindel describes the steps of the experiment, Ms. Sefchovich takes notes. She is hoping to create a modified version of the yeast experiment so all her students can try Crispr in class.

Later, Mr. Sadeghi recounts that the hardest part of the day was handling the micropipette, the lab tool he used to mix small amounts of liquid. He says he still feels clumsy. Ms. Sefchovich reassures him he'll get the hang of it; he just needs to practice.

"It's like driving," she tells him. "You learn the right feel." Mr. Sadeghi doesn't have his driver's license yet. He figures he'll do Crispr first.



For the full story, see:

Marcus, Amy Dockser. "JOURNAL REPORTS: HEALTH CARE; DIY Gene Editing: Fast, Cheap--and Worrisome; The Crispr technique lets amateurs enter a world that has been the exclusive domain of scientists." The Wall Street Journal (Mon., Feb. 27, 2017): R4.

(Note: ellipses added.)

(Note: the online version of the story has the date Feb. 26, 2017.)






July 13, 2017

Australian Government's Centrally Planned "Costly Internet Bungle"



(p. A6) BRISBANE, Australia -- Fed up with Australian internet speeds that trail those in most of the developed world, Morgan Jaffit turned to a more reliable method of data transfer: the postal system.

Hundreds of thousands of people from around the world have downloaded Hand of Fate, an action video game made by his studio in Brisbane, Defiant Development. But when Defiant worked with an audio designer in Melbourne, more than 1,000 miles away, Mr. Jaffit knew it would be quicker to send a hard drive by road than to upload the files, which could take several days.

"It's really the big file sizes that kill us," said Mr. Jaffit, the company's co-founder and creative director. "When we release an update and there's a small bug, that can kill us by three or four days."

Australia, a wealthy nation with a widely envied quality of life, lags in one essential area of modern life: its internet speed. Eight years after the country began an unprecedented broadband modernization effort that will cost at least 49 billion Australian dollars, or $36 billion, its average internet speed lags that of the United States, most of Western Europe, Japan and South Korea. In the most recent ranking of internet speeds by Akamai, a networking company, Australia came in at an embarrassing No. 51, trailing developing economies like Thailand and Kenya.


. . .


The story of Australia's costly internet bungle illustrates the hazards of mingling telecommunication infrastructure with the impatience of modern politics. The internet modernization plan has been hobbled by cost overruns, partisan maneuvering and a major technical compromise that put 19th-century technology between the country's 21st-century digital backbone and many of its homes and businesses.

The government-led push to modernize its telecommunications system was unprecedented, experts say -- and provides a cautionary tale for others who might like to try something similar.

"Australia was the first country where a totally national plan to cover every house or business was considered," said Rod Tucker, a University of Melbourne professor and a member of the expert panel that advised on the effort.



For the full story, see:

ANDREW McMILLEN. "How Australia Bungled Internet Modernization." The New York Times (Fri., MAY 12, 2017): A6.

(Note: ellipsis added.)

(Note: the online version of the story has the date MAY 11, 2017, and has the title "How Australia Bungled Its $36 Billion High-Speed Internet Rollout.")









July 12, 2017

Artificial Intelligence (AI) Cannot Automate All Legal Tasks



(p. B1) "There is this popular view that if you can automate one piece of the work, the rest of the job is toast," said Frank Levy, a labor economist at the Massachusetts Institute of Technology. "That's just not true, or only rarely the case."

An artificial intelligence technique called natural language processing has proved useful in scanning and predicting what documents will be relevant to a case, for example. Yet other lawyers' tasks, like advising clients, writing legal briefs, negotiating and appearing in court, seem beyond the reach of computerization, for a while.


. . .


(p. B3) Dana Remus, a professor at the University of North Carolina School of Law, and Mr. Levy studied the automation threat to the work of lawyers at large law firms. Their paper concluded that putting all new legal technology in place immediately would result in an estimated 13 percent decline in lawyers' hours.

A more realistic adoption rate would cut hours worked by lawyers by 2.5 percent annually over five years, the paper said. The research also suggests that basic document review has already been outsourced or automated at large law firms, with only 4 percent of lawyers' time now spent on that task.

Their gradualist conclusion is echoed in broader research on jobs and technology. In January, the McKinsey Global Institute found that while nearly half of all tasks could be automated with current technology, only 5 percent of jobs could be entirely automated. Applying its definition of current technology -- widely available or at least being tested in a lab -- McKinsey estimates that 23 percent of a lawyer's job can be automated.



For the full story, see:

STEVE LOHR. "A.I. Is Doing Legal Work. But It Won't Replace Lawyers, Yet.." The New York Times (Mon., MARCH 20, 2017): B1 & B3.

(Note: ellipsis added.)

(Note: the online version of the story has the date MARCH 19, 2017, and has the title "A.I. Is Doing Legal Work. But It Won't Replace Lawyers, Yet.")


The Remus and Levy article, mentioned above, is:

Remus, Dana, and Frank S. Levy. "Can Robots Be Lawyers? Computers, Lawyers, and the Practice of Law." Georgetown Journal of Legal Ethics (forthcoming).






July 7, 2017

"The Data Run Counter to Your Anecdotes"



(p. A13) "Shattered," by campaign reporters Jonathan Allen and Amie Parnes, narrates the petty bickering, foolish reasoning and sheer arrogance of a campaign that was never the sure thing that its leader and top staffers assumed. The authors, in a mostly successful attempt to get their sources to talk candidly, promised them that they wouldn't be identified.


. . .


The juicy quotes would mean more if they were on the record, but mostly it works: You can't pinpoint the identity of any one "top aide" or "close Hillary ally," but the authors' language leads you to believe they include the most senior Clinton advisers--Mr. Podesta, longtime Clinton confidante Huma Abedin, campaign manager Robby Mook, speechwriter Dan Schwerin, policy adviser Jake Sullivan --and probably the candidate herself.


. . .


Successful politicians must have a tacit sense of what voters want to hear and how they might be persuaded. Mrs. Clinton--in stark contrast to her husband--was never interested in that component of campaigning. You got the feeling she didn't like people all that much.

Mr. Mook's scientific "model" of how the campaign should run emphasized demographics, constituents' voting histories, regional electoral patterns, and so on. When staffers objected to his directives, the authors record, the response was always the same: "The data," as Mr. Mook at one point put it to former President Bill Clinton, "run counter to your anecdotes."



For the full review, see:

Barton Swaim. "BOOKSHELF; Hillary the Unready." The Wall Street Journal (Tues., April 18, 2017): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date April 17, 2017, and has the title "BOOKSHELF; How Hillary Lost the White House.")


The book under review, is:

Allen, Jonathan, and Amie Parnes. Shattered: Inside Hillary Clinton's Doomed Campaign. New York: Crown, 2017.






July 4, 2017

Fed Throws Seniors Under Bus



(p. A1) The average one-year CD hasn't paid more than 1% since 2009, according to Bankrate.com.

The drop in interest rates since the financial crisis cost U.S. savers almost $1 trillion in lost income from savings accounts, CDs and bonds from the start of 2008 through 2015, taking into account money saved on debt costs, according to April 2016 research (p. A2) by insurer Swiss Re.

There are few signs of imminent improvement. The yield on the benchmark 10-year Treasury note has risen since the election to nearly 2.6%, but it is still below the 2.9% it yielded when U.S. stocks hit their low on March 9, 2009.


. . .


Lawmakers such as House Speaker Paul Ryan (R., Wis.) have criticized the Fed's low-rate policy as harmful to savers. Sen. Bob Corker (R., Tenn.) in 2013 said it amounted to "throwing seniors under the bus."



For the full story, see:

Corrie Driebusch and Aaron Kuriloff. "Stocks Have Tripled Since Crisis, but Low Rates Are Still Squeezing Savers." The Wall Street Journal (Thurs., MARCH 9, 2017): A1-A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date MARCH 8, 2017, and has the title "Stocks Have Tripled Since Crisis, but Low Rates Are Still Squeezing Savers.")






July 2, 2017

Apple Hits Record Market Capitalization for Any U.S. Company in History



(p. B20) The world's most valuable listed company just got even more valuable.

Shares of Apple rose 0.6% to an all-time high of $153.99 Tuesday [May 9, 2017], sending its market capitalization above $800 billion, a first for any U.S. company. That level, the latest evidence of how much the stock has risen this year, is a milestone sure to stoke speculation about whether it will be the first public company to be worth $1 trillion.



For the full story, see:


BEN EISEN AND CHRIS DIETERICH. "Apple's Latest Record: An $800 Billion Market Cap." The Wall Street Journal (Weds., May 10, 2017): B20.

(Note: bracketed date added.)

(Note: the online version of the story has the date May 9, 2017, and has the title "Twitch Entices Video Creators With More Revenue Sharing.")






July 1, 2017

Introvert Was Student of Schumpeter and Hayek



(p. A9) As a boy, David Rockefeller idolized his big brother Nelson, a self-assured bon vivant who didn't let the family name stand in the way of a good time--and sometimes furtively shot rubber bands at his siblings during the morning prayer periods imposed by their austere father.

David, by contrast, was shy, insecure and often lonely, retreating into his hobby of collecting beetles and reliant on tutors for companionship.


. . .


A family friend advised him that studying economics would dispel the idea that any job he obtained was due to his family's influence. He took graduate courses at Harvard, including an introduction to economics from Joseph Schumpeter.

He furthered his studies at the London School of Economics, where his tutor was Friedrich von Hayek, a future Nobel laureate. He won a doctorate in economics from the University of Chicago in 1940 after writing a dissertation on overcapacity in industrial plants.



For the full obituary, see:

James R. Hagerty. "Former Chase Leader Overcame Shyness as Child." The Wall Street Journal (Sat., MARCH 25, 2017): A9.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date MARCH 24, 2017, and has the title "David Rockefeller Overcame Youthful Shyness and Insecurities.")






June 30, 2017

Amazon Increases Rewards to Live-Video-Content-Creators



(p. B4) Amazon.com Inc.'s Twitch is allowing more broadcasters to make money on its platform, a move that could help the live-streaming business seize on challenges facing bigger rivals YouTube and Facebook Inc.

On Friday, Twitch said it will open up its revenue-sharing program next week for more broadcasters to get paid whenever they receive "bits"--custom, animated emoticons that act as an online currency for viewers to tip them. Twitch says bits are a way for those in the broadcasters' channels to cheer them on.

Twitch will add more money-making opportunities to its new "affiliate program" in the future, the company said. Currently, only the top 1% of the 2.2 million people who stream on Twitch at least once a month--members of its so-called "partner program"--can generate revenue on the platform.


. . .


Twitch said its top earners in the partner program, who are its most popular broadcasters, make more than $100,000 a year. Under the new affiliate program, creators with fewer fans must meet certain criteria to demonstrate their commitment to streaming, such as a minimum number of hours spent on the air, to earn revenue. The amount of money the platform shares with its broadcasters varies depending on how it is earned.

Twitch sells bits to viewers in bundles ranging from $1.40 for 100 to $308 for 25,000. Broadcasters then earn one cent every time a viewer uses one.



For the full story, see:

Sarah E. Needleman. "Twitch Entices Video Creators With More Revenue Sharing." The Wall Street Journal (Sat., April 22, 2017): B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 21, 2017, and has the title "Twitch Entices Video Creators With More Revenue Sharing.")






June 29, 2017

Dynamism Dying from Bad Attitudes or Bad Policies?




I agree with Tyler that the U.S. is less dynamic than it once was. But I mainly blame our bad government policies, while he mainly blames our own bad attitudes.



(p. A15) Is the "land of opportunity," with dynamic labor markets and fresh sources of renewal, a thing of the past?

That's the fear of Tyler Cowen, who argues in "The Complacent Class" that America is increasingly defined by an aversion to risk as well as to anything that is unfamiliar or different. He sees a broad swath of the American population losing "the capacity to imagine or embrace a world where things do change rapidly for most if not all people." This mind-set, he says, has "sapped us of the pioneer spirit that made America the world's most productive and innovative economy."


. . .


To make his case, Mr. Cowen draws a contrast between the changes that Americans experienced in the first half of the 20th century and the changes of the past 50 years. The earlier period saw dramatic improvements in health and education as well as a proliferation of automobiles, airplanes and telephones. By comparison, the changes since 1965 have been modest. "A lot of our technological world seems to have stood pretty much still," he writes, "albeit with a variety of quality improvements along the way." He even notes that, while popular narcotics in the past were mind-altering (LSD) or activity-inciting (cocaine), today's drugs of choice, such as heroin and opioids, "induce a dreamlike stupor and passivity."


. . .


Given Mr. Cowen's own innovative thinking, it's disappointing that he does not focus more on potential remedies to the torpor he describes.



For the full review, see:


Matthew Rees. "BOOKSHELF; How American Workers Got Lazy." The Wall Street Journal (Tues., Feb. 28, 2017): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date Feb. 27, 2017.)


The book under review, is:

Cowen, Tyler. The Complacent Class: The Self-Defeating Quest for the American Dream. New York: St. Martin's Press, 2017.







June 28, 2017

Retiring Later Improves Health in Old Age



(p. 3) Despite what may seem like obvious benefits, scholars can't make definitive statements about the health effects of working longer. The research is inherently difficult: Just as retirement can influence health, so can health influence retirement.

"I would say, in my experience, the research is mixed," said Dr. Maestas of Harvard Medical School. "The studies I have seen tend to show that there are health benefits to working longer."

As the economists Axel Börsch-Supan and Morten Schuth of the Munich Center for the Economics of Aging of the Max Planck Institute for Social Law and Social Policy put it in an article for the National Bureau of Economic Research, "Even disliked colleagues and a bad boss, we argue, are better than social isolation because they provide cognitive challenges that keep the mind active and healthy."

Other studies have examined the impact of work and employment on the richness of social networks and social connectedness. The economists Eleonora Patacchini of Cornell University and Gary Engelhardt of Syracuse University tapped into a database of some 1,300 people from ages 57 to 85 that asked about their social networks in 2005 and 2010. After controlling for marital status, age, health and income, they concluded that people who continued to work enjoyed an increase in the size of their networks of family and friends of 25 percent. The social networks of retired people, on the other hand, shrank during the five-year period. In the study, the gains were found to be largely limited to women and older people with postsecondary education.



For the full commentary, see:

CHRISTOPHER FARRELL. "Retiring; Their Jobs Keep Them Healthy." The New York Times, SundayBusiness Section (Sun., MARCH 5, 2017): 3.

(Note: the online version of the commentary has the date MARCH 3, 2017, and has the title "Retiring; Working Longer May Benefit Your Health.")


The article by Börsch-Supan and Schuth, is:

Börsch-Supan, Axel, and Morten Schuth. "Early Retirement, Mental Health, and Social Networks." In Discoveries in the Economics of Aging, edited by David A. Wise. Chicago: University of Chicago Press, 2014, pp. 225-50.






June 25, 2017

"Hubs of Genius Do Not Arise from Government Planning"



(p. 13) In the early 1960s, the Soviet Union tried to make a version of Silicon Valley from scratch. A city called Zelenograd came to life on the outskirts of Moscow and was populated with all manner of brainy Soviet engineers. The hope -- naturally -- was that a concentration of clever minds coupled with ample funding would result in a wellspring of innovation and help Russia keep pace with California's electronics boom. The experiment worked as well as one might expect. Few people will read this on a Mayakovsky-branded tablet or ­smartphone.

Many similar attempts have been made in the subsequent dec­ades to replicate Silicon Valley and its abundance of creativity and ingenuity. Such efforts have largely failed. It seems near impossible to will an exceptional place into being or to manufacture the conditions that lead to an outpouring of genius.


. . .


As in the case of Zelenograd, hubs of genius do not arise from government planning or by acting on the observations of a traveler. They're happy accidents. To attempt to clone such things or pinpoint their characteristics is futile.



For the full review, see:

ASHLEE VANCE. "Smart Sites." The New York Times Book Review (Sun., JAN. 10, 2016): 13.

(Note: ellipsis added.)

(Note: the online version of the review has the date JAN. 8, 2016, and has the title "''The Geography of Genius,' by Eric Weiner.")


The book under review, is:

Weiner, Eric. The Geography of Genius: A Search for the World's Most Creative Places from Ancient Athens to Silicon Valley. New York: Simon & Schuster, 2016.







June 24, 2017

On-Site Work "Is a Remnant of the Industrial Era"



(p. B5) Studies show that when employees have the choice to work remotely, "business is a whole lot better" for "people, the planet and profit," said Kate Lister, president of Global Workplace Analytics, a consulting firm that focuses on emerging workplace trends.

Gallup's State of the American Workplace report, released in February [2017], showed that more American employees were working remotely and for longer periods. The "sweet spot" was employees who spend three to four days a week off site; they reported feeling most engaged at work.

Mohammed Chahdi, global human resources services director for Dell, said a large percentage of its 140,000 employees already worked remotely and the goal was to have 50 percent do so by 2020. The strategy has helped the company "grow smart," he said, by reducing its real estate and environmental footprints and retaining talented employees.

"We have data that show employees are more engaged when they enjoy flexibility," said Mr. Chahdi, who works remotely from Toronto. "Why insist that they be in an office when it simply doesn't matter?"

A new study, Future Workforce, released in February [2017] by Upwork, a marketplace for online work, surveyed more than 1,000 hiring managers in the United States. It found that only one in 10 believed location was important to a new hire's success; nearly two-thirds said they had at least some workers who did a significant portion of their work from a remote location, and about half agreed that they had trouble finding the talent they needed locally.

"Remote work has gone mainstream," said Stephane Kasriel, Upwork's chief executive. On-site work between the hours of 9 and 5 "is a remnant of the industrial era."



For the full story, see:

TANYA MOHN. "ITINERARIES; Digital Nomads Wander World Without Missing a Paycheck." The New York Times (Tues., APRIL 4, 2017): B5.

(Note: bracketed years added.)

(Note: the online version of the story has the date APRIL 3, 2017, and has the title "ITINERARIES; The Digital Nomad Life: Combining Work and Travel.")






June 22, 2017

Oregon Gadfly Fined for Practicing Engineering Without a License



(p. B2) Mats Jarlstrom acknowledges that he is unusually passionate about traffic signals -- and that his zeal is not particularly appreciated by Oregon officials.

His crusade to make traffic lights remain yellow longer -- which began after his wife received a red-light camera ticket -- has drawn some interest among transportation specialists and the media. But among the power brokers in his hometown, Beaverton, it has elicited ridicule and exasperation.

"They literally laughed at me at City Hall," Mr. Jarlstrom recalled of a visit there in 2013, when he tried to share his ideas with city counselors and the police chief.

Worse still was getting hit recently with a $500 fine for engaging in the "practice of engineering" without a license while pressing his cause. So last week, Mr. Jarlstrom filed a civil rights lawsuit in federal court against the Oregon State Board of Examiners for Engineering and Land Surveying, charging the state's licensing panel with violating his First Amendment rights.

"I was working with simple mathematics and applying it to the motion of a vehicle and explaining my research," said Mr. Jarlstrom, 56. "By doing so, they declared I was illegal."

The lawsuit is the latest and perhaps most novel shot in the continuing campaign against the proliferation of state licensing laws that can require costly training and fees before people can work. Mr. Jarlstrom is being represented by the Institute for Justice, a libertarian organization partly funded by the billionaire brothers and activists Charles G. and David H. Koch.



For the full story, see:

PATRICIA COHEN. "Crusader Fined for Doing Math Without License." The New York Times (Mon., May 1, 2017): B2.

(Note: the online version of the story has the date APRIL 30, 2017, and has the title "Yellow-Light Crusader Fined for Doing Math Without a License.")






June 21, 2017

FDR's Attorney General Warned Black Newspapers That He Would "Shut Them All Up"



(p. 12) . . . as the former Chicago Defender editor and reporter Ethan Michaeli shows in his extraordinary history, "The Defender," the Negro press barons attacked military segregation with a zeal that set Roosevelt's teeth on edge. The Negro press warned black men against Navy recruiters who would promise them training as radiomen, technicians or mechanics -- then put them to work serving food to white men. It made its readers understand that black men and women in uniform were treated worse in Southern towns than German prisoners of war and sometimes went hungry on troop trains because segregationists declined to feed them. It focused unflinchingly on the fistfights and gun battles that erupted between blacks and whites on military bases. And it reiterated the truth that no doubt cut Roosevelt the most deeply: His government's insistence on racial separation was of a piece with the "master race" theory put in play by Hitler in Europe.

This was not the first time The Defender and its sister papers had attacked institutional racism. That part of the story begins with Robert S. Abbott, the transplanted Southerner who created The Defender in 1905 and fashioned it into a potent weapon.


. . .


The black press was considerably more powerful and self-assured by 1940, when Abbott died and his nephew John H. Sengstacke succeeded him.


. . .


Things stood thus in 1942, when Sengstacke traveled to Washington to meet with Attorney General Francis Biddle. Sengstacke found Biddle in a conference room, sitting at a table across which was spread copies of black newspapers that included The Defender, The Courier and The Afro-American. Biddle said that the black papers were flirting with sedition and threatened to "shut them all up."



For the full review, see:

BRENT STAPLES. "'A 'Most Dangerous' Newspaper." The New York Times Book Review (Sun., JAN. 10, 2016): 12.

(Note: ellipses added.)

(Note: the online version of the review has the date JAN. 4, 2016, and has the title "''The Defender,' by Ethan Michaeli.")


The book under review, is:

Michaeli, Ethan. The Defender: How the Legendary Black Newspaper Changed America. New York: Houghton Mifflin Harcourt, 2016.






June 20, 2017

Government Regulations Suppress Poor Street Entrepreneurs



(p. 7) HANOI, Vietnam -- As strips of tofu sizzle beside her in a vat of oil, Nguyen Thu Hong listens for police sirens.

Police raids on sidewalk vendors have escalated sharply in downtown Hanoi since March [2017], she said, and officers fine her about $9, or two days' earnings, for the crime of selling bun dau mam tom -- vermicelli rice noodles with tofu and fermented shrimp paste -- from a plastic table beside an empty storefront.

"Most Vietnamese live by what they do on the sidewalk, so you can't just take that away," she said. "More regulations would be fine, but what the cops are doing now feels too extreme."

Southeast Asia is famous for its street food, delighting tourists and locals alike with tasty, inexpensive dishes like spicy som tam (green papaya salad) in Bangkok or sizzling banh xeo crepes in Ho Chi Minh City. But major cities in three countries are strengthening campaigns to clear the sidewalks, driving thousands of food vendors into the shadows and threatening a culinary tradition.


. . .


. . . some experts say street food is not inherently less sanitary than restaurant food. "If you're eating fried foods or things that are really steaming hot, then there's probably not much difference at all," said Martyn Kirk, an epidemiologist at the Australian National University.


. . .


Ms. Hong, the Hanoi vendor, said her earnings had cratered by about 60 percent since the start of the crackdown, when she moved to her present location from a busy street corner as a hedge against police raids.



For the full story, see:

MIKE IVES. "Food So Popular, Asian Cities Want It Off the Streets." The New York Times, First Section (Sun., APRIL 30, 2017): 7.

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

(Note: the online version of the story has the date APRIL 29, 2017, and has the title "Efforts to Ease Congestion Threaten Street Food Culture in Southeast Asia.")






June 19, 2017

"The System Is Totally Crazy"



(p. D1) Mr. Ahmed, 46, is in the business of chicken and rice. He immigrated from Bangladesh 23 years ago, and is now one of two partners in a halal food cart that sets up on Greenwich Street close to the World Trade Center, all year long, rain or shine. He is also one of more than 10,000 people, most of them immigrants, who make a living selling food on the city's sidewalks: pork tamales, hot dogs, rolled rice noodles, jerk chicken.

These vendors are a fixture of New York's streets and New Yorkers' routines, vital to the culture of the city. But day to day, they struggle to do business against a host of challenges: byzantine city codes and regulations on street vending, exorbitant fines for small violations (like setting up an inch too close to the curb) and the occasional rage of brick-and-mortar businesses or residents.


. . .


(p. D6) Mr. Ahmed ties on his apron and pushes a few boxes underneath the cart so he can squeeze inside and get to work. Any boxes peeking out beyond the cart's footprint could result in a fine (penalties can run up to $1,000), as could parking his cart closer than six inches to the curb, or 20 feet to the building entrance. Mr. Ahmed knows all the rules by heart.


. . .


He applied for a food vendor's license, took a required health and safety class, bought a used cart and took it for an inspection by city officials. (The health department inspects carts at least once a year, and more frequently if a violation is reported.)

Mr. Ahmed still needed a food-vending permit, though, and because of a cap on permits imposed in the 1980s, only 4,000 or so circulate. He acquired his from a permit owner who has charged him and his partner $25,000 for two-year leases (for a permit that cost the owner just $200), which they are still paying off.

A day ago, Mr. Ahmed received a text message: 100 vendors were protesting the cap. Organized by the Street Vendor Project, a nonprofit group that is part of the Urban Justice Center and offers legal representation to city vendors, they hoped to pressure the City Council to pass legislation introduced last fall that would double the number of food-vending permits, gradually, over the next seven years. Mr. Ahmed, who believes the costs for those starting out should be more manageable, wanted to join them, but like many vendors, he couldn't get away from work.

"The system is totally crazy," Mr. Ahmed says. "Whoever has a license, give them a permit. It's good for all of us."



For the full story, see:

TEJAL RAO. "A Day in the Lunch Box." The New York Times (Weds., APRIL 19, 2017): D1 & D6.

(Note: ellipses added.)

(Note: the online version of the story has the date APRIL 18, 2017, and has the title "A Day in the Life of a Food Vendor.")






June 16, 2017

Self-Driving Cars Would Help Older Adults Continue to Live at Home



(p. B4) Single, childless and 68, Steven Gold has begun to think about future mobility and independence. Although in good health, he can foresee a time when he won't be a confident driver, if he can drive at all. While he hopes to continue to live in his suburban Detroit home, he wonders how he will be able to get to places like his doctor's office and the supermarket if his driving becomes impaired.

For Mr. Gold and other older adults, self-driving cars might be a solution.

The number of United States residents age 70 and older is projected to increase to 53.7 million in 2030, from 30.9 million in 2014, according to the Institute for Highway Safety. Nearly 16 million people 65 and older live in communities where public transportation is poor or nonexistent. That number is expected to grow rapidly as baby boomers remain outside of cities.

"The aging of the population converging with autonomous vehicles might close the coming mobility gap for an aging society," said Joseph Coughlin, the director of the Massachusetts Institute for Technology AgeLab in Cambridge.

He said that 70 percent of those over age 50 live in the suburbs, a figure he expects to remain steady despite a recent rise in moves to urban centers. Further, 92 percent of older people want to age in place, he said.



For the full story, see:

MARY M. CHAPMAN. "Wheels; For the Aged, Self-Driving Cars Could Bridge a Mobility Gap." The New York Times (Fri., March 24, 2017): B4.

(Note: the online version of the story has the date March 23, 2017, and has the title "Wheels; Self-Driving Cars Could Be Boon for Aged, After Initial Hurdles.")






June 14, 2017

Lower Ivory Prices Reduce Incentives to Poach Elephants



(p. A9) NAIROBI, Kenya -- Finally, there's some good news for elephants.

The price of ivory in China, the world's biggest market for elephant tusks, has fallen sharply, which may spell a reprieve from the intense poaching of the past decade.

According to a report released on Wednesday [March 29, 2017] by Save the Elephants, a respected wildlife group in Kenya, the price of ivory is less than half of what it was just three years ago, showing that demand is plummeting.



For the full commentary, see:

JEFFREY GETTLEMAN. "Ivory Prices May Mean a Reprieve for Elephants." The New York Times (Thurs., March 30, 2017): A9.

(Note: bracketed date added.)

(Note: the online version of the commentary has the date March 29, 2017, and has the title "Elephants Get a Reprieve as Price of Ivory Falls.")






June 13, 2017

Banks Often Less Transparent and Less Flexible than Bank Alternatives



I saw a C-Span interview on their weekend Book TV today (3/16/17), with Professor Lisa Servon. She pointed out that many of the highly regulated, and much-criticized, alternative banking services, offer a more transparent, more flexible, and more friendly service environment than the incumbent banking industry. She even argues that for those with low-incomes, and low-education, the alternative services are often less expensive. This happens because those with low-incomes and low education are often those who by mistake or by difficult circumstance, incur high fees at banks.

She points out that many who are bankless, previously made use of bank services, but decided to go with the alternatives. She suggested that in a free market environment, some of the alternatives might creatively destroy the incumbent banks.

Servon is clearly no libertarian, but much of what she says is thought-provoking.


Servon's book is:

Servon, Lisa. The Unbanking of America: How the New Middle Class Survives. New York: Houghton Mifflin Harcourt Publishing Co., 2017.






June 12, 2017

DARPA's $66 Million Fails to Develop Tech to Match Dog Noses



(p. A2) "What's cool about dogs is when they do come into contact with an odor, they can track it to its source," said L. Paul Waggoner, co-director of the Canine Performance Sciences Program at Auburn University. "There is not an instrument out there that replicates a dog's nose."

That's not for lack of effort.

The Defense Advanced Research Projects Agency of the U.S. Department of Defense spent $66 million between 1997 and 2010 drawing on the expertise of at least 35 different research institutions to develop sensors that could detect explosives as ably as a dog and identify other chemicals.


They couldn't do it.


. . .


Surprisingly, pigs and ferrets outperformed German shepherds and Labrador retrievers, breeds often chosen for odor detection.

But overall, dogs won out because of their combination of qualities: Not only do they have strong noses, they are compatible with people, they respond to training, and--for now--they beat technology paws down.



For the full commentary, see:

Jo Craven McGinty. "THE NUMBERS; Dogs Still Beat Technology in the Smell Test." The Wall Street Journal (Sat., March 25, 2017): A2.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date March 24, 2017, and has the title"THE NUMBERS; Making Sense of a Dog's Olfactory Powers.")






June 11, 2017

Mainstream Economist William Baumol Celebrated Innovative Entrepreneurs




William J. Baumol is a key source in my book project on Innovation Unbound. I had hoped he would be able to read, and comment on, the current draft, but that is not to be. He was one of the heroes of the economics of entrepreneurship.



(p. A13) The disease that bears William J. Baumol's name is not what led to his death on May 4 [2017] at age 95, but it is what cemented his legacy as one of the pre-eminent economists of the 20th century.


. . .


Professor Baumol was "one of the great economists of his generation," Joseph Stiglitz, a Nobel Prize-winning economist at Columbia University, said in an interview, adding, "The series of insights he had about managerial economics, the role of innovation -- a whole series of innovational breakthroughs over a long period of time -- had a profound effect on economics."


. . .


"Nobody ever explained to him the difference between work and play," Daniel Baumol said of his father. "During a long trip, he would sit in the back of the car, oblivious to the world, and as we pulled in, he would announce, 'I just finished that article.'"

Patrick Bolton, a professor of economics at Columbia, described Professor Baumol as "someone who could come to a big problem and bring an extremely simple analysis that really shaped the way people would think about it."



For the full obituary, see:

PATRICIA COHEN. "William J. Baumol, 95, Leading Thinker in Economics." The New York Times (Fri., May 12, 2017): B14.

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

(Note: the online version of the obituary has the date May 10, 2017 and has the title "William J. Baumol, 95, 'One of the Great Economists of His Generation,' Dies.")


My favorite Baumol paper, is:

Baumol, William J. "Education for Innovation: Entrepreneurial Breakthroughs Versus Corporate Incremental Improvements." In Innovation Policy and the Economy, edited by Adam B. Jaffe, Josh Lerner and Scott Stern. Cambridge, Mass.: MIT Press, 2005, pp. 33-56.






June 10, 2017

Apple Funds Corning's Glass Innovation



(p. B6) SAN FRANCISCO -- Apple is seeding the next generation of American-made glass for its iPhones and iPads, and its investments may have the side benefit of helping the company win favor in Washington.

Apple announced Friday [May 12, 2017] that it was giving $200 million to Corning, which makes the tough, scratch-resistant face for every iPhone and iPad, to support the glass maker's efforts to develop and build more sophisticated products at its factory in Harrodsburg, Ky.

Corning has made the glass for every iPhone since the original 10 years ago. Apple's investment, the first from the technology giant's $1 billion fund to promote advanced manufacturing in the United States, will help Corning develop thinner, more versatile glass for iPhones as well as other product lines that Apple is exploring, such as screens for self-driving cars and augmented reality glasses.

The move goes beyond Apple's traditional practice of subsidizing suppliers, said Tim Bajarin, president of the technology consulting firm Creative Strategies.

"I would see this more as an Apple-Corning partnership to flesh out what other kinds of things you would use glass for," he said. "They are literally thinking about stuff you and I aren't thinking about yet."



For the full story, see:

VINDU GOEL. "Apple Gives $200 Million to Advance Phone Glass." The New York Times (Sat., MAY 13, 2017): B6.

(Note: bracketed date added.)

(Note: the online version of the story has the date MAY 12, 2017, and has the title "Apple Gives Corning $200 Million to Invent Better Phone Glass.")






June 8, 2017

Silicon Valley Funding Big Dings in the Universe




When Steve Jobs was trying to recruit Pepsi's John Sculley to become Apple CEO, Jobs asked him something like: 'do you want to spend the rest of your life selling sugar water, or do you want a chance to make a ding in the universe.'



(p. B1) One persistent criticism of Silicon Valley is that it no longer works on big, world-changing ideas. Every few months, a dumb start-up will make the news -- most recently the one selling a $700 juicer -- and folks outside the tech industry will begin singing I-told-you-sos.

But don't be fooled by expensive juice. The idea that Silicon Valley no longer funds big things isn't just wrong, but also obtuse and fairly dangerous. Look at the cars, the rockets, the internet-beaming balloons and gliders, the voice assistants, drones, augmented and virtual reality devices, and every permutation of artificial intelligence you've ever encountered in sci-fi. Technology companies aren't just funding big things -- they are funding the biggest, most world-changing things. They are spending on ideas that, years from now, we may come to see as having altered life for much of the planet.



For the full commentary, see:

Manjoo, Farhad. "STATE OF THE ART; These Days, Moon Shots Are Domain of the Valley." The New York Times (Thurs., MAY 17, 2017): B1 & B6.

(Note: the online version of the commentary has the date MAY 17, 2017, and has the title "STATE OF THE ART; Google, Not the Government, Is Building the Future.")






June 5, 2017

Going Postal



(p. 19) Over all, Leonard emphasizes a darker side of postal history, from the corruption scandals that periodically erupted after Andrew Jackson politicized the service, creating a gargantuan patronage machine, to oppressive government censorship campaigns. He devotes much of a chapter to Anthony Comstock, the longtime postal inspector and self-styled "weeder in God's garden," who banned and prosecuted the mailing of birth control pamphlets, "marriage aids" and "indecent" literary works like Walt Whitman's poems, lest they pollute public morals. Still another chapter charts the spree of mass killings by overworked, underpaid and aggrieved postal workers in the 1980s and early 1990s.


For the full review, see:

LISA McGIRR. "We Had Mail." The New York Times Book Review (Sun., JULY 10, 2016): 19.

(Note: the online version of the review has the date JULY 8, 2016, and has the title "Two Books Recount How Our Postal System Created a Communications Revolution.")


The book under review, is:

Leonard, Devin. Neither Snow nor Rain: A History of the United States Postal Service. New York: Grove Press, 2016.






June 4, 2017

Lower Quality Restaurants Most Hurt by Minimum Wage Hike



(p. A17) "There's only so much you can charge for tamales," the owner of a small eatery said in 2015 to explain one reason he was closing.

For some empirical backup, consider an April [2017] study from Michael Luca at Harvard Business School and Dara Lee Luca at Mathematica Policy Research. They used Bay Area data from the review website Yelp to estimate that a $1 minimum-wage hike leads to a 14% increase in "the likelihood of exit for a 3.5-star restaurant."

Put differently, San Francisco's minimum wage experiment may be dangerous for your favorite white-tablecloth restaurant--the kind of place where the food is exquisite and can command a premium--but it's downright deadly for your local white-apron diner.



For the full commentary, see:


Michael Saltsman. "The Minimum Wage Eats Restaurants; A San Francisco ex-owner says: 'There's only so much you can charge for tamales.'." The Wall Street Journal (Weds., May 9, 2017): A17.

(Note: bracketed year added.)

(Note: the online version of the commentary has the date May 9, 2017,)


The Luca and Luca paper, mentioned above, is:

Luca, Dara Lee and Luca, Michael. "Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit." (April 2017). Harvard Business School NOM Unit Working Paper No. 17-088.






June 3, 2017

"Mind-Bending" Automatic Braking Trickles Down to Cheaper Cars



(p. B4) I first experienced radar-assisted cruise control in a $70,000 Mercedes in 2001. Slowing automatically to keep from hitting the car ahead felt like a magic trick. In 2009, I was told to drive a new $50,000 Volvo into the back of a "parked car" (really, an inflatable mock-up). Every fiber of my body wanted to stomp on the brake pedal. Instead, the car did it for me. Automatic braking is mind-bending the first time.

Both of these technologies are standard equipment on 2017 Toyota Corollas, which start at $19,385. So is lane-keeping assist, which nudges the car back between the road stripes if you wander. Automatic high-beam headlamps, too.

Huzzah for technology trickle down!



For the full story, see:

TOM VOELK. "Tech Trickles Down into a Safer Corolla." The New York Times (Fri., MARCH 17, 2017): B4.

(Note: the online version of the story has the date MARCH 16, 2017, and has the title "Video Review: Not-So-Standard Equipment on the Otherwise Standard Corolla.")






May 29, 2017

Employers Less Likely to Hire Older Workers



(p. A3) Using a method of uncovering discrimination well known in economics, David Neumark, an economist at the University of California at Irvine, led a study that sent out 40,000 fake résumés to employers who had posted openings. Mr. Neumark and his co-authors found that résumés suggesting an applicant was 64 to 66 years old got a response 35 percent less often than résumés suggesting that the applicant was 29 to 31.

Labeling it discrimination is another matter, however. "The one thing that people always point out is that acceptability for age stereotyping is extremely high," Mr. Neumark said. "The number of people who make age-related jokes are way more frequent than people who make race-related jokes. For whatever reason, the social stigma for age discrimination is really weak."

Aside from fairness, evidence suggests that finding ways to keep older Americans working has benefits to the broader society: Working keeps older Americans happier, healthier and more mentally engaged. And forestalling retirement could relieve some of the pressure a large aging population places on this country's social safety net.

"Governments all over the world are trying to figure how to get old people to stay at work longer," Mr. Neumark said. "If we have discriminatory barriers, then all these reforms will be less effective."



For the full story, see:

Quoctrung Bui. "As More Older People Look for Work, They Are Put Into 'Old Person Jobs'." The New York Times (Thurs., AUG. 18, 2016): A3.

(Note: the online version of the article has the title "More Older People Are Finding Work, but What Kind?")


The Neumark paper mentioned above, is:

Neumark, David, Ian Burn, and Patrick Button. "Experimental Age Discrimination Evidence and the Heckman Critique." American Economic Review 106, no. 5 (May 2016): 303-08.






May 28, 2017

Under Communism Inventiveness Did Not Yield Economic Benefits



(p. A17) The Soviet Union may have pioneered in space with Sputnik and Yuri Gagarin, but today Russia has less than 1% of the world commercial market in space telecommunications, the most successful commercial product so far stemming from space exploration. Russians may have won Nobel Prizes for developing the laser, but Russia today is insignificant in the production of lasers for the world market. Russians may have developed the first digital computer in continental Europe, but who today buys a Russian computer? By missing out on the multi-billion-dollar markets for lasers, computers and space-based telecommunications, Russia has suffered a grievous economic loss.

Accompanying this technical and economic failure was a human tragedy. Russian achievements in science and technology occurred in an environment of political terror. The father of the Russian hydrogen bomb, Andrei Sakharov, wrote in his memoirs that the research facility in which he worked was built by political prisoners, and each morning he looked out the window of his office to see them marching under armed guard to their construction sites. The "chief designer" of the Soviet space program, Sergei Korolev, was long a prisoner who worked in a special prison laboratory, or sharashka. The dean of Soviet airplane designers, A.N. Tupolev, also labored for years as a prisoner in a special laboratory. Three of the Soviet Union's Nobel Prize-winning physicists were arrested for alleged political disloyalty. Probably half of the engineers in the Soviet Union in the late 1920s were eventually arrested. In 1928 alone 648 members of the staff of the Soviet Academy of Sciences were purged.

When one looks at these statistics and at the genuine achievements of Soviet science, one is forced to ask basic questions about the relation of freedom to scientific progress.


. . .


Mr. Ings admirable effort to reach nonspecialized readers sometimes leads him to make exaggerated statements. He claims that we have "good agricultural and climate data for Russia going back over a thousand years" when in fact the data is incomplete and unreliable.


. . .


The claim that the Soviet Union was a scientific state brings Mr. Ings close, in his conclusion, to condemning science itself. He sees science and technology as causing a coming global ecological collapse, and he thinks that in some ways the demise of the Soviet Union was a preview of what we will all soon face. In one of his final sentences he says: "We are all little Stalinists now, convinced of the efficacy of science to bail us out of any and every crisis." "Stalin and the Scientists" deserves attention, but a very critical form of attention. It is based on an impressive amount of study, and most readers will learn a great deal. It is, however, incomplete and overdrawn.



For the full review, see:

LOREN GRAHAM. "BOOKSHELF; No Good Deed Went Unpunished." The Wall Street Journal (Tues., Feb. 21, 2017): A17.

(Note: ellipses added.)

(Note: the online version of the review has the date Feb. 20, 2017, and has the title "BOOKSHELF; Science Under Stalin.")


The book under review, is:

Ings, Simon. Stalin and the Scientists: A History of Triumph and Tragedy, 1905-1953. New York: Atlantic Monthly Press, 2017.







May 27, 2017

Chinese Government Stimulus Inflated Egg Futures Bubble



(p. A1) HONG KONG -- China is pouring hundreds of billions of dollars into its economy in a new effort to support growth. Some of it is going into roads and bridges and other big projects that will keep the economy humming.

And some of it is going into eggs.

China's latest lending deluge has sent money sloshing into unexpected parts of the economy. That includes a financial market in Dalian where investors can place bets on the future productivity of the country's hens.

Egg futures have surged by as much as one-third since March, the sort of move that would be justified if investors believed China's chicken flocks were headed for an unfortunate fate.

But the market's usual participants say the flocks are fine. In fact, the actual price of eggs in the country's markets has fallen from a year ago, according to government statistics.

The reason for the unusual jump in egg futures, they say, is China's tendency to experience investment bubbles when the government steps up spending and lending. China's previous efforts to bolster growth unexpectedly (p. B2) sent money into real estate and the stock market -- markets that had unexplained rises followed by striking drops.

"Many commodities prices have gone up crazily," said Du Shaoxing, a futures trader in Guangzhou, in southern China. "We surely hope for a more stabilized trend where futures can reflect economic fundamentals. The way in which recent commodity prices went up is worrisome."

China's latest bubble illustrates the potential risks of its newest effort to spur growth. The Chinese economy is already burdened with too much debt, economists say. And sometimes, stopgap measures to help the economy create long-term problems.



For the full story, see:

NEIL GOUGH. "China's Flood of Cash Roils Egg Futures." The New York Times (Weds., May 2, 2016): A1 & B2 [sic].

(Note: the online version of the article has the date May 1, 2016, and has the title "China Lending Inflates Real Estate, Stocks, Even Egg Futures.")






May 26, 2017

Amateur Tinkerers Keep Steam Power Alive



(p. D4) Most people, when they think of steam power, they think of rusty farm tractors from 150 years ago. But there's such a thing as modern steam power. Steam is the most direct way to get power out of heat. You can't build an internal combustion engine in your garage. But you can build a steam engine, and the interesting thing is, it can run on anything that will burn, even sawdust.

At my farm, I have about 100 steam engines, many of them homemade, plus a library of technical papers, patents, and books on steam technology. I have Volkswagen engines converted to steam, outboard boat engines, etc. I collect and preserve this stuff. I get a lot of it from old widows whose deceased husbands were tinkerers; these women are so happy to get rid of it. Some of the engines are well built, others not, but you can learn as much from a bad example as a good one.



For the full story, see:


Kimmel, Tom (as told to A.J. BAIME). "MY RIDE; Never Before Has Steam Been Quite This Cool." The Wall Street Journal (Weds., Dec. 2, 2015): D4.

(Note: the online version of the story has the date Dec. 1, 2015, and has the title "MY RIDE; Never Has Steam Been So Cool." )






May 23, 2017

More Than 100 Video Stores Still Open in U.S.



(p. A15) "Whoa, a video store!" said a man recently walking by Video Free Brooklyn, loud enough to be heard inside the shop.

It's true: Video-store holdouts still exist. Their goal is to keep pushing DVDs, Blu-Rays and even VHS tapes in an age when streaming movies is second-nature.

Owners and customers of the more than 100 independent and nonprofit video stores still kicking throughout the U.S., often in places with strong locavore food scenes, say the stores offer variety film lovers can't find elsewhere. It might be a deep roster of anime films by Hayao Miyazaki, or one of Dario Argento 's more obscure grindhouse efforts. They allow a browsing experience impossible online and serve as libraries for movies and TV shows that will likely never transfer to an online format.



For the full story, see:


ERIN GEIGER SMITH. "Revenge of the Video Store." The Wall Street Journal (Mon., Nov. 28, 2016): A15.

(Note: the online version of the story has the date Nov. 26, 2016.)






May 21, 2017

Nano-Enhanced Fabrics Can Clean Themselves



(p. D3) Scientists in Australia, one of the sunniest places on the planet, have discovered a way to rid clothes of stubborn stains by exposing them to sunlight, potentially replacing doing the laundry.

Working in a laboratory, the researchers embedded minute flecks of silver and copper--invisible to the naked eye--within cotton fabric. When exposed to light, the tiny metal particles, or nanostructures, released bursts of energy that degraded any organic matter on the fabric in as little as six minutes, said Rajesh Ramanathan, a postdoctoral fellow at RMIT University, in Melbourne.

The development, reported recently in the journal Advanced Materials Interfaces, represents an early stage of research into nano-enhanced fabrics that have the ability to clean themselves, Dr. Ramanathan said. The tiny metal particles don't change the look or feel of the fabric. They also stay on the surface of the garment even when it is rinsed in water, meaning they can be used over and over on new grime, he said.



For the full story, see:

RACHEL PANNETT. "An End to Laundry? The Promise of Self-Cleaning Fabric." The Wall Street Journal (Tues., April 26, 2016): D3.

(Note: the online version of the story has the date April 25, 2016.)


The academic article describing the self-cleaning fabric, is:

Anderson, Samuel R., Mahsa Mohammadtaheri, Dipesh Kumar, Anthony P. O'Mullane, Matthew R. Field, Rajesh Ramanathan, and Vipul Bansal. "Robust Nanostructured Silver and Copper Fabrics with Localized Surface Plasmon Resonance Property for Effective Visible Light Induced Reductive Catalysis." Advanced Materials Interfaces 3, no. 6 (2016): 1-8.






May 20, 2017

"The Powers of a Man's Mind Are Directly Proportioned to the Quantity of Coffee He Drinks"



(p. C9) . . . certain aspects of 18th-century Parisian life diluted the importance of sight. This was, after all, a time before widespread street lighting, and, as such, activities in markets (notably Les Halles) were guided as much by sound and touch as by eyes that struggled in the near dark conditions. Natural light governed the lives of working people, principally because candles were expensive. Night workers--such as baker boys known as "bats," who worked in cheerless basements--learned to rely on their other senses, most notably touch.


. . .


"For Enlightenment consumers, a delicious food or beverage had more than just the power of giving a person pleasure," writes Ms. Purnell; taste, it was held, could influence personality, emotions and intelligence. Take coffee, "the triumphant beverage of the Age of Enlightenm ent." Considered a "sober liquor," it stimulated creativity without courting the prospect of drunkenness. Sir James Mackintosh, the Scottish philosopher, believed that "the powers of a man's mind are directly proportioned to the quantity of coffee he drinks." Voltaire agreed and supposedly quaffed 40 cups of it every day. Taste was also gendered: Coffee was deemed too strong for women; drinking chocolate was thought more suitable.



For the full review, see:

MARK SMITH. "The Stench of Progress." The Wall Street Journal (Sat., MARCH 11, 2017): C9.

(Note: ellipses added.)

(Note: the online version of the story has the date MARCH 10, 2017.)


The book under review, is:

Purnell, Carolyn. The Sensational Past: How the Enlightenment Changed the Way We Use Our Senses. New York: W. W. Norton & Company, 2017.






May 18, 2017

"Slow Is Smooth and Smooth Is Fast"



(p. B2) WASHINGTON -- Jeff Bezos, the billionaire chief executive of Amazon, founded a rocket company as a hobby 16 years ago. Now that company, Blue Origin, finally has its first paying customer as it ramps up to become a full-fledged business.

Mr. Bezos announced that customer, the satellite television provider Eutelsat, on Tuesday. In about five years, Eutelsat, which is based in Paris, will strap one of its satellites to a new Blue Origin rocket to be delivered to space, a process it has done dozens of times with other space partners.


. . .


Blue Origin's deal with Eutelsat is a "definite statement to the industry that Blue Origin will be a viable commercial launch vehicle," said Carissa Bryce Christensen, the chief executive of Bryce Space and Technology, a consulting firm.


. . .


Mr. Bezos "is investing because he wants to transform people's lives with space capabilities, but the expectation has always been that this will be a successful business," Ms. Christensen said.


. . .


Mr. Bezos said he was approaching his space project with an abundance of patience.

"I like to do things incrementally," he said, noting that Blue Origin's mascot is a tortoise. With such high costs and risks with each rocket launch, it is important not to skip steps, he said.

"Slow is smooth and smooth is fast," said Mr. Bezos, who also owns The Washington Post and a clock that will keep time for 10,000 years. "I've seen this in every endeavor I've been in."



For the full story, see:

CECILIA KANG. "Blue Origin, Bezos's Moon Shot, Gets First Paying Customer." The New York Times (Weds., March 8, 2017): B2.

(Note: ellipses added.)

(Note: the online version of the story has the date March 7, 2017, and has the title "Blue Origin, Jeff Bezos's Moon Shot, Gets First Paying Customer.")






May 16, 2017

Panopticon: "Bentham's Most Infamous Idea"



(p. C6) Perhaps the most fascinating chapter of the book, highlighting Mr. Crawford's ability to mix philosophy and reporting, is the one about the panopticon. The idea of an annular building with a central observation tower was conceived by the philosopher Jeremy Bentham (1748-1832). The utilitarian is known most superficially by students of and visitors to University College, London, as the eccentric who willed that, after his death, his body be preserved seated on a chair in a glass case.

Mr. Crawford fleshes out the story, noting that, in fact, the smartly dressed Bentham figure that sits inside a glass display case today is actually a skeleton of the man, his head a wax replica of the real one that did not survive the preservation process. When I was a regular at University College one summer, I was told that the cabinet holding the "Auto-Icon" (Bentham's term) was rolled over to the lecture hall on occasion, something that I don't recall witnessing.

The author's real purpose in discussing Bentham's most infamous idea is to describe the utopian--or dystopian, depending upon one's point of view--concept. In one embodiment, it took the form of a rimless wagon wheel, in which someone situated at the hub could oversee activities in all directions, making the layout ideal for insuring that workers in a factory did not take more breaks than allowed, inmates did not misbehave in a prison or students did not cheat on an exam.

Bentham's insight was that the mere fact that those being observed knew that they were being watched would cause them to alter their behavior for the better. Could Bentham have imagined that his idea would form the foundation of our surveillance society? Looking at our culture today--with its CCTV, smartphones and so on--to some it surely seems that we live in a permanent panopticon. "All this," Mr. Crawford writes, "from a 'simple idea in architecture.' "



For the full review, see:

HENRY PETROSKI. "What Goes Up." The Wall Street Journal (Sat., MARCH 11, 2017): C6.

(Note: ellipses added.)

(Note: the online version of the story has the date MARCH 10, 2017, and has the title "The Lives and Deaths of History's Greatest Buildings.")


The book under review, is:

Crawford, James. Fallen Glory: The Lives and Deaths of History's Greatest Buildings. New York: Picador, 2017.






May 15, 2017

For $9,000, No Chicken Need Die, When You Eat a Pound of Chicken



(p. B3) A Bay Area food-technology startup says it has created the world's first chicken strips grown from self-reproducing cells without so much as ruffling a feather.

And the product pretty much tastes like chicken, according to people who were offered samples Tuesday [March 14, 2017] in San Francisco, before Memphis Meats Inc.'s formal unveiling on Wednesday.

Scientists, startups and animal-welfare activists believe the new product could help to revolutionize the roughly $200 billion U.S. meat industry. Their goal: Replace billions of cattle, hogs and chickens with animal meat they say can be grown more efficiently and humanely in stainless-steel bioreactor tanks.


. . .


On Tuesday [March 14, 2017], Memphis Meats invited a handful of taste-testers to a San Francisco kitchen and cooked and served their chicken strip, along with a piece of duck prepared à l'orange style.

Some who sampled the strip--breaded, deep-fried and spongier than a whole chicken breast--said it nearly nailed the flavor of the traditional variety. Their verdict: They would eat it again.


. . .


The cell-cultured meat startups are a long way from replacing the meat industry's global network of hatcheries, chicken barns, feed mills and processing plants. But they say they're making progress. Memphis Meats estimates its current technology can yield one pound of chicken meat for less than $9,000. That is half of what it cost the company to produce its beef meatball about a year ago. The startups, however, aspire to produce meat that can be cost-competitive with the conventionally raised kind.



For the full story, see:

JACOB BUNGE. "Startup Serves Chicken From the Lab." The Wall Street Journal (Thurs., March 16, 2017): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date March 15, 2017, and has the title "Startup Serves Up Chicken Produced From Cells in Lab.")






May 14, 2017

As Consumers Accept Surge Pricing, More Will Accept Congestion Pricing Too



(p. B2) With remarkable consistency, the research finds the same thing: Whenever a road is built or an older road is widened, more people decide to drive more. Build more or widen further, and even more people decide to drive. Repeat to infinity.

Economists call this latent demand, which is a fancy way of saying there are always more people who want to drive somewhere than there is space for them to do it. So far anyway, nothing cities have done to increase capacity has ever sped things up.

The extent of this failure was chronicled in a 2011 paper called "The Fundamental Law of Road Congestion," by the economists Gilles Duranton, from the Wharton School of the University of Pennsylvania, and Matthew Turner, from Brown University.

The two went beyond road building to show that increases in public transit and changes in land use -- basically, building apartments next to office buildings so that more people can walk or bike to work -- also fail to cut traffic (or do so only a little).

This doesn't mean public transit and land planning are bad ideas, or that widening freeways is a bad idea. When roads are bigger, more people can get around. More people see family; more packages are delivered; more babies are lulled to sleep. It just means that none of those measures have done much to reduce commute times, and self-driving cars seem unlikely to either.

That's where charging people during busy times comes in. "Maybe autonomous cars will be different from other capacity expansions," Mr. Turner said. "But of the things we have observed so far, the only thing that really drives down travel times is pricing."

This is because the average person prefers the privacy and convenience of riding in a car.


. . .


"This idea of congestion pricing is not completely dismissed the way it once was," said Clifford Winston, an economist at the Brookings Institution.

Mr. Winston said the eventual introduction of self-driving cars would probably lessen consumer opposition to paying more to use roads during peak periods. Ride-hailing apps have taught consumers to accept surge pricing, and people are generally less resistant to paying for something new. The result would be something like variably priced lanes dedicated to fleets of robot vehicles.

If that happens, one of the hidden benefits of this revolutionary new technology will be that it got people to accept an idea that economists started talking about at least a century ago. And you get home a half-hour earlier.



For the full story, see:

Conor Dougherty. "A Cure for Traffic Jams." The New York Times (Weds., March 8, 2017): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the story has the title "Self-Driving Cars Can't Cure Traffic, but Economics Can.")






May 11, 2017

Fewer Regulations and Lower Taxes Rouse "Animal Spirits" in Small Businesses



(p. B1) More than any other president since Ronald Reagan, President Trump is moving to strip away regulations and slash taxes, said Jeffrey Korzenik, an investment strategist with Fifth Third, a large regional bank in the Midwest and Southeast. In meetings with clients, Mr. Korzenik has been making the case that these policies will rouse the slumbering animal spirits in businesses across America.

"And now we have seen this huge spike in small-business confidence since the election," Mr. Korzenik said, pointing to a chart. "So I have to ask you: Do you feel more confident now?"

There was a moment of silence, broken only by a howling northwestern Ohio wind that rattled the floor-to-ceiling windows in the bank's boardroom.

Then, with rapid-fire speed, came the responses.

The president of a trucking company spoke of a "tremendous dark cloud" lifting when he realized he would no longer be feeling the burden of rules and regulations imposed by the Obama administration.

The owner of an automotive parts assembler gave thanks that he would not be receiving visits from pesky envi-(p. B3)ronmental and workplace overseers.

And the head of a seating manufacturer expressed hope that, finally, his health care costs would come down when the Affordable Care Act was repealed.

"My gut just feels better," said Bob Fleisher, president of a local car dealership. "With Obama, you felt it was personal -- like he just didn't want you to make money. Now we have a guy who is cutting regulations and taxes. And when I see my taxes going down every quarter -- well, that means I am going to start investing again."


. . .


A heavier regulatory burden and uncertainty born of a weak economic recovery have kept small-business owners from making big bets in investments or hiring.

But in Toledo, this reluctance is changing -- and quickly.

Louis M. Soltis owns a small company that manufactures control panels for large factories and machines. After four years of not adding to his work force of 22, he has seen orders for panels jump in the last two months and is looking to take on as many as six new workers.

There may not be a direct correlation between his surging order book and the new president, but there is no doubting the psychological boost.

"That guy is a junkyard dog, doing his tweets at 3 a.m. and taking on the news media -- I just get strength from him," Mr. Soltis said over a wine-soaked dinner with a large group of his small-business friends and peers from around town. "And I have to say, it makes you feel gutsy -- ready to step up and start investing again."


. . .


Yet there is a downside to animal spirits that persist too long, especially in labor markets, like Toledo's, that are operating on the tight side.

And that is a sharp uptick in inflation.

In his presentation to Fifth Third's banking clients, Mr. Korzenik raised this issue, suggesting that the broader economy was in the "seventh inning" of what has been a pretty long business cycle.


. . .


Still, no one in the room seemed overly concerned. As the group saw it, the party was just beginning.

"Most businesses I know are just taking a deep breath, happy that there is finally someone in the White House who understands what they do," said Mr. Fleisher, the owner of the Lincoln car dealership. "So you say we are in the seventh inning -- well, I am not sure we are."



For the full story, see:

LANDON THOMAS Jr. "Small Businesses' Hopes Are Up." The New York Times (Mon., MARCH 13, 2017): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date MARCH 12, 2017, and has the title "The President Changed. So Has Small Businesses' Confidence.")






May 10, 2017

Restaurants Add Labor Surcharges to Help Pay Minimum Wage Costs



(p. B1) In lieu of steep menu price increases, many independent and regional chain restaurants in states including Arizona, California, Colorado and New York are adding surcharges of 3% to 4% to help offset rising labor costs. Industry analysts expect the practice to become widespread as more cities and states increase minimum wages.

"It's the emerging new norm," said Sharokina Shams, spokeswoman for the California Restaurant Association. She said California restaurants are adding surcharges as the state lifts the minimum wage every year until it reaches $15 an hour by 2023. It is currently at $10.50 an hour for employers with 26 or more workers.


. . .


While adding a surcharge risks turning diners away, some restaurateurs say they want customers to understand the consequences of higher wages on a business with profit margins of generally between 2% and 6%.


. . .


(p. B2) Sami Ladeki added surcharges to the menu at six Sammy's Woodfired Pizza & Grill restaurants in San Diego and eight more across California. He said it was a mistake to call the charge a state mandate, and has changed the wording. But he remains critical of rising minimum wages.

"This is not sustainable," said Mr. Ladeki, who says he makes a profit of around 1% charging $12 to $14 a pizza. "People are not going to pay $15 or $20 for a pizza."


. . .


David Cohn, who owns 15 restaurants in San Diego, including BO-beau, said his 3% surcharge wasn't a stunt.

"We want people to understand there is a cost," Mr. Cohn said. "How do we stay in business with margins shrinking and competition increasing?"



For the full story, see:

JULIE JARGON. "New on Your Dinner Tab: A Labor Surcharge." The Wall Street Journal (Fri., March 10, 2017): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date March 9, 2017.)






May 7, 2017

Entrepreneur Rothblatt Was Highest-Paid Female CEO in 2013



(p. 3) Martine Rothblatt, a serial entrepreneur, has a unique perspective on female 1 percenters. She not only founded Sirius Satellite Radio, but also founded and serves as chief executive of United Therapeutics, a pharmaceuticals company. Ms. Rothblatt was the highest-paid female chief executive in the country in 2013, with compensation of $38 million, yet she does not see her success as a victory for women. She was born as Martin and underwent gender reassignment surgery in 1994.

"I've only been a woman for half of my life, and there's no doubt that I've benefited hugely from being a guy," she told Fortune magazine.

In an interview, Ms. Rothblatt had some surprising suggestions for helping women reach the top. She supports eliminating "say on pay" rules that allow shareholders to vote on executive compensation, and eliminating shareholder advisory groups. "If shareholders do not like the pay a woman is receiving as C.E.O., they should simply sell the stock, and vice versa," she said.



For the full commentary, see:

ROBERT FRANK. "INSIDE WEALTH; Plenty of Billionaires, but Few Are Women." The New York Times, Sunday Business Section (Sun., Jan. 1, 2017): 3.

(Note: the online version of the commentary has the date DEC. 30, 2016, and has the title "INSIDE WEALTH; Why Aren't There More Female Billionaires?")







May 6, 2017

Music Cassettes Still Thrive



(p. D11) . . . thanks to music fans who are rediscovering the format's appeal--whether the ability to craft heartfelt mixtapes or the comfort of having tangible music--cassettes are making a comeback. Sales figures for streaming music and even vinyl may dwarf those of cassettes, but the format still thrives: An estimated 129,000 tapes sold last year, up from 74,000 the year before, according to Nielsen Music.

Blame the resurgence, in part, on Justin Bieber. So says Gigi Johnson, director of UCLA's Center for Music Innovation. When the heartthrob released a cassette version of his Grammy-nominated album "Purpose" in 2016, more than 1,000 copies of the retro iteration sold (a relatively significant sum). The Weeknd's Grammy-winning release "Beauty Behind the Madness" saw similar sales in cassette form, as did over 20 other albums last year, including the "Guardians of the Galaxy" soundtrack and reissues of works by Prince and Eminem.

Although four-digit sales figures might seem paltry, Ms. Johnson deemed 2016 "a breakout year" for cassettes. "You can expect to see many more artists embracing tapes this year and next," she said.


. . .


"I keep waiting for this to be a fad that will fade out," said Ms. Johnson of UCLA. "But we're almost a decade into this and it keeps growing."



For the full story, see:

NATHAN OLIVAREZ-GILES. "GEAR & GADGETS; Can't Stop the Music." The Wall Street Journal (Sat., March 11, 2017): D11.

(Note: ellipses added.)

(Note: the online version of the story has the date March 9, 2017, and has the title "GEAR & GADGETS; Why Cassette Tapes Are Making a Comeback.")






May 5, 2017

Most "Small Firms Do Not Innovate"



(p. A11) The neglect of small businesses stems in part from the sense that they aren't very dynamic--that in contrast with startups, they don't really grow or change from year to year. In a 2011 paper published by the National Bureau of Economic Research, Erik Hurst and Benjamin Wild Pugsley of the University of Chicago found that most of the people running these companies are content to stay small and continue offering the same kinds of products or services as competitors.


"Most firms start small and stay small throughout their entire lifecycle," they write. "Also, most surviving small firms do not innovate along any observable margin."

Profs. Ruback and Yudkoff are challenging that attitude. Their argument is that well-trained and energetic new managers can bring process innovations to these businesses that can fundamentally alter their trajectories. In many cases, the firms purchased by Harvard Business School graduates have begun hiring and growing. The alumni who are running them can make a good living today--and potentially see very good returns in the future, if and when they sell their better-run, more-profitable firm at a premium.



For the full commentary, see:

NITIN NOHRIA. "Appreciating the Big Role of Small Businesses." The Wall Street Journal (Sat., Sept. 3, 2016): A11.

(Note: the online version of the commentary has the date Sept. 2, 2016,)


The published version of the Hurst and Pugsley paper mentioned above, is:

Hurst, Erik, and Benjamin Wild Pugsley. "What Do Small Businesses Do?" Brookings Papers on Economic Activity Issue 2 (Fall 2011): 73-118.







April 26, 2017

Wall Street Needs Return to Partnership Culture



(p. A17) Ever since the crisis of 2008, banks have been subject to ferocious attack and more regulation. In "Why Wall Street Matters," William Cohan, the author of earlier books on Goldman Sachs and Lazard Frères, mounts a defense of Wall Street banking institutions and argues that much of the regulation after 2008 has been counterproductive. In his view, the main culprit in the financial meltdown was Wall Street's compensation culture, and he presents some controversial proposals to reform it.


. . .


So what went wrong? Where did useful innovation morph into lunacy that almost brought down the whole system? The sea change began in 1969, Mr. Cohan says, when the first investment bank (Donaldson, Lufkin & Jenrette) sold equity to the public. Previously investment banks were partnerships whose capital came from the net worth of the individual partners, who would assume only the most modest risk since investment failure might endanger their life savings. But once a firm's capital could be increased by debt and equity financing--in essence, by other people's money--the calculus shifted.


. . .


Mr. Cohan's solution is to replace Wall Street's broken compensation system: the bonus culture that creates incentives to take big bets with other people's money while avoiding accountability when the bets go bad. He says that we need to "return to a compensation system that more closely resembles that of the partnership culture" of earlier times. Going well beyond calls for a claw-back of bonuses when trouble hits, Mr. Cohan proposes that the leaders of Wall Street firms be required to put their entire net worth on the line. Their co-op apartments, houses in the Hamptons, art collections and bank accounts would all be "fodder for the bank's creditors" if something goes wrong.



For the full review, see:

Burton G. Malkiel . "BOOKSHELF; Big Bonus, Big Problem; Dodd-Frank and the Volcker Rule address the wrong problems and did nothing to fix Wall Street's broken compensation culture." The Wall Street Journal (Weds., March 1, 2017): A17.

(Note: ellipses added.)

(Note: the online version of the review has the date Feb, 28, 2017.)


The book under review, is:

Cohan, William D. Why Wall Street Matters. New York: Random House, 2017.







April 25, 2017

Increasing Number of Free Agent Entrepreneurs



(p. A3) A tiny segment of U.S. manufacturing appears to be thriving--the one with no employees.

A mix of technology, economic necessity and adventure is leading more Americans to found companies that plan to stay very small. That entrepreneurial spark also highlights challenges facing the economy, from difficulty re-entering the job market to the diminishing role of fast-growing young firms.

Nicholas Hollows wants to be his own boss, and not anyone else's.

"I definitely don't intend to switch my role from a person who makes things to a person who manages people," said the 32-year-old sole proprietor of Hollows Leather in Eugene, Ore. "Being hands-on is the whole reason I do this."

The number of businesses classified as manufacturers with no employees has been rising steadily since the depths of the recession. The tiny operations often make food, craft beer, toiletries or other niche products. Their growth stands out in a sector that has been shedding workers for decades.

U.S. food manufacturers with no employee but the owner nearly doubled from 2004 to 2014. One-worker beverage and tobacco makers expanded 150%. Such chemical manufacturers--a category that includes makers of soap and perfume--grew almost 70%.

In all, there were more than 350,000 manufacturing establishments with no employee other than the owner in 2014, up almost 17% from 2004, according to the most recent Commerce Department data. By comparison, there were 292,543 establishments with other employees, down 12%. The shift creates a challenge for building back the number of jobs in the U.S. manufacturing sector.



For the full story, see:

Sparshott, Jeffrey. "Tiny Firms Stay That Way." The Wall Street Journal (Thurs., Dec. 29, 2016): A3.

(Note: the online version of the story has the date Dec. 28, 2016, and has the title "Big Growth in Tiny Businesses.")






April 24, 2017

Kenneth Arrow Had Broad Knowledge Beyond Economics



(p. A21) Professor Arrow was widely hailed as a polymath, possessing prodigious knowledge of subjects far removed from economics. Eric Maskin, a Harvard economist and fellow Nobel winner, told of a good-natured conspiracy waged by junior faculty to get the better of Professor Arrow, even if artificially. They all agreed to study the breeding habits of gray whales -- a suitably abstruse topic -- and gathered at an appointed date at a place where Professor Arrow would be sure to visit.

When, as expected, he showed up, they were talking out loud about the theory by a marine biologist -- last name, Turner -- which purported to explain how gray whales found the same breeding spot year after year. As Professor Maskin recounted the story, "Ken was silent," and his junior colleagues amused themselves that they had for once bested their formidable professor.

Well, not so fast.

Before leaving, Professor Arrow muttered, "But I thought that Turner's theory was entirely discredited by Spencer, who showed that the hypothesized homing mechanism couldn't possibly work."



For the full obituary, see:

MICHAEL M. WEINSTEIN. "Kenneth Arrow, Influential Economist and Nobel Laureate, Is Dead at 95." The New York Times (Weds., FEB. 22, 2017): A21.

(Note: the online version of the obituary has the date FEB. 21, 2017, and has the title "Kenneth Arrow, Nobel-Winning Economist Whose Influence Spanned Decades, Dies at 95.")






April 22, 2017

Entrepreneur Marconi Was Driven by Wireless Communication Project



(p. C5) Marconi is another example of the Victorian "self-made man," in this case a precocious youth fascinated by electricity and electrical wave pulses.


. . .


Sending the letter "S" in Morse code to his assistant, Mignani, on the far side of the meadow several hundred yards away was great, but not enough. What if, instead, Mignani took the receiver to the other side of the hill, out of sight of the house, and then fired a gunshot if the pulses got through? "I called my mother into the room to watch the momentous experiment. . . . I waited to give Mignani time to get to his place. Then breathlessly I tapped the key three times. . . . Then from the other side of the hill came the sound of a shot. . . . That was the moment when wireless was born."


. . .


A combination of technological insight, organizational skill and business acumen gave him, like Steve Jobs in the next century, his place in history. To the end of his life Marconi was driven by a vision of the whole world communicating through wireless waves in the air.


. . .


. . ., Mr. Raboy exhaustively if deftly tells the tale of the next few critical years: Marconi's long stay in England, the search for funding (without losing control), the critical establishment of patents, the embrace by officials in the British Post Office and Royal Navy, the ship-to-shore and ship-to-ship wireless transmissions. There's a fine chapter on the critical long-range, trans-Atlantic experiments in 1901. These were conducted in wintry, gusty Newfoundland, whose supportive provincial government grasped almost immediately what Marconi offered: instant and vastly less expensive communication to Canada, Boston and New York and, above all, to Britain and its empire. Little wonder that such powerful entities as the (state-subsidized) Anglo-American Telegraph Co. were alarmed at this interloper. . . .

In 1909, at the age of 35, the Italian entrepreneur would stand up proudly to receive the Nobel Prize in physics.



For the full review, see:

PAUL KENNEDY. "When the World Took to the Air; Like Steve Jobs, Marconi combined technological insight, organizational skill and business acumen." The Wall Street Journal (Sat., Sept. 10, 2016): C5-C6.

(Note: ellipses internal to second quoted paragraph, in original; other ellipses, added.)

(Note: the online version of the review has the date Sept. 9, 2016, an has the title "The World's First Communications Giant; Like Steve Jobs, Marconi combined technological insight, organizational skill and business acumen.")


The book under review, is:

Raboy, Marc. Marconi: The Man Who Networked the World. New York: Oxford University Press, 2016.






April 21, 2017

Unemployment Was Lower When Fed Stuck to Taylor Rule



(p. A17) . . . in a recent empirical study, Alex Nikolsko-Rzhevskyy of Lehigh University and David Papell and Ruxandra Prodan of the University of Houston divided U.S. history into periods, like the 1980s and '90s, where Fed policy basically adhered to the Taylor rule and periods, like the past dozen years, where it did not. Unemployment was 1.4 percentage points lower on average in the Taylor rule periods, and it reached devastating highs of 10% or more in the non-Taylor rule periods.


. . .


Moreover, Fed calculations that only look at macroeconomic effects of low rates overlook their negative microeconomic effects on bank lending found by economists Charles Calomiris of Columbia University and David Malpass of Encima Global.



For the full commentary, see:

JOHN B. TAYLOR. "The Case for a Rules-Based Fed; Neel Kashkari is wrong. My proposed rules-based reform of the Fed would not be run by a computer." The Wall Street Journal (Weds., Dec. 21, 2016): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Dec. 20, 2016.)


The paper mentioned above, that shows the good results when the Fed followed policies close to the Taylor rule, is:

Nikolsko-Rzhevskyy, Alex, David H. Papell, and Ruxandra Prodan. "Deviations from Rules-Based Policy and Their Effects." Journal of Economic Dynamics and Control 49 (Dec. 2014): 4-17.






April 20, 2017

"Thank You, Industrialization" (Thank YOU, Hans Rosling)






The TED talk embedded above, is one of my favorites. I sometimes show an abbreviated version to my Economics of Technology seminar.



(p. B8) Hans Rosling, a Swedish doctor who transformed himself into a pop-star statistician by converting dry numbers into dynamic graphics that challenged preconceptions about global health and gloomy prospects for population growth, died on Tuesday in Uppsala, Sweden. He was 68.

The cause was pancreatic cancer, according to Gapminder, a foundation he established to generate and disseminate demystified data using images.


. . .


Brandishing his bubble chart graphics during TED (Technology, Entertainment and Design) Talks, Dr. Rosling often capsulized the macroeconomics of energy and the environment in a favorite anecdote about the day a washing machine was delivered to his family's cold-water flat.

"My mother explained the magic with this machine the very, very first day," he recalled. "She said: 'Now Hans, we have loaded the laundry. The machine will make the work. And now we can go to the library.' Because this is the magic: You load the laundry, and what do you get out of the machine? You get books out of the machines, children's books. And Mother got time to read to me."

"Thank you, industrialization," Dr. Rosling said. "Thank you, steel mill. And thank you, chemical processing industry that gave us time to read books."



For the full obituary, see:

SAM ROBERTS. "Hans Rosling, Swedish Doctor, Teacher and Pop-Star Statistician, Dies at 68." The New York Times (Fri., FEB. 10, 2017): B8.

(Note: ellipses added.)

(Note: the online version of the obituary has the date FEB. 9, 2017, and has the title "Hans Rosling, Swedish Doctor and Pop-Star Statistician, Dies at 68.")






April 19, 2017

Privatized Airports Are Better Managed



(p. A15) The highest-ranked American airport on the list of the world's top 100, as determined by the Passengers Choice Awards, is Denver--at 28. Atlanta comes in at 43, Dallas at 58, Los Angeles at 91.

Why do American passengers pay so much to get so little? Because their airports, by global standards, are terribly managed.

Cities from London to Buenos Aires have sold or leased their airports to private companies. To make a profit, these firms must hold down costs while enticing customers with lots of flights, competitive fares and appealing terminals. The firm that manages London's Heathrow, currently eighth in the international ranking, was so intent on attracting passengers that it built a nonstop express train to the city's center. It's also seeking to add another runway, as is the rival firm running Gatwick Airport.

American airports are typically run by politicians in conjunction with the dominant airlines, which help finance the terminals in return for long-term leases on gates and facilities. The airlines use their control to keep out competitors; the politicians use their share of the revenue to reward unionized airport workers. No one puts the passenger first.



For the full commentary, see:

JOHN TIERNEY. "'Third World' U.S. Airports? That Insults the Third World; Private managers make terminals sparkle and hum the world over. Here we're stuck with LaGuardia." The Wall Street Journal (Sat., Jan. 21, 2017): A15.

(Note: the online version of the commentary has the date Jan. 23 [sic], 2017.)






April 18, 2017

We Want Meaningful Work



(p. 1) HOW satisfied are we with our jobs?

Gallup regularly polls workers around the world to find out. Its survey last year found that almost 90 percent of workers were either "not engaged" with or "actively disengaged" from their jobs. Think about that: Nine out of 10 workers spend half their waking lives doing things they don't really want to do in places they don't particularly want to be.

Why? One possibility is that it's just human nature to dislike work. This was the view of Adam Smith, the father of industrial capitalism, who felt that people were naturally lazy and would work only for pay. "It is the interest of every man," he wrote in 1776 in "The Wealth of Nations," "to live as much at his ease as he can."

This idea has been enormously influential. About a century later, it helped shape the scientific management movement, which created systems of manufacture that minimized the need for skill and close attention -- things that lazy, pay-driven workers could not be expected to have.

Today, in factories, offices and other workplaces, the details may be different but the overall situation is the same: Work is structured on the assumption that we do it only because we have to. The call center employee is monitored to ensure that he ends each call quickly. The office worker's keystrokes are overseen to guarantee productivity.


. . .


(p. 4) To start with, I don't think most people recognize themselves in Adam Smith's description of wage-driven idlers. Of course, we care about our wages, and we wouldn't work without them. But we care about more than money. We want work that is challenging and engaging, that enables us to exercise some discretion and control over what we do, and that provides us opportunities to learn and grow. We want to work with colleagues we respect and with supervisors who respect us. Most of all, we want work that is meaningful -- that makes a difference to other people and thus ennobles us in at least some small way.


. . .


You enter an occupation with a variety of aspirations aside from receiving your pay. But then you discover that your work is structured so that most of those aspirations will be unmet. Maybe you're a call center employee who wants to help customers solve their problems -- but you find out that all that matters is how quickly you terminate each call. Or you're a teacher who wants to educate kids -- but you discover that only their test scores matter. Or you're a corporate lawyer who wants to serve his client with care and professionalism -- but you learn that racking up billable hours is all that really counts.

Pretty soon, you lose your lofty aspirations. And over time, later generations don't even develop the lofty aspirations in the first place. Compensation becomes the measure of all that is possible from work. When employees negotiate, they negotiate for improved compensation, since nothing else is on the table. And when this goes on long enough, we become just the kind of creatures that Adam Smith thought we always were.



For the full commentary, see:


BARRY SCHWARTZ. "Rethinking Work." The New York Times, SundayReview Section (Sun., AUG. 30, 2015): 1 & 4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date AUG. 28, 2015,)


The commentary is related to Schwartz's book:

Schwartz, Barry. Why We Work, Ted Books. New York: Simon & Schuster, 2015.






April 17, 2017

G.D.P. May Understate Growth by 2% or More



(p. B1) As the economy has shifted from one that primarily produced things -- refrigerators and cars, guns and shoes -- to one that now deals largely in services and information, economists have grown more and more skeptical that the traditional measure of gross domestic product -- the nation's total output -- is accurately capturing much of the economy's innovation and improvements.

"I think the official data on real growth substantially underestimates the rate of growth," said Martin Feldstein, an economist at Harvard.


. . .


(p. B2) Mr. Feldstein likes to illustrate his argument about G.D.P. by referring to the widespread use of statins, the cholesterol drugs that have reduced deaths from heart attacks. Between 2000 and 2007, he noted, the death rate from heart disease among those over 65 fell by one-third.

"This was a remarkable contribution to the public's well-being over a relatively short number of years, and yet this part of the contribution of the new product is not reflected in real output or real growth of G.D.P.," he said. He estimates -- without hard evidence, he is careful to point out -- that growth is understated by 2 percent or more a year.


. . .


For Mr. Feldstein, it is misleading measurements that are contributing to a public perception that real incomes -- particularly for the middle class -- aren't rising very much. That, he said, "reduces people's faith in the political and economic system."

"I think it creates pessimism and a distrust of government," leading Americans to worry that "their children are going to be stuck and won't be able to enjoy upward mobility," he said. "I think it's important to understand this."



For the full story, see:

PATRICIA COHEN. "Is the Slogging Economy Blazing? Growth Our Old Gauge Can't See." The New York Times (Tues., FEB. 7, 2017): B1-B2.

(Note: ellipses added.)

(Note: the online version of the article has the date FEB. 6, 2017, and has the title "The Economic Growth That Experts Can't Count.")






April 15, 2017

"More Women in Their 60s and 70s" Work in Fulfilling Jobs



(p. 1) Kay Abramowitz has been working, with a few breaks, since she was 14. Now 76, she is a partner in a law firm in Portland, Ore. -- with no intention of stopping anytime soon. "Retirement or death is always on the horizon, but I have no plans," she said. "I'm actually having way too much fun."

The arc of women's working lives is changing -- reaching higher levels when they're younger and stretching out much longer -- according to two new analyses of census, earnings and retirement data that provide the most comprehensive look yet at women's career paths.


. . .


Most striking, women have become significantly more likely to work into their 60s and even 70s, often full time, according to the analyses. And many of these women report that they do it because they enjoy it.


. . .


Nearly 30 percent of women 65 to 69 are working, up from 15 percent in the late 1980s, one of the analyses, by the Harvard economists Claudia Goldin and Lawrence Katz, found. Eighteen per-(p. 4)cent of women 70 to 74 work, up from 8 percent.


. . .


Of those still working, Ms. Goldin said, "They're in occupations in which they really have an identity." She added, "Women have more education, they're in jobs that are more fulfilling, and they stay with them." (Ms. Goldin happens to be an example of the phenomenon, as a 70-year-old professor and researcher.)



For the full story, see:

Claire Cain Miller. "With More Women Fulfilled by Work, Retirement Has to Wait." The New York Times, First Section (Sun., FEB. 12, 2017): 1 & 4.

(Note: ellipses added.)

(Note: the online version of the article has the date FEB. 11, 2017, and has the title "More Women in Their 60s and 70s Are Having 'Way Too Much Fun' to Retire.")


The paper by Goldin and Katz, mentioned above, is:

Goldin, Claudia, and Lawrence F. Katz. "Women Working Longer: Facts and Some Explanations." NBER Working Paper #22607. National Bureau of Economic Research, Inc., Sept. 2016.






April 9, 2017

Government Threw the Party; Taxpayers Pay the Bill



(p. A1) RIO DE JANEIRO -- It is not uncommon for the Olympics to leave behind some unneeded facilities. Rio, however, is experiencing something exceptional: Less than six months after the Summer Games ended, the host city's Olympic legacy is decaying rapidly.


. . .


"The government put sugar in our mouths and took it out before we could swallow," Luciana Oliveira Pimentel, a social worker from Deodoro, said as her children played in a plastic pool. "Once the Olympics ended, they turned their backs on us."

Olympic officials and local organizers often boast about the legacy of the Games -- the residual benefits that a city and country will experience long after the competitions end. Those projections are often met with skepticism by the public and by independent economists, who argue that Olympic bids are built on wasted public money. Rio has quickly become the latest, and perhaps the most striking, case of (p. A8) unfulfilled promises and abandonment.

"It's totally deserted," said Vera Hickmann, 42, who was at the Olympic Park recently with her family. She lamented that although the area was open to the public, it lacked basic services.

"I had to bring my son over to the plants to go to the bathroom," she said.

At the athletes' village, across the street from the park, the 31 towers were supposed to be sold as luxury condominiums after the Games, but fewer than 10 percent of the units have been sold. Across town at Maracanã Stadium, a soccer temple, the field is brown, and the electricity has been shut off.

"The government didn't have money to throw a party like that, and we're the ones who have to sacrifice," Ms. Hickmann said, referring to local taxpayers.



For the full story, see:

ANNA JEAN KAISER. "Legacy of Rio Olympics So Far Is Series of Unkept Promises." The New York Times (Thurs., FEB. 16, 2017): A1 & A8.

(Note: ellipsis added.)

(Note: the online version of the story has the date FEB. 15, 2017.)






April 7, 2017

Public Policies Choke Off Entrepreneurial Opportunities




George McGovern was the Democratic candidate for President of the United States in 1972. He was a fervent advocate for expansion of the federal government.



(p. A12) We intuitively know that to create job opportunities we need entrepreneurs who will risk their capital against an expected payoff. Too often, however, public policy does not consider whether we are choking off those opportunities.

My own business perspective has been limited to that small hotel and restaurant in Stratford, Conn., with an especially difficult lease and a severe recession. But my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never have doubted the worthiness of any of these goals, the concept that most often eludes legislators is: "Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape." It is a simple concern that is nonetheless often ignored by legislators.

For example, the papers today are filled with stories about businesses dropping health coverage for employees. We provided a substantial package for our staff at the Stratford Inn. However, were we operating today, those costs would exceed $150,000 a year for health care on top of salaries and other benefits. There would have been no reasonable way for us to absorb or pass on these costs.

Some of the escalation in the cost of health care is attributed to patients suing doctors. While one cannot assess the merit of all these claims, I've also witnessed firsthand the explosion in blame-shifting and scapegoating for every negative experience in life.

Today, despite bankruptcy, we are still dealing with litigation from individuals who fell in or near our restaurant. Despite these injuries, not every misstep is the fault of someone else. Not every such incident should be viewed as a lawsuit instead of an unfortunate accident. And while the business owner may prevail in the end, the endless exposure to frivolous claims and high legal fees is frightening.



For the full commentary, see:

McGovern, George. "Manager's Journal: A Politician's Dream Is a Businessman's Nightmare." The Wall Street Journal (Mon., June 1, 1992): A12.






April 6, 2017

Mokyr Credits the Great Enrichment to a Culture That Values Scientific Inquiry



(p. A13) Life is "solitary, poor, nasty, brutish and short" Thomas Hobbes proclaimed in 1651, and it had been that way ever since humans had inhabited the Earth. At the time Hobbes wrote those words, life expectancy averaged about 30 years old in his native England and income per person typically was around $5 a day (in 2016 dollars). Thanks to the Industrial Revolution and the Great Enrichment that followed, the typical subject of Queen Elizabeth II lives to almost 80 and has an income of over $100 a day. Perhaps more impressively, most people in the world today face the prospect of living at least that well within a generation or two.

What brought about the Great Enrichment? And why did it all start in England? Joel Mokyr, in his fine book, attributes it to the unique and productive culture that evolved there. It was a culture that welcomed change and favored scientific inquiry that spurred radical technological improvements.


. . .


According to Mr. Mokyr, three factors led to the ultimate triumph of the new modern search for scientific truth over the largely inaccurate "science" of the ancients. First, Europe's fractured political environment was a blessing: Scientists who were banned or ostracized in one political jurisdiction fled to other locales more tolerant of their views. The controversial Franciscan monk, Bernardino Ochino (1487-1564), for example, was often in trouble and moving to evade authorities, leading him to flee from Italy to Switzerland and later, England, Poland and Moravia. Second, the invention of Gutenberg's printing press around 1440 enormously lowered the cost of widely disseminating knowledge over large areas. Third, an extraordinary intellectual community evolved--Voltaire and others called the Republic of Letters--that made the dissemination of new information (through letters to fellow scientists) obligatory for anyone who wanted to gain respect in the growing international community of scientists.



For the full review, see:

RICHARD VEDDER. "BOOKSHELF; The Genesis of Prosperity; What brought about the Great Enrichment? And why did it start in England? It had a culture that embraced change and scientific inquiry." The Wall Street Journal (Fri., Nov. 11, 2016): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date Nov. 10, 2016.)


The book under review, is:

Mokyr, Joel. A Culture of Growth: The Origins of the Modern Economy, Graz Schumpeter Lectures. New Haven, CT: Princeton University Press, 2016..






April 5, 2017

"Tax and Regulatory Policies" Influence Intel to Build Arizona Chip Plant



(p. B1) SAN FRANCISCO -- Intel, the world's largest computer chip manufacturer, will invest $7 billion to finish a factory in Arizona, adding 3,000 jobs, the company's chief executive said on Wednesday after meeting with President Trump at the White House.

The completion of the factory, which will complement two other Intel semiconductor plants in Chandler, Ariz., had been under consideration for several years.

Standing beside Mr. Trump in the Oval Office, Brian Krzanich, Intel's chief executive, said the company had decided to proceed now because of "the tax and regulatory policies we see the administration pushing forward."



For the full story, see:

VINDU GOEL. "Intel Will Invest $7 Billion in Chip Plant in Arizona." The New York Times (Thurs., FEB. 9, 2017): B1-B2.

(Note: the online version of the story has the date FEB. 8, 2017, and has the title "Intel, in Show of Support for Trump, Announces Factory in Arizona.")






April 4, 2017

IBM Advance May Help Sustain Moore's Law



(p. B3) In the semiconductor business, it is called the "red brick wall" -- the limit of the industry's ability to shrink transistors beyond a certain size.

On Thursday, however, IBM scientists reported that they now believe they see a path around the wall. Writing in the journal Science, a team at the company's Thomas J. Watson Research Center said it has found a new way to make transistors from parallel rows of carbon nanotubes.

The advance is based on a new way to connect ultrathin metal wires to the nanotubes that will make it possible to continue shrinking the width of the wires without increasing electrical resistance.

One of the principal challenges facing chip makers is that resistance and heat increase as wires become smaller, and that limits the speed of chips, which contain transistors.

The advance would make it possible, probably sometime after the beginning of the next decade, to shrink the contact point between the two materials to just 40 atoms in width, the researchers said. Three years later, the number will shrink to just 28 atoms, they predicted.


. . .


. . . , during the last decade, the pace and power of semiconductor technology has begun to slow. The switching speed of computer chips stopped increasing because heat created by ultrafast processors was rising to the point where the chips would break.

More recently, for most of the industry, the cost of transistors has ceased to decline with each new generation. This has undercut the tremendous power of the technology to create new markets. And this year, Intel announced that the challenges and costs of bringing a new generation of technology to market had forced it to slow the every-two-year pace it had been on for more than a decade.

Now the industry has a new reason for optimism.



For the full story, see:

JOHN MARKOFF. "IBM Scientists Find New Way to Shrink Transistors (Measuring in Atoms)." The New York Times (Fri., OCT. 2, 2015): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date OCT. 1, 2015, and has the title "IBM Scientists Find New Way to Shrink Transistors.")


The IBM advance is documented in:

Cao, Qing, Shu-Jen Han, Jerry Tersoff, Aaron D. Franklin, Yu Zhu, Zhen Zhang, George S. Tulevski, Jianshi Tang, and Wilfried Haensch. "End-Bonded Contacts for Carbon Nanotube Transistors with Low, Size-Independent Resistance." Science 350, no. 6256 (Oct. 2, 2015): 68-72.






April 3, 2017

Government Job Certification Boards Reduce Opportunities for Former Prisoners



(p. A21) . . . while there's been a rightful focus on ending mass incarceration, there has been little public discussion of how we reintegrate this growing population.


. . .


. . . , we should remove unfair barriers to employment. Many jobs now require professional certification, like being a barber in Connecticut or a truck driver in Texas, and state certification boards often bar former prisoners. We should eliminate those blanket prohibitions.



For the full commentary, see:

ROBERT E. RUBIN. "How to Help Former Inmates Thrive." The New York Times (Mon., JUNE 3, 2016): A21.

(Note: ellipses added.)

(Note: the online version of the commentary has the title "The Smart Way to Help Ex-Convicts, and Society.")






April 1, 2017

Chinese Economic Stimulus Creates Egg Bubble



(p. A1) HONG KONG -- China is pouring hundreds of billions of dollars into its economy in a new effort to support growth. Some of it is going into roads and bridges and other big projects that will keep the economy humming.

And some of it is going into eggs.

China's latest lending deluge has sent money sloshing into unexpected parts of the economy. That includes a financial market in Dalian where investors can place bets on the future productivity of the country's hens.

Egg futures have surged by as much as one-third since March, the sort of move that would be justified if investors believed China's chicken flocks were headed for an unfortunate fate.

But the market's usual participants say the flocks are fine. In fact, the actual price of eggs in the country's markets has fallen from a year ago, according to government statistics.

The reason for the unusual jump in egg futures, they say, is China's tendency to experience investment bubbles when the government steps up spending and lending. China's previous efforts to bolster growth unexpectedly sent money into real estate and the stock market -- markets that had unexplained rises followed by striking drops.



For the full story, see:

NEIL GOUGH. "China's Flood of Cash Roils Egg Futures." The New York Times (Mon., MAY 2, 2016): A1 & B2 [sic].

(Note: ellipsis added.)

(Note: the online version of the story has the date MAY 1, 2016, and has the title "China Lending Inflates Real Estate, Stocks, Even Egg Futures.")






March 30, 2017

Economic Growth Depends Mainly on Micro Policies and Serendipity



(p. A2) In the long run, . . . , potential growth is a job for microeconomic, not macroeconomic, policy. It requires countless, painstaking fixes: raising labor-force participation with training and safety-net programs that don't discourage work; investment-friendly tax and regulatory policies to incentivize investments that take years to pay off, if ever; and trade deals that let firms market their products to the entire world. It will also take some serendipity as firms keep hunting for the next miracle technology. No one foresaw how the information revolution would revitalize productivity in the 1990s, and the next such breakthrough will probably surprise us as well.


For the full story, see:

GREG IP. "CAPITAL ACCOUNT; Rewriting Recent Economic History." The Wall Street Journal (Mon., June 2, 2016): A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 1, 2016, and has the title "CAPITAL ACCOUNT; Post-Recession Rethink: Growth Potential Dimmed Before Downturn.")






March 26, 2017

Musk Unveils Bold Private Enterprise Plan to Colonize Mars



(p. B3) Entrepreneur Elon Musk unveiled his contrarian vision for sending humans to Mars in roughly the next decade, and ultimately setting up colonies there, relying on bold moves by private enterprise, instead of more-gradual steps previously proposed by Washington.

Mr. Musk--who in 14 years transformed his closely held rocket company, Space Exploration Technologies Corp., into a global presence--envisions hosts of giant, reusable rockets standing more than 300 feet tall eventually launching fleets of carbon-fiber spacecraft into orbit.

The boosters would return to Earth, blast off again into the heavens with "tanker" spaceships capable of refueling the initial vehicles, and then send those serviced spacecraft on their way to the Red Planet. The rockets would be twice as powerful as the Saturn 5 boosters that sent U.S. astronauts to the Moon. Each fully developed spacecraft likely would carry between 100 and 200 passengers, Mr. Musk said.



For the full story, see:

ANDY PASZTOR. "Musk Offers Vision of Mars Flights." The Wall Street Journal (Weds., Sept. 28, 2016): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Sept. 27, 2016, and has the title "Elon Musk Outlines Plans for Missions to Mars.")






March 22, 2017

Blockchain Is a Process Innovation That Will Make Financial Records More Reliable and Easier to Access



(p. A13) Until the mid-1990s, the internet was little more than an arcane set of technical standards used by academics. Few predicted the profound effect it would have on society. Today, blockchain--the technology behind the digital currency bitcoin--might seem like a trinket for computer geeks. But once widely adopted, it will transform the world.

Blockchain offers a way to track items or transactions using a shared digital "ledger." Blocks of new transactions are added at the end of the chain, and encryption ensures that it remains unbroken--tamper-proof and error-free. This is significantly more efficient than the current methods for logging and sharing such information.

Consider the process of buying a house, a complex transaction involving banks, attorneys, title companies, insurers, regulators, tax agencies and inspectors. They all maintain separate records, and it's costly to verify and record each step. That's why the average closing takes roughly 50 days. Blockchain offers a solution: a trusted, immutable digital ledger, visible to all participants, that shows every element of the transaction.



For the full commentary, see:

GINNI ROMETTY. "How Blockchain Will Change Your Life." The Wall Street Journal (Tues., Nov. 8, 2016): A13.

(Note: the online version of the commentary has the date Nov. 7, 2016, and has the title "KEYWORDS; Is Engine of Innovation in Danger of Stalling?")






March 18, 2017

Coastal Damage Caused by Storm Surges at High Tide, Not by Tiny Rise in Sea Levels



(p. A11) When Teddy Roosevelt built his Sagamore Hill on Long Island, he did so a quarter mile from shore at an elevation of 115 feet not because he disdained proximity to the beach or was precociously worried about climate change. The federal government did not stand ready with taxpayer money to defray his risk.

Estimates vary, but sea levels may have risen two millimeters a year over the past century. Meanwhile, tidal cycles along the U.S. east coast range from 11 feet every day (in Boston) to two feet (parts of Florida).

On top of this, a "notable surge event" can produce a storm surge of seven to 23 feet, according to a federal list of 10 hurricanes over the past 70 years.

We should not exaggerate the degree to which homeowners are being asked to shoulder their own risks. Washington is doling out five-figure checks to Jersey homeowners to raise houses on pilings to reduce the federal government's future rebuilding costs. But, to state the obvious, normal tidal variation plus storm surge is the danger to coastal property. Background sea-level rise is a non-factor. A FEMA study from several years ago found that fully a quarter of coastal dwellings are liable to be destroyed over a 50-year period.

Though it pleased New York Gov. Andrew Cuomo to pretend Superstorm Sandy in 2012 was caused by global warming, the storm wasn't even a hurricane by the time it hit shore--it just happened to hit at peak tide. Sure, certain people in Florida and elsewhere like to conflate the two. It's in their interests to do so.



For the full commentary, see:

HOLMAN W. JENKINS, JR. "Shoreline Gentry Are Fake Climate Victims." The Wall Street Journal (Sat., Nov. 26, 2016): A11.






March 17, 2017

"We Shall Increasingly Have the Power to Make Life Good"



(p. B13) Derek Parfit, a British philosopher whose writing on personal identity, the nature of reasons and the objectivity of morality re-established ethics as a central concern for contemporary thinkers and set the terms for philosophic inquiry, died on Monday at his home in London.


. . .


The two volumes of "On What Matters," published in 2011, dealt with the theory of reasons and morality, arguing for the existence of objective truth in ethics.


. . .


"With no other philosopher have I had such a clear sense of someone who had already thought of every objection I could make, of the best replies to them, of further objections that I might then make, and of replies to them too," the philosopher Peter Singer wrote recently on the philosophy website Daily Nous.


. . .


In February [2017], Oxford University Press plans to publish a third volume of "On What Matters." It consists in part of responses to criticism of his work by leading philosophers, which will appear in a companion volume, edited by Mr. Singer, titled "Does Anything Really Matter?"


. . .


On Daily Nous, Mr. Singer offered a snippet from Mr. Parfit's new work:

"Life can be wonderful as well as terrible, and we shall increasingly have the power to make life good. Since human history may be only just beginning, we can expect that future humans, or supra-humans, may achieve some great goods that we cannot now even imagine.

"In Nietzsche's words, there has never been such a new dawn and clear horizon, and such an open sea."



For the full obituary, see:

WILLIAM GRIMES. "Derek Parfit, 74, Philosopher Who Explored Identity." The New York Times (Thurs., JAN. 5, 2017): B13.

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

(Note: the online version of the obituary has the date JAN. 4, 2017, and has the title "Derek Parfit, Philosopher Who Explored Identity and Moral Choice, Dies at 74.")


The book by Parfit quoted above, is:

Parfit, Derek. On What Matters: Volume Three. Oxford, UK: Oxford University Press, forthcoming 2017.






March 15, 2017

Decrease in Number of Tech Startups Results in Less Job Creation



(p. A10) Since 2002, the number of technology startups has slowed, hurting job creation. In a 2014 study, economists Javier Miranda, John Haltiwanger and Ian Hathaway said the growth of tech startups accelerated to 113,000 in 2001 from 64,000 in 1992.

That number slumped to 79,000 in 2011 and hasn't recovered, according to the economists' calculations using updated data. The causes include global competition and increased domestic regulation, says Mr. Haltiwanger, an economics professor at the University of Maryland.



For the full story, see:

Jon Hilsenrath and Bob Davis. "'America's Dazzling Tech Boom Has a Downside: Not Enough Jobs." The Wall Street Journal (Thurs., Oct. 13, 2016): A1 & A10.

(Note: the online version of the story has the date Oct. 12, 2016, and has the title "'America's Dazzling Tech Boom Has a Downside: Not Enough Jobs.")


The Haltiwanger paper mentioned above, is:

Haltiwanger, John, Ian Hathaway, and Javier Miranda. "Declining Business Dynamism in the U.S. High-Technology Sector." Feb. 2014.






March 13, 2017

Automation Raises Productivity, Consumer Spending, and Creates New Jobs



(p. B1) Since the 1970s, when automated teller machines arrived, the number of bank tellers in America has more than doubled. James Bessen, an economist who teaches at Boston University School of Law, points to that seeming paradox amid new concerns that automation is "stealing" human jobs. To the contrary, he says, jobs and automation often grow hand in hand.

Sometimes, of course, machines really do replace humans, as in agriculture and manufacturing, says Massachusetts Institute of Technology labor economist David Autor in a succinct and illuminating TED talk, which could have served as the headline for this column. Across an entire economy, however, Dr. Autor says that's never happened.


. . .


(p. B4) . . . a long trail of empirical evidence shows that the increased productivity brought about by automation and invention ultimately leads to more wealth, cheaper goods, increased consumer spending power and ultimately, more jobs.

In the case of bank tellers, the spread of ATMs meant bank branches could be smaller, and therefore, cheaper. Banks opened more branches, and in total employed more tellers, Mr. Bessen says.



For the full commentary, see:

CHRISTOPHER MIMS. "KEYWORDS; Automation Actually Can Lead to More Job Creation." The Wall Street Journal (Mon., Dec. 12, 2016): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Dec. 11, 2016, and has the title "KEYWORDS; Automation Can Actually Create More Jobs.")


Bessen more fully presents his ATM example in his book:

Bessen, James. Learning by Doing: The Real Connection between Innovation, Wages, and Wealth. New Haven, CT: Yale University Press, 2015.







March 12, 2017

Flaws in Early Tech, Solved by Later and Better Tech



(p. A2) Mr. Mokyr says innovators gravitate to society's greatest needs. In previous eras, it was cheap and rapid transport, reliable energy, and basic health care. Today, seven of the top 10 problems he says are most in need of innovative solutions are instances of bite-back. They include global warming, antibiotic resistance, obesity and information overload. Fixing these problems may weigh heavily on growth. Yet Mr. Mokyr argues past productivity was overstated because it didn't include those costs.

Nonetheless, he's an optimist. For every unintended consequence one innovation brings, another innovation will find the answer. Fluoridation cured tooth decay, and automotive engineers found alternatives to leaded gasoline. And distracted driving? Driverless cars may take care of that plague before long.



For the full commentary, see:

GREG IP. "CAPITAL ACCOUNT; When Tech Bites Back: The Cost of Innovation." The New York Times (Thurs., Oct. 20, 2016): A2.

(Note: the online version of the commentaty has the date Oct. 19, 2016, and has the title "CAPITAL ACCOUNT; When Tech Bites Back: Innovation's Dark Side.")






March 11, 2017

Venture Capitalists Expect Future Successful Entrepreneurs to Look Like Recent Successful Entrepreneurs



(p. 4) In recent months, the fund-raising atmosphere has cooled as venture capitalists react to the poor stock market performance of some public tech companies and question whether the recent fast pace of investment is sustainable. Venture capitalists are making fewer investments at lower valuations.

"There is this delusion that it's easy to raise money in Silicon Valley," said Sam Altman, president of Y Combinator, a mentorship and investment program for start-ups. "Raising money is incredibly hard."


. . .


Venture capitalists, who hold the keys to success in Silicon Valley by providing start-up money, are even more likely to be white and male than tech company employees are. Theirs is an insular business. Most investors accept pitches only from entrepreneurs who come through an introduction, and they tend to finance people who have succeeded before, or who remind them of those who did.

According to a 2014 study published by the National Academy of Sciences, investors prefer pitches by men, particularly attractive men, to those by women, even when the content of the pitch is the same. In addition to studying the results of three entrepreneurial pitch competitions, the researchers conducted two experiments in which a representative sample of working adults heard identical pitches in male and female voices. Sixty-eight percent of people preferred to finance the company when it was pitched by a male voice, while 32 percent chose the female.


. . .


At the gender discrimination trial last year against Kleiner Perkins Caufield & Byers, which the venture capital firm won, female employees said they were excluded from a ski trip, denied credit for deals they brought to the firm, and told they both didn't speak up enough and talked too much.

"I feel like it's a lot more nuanced and sometimes it's subconscious," said Julia Hu, the founder and chief executive of Lark, which makes a health and weight-loss app. "V.C.s are pattern matchers, and they're just used to seeing men like themselves."

Many women convey confidence and leadership in a different way than men do, she said. As an Asian woman, she said, she was raised to be humble and quiet and felt uncomfortable promoting her skills. "To try to be who I thought they wanted me to be, which was another Mark Zuckerberg, was actually very difficult for me without feeling inauthentic."



For the full story, see:

Miller, Claire Cain. "The Venture Capital Ceiling." The New York Times, SundayBusiness Section (Sun., FEB. 28, 2016): 1 & 4-5.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 27, 2016, and has the title "What It's Really Like to Risk It All in Silicon Valley.")


The National Academy of Sciences study mentioned above, is:

Wood Brooks, Alison, Laura Huang, Sarah Wood Kearney, and Fiona E. Murray. "Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men." Proceedings of the National Academy of Sciences of the United States of America 111, no. 12 (March 25, 2014): 4427-31.






March 8, 2017

Pope Francis Has "a Great Allergy to Economic Things"



(p. A7) ABOARD THE PAPAL AIRPLANE -- Pope Francis has dedicated his papacy to the plight of the poor and delivered severe critiques of economic systems that benefit the rich. But flying back to Rome from his eight-day visit to Latin America, Francis admitted he had overlooked a group.

He has delivered few messages for the global middle class.

"Thank you," he replied, after a German journalist, Ludwig Ring-Eifel, asked about the omission. "It's a good correction, thanks. You are right. It's an error of mine not to think about this."


. . .


In fact, the pope expressed "a great allergy to economic things," explaining that his father had been an accountant who often brought work home on weekends.

"I don't understand it very well," he said of economics, even though the issue of economic justice has become central to his papacy.


. . .


"Then, on the middle class, there are some words that I've said -- but a little in passing," he said, musing. "But talking about the common people, the simple people, the workers, that is a great value, no? But I think you're telling me about something I need to do. I need to delve further into this."



For the full story, see:

JIM YARDLEY. "In His Focus on Rich and Poor, Pope Admits to Overlooking the Middle Class." The New York Times (Tues., JULY 14, 2015): A7.

(Note: ellipses added.)

(Note: the online version of the story has the date JULY 13, 2015, and has the title "Pope Francis Says He's Overlooked the World's Middle Class.")






March 2, 2017

1.87 Births Per U.S. Couple in 2015



(p. A2) The U.S. is experiencing a baby lull that looks set to last for years, a shift demographers say will likely ripple through the U.S. economy and have an impact on everything from maternity wards to federal social programs.


. . .


Demographic Intelligence, a Charlottesville, Va., firm that forecasts birth trends, projects there were about 4 million babies born in the U.S. in 2015, up slightly from the 3.99 million babies born the previous year. The total fertility rate--a snapshot that measures the number of births the average woman will have during her lifetime--is expected to rise to 1.87 in 2015 from 1.86 the previous year, according to the firm. It says its projections, which rely on unemployment rates, consumer-confidence measures and other variables, have been about 99% accurate in recent years.

That is well below the relatively strong fertility rates that started during the late 1980s and lasted until 2007, when the total fertility rate peaked at 2.12 babies per woman.



For the full story, see:

JANET ADAMY. "Low Birth Rate Poses Economic Challenge." The Wall Street Journal (Weds., May 11, 2016): A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 10, 2016, and has the title "Baby Lull Promises Growing Pains for Economy." The passages quoted above include a sentence (at the end of the second quoted paragraph) that appears in the online, but not in the print, version.)






March 1, 2017

Kahneman Was "Consumed with Despair" Over Writing "Thinking, Fast and Slow"



(p. C23) Mr. Lewis has always had a knack for identifying eccentrics and horde-defiers who somehow tell us a larger story, generally about an idea that violates our most basic intuition. In "Moneyball," he gave us Billy Beane, who rejected the wisdom of traditional baseball scouts and rehabilitated the Oakland A's through statistical reasoning. In "The Big Short," he gave us an assortment of jittery misfits who bet against the housing market.

In "The Undoing Project," Mr. Lewis has found the granddaddy of all stories about counterintuition, because Dr. Kahneman and Dr. Tversky did some of the most definitive research about just how majestically, fantastically unreliable our intuition can be. The biases they identified that distort our decision-making are now so well known -- like our outsize aversion to loss, for instance -- that we take them for granted. Together, you can safely say, these two men made possible the field of behavioral economics, which is predicated on the notion that humans do not always behave rationally.


. . .


In a remarkable note on his sources, Mr. Lewis reveals that for years he watched Dr. Kahneman agonize over his 2011 book, "Thinking, Fast and Slow," which became both a critical and a fan favorite. "Every few months he'd be consumed with despair, and announce that he was giving up writing altogether -- before he destroyed his own reputation," Mr. Lewis writes. "To forestall his book's publication he paid a friend to find people who might convince him not to publish it."



For the full review, see:

JENNIFER SENIOR . "Books of The Times; Two Men, Mismatched Yet Perfectly Paired." The New York Times (Fri., December 2, 2016): C21 & C23.

(Note: ellipses added.)

(Note: the online version of the review has the date Dec. 1, 2016, and has the title "Books of The Times; Michael Lewis on Two Well Matched (but Finally Mismatched) Men.")


The book under review, is:

Lewis, Michael. The Undoing Project: A Friendship That Changed Our Minds. New York: W. W. Norton & Company, Inc., 2016.






February 28, 2017

To Save Administrative Costs, Health-Care Providers Give Discounts for Paying Out-of-Pocket



(p. R6) As consumers get savvier about shopping for health care, some are finding a curious trend: More hospitals, imaging centers, outpatient surgery centers and pharmacy chains will give them deep discounts if they pay cash instead of using insurance.

When Nancy Surdoval, a retired lawyer, needed a knee X-ray last year, Boulder Community Hospital in Colorado said it would cost her $600, out of pocket, using her high-deductible insurance, or just $70 if she paid cash upfront.

When she needed an MRI to investigate further, she was offered a similar choice--she could pay $1,100, out of pocket, using her insurance, or $600 if she self-paid in cash.

Rather than feel good about the savings, Ms. Surdoval got angry at her carrier, Blue Cross Blue Shield of Arizona. "I'm paying $530 a month in premiums and I get charged more than someone who just walks in off the street?" says Ms. Surdoval, who divides her time between Boulder and Tucson. "I thought insurance companies negotiated good deals for us. Now things are totally upside down."

Deep discounts
Not long ago, hospitals routinely charged uninsured patients their highest rates, far more than insured patients paid for the same services. Now, in the Alice-in-Wonderland world of health-care prices, the opposite is often true: Patients who pay up front in cash often get better deals than their insurance plans have negotiated for them.

That is partly due to new state and federal rules aimed at protecting uninsured patients from price gouging. (Under the Affordable Care Act, for example, tax-exempt hospitals can't charge financially strapped patients much more than Medicare pays.) Many hospitals also offer discounts if patients pay in cash on the day of service, because it saves administrative work and collection hassles. Cash prices are officially aimed at the uninsured, but people with coverage aren't legally required to use it.

Hospitals, meanwhile, have sought ever-higher rates from commercial insurers to make up for losses on other patients. Insurers pass those negotiated rates on to plan members, and given the growth in high-deductible plans, more Americans are paying those rates in full, out of pocket, than ever before.



For the full story, see:

Beck, Melinda. "Here's a Way to Cut Your Health-Care Bill: Pay Cash." The Wall Street Journal (Tues., Feb. 16, 2016): R6.

(Note: bold heading in original.)

(Note: the online version of the story has the date Feb. 15, 2016, and has the title "How to Cut Your Health-Care Bill: Pay Cash.")






February 26, 2017

Giving $10,000 to Each Adult American Would Cost 13% of GDP



(p. A2) Imagine you're president and Congress gives you a huge chunk of money to spend as you wish. Instead of cutting taxes or splashing out more on health care, infrastructure and defense, why not send a check to every adult?

That's the essence of universal basic income, a centuries-old idea now enjoying a revival across the political spectrum.


. . .


To send every American adult $10,000 a year would cost $2.4 trillion, or 13% of gross domestic product. Junking the current safety net wouldn't come close to paying for this: Scrapping income support for the poor, disabled and unemployed would save just $500 billion. Get rid of health care for the poor (mostly Medicaid), and the savings rise to only $900 billion. Getting rid of Medicare and Social Security would balance the costs, but that would leave the average retiree considerably worse off--politically (and ethically) a nonstarter.



For the full commentary, see:

Ip, Greg. "CAPITAL ACCOUNT; Payout Proposal Ignores Labor Needs." The Wall Street Journal (Thurs., July 14, 2016): A2.

(Note: the online version of the commentary has the date July 13, 2016, and has the title "CAPITAL ACCOUNT; Revival of Universal Basic Income Proposal Ignores Needs of Labor Force.")






February 24, 2017

Doctors Lack Incentives to Use Best Ovarian Cancer Treatment



(p. 22) In 2006, the National Cancer Institute took the rare step of issuing a "clinical announcement," a special alert it holds in reserve for advances so important that they should change medical practice.

In this case, the subject was ovarian cancer. A major study had just proved that pumping chemotherapy directly into the abdomen, along with the usual intravenous method, could add 16 months or more to women's lives. Cancer experts agreed that medical practice should change -- immediately.

Nearly a decade later, doctors report that fewer than half of ovarian cancer patients at American hospitals are receiving the abdominal treatment.

"It's very unfortunate, but it's the real world," said Dr. Maurie Markman, the president of medicine and science at Cancer Treatment Centers of America. He added, "The word 'tragic' would be fair."

Experts suggest a variety of reasons that the treatment is so underused: It is harder to administer than intravenous therapy, and some doctors may still doubt its benefits or think it is too toxic. Some may also see it as a drain on their income, because it is time-consuming and uses generic drugs on which oncologists make little money.



For the full story, see:

DENISE GRADY. "Ovarian Cancer Treatment Is Found Underused." The New York Times (Tues., AUG. 4, 2015): A1 & A13.

(Note: the online version of the story has the date AUG. 3, 2015, and has the title "Effective Ovarian Cancer Treatment Is Underused, Study Finds.")






February 23, 2017

Winemakers Adapt to Global Warming with Owls and Technology



(p. 7) As California heats up, winemakers are confronting new challenges large and small -- some very small.

Mice, voles and gophers love vineyards. "We're seeing more pest pressures due to warmer winters," Ms. Jackson said, walking through rows of cabernet grapes. Another emerging issue: Grapes ripen earlier, and swallows and crows are eating fruit before the harvest. "It's a big problem," she said.

That explains the owls. Sixty-eight boxes are occupied by hungry barn owls; during the harvest, a falconer comes to some vineyards every day, launching a bird of prey to scare away other birds with a taste for grapes.

The Jacksons have also begun analyzing their crops with increasingly sensitive tools. Ms. Jackson recently installed devices that measure how much sap is in the vines. They transmit the data over cellular networks to headquarters, where software calculates how much water specific areas of vineyards do or don't need. "Data-driven farming," Ms. Jackson said.

The Jacksons are also monitoring their crops using drones equipped with sensors that detect moisture by evaluating the colors of vegetation. The wrong color can indicate nutritional deficiencies in the crops, or irrigation leaks.

"Previously, it would require an experienced winemaker to go and look at the grapes," said Clint Fereday, the company's director of aviation. "Now we can run a drone, tag an area of the vines with GPS, and go right to the spot that has a problem."

The drones have other uses, too. An infrared camera can scan for people guarding illicit marijuana operations on nearby lands.

Not all the changes being made on the Jackson vineyards involve advanced technology. Some are simply ancient farming techniques that the drought has made increasingly relevant.

Field hands plant cover crops, like rye and barley, between every second row of vines, to help keep the soil healthy. The family is stepping up its composting program. Pressed grapes are composted, then placed beneath rows of vines, since the organic matter is better at retaining moisture than soil.

Ms. Jackson's husband, Shaun Kajiwara, is a vineyard manager for the company, overseeing the grapes that go into many of the upscale labels.


. . .


Ultimately, Mr. Kajiwara believes that with the right mix of new rootstocks, cover crops and fortuitous rainfall, some of the Jackson vineyards might not need irrigation at all. "In a few years, I think we could be dry-farmed up here," he said. "Our reservoir will just be insurance."

It is a snapshot of the future for the Jackson family: a vineyard north of traditional wine country, where natural features might offset some of the deleterious effects wrought by climate change. And, in combination with the adaptations Ms. Jackson has put in place, it might just be enough to allow the company to keep making fine wines for many years to come.



For the full story, see:

DAVID GELLES. "A Winery Battles Warming." The New York Times, SundayBusiness Section (Sun., JAN. 8, 2017): 1 & 6-7.

(Note: ellipsis added.)

(Note: the online version of the story has the date JAN. 5, 2017, and has the title "Falcons, Drones, Data: A Winery Battles Climate Change.")






February 21, 2017

NASA Funding Depends on "Pure Pork-Barrel Politics"



(p. A15) "Beyond Earth" is delightfully different from any other book I've ever read by human-spaceflight cheerleaders. The authors have put their thinking caps on and broken out of the usual orthodoxy by presenting cogent ideas on why humans should go into space, including their lovely idea of going to and living on obscure (to most folks) Titan. We go, they say, because we need to go, not just to explore and study but to find another place to live and, if we want to, screw it up just as much as we have screwed up Earth, because that's what we do, that's what makes us human. We may make mistakes but, by God, we also produce great civilizations and art and, yes, science in the process. We've done Earth, so let's now go wherever our abilities take us and physics allow.


. . .


The one great truth I always tell people wanting to understand the American space program is this: The federal government doesn't give a flip about human spaceflight. That's why Apollo was canceled just as it hit its stride, why the shuttle program was underfunded from its inception, and why, after the shuttle was retired, NASA had nothing to replace it with. No one who holds the purse strings for NASA really cares whether American astronauts ever go anywhere. It's just not that important to a country beset with a vast array of pressing problems.

What keeps the current space program going at all is pure pork-barrel politics. That's why President Obama didn't blink an eye when he signed NASA budgets that provided funds to build a giant rocket called the Space Launch System, which has no well-defined purpose, as well as a crewed capsule called Orion, which has no specifically assigned places to go. As proof that spending money isn't evidence of support, there wasn't one dime in those budgets to procure and deliver the accouterments needed for true human space endeavors--no space suits, no planetary landers, no rovers, no habitats, nothing but the bottom and top of a big, expensive rocket that will require a vast marching army to operate for no apparent reason.



For the full review, see:

HOMER HICKAM. "BOOKSHELF; Forget Mars, Aim for Titan." The Wall Street Journal (Fri., December 16, 2016): A15.

(Note: ellipsis added.)

(Note: the online version of the review has the date Dec. 15, 2016,)


The book under review, is:

Wohlforth, Charles, and Hendrix. Amanda R. Beyond Earth: Our Path to a New Home in the Planets. New York: Pantheon, 2016.






February 20, 2017

Firm Success May Depend on Being Allowed to Create Corporate Culture Through Hiring



(p. B1) After submitting an online application, completing a video interview and meeting with a hiring manager, the last thing standing between many applicants and a job at G Adventures Inc. is a roughly two-foot-deep ball pit similar to what you might find at a Chuck E. Cheese's.

Candidates remove their shoes and join three of the Toronto-based tour company's employees, who spin a wheel with questions such as, "What's a signature dance move and will you demonstrate it?"

Sitting in a pool of plastic balls seemingly has little to do with selling package tours, but company founder Bruce Poon Tip says it reveals a lot about who will be successful at the 2,000-employee company.

Culture is "like a tribal thing for us," he says. Lately, many companies seem to agree.

Employers are finding new ways to assess job candidates' cultural suitability as they seek hires who fit in from day one. While few go as far as G Adventures, companies such as Salesforce.com Inc. have experimented with tapping "cultural ambassadors" to evaluate finalists for jobs in other departments. Zappos.com Inc. gives company veterans veto power over hires who might not fit in with its staff--even if those hires have the right skills for the job.

Though employment experts warn that fuzzy criteria such as culture fit may permit bias in the hiring process and result in a lack of diversity, companies say culture often determines who succeeds or fails in their workplace.



For the full commentary, see:

RACHEL FEINTZEIG. "'Culture Fit' May Be Key to Your Next Job." The Wall Street Journal (Weds., Oct. 12, 2016): B1 & B6.

(Note: the online version of the commentary has the title "Culture Fit' May Be the Key to Your Next Job.")






February 19, 2017

Jewish Medical Inventor Invested in Human Capital Because That "Could Never Be Taken from Me"





Louis Sokoloff's son Kenneth authored, or co-authored, important papers on how patents aided invention in the 1800s.



(p. A21) Dr. Louis Sokoloff, who pioneered the PET scan technique for measuring human brain function and diagnosing disorders, died on July 30 [2015] in Washington.


. . .


. . . he leapt at the opportunity when he won a scholarship to the University of Pennsylvania, guided by his grandfather's advice.

"He advised me to choose a profession, any one," he wrote, "in which all my significant possessions would reside in my mind because, being Jewish, sooner or later I would be persecuted and I would lose all my material possessions; what was contained in my mind, however, could never be taken from me and would accompany me everywhere to be used again."


. . .


Dr. Sokoloff's wife, the former Betty Kaiser, died in 2003, and his son, Kenneth, an economic historian, died in 2007.



For the full obituary, see:

SAM ROBERTS. "Louis Sokoloff, Pioneer of PET Scan, Dies at 93." The New York Times (Thurs., AUG. 6, 2015): A21.

(Note: ellipses added.)

(Note: the online version of the obituary has the date AUG. 5, 2015.)






February 18, 2017

Government Wastes Millions on Corrupt Nanotech Boondoggle



(p. A19) In Utica, a former industrial hub in upstate New York where the near collapse of manufacturing has made for a scarcity of jobs and a rarity of good news, the announcement in August 2015 that an Austrian chip maker had decided to put down roots in a fabrication plant built by the state was cause for jubilation.

Gov. Andrew M. Cuomo celebrated with an appearance in Utica, promising $585 million in state funds to cement the public-private partnership, which was to create 1,000 jobs. Some in the crowd wept with emotion.

But last week, after months of delays and mismanagement that culminated in September with federal prosecutors revealing a far-reaching bribery and bid-rigging scheme, state and local officials said that the Austrian chip maker, AMS, had abandoned the project.

The Utica project was merely one chunk of the multibillion-dollar investment with which the Cuomo administration has pledged to seed nanotechnology and high-tech industries in upstate cities starved for economic growth.


. . .


For the state, it seems, the strategy developed by Mr. Kaloyeros and trumpeted by Mr. Cuomo -- to lavish hundreds of millions of dollars in state subsidies on corporate partners to create high-tech jobs -- is unblemished. Yet the model has come in for repeated criticism from government watchdogs, who say an economic policy that tries to create risky new industries virtually from scratch, and that spends millions in taxpayer dollars to create every new job, is folly.

"We're incredibly skeptical of the economic logic behind these projects because they're too expensive," said John Kaehny, the executive director of Reinvent Albany, a good-government group. "There is no economic logic to (p. A21) this, really. But there's a huge political logic to it. The governor desperately needs for this to be a success for his political legacy in New York."



For the full story, see:

VIVIAN YEE. "How Missteps Doomed Plan for Growth, Foiling Cuomo." The New York Times (Weds., DEC. 28, 2016): A19.

(Note: ellipsis added.)

(Note: the online version of the story has the date DEC. 27, 2016, and has the title "How Cuomo's Signature Economic Growth Project Fell Apart in Utica.")






February 16, 2017

Tech Firms Rally Their Customers to Fight Restrictive Regulations



(p. A23) The nasty battle between Uber and the administration of Mayor Bill de Blasio over New York City's proposed cap on livery vehicles has ended, at least for now, with the city and the ride-hailing giant agreeing to postpone a decision pending a "traffic study." There's no doubt who won, though. The mayor underestimated his opponent and was forced to retreat.

It wasn't just conventional pressure -- ads, money, lobbying -- that caught the mayor off guard. Uber mobilized its customers, leveraging the power of its app to prompt a populist social-media assault, all in support of a $50 billion corporation. The company added a "de Blasio's Uber" feature so that every time New Yorkers logged on to order a car, they were reminded of the mayor's threat ("NO CARS -- SEE WHY") and were sent directly to a petition opposing the new rules. Users were also offered free Uber rides to a June 30 rally at City Hall. Eventually, the mayor and the City Council received 17,000 emails in opposition. Just as Uber has offloaded most costs of operating a taxi onto its drivers, the company uses its customers to do much of its political heavy lifting.

Uber's earlier strategy to win entry into the Portland, Ore., market followed a similar pattern. When the city wasn't allowing the company to operate taxis, Uber exploited rules that allowed it to act as a delivery company, and distributed free ice cream around town. Using data on these deliveries, the firm shrewdly recruited recipients as pro-Uber citizen lobbyists, pressuring local officials to allow their cars to pick up passengers. It worked.

Many tech firms now recognize the organizing power of their user networks, and are weaponizing their apps to achieve political ends. Lyft embedded tools on its site to mobilize users in support of less restrictive regulations. Airbnb provided funding for the "Fair to Share" campaign in the Bay Area, which lobbies to allow short-term housing rentals, and is currently hiring "community organizers" to amplify the voices of home-sharing supporters. Amazon's "Readers United" was an effort to gain customer backing during its acrimonious dispute with the publisher Hachette. Emails from eBay prodded users to fight online sales-tax legislation.



For the full commentary, see:

EDWARD T. WALKER. "The Uber-ization of Activism." The New York Times (Fri., AUG. 7, 2015): A23.

(Note: the online version of the commentary has the date AUG. 6, 2015.)






February 15, 2017

Where Fidelistas Miss Mr. Hershey's Company Town



(p. A9) This small town on Cuba's northern coast is steeped in memory and wistfulness, a kind of living monument to the intertwined histories of the United States and Cuba and to the successes and failures of Fidel Castro's social revolution.

The town dates to 1916, when Milton S. Hershey, the American chocolate baron, visited Cuba for the first time and decided to buy sugar plantations and mills on the island to supply his growing chocolate empire in Pennsylvania. On land east of Havana, he built a large sugar refinery and an adjoining village -- a model town like his creation in Hershey, Pa. -- to house his workers and their families.

He named the place Hershey.

The village would come to include about 160 homes -- the most elegant made of stone, the more modest of wooden planks -- built along a grid of streets and each with tidy yards and front porches in the style common in the growing suburbs of the United States. It also had a public school, a medical clinic, shops, a movie theater, a golf course, social clubs and a baseball stadium where a Hershey-sponsored team played its home games, residents said.

The factory became one of the most productive sugar refineries in the country, if not in all of Latin America, and the village was the envy of surrounding towns, which lacked the standard of living that Mr. Hershey bestowed on his namesake settlement.


. . .


"I'm a Fidelista, entirely in favor of the revolution," declared Meraldo Nojas Sutil, 78, who moved to Hershey when he was 11 and worked in the plant during the 1960s and '70s. "But slowly the town is deteriorating."

Many residents do not hesitate to draw a contrast between the current state of the town and the way that it looked when "Mr. Hershey," as he is invariably called here, was the boss.

Residents seem amused by, if not proud of, the ties to the United States.

Most still use the village's original name, pronounced locally as "AIR-see." And Hershey signs still hang at the town's train station, a romantic nod to a bygone era, though perhaps also a symbol of hope that the past -- at least, certain aspects of it -- will again become the present.



For the full story, see:

KIRK SEMPLE. "CAMILO CIENFUEGOS JOURNAL; Past Is Bittersweet in Cuban Town That Hershey Built." The New York Times (Thurs., DEC. 7, 2016): A9.

(Note: ellipsis added.)

(Note: the online version of the article has the date DEC. 7, 2016, and has the title "CAMILO CIENFUEGOS JOURNAL; In Cuban Town That Hershey Built, Memories Both Bitter and Sweet.")






February 14, 2017

Government Sugar Protectionism Kills More Jobs than It Saves



(p. A13) As if domestic price-fixing by the government--here, driving prices up by setting production limits--weren't enough, the feds then set a limit on sugar imports, and punish any imports above that limit with heavy tariffs.

The result? Countries such as Canada openly advertise to U.S. companies that use sugar--for instance, in the food industry--that they will enjoy lower business costs if they move. And when companies leave, like some candy makers that have moved production overseas, they take their jobs with them. Even the Commerce Department admits that for every job that the sugar program "protects," it kills three others.

Reforming this policy sounds like a no-brainer, but the small number of beneficiaries use their benefits to influence--by lobbying, for instance, or with campaign contributions--politicians who block any reforms. No wonder sugar was the only commodity program not to be reformed by having its subsidies reduced in the most-recent farm bill, in 2013.



For the full commentary, see:

JOE PITTS and DAVID MCINTOSH. "Your Funny Valentine Candy Pricing; Making a box of chocolates more expensive is one of many ways federal sugar policy hurts U.S. taxpayers." The Wall Street Journal (Fri., Feb. 12, 2016): A13.

(Note: the online version of the commentary has the date Feb. 11, 2016.)






February 13, 2017

The Good Old Days Were Grim



(p. A15) In "Progress," the Swedish author Johan Norberg deploys reams of data to show just how much life has improved--especially over the past few decades but over the past couple of centuries as well. Each chapter is devoted to documenting progress in a single category, including food, sanitation, life expectancy, poverty, violence, the environment, literacy and equality.

In response to people who look fondly on the "good old days," Mr. Norberg underscores just how grim they could be. Rampant disease, famine and violence routinely killed off millions. In the 14th century, the so-called Black Death wiped out a third of Europe's population. Five hundred years later, cholera outbreaks throughout the world led to hundreds of thousands of deaths and even killed a U.S. president, James Polk.



For the full review, see:


MATTHEW REES. "BOOKSHELF; Bending the Arc of History." The Wall Street Journal (Tues., December 13, 2016): A15.

(Note: the online version of the review has the date Dec. 12, 2016,)


The book under review, is:

Norberg, Johan. Progress: Ten Reasons to Look Forward to the Future. London, UK: Oneworld Publications, 2016.






February 12, 2017

"Worrying About Overpopulation on Mars"



(p. B4) Reflecting on my own brief experience as an invertebrate neuroscientist, I'd say that today's AI is at the jellyfish stage in the evolution of biological intelligence. Real brains--and genuine intelligence--are so far in the future as to be beyond any reasonable horizon of prediction.

Or, as chief scientist and AI guru Andrew Ng of Chinese search giant Baidu Inc. once put it, worrying about takeover by some kind of intelligent, autonomous, evil AI is about as rational as worrying about overpopulation on Mars.



For the full commentary, see:

CHRISTOPHER MIMS. "KEYWORDS; Artificial Intelligence Has a Way to Go." The Wall Street Journal (Mon., Dec. 5, 2016): B1 & B4.

(Note: the online version of the commentary has the date Dec. 4, 2016, and has the title "KEYWORDS; Artificial Intelligence Makes Strides, but Has a Long Way to Go.")






February 10, 2017

The Case Against "Mindful Dishwashing"



(p. 9) I'm making a failed attempt at "mindful dishwashing," the subject of a how-to article an acquaintance recently shared on Facebook. According to the practice's thought leaders, in order to maximize our happiness, we should refuse to succumb to domestic autopilot and instead be fully "in" the present moment, engaging completely with every clump of oatmeal and decomposing particle of scrambled egg. Mindfulness is supposed to be a defense against the pressures of modern life, but it's starting to feel suspiciously like it's actually adding to them. It's a special circle of self-improvement hell, striving not just for a Pinterest-worthy home, but a Pinterest-worthy mind.

Perhaps the single philosophical consensus of our time is that the key to contentment lies in living fully mentally in the present. The idea that we should be constantly policing our thoughts away from the past, the future, the imagination or the abstract and back to whatever is happening right now has gained traction with spiritual leaders and investment bankers, armchair philosophers and government bureaucrats and human resources departments.


. . .


So does the moment really deserve its many accolades? It is a philosophy likely to be more rewarding for those whose lives contain more privileged moments than grinding, humiliating or exhausting ones. Those for whom a given moment is more likely to be "sun-dappled yoga pose" than "hour 11 manning the deep-fat fryer."

On the face of it, our lives are often much more fulfilling lived outside the present than in it.


. . .


Surely one of the most magnificent feats of the human brain is its ability to hold past, present, future and their imagined alternatives in constant parallel, . . .


. . .


What differentiates humans from animals is exactly this ability to step mentally outside of whatever is happening to us right now, and to assign it context and significance. Our happiness does not come so much from our experiences themselves, but from the stories we tell ourselves that make them matter.


. . .


So perhaps, rather than expending our energy struggling to stay in the Moment, we should simply be grateful that our brains allow us to be elsewhere.



For the full commentary, see:

RUTH WHIPPMAN. "Actually, Let's Not Be in the Moment." The New York Times, SundayReview Section (Sun., NOV. 27, 2016): 9.

(Note: ellipses added.)

(Note: the online version of the commentary has the date NOV. 26, 2016.)







February 7, 2017

Rigid Labor Regulations Hurt Labor in India



(p. A9) . . . rigid and complex regulations have discouraged investment in labor-intensive industries in India, . . . .

Many economists say India's labor laws have encouraged enterprises to stay small, rely on informal labor or substitute capital for workers. A report by the Paris-based Organization for Economic Cooperation and Development said for India to return to a high-growth trajectory, it must "reduce barriers to formal employment by introducing a simpler and more flexible labor law which doesn't discriminate by size of enterprise."



For the full story, see:

NIHARIKA MANDHANA. "India State Tests Labor-Law Overhaul." The Wall Street Journal (Sat., Dec. 6, 2014): A9.

(Note: ellipses added.)

(Note: the online version of the article has the date Dec. 7 [sic], 2014, and has the title "Modi's BJP-Controlled States Become Labs for Contentious Reform.")






February 5, 2017

Innovation Brought Rise of Middle Class and Decline of Aristocracy



(p. C7) Mr. Evans claims that "master narratives" have fallen into disrepute, and he does not aspire to provide one. But he returns repeatedly to such themes as the growth of "public space" as Europe urbanized and communications improved. He likewise describes the "shifting contours of inequality" as the middle classes burgeoned and benefited from the hastening pace of scientific innovation while the aristocracy slowly declined in status (albeit not in creature comforts).

Similarly, Mr. Evans offers an interesting discussion of how various forms of serfdom disappeared, even as the essence of rural immiseration generally did not. He conveys the degradation of existence for the emergent working class of the cities with controlled pathos yet without acknowledging the improvements in living standards that took place in advanced countries during the last decades of the century. He adduces evidence to show that the benefits of improved sanitation and hygiene, health and nutrition, consumer products and home conveniences, as well as longer life expectancy, went at first disproportionately to the urban middle and professional classes, strata that tripled as a fraction of the population in leading countries. Thus even in comparatively prosperous England, well-off adolescents at midcentury stood almost 9 inches taller than their proletarian contemporaries and by 1900 enjoyed a life expectancy 14 years longer.



For the full review, see:

STEPHEN A. SCHUKER. "The European Century." The Wall Street Journal (Sat., December 3, 2016): C7.

(Note: the online version of the review has the date Dec. 2, 2016, and has the title "A Long Century of Peace.")


The book under review, is:

Evans, Richard J. The Pursuit of Power: Europe 1815-1914. New York: Viking, 2016.






January 31, 2017

Increasing Minimum Wage Hurts Low Productivity Workers



(p. B1) CHICAGO -- A growing number of economists have found that many cities and states have considerable room to raise the minimum wage before employers meaningfully cut back on hiring.

But that conclusion may gloss over some significant responses to minimum-wage increases by individual employers, according to two new studies. And those reactions may, in turn, raise questions about the effectiveness of the minimum wage in helping certain workers.

The findings, presented over the weekend at the annual meeting of the American Economic Association, the nation's premier gathering of academic economists, come as many cities and states are raising their minimum wages. California and New York last year approved gradual increases to $15 per hour. Proponents argue that raising the minimum is one of the most practical ways of improving living standards for the working poor and reducing inequality.

To test that proposition, John Horton of New York University conducted an experiment on an online platform where employers post discrete jobs -- including customer service support, data entry, and graphic design -- and workers submit a proposed hourly wage for completing them.

Mr. Horton, working with the platform, was able to impose a minimum wage at random on one-quarter of about 160,000 jobs posted over roughly a (p. B4) month and a half in 2013. If a worker proposed an hourly wage that was below the minimum, the platform's software asked him or her to raise the bid until it cleared the threshold. In some cases the minimum wage was $2 per hour, in some cases $3, and in some cases $4.

At first glance, the findings were consistent with the growing body of work on the minimum wage: While the workers saw their wages rise, there was little decline in hiring. But other results suggested that the minimum wage was having large effects. Most important, the hours a given worker spent on a given job fell substantially for jobs that typically pay a low wage -- say, answering customer emails.

Mr. Horton concluded that when forced to pay more in wages, many employers were hiring more productive workers, so that the overall amount they spent on each job changed far less than the minimum-wage increase would have suggested. The more productive workers appeared to finish similar work more quickly.



For the full story, see:

NOAM SCHEIBER. "Studies Find Higher Minimum Wage May Have Losers." The New York Times (Weds., JAN. 11, 2017): B1 & B4.

(Note: the online version of the article has the date JAN. 10, 2017, and has the title "Higher Minimum Wage May Have Losers.")


The paper that Horton presented at the 2017 AEA meetings in Chicago, is:

Horton, John J. "Evidence from a Minimum Wage Experiment." Working Paper, Leonard N. Stern School of Business. New York University, Jan. 10, 2017.







January 30, 2017

Entrepreneur Hires for Perseverance




Max Levchin, who is quoted below, is an entrepreneur who played an important role in the early days of PayPal.



(p. 2) How do you think your parents and grandparents influenced your leadership style today?

My grandmother was exceptionally formative. She basically was willpower personified. If she wanted something to happen, it would happen. She had this walk-through-walls style where you did not ask for permission or forgiveness; you just did what you needed to get it done. I still judge some of my decisions based on: What would Grandma decide? Was I sufficiently tenacious or not enough?

And one thing I have found over the years is that in hiring, the dominant characteristic I select for is this sense of perseverance in really tough situations. It's like the difference between endurance athletes and sprinters. I think it is a really good predictor for how people behave under severe stress.

Working in a start-up means there is a baseline of stress with occasional spikes. There are people who are really good at handling spikes. In fact, most people are really good at handling spikes. But normal isn't normal. There is constant stress. And so I look for endurance athletes, in the business sense.



For the full interview, see:

ADAM BRYANT. "Corner Office; Looking for Signs of Endurance." The New York Times, SundayBusiness Section (Sun., December 11, 2016): 2.

(Note: bold in original.)

(Note: the online version of the interview has the date DEC. 9, 2016, and has the title "Corner Office; Max Levchin of Affirm: Seeking the Endurance Athletes of Business." The bold words are Adam Bryant's question; the non-bold words are Max Levchin's answer.)






January 25, 2017

Everybody Is Seeking "a Life that Provides Them with Dignity"



(p. A11) I want to end this dramatic year writing of a man whose great and constructive work I discovered in 2016. He is the photojournalist Chris Arnade.


. . .


In his work you see an America that is battered but standing, a society that is atomized--there are lonely people in his pictures--but holding on.


. . .


Mr. Arnade didn't intend to discover virtue in a mighty corporation, but McDonald's "has great value to community." He sees an ethos of patience and respect. "McDonald's is nonjudgmental." If you have nowhere to go all day they'll let you stay, nurse your coffee, read your paper. "The bulk of the franchises leave people alone. There's a friendship that develops between the people who work there and the people who go." "In Natchitoches, La., there's a twice-weekly Bible study group," that meets at McDonald's. "They also have bingo games." There's the Old Man table, or the Romeo Club, for Retired Old Men Eating Out.

I've written of the great divide in America as between the protected and the unprotected--those who more or less govern versus the governed, the facts of whose lives the protected are almost wholly unaware. Mr. Arnade sees the divide as between the front-row kids at school waving their hands to be called on, and the back-row kids, quiet and less advantaged. The front row, he says, needs to learn two things. "One is how much the rest of the country is hurting. It's not just economic pain, it's a deep feeling of meaninglessness, of humiliation, of not being wanted." Their fears and anxieties are justified. "They have been excluded from participating in the great wealth of this country economically, socially and culturally." Second, "The front-row kids need humility. They need to look in the mirror, 'We messed this up, we've been in charge 30 years and haven't delivered much.' " "They need to take stock of what has happened."

Of those falling behind: "They're not lazy and weak, they're dealing with bad stuff. Both conservative and progressive intellectuals say Trump voters are racist, dumb. When a conservative looks at a minority community and says, 'They're lazy,' the left answers, 'Wait a minute, let's look at the larger context, the availability of jobs, structural injustice.' But the left looks at white working-class poverty and feels free to judge and dismiss."


. . .


I asked how he describes his work. I see it as an effort to help America better understand itself. He said he was trying to show that "Everybody is kind of working in the same direction, trying to get by, get a life that provides them with dignity." In this, he suggests, we are more united than we know.



For the full commentary, see:

PEGGY NOONAN. "Shining a Light on 'Back Row' America; Chris Arnade's photos reveal an America that is battered but standing, atomized but holding on." The Wall Street Journal (Sat., Dec. 31, 2016): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Dec. 29, 2016.)






January 22, 2017

Complex Labor Rules Reduce Work Choices for Older Workers



(p. B4) CALL them boomerang retirees: people who exit gracefully after their career at a company, then return shortly afterward to work there part time.

More and more companies are establishing formal programs to facilitate this, for reasons that benefit both the employer and the retiree. Leaving a satisfying job cold-turkey for a life of leisure can be an abrupt jolt to people accustomed to feeling purposeful, earning money and enjoying their colleagues. From the corporate perspective, it is useful to have experienced hands who can train younger people, pass along institutional wisdom and work with fewer strings attached.

"People in the U.S. define themselves by their work, and they like their co-workers," said Roselyn Feinsod, senior partner in the retirement practice at the human resources firm Aon Hewitt, the human resources consultancy. Thus, unlike many retirees from past generations, people from both the blue-collar and white-collar sectors are more eager to retain ties to the familiar working world that they enjoyed (and sometimes loathed).


. . .


. . . , Atlantic Health Systems of Morristown, N.J., is among the growing ranks of employers that sponsor a formal program to invite retirees back into the work force, for no more than 1,000 hours a year. The company's Alumni Club -- formerly known as the 1,000 Hour Club -- was established in 2006, and about 300 Atlantic Health retirees are currently on the company's payroll in various capacities. "They're engaged employees; they're productive," said Lesley Meyer, Atlantic Systems' manager of corporate human resources. "They're a stable talent pool."


. . .


Most boomerang retirees return to work after an informal negotiation with a former boss. Programs like the one at Atlantic Systems are still relatively rare -- for instance, about 8 percent of the 463 companies surveyed by the Society for Human Resource Management in 2015 had one -- but they are on the rise.

They are also tricky to run: Establishing a boomerang retiree program involves a substantial commitment of resources, including systems for navigating complex labor market rules and pension law. Most returning retirees must wait several months before they can come back, and are often limited to that 1,000 hours a year. Companies are increasingly turning to outside staffing firms to manage the nuts and bolts.


. . .


It was a phone call from her former manager that lured Pat Waller, who spent 39 years as an intensive care nurse for Atlantic Health before retiring in 2005 at age 66, back to the work force part time. She joined the Alumni Club in 2007 after the hospital where she had worked, Morristown Medical Center in Morristown, N.J., applied to qualify as a federal center of excellence in knee and hip surgery; her former boss wondered if she would help gather data. Absolutely, she answered.

Since then, Ms. Waller has worked on several projects for Atlantic Health, gigs that easily give her the time to travel with her husband and see her six grandchildren.

Now that she is 77, Ms. Waller works mostly from home, sometimes three to four days a week and other times one to two, depending on the project, "I always said when I was at work I learned something every day," she said. "Since I've come back, I feel the same way."



For the full story, see:

CHRISTOPHER FARRELL. "Boomerang Boom: Firms Tapping Skills of the Recently Retired." The New York Times (Sat., December 17, 2016): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date DEC. 16, 2016, and has the title "Retiring; Boomerang Boom: More Firms Tapping the Skills of the Recently Retired.")






January 21, 2017

Cloud-Computing Firms Run Key Services on Private Servers



(p. B8) For nearly a decade, Amazon Web Services, the giant retailer's cloud computing division, has told prospective customers: Ditch your data center and trust us to run your applications, store your data and host your internal software development.

Yet Amazon.com Inc. itself doesn't fully run in the cloud.

Amazon isn't alone. The other top cloud providers-- Google Inc., Microsoft Corp. and International Business Machines Corp.--use their own cloud services for some purposes, but they continue to keep certain functions on private servers. Their struggles are a microcosm of the issues that dog their customers: Worries about reliability, security and risks inherent with change that have made it hard to move critical computing tasks to the public cloud.

"The vast majority of Amazon.com runs on AWS," a company spokesperson said, and it intends to run everything there eventually.

The fact that Amazon still uses private servers is "ironic," said Ed Anderson, an analyst with Gartner, which advises customers on both cloud services and data center servers. "That's exactly why we tell people evaluating cloud services, 'Do not buy into the hype. Do not buy into the myths. You have to be pragmatic, just like these vendors are,'" he said.



For the full story, see:

ROBERT MCMILLAN. "Companies Touting Cloud-Computing Don't Always Use It." The Wall Street Journal (Weds., Aug. 5, 2015): B8.

(Note: the online version of the story has the date Aug. 4, 2015, and has the title "Cloud-Computing Kingpins Slow to Adapt to Own Movement.")






January 17, 2017

Students Learn Less, and Score Worse, When Hot



(p. 11) A clever new working paper by Jisung Park, a Ph.D. student in economics at Harvard, compared the performances of New York City students on 4.6 million exams with the day's temperature. He found that students taking a New York State Regents exam on a 90-degree day have a 12 percent greater chance of failing than when the temperature is 72 degrees.

The Regents exams help determine whether a student graduates and goes to college, and Park finds that when a student has the bad luck to have Regents exams fall on very hot days, he or she is slightly less likely to graduate on time.

Likewise, Park finds that when a school year has an unusual number of hot days, students do worse at the end of the year on their Regents exams, presumably because they've learned less. A school year with five extra days above 80 degrees leads students to perform significantly worse on Regents exams.

The New York City students in Park's study do poorly on hot days even though the majority of city schools are air-conditioned (perhaps in part because the air-conditioning often barely works).



For the full commentary, see:

Kristof, Nicholas. "Temperatures Rise, and We're Cooked." The New York Times, SundayReview Section (Sun., SEPT. 11, 2016): 11.

(Note: the online version of the commentary has the date SEPT. 10, 2016.)


The working paper by Jisung Park on the effects of heat, is:

Park, Jisung. "Heat Stress and Human Capital Production." Harvard University, 2016.






January 15, 2017

Better Policies Can Turn Stagnation into Growth



(p. A19) . . . , now ought to be the time that policy makers in Washington come together to tackle America's greatest economic problem: sclerotic growth. The recession ended more than seven years ago. Unemployment has returned to normal levels. Yet gross domestic product is rising at half its postwar average rate. Achieving better growth is possible, but it will require deep structural reforms.

The policy worthies have said for eight years: stimulus today, structural reform tomorrow. Now it's tomorrow, but novel excuses for stimulus keep coming. "Secular stagnation" or "hysteresis" account for slow growth. Prosperity demands more borrowing and spending--even on bridges to nowhere--or deliberate inflation or negative interest rates. Others advocate surrender. More growth is impossible. Accept and manage mediocrity.

But for those willing to recognize the simple lessons of history, slow growth is not hard to diagnose or to cure. The U.S. economy suffers from complex, arbitrary and politicized regulation. The ridiculous tax system and badly structured social programs discourage work and investment. Even internet giants are now running to Washington for regulatory favors.


. . .


So why is there so little talk of serious growth-oriented policy? Regulated and protected industries and unions, and the politicians who extract support from them in return for favors, will lose enormously. The global policy elite, steeped in Keynesian demand management for the economy as a whole, and microregulation of individual businesses, are intellectually unprepared for the hard project of "structural reform"--fixing the entire economy by cleaning up the thousands of little messes. Even economists fight to protect outdated skills.



For the full commentary, see:

JOHN H. COCHRANE. "Don't Believe the Economic Pessimists; Memo to Clinton and Trump: The U.S. economy can and will grow faster with the right policies." The Wall Street Journal (Mon., Nov. 7, 2016): A19.

(Note: ellipses added.)






January 13, 2017

Government Permission to Build Takes Longer than It Takes to Build



(p. A21) America used to be the envy of the world in building great projects responsibly, efficiently and on time. The Pentagon was built in 16 months. The 1,500-mile Alaska-Canadian Highway, which passes through some of the world's most rugged terrain, took about eight months. Today, infrastructure projects across America often require several years simply to get through the federal government's pre-build permitting process. Consider a few examples.

New U.S. highway construction projects usually take between nine and 19 years from initial planning and permitting to completion of construction, according to a 2002 Government Accountability Office study. It will have taken 14 years to permit an expansion of Gross Reservoir in Colorado, and it took almost 20 years to permit the Kensington gold mine in Alaska.

It took four years to construct a new runway at Seattle-Tacoma International Airport, but it took 15 years to get the permits. Todd Hauptli of the American Association of Airport Executives bitterly joked to the Senate Commerce Committee last year, "It took longer to build that runway than the Great Pyramids of Egypt."

These problems have been building for decades as the U.S. regulatory state has grown.



For the full commentary, see:

DAN SULLIVAN. "How to Put Building Permits on a Fast Track; It can take 15 years to win approval for a new airport runway. No wonder U.S. infrastructure needs a lift." The Wall Street Journal (Mon., Dec. 5, 2016): A21.

(Note: the online version of the commentary has the date Dec. 4, 2016.)






January 12, 2017

Greenspan "Implemented a Successful Rule-Based Monetary Policy"



(p. C12) Effective public policy requires getting good ideas and putting them into practice. There is no better account of the world where economic ideas emerge as economic policy than Sebastian Mallaby's thoroughly researched (there are 1,625 endnotes) "The Man Who Knew," which takes up Alan Greenspan's long career. Mr. Greenspan knew the ideas, Mr. Mallaby first argues, and then tells story after story of how the economist worked them into policy in Washington. Mr. Greenspan approved President Ford's questionable stimulus package in order to implement ideas on spending control; he skillfully drove reform ideas as chair of the Social Security commission; he implemented a successful rule-based monetary policy at the Fed with careful data analysis for many years, but ran into difficulties when the data gave mixed messages toward the end of his term.


For Taylor's full book recommendations, see:

John Taylor. "12 Months of Reading." The Wall Street Journal (Sat., December 10, 2016): C12.

(Note: the online version of the review has the date Dec. 7, 2016, and has the title "John Taylor on Alan Greenspan.")


The book recommended, is:

Mallaby, Sebastian. The Man Who Knew: The Life and Times of Alan Greenspan. New York: Penguin Press, 2016.






January 11, 2017

$19 Billion in Farm Subsidies Mostly Go to Big Farms



(p. A17) President-elect Donald Trump's vow to "drain the swamp" in Washington could begin with the Agriculture Department. Federal aid to farmers is forecast by the Congressional Budget Office to soar to $19 billion in 2017. Farmers will receive twice as much of their income from handouts (25%) this year as they did in 2013, according to the USDA. Whoever Mr. Trump names as his agriculture secretary should target wasteful farm programs for spending cuts.


. . .


While generous government subsidies are defended by invoking the "family farmer," big farmers snare the vast majority of federal handouts. According to a report released this year by the Environmental Working Group, a Washington-based nonprofit research organization, "the top 1 percent of farm subsidy recipients received 26 percent of subsidy payments between 1995 and 2014." The group's analysis of government farm-subsidy data also found that the "top 20 percent of subsidy recipients received 91 percent of all subsidy payments." Fifty members of the Forbes 400 list of wealthiest Americans have received farm subsidies, according to the group, including David Rockefeller Sr. and Charles Schwab.



For the full commentary, see:

JAMES BOVARD. "Living Off the Fat of Washington; If Trump is going to 'drain the swamp,' he might start with wasteful ag subsidies." The Wall Street Journal (Mon., Dec. 12, 2016): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Dec. 11, 2016.)






January 10, 2017

Business Cycles Can Be Moderated



LongEconomicExpansionsGraph2016-12-05.pngSource of graph: online version of the NYT article quoted and cited below.



(p. B2) It's tempting to think of an economic expansion as being like a life span. The older you get, the closer you are to death; a 95-year-old probably has fewer years left to live than a 60-year-old. But this year Glenn D. Rudebusch, an economist at the Federal Reserve Bank of San Francisco, looked at the evidence from post-World War II United States economic expansions, and did not find that pattern held up at all.

"A long recovery appears no more likely to end than a short one," Mr. Rudebusch wrote. "Like Peter Pan, recoveries appear to never grow old."

Expansions don't die of old age. They die because something specific killed them. It can be a wrong-footed central bank, the popping of a financial bubble or a shock from overseas. But age itself isn't the problem.

A look around the world also shows plenty of examples of expansions that have lasted a lot longer than either the seven years the current United States expansion has been underway or the longest expansion in American history, from 1991 to 2001.

Britain had a nearly 17-year expansion from the early 1990s until the 2008 global financial crisis. France had a slightly longer expansion that ended in 1992. And the record-holders among advanced economies in modern times, according to the research firm Longview Economics, are the Netherlands, which experienced a nearly 26-year "Dutch miracle" that ended in 2008, and Australia, which has an expansion that began in 1991 and is on track to overtake the Dutch soon for the longest on record.



For the full story, see:

NEIL IRWIN. "Expansion Is Old, Not at Death's Door." The New York Times (Fri., OCT. 28, 2016): B1 & B2.

(Note: the online version of the article has the date Oct. 27, 2016, and has the title "Will the Next President Face a Recession? Don't Assume So.")


Rudebusch's research, mentioned above, appeared in:

Rudebusch, Glenn D. "Will the Economic Recovery Die of Old Age?" FRBSF Economic Letter # 2016-03 (Feb. 8, 2016): 1-4.







January 9, 2017

Unbinding Entrepreneurs Can Create Jobs and Speed Growth



(p. A21) This week more than 160 countries are celebrating Global Entrepreneurship Week. The Kauffman Foundation, which I once led, created this event eight years ago to encourage other nations to follow the American tradition of bottom-up economic success. Yet this example has been less powerful in recent years, as American entrepreneurship has waned. Fortunately, President-elect Donald Trump has plenty of options if he wants to resurrect America's startup economy.

Consider the economic situation that the president-elect is inheriting. Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve. More people have joined the ranks of the chronically unemployed, slipping into poverty at alarming rates as their skills decay and dependency on public assistance grows. Considering population growth, America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.

Merely bringing back factories from overseas will not solve this problem. Technology has made every factory more productive. Fewer workers make more goods no matter where they're located. At the same time, fewer U.S. businesses are being started. New firms are the country's principal generator of new jobs. Data from the Kauffman Foundation suggest companies less than five years old create more than 80% of new jobs every year. While the nation seems more enthusiastic than ever about the promise of entrepreneurship, fewer than 500,000 new businesses were started in 2015. That is a disastrous 30% decline from 2008.


. . .


What can President Trump do to encourage more entrepreneurship?


. . .


Government must . . . widen the scope of innovation by stepping back and letting the market find the future. By promoting trendy ideas and subsidizing politically favored companies, government dampens diversity in creative business ideas.


. . .


Mr. Trump can also reverse regulatory sprawl and cut government-imposed requirements that add to every entrepreneurs' costs and risks. Anti-growth policies like ObamaCare and minimum-wage increases make hiring workers prohibitively expensive.


. . .


With these policies in mind, President Trump should set another goal: that his administration will create an environment that enables one million Americans to start companies every year. Such an outcome would assure his target of 4% GDP growth, as well as full employment.



For the full commentary, see:

CARL J. SCHRAMM. "The Entrepreneurial Way to 4% Growth; Trump should set a goal: fix the business climate so a million Americans a year can start companies." The Wall Street Journal (Weds., Nov. 16, 2016): A21.






January 7, 2017

Not All Secure Jobs Are Good Jobs



(p. C8) The village idiot of the shtetl of Frampol was given the job of waiting at the village gates for the arrival of the Messiah. The pay wasn't great, he was told, but the work was steady.


For Epstein's book recommendations, see:

Joseph Epstein. "12 Months of Reading." The Wall Street Journal (Sat., December 10, 2016): C8.

(Note: the online version of the review has the date Dec. 7, 2016, and has the title "Books of The Times; Review: 'A Truck Full of Money' and a Thirst to Put It to Good Use.")







January 5, 2017

Invention Requires More than Just Necessity




If necessity is the mother of invention, why did it take 2,000 years for necessity to give birth?



(p. D2) Archaeological evidence suggests that after setting sail from the Solomon Islands, people crossed more than 2,000 miles of open ocean to colonize islands like Tonga and Samoa. But after 300 years of island hopping, they halted their expansion for 2,000 years more before continuing -- a period known as the Long Pause that represents an intriguing puzzle for researchers of the cultures of the South Pacific.

"Why is it that the people stopped for 2,000 years?" said Dr. Montenegro. "Clearly they were interested and capable. Why did they stop after having great success for a great time?"

To answer these questions, Dr. Montenegro and his colleagues ran numerous voyage simulations and concluded that the Long Pause that delayed humans from reaching Hawaii, Tahiti and New Zealand occurred because the early explorers were unable to sail through the strong winds that surround Tonga and Samoa. They reported their results last week in the journal of the Proceedings of the National Academy of Sciences.

"Our paper supports the idea that what people needed was boating technology or navigation technology that would allow them to move efficiently against the wind," Dr. Montenegro said.



For the full story, see:

NICHOLAS ST. FLEUR. "Long Layovers: A 2,000-Year Pause in Exploring Oceania." The New York Times (Sat., November 8, 2016): D2.

(Note: the online version of the story has the date NOV. 1 [sic], 2016, and has the title "How Ancient Humans Reached Remote South Pacific Islands." The passages quoted above are from the much-longer online version of the article.)


Montenegro's academic article, mentioned above, is:

Montenegro, Álvaro, Richard T. Callaghan, and Scott M. Fitzpatrick. "Using Seafaring Simulations and Shortest-Hop Trajectories to Model the Prehistoric Colonization of Remote Oceania." Proceedings of the National Academy of Sciences 113, no. 45 (Nov. 8, 2016): 12685-90.







January 4, 2017

Best Entrepreneurs, and Managers, Help Workers Lead Meaningful Lives



(p. C6) In "Payoff," Dan Ariely makes the strong case that the best way to motivate people, including ourselves, is not through persuasive tactics, however subtle, but by providing the groundwork for meaning in people's lives.


For Altucher's full book recommendations, see:

James Altucher. "12 Months of Reading." The Wall Street Journal (Sat., December 10, 2016): C6.

(Note: the online version of the review has the date Dec. 7, 2016, and has the title "James Altucher on con artists.")


The book recommended, is:

Ariely, Dan. Payoff: The Hidden Logic That Shapes Our Motivations, Ted Books. New York: Simon & Schuster, Inc., 2016.






January 3, 2017

Micro-Entrepreneur Worked Hard, Saved, and Has No Regrets



(p. 1) PORT HEDLAND, Australia -- A lanky, dark-haired surfer, Lee Meadowcroft modeled on the runways of London, Milan and Singapore, then followed his dream of going home to Australia to sell herbal medicines. His store failed -- he had chosen the wrong street, he says -- and he lost almost all his savings. By then, the fashion world had found fresher faces.

So like tens of thousands of other Australians, Mr. Meadowcroft went to the mines.

It was late 2004. He plowed his last $4,000 into a two-week course on how to operate a crane. He found companies so desperate for workers that they would send chauffeured cars to pick up prospective welders, electricians and crane operators and deliver them to the nearest airport for their flights to mining country, here on Australia's remote northwestern coast.

China back then was growing at a breathtaking pace and needed all the Australian rocks it could get. Mine workers like Mr. Meadowcroft kept a punishing schedule: 13 consecutive days of 12-hour shifts, a day off, then another 13 consecutive days of 12-hour (p. 4) shifts. Mining fueled Australia's surging exports to China, which at their peak reached nearly $100 billion a year -- a figure representing $4,300 for every man, woman and child in the country.

Resource-rich places around the world prospered thanks to China, and Mr. Meadowcroft and his fellow Port Hedland equipment jockeys were no exception. By 2011 he was earning $250,000 a year.


. . .


The bust came just as hard and just as fast. China's economic slowdown left too many mines to feed too many dormant Chinese steel mills. Construction of new mines stopped. Port Hedland's economy slumped. Mr. Meadowcroft lost his job, then lost a second job. Like thousands of others, he went back home.

Mr. Meadowcroft's tale could serve as yet another boom-and-bust cautionary tale of the limits of China's rise. From Russia to Brazil, and Nigeria to Venezuela, resource-rich countries that boomed during China's surge found their economies shaken when Chinese demand slowed.

Except something unexpected has happened to Australia: It has withstood the global rout. Most mines -- lower-cost compared with mines elsewhere -- have stayed open. But Australia has also kept thriving, against all expectations, with a different kind of money flowing in from China.

Attracted by clean air, a strong education system and worries about China's future, more Chinese are spending their money in Australia. Thousands of Chinese families have sent their children to study at costly Australian universities, and Australian food exports to China have boomed. Chinese investment in Australian real estate has increased at least tenfold since 2010; Chinese investors have purchased up to half the new apartments in downtown Melbourne and Sydney.


. . .


. . . for people like Mr. Meadowcroft and others in Western Australia who were cut loose by the mining slump, Chinese money is a blessing. He now lives in the Western Australia capital city of Perth and works as an apprentice plumber in new housing developments aimed at Chinese buyers. He earns just $21,000 a year, but that could double or triple when he finishes his apprenticeship.


. . .


(p. 5) . . . for now, Chinese money is still flowing. Many miners who squandered their earnings during the iron ore boom are now trying to catch up in construction jobs. But many others socked away their money from the boom and have used those savings to buy homes or start small businesses.

"They were micro-entrepreneurs," said Tom Barratt, a University of Western Australia doctoral student who is doing his thesis on labor markets in the Pilbara hills.

Mr. Meadowcroft is among those savers. He bought a house and soon paid off most of the mortgage. He also married his longtime girlfriend after years of commuting to far-flung mines and ports, and is now raising two children as he learns to be a plumber.

Although his savings account is much smaller now, he has no regrets about the boom years. "That was 12 years of really hard work," he said, "to achieve what a lot of people don't achieve in their whole lives."



For the full story, see:

KEITH BRADSHER. "Money From the Dust." The New York Times, SundayBusiness Section (Sun., SEPT. 25, 2016): 1 & 4-5.

(Note: ellipses added.)

(Note: the online version of the story has the date SEPT. 24, 2016, and has the title "In Australia, China's Appetite Shifts From Rocks to Real Estate.")






January 1, 2017

Air-Conditioning Is "a Critical Adaptation" that Saves Lives



(p. A3) Air-conditioning is not just a luxury. It's a critical adaptation tool in a warming world, with the ability to save lives.


. . .


In our continuing research, my colleagues and I have found that hot days in India have a strikingly big impact on mortality. Specifically, the mortality effects of each additional day in which the average temperature exceeds 95 degrees Fahrenheit are 25 times greater in India than in the United States.


. . .


The effect of very hot days on mortality in the United States is so low in part because of the widespread use of air-conditioning. A recent study I did with colleagues showed that deaths as a result of these very hot days in the United States declined by more than 80 percent from 1960 to 2004 -- and it was the adoption of air-conditioning that accounted for nearly the entire decline.



For the full story, see:

Michael Greenstone. "'India's Air-Conditioning and Climate Change Quandary." The New York Times (Thurs., OCT. 27, 2016): A3.

(Note: ellipses added.)

(Note: the online version of the story has the date OCT. 26, 2016.)


The Greenstone study mentioned above on heat mortality in the U.S., is:

Barreca, Alan, Karen Clay, Olivier Deschenes, Michael Greenstone, and Joseph S. Shapiro. "Adapting to Climate Change: The Remarkable Decline in the Us Temperature-Mortality Relationship over the Twentieth Century." Journal of Political Economy 124, no. 1 (Feb. 2016): 105-59.







December 28, 2016

Middle Class Income Increased 5.2 Percent in 2015



(p. B1) Working families finally got a raise.

Early on Tuesday, the Census Bureau provided some long-awaited good news for the beleaguered working class: The income of the typical American household perched on the middle rung of the income ladder increased a hearty 5.2 percent in 2015, the first real increase since 2007, the year before the economy sank into recession.

Households all the way down the income scale made more money last year. The average incomes of the poorest fifth of the population increased 6.6 percent after three consecutive years of decline. And the official poverty rate declined to 13.5 percent from 14.8 percent in 2014, the sharpest decline since the late 1960s.

The numbers are heartening, confirming that the sluggish yet consistent recovery of the American economy has finally begun to lift all boats.



For the full commentary, see:

Porter, Eduardo. "ECONOMIC SCENE; The Bad News Is the Good News Could Be Better." The New York Times (Mon., SEPT. 14, 2016): B1 & B5.

(Note: the online version of the commentary has the date SEPT. 13, 2016, and has the title "ECONOMIC SCENE; America's Inequality Problem: Real Income Gains Are Brief and Hard to Find.")






December 24, 2016

Infrastructure Costs Often Exceed Benefits



(p. A13) Most federal infrastructure spending is done by sending funds to state and local governments. For highway programs, the ratio is usually 80% federal, 20% state and local. But that means every local district has an incentive to press the federal authorities to fund projects with poor national returns. We all remember Alaska's infamous "bridge to nowhere."

In other words, if a local government is putting up only 20% of the funds, it needs the benefits to its own citizens to be only 21% of the total national cost. Yet every state and every locality has potential infrastructure needs that it would like the rest of the country to pay for. That leads to the misallocation of federal funds and infrastructure projects that benefit the few at the cost of the many.


. . .


Japan tried infrastructure-heavy serial fiscal stimuli for decades and is trying again under Prime Minister Shinzo Abe. Yes, Japan now has many new bridges, roads and paved drainage ditches, but the spending has done little to improve Japan's meager growth rate.



For the full story, see:

MICHAEL J. BOSKIN. "All Aboard the Infrastructure Boondoggle; Whoever wins on Nov. 8, a flood of public-works money is coming. Cost-benefit tests are crucial." The Wall Street Journal (Tues., Nov. 1, 2016): A13.

(Note: ellipsis added.)

(Note: the online version of the article has the date Oct. 31, 2016.)






December 23, 2016

Blockchain Can Cut Out Financial Middlemen



(p. A9) Blockchains are basically a much better way of managing information. They are distributed ledgers, run on multiple computers all over the world, for recording transactions in a way that is fast, limitless, secure and transparent. There is no central database overseen by a single institution responsible for auditing and recording what goes on. If you and I were to engage in a transaction, it would be executed, settled and recorded on the blockchain and evident for all to see, yet encrypted so as to be villain-proof. "The new platform enables a reconciliation of digital records regarding just about everything in real time," write the Tapscotts. No more waiting for that check to clear. It would all be done and recorded for eternity before you know it.

The digital currency bitcoin is currently the best-known blockchain technology. If I wanted to pay you using bitcoin, I would start with a bitcoin wallet on my computer or phone and buy bitcoins using dollars. I would then send you a message identifying the bitcoin I would like to send you and sign the transaction using a private key. The heavily encrypted reassignment of the bitcoin to your wallet is recorded and verified in the bitcoin ledger for all to see, and they are now yours to spend. The transaction is likely more secure and cheaper than a traditional bank transfer.


. . .


The layman, . . . , might want to wait for a more penetrable explanation of blockchains to come along--as one surely will if the authors' predictions are even one-zillionth right.​



For the full review, see:

PHILIP DELVES BROUGHTON. "BOOKSHELF; Bitcoin Is Just The Beginning; Imagine a personal-identity service that gives us control over selling our personal data. Right now, Google and Facebook reap the profit." The Wall Street Journal (Fri., May 27, 2016): A9.

(Note: ellipses added.)

(Note: the online version of the review has the date May 26, 2016.)


The book under review, is:

Tapscott, Don, and Alex Tapscott. Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World. New York: Portfolio, 2016.






December 21, 2016

Udacity Entrepreneur Counters Creeping Credentialism



(p. B2) Udacity, an online learning start-up founded by a pioneer of self-driving cars, is finally taking the wraps off a job trial program it has worked on for the last year with 80 small companies.

The program, called Blitz, provides what is essentially a brief contract assignment, much like an internship. Employers tell Udacity the skills they need, and Udacity suggests a single candidate or a few. For the contract assignment, which usually lasts about three months, Udacity takes a fee worth 10 to 20 percent of the worker's salary. If the person is then hired, Udacity does not collect any other fees, such as a finder's fee.

For small start-ups, a hiring decision that goes bad can be a time-consuming, costly distraction. "This lets companies ease their way into hiring without the hurdle of making a commitment upfront," said Sebastian Thrun, co-founder and chairman of Udacity.


. . .


Mr. Thrun, a former Stanford professor and Google engineer who led the company's effort in self-driving cars, said he was also trying to nudge the tech industry's hiring beyond its elite-college bias.

"For every Stanford graduate, there are hundreds of people without that kind of pedigree who can do just as well," he said.



For the full story, see:

STEVE LOHR. "Udacity, an Education Start-Up, Offers Tech Job Tryouts." The New York Times (Fri., NOV. 18, 2016): B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date NOV. 17, 2016, and has the title "Udacity, an Online Learning Start-Up, Offers Tech Job Trials.")






December 19, 2016

Dignity and Equality Before the Law Unleashes Creativity in the Poor



(p. A23) We can improve the conditions of the working class. Raising low productivity by enabling human creativity is what has mainly worked. By contrast, taking from the rich and giving to the poor helps only a little -- and anyway expropriation is a one-time trick.


. . .


Look at the astonishing improvements in China since 1978 and in India since 1991. Between them, the countries are home to about four out of every 10 humans. Even in the United States, real wages have continued to grow -- if slowly -- in recent decades, contrary to what you might have heard. Donald Boudreaux, an economist at George Mason University, and others who have looked beyond the superficial have shown that real wages are continuing to rise, thanks largely to major improvements in the quality of goods and services, and to nonwage benefits. Real purchasing power is double what it was in the fondly remembered 1950s -- when many American children went to bed hungry.

What, then, caused this Great Enrichment?

Not exploitation of the poor, not investment, not existing institutions, but a mere idea, which the philosopher and economist Adam Smith called "the liberal plan of equality, liberty and justice." In a word, it was liberalism, in the free-market European sense. Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic.



For the full commentary, see:

DEIRDRE N. McCLOSKEY. "Economic View; Equality, Liberty, Justice and Wealth." The New York Times, SundayBusiness Section (Sun., SEPT. 4, 2016): 6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date SEPT. 2, 2016, and has the title "Economic View; The Formula for a Richer World? Equality, Liberty, Justice.")


McCloskey's commentary, quoted above, is related to her book:

McCloskey, Deirdre N. Bourgeois Equality: How Ideas, Not Capital, Transformed the World. Chicago: University of Chicago Press, 2016.






December 16, 2016

Space Trash Start-Up Aims to Be Quicker than Government



(p. D1) Mr. Okada is an entrepreneur with a vision of creating the first trash collection company dedicated to cleaning up some of humanity's hardest-to-reach rubbish: the spent rocket stages, inert satellites and other debris that have been collecting above Earth since Sputnik ushered in the space age. He launched Astroscale three years ago in the belief that national space agencies were dragging their feet in facing the problem, which could be tackled more quickly by a small private company motivated by profit.

"Let's face it, waste management isn't sexy enough for a space agency to convince taxpayers to allocate money," said Mr. Okada, 43, who put Astroscale's headquarters in start-up-friendly Singapore but is building its spacecraft in his native Japan, where he found more engineers. "My breakthrough is figuring out how to make this into a business."


. . .


(p. D3) "The projects all smelled like government, not crisp or quick," he said of conferences he attended to learn about other efforts. "I came from the start-up world where we think in days or weeks, not years."


. . .


He also said that Astroscale would start by contracting with companies that will operate big satellite networks to remove their own malfunctioning satellites. He said that if a company has a thousand satellites, several are bound to fail. Astroscale will remove these, allowing the company to fill the gap in its network by replacing the failed unit with a functioning satellite.

"Our first targets won't be random debris, but our clients' own satellites," he said. "We can build up to removing debris as we perfect our technology."



For the full story, see:


MARTIN FACKLER. "Building a Garbage Truck for Space." The New York Times (Tues., Nov. 29, 2016): D1 & D3.

(Note: the online version of the story has the date Nov. 28, 2016, and has the title "Space's Trash Collector? A Japanese Entrepreneur Wants the Job.")






December 12, 2016

Prehistoric Hunter Suffered from Ulcer-Causing Microbe



(p. A7) Microbes that once troubled the stomach of a prehistoric hunter known as "Otzi the Iceman," who died on an Alpine glacier 5,300 years ago, are offering researchers a rare insight into the early settlement of Europe.

In findings reported Thursday [January 7, 2016] in Science, an international research group analyzed remnants of ulcer-causing microbes called Helicobacter pylori exhumed from the well-preserved mummy of the Neolithic nomad. With modern DNA sequencing technology, they reconstructed the genetic structure of this ancient microbe--the oldest known pathogen sequenced so far.


. . .


"We know he had a rough lifestyle," said Frank Maixner at the European Academy Institute for Mummies and the Iceman in Bolzano, Italy, who led the team of 23 scientists. "We found a lot of pathological conditions."


. . .


The researchers also determined that the bacteria had inflamed his stomach lining, indicating that the prehistoric hunter, fleeing into the icy highlands where he was shot in the back with an arrow and beaten, may have been feeling ill on the day he was murdered.



For the full story, see:

ROBERT LEE HOTZ. "Iceman's Gut Sheds Light on Human Migration." The Wall Street Journal (Fri., Jan. 8, 2016): A7.

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

(Note: the online version of the story has the date Jan. 7, 2016, and has the title "Otzi the Iceman's Stomach Sheds Light on Copper-Age Migration to Europe.")


The research summarized in the passages quoted above, was more fully reported in:

Maixner, Frank, Ben Krause-Kyora, Dmitrij Turaev, Alexander Herbig, Michael R. Hoopmann, Janice L. Hallows, Ulrike Kusebauch, Eduard Egarter Vigl, Peter Malfertheiner, Francis Megraud, Niall O'Sullivan, Giovanna Cipollini, Valentina Coia, Marco Samadelli, Lars Engstrand, Bodo Linz, Robert L. Moritz, Rudolf Grimm, Johannes Krause, Almut Nebel, Yoshan Moodley, Thomas Rattei, and Albert Zink. "The 5300-Year-Old Helicobacter pylori Genome of the Iceman." Science 351, no. 6269 (Jan. 8, 2016): 162-65.







December 2, 2016

Poor Are Exiting High-Housing-Cost Cities



GroupsExitingHighHousingCostCitiesGraph2106-11-18.jpgSource of graph: online version of the WSJ article quoted and cited below.



(p. A3) Americans are leaving the costliest metro areas for more affordable parts of the country at a faster rate than they are being replaced, according to an analysis of census data, reflecting the impact of housing costs on domestic migration patterns.

Those mostly likely to move from expensive to inexpensive metro areas were at the lower end of the income scale, under the age of 40 and without a bachelor's degree, the analysis by home-tracker Trulia found.


. . .


Another study this year from California policy group Next 10 and Beacon Economics found that New York state and California had the largest net losses of domestic migrants between 2007 and 2014, and that lower- and middle-income people were more likely to leave.



For the full story, see:

CHRIS KIRKHAM. "Costly Cities See Exodus." The Wall Street Journal (Thurs., Nov. 3, 2016): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date Nov. 1, 2016, and has the title "More Americans Leave Expensive Metro Areas for Affordable Ones.")






November 30, 2016

About 90% of Current Jobs Include Tasks that Are Hard to Automate



(p. B1) They replaced horses, didn't they? That's how the late, great economist Wassily Leontief responded 35 years ago to those who argued technology would never really replace people's work.


. . .


(p. B6) A research paper published last month by the Organization for Economic Cooperation and Development argued that even the occupations most at risk of being replaced by machines contained lots of tasks that were hard to automate, like face-to-face interaction with customers.

It concluded that only 9 percent of American workers faced a high risk of being replaced by an automaton. Austrians, Germans and Spaniards were the most vulnerable, but only 12 percent of them risked losing their jobs to information technology.



For the full commentary, see:

Porter, Eduardo. "ECONOMIC SCENE; Contemplating the End of Human Workhorse." The New York Times (Weds., JUNE 8, 2016): B1 & B6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date JUNE 7, 2016, and has the title "ECONOMIC SCENE; Jobs Threatened by Machines: A Once 'Stupid' Concern Gains Respect.")


The Organization for Economic Cooperation and Development paper mentioned above, is:

Arntz, Melanie, Terry Gregory, and Ulrich Zierahn. "The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis." OECD Social, Employment and Migration Working Papers, No. 189. Paris: OECD Publishing, 2016.






November 28, 2016

Berners-Lee Suggests Web Micropayments Replace Ad Revenue



(p. B1) SAN FRANCISCO -- Twenty-seven years ago, Tim Berners-Lee created the World Wide Web as a way for scientists to easily find information. It has since become the world's most powerful medium for knowledge, communications and commerce -- but that doesn't mean Mr. Berners-Lee is happy with all of the consequences.


. . .


So on Tuesday [June 7, 2016], Mr. Berners-Lee gathered in San Francisco with other top computer scientists -- including Brewster Kahle, head of the nonprofit Internet Archive and an internet activist -- to discuss a new phase for the web.


. . .


(p. B6) Consider payments. In many cases, people pay for things online by entering credit card information, not much different from handing a card to a merchant for an imprint."

At the session on Tuesday [June 7, 2016], computer scientists talked about how new payment technologies could increase individual control over money. For example, if people adapted the so-called ledger system by which digital currencies are used, a musician might potentially be able to sell records without intermediaries like Apple's iTunes. News sites might be able to have a system of micropayments for reading a single article, instead of counting on web ads for money.

"Ad revenue is the only model for too many people on the web now," Mr. Berners-Lee said. "People assume today's consumer has to make a deal with a marketing machine to get stuff for 'free,' even if they're horrified by what happens with their data. Imagine a world where paying for things was easy on both sides."



For the full story, see:

QUENTIN HARDY. "World Wide Web's Creator Looks to Reinvent It." The New York Times (Weds., JUNE 8, 2016): B1 & B6.

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

(Note: the online version of the story has the date JUNE 7, 2016, and has the title "The Web's Creator Looks to Reinvent It." )






November 25, 2016

When People's Lives Stagnate They "Often Become Angry, Resentful"



(p. 3) Benjamin M. Friedman of Harvard University, in his book "The Moral Consequences of Economic Growth" (Knopf, 2005), said that at a deep level people make judgments about the economic progress that they see in their own lifetimes, and in comparison with the progress made by the previous generation, especially their own parents. Few people study economic growth statistics. But nearly everyone knows what they are being paid. If they realize that they are doing less well than their forebears, they become anxious. And if they can't see themselves and others in their cohort as progressing over a lifetime, their social interactions often become angry, resentful and even conspiratorial.


For the full commentary, see:

ROBERT J. SHILLER. "Economic View; Weak Economies Foment Ethnic Nationalism." The New York Times, SundayBusiness Section (Sun., OCT. 16, 2016): 3.

(Note: the online version of the commentary has the date OCT. 14, 2016, and has the title "Economic View; What's Behind a Rise in Ethnic Nationalism? Maybe the Economy.")


The Benjamin Friedman book mentioned in the commentary above, is:

Friedman, Benjamin M. The Moral Consequences of Economic Growth. New York: Knopf, 2005.






November 24, 2016

Tech Start-Up Grows with No Outside Money



(p. B6) . . . , it's possible to create a huge tech company without taking venture capital, and without spending far beyond your means. It's possible, in other words, to start a tech company that runs more like a normal business than a debt-fueled rocket ship careening out of control. Believe it or not, start-ups don't even have to be headquartered in San Francisco or Silicon Valley.

There is perhaps no better example of this other way than MailChimp, a 16-year-old Atlanta-based company that makes marketing software for small businesses. If you've heard of MailChimp, it's either because you are one of its 12 million customers or because you were hooked on "Serial," the blockbuster true-crime podcast that MailChimp sponsored.

Under the radar, slowly and steadily, and without ever taking a dime in outside funding or spending more than it earned, MailChimp has been building a behemoth. According to Ben Chestnut, MailChimp's co-founder and chief executive, the company recorded $280 million in revenue in 2015 and is on track to top $400 million in 2016. MailChimp has always been profitable, Mr. Chestnut said, though he declined to divulge exact margins. The company -- which has repeatedly turned down overtures from venture capitalists and is wholly owned by Mr. Chestnut and his co-founder, Dan Kurzius -- now employs about 550 people, and by next year it will be close to 700.

As a private company, MailChimp has long kept its business metrics secret, but Mr. Chestnut wants to publicize its numbers now to show the road less traveled: If you want to run a successful tech company, you don't have to follow the path of "Silicon Valley." You can simply start a business, run it to serve your customers, and forget about outside investors and growth at any cost.


. . .


"Every time we sat down with potential investors, they never seemed to understand small business," Mr. Chestnut said. Venture capitalists always wanted MailChimp to serve "enterprise companies," large businesses with thousands of employees and, potentially, thousands to spend.

"Everybody we talked to said, 'You're sitting on a gold mine, and if you pivot to enterprise, you could be huge,'" Mr. Chestnut said. "But something in our gut always said that didn't feel right."



For the full story, see:

Farhad Manjoo. "STATE OF THE ART; A Road Less Traveled to Success as a Start-Up." The New York Times (Thurs., Oct. 6, 2016): B1 & B6.

(Note: ellipses added.)

(Note: the online version of the story has the date Oct. 5, 2016, and has the title "STATE OF THE ART; MailChimp and the Un-Silicon Valley Way to Make It as a Start-Up.")






November 21, 2016

Immigration Depresses Wages of Low-Wage Americans



(p. A11) Mr. Borjas is himself an immigrant, having at age 12 fled from Cuba to Miami with his widowed mother in 1962, just before the Cuban Missile Crisis shut down legal exits. As a labor economist, he has spent much of his academic career studying the effects of immigration on the American jobs market, often arguing that immigration depresses wages, or job opportunities, at the lower end of the scale. Here he notes that, on balance, the added production supplied by immigrants makes a modest contribution to U.S. economic growth. He generously provides readers with arguments on all sides, including Milton Friedman's wry observation that illegal immigrants are of more net benefit to the American economy than legals because they make less use of welfare-state services.


. . .


After totting up the pluses and minuses, Mr. Borjas concludes that immigration has very little effect on the lives of most Americans. He does worry, however, that some future wave might bring along with it the "institutional, cultural and political baggage that may have hampered development in the poor countries" from which immigrants often come, and he sees a need for reforms.



For the full review, see:


GEORGE MELLOAN. "BOOKSHELF; The Immigration Debate We Need." The Wall Street Journal (Weds., Oct. 19, 2016): A11.

(Note: ellipsis added.)


The book under review, is:

Borjas, George J. We Wanted Workers: Unraveling the Immigration Narrative. New York: W. W. Norton & Company, 2016.






November 20, 2016

Unions Spend $108 Million on 2016 Elections



UnionPresidentialElectionSpendingGraph2016-11-14.jpgSource of graph: online version of the WSJ article quoted and cited below.



(p. A1) PHILADELPHIA--U.S. labor unions are plowing money into the 2016 elections at an unprecedented rate, largely in an effort to help elect Hillary Clinton and give Democrats a majority in the Senate.

According to the most recent campaign-finance filings, unions spent about $108 million on the elections from January 2015 through the end of August [2016], a 38% jump from $78 million during the same period leading up to the 2012 election, and nearly double their 2008 total in the same period. Nearly 85% of their spending this year has supported Democrats.



For the full story, see:

BRODY MULLINS, REBECCA BALLHAUS and MICHELLE HACKMAN. "Labor Unions Step Up Presidential-Election Spending." The Wall Street Journal (Weds., Oct. 19, 2016): A1 & A4.

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

(Note: the online version of the story has the date Oct. 18, 2016, and has the title "Unions Up the Election Ante.")






November 19, 2016

Regulations Cause Sluggish Economy by Slowing Startup Creation



StartupFormationGraph2016-10-27.jpgSource of graph: online version of the WSJ article quoted and cited below.




(p. A2) The U.S. economy is inching along, productivity is flagging and millions of Americans appear locked out of the labor market.

One key factor intertwined with this loss of dynamism: The U.S. is creating startup businesses at historically low rates.


. . .


The share of private firms less than a year old has dropped from more than 12% during much of the 1980s to only about 8% since 2010. In 2014, the most recent year of data, the startup rate was the second-lowest on record, after 2010, according to Census Bureau figures released last month, so there's little sign of a postrecession rebound.


. . .


Rules and regulations also could be at play. Goldman Sachs economists in part blame the cumulative effect of regulations enacted since the Great Recession for reducing the availability of credit and raising the cost of doing business for small firms, making them less competitive.


. . .


There is some disagreement on whether tech firms have fallen into the same doldrums as other startups like mom-and-pop shops. Mr. Haltiwanger and colleagues at the Federal Reserve and Census Bureau find evidence they have, with significant detriment to the economy.

"It may be that we are designing things here in the U.S. as rapidly as ever," Mr. Haltiwanger said. "We're just not producing here. That's not good news for U.S. productivity."

Researchers at the Massachusetts Institute of Technology delved into state business licensing information and found somewhat different but also discouraging results. That is, tech entrepreneurs are generating good ideas and founding companies at a healthy pace, but those ventures aren't breaking out into successful big companies.

"The system for translating good, high-quality foundings into a growth firm, that system seems to have broken," said Scott Stern, an MIT professor and co-author of the study on startups.



For the full commentary, see:

Sparshott, Jeffrey. "THE OUTLOOK; Sputtering Startups Weigh Down Growth." The Wall Street Journal (Mon., Oct. 24, 2016): A2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Oct. 23, 2016 title "THE OUTLOOK; Sputtering Startups Weigh on U.S. Economic Growth." The passages quoted above include a couple of sentences that appeared in the online, but not the print, version of the article.)






November 18, 2016

Land Use Regulations Increase Income Inequality



IncomeAndPopulationInRichAndPoorStatesGraph2016-11-14.jpgSource of graph: online version of the WSJ article quoted and cited below.



(p. A3) In this year's election, candidates have focused blame for rising income inequality on broad economic forces, from globalization to the decline of the American manufacturing base. But a growing body of research suggests a more ordinary factor: the price of the average single-family home for sale, from Fairfield, Conn., to Portland, Ore.

According to research by Daniel Shoag, an associate professor of public policy at Harvard University, and Peter Ganong, a postdoctoral fellow at the National Bureau of Economic Research, a decadeslong trend in which the income gap between the poorest and richest states steadily closed has been upended by growth in land-use regulations.

Moving to a wealthier area in search of job opportunities has historically been a way to promote economic equality, allowing workers to pursue higher-paying jobs elsewhere. But those wage gains lose their appeal if they are eaten up by higher housing costs. The result: More people stay put and lose out on potential higher incomes.


. . .


Messrs. Shoag and Ganong looked at mentions of "land-use" in appeals-court cases and found the number of references began rising sharply around 1970, with some states seeing a much larger increase than others. For example, the share of cases mentioning land use for New York rose 265% between 1950 and 2010 and 644% in California during the same period. By contrast, it increased by only 80% in Alabama.



For the full story, see:

LAURA KUSISTO. "Land Use Rules Under Fire." The Wall Street Journal (Weds., Oct. 19, 2016): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date Oct. 18, 2016, and has the title "As Land-Use Rules Rise, Economic Mobility Slows, Research Says." A few extra words appear in the online version quoted above, that were left out of the print version.)


The research by Ganong and Shoag, mentioned above, is:


Ganong, Peter, and Daniel Shoag. "Why Has Regional Income Convergence in the U.S. Declined?" Harvard University, John F. Kennedy School of Government, Working Paper Series, Jan. 2015.







November 16, 2016

FCC Regulations Motivated by Cronyism, Not Economics



(p. A13) . . . , this burgeoning competition between fixed and mobile has always been predictable and yet has figured not at all in the Federal Communications Commission's regulatory efforts, which paint the country as descending into an uncompetitive broadband hell.

A new study by economists Gerald Faulhaber and Hal Singer details how an agency that once prized economic analysis increasingly ignores or disregards economics in its regulatory findings. Why? Because if it acknowledged the increasing competitiveness of the market, there would be nothing to regulate, no favor-factory opportunities for its political sponsors to milk.



For the full commentary, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; Big Cable and Mobile Are Ready to Rumble; Technology is about to upend Washington's dire prescriptions for a broadband monopoly." The Wall Street Journal (Sat., Oct. 8, 2016): A13.

(Note: ellipsis added.)


The working paper mentioned above, is:

Faulhaber, Gerald, and Hal Singer. "The Curious Absence of Economic Analysis at the Federal Communications Commission: An Agency in Search of a Mission." 2016.







November 12, 2016

Medal-Winning Official Steals Concrete from Public Road and Sells to Cronies



(p. A4) MOSCOW -- Corruption in Russia sometimes amounts to highway robbery, literally.

A senior prison official has been accused of stealing the pavement from a 30-mile stretch of public highway in the Komi Republic, a thinly populated, heavily forested region in northern Russia, the daily newspaper Kommersant reported on its website on Wednesday [January 13, 2016].


. . .


While he was in Komi, Mr. Protopopov won a medal for fostering "spiritual unity," the Kommersant report said, without specifying whether the unity was with the crews doing the illicit road work.



For the full story, see:

NEIL MacFARQUHAR. "Don't Blame Snow for Missing Road in Russia's North." The New York Times (Thurs., JAN. 14, 2016): A4.

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

(Note: online version of the story has the date JAN. 13, 2016, and has the title "Missing a Road in Russia? This May Be Why.")






November 11, 2016

"Politicized Regulatory State" Cuts Hiring and Slows Innovation





EaseOfDoingBusinessGraph2016-09-30.jpgSource of graph: online version of the WSJ article quoted and cited below.




(p. A13) Sclerotic growth is America's overriding economic problem. From 1950 to 2000, the U.S. economy grew at an average rate of 3.5% annually. Since 2000, it has grown at half that rate--1.76%. Even in the years since the bottom of the great recession in 2009, which should have been a time of fast catch-up growth, the economy has only grown at 2%.


. . .


. . . the U.S. economy is simply overrun by an out-of-control and increasingly politicized regulatory state. If it takes years to get the permits to start projects and mountains of paper to hire people, if every step risks a new criminal investigation, people don't invest, hire or innovate.


. . .


How much more growth is really possible from better policies? To get an idea, see the nearby chart plotting 2014 income per capita for 189 countries against the World Bank's "Distance to Frontier" ease-of-doing-business measure for the same year. The measure combines individual indicators, including starting a business, dealing with construction permits, protecting minority investors, paying taxes and trading across borders.


. . .


Most of all, the country needs a dramatic legal and regulatory simplification, restoring the rule of law. Middle-aged America is living in a hoarder's house of a legal system. State and local impediments such as occupational licensing and zoning are also part of the problem.


. . .


There is hope. Washington lawmakers need to bring about a grand bargain, moving the debate from "they're getting their special deal, I want mine," to "I'm losing my special deal, so they'd better lose theirs too."



For the full commentary, see:

JOHN H. COCHRANE. "Ending America's Slow-Growth Tailspin; The U.S. economy needs a dramatic legal and regulatory simplification." The Wall Street Journal (Tues., May 3, 2016): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 2, 2016.)






November 7, 2016

Many Can Have Good Jobs, and Good Lives, Without College



SkillsGapApprenticeshipsGraph2016-09-30.jpgSource of graph: online version of the WSJ article quoted and cited below.



(p. B1) American employers struggling to find enough qualified industrial workers are turning to Germany for a solution to plug the U.S. skills gap: vocational training.

Two million U.S. manufacturing jobs will remain vacant over the next decade due to a shortage of trained workers, according to an analysis by the Manufacturing Institute, a nonprofit advocacy group affiliated with the National Association of Manufacturers, and professional-services firm Deloitte LLP.

While the Obama administration has invested millions of dollars to promote skills-based training, it remains a tough sell in a country where four-year university degrees are seen as the more viable path to good-paying jobs. The Bureau of Labor Statistics said two-thirds of high school graduates who enrolled in college in 2015 opted for four-year degrees.


. . .


In Germany, roughly half of high-school graduates opt for (p. B2) high-octane apprenticeships rather than college degrees. One draw: almost certain employment.

German apprentices spend between three and four days a week training at a company and between one and two days at a public vocational school. The company pays wages and tuition. After three years, apprentices take exams to receive nationally recognized certificates in their occupation. Many continue working full time at the company.

The Labor Department said 87% of apprentices in the U.S. are employed after completing their training programs. Workers who complete apprenticeships earn $50,000 annually on average, or higher than the median U.S. annual wage of $44,720,



For the full story, see:

ELIZABETH SCHULZE. "U.S. Turns to Germany to Fill Jobs." The Wall Street Journal (Tues., Sept. 27, 2016): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date Sept. 26, 2016, and has the title "U.S. Companies Turn to German Training Model to Fill Jobs Gap.")






November 6, 2016

New Tech in Costly Cars "Trickles Down" to Cheaper Cars



(p. B5) Chances are slim that the car, starting at just over $200,000 ($215,000 as tested), will grab market share from the Toyota Corolla and Honda Civic. But in the four days I had the GT, my wife was astonished at my eagerness to run errands of any kind.


. . .


Surely, few people buy cars this expensive, but such vehicles are important because they pioneer technology that trickles down to everyday cars. Recall that anti-lock brakes showed up first on supercars in the late 1970s. (The 570GT's brakes are very good, by the way.)

Perhaps McLaren's carbon-fiber tub chassis structure will be common in the future.



For the full commentary, see:

TOM VOELK. "Driven: McLaren 570GT: High Speed Meets High Style (at a High Price)." The New York Times (Fri., NOV. 3, 2016): B5.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date NOV. 3, 2016, and has the title "Driven: Video Review: McLaren 570GT Is a Rare Blend of Speed and Comfort.")






November 2, 2016

After Infrastructure Stimulus "Japan Is Less, Not More, Dynamic"



(p. A15) To help fight . . . economic sluggishness, Japan has invested enormously in infrastructure, building scores of bridges, tunnels, highways, and trains, as well as new airports--some barely used. The New York Times reported that, between 1991 and late 2008, the country spent $6.3 trillion on "construction-related public investment"--a staggering sum. This vast outlay has undoubtedly produced engineering marvels: in 1998, for instance, Japan completed the Akashi Kaikyō Bridge, the longest suspension bridge in the world; just this year, the country began providing bullet-train service between Tokyo and the northern island of Hokkaido. The World Competitiveness Report ranks Japan's infrastructure as seventh-best in the world and its train infrastructure as the best. But while these trillions in spending may have kept some people working, no one can look at the Japanese numbers and conclude that the money has ramped up the growth rate. Moreover, the largesse is part of the reason that the nation now labors under a crushing public debt, worth 230 percent of GDP. Japan is less, not more, dynamic after its infrastructure bonanza.


For the full commentary, see:

Edward L. Glaeser. "Notable & Quotable: Infrastructure Isn't Always Stimulating." The Wall Street Journal (Weds., Sept. 14, 2016): A15.

(Note: ellipsis above added; ellipsis in article title below, in original.)

(Note: the online version of the commentary has the date Sept. 13, 2016.)


The above commentary by Glaeser was quoted from the Glaeser article:

Glaeser, Edward L. "If You Build It . . . : Myths and Realities About America's Infrastructure Spending." City Journal 26, no. 3 (Summer 2016): 25-33.






November 1, 2016

GE Shifts Away from Six Sigma and Toward Innovation



(p. B1) One of the biggest engineering projects under way at General Electric Co. these days isn't a turbine or locomotive. It is reinventing the way the company's employees are assessed, reviewed and even paid.

For decades, an ideal GE worker was one adept at squeezing out product defects and almost allergic to admitting uncertainty.

Now, as the 124-year-old company refocuses itself on industrial businesses, executives say top performers are those willing to take risks, test new ideas with customers and even make mistakes.

Leaders say GE's multiyear effort to remake itself into a leaner, innovation-driven company requires a nimble workforce that can develop products faster and more cheaply. The shift is significant for GE, whose corporate ethos had long been embodied by Six Sigma, a manufacturing system designed to eliminate error, enshrining certainty and consistency.


. . .


(p. B6) The new style of measuring employees has roots in FastWorks, a companywide initiative intended to hasten product development and ensure that customers want new products before GE spends millions building them. It is based on Lean Startup, a management system popularized by Eric Ries, a 37-year-old author and consultant GE brought in with the blessing of Chief Executive Jeff Immelt to help employees get comfortable with trial, error and experimentation.



For the full story, see:

RACHEL EMMA SILVERMAN. "GE Tries to Reinvent the Employee Review, Encouraging Risks." The Wall Street Journal (Weds., June 8, 2016): B1 & B6.

(Note: ellipsis added.)

(Note: the online version of the story has the title "GE Re-Engineers Performance Reviews, Pay Practices.")


Ries's Lean Startup management system is advocated in his book:

Ries, Eric. The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. New York: Crown Business, 2011.






October 28, 2016

Those Who See, and Fill, Big Unmet Needs Are Often "Weirdos"



(p. A11) . . . "A Truck Full of Money" provides a portrait of a strange, troubled man who happens to be one of the smartest minds in the Route 128 tech corridor.


. . .


The book is being marketed as inspirational, but I found it to be the opposite. No one could read it and become Paul English, or want to. Most tech startups think too small, but the few people with the vision to identify big unmet needs seem to be, for whatever reason, weirdos. The split-second fare comparison that Kayak did is something no human being could do--it requires super-computing--and it has an enormous value, since 8% of the U.S. economy is travel. But once you've solved a problem like that, what do you do next?

Paul English hasn't figured that out, so this book sort of peters out--he may do his once-in-a-lifetime charity project, or he may follow through on Blade--and he has retreated back into the familiar, running a company called Lola that is sort of the opposite of Kayak: It gives you live access to travel concierges. But how could Mr. Kidder's ending be anything but inconclusive? Mr. English is just 53. Undoubtedly he has another billion-dollar idea nestled in that overactive brainpan, but his investors have to make a leap of faith--that they've bet on the right weirdo. God bless these genius geeks, who make our economy leaner by constantly finding more efficient ways to do old things. And God bless the pharmaceutical industry, which protects and preserves them.​



For the full review, see:

JOHN BLOOM. "BOOKSHELF; The Man Who Built Kayak; During one episode of hypomania, Paul English bid $500,000 on an abandoned lighthouse. Recently, he decided to become an Uber driver." The Wall Street Journal (Thurs., Sept. 27, 2016): A11.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 26, 2016.)


The book under review, is:

Kidder, Tracy. A Truck Full of Money: One Man's Quest to Recover from Great Success. New York: Random House, 2016.






October 27, 2016

Making Technologies Useful to End Users Can Be Hard



Sharma's theory sounds somewhat similar to that of Bhidé in his The Venturesome Economy.


(p. B4) Anshu​ Sharma,​ a venture capitalist at Storm Ventures, thinks he knows why so many companies that should have all the resources and brainpower required to build the next big thing so often fail to. He calls his thesis the "stack fallacy," and though he sketched its outline in a recent essay, I found it so compelling that I thought it worth a more thorough exploration of the implications of his theory. What follows is the result of that conversation.

"Stack fallacy is the mistaken belief that it is trivial to build the layer above yours," Mr. Sharma wrote. And as someone who worked at both Oracle and Salesforce, his exhibit A is these two companies. To Oracle, which is primarily a database company, Salesforce is just a "hosted database app," he wrote. and yet despite spending millions on it, Oracle has been unable to beat Salesforce in Salesforce's core competency, notably customer-relations management software.

It helps to understand that in tech, the "stack" is the layer cake of technology, one level of abstraction sitting atop the next, that ultimately delivers a product or service to the user. On the Internet, for example, there is a stack of technologies stretching from the server through the operating system running on it through a cloud abstraction layer and then the apps running atop that, until you reach the user. Even the electricity grid required to power the data center in which the server lives could be considered part of the technology "stack" of, say, your favorite email service.


. . .


The reason that companies fail when they try to move up the stack is simple, argues Mr. Sharma: They don't have firsthand empathy for what customers of the product one level above theirs in the stack actually want. Database engineers at Oracle don't know what supply-chain managers at Fortune 500 companies want out of an enterprise resource-planning system like SAP, but that hasn't stopped Oracle from trying to compete in that space.



For the full commentary, see:

CHRISTOPHER MIMS. "Why Companies Are Being Disrupted." The Wall Street Journal (Mon., Jan. 25, 2016): B4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the title "Why Big Companies Keep Getting Disrupted." The last sentence quoted above appears in the online, but not the print, version of the article.)


Sharma's blog essay mentioned above, is:

Sharma, Anshu. "Why Big Companies Keep Failing: The Stack Fallacy." On Crunch Network blog, Posted Jan. 18, 2016.


The Bhidé book that I mention way above, is:

Bhidé, Amar. The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. Princeton, NJ: Princeton University Press, 2008.


A briefer version of Bhidé's theory can be found in:

Bhidé, Amar. "The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World." Journal of Applied Corporate Finance 21, no. 1 (Winter 2009): 8-23.






October 22, 2016

Toy Car Gives Child with Cerebral Palsy Mobility and Control



HauschildMadelineDrivingModifiedToyCar2016-09-11.jpg"Madeline Hauschild, 3, is thrilled to be at the wheel of her modified toy car at the UNMC Student Life Center on Wednesday [August 10, 2016]. Cars such as Madeline's enable children with little mobility to get around without feeling reliant on parents or siblings." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.




(p. 1B) Now Madeline Hauschild will be able to drive a toy car just like her brother.

On Wednesday [August 10, 2016] Madeline, 3, received a battery-operated toy car modified so that she could sit in it and make it go forward by pushing a large button on the steering wheel. Madeline, who has cerebral palsy, was one of six small children who received cars through a program overseen by the University of Nebraska Medical Center and Children's Hospital & Medical Center.


. . .


The cars give children with little mobility the opportunity to play, explore and socialize rather than feeling stuck and dependent on parents or siblings to move them around.


. . .


(p. 5B) Cerebral palsy is a disorder that causes movement, posture and other developmental problems. Among Madeline's challenges: She can't walk or bear any weight on her legs.

Madeline, of Syracuse, Nebraska, smiled and pounded the button, giving her a herky-jerky ride.


. . .


"Is that fun?" Madeline's mother, Kelly Hauschild, asked as her daughter enjoyed the erratic drive in a room at UNMC's Student Life Center. "You do like it, don't you?"


. . .


"I loved seeing her be able to operate it all by herself, and her smiles," Hauschild said.



For the full story, see:

Ruggles, Rick. "Toy Cars Give Kids Vroom to Maneuver." Omaha World-Herald (Thurs., Aug. 11, 2016): 1B & 5B.

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






October 21, 2016

Firms No Longer Need Middlemen to Help Find Factories to Make Their Products



(p. B6) The migration of shoppers online has been squeezing profits throughout the retail industry--including at Li & Fung Ltd., one of the world's largest factory middlemen.

The more than 100-year-old company, based in Hong Kong, contracts with 15,000 factories globally to make apparel, toys and other goods. Its core business has been connecting Western retailers such as Abercrombie & Fitch Co. and Target Corp. with factories around the world.

But as consumers increasingly shop online for the best deals, retailers have been forced to offer lower prices, putting pressure on factories and intermediaries alike.

Middlemen need to "either figure out ways to create value, or they will be going out of business," said Edwin Keh, chief executive of the Hong Kong Research Institute of Textiles and Apparel. "The bigger question is whether middlemen can still exist in a globalized economy."



For the full story, see:

KATHY CHU. "Shift to Web Hits Factory Middlemen." The Wall Street Journal (Fri., Aug. 26, 2016): B6.

(Note: the online version of the story has the date Aug. 25, 2016, and has the title "Lower Retail Prices Threaten Profits of Middleman Li & Fung.")






October 19, 2016

Uber Drivers Learn to Work Optimal Hours



(p. B1) For nearly 20 years, economists have been debating how cabdrivers decide when to call it a day. This may seem like a trivial question, but it is one that cuts to the heart of whether humans are fundamentally rational -- in this case, whether they earn their incomes efficiently -- as the discipline has traditionally assumed.

In one camp is a group of so-called behavioral economists who have found evidence that many taxi drivers work longer hours on days when business is slow and shorter hours when business is brisk -- the opposite of what economic rationality, to say nothing of common sense, would seem to dictate.

In another camp is a group of more orthodox economists who argue that this perverse habit is largely an illusion in the eyes of certain researchers. Once you consult more precise numbers, they argue, you find that drivers typically work longer hours when it is in their financial interest to do so.


. . .


So who is right? That's where Uber comes in. When one of the company's researchers, using its supremely detailed data on drivers' work time and rides, waded into the debate with a paper this year, the results were intriguing.

Over all, there was little evidence that drivers were driving less when they could make more per hour than usual. But that was not true for a large portion of new drivers. Many of these drivers appeared to have an income goal in mind and stopped when they were near it, causing them to knock off sooner when their hourly wage was high and to work longer when their wage was low.


. . .


"A substantial, although not most, frac-(p. B5)tion of partners do in fact come into the market with income targeting behavior," the paper's author, Michael Sheldon, an Uber data scientist, wrote. The behavior is then "rather quickly learned away in favor of more optimal decision making."

In effect, Mr. Sheldon was saying, the generally rational beings that most economists presume to exist are made, not born -- at least as far as their Uber driving is concerned.


. . .


As for Mr. Sheldon, the Uber paper's author, he attributed his finding to the adventurous nature of many Uber drivers, who were open to running headlong into unfamiliar territory. It's the sheer unfamiliarity of the Uber driving experience, he speculated, that may explain the initial bout of economically irrational behavior.

Mr. Sheldon was less open to the idea that people who did not depend on Uber for their livelihood helped account for his finding. So far as Uber can tell from other research, he said, those who drive irregularly respond more to fare increases than more regular drivers, at any level of earnings.



For the full story, see:

NOAM SCHEIBER. "Are Uber Drivers Rational? Not Always, Economists Say." The New York Times (Mon., SEPT. 5, 2016): B1 & B5.

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

(Note: the online version of the story has the date SEPT. 4, 2016, and has the title "How Uber Drivers Decide How Long to Work.")


The working paper by Michael Sheldon mentioned above, is:

Sheldon, Michael. "Income Targeting and the Ridesharing Market." Working Paper, Feb. 18, 2016.






October 18, 2016

Faster, Stronger 3-D Printing Method May Be Better for Manufacturing



(p. B1) Ford Motor Co. is experimenting with a new form of 3-D printing the auto maker says could solve a structural flaw that has kept the technology from widespread use in manufacturing.

The ability to "print" parts within an assembly plant would drastically reduce transport and logistics costs for the auto industry, where car makers must source parts from dozens of suppliers around the world. But the most widely used version of the technology is ill-suited for mass production because objects are printed layer by layer, a slow process that also creates tiny fault lines that can crack when stressed.

A startup backed by Alphabet Inc.'s Google Ventures is developing a different 3-D printing method that some manufacturers, including Ford, say shows more promise. Carbon3D Inc.'s printers project light continuously through a pool of resin, gradually solidifying it onto an overhead platform that slowly lifts the object up until it is fully formed. The process takes a fraction of the time of other printing methods, and forms solid items more similar to those created using conventional auto-part molds, said Ellen Lee, who leads a 3-D printing research division at Ford.



For the full story, see:

LORETTA CHAO. "Fast 3-D Printing Earn New Respect." The Wall Street Journal (Tues., April 26, 2016): B1 & B4.

(Note: the online version of the story has the date April 25, 2016, and has the title "Auto Makers, Others Explore New Roles for 3-D Printing.")






October 16, 2016

Income Redistribution May Hurt Innovation



(p. A13) Edward Conard is on a dual crusade. First, he is out to prove that technological innovation is the major driver of the creation of wealth. Second, that government programs to redistribute income are at best futile and at worst the enemy of the middle class.


. . .


"The late Steve Jobs," Mr. Conard writes, "may have made huge profits from his innovations, but his wealth was small in comparison with the value of the iPhone and its imitators to their users."


. . .


"Redistribution--whether achieved through taxation, regulatory restrictions, or social norms--appears," he asserts, "to have large detrimental effects on risk-taking, innovation, productivity, and growth over the long run, especially in an economy where innovation produced by the entrepreneurial risk-taking of properly trained talent increasingly drives growth."



For the full review, see:

RICHARD EPSTEIN. "BOOKSHELF; The Necessity of the Rich; Steve Jobs may have earned huge profits from his innovations, but they pale in comparison with the value of the iPhone to its users." The Wall Street Journal (Thurs., Sept. 15, 2016): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 14, 2016, and has the title "BOOKSHELF; The Necessity of the Rich; Steve Jobs may have earned huge profits from his innovations, but they pale in comparison with the value of the iPhone to its users.")


The book under review, is:

Conard, Edward. The Upside of Inequality: How Good Intentions Undermine the Middle Class. New York: Portfolio, 2016.






October 15, 2016

Low Interest Rates Cannot Substitute for Needed Deeper Reforms



(p. B3) MUMBAI, India -- Three years before the 2008 global financial crisis, an Indian economist named Raghuram G. Rajan presciently warned a skeptical audience of top economic thinkers that excessive risk threatened the entire global financial system.

As Mr. Rajan stepped down on Sunday [Sept. 4, 2016] as India's top central banker, following intense criticism at home, he offered a new warning: Low interest rates globally could distort markets and would be difficult to abandon.

Countries around the world, including the United States and Europe, have kept interest rates low as a way to encourage growth. But countries could become "trapped" by fear that when they eventually raised rates, they "would see growth slow down," he said.

Low interest rates should not be a substitute for "other instruments of policy" and "various kinds of reforms" that are needed to encourage growth, Mr. Rajan said in a recent interview with The New York Times. "Often when monetary policy is really easy, it becomes the residual policy of choice," he said, when deeper reforms are needed.


. . .


In discussing the Indian economy in the interview, Mr. Rajan offered a less-than-ringing endorsement of the government's emphasis on manufacturing in India -- what the prime minister has called his Make in India campaign.

Mr. Rajan said he did not support the view of critics that it was too late in world economic history for India to become a manufacturing hub. But he also said that he would not focus exclusively on manufacturing as the solution to joblessness.

If India improves infrastructure and reduces government regulations, manufacturing might take off in a big way, but it "could also be services. It could be value-added agriculture also."`



For the full story, see:

GEETA ANAND. "A Departing Central Banker's Warning." The New York Times (Mon., SEPT. 5, 2016): B3.

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

(Note: the online version of the story has the date SEPT. 4, 2016, and has the title "Raghuram Rajan, India's Departing Central Banker, Has a New Warning." The online version is somewhat longer than the print version, and has minor differences in the last three paragraphs quoted above. The last three paragraphs quoted above, are from the online version.)






October 14, 2016

"I Could Lose My Ability to Control My Business"



(p. B4) Small-business owners say they are shouldering higher costs and scaling back expansion plans because of a revised federal rule that gives employees more leverage in settling workplace grievances.

The new policy, intended to hold businesses accountable for labor-law violations against people whose working conditions they control but don't claim as employees, was put in place last year through a ruling by the National Labor Relations Board, . . .


. . .


Businesses say they are in a regulatory limbo because the new standard is vague about what constitutes control.

The previous test measured the direct control one business had over working conditions of people employed by another business. Now, even indirect control can count.


So far the impact seems to be largely on the franchisees. A home health-care business in Wisconsin is taking on $10,000 in annual recruiting costs because its franchiser stopped providing assistance to steer clear of regulators, and a small hotelier in Florida is abandoning expansion plans in small markets because one of its franchisers scaled back worker training it provides. A printing business owner in Washington state said he canceled plans to open an eighth store because he doesn't want to risk the investment until it is clear his franchiser wouldn't be considered a joint-employer.

"I could lose my ability to control my business," said Chuck Stempler, an owner of the seven printing stores that operate under the AlphaGraphics brand in Washington and California.


. . .


Employers say the NLRB is confusing control with contractual relationships that help businesses and workers thrive.

"The NLRB is applying a new legal standard that would undermine a successful American business model that has enabled thousands of families to operate their own small businesses and help support millions of American jobs," McDonald's said in a statement, referring to the franchising business.



For the full story, see:

MELANIE TROTTMAN. "New Labor Law Curbs Small Firms' Plans." The Wall Street Journal (Sat., Aug. 6, 2016): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date Aug. 5, 2016, and has the title "Some Small-Business Owners Trim Expansion Plans, Cite New Labor Law.")






October 11, 2016

Private Nav Canada More Innovative than Government FAA



(p. D1) Ottawa

Flying over the U.S.-Canadian border is like time travel for pilots. Going north to south, you leave a modern air-traffic control system run by a company and enter one run by the government struggling to catch up.

Airlines, the air-traffic controllers' union and key congressional leaders all support turning over U.S. air-traffic control services to a newly created nonprofit company and leaving the Federal Aviation Administration as a safety regulator. It's an idea that still faces strong opposition in Congress, but has gained traction this year.

The model is Nav Canada, the world's second-largest air-traffic control agency, after the U.S.


. . .


The key, Nav Canada says, is its nongovernmental structure. Technology, critical to efficient airspace use these days, gets developed faster than if a government agency were trying to do it, officials say. Critics say slow technology development has been the FAA's Achilles' heel.

"We can fly optimal routes because of the technology they have. It makes a big difference," American Airlines vice president Lorne Cass says. "These are things customers don't see except they shave off minutes."

Mr. Cass, who has worked for several airlines and the FAA, first visited Nav Canada in 2004 to see new technology. "They've always been pretty good at continuous modernization," he says. "They just have more flexibility than the FAA has."


. . .


(p. D2) In government, you often need giant programs with huge promises to get funding. But Nav Canada opted for small projects, often with no idea what the outcome should look like. The company hired a corps of techies that the federal agency had never had and involved controllers in development.

"We're convinced you're better off doing things incrementally than a big bang approach," Mr. Koslow says.

Data linkage between cockpits and control centers is one example. Text messages with cockpits have been in use across oceans, in parts of Europe and across all of Canada for several years. Controllers in Montreal who handle planes to and from North America and both Europe and Asia say the texting system virtually eliminates problems of mishearing instructions and readbacks over the radio because of foreign accents.

Another innovation adopted around the world is electronic flight strips--critical information about each flight that gets changed on touch screens and passed from one controller to another electronically. Nav Canada has used them for more than 13 years. Many U.S. air controllers still use paper printouts placed in plastic carriers about the size of a 6-inch ruler that controllers scribble on.


. . .


Jerome Gagnon, a shift manager in Montreal's control tower, says the electronic system has reduced workload, errors and noise. "We don't want controllers to just be heads down. There's a lot of stuff that happens out the window," he says.

Rarely do controllers have to call each other to coordinate flights anymore, but making changes with the FAA on cross-border flights can't be done electronically.

As he explains the process in the Montreal tower, other controllers start laughing. One blurts out incredulously: "You still have to call the FAA by phone!""



For the full story, see:

SCOTT MCCARTNEY. "THE MIDDLE SEAT; The Air-Traffic System U.S. Airlines Wish They Had." The Wall Street Journal (Thurs., April 28, 2016): D1-D2.

(Note: ellipses added.)

(Note: the online version of the story has the date April 27, 2016. The online version has a couple of extra sentences that are included in the passages quoted above.)






October 8, 2016

The Internet Favors Creators in the Long Tail of Distribution



(p. A13) Does the internet pose a threat to established entertainment companies? Michael D. Smith and Rahul Telang lead a class at Carnegie Mellon University in which a student recently put that question to a visiting executive. He pooh-poohed the idea: "The original players in this industry have been around for the last 100 years, and there's a reason for that." As co-heads of CMU's Initiative for Digital Entertainment Analytics, Messrs. Smith and Telang aim to counter this line of thought, and in "Streaming, Sharing, Stealing" they do just that, explaining gently yet firmly exactly how the internet threatens established ways and what can and cannot be done about it. Their book should be required for anyone who wishes to believe that nothing much has changed.


. . .


Then there's the question of blockbusters vs. the long tail. In her book "Blockbusters" (2013), Anita Elberse, a Harvard Business School professor, contended that digital markets, far from favoring the "long tail" of products that were mostly unavailable in physical stores or theaters, actually concentrate sales at the top even further. Messrs. Smith and Telang quietly but effectively demolish this argument, noting numerous instances in which the opposite happened. In the case of one large chain, the top 100 titles accounted for 85% of the DVDs rented in-store--but when stores closed and customers were shifted to the Web, the most popular titles made up only 35% of the DVDs rented online.

The authors also note that, by making it easy for writers, musicians, and directors to work independently, digital technology has vastly increased the number of works available. Between 2000 and 2010, an explosion in self-publishing raised the number of new books issued per year to 3.1 million from 122,000.



For the full review, see:

FRANK ROSE. "BOOKSHELF; We're All Cord Cutters Now; At one chain, the top 100 movie titles accounted for 85% of the DVDs rented in-store. But online, the top titles make up only 35% of rentals." The Wall Street Journal (Weds., Sept. 7, 2016): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date Sept. 6, 2016.)


The book under review, is:

Smith, Michael D., and Rahul Telang. Streaming, Sharing, Stealing: Big Data and the Future of Entertainment. Cambridge, MA: The MIT Press, 2016.






October 7, 2016

Mobile Game Helps When Work Is Absurd Drudgery



(p. A1) SEOUL--When Lee Jin-po was laid off last year for the third time in as many years, the 29-year-old mobile-game programmer expressed his frustration in his own instinctive way: He made a mobile game about it.

In Mr. Lee's "Don't Get Fired!," the object is to rise through the ranks at a nameless corporation by performing an endless string of mind-numbing tasks, while avoiding a long list of fireable offenses.

"It's just like real life," he says.

In South Korea, where youth unemployment has hit an all-time high amid sluggish economic growth, "Don't Get Fired!" has become a certified hit--one in a small raft of mobile games that has found success by embracing the drudgery and absurdity of work.


. . .


(p. A10) Mr. Lee later found volunteers to translate it into 12 languages, helping the international version attract another million downloads. Griffin Crowley, a 20-year-old high-school graduate in a Cleveland suburb, couldn't stop playing after stumbling on it while fiddling with his cellphone. "Sometimes, you just have to laugh at the futility of life," says Mr. Crowley, who recently worked a stint at a telemarketing company.



For the full story, see:

Cheng, Jonathan. "Congratulations Player One, Your Zombie Boss Didn't Fire You; South Korean unemployment inspires games about work; laugh at chief's jokes." The Wall Street Journal (Mon., August 6, 2016): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date August 8 [sic], 2016.)






October 5, 2016

Japan Counting on Innovative Entrepreneurs for Economic Growth



(p. B3) TOKYO--Stacks of cardboard boxes serve as makeshift partitions at Mistletoe Inc.'s new office in Tokyo's posh Aoyama district, where startups gather to work on their latest projects.

The do-it-yourself vibe--a far cry from the stuffiness typical of Japanese corporate offices--is something founder Taizo Son, serial entrepreneur and youngest brother of SoftBank Group Corp. founder Masayoshi Son, wants to see more of.

"Japan has the talent and funds but lacks the necessary ecosystem to create its own Silicon Valley, so that's what we're trying to provide," said Mr. Son, 43, who describes Mistletoe as a program to cofound new businesses.

The nation that created the Walkman and the bullet train before China even had a tech industry now lags behind as Chinese Internet startups like Alibaba Group Holding Ltd. become global powerhouses. With its once-dominant technology industry struggling, Japan is counting on entrepreneurs to rekindle its hobbling economy.

The government is pledging to fund startups, top universities have launched incubators and venture funds to transform their wealth of knowledge into innovation and even Japan's oldest and largest conglomerates, such as the Mitsubishi and Mitsui groups, are looking to nurture entrepreneurs..



For the full story, see:

ALEXANDER MARTIN. "Japan Looks to Rekindle Its Technology Innovation." The Wall Street Journal (Mon., April 11, 2016): B3.

(Note: the online version of the story has the date April 10, 2016, and has the title "Japan Tech Hunts for Restart Button.")






September 29, 2016

Chinese Industry Using Robots to Automate Routine Tasks



(p. B1) China's appetite for European-made industrial robots is rapidly growing, as rising wages, a shrinking workforce and cultural changes drive more Chinese businesses to automation. The types of robots favored by Chinese manufacturers are also changing, as automation spreads from heavy industries such as auto manufacturing to those that require more precise, flexible robots capable of handling and assembling smaller products, including consumer electronics and apparel.

At stake is whether China can retain its dominance in manufacturing.


. . .


(p. B2) China, in 2013, became the world's largest market for industrial robots, surpassing all of Western Europe, according to the International Federation of Robotics. In 2015, Chinese manufacturers bought roughly 67,000 robots, about a quarter of global sales, and demand is projected to more than double to 150,000 robots annually by 2018.



For the full story, see:

Robbie Whelan and Esther Fung. "China's Factories Turn to Robots." The Wall Street Journal (Weds., August 17, 2016): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date August 16, 2016, and has the title "China's Factories Count on Robots as Workforce Shrinks.")






September 24, 2016

Executive Job-Hopping Increases



(p. B8) Corey Heller often finds himself ordering fresh business cards. The human resources executive has switched employers nine times since 1996--and spent less than three years at six of those workplaces.

In any other era, the 51-year-old Mr. Heller would be viewed as an unstable job hopper. But today, that stigma is starting to fade amid greater pressure for rapid results and decreased workplace loyalty, according to executive recruiters and coaches. The change suggests that companies increasingly believe high-level hires with multiple recent employers bring fresh insights and a mix of experience.


. . .


Brief stints will spread "because of the explosion of online recruiting and opportunistic offers to candidates with strong profiles,'' predicts Stefanie Smith, a New York executive coach.



For the full story, see:

JOANN S. LUBLIN. "Job-Hopping Is Losing Its Stigma." The Wall Street Journal (Weds., July 27, 2016): B8.

(Note: ellipsis added.)

(Note: the online version of the story has the date July 26, 2016, and has the title "Job-Hopping Executives No Longer Pay Penalty.")






September 21, 2016

Maduro Counts on Marxist Professor to Be Miraculous "Jesus Christ of Economics"



(p. B1) CARACAS, Venezuela--President Nicolás Maduro, hoping for an economic miracle to salvage his country, has placed his trust in an obscure Marxist professor from Spain who holds so much sway the president calls him "the Jesus Christ of economics."

Alfredo Serrano--a 40-year-old economist whose long hair and beard have also elicited the president's comparison to Jesus--has become the central economic adviser to Mr. Maduro, according to a number of officials in the ruling United Socialist Party and other government consultants.


. . .


Most international and domestic economists blame Venezuela's food shortages, which have triggered riots, on price controls and expropriations. Mr. Serrano, though, attributes an "inefficient distribution system in the hands of speculative capitalism," which he says allows companies to hoard products. He also says foreign and local reactionary forces are waging an economic war against Venezuela.

The adviser has championed urban agriculture in a country where about 40% of fertile land is left fallow by price controls and seed shortages. Mr. Maduro created the Ministry of Urban Agriculture, headed by a 33-year-old member researcher at Mr. Serrano's think tank, Lorena Freitez. A senior adviser at the think tank, Ricardo Menéndez, heads the planning ministry.

"Serrano is a typical European leftist who came to Latin America to experiment with things no one wants at home: state domination, price controls and fixed exchange rates," said José Guerra, a Venezuelan opposition lawmaker and former chief economist at the central bank.



For the full story, see:

ANATOLY KURMANAEV and MAYELA ARMAS. "Maduro Turns to Spanish Marxist for a Miracle." The Wall Street Journal (Tues., Aug. 9, 2016): A9.

(Note: ellipsis added.)

(Note: the online version of the story has the date Aug. 8, 2016, and has the title "Venezuela's Nicolás Maduro Looks to a Marxist Spaniard for an Economic Miracle.")






September 19, 2016

Innovations Make It Easier to Form and Run Smaller Firms



(p. B3) Unilever is paying $1 billion for Dollar Shave Club, a five-year-old start-up that sells razors and other personal products for men. Every other company should be afraid, very afraid.

The deal anecdotally shows that no company is safe from the creative destruction brought by technological change. The very nature of a company is fundamentally changing, becoming smaller and leaner with far fewer employees.


. . .


Now it is possible to leverage technology and transportation systems that never existed before. Dollar Shave Club used Amazon Web Services, a cloud computing service started by the online retailing giant in 2006 that encouraged a proliferation of e-commerce companies. Manufacturing now is just as much a line item as is a distribution apparatus. This is the business strategy of many other disruptive companies, including the home-sharing site Airbnb, which upends the idea of needing a hotel. The ride-hailing start-up Uber could never have been possible without a number of inventions including the internet, the smartphone and, most important, location tracking technology, enabling anyone to be a driver.



For the full commentary, see:

STEVEN DAVIDOFF SOLOMON. "Deal Professor; In Comfort of a Close Shave, a Distressing Disruption." The New York Times (Weds., JULY 27, 2016): B3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date JULY 26, 2016, and has the title "Deal Professor; $1 Billion for Dollar Shave Club: Why Every Company Should Worry.")






September 18, 2016

Lack of Control at Job Causes Stress, Leading to Cardiovascular Disease



(p. 6) Allostasis is not about preserving constancy; it is about calibrating the body's functions in response to external as well as internal conditions. The body doesn't so much defend a particular set point as allow it to fluctuate in response to changing demands, including those of one's social circumstances. Allostasis is, in that sense, a politically sophisticated theory of human physiology. Indeed, because of its sensitivity to social circumstances, allostasis is in many ways better than homeostasis for explaining modern chronic diseases.

Consider hypertension. Seventy million adults in the United States have it. For more than 90 percent of them, we don't know the cause. However, we do have some clues. Hypertension disproportionately affects blacks, especially in poor communities.


. . .


Peter Sterling, a neurobiologist and a proponent of allostasis, has written that hypertension in these communities is a normal response to "chronic arousal" (or stress).


. . .


Allostasis is attractive because it puts psychosocial factors front and center in how we think about health problems. In one of his papers, Dr. Sterling talks about how, while canvassing in poor neighborhoods in Cleveland in the 1960s, he would frequently come across black men with limps and drooping faces, results of stroke. He was shocked, but today it is well established that poverty and racism are associated with stroke and poor cardiovascular health.

These associations also hold true in white communities. One example comes from the Whitehall study of almost 30,000 Civil Service workers in Britain over the past several decades. Mortality and poor health were found to increase stepwise from the highest to the lowest levels in the occupational hierarchy: Messengers and porters, for example, had nearly twice the death rate of administrators, even after accounting for differences in smoking and alcohol consumption. Researchers concluded that stress -- from financial instability, time pressures or a general lack of job control -- was driving much of the difference in survival.



For the full commentary, see:

SANDEEP JAUHAR. "When Blood Pressure Is Political." The New York Times, SundayReview Section (Sun., AUG. 7, 2016): 6.

(Note: ellipses added.)

(Note: the online version of the review has the date AUG. 6, 2016.)


The commentary quoted above is distantly related to Jauhar's book:

Jauhar, Sandeep. Doctored: The Disillusionment of an American Physician. New York: Farrar, Straus and Giroux, 2014.






September 17, 2016

Cutting Taxes Helps Economy More than Increasing Government Spending





I believe the "policy missteps" diagnosis is mainly the right one, but quote some comments on the "secular stagnation" diagnosis because I want to document that for easy access for my book project.



(p. 3) Economists, like physicians, sometimes confront a patient with an obvious problem but no obvious diagnosis. That is precisely the situation we face right now.


. . .


Secular stagnation Lawrence H. Summers, former economic adviser to President Obama, has suggested that the problem predates the recent financial crisis. He points to the long-term decline in inflation-adjusted interest rates as evidence of reduced demand for capital to fund investment projects. He cites several reasons for the change, including lower population growth, lower prices for capital goods and the nature of recent innovations, like the replacement of brick-and-mortar stores with retail websites. The result, he says, is secular stagnation -- a persistent inability of the economy to generate sufficient demand to maintain full employment.

His solution? More government spending on infrastructure, like roads, bridges and airports. If the government takes advantage of lower interest rates to make the right investments in public capital -- admittedly a big if -- the policy would promote employment in the short run as projects are being built and make the economy more productive when they are put into use.


. . .


Policy missteps When Barack Obama took office in 2009, the economy was in the midst of the Great Recession. President Obama's advisers relied on standard Keynesian theory when they proposed a large increase in government spending to energize the economy. The stimulus package was the administration's first economic policy initiative. As the economy recovered, the administration supported tax increases to shrink the budget deficit.

But even at the time, there were reasons to doubt this approach. A 2002 study of United States fiscal policy by the economists Olivier Blanchard and Roberto Perotti found that "both increases in taxes and increases in government spending have a strong negative effect on private investment spending." They noted that this finding is "difficult to reconcile with Keynesian theory."

Consistent with this, a more recent study of international data by the economists Alberto Alesina and Silvia Ardagna found that "fiscal stimuli based on tax cuts are more likely to increase growth than those based on spending increases."



For the full commentary, see:

N. GREGORY MANKIW. "Economic View; One Economic Sickness, Five Diagnoses." The New York Times, SundayBusiness Section (Sun., JUNE 19, 2016): 5.

(Note: ellipses added, bold font in original.)

(Note: the online version of the commentary has the date JUNE 17, 2016.)


A Larry Summers paper on his version of secular stagnation, is:

Summers, Lawrence H. "U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound." Business Economics 49, no. 2 (April 2014): 65-73.


The Blanchard and Perotti paper mentioned above, is:

Blanchard, Olivier, and Roberto Perotti. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output." The Quarterly Journal of Economics 117, no. 4 (Nov. 2002): 1329-68.


The Alesina and Ardagna paper mentioned above, is:

Alesina, Alberto, and Silvia Ardagna. "Large Changes in Fiscal Policy: Taxes Versus Spending." In Tax Policy and the Economy. Volume 24, edited by Jeffrey R. Brown. Chicago and London: University of Chicago Press; Cambridge, Mass.: National Bureau of Economic Research, 2010, pp. 35-68.






September 15, 2016

Andreessen Venture Funds Succeed Modestly




In an Andrew Ross Sorkin column, Sean Parker urged successful entrepreneurs to become serial entrepreneurs, rather than to semi-retire as venture capitalists. In that column, Marc Andreessen was quoted as sympathizing with Parker's view.



(p. A1) Andreessen Horowitz's first three venture funds have nearly doubled their investment capital or better since inception, according to documents reviewed by The Wall Street Journal that provide a rare look at the performance of one of Silicon Valley's top venture-capital firms.

But an analysis of its returns, compared with funds from top rivals and industry averages, shows that Andreessen Horowitz hasn't yet earned its reputation as an elite firm.

The firm, co-founded by web pioneer Marc Andreessen in 2009, is routinely mentioned among the pantheon of great startup investors with the likes of Sequoia Capital, a status that has allowed it to command higher fees than some of its peers.

Sequoia has separated itself from the pack thanks to its consistently high returns. Its 2003 and 2006 venture funds have both risen eightfold net of fees, according to a person familiar with the matter.


. . .


(p. A2) Venture-capital firms raise money from universities, pension funds and other institutions to wager on startups. They typically raise a new fund every few years, operating a handful at the same time with each expected to wind down after 10 years.

Though they fall short of their top-notch rivals, all three Andreessen Horowitz funds--whose bets include Instagram, Airbnb and Pinterest Inc.--have outperformed the average of venture funds raised in the same years, according to benchmark data from investment adviser Cambridge Associates. The earliest fund, raised in 2009, ranks in the top 5% of venture funds from that year; the second fund, raised in 2010, ranks in the top 50%; and the third from 2012 ranks in the top 25%.



For the full story, see:

Winkler, Rolfe. "Andreessen's Venture Firm Trails Rivals." The Wall Street Journal (Fri., Sept. 2, 2016): A1-A2.

(Note: ellipsis added.)

(Note: the online version of the article has the date Sept. 1, 2016, and had the title "Andreessen Horowitz's Returns Trail Venture-Capital Elite.")


The views of Sean Parker and Marc Andreessen on venture capital, that I mention at the top, are summarized in:

Sorkin, Andrew Ross. "Dealbook; Taking a Risk, and Hoping That Lightning Strikes Twice." The New York Times (Tues., July 24, 2012): B1 & B4.






September 9, 2016

College Admissions Process Encourages Superficial Service



(p. 3) This summer, as last, Dylan Hernandez, 17, noticed a theme on the social media accounts of fellow students at his private Catholic high school in Flint, Mich.

"An awfully large percentage of my friends -- skewing towards the affluent -- are taking 'mission trips' to Central America and Africa," he wrote to me in a recent email. He knows this from pictures they post on Snapchat and Instagram, typically showing one of them "with some poor brown child aged 2 to 6 on their knee," he explained. The captions tend to say something along the lines of, "This cutie made it so hard to leave."

But leave they do, after as little as a week of helping to repair some village's crumbling school or library, to return to their comfortable homes and quite possibly write a college-application essay about how transformed they are.


. . .


Hernandez reached out to me because he was familiar with writing I had done about the college admissions process. What he described is something that has long bothered me and other critics of that process: the persistent vogue among secondary-school students for so-called service that's sometimes about little more than a faraway adventure and a few lines or paragraphs on their applications to selective colleges.

It turns developing-world hardship into a prose-ready opportunity for growth, empathy into an extracurricular activity.

And it reflects a broader gaming of the admissions process that concerns me just as much, because of its potential to create strange habits and values in the students who go through it, telling them that success is a matter of superficial packaging and checking off the right boxes at the right time. That's true only in some cases, and hardly the recipe for a life well lived.


. . .


Richard Weissbourd, a child psychologist and Harvard lecturer who has studied the admissions process in the interest of reforming it, recalled speaking with wealthy parents who had bought an orphanage in Botswana so their children could have a project to write and talk about. He later became aware of other parents who had bought an AIDS clinic in a similarly poor country for the same reason.

"It becomes contagious," he said.

A more recent phenomenon is teenagers trying to demonstrate their leadership skills in addition to their compassion by starting their own fledgling nonprofit groups rather than contributing to ones that already exist -- and that might be more practiced and efficient at what they do.


. . .


In many cases they are compelled. Tara Dowling, the director of college counseling at the Rocky Hill School in East Greenwich, R.I., said that many secondary schools (including, as it happens, Dylan Hernandez's) now require a minimum number of hours of service from students, whose schedules -- jammed with sports, arts, SAT prep and more -- leave little time for it.

Getting it done in one big Central American swoop becomes irresistible, and if that dilutes the intended meaning of the activity, who's to blame: the students or the adults who set it up this way?



For the full commentary, see:

Bruni, Frank. "To Get to Harvard, Go to Haiti?" The New York Times, SundayReview Section (Sun., AUG. 14, 2016): 3.

(Note: ellipses added.)

(Note: the online version of the commentary has the date AUG. 13, 2016.)






September 7, 2016

When Minimum Wage Rises, So Does Crime



(p. A13) By significantly reducing the available stock of job opportunities at the bottom end of the career ladder, a higher minimum wage increases the likelihood that unemployed teens will seek income elsewhere. A 2013 study by economists at Boston College analyzed increases in state and federal minimum-wage levels between 1997 and 2010. It found that low-skill workers affected by minimum-wage hikes were more likely to lose their jobs, become idle and commit crime. The authors warn that their results "point to the dangers both to the individual and to society from policies that restrict the already limited employment options of this group."


For the full commentary, see:

MARK J. PERRY and MICHAEL SALTSMAN. "The Fight for $15 Will Hit North Philly Hard; Not far from Democrats' soiree, teen unemployment is at 42%. What if the minimum wage doubles?" The Wall Street Journal (Weds., July 27, 2016): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 26, 2016.)


The 2013 study by Boston College economists, mentioned above, was published in 2014. The published version is:

Beauchamp, Andrew, and Stacey Chan. "The Minimum Wage and Crime." B.E. Journal of Economic Analysis and Policy 14, no. 3 (July 2014): 1213-35.






September 6, 2016

American Indians Suffer from Lack of Property Rights



(p. A15) There are almost no private businesses or entrepreneurs on Indian reservations because there are no property rights. Reservation land is held in trust by the federal government and most is also owned communally by the tribe. It's almost impossible for tribe members to get a mortgage, let alone borrow against their property to start a business. The Bureau of Indian Affairs regulates just about every aspect of commerce on reservations.

Instead of giving Indians more control over their own land--allowing them to develop natural resources or use land as collateral to start businesses--the federal government has offered them what you might call a loophole economy. Washington carves out a sector of the economy, giving tribes a regulatory or tax advantage over non-Indians. But within a few years the government takes it away, in many cases leaving Indian tribes as impoverished and more disheartened than they were before.


. . .


What American Indians need first is less regulation. There is a reason that Native Americans say BIA, the initials for the Bureau of Indian Affairs, really stands for "Bossing Indians Around."



For the full commentary, see:

NAOMI SCHAEFER RILEY. "The Loophole Economy Is No Jackpot for Indians; Running casinos or selling tax-free cigarettes can't substitute for what tribes truly need: property rights." The Wall Street Journal (Thurs., July 28, 2016): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date July 27, 2016.)


The above commentary by Riley is related to her book, which is:

Riley, Naomi Schaefer. The New Trail of Tears: How Washington Is Destroying American Indians. New York: Encounter Books, 2016.






September 3, 2016

87% of Billionaires Inherited Less than Half of Wealth



(p. C6) Billionaires controlled 3.9% of the world's total household wealth in 2015, slightly down from 4% in 2014, according to Wealth-X, a consulting group that uses public records and research staff to manually track the habits of ultra-high-net-worth individuals, or people valued at more than $30 million.


. . .


For most billionaires, however, it takes more than an inheritance to join the so-called three-comma club, according to the census; 87% of billionaires, up from 81% in 2014, made the majority of their fortunes themselves.

Todd Morgan, senior managing director at Bel Air Investment Advisors LLC in Los Angeles, says several of his billionaire clients are entrepreneurs and they are "very driven" and typically opt to keep working long after they've made their fortune.

"It's not, 'I'm worth a billion, now I'm going to sit on a beach and relax.' It's more of, 'What can I create or achieve next?'" he says.



For the full story, see:

VERONICA DAGHER. "Ranks of Billionaires Grow, and They're Getting Richer." The Wall Street Journal (Weds., Aug. 8, 2016): C6.

(Note: ellipsis added.)

(Note: the online version of the story has the title "The Rich Get Richer as Billionaires Increase in Number." There are minor differences in wording between the online and print versions. The sentences quoted above, follow the online version.)






August 28, 2016

Cancer Is Not Due to Modernity



(p. 1A) Scientists' conventional opinion about cancer was that it's a relatively recent phenomenon caused by the stresses of modern life.

Dietary changes, behavioral changes and man-made changes to our environment have subjected humans to toxins that contribute to cancers, they say.

But new findings from researchers at South Africa's University of the Witwatersrand published in the South African Journal of Science challenge that assumption.

Paleontologists found a benign tumor in a 12 or 13-year-old boy specimen that dates back almost 2 million years.

More significantly, they also found a malignant tumor that's 1.7 million years old on the little toe bone of a left foot.

Previously the oldest discovered human cancer was between 780,000 and 120,000 years old.


. . .


(p. 2A) "The evidence is out there that these conditions have been with us a long time and we've been kind of hoodwinked that cancer is a modernity," said Patrick Randolph-Quinney, one of the study's authors. "These things are ancient."

The greatest predictor of cancer, the study argues, even in our ancestors, is longevity. The longer we live, the more chances something in our bodies goes wrong, the more chances that something is a tumor.



For the full story, see:

The Washington Post. "Ancient tumor upends notion of cancer as modern affliction; 1.7-million-year-old malignant growth is causing scientists to rethink diseases and human history." Omaha World-Herald (Sat., JUNE 20, 2016): 1A & 2A.

(Note: ellipsis added.)


The scientific article mentioned above, is:

Patrick, S. Randolph-Quinney, A. Williams Scott, Steyn Maryna, R. Meyer Marc, S. Smilg Jacqueline, E. Churchill Steven, J. Odes Edward, Augustine Tanya, Tafforeau Paul, and R. Berger Lee. "Osteogenic Tumour in Australopithecus Sediba: Earliest Hominin Evidence for Neoplastic Disease." South African Journal of Science (July/Aug. 2016), DOI: http://dx.doi.org/10.17159/sajs.2016/20150470.






August 26, 2016

VCRs Let "You Create Your Own Prime Time"



(p. B1) Many new technologies are born with a bang: Virtual reality headsets! Renewable rockets! And old ones often die with a whimper. So it is for the videocassette recorder, or VCR.

The last-known company still manufacturing the technology, the Funai Corporation of Japan, said in a statement Thursday [July 21, 2016] that it would stop making VCRs at the end of this month, mainly because of "difficulty acquiring parts."


. . .


In 1956, Ampex Electric and Manufacturing Company introduced what its website calls "the first practical videotape recorder." Fred Pfost, an Ampex engineer, described demonstrating the technology to CBS executives for the first time. Unbeknown to them, he had recorded a keynote speech delivered by a vice president at the network.

"After I rewound the tape and pushed the play button for this group of executives, they saw the instantaneous replay of the speech. There were about 10 seconds of total silence until they suddenly realized just what they were seeing on the 20 video monitors located around the room. Pandemonium broke out with wild clapping and cheering for five full minutes. This was the first time in history that a large group (outside of Ampex) had ever seen a high-quality, instantaneous replay of any event."

At the time, the machines cost $50,000 apiece. But that did not stop orders from being placed for 100 of them in the week they debuted, according to Mr. Pfost.


. . .


A consumer guide published in The Times in 1981 -- when the machines ranged in price from $600 to $1,200 -- explained the appeal:

"In effect, a VCR makes you independent of television schedules. It lets you create your own prime time. You set the timer and let the machine automatically record the programs you want to watch but can't. Later, you can play the tape at your convenience. Or you can tape one show while watching another, thus missing neither."



For the full story, see:

JONAH ENGEL BROMWICH. "Once $50,000. Now VCR, Collects Dust." The New York Times (Mon., JULY 21, 2016): B1 & B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date JUNE 19, 2016, and has the title "The Long, Final Goodbye of the VCR.")






August 24, 2016

Monopolist Ede & Ravenscroft Had 98% of Legal Wigs Market



(p. A1) British barristers and judges have worn wigs since Charles II Imported the idea from France in the 1670s. A London company, Ede & Ravenscroft Ltd., today claims 98% of the market for legal wigs in the United Kingdom. The wigs distinguish barristers from solicitors, lawyers who ordinarily don't appear In court.

Ede & Ravenscroft, 300 years old, pursues its monopoly from a narrow London shop whose carved mahogany paneling, brass rails and chest-high counters hark back to the Victorian era.


. . .


(p. A7) In a stuffy loft two floors above, six women fabricate about 1,000 wigs a year on pockmarked wooden blocks resembling shrunken skulls. The wigmakers attach rows
of tightly rolled curls and a pair of ponytails with painful hand stitching, using 12-yard lengths of bleached curls made from horses' tails and manes.

They strictly follow a pattern conceived by Humphrey Ravenscroft in 1822 when he invented the "modern" horsehair wig with fixed curls. It replaced ones made of goat hair, which had to be powdered and dressed with scented ointment every day to conceal the filth.



For the full story, see:

Lublin, Joann S. "Who Has Means and Motive to Steal in Halls of Justice?; British Barristers, It Seems, Can't Resist Purloining Each Other's Ratty Wigs." The Wall Street Journal (Weds., Oct. 4, 1989): A1 & A7.

(Note: ellipsis added.)






August 22, 2016

Economist Removed from Plane for Scribbling Math




The seatmate was wrong to think the scribbling was Arabic, but was right to be alarmed.


(p. A13) In May [2016], an Italian economist from the University of Pennsylvania was removed from an American Airlines flight in Philadelphia after his seatmate became alarmed, thinking that the math he was scribbling on a piece of paper was Arabic, The Washington Post reported.


For the full story, see:

CHRISTINE HAUSER. "American Airlines Orders 2 Muslim American Women Off a Long-Delayed Flight." The New York Times (Sat., AUG. 5, 2016): A13.

(Note: bracketed year added.)

(Note: the online version of the story has the date AUG. 5, 2016, and has the title "2 Muslim American Women Ordered Off American Airlines Flight.")






August 21, 2016

Brazilians See Government as a Father Who Should Hand Out Subsidies to His Favorites



(p. 9) . . . "Brazillionaires" offers more than a flat collection of billionaire tales. Cuadros shrewdly presents his collage of immense wealth against an underlying background of corruption. There are kickbacks for government contracts. There are gigantic taxpayer subsidies: In 2009 alone, the state-run development bank, BNDES, lent out $76 billion, "more than the World Bank lent out in the entire world." And of course there are lavish campaign contributions, attached to the inevitable quid pro quos. JBS, which leveraged government loans to become the largest meatpacking company in the world, spent $180 million on the 2014 elections alone. "If every politician who had received JBS money formed a party," Cuadros writes, "it would be the largest in Congress."

In his telling, Brazilians seem to embrace the cozy relationship between business and government as a source of pride rather than a risk for conflicts of interest. In one passage, Cuadros underscores the contrast between Adam Smith and the 19th-century Brazilian thinker José da Silva Lisboa, viscount of Cairu. Lisboa's "Principios de Economía Politica" was meant to be an adaptation of Smith's "Wealth of Nations." But rather than present a paean to the invisible hand of the market, the viscount offered a rather paternalistic view of economic progress.

"The sovereign of each nation must be considered the chief or head of a vast family," he wrote, "and thus care for all those therein like his children, cooperating for the greater good." Swap "government" for "sovereign" and the passage still serves as an accurate guide to the Brazilian development strategy. It's just that some children -- the Marinhos, the Camargos -- are cared for better than ­others.


. . .


It would be wrong, . . . , to understand Brazil's plutocracy as the product of some unique outcrop of corruption. The hold on political power by the rich is hardly an exclusive feature of Brazil. ­Latin America has suffered for generations from the collusion between government and business. Where I grew up, in Mexico, it is the norm.



For the full review, see:

EDUARDO PORTER. "Real Rich." The New York Times Book Review (Sun., JULY 24, 2016): 9.

(Note: ellipses added.)

(Note: the online version of the review has the date JULY 22, 2016, and has the title "Watching Brazil's Rich: A Full-Time Job.")


The book under review, is:

Cuadros, Alex. Brazillionaires: Wealth, Power, Decadence, and Hope in an American Country. New York: Spiegel & Grau, 2016.






August 16, 2016

Certificate-of-Need Regulations Protect Incumbents and Hurt Consumers



(p. A11) An important but overlooked debate is unfolding in several states: When governments restrict market forces in health care, who benefits? Legislative majorities in 36 states believe that consumers benefit, because restrictions help control health-care costs. But new research confirms what should be common sense: Preventing qualified health-care providers from freely plying their trade results in less access to care.

Most states enforce market restrictions through certificate-of-need programs, which mandate a lengthy, expensive application process before a health-care provider can open or expand a facility. The story goes: If hospitals or physicians could choose what services to provide, competition for patients would force providers to overinvest in equipment such as MRI machines--and the cost could be passed on to patients through higher medical bills.


. . .


These restrictions have largely failed to reduce costs, but they certainly reduce services. A 2011 study in the Journal of Health Care Finance found that certificate-of-need laws resulted in 48% fewer hospitals and 12% fewer hospital beds.



For the full commentary, see:

THOMAS STRATMANN and MATTHEW BAKER. "Certifiably Needless Health-Care Meddling." The Wall Street Journal (Tues., Jan. 12, 2016): A11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Jan. 11, 2016.)


The "new research" mentioned by Stratman in the passage quoted above, is:

Stratmann, Thomas, and Matthew C. Baker. "Are Certificate-of-Need Laws Barriers to Entry?: How They Affect Access to MRI, CT, and Pet Scans." Mercatus Working Paper, Jan. 2016.






August 13, 2016

Technology Platforms Will Create Decades of Gales of Creative Destruction



(p. A11) For traditional businesses, economies of scale are the key to competitive advantage: Larger firms have lower average costs. In the digital economy, network effects matter most. In "Matchmakers" (Harvard Business Review, 260 pages, $35), David S. Evans (a consultant) and Richard Schmalensee (a professor of management) highlight two particular forms.

Direct network effects occur when additional users make a service more valuable for everyone. If one's colleagues are all on, say, LinkedIn, it will be hard for another professional network to exert a strong appeal. Without the critical mass of LinkedIn, the alternative will have less utility even if its features are better. Indirect network effects arise from positive feedback loops between opposing sides of a market. The value of Rightmove, for instance, the leading online real-estate site in Britain, comes from a matching function: Since each home is unique, buyers prefer the site with the most properties, and real-estate agents favor the site with the most buyers. This virtuous cycle magnifies Rightmove's advantage even though participants on each side of the market compete with one another: More buyers increase competition for the same homes, and agents compete for buyers.


. . .


"Matchmakers" is . . . measured and analytical . . . . The authors fairly conclude that, while the telegraph was "a far more important multisided platform" than anything produced so far by the Internet, platforms are "behind the gales of creative destruction that . . . will sweep industries for decades to come."



For the full review, see:


JEREMY G. PHILIPS. "Why Facebook's Imitators Failed; If one's coworkers are all on the same platform, any alternative will have less utility--even if its features are better." The Wall Street Journal (Thurs., May 19, 2016): A11.

(Note: the ellipsis between paragraphs, and the first two in the final quoted paragraph, are added; the third ellipsis in the final paragraph is in the original.)

(Note: the online version of the review has the date May 18, 2016.)


The book under review, is:

Evans, David S., and Richard Schmalensee. Matchmakers: The New Economics of Multisided Platforms. Boston: Harvard Business Review Press, 2016.






August 12, 2016

Taylor Swift Defends Intellectual Property Rights



(p. A11) In battles against tech titans, Chinese e-commerce swindlers and others, Ms. Swift has repeatedly insisted on being paid for her music and brand--and in the process has taught some valuable lessons in basic economics.


. . .


Last year she picked a fight with Apple after the company announced plans to launch its Apple Music streaming service with a three-month trial period during which users wouldn't pay subscription fees and Apple wouldn't pay royalties for the songs streamed.


. . .


Ms. Swift had less luck trying to get the Spotify streaming service to restrict her songs to paying customers, so in 2014 she pulled her catalog from the platform entirely. Her manager said Spotify's royalty payments are miserly compared with regular album revenues: "Don't forget this is for the most successful artist in music today. What about the rest of the artists out there struggling to make a career?"

Ms. Swift's most ambitious crusade may be in China, where she has launched branded clothing lines with special antipiracy mechanisms to combat rampant counterfeiting on e-commerce sites like Alibaba's Taobao. Said one of the branding executives leading the effort: "It's time for Chinese companies to say, 'We don't want to be known for piracy anymore.' " Good luck with that.



For the full commentary, see:


DAVID FEITH. "In Support of Taylor Swift, Economist." The Wall Street Journal (Thurs., July 21, 2016): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 20, 2016.)






August 4, 2016

Based on Cost and Fairness, 76.9% of Swiss Voters Say "No" to Taxpayer-Paid Minimum Income for All



(p. C6) ZURICH--Swiss voters on Sunday overwhelmingly rejected a controversial initiative that would have guaranteed all Swiss residents a minimum income on which to live.

The Basic Income Initiative received just 23.1% of the vote in Sunday's referendum, compared with 76.9% against. . . .

Rather, the significance of Sunday's vote--which the plan's backers ensured by collecting the necessary 100,000 signatures--was that it gave a high-profile airing to an idea that has gained traction among economists in Europe and the U.S. in recent years.

Though the monthly amount wasn't spelled out, it was expected to have been around 2,500 Swiss francs ($2,560) per adult, with a smaller subsidy for children, without regard to employment, education, disability, age or even wealth.


. . .


Opponents, . . . , latched on to two critiques: cost and fairness.



For the full story, see:

BRIAN BLACKSTONE. "Switzerland Votes to Reject Basic Income Initiative." The Wall Street Journal (Mon., June 6, 2016): C6.

(Note: ellipses added.)

(Note: the online version of the story has the date June 5, 2016.)






August 3, 2016

Obama and Koch Brothers Agree Occupational Licensing Restricts Opportunity



GranatelliGraceCanineMassageTherapist2016-07-11.jpg"Grace Granatelli, a certified canine massage therapist. In 2013, Arizona's Veterinary Medical Examining Board demanded that she close up shop for medically treating animals without a veterinary degree." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. B1) SCOTTSDALE, Ariz. -- "I usually start behind the neck," Grace Granatelli said from her plump brown sofa. "There's two pressure points back behind the ears that help relax them a little bit." In her lap, she held the head of Sketch, her mixed beagle rat terrier, as her fingers traced small circles through his fur.

Ms. Granatelli, whose passion for dogs can be glimpsed in the oil portrait of her deceased pets and the bronzed casts of their paws, started an animal massage business during the recession after taking several courses and workshops. Her primary form of advertising was her car, with its "K9 RUBS" license plate and her website, Pawsitive Touch, stenciled onto her rear window.

But in 2013, Arizona's Veterinary Medical Examining Board sent her a cease-and-desist order, demanding that she close up shop for medically treating animals without a veterinary degree. If not, the board warned, every Swedish doggy massage she completed could cost her a $1,000 fine.

To comply with the ruling and obtain a license, Ms. Granatelli would have to spend about $250,000 over four years at an accredited veterinary school. None require courses in massage technique; many don't even offer one.


. . .


(p. B5) The Obama administration and the conservative political network financed by the Koch brothers don't agree on much, but the belief that the zeal among states for licensing all sorts of occupations has spiraled out of control is one of them. In recent months, they have collaborated with an array of like-minded organizations and political leaders in a bid to roll back licensing rules.


. . .


. . . the current mishmash of requirements is too often "inconsistent, inefficient, and arbitrary," a White House report concluded last year. Many of them, the report said, have little purpose other than to protect those already in the field from further competition.


. . .


Only rarely are licensing requirements removed. Last month, though, Arizona agreed to curb them for yoga teachers, geologists, citrus fruit packers and cremationists.

But dozens more professions escaped the ax. "Arizona is perceived as a low-regulatory state, but this was the most difficult bill we worked on this session," said Daniel Scarpinato, a spokesman for the Republican governor, Douglas Ducey.

Licensing boards are generally dominated by members of the regulated profession. And in Arizona, more than two dozen of the boards are allowed to keep 90 percent of their fees, turning over a mere 10 percent of the revenue to the state.

"They use that money to hire contract lobbyists and P.R. people," Mr. Scarpinato said. "This is really a dark corner of state government."

They are often joined in their campaign by lobbyists from industry trade associations and for-profit colleges, which sell the required training courses.



For the full story, see:

PATRICIA COHEN. "Horse Rub? Where's Your License?" The New York Times (Sat., JUNE 18, 2016): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story has the date JUNE 17, 2016, and has the title "Moving to Arizona Soon? You Might Need a License.")


The White House report mentioned above, is:

The White House. "Occupational Licensing: A Framework for Policy Makers." July 2015.






August 2, 2016

$10,000 Universal Income Would Reduce Work and Cost Taxpayers Trillions



(p. B4) This month [June 2016], Charles Murray of the American Enterprise Institute will publish an updated version of his plan to replace welfare as we know it with a dollop of $10,000 in after-tax income for every American above the age of 21.


. . .


Its first hurdle is arithmetic. As Robert Greenstein of the left-leaning Center on Budget and Policy Priorities put it, a check of $10,000 to each of 300 million Americans would cost more than $3 trillion a year.

Where would that money come from? It amounts to nearly all the tax revenue collected by the federal government. Nothing in the history of this country suggests Americans are ready to add that kind of burden to their current taxes. Cut it by half to $5,000?


. . .


As Lawrence H. Summers, the former Treasury secretary and onetime top economic adviser to President Obama, told me, paying a $5,000 universal basic income to the 250 million nonpoor Americans would cost about $1.25 trillion a year. . . .

The popularity of the universal basic income stems from a fanciful diagnosis born in Silicon Valley of the challenges faced by the working class across industrialized nations: one that sees declining employment rates and stagnant wages and concludes that robots are about to take over all the jobs in the world.


. . .


Work, as Lawrence Katz of Harvard once pointed out, is not just what people do for a living. It is a source of status. It organizes people's lives. It offers an opportunity for progress. None of this can be replaced by a check.

A universal basic income has many undesirable features, starting with its non-negligible disincentive to work. Almost a quarter of American households make less than $25,000. It would be hardly surprising if a $10,000 check each for mom and dad sapped their desire to work.


. . .


As Mr. Summers told a gathering last week at the Brookings Institution, "a universal basic income is one of those ideas that the longer you look at it, the less enthusiastic you become."



For the full commentary, see:

Porter, Eduardo. "ECONOMIC SCENE; Plan to End Poverty Is Wide of the Target." The New York Times (Weds., June 1, 2016): B1 & B4.

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

(Note: the online version of the commentary has the date MAY 31, 2016, and has the title "ECONOMIC SCENE; A Universal Basic Income Is a Poor Tool to Fight Poverty.")






August 1, 2016

The Role of Steve Jobs in the Creation of Pixar



(p. B4) . . . [a] book that isn't out yet (until November [2016]): "To Pixar and Beyond: My Unlikely Journey with Steve Jobs to Make Entertainment History" by Lawrence Levy, the former chief financial officer of Pixar. What a delightful book about the creation of Pixar from the inside. I learned more about Mr. Jobs, Pixar and business in Silicon Valley than I have in quite some time. And like a good Pixar film, it'll put a smile on your face.


For the full commentary, see:

Sorkin, Andrew Ross. "DEALBOOK; Tell-Alls, Strategic Plans and Cautionary Tales." The New York Times (Tues., JULY 5, 2016): B1 & B4.

(Note: ellipsis, and bracketed word and year, added.)

(Note: the online version of the commentary has the date JULY 4, 2016, and has the title "DEALBOOK; A Reading List of Tell-Alls, Strategic Plans and Cautionary Tales in Finance.")


The book praised by Sorkin in the passage quoted above, is:

Levy, Lawrence. To Pixar and Beyond: My Unlikely Journey with Steve Jobs to Make Entertainment History. Boston, MA: Houghton Mifflin Harcourt, 2016.






July 31, 2016

Bourgeois Ideology Caused the Great Enrichment



(p. A13) What accounts for the wealth and prosperity of the developed nations of the world? How did we get so rich, and how might others join the fold?

Deirdre McCloskey, a distinguished economist and historian, has a clarion answer: ideas. It was ideas, she insists--about commerce, innovation and the virtues that support them--that account for the "Great Enrichment" that has transformed much of the world since 1800.


. . .


. . . , this monumental achievement was caused by a change in values, Ms. McCloskey says--the rise of what she calls, in a mocking nod to Marx, a "bourgeois ideology." It was far from an apology for greed, however. Anglo-Dutch in origin, the new ideology presented a deeply moral vision of the world that vaunted the value of work and innovation, earthly happiness and prosperity, and the liberty, dignity and equality of ordinary people. Preaching tolerance of difference and respect for the individual, it applauded those who sought to improve their lives (and the lives of others) through material betterment, scientific and technological inquiry, self-improvement, and honest work. Suspicious of hierarchy and stasis, proponents of bourgeois values attacked monopoly and privilege and extolled free trade and free lives while setting great store by prudence, enterprise, decency and hope.



For the full review, see:

DARRIN M. MCMAHON. "BOOKSHELF; The Morality of Prosperity; Grinding poverty was the norm for humanity until 1800. It changed with the rise of values like tolerance and respect for individual liberty." The Wall Street Journal (Mon., June 13, 2016): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date June 12, 2016.)


The book under review, is:

McCloskey, Deirdre N. Bourgeois Equality: How Ideas, Not Capital, Transformed the World. Chicago: University of Chicago Press, 2016.






July 26, 2016

Government Land Use Regulations Increase Income Inequality



(p. A1) . . . a growing body of economic literature suggests that anti-growth sentiment, when multiplied across countless unheralded local development battles, is a major factor in creating a stagnant and less equal American economy.

It has even to some extent changed how Americans of different incomes view opportunity. Unlike past decades, when people of different socioeconomic backgrounds tended to move to similar areas, today, less-skilled workers often go where jobs are scarcer but housing is cheap, instead of heading to places with the most promising job opportunities, according to research by Daniel Shoag, a professor of public policy at Harvard, and Peter Ganong, (p. B2 [sic]) also of Harvard.


. . .


"To most people, zoning and land-use regulations might conjure up little more than images of late-night City Council meetings full of gadflies and minutiae. But these laws go a long way toward determining some fundamental aspects of life: what American neighborhoods look like, who gets to live where and what schools their children attend.

And when zoning laws get out of hand, economists say, the damage to the American economy and society can be profound. Studies have shown that laws aimed at things like "maintaining neighborhood character" or limiting how many unrelated people can live together in the same house contribute to racial segregation and deeper class disparities. They also exacerbate inequality by restricting the housing supply in places where demand is greatest.

The lost opportunities for development may theoretically reduce the output of the United States economy by as much as $1.5 trillion a year, according to estimates in a recent paper by the economists Chang-Tai Hsieh and Enrico Moretti. Regardless of the actual gains in dollars that could be achieved if zoning laws were significantly cut back, the research on land-use restrictions highlights some of the consequences of giving local communities too much control over who is allowed to live there.

"You don't want rules made entirely for people that have something, at the expense of people who don't," said Jason Furman, chairman of the White House Council of Economic Advisers.



For the full story, see:

CONOR DOUGHERTY. "When Cities Spurn Growth, Equality Suffers." The New York Times (Mon., July 4, 2016): A1 & B2 [sic].

(Note: the online version of the story has the date July 3, 2016, and has the title "How Anti-Growth Sentiment, Reflected in Zoning Laws, Thwarts Equality.")


The paper mentioned above by Ganong and Shoag, is:

Ganong, Peter, and Daniel Shoag. "Why Has Regional Income Convergence in the U.S. Declined?" Working Paper, Jan. 2015.


The paper mentioned above by Hsieh and Moretti, is:

Hsieh, Chang-Tai, and Enrico Moretti. "Why Do Cities Matter? Local Growth and Aggregate Growth." National Bureau of Economic Research (NBER) Working Paper # 21154, May 2015.






July 25, 2016

Tesla and Google Bet on Different Paths to Driverless Cars



(p. B1) SAN FRANCISCO -- In Silicon Valley, where companies big and small are at work on self-driving cars, there have been a variety of approaches, and even some false starts.

The most divergent paths may be the ones taken by Tesla, which is already selling cars that have some rudimentary self-driving functions, and Google, which is still very much in experimental mode.

Google's initial efforts in 2010 focused on cars that would drive themselves, but with a person behind the wheel to take over at the first sign of trouble and a second technician monitoring the navigational computer.

As a general concept, Google was trying to achieve the same goal as Tesla is claiming with the Autopilot feature it has promoted with the Model S, which has hands-free technology that has come under scrutiny after a fatal accident on a Florida highway.

But Google decided to play down the vigilant-human approach after an experiment in 2013, when the company let some of its employees sit behind the wheel of the self-driving cars on their daily commutes.

Engineers using onboard video cameras to remotely monitor the results were alarmed by what (p. B5) they observed -- a range of distracted-driving behavior that included falling asleep.

"We saw stuff that made us a little nervous," Christopher Urmson, a former Carnegie Mellon University roboticist who directs the car project at Google, said at the time.

The experiment convinced the engineers that it might not be possible to have a human driver quickly snap back to "situational awareness," the reflexive response required for a person to handle a split-second crisis.

So Google engineers chose another route, taking the human driver completely out of the loop. They created a fleet of cars without brake pedals, accelerators or steering wheels, and designed to travel no faster than 25 miles an hour.

For good measure they added a heavy layer of foam to the front of their cars and a plastic windshield, should the car make a mistake. While not suitable for high-speed interstate road trips, such cars might one day be able to function as, say, robotic taxis in stop-and-go urban settings.



For the full story, see:

JOHN MARKOFF. "Tesla and Google Take Two Roads to Driverless Car." The New York Times (Tues., JULY 5, 2016): B1 & B5.

(Note: the online version of the commentary has the date JULY 4, 2016, and has the title "Tesla and Google Take Different Roads to Self-Driving Car.")






July 24, 2016

Most Eventually Successful Entrepreneurs Don't Quickly Quit Their Day Jobs



(p. B4) For people who prefer an introspective read that is both inspiring and has a dash of self-help, Adam Grant's "Originals: How Non-Conformists Move the World" is truly original. Mr. Grant, the youngest-ever tenured full professor at the Wharton School at the University of Pennsylvania, dives into what it takes to be a shoot-the-moon, Steve-Jobs-like success. Many of his conclusions are counterintuitive and based on deep research.

The biggest surprise for me was that the most successful entrepreneurs didn't quit their day jobs to pursue their ideas; instead, they stayed at work until they had worked all the kinks out of their plans and gotten them off the ground. The other head-scratcher in this book? Procrastination is a great thing. (This was a terrific revelation.)

Mr. Grant's research shows that some of the most creative thoughts develop during periods of so-called procrastination.



For the full commentary, see:

Sorkin, Andrew Ross. "DEALBOOK; Tell-Alls, Strategic Plans and Cautionary Tales." The New York Times (Tues., JULY 5, 2016): B1 & B4.

(Note: the online version of the commentary has the date JULY 4, 2016, and has the title "DEALBOOK; A Reading List of Tell-Alls, Strategic Plans and Cautionary Tales in Finance.")


The book praised by Sorkin in the passage quoted above, is:

Grant, Adam. Originals: How Non-Conformists Move the World. New York: Viking, 2016.






July 20, 2016

The Lucky Success of the Half-Blind "Becomes the Inevitable Coup of the Assured Visionary"



(p. B1) The most fun business book I have read this year? "Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley," by a former Facebook executive, Antonio García Martinez. I was sent a galley copy several months ago and picked it up with no intention of reading more than the first couple of pages. I don't think I looked up until about three hours later.

This is a tell-all of Mr. Martinez's experience in venture capital and later at Facebook, filled with insights about Silicon Valley -- what he calls "the tech whorehouse" -- mixed with score-settling anecdotes that will occasionally make you laugh out loud. Clearly there will be people who hate this book -- which is probably one of the things that makes it such a great read.

The dedication page includes this gem: "To all my enemies: I could not have done it without you." Mr. Martinez is particularly incisive when it comes to illustrating how failed ideas that happen to work are often spun into great successes: "What was an improbable bonanza at the hands of the flailing half-blind becomes the inevitable coup of the assured visionary," he writes. "The world crowns you a genius, and you start acting like one."



For the full commentary, see:

Sorkin, Andrew Ross. "DEALBOOK; Tell-Alls, Strategic Plans and Cautionary Tales." The New York Times (Tues., JULY 5, 2016): B1 & B4.

(Note: the online version of the commentary has the date JULY 4, 2016, and has the title "DEALBOOK; A Reading List of Tell-Alls, Strategic Plans and Cautionary Tales in Finance.")


The book praised by Sorkin in the passage quoted above, is:

Martinez, Antonio Garcia. Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley. New York: Harper, 2016.






July 19, 2016

Good Niche Movies Can Be More Profitable than Blockbusters



(p. 5D) "Counterprogramming is the framework to get the most
bang for the buck for movies that aren't necessarily going to be blockbusters. "

Counterprogramming has become a crazy expensive game of chicken, Dergarabedian says.

Scheduling a rom-com next to a superhero franchise or a horror movie on Valentine's Day is a classic ploy, he says, but there's no formula that's guaranteed. "You still have to be able to deliver the movie," Dergarabedian says. "People are looking for different and good. You can't just rely on being the other option."


. . .


"A lot of these are David and Goliath matchups," Dergarabedian says. "But it's about who wins the profitability derby. That can ultimately be more important than where you rank on the chart."

To determine success, look at how well the audience is served rather than money, says Erik Davis, managing editor for Movies.com and Fandango.com. The greater the disparity in the genres, the better the position to succeed, he says.

Though Big Fat Greek Wedding 2 performed modestly against BvS, Davis considers that scheduling a a win. "They (both) have potential to mine their specific audience," he says.



For the full story, see:

Heady, Chris. "Studios Think Outside the Box (Office)." USA Today (Thurs., July 7, 2016): 5D.






July 13, 2016

Computers and Humans as Complements Rather than Substitutes



(p. B1) "A lot of companies pushed hard on the idea that technology will solve every problem, and that we shouldn't use humans," said Paul English, the co-founder of a new online company called Lola Travel. (p. B10) "We think humans add value, so we're trying to design technology to facilitate the human-to-human connection."


. . .


"I tried to create the best travel website on the market," he said. "But as good as we thought our tech was, there were many times where I thought I did a better job for people on the phone than our site could do."

You've most likely experienced the headaches Mr. English is talking about. Think back to the last time you booked anything beyond a routine trip online. There's a good chance you spent a lot more time and energy than you would have with a human. Sure, the Internet has obligingly stepped in to help; there are review sites, travel blogs, discussion forums and the hordes on social media to answer every possible travel question. But these resources only exacerbate the problem. They often turn what should be a fun activity into an hourslong research project.


. . .


In many cases, yes, but there remain vast realms of commerce in which guidance from a human expert works much better than a machine. Other than travel, consider the process of finding a handyman or plumber. The Internet has given us a wealth of data about these services. You could spend all day on Craigslist, Yelp or Angie's List finding the best person for your job, which is precisely the problem.

"It's going to be a long time until a computer can replace the estimating power of an experienced handyman," said Doug Ludlow, the founder of the Happy Home Company, a one-year-old start-up that uses human experts to find the right person for your job. The company, which operates in the San Francisco Bay Area but plans to expand nationally, has contracts with a network of trusted service professionals in your area. To get some work done, you simply text your Happy Home manager with a description of the problem and maybe a few pictures.

"A quick glance from our handyman gives us an idea of who to send to your job, and what it will cost," Mr. Ludlow said. The company handles payment processing, scheduling and any complaints if something goes wrong.

I recently used Happy Home to get a few home theater cables concealed in a wall. The experience was liberating -- I found a handyman and a drywall specialist to do my job with little more than few texts, and no time spent scouring through web reviews.

It isn't feasible to get humans involved in all of our purchases. Humans are costly and they're limited in capacity. The great advantage of computers is that they "scale" -- software can serve evermore customers for ever-lower prices.

But one of the ironies of the digital revolution is that it has also helped human expertise scale. Thanks to texting, human customer service agents can now serve multiple customers at a time. They can also access reams of data about your preferences, allowing them to quickly find answers for your questions.

As a result, for certain purchases, the cost of adding human expertise can be a trivial part of the overall transaction. Happy Home takes a cut of each service it sets up, but because it can squeeze out certain efficiencies from operating a network of service professionals, its prices match what you'd find looking for a handyman on your own. That's true of human travel agencies, too -- the commissions on travel are so good that Lola can afford to throw in human expertise almost as a kind of bonus.

The rise of computers is often portrayed as a great threat to all of our jobs. But these services sketch out a more optimistic scenario: That humans and machines will work together, and we, as customers, will be allowed, once more, to lazily beg for help.



For the full commentary, see:

Manjoo, Farhad. "State of the Art; The Machines Rose, but Now Start-Ups Add Human Touch." The New York Times (Thurs., DEC. 17, 2015): B1 & B10.

(Note: ellipses added.)

(Note: the online version of the commentary has the date DEC. 16, 2015, and has the title "State of the Art; In a Self-Serve World, Start-Ups Find Value in Human Helpers.")






July 10, 2016

Tribe Uses Autonomy to Fight American Dental Association (A.D.A.) Credentialism



(p. A10) Mr. Kennedy, 56, a soft-spoken Tlingit Native Alaskan, is a dental therapist, the rough equivalent of a physician assistant. He is trained to perform the most common procedures that dentists do, from fillings to extractions. Since January, when he started at the Swinomish Dental Clinic, over 50 miles north of Seattle, he has been the only dental therapist on tribal land anywhere in the lower 48 states. He studied in Alaska, which has the nation's only program -- patterned after one in New Zealand -- aimed at training therapists specifically to work in underserved tribal areas.

Laws here in Washington and most other states bar dental therapists, who have long been opposed by the American Dental Association, so the tribe created its own licensing system. The federal Indian Health Service, which pays for medical care on Indian lands, cannot compensate therapists unless authorized by the state, so the Swinomish (pronounced SWIN-o-mish) needed private foundation support and meticulous accounting so that no law was violated.

"We had to take matters into our own hands," said Brian Cladoosby, the chairman of the Swinomish Senate and president of the National Congress of American Indians. The breaking point came in 2015, after Washington's Legislature -- pressured by the dental lobby, Mr. Cladoosby said -- declined for the fifth year in a row to pass a bill allowing a therapist program. Asserting tribal sovereignty, the tribe forged ahead anyway.

"The American Dental Association is no friend to American Indian tribes," Mr. Cladoosby said in an interview.


. . .


(p. A11) Dr. Rachael R. Hogan, a dentist who works at the Swinomish Clinic, supervises Mr. Kennedy's work. At first she did not think the arrangement would work. The A.D.A.'s safety concerns made sense, she said.

"I was leery," she said. But after watching Mr. Kennedy for the past four months and visiting the training school in Alaska, she has changed her mind. By practicing procedures over and over -- more than most dental school graduates, who must also study a broad range of diagnostic and disease issues -- therapists can hone procedures, she said, to an art.

"Their fillings are better," she said. "Are we providing substandard care by providing a therapist? Actually, I would say it's the opposite."



For the full story, see:

KIRK JOHNSON. "Asserting Tribal Sovereignty to Improve Indian's Dental Care." The New York Times (Mon., MAY 23, 2016): A10-A11.

(Note: ellipsis added.)

(Note: the online version of the story has the date MAY 22, 2016, and has the title "Where Dentists Are Scarce, American Indians Forge a Path to Better Care.")






July 9, 2016

German Car Makers in No Rush to Catch Up to Tesla



(p. A7) When Elon Musk rolled out the new Tesla Model X at the end of September [2015], some grumbled that the Silicon Valley car maker's all-electric luxury crossover was coming to market two years too late. It depends on who you ask. The Big Three German auto makers only wish they could catch the tail of Mr. Musk's rocket.

I'm not talking about units sold, though Tesla's target of 50,000 cars in 2015 is a respectable chunk of the global luxury-sedan market. But Tesla has taken more hide off German prestige and sense of technical primacy. I mean, the Model X was just rubbing their noses in it with those "falcon" doors, right? In executive interviews at the Frankfurt Auto Show any praise of Tesla was guaranteed to land on the table like a paternity suit.


. . .


I wonder if any traditional auto maker whose existence does not hang in the balance can ever have enough belly for the EV long game?

Even if the Germans had market-bound EVs in mass quantities, there is the concurrent problem of charging. As the estimable John Voelcker of Green Car Reports notes, the luxury incumbents have no plans to challenge Tesla on charging availability. Tesla has hundreds of charging stations in the U.S. and Europe and plans for hundreds more--all free to owners.


. . .


I am struck by the lag time. This isn't about profit and loss but industry leadership. The Germans are headed where Tesla already is and, taking Frankfurt as the measure, they are in no great hurry to get there.



For the full commentary, see:

Dan Neil. "RUMBLE SEAT; How Tesla Leaves its Rivals Playing Catch Up." The Wall Street Journal (Sat., Oct. 10, 2015): D11.

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

(Note: the online version of the commentary has the date Oct. 8, 2015.)






July 7, 2016

Richest Rich Use Crony Capitalism to Game Tax System



(p. A1) Two decades ago, when Bill Clinton was elected president, the 400 highest-earning taxpayers in America paid nearly 27 percent of their income in federal taxes, according to I.R.S. data. By 2012, when President Obama was re-elected, that figure had fallen to less than 17 percent, which is just slightly more than the typical family making $100,000 annually, when payroll taxes are included for both groups.


. . .


(p. A12) "There's this notion that the wealthy use their money to buy politicians; more accurately, it's that they can buy policy, and specifically, tax policy," said Jared Bernstein, a senior fellow at the left-leaning Center on Budget and Policy Priorities who served as chief economic adviser to Vice President Joseph R. Biden Jr. "That's why these egregious loopholes exist, and why it's so hard to close them."

The Family Office

Each of the top 400 earners took home, on average, about $336 million in 2012, the latest year for which data is available. If the bulk of that money had been paid out as salary or wages, as it is for the typical American, the tax obligations of those wealthy taxpayers could have more than doubled.

Instead, much of their income came from convoluted partnerships and high-end investment funds. Other earnings accrued in opaque family trusts and foreign shell corporations, beyond the reach of the tax authorities.

The well-paid technicians who devise these arrangements toil away at white-shoe law firms and elite investment banks, as well as a variety of obscure boutiques. But at the fulcrum of the strategizing over how to minimize taxes are so-called family offices, the customized wealth management departments of Americans with hundreds of millions or billions of dollars in assets.


. . .


The major industry group representing private equity funds spends hundreds of thousands of dollars each year lobbying on such issues as "carried interest," the granddaddy of Wall Street tax loopholes, which makes it possible for fund managers to pay the capital gains rate rather than the higher standard tax rate on a substantial share of their income for running the fund.



For the full story, see:

NOAM SCHEIBER and PATRICIA COHEN. "By Molding Tax System, Wealthiest Save Billions." The New York Times (Weds., DEC. 30, 2015): A1 & A12.

(Note: bold, and larger font, in original; ellipses added.)

(Note: the online version of the story has the date DEC. 29, 2015, and has the title "For the Wealthiest, a Private Tax System That Saves Them Billions.")






July 2, 2016

President Kenyatta Burns Ivory, Raising Its Price, and Increasing the Incentive for Poachers to Kill Elephants



If President Kenyatta wants to save elephants, instead of burning ivory, he should sell it on the open market, moving the supply curve to the right, and lowering the price of ivory. A lower price of ivory would reduce the incentive for poachers to kill elephants.







(p. 10) NAIROBI, Kenya -- What do you do when you have more than $100 million worth of ivory sitting around, just collecting dust?

You burn it, of course.

That is what Kenya did on Saturday, when President Uhuru Kenyatta lit a huge pyre of elephant tusks as a way to show the world that Kenya is serious about ending the illegal ivory trade, which is threatening to push wild elephants to extinction.

"No one, and I repeat, no one, has any business in trading in ivory, for this trade means death -- the death of our elephants and the death of our natural heritage," Mr. Kenyatta said.



For the full story, see:

ELLEN BARRY. "A Year Later, Nepal Is Trapped in the Shambles of a Devastating Quake." The New York Times, First Section (Sun., May 1, 2016): 10.

(Note: ellipses added.)

(Note: the online version of the story has the date APRIL 30, 2016, and has the title "A Year After Earthquake, Nepal's Recovery Is Just Beginning.")






July 1, 2016

"Robots Take Away Subhuman Jobs"



(p. A21) Joseph F. Engelberger, a visionary engineer and entrepreneur who was at the forefront of the robotics revolution, building robots for use on assembly lines and fostering another, named Seymour, to handle chores in hospitals, died on Tuesday [December 1, 2015] in Newtown, Conn. . . .


. . .


Mr. Engelberger was a force in robotics from its early days, in the 1960s, when his company, Unimation, in Danbury, Conn., developed the Unimate, a robotic arm that would greatly accelerate industrial production lines.


. . .


Labor unions and some corporate managers resisted robotics at first, worrying, as Mr. Engelberger later put it, "that the robots can take all the jobs away."

He disagreed with that notion.

"It's unjustified," he told The New York Times in 1997. "The robots take away subhuman jobs which we assign to people."

Unimate proved to be more precise than the human hand in completing some repetitive and dangerous tasks. Automobile makers employed the arm to weld and move vehicle parts, apply adhesives to windshields and spray-paint car bodies -- jobs that had posed chemical hazards to workers.



For the full obituary, see:

JEREMY PEARCE. "Joseph F. Engelberger, a Leader of the Robot Revolution, Dies at 90." The New York Times (Thurs., DEC. 3, 2015): A33.

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

(Note: the online version of the obituary has the date DEC. 2, 2015, and has the title "Joseph F. Engelberger, a Leader of the Robot Revolution, Dies at 90.")






June 29, 2016

Perfect Reliability Is Not Worth the Cost



(p. B4) Say what you will about Plain Old Telephone Service, but it worked. The functionality of POTS, as it was known, was limited to making calls, and they were expensive. But many traditional phone companies offered 99.999% reliability, which allowed for about five minutes of downtime a year.

Today's networks are far less expensive, infinitely more capable and nowhere near as reliable as the wired-to-the-wall phone, . . .


. . .


To some extent, contemporary networks suffer from inattention. The old phone system worked so well because regulators in certain countries like the U.S. said it had to, and enough money was set aside to fund an army of technicians and engineers to oversee it. That generally isn't the case with modern, digital networks and IT infrastructure, and companies often neglect this nuts-and-bolts technology.


. . .


Underneath it all, the economics of falling prices carry a trade-off. Consumers get more for their money in the mobile, digital era, but that often leaves margin-stretched companies with fewer resources to invest in robustness and maintenance. Reliability is as much a function of business and risk management as it is about tech.

"I don't know if people are sweating that detail as much as they used to," said Mr. Bayer, previously CIO of the Securities and Exchange Commission.


. . .


Former NYSE Euronext Chief Operating Officer Lawrence Leibowitz told the Journal in 2013 the public shouldn't expect market technology to function perfectly, a goal that would be too expensive to implement even if it were technically feasible.



For the full story, see:

STEVE ROSENBUSH and STEVEN NORTON. "Network Reliability, a Relic of Business?" The Wall Street Journal (Fri., July 10, 2015): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date July 9, 2015 and has the title "What We Learned From the NYSE, United Airlines Tech Outages.")






June 20, 2016

Taxpayer Funded Stadiums Fail to Bring Promised Economic Development



(p. C14) The Twin Cities of Minneapolis and St. Paul have been an epicenter of the U.S. stadium-and-arena boom, rolling out five major sports facilities since 1990 that together cost more than $2 billion.

Now, the neighboring cities are readying for a sixth: a 20,000-seat, $150 million Major League Soccer stadium to be built by 2018 in St. Paul about halfway between the two downtowns.


. . .


But taken with the other facilities that have a combined seat count of nearly 200,000, this latest project illustrates how the Twin Cities are an acute example of the rapid increase in stadiums and arenas in U.S. cities. These developments come despite a growing chorus of warnings from economists who say the stadiums are almost always poor drivers of economic development. Even when these facilities do spur nearby investment, economists and critics say the cost to the public is typically far higher than with traditional economic-development programs.


"I've lived in the Twin Cities since 1976, and have seen this proliferation of new sports stadia," said Jane Prince, a St. Paul city council member who voted against the soccer stadium aid package. "I just don't see the promised economic development occurring in conjunction with all of these."


. . .


"There's not one group that makes these decisions--it was two city governments, it was a legislature, it was sports owners," said R.T. Rybak, the mayor of Minneapolis from 2002 to 2014. Mr. Rybak said he had long been critical of sports subsidies but he grudgingly helped craft the aid package for the Vikings stadium after the team was poised to move elsewhere.

That deal, and the others, he said, were "also driven by the increasingly crazy politics of sports economics," in which teams want their own facilities, custom designed for their ideal crowd sizes.



For the full story, see:

ELIOT BROWN. "Twin Cities to Get Yet Another Stadium." The Wall Street Journal (Weds., March 23, 2016): C14.

(Note: ellipses added.)

(Note: the online version of the story has the date March 22, 2016, and has the title "In Twin Cities, How Many Stadiums Are Enough?")






June 12, 2016

Workers Gain Slightly Larger Percent of GDP



WorkerCompensationGraph2016-05-27.jpgSource of graph: online version of the NYT article quoted and cited below.



(p. B1) American workers are reaping fewer of the gains of a growing economy in the form of pay and benefits. Shareholders are reaping more in the form of corporate profits. That shift has been one of the most important economic stories of the last several decades, and it is the key to understanding stagnant wages for middle-class workers and a soaring stock market in the last quarter-century.

Here is what is less widely understood: That trend appears to be reversing itself.

It is early and the reversal may not last. And it certainly hasn't fully undone the shift underway since the 1980s. But the numbers are quite clear that in the last couple of years workers have claimed a bigger piece of the economic pie and shareholders a smaller one.

The evidence available so far in 2016 -- steady growth in wages and weak earnings for publicly traded companies -- suggests that the reversal is continuing this year.



For the full story, see:

Neil Irwin. "The Upshot; Workers Are Getting a Bit More of the Economic Pie." The New York Times (Fri., MAY 6, 2016): B1 & B9.

(Note: the online version of the story has the date MAY 3, 2016, and has the title "The Upshot; Workers Are Getting a Bit More of the Economic Pie (and Shareholders Less).")






June 9, 2016

Feds Spend Over $500 Million to Aid Barges Shipping Coal



(p. B1) CHARLEROI, Pa.--A few years ago, coal barges lined up 20 or 30 deep, waiting their turn for a towboat to shuttle them through the locks near this town along the Monongahela River.

These days it is the towboats that often sit idle. Cheap natural gas, stricter power-plant-emissions rules and a weak steel market have gutted coal demand, and with it traffic on the rivers that have served as the industry's commercial arteries for over a century.

Nevertheless, river infrastructure is about to be flooded with federal cash. In December, Congress authorized $405 million to improve river locks and dams over the next fiscal year, the most since 2008.

The money follows a multimillion-dollar lobbying effort spearheaded by the Waterways Council Inc., which represents an array of companies including coal producer Murray Energy Corp., utility FirstEnergy Corp., agricultural-commodities trader Cargill Inc. and Marathon Petroleum Corp.


. . .


"It's kind of ironic--we're spending even more to update and modernize this system when the value and volume of the commodities is diminishing, and coal is something that we as a country are moving away from," said Steve Ellis, vice president of Taxpayers for Common Sense, a conservative-leaning advocacy group that analyzes infrastructure spending.



For the full story, see:

ROBBIE WHELAN. "Barges Get a Boost, Even as Demand Sinks." The Wall Street Journal (Thurs., Feb. 4, 2016): B1 & B7.

(Note: ellipsis added.)

(Note: the online version of the story has the date Feb. 2, 2016, and has the title "U.S. Opens Spigot for Lock-and-Dam Fixes, Even as Coal Traffic Dwindles.")






June 7, 2016

Steady-State Stagnation Is Not an Option



Some environmentalists advocate an end to economic growth. Inside economics, and in the broader world, a heated debate has considered whether an economy can long stagnate in a steady-state. The idea that it can, is captured in the circular flow diagram that has been a fixture of many introductory economics textbooks for many decades. I argue that without the dynamism that is achieved by innovative entrepreneurs, long-term stagnation is not an option. Exogenous events, such as earthquakes, will always come along to disturb the steady-state. And when they do, only entrepreneurs can restore the steady-state. If there are no entrepreneurs, there will be decline. If there are entrepreneurs, they will not stop at the steady-state; they will seek progress. The choice is forward or backward. Long-term steady-state stagnation is not an option.



(p. 10) SANKHU, Nepal -- As the anniversary of Nepal's devastating earthquake came and went last week, Tilakmananda Bajracharya peered up at the mountainside temple his family has tended for 13 generations, wondering how long it would remain upright.


. . .


Many people here pin their hopes on promises of foreign aid: After the disaster, images of collapsed temples and stoic villagers in a sea of rubble were beamed around the world, and donors came forward with pledges of $4.1 billion in foreign grants and soft loans.

But those promises, so far, have not done much to speed the progress of Nepal's reconstruction effort. Outside Kathmandu, the capital, many towns and villages remain choked with rubble, as if the earthquake had happened yesterday. The government, hampered by red tape and political turmoil, has only begun to approve projects. Nearly all of the pledged funds remain in the hands of the donors, unused.

The delay is misery for the 770,000 households awaiting a promised subsidy to rebuild their homes. Because a yearly stretch of bad weather begins in June, large-scale rebuilding is unlikely to begin before early 2017, consigning families to a second monsoon season and a second winter in leaky shelters made of zinc sheeting.


. . .


. . . , some visitors who came here to assess the reconstruction expressed shock at how little had been done.


. . .


"It has been a horrible year," said Anju Shrestha, 36, whose shed stands on a site that once held a three-story brick house.

A neighbor, Kanchhi Shrestha, guessed her age at about 75, based on a major earthquake that occurred two years before she was born. She pulled her skirt up to show feet splotchy with raw sores.

"I will die in this shelter if they do not give me money," she said. "I have nothing to eat."

However, she added, it would be inappropriate for a person like her to demand assistance from Nepal's government.

"We cannot scold the government," she said. "If the government provides, we will fold our hands and tell them, 'You are God.' "



For the full story, see:

ELLEN BARRY. "A Year Later, Nepal Is Trapped in the Shambles of a Devastating Quake." The New York Times, First Section (Sun., May 1, 2016): 10.

(Note: ellipses added.)

(Note: the online version of the story has the date APRIL 30, 2016, and has the title "A Year After Earthquake, Nepal's Recovery Is Just Beginning.")






June 6, 2016

Plastic Buttons Replaced Seashell Buttons, but Technology Can Be Restored




In What Technology Wants, Kevin Kelly has made the point that most obsolete technologies remain available to satisfy nostalgia, or for more practical uses, if the need arises. Below is another example.



(p. C27) In a tan outbuilding overlooking a pond in northeastern Connecticut, equipment for turning seashells into buttons has lain fallow for nearly eight decades. The building's owner, Mark Masinda, a retired university administrator, is working to transform the site into a tourist attraction.

In the early 1900s, his grandfather William Masinda, a Czech immigrant, supervised a dozen button makers in the building, which is on a rural road in Willington. They cut, drilled and polished bits of shells imported from Africa and Australia to make "ocean pearl buttons" with two or four holes. The area's half-dozen button factories supplemented the incomes of families struggling to farm on rocky terrain.

The Masinda operation closed in 1938, as plastic flooded the market. "The equipment he had just couldn't make the transition," Mr. Masinda said.


. . .


Mr. Masinda is planning to reactivate the equipment and open the site for tours by . . . spring [2016].



For the full story, see:

EVE M. KAHN. "Antiques; Restoring a Button Factory." The New York Times (Thurs., DEC. 3, 2015): C27.

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

(Note: the online version of the story has the date DEC. 3, 2015, and has the title "Antiques; Yale Buys Collection of Scattered Medieval Pages; Restoring a Button Factory.")


The Kelly book mentioned above, is:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.






May 27, 2016

Basic Goods Unavailable in Socialist Venezuela



(p. 5) I used to laugh when I heard that reporters were headed to Caracas with their own deodorant. I thought they were just being fussy.

Then came my turn.

I brought Old Spice. For detergent, I brought a ton of Tide. That's one of my bags above, and all the other essentials that came along: two nasal spray bottles, three tubes of toothpaste, one package of floss, a bottle of body wash, shaving cream, contact lens solution, AA batteries, sponges, detergent, toilet paper and a big bottle of ibuprofen. Two bottles of Scotch.

If a selfie in the airport is a rite of passage for those leaving Venezuela, a preflight run to the supermarket to fill a suitcase with basic goods is the ritual for those arriving here.

Since the economy fell into deep collapse in 2015, some things just aren't sold here. Other items -- like toilet paper -- are on the black market but can be tricky to find.

My friend Girish has been making these trips for the last five years. I asked him before moving here what to pack, besides toilet paper.

He responded, via text: "Medicine. First Aid stuff. Spices/other food you like. Kindle (as books aren't so easy to get here), shampoos/toiletries etc if you like something specific..."

Like some people here, Girish brings enough to get him through a month or so. Then he makes a pit stop in Colombia to fill up the cabinet again.

But most people in Venezuela can't leave and have to make do with whatever they can find.



For the full story, see:

NICHOLAS CASEY. "Settling Into Venezuela, a Land in Turmoil." The New York Times, First Section (Sun., Jan. 24, 2016): 5 & 9.

(Note: ellipsis added.)

(Note: the online version of the story has the date January 5 [sic], 2016, and has the title "Moving to Venezuela, a Land in Turmoil.")






May 26, 2016

Tesla Direct Sales Thwarted by Laws that Protect Dealers Instead of Consumers



(p. B3) Tesla Motors Inc. hopes to capture mainstream auto buyers with its Model 3, an electric car it plans to unveil this week at a price about the same as the average gasoline-powered vehicle, but it may need a federal court ruling to succeed.

The Palo Alto, Calif., auto maker's direct-to-consumer sales are prohibited by law in six states that represent about 18% of the U.S. new-car market. Barring a change of heart by those states, Tesla is preparing to make a federal case out of the direct-sales bans.

The auto maker's legal staff has been studying a 2013 federal appeals court ruling in New Orleans that determined St. Joseph Abbey could sell monk-made coffins to customers without having a funeral director's license. The case emerged amid a casket shortage after Hurricane Katrina. The abbey had tried to sell coffins, only to find state laws restricted such sales to those licensed by the Louisiana Board of Funeral Directors.

For now, Tesla is banking on a combination of new legislation, pending dealer applications and other factors to open doors to selling directly in Arizona, Michigan, Texas, Connecticut, Utah and West Virginia. But the company said it is ready to argue in federal court using the coffin case if necessary.

"It is widely accepted that laws that have a protectionist motivation or effect are not proper," Todd Maron, the auto maker's chief counsel, said in an interview. "Tesla is committed to not being foreclosed from operating in the states it desires to operate in, and all options are on the table."


. . .


"There is no legitimate competitive interest in having consumers purchase cars through an independent dealership," Greg Reed, an attorney with Washington D.C.-based Institute for Justice, a libertarian-leaning law firm, said. He calls Michigan's laws "anti-competitive protectionism."



For the full story, see:

MIKE RAMSEY. "Tesla Weighs Legal Fight." The Wall Street Journal (Tues., March 29, 2016): B3.

(Note: ellipsis added.)

(Note: the online version of the story has the date March 28, 2016, and has the title "Tesla Weighs New Challenge to State Direct-Sales Bans.")






May 22, 2016

More Evidence that Once-Dynamic Florence Is Now Stagnant



(p. C1) New research from a pair of Italian economists documents an extraordinary fact: The wealthiest families in Florence today are descended from the wealthiest families of Florence nearly 600 years ago.

The two economists -- Guglielmo Barone and Sauro Mocetti of the Bank of Italy -- compared data on Florentine taxpayers in 1427 against tax data in 2011. Because Italian surnames are highly regional and distinctive, they could compare the income of families with a certain surname today, to those with the same surname in 1427. They found that the occupations, income and wealth of those distant ancestors with the same surname can help predict the occupation, income and wealth of their descendants today.



For the full story, see:

JOSH ZUMBRUN. "Florence's Rich Stay Rich--for 600 Years." The Wall Street Journal (Fri., May 20, 2016): C1-C2.

(Note: the online version of the story has the date May 19, 2016, and has the title "The Wealthy in Florence Today Are the Same Families as 600 Years Ago." Where there are minor differences in the two versions, the passages quoted above follow the online version.)


The Barone and Mocetti working paper, is:

Barone, Guglielmo, and Sauro Mocetti "Intergenerational Mobility in the Very Long Run: Florence 1427-2011." Bank of Italy Working Paper #1060, April 2016.






May 21, 2016

"Liberated People Are Ingenious"



(p. C1) Nothing like the Great Enrichment of the past two centuries had ever happened before. Doublings of income--mere 100% betterments in the human condition--had happened often, during the glory of Greece and the grandeur of Rome, in Song China and Mughal India. But people soon fell back to the miserable routine of Afghanistan's income nowadays, $3 or worse. A revolutionary betterment of 10,000%, taking into account everything from canned goods to antidepressants, was out of the question. Until it happened.


. . .


(p. C2) Why did it all start at first in Holland about 1600 and then England about 1700 and then the North American colonies and England's impoverished neighbor, Scotland, and then Belgium and northern France and the Rhineland?

The answer, in a word, is "liberty." Liberated people, it turns out, are ingenious. Slaves, serfs, subordinated women, people frozen in a hierarchy of lords or bureaucrats are not. By certain accidents of European politics, having nothing to do with deep European virtue, more and more Europeans were liberated. From Luther's reformation through the Dutch revolt against Spain after 1568 and England's turmoil in the Civil War of the 1640s, down to the American and French revolutions, Europeans came to believe that common people should be liberated to have a go. You might call it: life, liberty and the pursuit of happiness.

To use another big concept, what came--slowly, imperfectly--was equality. It was not an equality of outcome, which might be labeled "French" in honor of Jean-Jacques Rousseau and Thomas Piketty. It was, so to speak, "Scottish," in honor of David Hume and Adam Smith: equality before the law and equality of social dignity. It made people bold to pursue betterments on their own account. It was, as Smith put it, "allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice."



For the full commentary, see:


DEIRDRE N. MCCLOSKEY. "How the West (and the Rest) Got Rich; The Great Enrichment of the past two centuries has one primary source: the liberation of ordinary people to pursue their dreams of economic betterment." The Wall Street Journal (Sat., May 21, 2016): C1-C2.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 20, 2016.)


McCloskey's commentary is based on her "bourgeois" trilogy, the final volume of which is:

McCloskey, Deirdre N. Bourgeois Equality: How Ideas, Not Capital, Transformed the World. Chicago: University of Chicago Press, 2016.






May 12, 2016

Some Entrepreneurs Support Big Government, Except When They Are the Ones Regulated



(p. A11) In October [2015], author Steven Hill will publish a book called "Raw Deal: How the 'Uber Economy' and Naked Capitalism Are Screwing American Workers." At the political conventions next summer, which party's attendees will be most likely to have read that book?

The ironies run deep. The Uber driver who ferried Jeb Bush around San Francisco said the former Florida governor was a nice chap but added that he still planned to vote for Mrs. Clinton--the candidate who regards the innovations that has led to the creation of his job as a problem that government needs to solve.

But is Uber co-founder Travis Kalanick any different? Even as he struggles with regulators taking aim at his business model, Mr. Kalanick has spoken up in favor of ObamaCare. During a visit to New York last November, he enthused that ObamaCare was "huge" for companies like his, on the grounds that the individual market has democratized benefits such as health care.

That's true insofar as it means he doesn't have to provide it for his drivers. But the reality is that ObamaCare is to health what taxi commissions are to transportation. And if Uber's co-founder can't see the difference, maybe he deserves the Bill de Blasios and Hillary Clintons coming after him.



For the full commentary, see:

WILLIAM MCGURN. "MAIN STREET; Uber Crashes the Democratic Party; The ride-share app is bringing out the inner Elizabeth Warren." The New York Times (Tues., July 21, 2015): A11.

(Note: bracketed year added.)

(Note: the online version of the commentary has the date July 20, 2015.)






May 10, 2016

Sanders's Economics Agenda: "Magic Flying Puppies with Winning Lotto Tickets Tied to Their Collars"



(p. A9) WASHINGTON -- With his expansive plans to increase the size and role of government, Senator Bernie Sanders has provoked a debate not only with his Democratic rival for president, Hillary Clinton, but also with liberal-leaning economists who share his goals but question his numbers and political realism.


. . .


By the reckoning of the left-of-center economists, none of whom are working for Mrs. Clinton, the proposals would add $2 trillion to $3 trillion a year on average to federal spending; by comparison, total federal spending is projected to be above $4 trillion in the next president's first year. "The numbers don't remotely add up," said Austan Goolsbee, formerly chairman of President Obama's Council of Economic Advisers, now at the University of Chicago.

Alluding to one progressive analyst's criticism of the Sanders agenda as "puppies and rainbows," Mr. Goolsbee said that after his and others' further study, "they've evolved into magic flying puppies with winning Lotto tickets tied to their collars."



For the full story, see:

JACKIE CALMES. "Left-Leaning Economists Question Sanders's Plans." The New York Times (Tues., FEB. 16, 2016): A9.

(Note: ellipsis added.)

(Note: the online version of the story has the date FEB. 15, 2016, and has the title "Left-Leaning Economists Question Cost of Bernie Sanders's Plans.")






May 8, 2016

Many Empirical Research Results Are False



(p. B7) Research on 100 studies in psychology found in 2015 that more than 60% couldn't be replicated. Similar results have been found in medicine and economics. Campbell Harvey, a professor at Duke University and president of the American Finance Association, estimates that at least half of all "discoveries" in investment research, and financial products based on them, are false.


. . .


Brian Nosek, a psychology professor at the University of Virginia and executive director of the Center for Open Science, a nonprofit seeking to improve research practices, has spent much of the last decade analyzing why so many studies don't stand up over time.

Because researchers have an incentive to come up with results that are "positive and clean and novel," he says, they often test a plethora of ideas, throwing out those that don't appear to work and pursuing those that confirm their own hunches.

If the researchers test enough possibilities, they may find positive results by chance alone -- and may fool themselves into believing that luck didn't determine the outcomes.



For the full commentary, see:

JASON ZWEIG. "Chasing Hot Returns in 'Smart-Beta' Can Be Dumb." The Wall Street Journal (Sat., Feb 13, 2016): B1 & B7.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Feb 12, 2016, and has the title "Chasing Hot Returns in 'Smart-Beta' Funds Can Be a Dumb Idea.")






May 3, 2016

Info Tech Boomed Because It Was Least Regulated Sector



(p. A9) "The regulatory environment has become so onerous in America that it is now easier to start a business in England than in the U.S.," Mr. Hill says--and he would know.


. . .


In 1973 and only 27 years old, Mr. Hill founded Commerce Bank with one branch in Marlton, N.J. The fledgling company focused on customer service and called itself "America's most convenient bank." By the time Mr. Hill left Commerce Bancorp 34 years later, only months before the company announced it would be bought by TD Bank for $8.5 billion, he had grown the business to some 460 branches, with 14,000 employees and combined deposits of about $40 billion.

Now he's replicating that model in the United Kingdom with Metro Bank, which he founded in 2010. And Mr. Hill says there's an ocean of difference between doing business in the overregulated U.S. and in the U.K. "When I went to Britain I thought the regulatory environment would be much worse," he says. "It's infinitely better there."

The problem in the U.S. starts with towering federal regulations, such as the voluminous reporting and compliance rules in Dodd-Frank, the financial reform act that recently celebrated its fifth birthday. "Regulators are making it impossible for the medium and small banks to comply with the rules," he says. "The burdens get so intense that it is destroying the small and medium-size banks in America."

The result is that Dodd-Frank, a law intended to take on the systemic risk of "too-big-to-fail" banks, is multiplying the problem. "The big banks that are too big to fail are bigger now than ever, but the regulations have trickled down to the smaller banks that didn't cause the financial crisis" Mr. Hill says. As a result, community banks are disappearing. "When I started my first bank in the 1970s there were 24,000 banks in America," he says. "There are now 7,000 banks. It may soon be 500 or even fewer."

But it's more than Dodd-Frank that leaves him frustrated. "The feds have taken anti-money-laundering rules to the extreme," Mr. Hill says. "We have to monitor every deposit account every 24 hours. Somebody's monitoring your account every day." That's invasive and expensive.

He laments that the Community Reinvestment Act, a catalyst of the 2008 subprime mortgage crisis, still hasn't been repealed. "We are literally required to make loans that we know are going to fail," he says.

Then there's the tangle of local regulations that every American small business must cut through. "You don't need a building permit in Britain. Here [the U.S.] you have to get permits and you have to get inspections," he says. All that can eat up months and months. "I can build 100 branch banks in Britain before I can get one built in the U.S., thanks to regulators."

Policy makers and economists in Washington fret about what's slowing the rate of business startups and entrepreneurial ventures. But Mr. Hill says it's no wonder, with all this red tape, and it's no accident that the industry that is really booming, technology, is the one least regulated by government--though the assault against Uber suggests that Silicon Valley might not be immune for long.


. . .


And how much should we be worried about overregulation--or competition from abroad? "Here's my story in a nutshell and I hope Washington is paying close attention," Mr. Hill says. "A very successful American business model has been transferred to Britain, where it's even more successful because it doesn't have to deal with the same burdens of government."

He continues: "The politicians keep talking about fairness and helping the little guy. But it's the little startup businesses that get hurt the most from the heavy hand of excessive government regulation. How is that fair?"



For the full interview, see:

STEPHEN MOORE. "THE WEEKEND INTERVIEW; The Demise of the Small American Bank; The man who put the customer first in retail banking says Dodd-Frank is crushing community banks and Britain is now a better bet." The Wall Street Journal (Sat., Aug. 1, 2015): A9.

(Note: ellipses added.)

(Note: the online version of the interview has the date July 31, 2015.)






April 29, 2016

Tesla Model 3 Excites Venturesome Consumers




America's venturesome consumers are hungry for products exciting enough to justify enthusiasm. They are desperate for evidence that the future can continue to look bright.



(p. B2) DETROIT -- Despite a steady stream of new models from a number of automakers, sales this year of electric and hybrid vehicles have failed to keep pace with the growth in the overall American market.

But if the market for electrified cars was slumbering, Tesla Motors woke it up with a jolt Thursday [March 31, 2016] with the unveiling of its coming Model 3 lineup of affordable, zero-emission vehicles.

Given that electric and hybrid vehicles account for only about 2 percent of last year's record-setting sales in the United States, the extraordinary reaction to Tesla's first mass-market model was a vivid demonstration of the potential demand in the segment.

"It shows that the future of electric vehicles is not necessarily bleak," said Alec Gutierrez, an analyst with the research firm Kelley Blue Book. "Maybe we've been waiting for the right products that resonate with consumers."

Tesla said on Friday that it had booked reservations -- at $1,000 each -- from nearly 200,000 people for the first Model 3 sedans, which will not be available until next year.

With a starting price of $35,000 and a battery range of 215 miles, the new Tesla is a big leap in the company's expansion beyond expensive luxury models.

"The final step in the master plan is a mass-market, affordable car," Elon Musk, Tesla's chief executive, said at the lavish introduction of the Model 3 held at the company's design studios in Hawthorne, Calif.



For the full story, see:

BILL VLASIC "In Clamor for new Tesla, Signs of an Electric Future." The New York Times (Sat., APRIL 2, 2016): B2.

(Note: bracketed date added.)

(Note: the online version of the story has the date APRIL 1, 2016, and has the title "Tesla's New Model 3 Jump-Starts Demand for Electric Cars.")






April 26, 2016

Feds' Regulatory Delay Supports High-Fare Trans-Atlantic Airline Oligopoly



(p. B1) In the past three years, Norwegian, one of Europe's biggest low-cost airlines, has quietly established a beachhead in the trans-Atlantic market by offering low-fare, no-frills service on long-haul flights.

Thanks to a small but expanding fleet of fuel-efficient planes combined with deeply discounted ticket prices, Norwegian Air Shuttle has attracted a growing number of leisure travelers looking for cheap flights.

It is all part of the vision of Norwegian's outspoken chief executive, Bjorn Kjos, who is determined to force the same kind of low-fare competition on international routes that has been so successful in domestic markets for airlines like Southwest and Spirit, and Ryanair in Europe.


. . .


But Norwegian's expansion has been stymied by vigorous opposition. Legacy airlines on both sides of the Atlantic see a low-cost competitor on their cash-cow routes as a major threat to their long-term profitability. Labor unions object to Norwegian's plans to hire flight crew from Thailand, a practice they have repeatedly described as "labor dumping."

The airline has also faced lengthy delays in receiving regulatory approvals in the United States.


. . .


(p. B4) A spokeswoman for the Transportation Department did not give any reasons for the delays that have left Norwegian in bureaucratic limbo in the United States. The airline's first request was filed more than two years ago. . . .

The long delay in approving the application "does not reflect well on the political independence of the Department of Transportation with respect to the free trade principles behind the E.U.-U.S. open skies agreement," according to a report by analysts at the CAPA Center for Aviation. "The calculated inaction only serves to restrict competition and to deny consumer choice."


. . .


"There is still a lot to do," Mr. Kjos said. "We have to think about how to fly more people more cheaply. There are hundreds of millions of people that don't have access to cheap flights."



For the full story, see:

JAD MOUAWAD. "Norwegian Air Flies in the Face of the Trans-Atlantic Establishment." The New York Times (Tues., FEB. 23, 2016): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 22, 2016.)






April 20, 2016

Tech Replaces Labor When Government Raises Labor Costs



(p. A11) In late 2013, Chili's and Applebee's announced that they were installing more than 100,000 tableside tablets at their restaurants across the country, allowing customers to order and pay their bill without ever talking to a waiter. The companies were soon followed by Buffalo Wild Wings, Panera Bread, Olive Garden and dozens of others. This means fewer servers covering more tables. Quick-service restaurant chains are also testing touch-screen ordering.


. . .


So why the increased use of technology? The major reason is consumer preference. Research shows that many appreciate the speed, order accuracy, and convenience of touch screens. This is particularly so among millennials who already do so much on smartphones and tablets. I've watched people--young and old--waiting in line to use the touch screens while employees stand idle at the counter.

The other reason is costs. While the technology is becoming much cheaper, government mandates have been making labor much more expensive.

In 2015, 14 cities and states approved $15 minimum wages--double the current federal minimum. Additionally, four states, 20 cities and one county now have mandatory paid-sick-leave laws generally requiring a paid week of time off each year per covered employee. And then there's the Affordable Care Act, which further raises employer costs.



For the full commentary, see:

ANDY PUZDER. "Why Restaurant Automation Is on the Menu; Forget about robot waiters, but technology helps cut government-imposed costs. And consumers like it." The Wall Street Journal (Fri., March 25, 2016): A11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date March 24, 2016.)






April 16, 2016

Robert J. Gordon, Purveyor of Doom and Gloom




Those who support the policies that have brought us economic stagnation, endorse Robert J. Gordon who believes that doom and gloom are inevitable. With Gordon to rely on, they do not have to face responsibility for the effects of their policies, or go through the cognitive stress of changing their views.

Contra Gordon, if we adopt policies friendly to innovative entrepreneurship, opportunity and growth will return.



(p. B1) The idea that America's best days are behind us sits in sharp tension with the high-tech optimism radiating from the offices of the technology start-ups and venture capital firms of Silicon Valley. But it lies at the heart of the current political unrest. And it is about to elbow its way forcefully into the national conversation.

Robert J. Gordon, a professor of economics at Northwestern University who has patiently developed the proposition in a series of research papers over the (p. B9) last few years, has bundled his arguments into an ambitious new book, "The Rise and Fall of American Growth" (Princeton University Press).

The hefty tome, minutely detailed yet dauntingly broad in scope, offers a lively portrayal of the evolution of American living standards since the Civil War. It also adds up to a dispiriting forecast for American prosperity in the decades to come. "This book," he writes in the introduction, "ends by doubting that the standard of living of today's youths will double that of their parents, unlike the standard of living of each previous generation of Americans back to the late 19th century."


. . .


Skepticism is warranted, to be sure. Since the time of Thomas Malthus, eras of depressed expectations like our own have inspired predictions of doom and gloom that were proved wrong once economies turned up a few years down the road.

"For reasons I have never understood, people like to hear that the world is going to hell," the economic historian Deirdre N. McCloskey of the University of Illinois, Chicago, wrote in an essay about "Capital in the Twenty-First Century," the blockbuster about income inequality by the French economist Thomas Piketty. "Yet pessimism has consistently been a poor guide to the modern economic world."

Optimism, though, is also subject to cognitive biases. It's not just that the income of our optimistic techno-entrepreneurs is growing faster than gross domestic product. A lot of new innovation -- the rockets to vacations in orbit, the Apple Watch and Google Glass -- also seems custom-designed for them.

"If you are sitting in Silicon Valley, rich and at the frontier of technology," said Lawrence F. Katz of Harvard, "it is probably true that things are getting better."

The same can't always be said for the rest of us.



For the full commentary, see:

Eduardo Porter. "ECONOMIC SCENE; America's Best Days May Be Behind It." The New York Times (Weds., JAN. 20, 2016): B1 & B9.

(Note: the online version of the commentary has the date JAN. 19, 2016.)


The Gordon book discussed in the commentary, is:

Gordon, Robert J. The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War, The Princeton Economic History of the Western World. Princeton, NJ: Princeton University Press, 2016.






April 9, 2016

"China Has Blindly Constructed So Many Homes and Wasted So Much Resources"



(p. C6) In November [2015], President Xi Jinping told a meeting of officials that China must resolve the housing inventory situation and ensure the health of the property sector.

Since then, Meishan, a city of 3.5 million people, has become a showcase for efforts to lure rural dwellers to cities to buy homes as part of so-called destocking efforts to reduce the glut.


. . .


. . ., some analysts and local government officials warn the rural strategy isn't a cure-all. Banks typically hesitate to extend mortgages to rural migrants, whose homestead land doesn't typically qualify as collateral.

"Now with bad loans growing in China, banks are reluctant to lend to farmers. Farmers don't have assets and lending to them is risky," said Wang Fei, an official at Hubei Province's department of housing and urban-rural development.


. . .


Housing inventory in the city rose to 22.5 months last April, an alarmingly high level compared with a healthier rate of 12 months or lower. There were also cases where cash-strapped property firms defaulted on their loans, leaving behind unfinished apartments.

Buyers of Purple Cloud Golden World housing project are now stranded after Yang Jinhao, who controlled Sichuan Xinrui Property Development, got involved in a dispute with a shadow lender early last year.

"China has blindly constructed so many homes and wasted so much resources. I can't stand it!" said Yu Jianmin, a 70-year-old caretaker of the stalled project who said the construction firm he works for is still awaiting payment from Mr. Yang. Mr. Yang couldn't be reached.



For the full story, see:

ESTHER FUNG. "Discounts Help China Ease Home Glut." The Wall Street Journal (Weds., March 2, 2016): C6.

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

(Note: the online version of the story has the date March 1, 2016, and has the title "China Sweetens Home-Ownership Deals for Rural Dwellers.")






April 7, 2016

A&P, Once Dominant Grocery Chain, Files for Bankruptcy Again



(p. B1) A&P, a former titan of the grocery industry, has filed for bankruptcy protection for the second time in five years and is trying to sell more than 100 of its stores.

The company, which owns Pathmark, Food Emporium and other food retailers clustered primarily in New York, New Jersey and Pennsylvania, said on Sunday that a restructuring in 2010 had failed to put it on secure enough financial footing to keep up with a shifting grocery landscape.

A&P, less commonly referred to as the Great Atlantic & Pacific Tea Company, has lost market share to competing stores like ShopRite and Stop & Shop Supermarket Company, as well Walmart and Target, retail giants that have spent the last few years expanding their offerings in the grocery aisles. A&P has debts of about $2.3 billion, court filings show, and assets of $1.6 billion.


. . .


Founded in 1859 as a mail-order tea business, A&P evolved into a discount food retailer that operated 16,000 stores by the mid-1930s and remained a dominant player in America's grocery landscape into the second half of the century.

"It was truly a powerhouse," said Marc Levinson, an independent historian and the author of "The Great A&P and the Struggle for Small Business in America." "In those days, independent grocers were every bit as afraid of A&P as mom-and-pop retailers are today of Walmart."

In 1912, A&P opened its first discount store in Jersey City. The idea of a retailer focused on low-cost groceries was novel at the time, and a reputation for rock-bottom prices helped the company flourish.

"They were opening stores literally more than one a day during World War I," Mr. Levinson said.



For the full story, see:

RACHEL ABRAMS. "A&P Files for Bankruptcy and Aims to Sell 120 Stores." The New York Times (Tues., JULY 21, 2015): B3.

(Note: ellipsis added.)

(Note: the online version of the story has the date JULY 20, 2015.)


Levinson's excellent book on the economic history of A&P, mentioned above, is:

Levinson, Marc. The Great A&P and the Struggle for Small Business in America. New York: Hill and Wang, 2011.






April 5, 2016

Owner Wants to Give Up Business Due to Regulations



(p. A11) D. Joy Riley, 59, of Brentwood, Tenn., who went to hear Mr. Rubio speak last weekend in the affluent Nashville suburb of Franklin, said that his story struck a chord with her personally. Her father was a coal miner. She is now a physician with a master's degree in bioethics. "We're all one or two generations away from some story like that," she said, repeating a line Mr. Rubio often uses in his speeches.


. . .


Mr. Rubio's story is intended to pull at the heartstrings. At his rally in Franklin, he spoke of his mother's struggles growing up in poverty in rural Cuba.

"My mother was one of seven girls raised by a disabled father," he said as he looked out on a horde of gingham shirts, khaki, fine Sunday dresses and derby hats.

He recalled how she left him with a strong understanding of selflessness and sacrifice. "My mother says her and her sisters never went to bed hungry," he continued. "But she's sure her parents did many nights."

As he tells these personal stories, Mr. Rubio weaves in the policy prescriptions he would act on as president, making his case for a smaller, more conservative government.

When he talks of the need for lower taxes, he cites the work his parents found in hospitality. The only reason the hotel where his father worked could exist, he insists, was because the business climate in Miami Beach was friendly enough that someone wanted to invest. And had it not been for taxes that were low enough to allow people the disposable income to vacation in Las Vegas, he says, his mother would not have had any hotel rooms to clean.


. . .


Nancy Conklin, 52, a business owner from North Hampton, N.H., was nodding along as Mr. Rubio spoke near Portsmouth last month. "You get older, have a family, employ people, and you start to realize how difficult all these regulations are," she said. "You don't want to have a business because you can't afford it."



For the full story, see:

JEREMY W. PETERS. "Rubio's Bootstraps Entice a Receptive Constituency: The Well-to-Do." The New York Times (Sat., FEB. 27, 2016): A11.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 26, 2016, and has the title "Marco Rubio Entices a Receptive Constituency: The Well-to-Do.")






April 4, 2016

Arbitrary Regulatory Waivers Undermine Rule of Law



(p. A11) Who cares about the swelling power of bureaucratic discretion in Washington over big business, since it doesn't threaten your personal freedom and prosperity. Or does it? That question lurked in the background of a Hoover Institution discussion on June 25, hosted by economist and podcaster extraordinaire Russ Roberts. The occasion was the 800th anniversary of Britain's Magna Carta, a landmark in the struggle for a rule of law.

One of the participants, Hoover economist John Cochrane, spoke of fears that America is drifting toward a "corporatist system" with diminished political freedom. Are rules knowable in advance so businesses can avoid becoming targets of enforcement actions? Is there meaningful appeal? Are permissions received in a timely fashion or can bureaucrats arbitrarily decide your case simply by sitting on it?

The answer to these questions increasingly is "no." Whatever the merits of 1,231 individual waivers issued under ObamaCare, a law implemented largely through waivers and exemptions is not law-like. In such a system, where even hairdressers and tour guides are subjected to arbitrary licensing requirements, all the advantages accrue to established, politically-connected businesses.

Another participant, Lee Ohanian, a UCLA economist affiliated with Hoover, drew the connection between the regulatory state and today's depressed growth in labor productivity. From a long-term average of 2.5% a year, the rate has dropped to 0.7% in the current recovery. Labor productivity is what allows rising incomes. A related factor is a decline in business start-ups. New businesses are the ones that bring new techniques to bear and create new jobs. Big, established companies, in contrast, tend to be net job-shrinkers over time.



For the full commentary, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; The New Slow-Growth Normal and Where It Leads; On the 800th anniversary of the Magna Carta, an unhinged regulatory state is our doomsday machine." The Wall Street Journal (Sat., Aug. 1, 2015): A11.

(Note: the online version of the commentary has the date July 31, 2015.)







April 1, 2016

Obama Says Stimulus Worked at Battery Plant Where CEO Remains "Frustrated" at Losses



(p. A12) JACKSONVILLE, Fla. -- President Obama on Friday [February 26, 2016] used a visit to a high-technology battery plant in Florida to argue that the hundreds of billions of dollars in federal subsidies he signed into law during his first days in office had bolstered the economy, transformed the nation's energy sector, and positioned the United States for a strong rebound.

But Mr. Obama's trip to the Saft America factory here, opened in 2011 with a $95.5 million investment from the Department of Energy, also highlighted the challenges that have tempered the economic recovery and the difficulty that the president has had in claiming credit for it.


. . .


After touring the facility and watching a large robot named Wall-E assembling one of the batteries, the president called the factory "tangible evidence" that his stimulus package had worked and said that the economy was better off for it. "We took an empty swamp and turned it into an engine of innovation," he said.

That engine, though, has sputtered as it has struggled to start here. Saft, based in Paris, announced last week that it was reducing the factory's value because it had still not gained profitability in the competitive lithium-ion battery market. Saying he was "frustrated," the company's chief executive projected the plant might not be profitable for a few more years.



For the full story, see:

JULIE HIRSCHFELD DAVIS. "Obama Praises Stimulus at Battery Plant." The New York Times (Sat., FEB. 27, 2016): A12.

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

(Note: the online version of the story has the date FEB. 26, 2016, and has the title "Obama Points to Florida Factory as Evidence That Stimulus Worked.")






March 28, 2016

Federal Regulations Restrict Concrete Innovation



(p. B1) Chris Tuan, a professor of civil engineering for the University of Nebraska at the Peter Kiewit Institute, has been perfecting an electrically semiconductive concrete over the past 20 years.

The mixture includes a 20 percent mix of steel fibers, shavings and carbon added to a traditional concrete mix. Steel reinforcing bars serve as the conductor, and once electricity is added, the concrete heats to 35 to 40 degrees -- just enough to melt the ice and snow.


. . .


For now, the concrete can't be used in public spaces. Anything exposed and electrified above 48 volts -- much less than the 208 volts used in Tuan's concrete -- is considered high voltage and is not allowed. Federal law will have to be rewritten to change that.


. . .


Tuan said traditional concrete needs to be replaced every five years or so. Without chemical use, the electric concrete lasts much longer, with fewer potholes. His concrete is also maintenance-free, because the power cords and conductive rods are encased in the concrete and not exposed to the elements.


. . .


In 2013 Tuan also implemented his concrete on ramps in China. He recently installed a private driveway in Regency using the legally allowed 48-volt limit, which is less energy efficient.

"If the government or if insurance agencies approve this technology, then everybody can use it," Tuan said. "But right now, it's almost cost prohibitive."



For the full story, see:

Reece Ristau. "In Concrete World, This Is Hot Stuff." Omaha World-Herald (Tues., JAN. 15, 2016): B1 & B2.

(Note: ellipses added.)

(Note: the online version of the story has the title "Special Concrete Mix Can Melt Snow and Ice All by Itself -- Just Add Electricity.")






March 23, 2016

Japan Population Down a Million in Five Year Period



(p. A12) TOKYO -- Japan's population shrank by nearly a million during the last half-decade, official census figures confirmed on Friday [February 26, 2016], an unprecedented drop for a society not ravaged by war or other deadly crisis, and one that helps explain the country's persistent economic woes.

It was the first time since Japan began collecting census data in 1920 that a nationwide count recorded a decline in the population, though surveys based on smaller samples have shown a downward trend for years.



For the full story, see:

JONATHAN SOBLE. "Japan Lost Nearly a Million People in 5 Years, Census Says." The New York Times (Sat., FEB. 27, 2016): A12.

(Note: bracketed date added.)

(Note: the online version of the story has the date FEB. 26, 2016.)






March 22, 2016

Greek Corruption, Fraud, Evasion and Public Worker Job Security



(p. A11) Mr. Angelos, a former Journal correspondent, travels through Greece as a journalist first, and a native son second, to conduct a mostly unpleasant archaeology. By way of background, however, he first tackles the pervasive issues of disability and pension fraud, rampant tax evasion, and public worker job protections. These are the very problems that Greece's European lenders sought to remedy through a series of supposedly helpful but also punitive and ineptly administered reforms. Mr. Angelos dismantles the facile narrative accepted by many in the eurozone, in which hardworking Germans must clean up a mess made by their lazy and "Oriental" southern neighbors. But he is equally tenacious when it comes to exposing the misconduct of Greek politicians, not to mention the country's corrupt system of career tenure and its, well, truly Byzantine bureaucracy.

Mr. Angelos's book allows us to see how these problems play out, sometimes farcically, in the lives of actual people. There's a cranky grandmother on the island of Zakynthos who receives generous blindness benefits even though she can see perfectly well. There's the arrogant former prime minister who accepted millions of euros in bribes to buy useless submarines on behalf of the Greek government.


. . .


. . . the book's single most flattering portrait is of Yiannis Boutaris, the tattooed, wine-making, freethinking mayor of Thessaloniki, who courts Turkish tourism, refuses to kowtow to the church and publicly acknowledges the crucial role of Jews in the city's history.



For the full review, see:


CHRISTOPHER BAKKEN. "BOOKSHELF; How Greece Got to 'No'; On the island of Zakynthos, a grandmother receives generous blindness benefits--even though she can see perfectly well."The Wall Street Journal (Tues., July 7, 2015): A11.

(Note: ellipses added.)

(Note: the online version of the review has the date July 6, 2015.)


The book under review, is:

Angelos, James. The Full Catastrophe: Travels among the New Greek Ruins. New York: Crown Publishers, 2015.






March 20, 2016

Working for Uber Allows Flexibility for Aspiring Actors



(p. 8) Not long ago, being a waiter at the Ivy or a salesman at Fred Segal was considered the reliable way to earn a living until one got a big break in a Wes Anderson film and got picked up by a major Hollywood agency like CAA or WME.

But Krystal Harris, 27, an actress who appeared in the recent Kevin Hart film "About Last Night," quickly realized those sorts of jobs were overrated. So now she works primarily for Lyft.

"I was a lead hostess at three different restaurants," Ms. Harris said. "It really didn't allow for much flexibility at all. I ended up getting fired for going to an audition. Even when I got my shifts covered, they gave me a hard time."

In 2013, she turned her Ford Escape into a roving cash register. She had total control over her hours, never needing to clear her schedule with anyone for a last-minute audition. There weren't even rules against working for both Uber and Lyft.

When acting gigs were hard to come by, she drove as many as 40 hours a week, earning what she estimated was about $20 an hour after Uber and Lyft took their commissions (generally around 20 percent). If the casting gods shined on her, she simply shut off the apps.

"When I'm really on a roll, I don't have to work," she said. "As long as my insurance and registration are up to date, I can go back."

Mr. Totten had a similar experience. Before driving for Uber, he worked at a half-dozen restaurants. All those jobs ended when he had to take off for auditions, or was caught trying to learn lines on the job. Once, he refused to shave because a casting director was looking for someone with stubble.

"My look is my scruff," said Mr. Totten, who is blond and blue-eyed, with a James Dean meets 90210 appeal. "As soon as I started driving for Uber, things got better."


. . .


(p. 9) Recently, Mr. Totten considered getting a new side job. "I'm probably going to do Postmates," he said, referring to the app-based service that delivers artisanal food in under 60 minutes and guarantees its drivers a minimum of $25 an hour. "You can't live on this anymore."



For the full story, see:

JACOB BERNSTEIN. "Drivers With Head Shots." The New York Times, SundayStyles Section (Sun., JAN. 24, 2016): 1 & 8-9.

(Note: ellipsis added.)

(Note: the online version of the story has the date JAN. 23, 2016, and has the title "The New Side Job for Actors and Artists in Los Angeles: Driving.")






March 18, 2016

"Ordinary People Should Have a Go"



(p. A11) The classical archaeologist and now big-picture historian Ian Morris, whose last book argued that war is good for you, now explains why coal is too. In "Foragers, Farmers, and Fossil Fuels," Mr. Morris puts "energy capture" at the center of human values since the Ice Age, through three eras: the Foragers to begin with; the Farmers after about 8,000 B.C.; and, in the past few centuries, the Fossil Fuelers.


. . .


A culture favorable to liberty and dignity for commoners came out of the Reformation and 16th-century Holland, spread to Britain and Britain's colonies in the 18th century, and resulted after 1800 in an explosion of ingenuity.

This Great Enrichment, which Mr. Morris acknowledges but does not explain, increased income per head not by the 100% or 200% of earlier efflorescences but by anything from 2,000% to 10,000%. Routine materialism of Mr. Morris's sort can't explain the most important secular event in human history. He wants to pin it all on energy capture. The correct story is one of ideas of human equality changing, starting with a conviction novel in the 17th century in northwestern Europe that ordinary people should have a go. This led to massive innovation, among which was energy capture. We do not have a fossil-fuel civilization. We have a free and ingenious one.



For the full review, see:

DEIRDRE MCCLOSKEY. "BOOKSHELF; Oil on Troubled Waters; In this telling, progress is explained by the rising use of fossil fuels. Yet the Industrial Revolution was powered by water, not coal.."The Wall Street Journal (Mon., July 6, 2015): A11.

(Note: ellipsis added.)

(Note: the online version of the review has the date July 5, 2015.)


The book under review, is:

Morris, Ian. Foragers, Farmers, and Fossil Fuels: How Human Values Evolve, The University Center for Human Values Series. Princeton, NJ: Princeton University Press, 2015.






March 17, 2016

Americans Should Not Be Required to Join a Private Organization Against Their Will



(p. A15) I am one of 10 California teachers suing to end compulsory union dues in Friedrichs v. California Teachers Association, which will be heard by the Supreme Court Jan. 11. Our request is simple: Strike down laws in 23 states that require workers who decline to join a union to pay fees anyway. In our view, paying fees to a union should not be a prerequisite for teaching in a public school. No one in the U.S. should be forced to give money to a private organization he or she disagrees with fundamentally. Teachers deserve a choice.


. . .


I was a member of the union for years and even served as a union representative. But the union never played an important role in my school. When most teachers sought guidance, they wanted help in the classroom and on how to excel at teaching. The union never offered this pedagogic aid.

Instead, the union focused on politics. I remember a phone call I received before a major election from someone in the union. It was a "survey," asking teachers whether they would vote for so-and-so if the election were held tomorrow. I disagreed with every issue and candidate the union was promoting. After that conversation, I thought about what the union represents. Eventually, I realized that my dues--about $1,000 a year--went toward ideas and issues that ran counter to my beliefs.


. . .


A Gallup poll last year found that 82% of the public agrees that "no American should be required to join any private organization, like a labor union, against his will." That's all we're asking.



For the full commentary, see:

HARLAN ELRICH. "Why I'm Fighting My Teachers Union; I don't want to be forced to pay for a political agenda I don't support. Now the Supreme Court will rule." The Wall Street Journal (Mon., Jan. 4, 2016): A15.

(Note: ellipses added, italics in original.)

(Note: the online version of the commentary has the date Jan. 3, 2016.)






March 15, 2016

Global Poor Fell from 29% in 2001 to 15% in 2015



(p. A6) UNITED NATIONS -- Poverty may be down worldwide, yet that does not mean that yesterday's poor are today's middle class. Data analyzed by the Pew Research Center concluded that more than half the world's population remains "low-income," while another 15 percent are still what a report issued by the center on Wednesday called "poor."

The share of the global poor, defined as those who lived on $2 a day or less, fell from 29 percent in 2001. Most of the people in that category, though, took "only a moderate step up the income ladder," the report concluded: 56 percent were "low-income," in 2011, living on $2 to $10 a day.



For the full story, see:

SOMINI SENGUPTAJ. "Study Finds Low Incomes Constrain Half of World." The New York Times (Thurs., JULY 9, 2015): A6.

(Note: the online version of the story has the date JULY 8, 2015.)






March 13, 2016

More Evidence for Stigler's Capture Theory



(p. A15) WASHINGTON -- Marilyn B. Tavenner, the former Obama administration official in charge of the rollout of HealthCare.gov, was chosen on Wednesday to be the top lobbyist for the nation's health insurance industry.

Ms. Tavenner, who stepped down from her federal job in February, will become president and chief executive of America's Health Insurance Plans, the trade group whose members include Aetna, Anthem, Humana, Kaiser Permanente and many Blue Cross and Blue Shield companies.

As the new voice for insurers, Ms. Tavenner will lead the industry in a time of tumultuous changes and challenges, including delicate negotiations with Congress over the future of the Affordable Care Act.


. . .


The board of America's Health Insurance Plans unanimously elected Ms. Tavenner at a meeting here on Wednesday, according to Mark B. Ganz, the board chairman, who is also the chief executive of Cambia Health Solutions, based in Portland, Ore.


. . .


Mr. Ganz said that Ms. Tavenner had "the trust and respect of members of Congress from both sides of the aisle."

Senator John Barrasso, Republican of Wyoming, described the selection in more negative terms. "While millions of Americans are still being hurt by Obamacare's soaring costs and fewer choices," he said, "Ms. Tavenner's appointment shows how the law has created a cozy and profitable relationship for some."



For the full story, see:

ROBERT PEAR. "Head of Obama's Health Care Rollout to Lobby for Insurers." The New York Times (Thurs., JULY 16, 2015): A15.

(Note: ellipses added.)

(Note: the online version of the story has the date JULY 15, 2015.)






March 12, 2016

Yamir Jackson-Adens on How You Learn



(p. B4) PHILANTHROPISTS have poured millions of dollars into improving education in the United States -- paying for new buildings, buying new computers and even creating new charter schools.

Susan Crown, a member of the billionaire Crown family of Chicago, is trying something different. Two years ago, she began working with organizations that seek to foster character traits like grit, empathy and perseverance, which studies show can be determinants of future success.

But financing organizations that focus on social and emotional learning programs for disadvantaged children was just part of the effort. Ms. Crown said she also wanted to go deeper into understanding why some organizations succeeded so well.


, , ,


Yamir Jackson-Adens, 18, began going to the Philadelphia Wooden Boat Factory in eighth grade. Living in a poor section in the northeast part of the city, he said he had been bullied in elementary school, and he was still shy. The boat program intrigued him, even though he knew no one who owned a boat.

"In boat building, you learn stuff," Mr. Jackson-Adens said. "You're free to move. You don't have a whole lot of restrictions. It's more of a trial-and-error kind of thing. You learn from those mistakes. In school, if you fail, you've failed."


. . .


Next fall, Mr. Jackson-Adens will be attending Colorado State University to begin studies that he hopes will lead to becoming a veterinarian.

"Boat got me into thinking outside the box," he said. "It helped me adjust to different situations."

That is a life skill anyone could use.



For the full story, see:

PAUL SULLIVAN. "A Philanthropist Drills Down to Discover Why Programs Work." The New York Times (Sat., Feb. 6, 2016): B4.

(Note: ellipsis added.)

(Note: the online version of the article has the date Feb. 5, 2016.)






March 8, 2016

Proletariat Loses Money Investing in Ponzi Scheme Supported by Chinese Communists



(p. B1) HONG KONG -- At every turn in his improbably rapid rise, Ding Ning, 34, went to great efforts to convey the image of strong government backing for his Internet financing business.

There was his company's lavish annual meeting and banquet last year in Beijing's Great Hall of the People, where China's legislature meets and where top government leaders host official functions. Adding a splash of celebrity to the event were Zhou Tao, a nationally famous actress and host on the government's main television broadcaster, and several mid-ranking officials, bureaucrats and lawmakers.

There were the positive profiles in state-controlled media, as well as the company's advertising on official TV. There was the section of his company's website devoted to building Communist Party spirit.

But it all came crashing down in dramatic fashion for Mr. Ding this week, when the police alleged that his financing business, Ezubao, was a $7.6 billion Ponzi scheme and announced 21 arrests, including of Mr. Ding. The company was shut down.


, , ,


(p. B7) In interviews, former staff and investors described the signals of strong state support as one of the keys to Ezubao's rapid rise.

"Many people joined Ezubao because they saw the support from the government and from some government officials," said Feng Zhe, 36, a Beijing resident who worked as a salesman at the company from June of last year until December.

Mr. Feng said a number of his friends and family members invested in Ezubao's products and suffered losses. "Many people bought their products because the government has lent the company credibility," he added.



For the full story, see:

NEIL GOUGH. "Feeling Twice Victimized." The New York Times (Sat., Feb. 6, 2016): B1 & B7.

(Note: ellipsis added.)

(Note: the online version of the article has the date Feb. 5, 2016, and has the title "Ponzi Scheme in China Gained Credibility From State Media.")






March 7, 2016

"Recyclers Around the Country Face Losses"



(p. B1) . . . recycling is a commodities business. The paper, metal, plastic and glass that recyclers collect, sort and sell competes against so-called virgin materials. And right now, many commodities are cheap.

Abundant oil is the latest headache for recyclers. New plastics are made from the byproducts of oil and gas production. So as plentiful fossil fuels saturate global markets, it has become cheaper for the makers of water bottles, yogurt containers and takeout boxes to simply buy new plastics. This, in turn, is dragging down the price of recycled materials, straining every part of the recycling industry.

In Montgomery, Ala., Infinitus Energy opened a $35 million recycling center in 2014. By last October, it was hemorrhaging (p. B5) money and shut down. Montgomery's recyclables are now going to a landfill, and a once booming local business, United Plastic Recycling, filed for bankruptcy last year.


. . .


. . . as recyclers around the country face losses, they are passing their costs along to cities and counties. Increasingly, local governments are receiving nothing at all for their recyclables, or even having to pay companies to accept them.

Last year, the city government in Washington, D.C., paid Waste Management $1.37 million to accept the recyclables it collected from residents.



For the full story, see:

DAVID GELLES. "Losing a Profit Motive: A Skid in Oil Prices Pulls the Recycling Industry Down With It." The New York Times (Sat., FEB. 13, 2016): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 12, 2016, and has the title "Skid in Oil Prices Pulls the Recycling Industry Down With It.")






March 5, 2016

New Middle-Skill Jobs Combine Technical and Social Skills



DemingGraphOnMathSocialSkillJobs2015-10-18.jpgSource of graph: online version of the NYT article quoted and cited below, based on Deming paper cited further below.




(p. 4) For all the jobs that machines can now do -- whether performing surgery, driving cars or serving food -- they still lack one distinctly human trait. They have no social skills.

Yet skills like cooperation, empathy and flexibility have become increasingly vital in modern-day work. Occupations that require strong social skills have grown much more than others since 1980, according to new research. And the only occupations that have shown consistent wage growth since 2000 require both cognitive and social skills.

The findings help explain a mystery that has been puzzling economists: the slowdown in the growth even of high-skill jobs. The jobs hit hardest seem to be those that don't require social skills, throughout the wage spectrum.

"As I'm speaking with you, I need to think about what's going on in your head -- 'Is she bored? Am I giving her too much information?' -- and I have to adjust my behavior all the time," said David Deming, associate professor of education and economics at Harvard University and author of a new study. "That's a really hard thing to program, so it's growing as a share of jobs."


. . .


"If it's just technical skill, there's a reasonable chance it can be automated, and if it's just being empathetic or flexible, there's an infinite supply of people, so a job won't be well paid," said David Autor, an economist at the Massachusetts Institute of Technology. "It's the interaction of both that is virtuous."

Mr. Deming's conclusions are supported by previous research, including that of Mr. Autor. Mr. Autor has written that traditional middle-skill jobs, like clerical or factory work, have been hollowed out by technology. The new middle-skill jobs combine technical and interpersonal expertise, like physical therapy or general contracting.

James Heckman, a Nobel Prize-winning economist, did groundbreaking work concluding that noncognitive skills like character, dependability and perseverance are as important as cognitive achievement. They can be taught, he said, yet American schools don't necessarily do so.



For the full commentary, see:

Claire Cain Miller. "The Upshot; The Best Jobs Require Social Skills." The New York Times, SundayReview Section (Sun., OCT. 18, 2015): 4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date OCT. 16, 2015, and has the title "The Upshot; Why What You Learned in Preschool Is Crucial at Work.")


The Deming paper referred to above, is:

Deming, David J. "The Growing Importance of Social Skills in the Labor Market." National Bureau of Economic Research, Inc., NBER Working Paper # 21473, Aug. 2015.


The Autor paper referred to above, is:

Autor, David. "Polanyi's Paradox and the Shape of Employment Growth." National Bureau of Economic Research, Inc., NBER Working Paper # 20485, Sept. 2014.


The Heckman paper referred to above, is:

Heckman, James J., Jora Stixrud, and Sergio Urzua. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior." Journal of Labor Economics 24, no. 3 (July 2006): 411-82.






March 4, 2016

Technology Extends Capabilities of Older Japanese



(p. A1) TOKYO--At an office-building construction site in the center of Japan's capital, 67-year-old Kenichi Saito effortlessly stacks 44-pound boards with the ease of a man half his age.

His secret: a bendable exoskeleton hugging his waist and thighs, with sensors attached to his skin. The sensors detect when Mr. Saito's muscles start to move and direct the machine to support his motion, cutting his load's effective weight by 18 pounds.

"I can carry as much as I did 10 years ago," says the hard-hatted Mr. Saito.

Mr. Saito is part of an experiment by Obayashi Corp. , the construction giant handling the building project, to confront one of the biggest problems facing the company and the country: a chronic labor shortage resulting from a rapidly aging population. The exoskeleton has allowed Mr. Saito to extend his working life--and Obayashi to keep building.


. . .


(p. A14) The Fujisawa Aikoen nursing home about an hour outside Tokyo started leasing the "hybrid assistive limb," or HAL, exoskeletons from maker Cyberdyne Inc. in June.

In Hokkaido, 60-year-old potato-pickers use rubber "smart suits" making it easier to bend over. Baggage handlers at Tokyo's Haneda airport employ similar assistance.

In cases where older people simply can't do the job or aren't available, Japanese manufacturers are turning to robots, which help them keep costs down and continue growing.

Bank of Tokyo Mitsubishi UFJ, Japan's largest bank, employs a small robot speaking 19 languages to greet customers, while a Nagasaki hotel staffed mainly by robots opened in July. Komatsu Ltd. is developing self-driving vehicles for construction sites, while industrial robot maker Fanuc Corp. is designing machines that repair each other.

Toyota Motor Corp. is testing in homes its "human support robot," a videophone/remote-controlled android that allows family and friends to perform tasks for distant elderly people as if they were in the same home. In one demonstration, a young man uses a tablet to look around a bed-bound older man's room, then directs the robot to open the curtains and bring the older man a drink.

SoftBank Group Corp. earlier this year drew global attention when it put on sale in Japan an automaton called Pepper, which it called the world's first robot capable of understanding emotions. One of the earliest uses for the 4-foot-tall white humanoid is as a nursing helper.

In a Kanagawa Prefecture test, Pepper entertained a room of 30 80- to 90-year-olds for 40 minutes. He led them in light exercises and tested their ability to recognize colors and letters. Women patted his head like a grandchild.

Showing a video of Pepper with a dementia patient on another occasion, Shunji Iyama, one of the developers, says the robot may sometimes work better than people. "That man keeps repeating himself over and over again," Mr. Iyama said. "If Pepper were human, he'd get fed up, but he just repeats the same reaction and doesn't get tired."



For the full story, see:

Jacob M. Schlesinger and Alexander Martin. "Graying Japan Tries to Embrace the Golden Years." The Wall Street Journal (Mon., Nov. 30, 2015): A1 & A14.

(Note: ellipsis added.)

(Note: the online version of the story has the date Nov. 29, 2015, and has the title "Graying Japan Tries to Embrace the Golden Years.")






March 3, 2016

To Get the High-Hanging Fruit, Grow Shorter Trees



Dr. Gennaro Fazio, a plant breeder and geneticist with the USDA's Agricultural Resource Service tells us . . . :

"In taller apple trees, the fruit that is high up, exposed to the sun, ripens the fastest. Low-hanging fruit doesn't get much sun, and it's not as ripe -- not so delectable, you could say -- as the higher fruit. You want to pick the low-hanging fruit last, so it has more time to develop."

But according to Fazio none of this ultimately matters: the idiom "low-hanging fruit" has been rendered totally and utterly irrelevant by the changing nature of apple tree genetics.

When "low-hanging fruit" became a metaphor in the late 1960s, the majority of apple trees in the U.S. were 25- to 30-foot tall goliaths--and the only fruits within reach were those that lingered on lower branches. Today, however, the majority of apple trees are what arborists refer to as "dwarfs."


. . .


Once hesitant that the smaller trees wouldn't produce as much fruit, apple growers realized dwarf trees were actually far more profitable. "Farmers get a higher yield per acre," says Heather Faubert, of the Rhode Island Fruit Growers Association. "With the taller trees, you could only plant about 20 trees per acre; now, you can get as many as 2,000 in the same space."

The result of these smaller trees is that the lowest-hanging fruits are actually no longer the easiest to pick. In fact, picking them requires repeatedly bending over to knee-level, a maneuver that can prove incredibly straining on the lower back.

"The ergonomics of picking apples have completely changed," says Fazio. "It really no longer makes sense to go for the low-hanging fruit. The phrase is irrelevant."



For the full story, see:

Priceonomics.com, "Should You Literally Pick the Low-Hanging Fruit?," Feb. 5, 2016, URL: http://priceonomics.com/should-you-literally-pick-the-low-hanging-fruit/.

(Note: ellipses added.)


The web page was excerpted in:

"Notable & Quotable: 'Low-Hanging Fruit'." The Wall Street Journal (Weds., Feb. 10, 2016): A11.

(Note: the online version of the article has the date Feb. 9, 2016.)






March 1, 2016

Spread of Dynamic Pricing Increases Economic Surplus



The theory of consumer and producer surplus implies that total economic surplus will be greater when pricing changes as supply and demand shift. Dynamic pricing increases the extent to which that is possible, and so should increase the total economic surplus (which is the sum of consumer surplus and producer surplus.) Dynamic pricing should also reduce the time consumers waste waiting for the product or service, when pricing is below the market clearing level (like when there are more people seeking a taxi, than there are taxis at the location).



(p. B1) Adult passes to the Indianapolis Zoo used to cost $16.95. Now they set customers back $8 or $30--or almost anywhere in between.

The zoo prices tickets like airfares, changing prices daily based on advance sales and expected demand. It discounts cold weekdays in February and boosts prices after school groups book dozens of tickets. Since introducing such dynamic pricing last year, the zoo's admission revenue has grown 12%.


. . .


Backed by vast amounts of data and powerful software, more businesses are varying prices by the day, the hour, or even the minute. Online sellers have used such tactics for years, but frequent price (p. B4) changes are increasingly common in the physical world, amplifying the effects of supply and demand on everything from parking spots to golf-course greens fees.


. . .

Previously, a taxi at rush hour went to "the person who happened to be on the right street corner," said Ian McHenry, the president of Beyond Pricing, which helps homeowners price their rented guest rooms like big hotels. Now, rides go to people willing to pay more, and fewer people "hit the jackpot and get that underpriced reservation or baseball ticket or open cab."


. . .


"This is not a passing fad," said Peter Fader, co-director of the University of Pennsylvania's customer-analytics initiative. Amazon is making dynamic pricing the norm, he said, "and then it's going to become imperative for the brick-and-mortar players to figure out how to do this."

The trend is good for business, helping companies charge more for in-demand items and offload surplus goods. Caberfae Peaks ski resort in Cadillac, Mich., said its revenue per customer has surged 17.6% since it began dynamically pricing its advance-sale tickets five years ago.

Variable pricing can also influence behavior. Uber and Lyft raise prices during peak times in part to lure more drivers onto the road.

Highway operators use dynamic pricing to regulate traffic. Over the past two years, Ferrovial SA unit Cintra has opened several toll roads in the Dallas area that can change prices every five minutes to keep speeds above 50 miles an hour. The toll for one 7-mile stretch, for instance, fluctuated between 90 cents and $4.50 in a recent week.

The Indianapolis Zoo said it adopted dynamic pricing in part to limit crowds after opening a new orangutan center last year. The strategy worked: two-thirds of guests visited on weekdays this summer, compared with 57% in 2013.

And Gogo Inc. shifts the price of its in-flight Internet between $8 and $40 based on a flight's route, day and time to limit the number of users and keep speeds high.

Andrew Sullivan, a products manager at a California manufacturer, recently paid $34 for the Wi-Fi. "It's a drag as a consumer," he said. "You're not getting any additional value when you're paying twice as much for the same commodity."

Consumers typically resist dynamic pricing when it is introduced, but then quickly acclimate, Mr. Fader said. Five years ago, Major League Baseball teams caught flak when they began changing ticket prices based on factors such as date, opponent, weather forecasts and seats remaining.

"Now pretty much every one of them is doing it routinely, and doing it with a remarkable lack of backlash," Mr. Fader said. "The first time, it's 'That ain't right.' The second time, it's all right."



For the full story, see:

JACK NICAS. "The Price You Pay Depends on Time and Day." The Wall Street Journal (Mon., Dec. 14, 2015): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the story has the title "Now Prices Can Change From Minute to Minute." The three contiguous paragraphs quoted near the end above (on the orangutan center, on Gogo, and on Wi-Fi) appeared in the online, but not the print, version of the article.)






February 29, 2016

Uber Attracts Older Drivers for the Freedom, Flexibility, Adventure and Money



(p. B1) When Carol Sue Johnson, 73, wheels her silver Mazda S.U.V. out of her driveway in suburban Minneapolis, she doesn't know how much money she will make driving for the ride-hailing service Uber, but she's sure she will have an adventure.

Her passengers run the gamut, she said, from three visiting Chinese business executives who were surprised to see a female driver, to teenagers needing a ride to hockey practices or games.

When one group of teenagers "started to get too rowdy," said Ms. Johnson, who goes by Sue, "one of them told the others to stop because 'Grandma's in the car.'"


. . .


(p. B4) For most senior drivers, the biggest advantage is the extra income. Many of those who continue working after 65 do so because they would be too poor otherwise, according to a new report from the labor-backed Economic Policy Institute that found the current retirement system inadequate.

But driving for a ride-booking service, some retirees said, also can offer more than money.

"I love the freedom, the flexibility -- and the cash coming in every week," said Maureen Mahon, 59, who first saw an Uber advertisement on the side of a bus in Manhattan. Ms. Mahon, who lives in Brick Township, N.J., said she had been laid off twice in recent years from Wall Street, and has been driving intermittently since mid-2014.

"I meet businessmen, college kids on their way out for the night, folks going to parties, pretty much the whole range," she said. "You can drive as much or as little as you like. If the weather's bad or you have a doctor's appointment, you just don't turn on the app."

Another attraction, compared to driving a taxi, is safety, since customers are screened and no cash is exchanged. So, too, is the opportunity for drivers to shape the job on their own terms.

Driving for Uber "is like a game," said Stephen B. McPhail, 66, a former charter bus driver who lives in Covington, Wash., south of Seattle. "I like to map out how I spend my time to make the most money."

An early riser, he gets up at 4:30 a.m. to land several airport rides. Typically, he said, "I work five hours to make between $100 and $150 a day, and I can be done as early as 10 a.m."



For the full story, see:

ELIZABETH OLSON. "Retiring; Retired, and Now Hitting the Road for Uber and Lyft." The New York Times (Sat., JAN. 23, 2016): B1 & B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date JAN. 22, 2016, and has the title "Retiring; Older Drivers Hit the Road for Uber and Lyft.")






February 27, 2016

Bernanke's "Astonishing" Admission that He Tried, and Failed, to Save Lehman



(p. B1) It is astonishing to hear a former Federal Reserve chairman acknowledge that he may have misled the public as part of an agreement with another senior government official about one of the most crucial moments in recent financial history -- and that he now questions whether he should have "been more forthcoming." But that is what Ben S. Bernanke says in his new memoir, "The Courage to Act: A Memoir of a Crisis and Its Aftermath."

That crucial moment? The bankruptcy of Lehman Brothers. Mr. Bernanke, in perhaps the most candid explanation of Lehman's 2008 collapse, writes that he and Henry M. Paulson, then the treasury secretary, purposely obfuscated when asked about Lehman's demise early on, allowing a narrative to develop that the government had purposely let the firm fail.

"In congressional testimony immediately after Lehman's collapse, Paulson and I were deliberately quite vague when discussing whether we could have saved Lehman," Mr. Bernanke writes. "But we had agreed in advance to be vague because we were intensely concerned that acknowledging our inability to save Lehman would hurt market confidence and increase pressure on other vulnerable firms."


. . .


(p. B4) He writes that it was simply impossible to save Lehman, pointing to the nearly $200 billion of losses that Lehman's creditors have since suffered. No one has come forward on the record, nor has any contemporaneous document been produced in the past seven years that said the government had found a way to save the company and specifically chose not to do so for political reasons, a point Mr. Bernanke alludes to in his book. "I do not want the notion that Lehman's failure could have been avoided, and that its failure was consequently a policy choice, to become the received wisdom, for the simple reason that it is not true," he writes. "We did everything we could think of to avoid it."



For the full commentary, see:

Sorkin, Andrew Ross. "In Bernanke's Memoir, a Candid Look at Lehman." The New York Times (Tues., OCT. 6, 2015): B1 & B4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date OCT. 5, 2015, and has the title "In Ben Bernanke's Memoir, a Candid Look at Lehman Brothers' Collapse.")


The Bernanke memoir is:

Bernanke, Ben S. The Courage to Act: A Memoir of a Crisis and Its Aftermath. New York: W. W. Norton & Co., 2015.






February 26, 2016

Economists Blame Weather for Missed Forecast



(p. C8) Dozens of economists polled by The Wall Street Journal had correctly predicted a drop, but one that was far less severe - negative 0.2% compared with the actual 0.6% month-over-month decline.

But they weren't bothered by the discrepancy, blaming it on the weather. While that sounds like executives on a conference call throwing up excuses for a "miss" following quarterly earnings, the weather really did play a role. November was unusually mild and utility output was 7.6% lower than a year earlier. Manufacturing, by contrast, rose nearly 1%.

The surprising thing is that this wasn't anticipated. Since few of the economists surveyed live in balmy places like Florida, they somehow failed to notice that they didn't have to put on a heavy coat or sweater last month when heading into their offices to crank out forecasts.



For the full story, see:

SPENCER JAKAB. "OVERHEARD." The Wall Street Journal (Thurs., Dec 17, 2015): C8.

(Note: the online version of the story has the date Dec 16, 2015, and has the title "OVERHEARD; Economists Need to Get Out More." The print version does not list an author. The wording of the two versions differs. The version quoted above is the online version.)






February 25, 2016

China "on a Treadmill to Hell"



(p. B1) DAVOS, Switzerland -- At the World Economic Forum here, chief executives and investors are blaming China for a slump in global markets.

Fears about the country's downshift, as its official growth slowed to a quarter-century low, have dominated high-level discussions, both during public debates and in smaller, private meetings.

The financier George Soros said at a dinner on Wednesday night [January 20, 2016] that a "hard landing is practically unavoidable," adding that China is the root of the current financial crisis.


. . .


(p. B6) Kenneth Rogoff, a Harvard economist who has long warned of a potential financial crisis in China, remained skeptical [that the Chinese government will reform its policies]. "There is a big propaganda push to say everything is good, everything is fine."

Earlier in the week he told attendees at the forum that China's large accumulation of government debt would one day be a shock to a financial system that "amplifies shocks."

Others with bearish views on China have kept their claws out. Jim S. Chanos, who once said China was "on a treadmill to hell," said he remained deeply concerned. His hedge fund, Kynikos Associates, estimated that China's nominal gross domestic growth in 2015 was 5 percent compared with 15 percent just five years earlier.

"China's debt problems still lie ahead of it," Mr. Chanos said on Thursday, referring to concerns about the extent to which China's seeming economic growth is actually fueled by borrowing.

As for Mr. Soros, he told an audience at the Panorama Restaurant in the Seehof Hotel in Davos this year that the Chinese had waited too long to properly address the transition of its growth model. Asked by a Bloomberg reporter if there was a risk of repeating 2008, Mr. Soros said the market was in a similar time of financial crisis.

"But the source of the disequilibrium is different," Mr. Soros said, adding that in 2008, the main cause was the United States subprime crisis. "Now," he said, "the root cause is basically China."



For the full story, see:

ALEXANDRA STEVENSON. "Fears About China's Economy Fester at Davos." The New York Times (Sat., JAN. 23, 2016): B1 & B6.

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

(Note: the online version of the story has the date JAN. 22, 2016.)






February 23, 2016

"Minds Feel More Crimped, Fear More Pervasive, Possibility More Limited"



Maybe to lead happy or satisfying lives, we need more adventure, or more projects (hard and important ones) to commit ourselves to?



(p. 19) Freedom is still out there. We all have our idea of it, the deferred dream. Your psyche builds layers of protection around your most vulnerable traits, which may be closely linked to that precious essence in which freedom resides. Freedom is inseparable from risk.


. . .


I don't know if the world is freer than a half-century ago. On paper, it is. The totalitarian Soviet Imperium is gone. The generals who bossed Latin America are gone, generally. Asia has unshackled itself and claims this century as its own. Media has opened out, gone social.

Yet minds feel more crimped, fear more pervasive, possibility more limited, adventure more choreographed, politics more stale, economics more skewed, pressure more crushing, escape more elusive.


. . .


Which brings me to Finnegan's wonderful book, a kind of hymn to freedom and passion. Freedom is inside you. It's the thing that cannot be denied. For Finnegan, that's surfing and writing. "How could you know your limits unless you tested them?" he asks -- a question as true before the ferocious energy of the wave as before the infinite possibilities of the written form.



For the full commentary, see:

Cohen, Roger. "Ways to Be Free." The New York Times (Sat., JAN. 23, 2016): A19.

(Note: ellipses added.)

(Note: the online version of the commentary has the date JAN. 21, 2016.)


The Finnegan book praised in the passage quoted above, is:

Finnegan, William. Barbarian Days: A Surfing Life. New York: Penguin Press, 2015.







February 20, 2016

Mast Brothers Started Their Chocolate Business in Their Apartment



The Masts provide another example showing the possibility of entry into the candy business. The issue is relevant to the claim of those who support sugar quotas, that a decline in sugar prices would not be passed on to consumers in the form of lower candy prices. If there is easy entry into the candy business, then the business is traditionally competitive, and lower costs of production will be passed on to consumers.



(p. A20) In an interview on Sunday [Dec. 20, 2015], Rick Mast, who with his brother began making chocolate in a Brooklyn apartment in 2006, said the allegations were untrue -- for the most part. But on the claim that the Masts were "remelters" at the start, Mr. Mast confirmed the brothers did use industrial chocolate, what is known as couverture, in some of their early creations, before settling on the bean-to-bar process for which they are now known.

"It was such a fun experimental year," Mr. Mast said, adding that the brothers were transparent "to anyone that asked."



For the full story, see:

SARAH MASLIN NIR. "Unwrapping a Chocolatier's Mythos." The New York Times (Mon., DEC. 21, 2015): A20 & A22.

(Note: bracketed date added.)

(Note: the online version of the story has the date DEC. 20, 2015, and has the title "Unwrapping the Mythos of Mast Brothers Chocolate in Brooklyn.")






February 14, 2016

Textile Production Moving from China Back to United States



(p. A1) INDIAN LAND, S.C. -- Twenty-five years ago, Ni Meijuan earned $19 a month working the spinning machines at a vast textile factory in the Chinese city of Hangzhou.

Now at the Keer Group's cotton mill in South Carolina, which opened in March, Ms. Ni is training American workers to do the job she used to do.

"They're quick learners," Ms. Ni said after showing two fresh recruits how to tease errant wisps of cotton from the machines' grinding gears. "But they have to learn to be quicker."

Once the epitome of cheap mass manufacturing, textile producers from formerly low-cost nations are starting to set up shop in America. It is part of a blurring of once seemingly clear-cut boundaries between high- and low-cost manufacturing nations that few would have predicted a decade ago.

Textile production in China is becoming increasingly unprofitable after years of rising wages, higher energy bills and mounting logistical costs, as well as new government quotas on the import of cotton.

At the same time, manufacturing costs in the United States are becoming more competitive.


. . .


(p. A3) Ms. Ni, one of 15 Chinese trainers at Keer's Indian Land plant, complained softly of American workers' occasional tardiness. In China, she said, managers can dock the pay of workers who show up late. But here, she said, she felt frustrated that she could not discipline tardy staff.



For the full story, see:

HIROKO TABUCHI. "Chinese Textile Mills Are Now Hiring in Places Where Cotton Was King." The New York Times (Mon., AUG. 3, 2015): A1 & A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date AUG. 2, 2015, and has the title "Chinese Textile Mills Are Now Hiring in Places Where Cotton Was King.")






February 13, 2016

Ten Quit, or Were Fired, "to Honor the Other 290"



(p. 1) A hellbent quest for authenticity produced some indelible on-set moments for Alejandro G. Iñárritu as he directed "The Revenant," his two-and-a-half-hour opus of death, love and improvised surgery in the American West of the 1820s.


. . .


(p. 20) There were enough grumblings from the crew about delays, safety and overall misery that The Hollywood Reporter published an article in July in which one source described the experience as "a living hell." Ten people either quit or were fired during filming, Mr. Iñárritu said, and he will not apologize for that.

"I have nothing to hide," he said. "Of the 300 we started with, I had to ask some to step away, to honor the other 290. If one piece in the group is not perfect, it can screw the whole thing up."


. . .


"Standing in a freezing river and eating a fish, or climbing a mountain with a wet bear fur on my back -- those were some of the most difficult sequences for me," said Mr. DiCaprio, who is considered a strong contender for an Oscar nomination for his performance. "This entire movie was something on an entirely different level. But I don't want this to sound like a complaint. We all knew what we were signing up for. It was going to be in the elements, and it was going to be a rough ride."


. . .


In person, . . . , Mr. Iñárritu has the chilled-out affect of a man who meditates every day and loves long walks. The only hint of intensity, and just a tinge of anger, comes when he discusses other movies. Too many of them today are like the products of fast-food chains, he said, ordered up by corporations that prize predictability and sameness over all else.

"What about going to a restaurant to be surprised?" he all but shouted. "That's the risk that everybody avoids! In the context of cinema now, this movie is a bet."

Raised in Mexico City, Mr. Iñárritu, 52, is the son of a banker who would eventually file for bankruptcy and end up selling fruit and vegetables to hotels and restaurants. The younger Iñárritu started off as a radio host, playing music and writing provocative, comical sketches with a political bent. He studied theater and learned to direct by shooting brand-identity commercials for a television station. By the time he landed his first feature, "Amores Perros," released in 2000, he had spent hundreds of hours behind a camera. Then came "21 Grams" (2003), "Babel" (2006) and "Biutiful" (2010).



For the full story, see:

DAVID SEGAL. "That Bear and Other Threats." The New York Times, Arts&Leisure Section (Sun., DEC. 27, 2015): 1 & 20.

(Note: ellipses added.)

(Note: the online version of the story has the date DEC. 22, 2015, and has the title "About That Bear: Alejandro G. Iñárritu Discusses Making 'The Revenant'.")






February 12, 2016

Innovators Need Time for Tedious Tasks



(p. 3) Innovation isn't all about eureka moments. In fact, the road to creative breakthroughs is paved with mundane, workaday tasks. That's the message of a recent study that might as well be titled "In Praise of Tedium."

In the study, researchers sought to examine how extended periods of free time affect innovation. To do this, they analyzed activity on Kickstarter, the crowdfunding website, in nearly 6,000 American cities.


. . .


Over a period of about nine months, the researchers found a sharp increase in the number of new projects posted during the first few days of school break periods. The spike, they suggest, is tied to people having more time to perform the administrative aspects of Kickstarter projects -- working on a manufacturing plan, say, or setting up a rewards schedule. While people may be using some stretches of free time to nurture those much lauded light bulb moments, the process of innovation also appears to require time to carry out execution-oriented tasks that are not particularly creative but still necessary to transform an idea into a product, the study indicates.



For the full story, see:

PHYLLIS KORKKI. "Applied Science; Good Ideas Need Time for Tedious Legwork." The New York Times, SundayBusiness Section (Sun., AUG. 16, 2015): 3.

(Note: ellipsis added.)

(Note: the online version of the story has the date AUG. 15, 2015, and has the title "Applied Science; Looking for a Breakthrough? Study Says to Make Time for Tedium.")


The academic paper summarized in the passages quoted above, is:

Agrawal, Ajay, Christian Catalini, and Avi Goldfarb. "Slack Time and Innovation." Rotman School of Management Working Paper #2599004, April 25, 2015.






February 10, 2016

Serendipitous Fix for Colorblindness



(p. 3) The eyeglass lenses that Don McPherson invented were meant for surgeons. But through serendipity he found an entirely different use for them: as a possible treatment for colorblindness.

Mr. McPherson is a glass scientist and an avid Ultimate Frisbee player. He discovered that the lenses he had invented, which protect surgeons' eyes from lasers and help them differentiate human tissue, caused the world at large to look candy-colored -- including the Frisbee field.

At a tournament in Santa Cruz, Calif., in 2002, while standing on a grassy field dotted with orange goal-line cones, he lent a pair of glasses with the lenses to a friend who happened to be colorblind. "He said something to the effect of, 'Dude, these are amazing,' " Mr. McPherson says. "He's like, 'I see orange cones. I've never seen them before.' "

Mr. McPherson was intrigued. He said he did not know the first thing about colorblindness, but felt compelled to figure out why the lenses were having this effect. Mr. McPherson had been inserting the lenses into glasses that he bought at stores, then selling them through Bay Glass Research, his company at the time.

Mr. McPherson went on to study colorblindness, fine-tune the lens technology and start a company called EnChroma that now sells glasses for people who are colorblind. His is among a range of companies that have brought inadvertent or accidental inventions to market. Such inventions have included products as varied as Play-Doh, which started as a wallpaper cleaner, and the pacemaker, discovered through a study of hypothermia.


. . .


EnChroma was still struggling to solve its marketing conundrum when another serendipitous event occurred: A paint company wanted to finance an ad campaign featuring the glasses. The idea was to introduce color to the colorblind. To that end, videos were made of EnChroma users wearing the glasses for the first time while looking at things like sunsets, colorful artwork and, of course, paint samples.

The ad campaign increased EnChroma's sales and spurred a trend: New EnChroma customers began filming and sharing their experiences online. The company placed inserts in its eyeglass boxes encouraging customers to participate.

Prompted by the insert, Bob Balcom, a 60-year-old retired high school science teacher and labor relations specialist in Chatham, N.Y., uploaded his first YouTube video in March. Shot by his wife, it shows Mr. Balcom putting the glasses over his own eyeglasses and staring up at the sky quietly for several seconds. "The blue sky is deeper than I've ever seen," he says. "It reminds me of Colorado. And the pine trees, they're just so green." Tears stream down his cheeks and into his gray beard.



For the full story, see:

CLAIRE MARTIN. "Finding a Niche for the Accidental Spectacles." The New York Times, SundayBusiness Section (Sun., AUG. 16, 2015): 3.

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

(Note: the online version of the story has the date AUG. 15, 2015, and has the title "EnChroma's Accidental Spectacles Find Niche Among the Colorblind." )






February 9, 2016

Canadian Cartel Seizes 20,400 Pounds of Robert Hodge's Maple Syrup



Video interviews related to the New York Times article quoted below.



(p. B1) The scenic and narrow lane that leads to Robert Hodge's sugar camp is surrounded by a cat's cradle of plastic piping that draws sap from 12,000 trees. At the end of the lane, a ramshackle hut contains reverse osmosis pumps to concentrate the harvest. A stainless steel evaporator, about the size of a truck, finishes the conversion into maple syrup.

Just one thing is missing: the maple syrup.

For weeks, security guards, hired by the Federation of Quebec Maple Syrup Producers, kept watch over Mr. Hodge's farm. Then one day, the federation seized 20,400 pounds of maple syrup, his entire annual production, worth about 60,000 Canadian dollars, or nearly $46,000.

The incident was part of the escalating battle with farmers like Mr. Hodge who break the law by not participating in the federation's tightly controlled production and sales system.

"It's a good thing that I'm not 35, 40 years old because I'd pack up all my sugar equipment that's movable, and I'd go to the United States -- oh yes, in a minute, in a minute," said Mr. Hodge, 68.

While many Americans associate Vermont with maple syrup, Quebec is its center. The province's trees produce more than 70 (p. 4) percent of the world's supply and fill the majority of the United States' needs. The federation, in turn, has used that dominance to restrict supply and control prices of the pancake topping.


. . .


Mr. Hodge is similarly intransigent. At this point in the season, Mr. Hodge would normally have sold his syrup, turning his attention to his cattle and other crops. But this year he had nothing to sell. He contends that farmers should be allowed to set their own level of production and sell directly to large buyers, regardless of what the law says.

"They call us rebels, say we're in a sugar war or something. I've heard rumors of that," said Mr. Hodge, at his farm in Bury, Quebec.

"Yeah, I guess you could call it that."

Across the table, Whitney, his 20-year-old daughter, who also farms, looked up from her smartphone and interjected.

"A war over maple syrup, like how pathetic can you get?"


. . .


Prices are set by the federation, in negotiation with a buyers' group. The federation holds most of the power, given that it controls a majority of the world's production.

Such domestic systems are facing scrutiny in a global marketplace. One major hurdle in the talks over the Trans-Pacific Partnership, a major trade deal with 12 countries, has been Canada's refusal to dismantle a similar quota system for dairy and poultry farmers.

Maple syrup buyers, including some American companies, have bristled at the federation's tactics. They appreciate the steady supply. But some have taken issue with the aggressive enforcement efforts, including large fines for companies buying from Quebec producers outside the system, and the rising prices.

The situation, critics contend, could prompt buyers and producers to shift to the neighboring province of New Brunswick, and Vermont in the United States. Or consumers might simply pour artificial syrup instead.

"People will always eat chicken," said Antoine Aylwin, a Montreal lawyer who has represented several buyers in disputes with the federation, including some American companies. "But they will not always eat maple syrup if they think that they can't afford it."

Defying the Law

Mr. Hodge was shocked in 2009 when the federation demanded 278,000 Canadian dollars for not joining the system and for selling directly to a buyer in Ontario.

Most years, Mr. Hodge's sugar bush grosses about 50,000 Canadian dollars. About half the money goes to cover electricity for the vacuum pumps and oil for the evaporator.

"I'd have to give them 100 percent of what I gross for five years, and I would have nothing for production cost," he said. "That just ain't possible."

Mr. Hodge openly acknowledges that he is defying the law. When the quota and centralized selling system were introduced, he continued to sell directly to a buyer in Ontario.


. . .


Like others who have invoked the federation's wrath, Mr. Hodge's battle seems as much about principle as avoiding a potentially crippling fine.

In Mr. Hodge's view, the system's restrictions are stunting the growth of Quebec's industry. It is less bureaucratic and less expensive, he explains, for buyers to go to Vermont or New Brunswick. He said that he had no problem with paying the federation its 12 cents a pound tax for various services, like promoting maple syrup in new markets, particularly in Asia. But he will not adhere to the quotas.

"Well, I don't accept the system because I don't believe in not being able to sell our product," he said. "We just think that that product is ours. We bought the land. We've done all the work. Why should we not be able to sell our product the way we want as long as we legitimately put it on our income tax?"

That's a question that exasperates Mr. Trépanier of the federation. While Mr. Trépanier studiously avoids calling the organization a cartel, he has described it as the OPEC of maple syrup in the past, referring to the group of oil-producing countries. The system, he said, is doomed to collapse without production discipline.



For the full story, see:

IAN AUSTEN. "The Maple Syrup Mavericks." The New York Times, SundayBusiness Section (Sun., AUG. 23, 2015): 1 & 4.

(Note: ellipses added.)

(Note: the online version of the story has the date AUG. 20, 2015, and has the title "Canadian Maple Syrup 'Rebels' Clash With Law.")






February 7, 2016

Communist Chinese One Child Laws Violated Basic Human Rights



On Sat., Jan. 17, 2016 I caught the re-broadcast of an interview with Mei Fong that C-SPAN's web site suggests was first broadcast on Jan. 11, 2016. The interview focused on Fong's book on the history, causes and effects of China's one child laws. Fong is understated in her style, but it is clear that the Chinese communist government violated the rights of many Chinese citizens by forcing them to have unwanted abortions, and to undergo unwanted sterilizations. In many cases, when their "one child" died in a disaster, or of natural causes, parents desperately rushed to try to have the forced sterilization reversed.

Fong's book, that she discussed on C-SPAN, is:

Fong, Mei. One Child: The Story of China's Most Radical Experiment. Boston, MA: Houghton Mifflin Harcourt, 2016.






February 6, 2016

French Union Activists Rip Shirts Off Backs of Executives and Force Them to Escape Over Fence



(p. B3) PARIS -- Angry workers stormed Air France headquarters on Monday [October 5, 2016] as top managers were meeting to discuss plans to shed more than 2,900 jobs, forcing two executives to flee over a fence and in the process ripping the shirts from their backs.

The violence at the Air France offices near Charles de Gaulle Airport broke out shortly after 9:30 a.m. Officials, including the chief executive officer, Frédéric Gagey, had informed the company's workers council that 900 flight attendants, 1,700 ground crew members and 300 pilots could be laid off as the airline strives to return to profitability.

The talks at the company, which is facing headwinds from an economic downturn and competition from low-cost carriers, had been tense for more than a year. While violence had not marred previous negotiations, the protests Monday were the latest in a series of incidents in France in which workers have held company bosses hostage or damaged property to make their point.

As the Air France executives detailed the latest restructuring plan, union activists swarmed into the room, waving flags and chanting protests, prompting Mr. Gagey to make a hasty exit.



For the full story, see:

LIZ ALDERMAN. "Workers Storm Air France Offices as Job Cuts Are Discussed." The New York Times (Tues., OCT. 6, 2015): B3.

(Note: bracketed date added.)

(Note: the online version of the story has the date OCT. 5, 2015, and has the title "Angry Workers Storm Air France Meeting on Job Cuts.")






January 27, 2016

Hiring Based on What People Can Do, Instead of Their Credentials



(p. B4) Compose Inc. asks a lot of job applicants. Anyone who wants to be hired at the San Mateo, Calif., cloud-storage firm must write a short story about data, spend a day working on a mock project and complete an assignment.

There is one thing the company doesn't ask for: a résumé.

Compose is among a handful of companies trying to judge potential hires by their abilities, not their résumés. So-called "blind hiring" redacts information like a person's name or alma mater, so that hiring managers form opinions based only on that person's work. In other cases, companies invite job candidates to perform a challenge--writing a software program, say--and bring the top performers in for interviews or, eventually, job offers.

Bosses say blind hiring reveals true talents and results in more diverse hires. And the notion that career success could stem from what you know, and not who you know, is a tantalizing one.


. . .


"We were hiring people who were more fun for us to talk to," says Mr. Mackey. Trouble was, they were often a poor fit for the job, according to the CEO.

So the company, which was acquired by International Business Machines Corp. last year, added an anonymous sample project to the hiring process. Prospective hires spend about four to six hours performing a task similar to what they would do at Compose--writing a marketing blog post for a technical product, for example.


. . .


The sample projects have unearthed hires who have turned out to be top performers, says Mr. Mackey.



For the full story, see:

RACHEL FEINTZEIG. "Why Bosses Are Turning to 'Blind Hiring'." The Wall Street Journal (Weds., Jan. 6, 2016): B4.

(Note: ellipses added.)

(Note: the online version of the article has the date Jan. 5, 2016, and has the title "The Boss Doesn't Want Your Résumé.")






January 26, 2016

Open Offices Are "an Absurd Attack on Concentration"



(p. A11) Mr. Newport acknowledges the good intentions behind open offices: They are meant to encourage serendipity and teamwork. But he argues that burdening workers with perpetual distractions constitutes "an absurd attack on concentration" that creates "an environment that thwarts attempts to think seriously." Sure, there's collaboration--not least the unspoken camaraderie among coworkers who have shared in the cringe-inducing experience of hearing a colleague castigate her spouse over the phone.

Mr. Newport, a computer science professor at Georgetown, is the unusual academic who will sully himself with matters as practical as: How can a talented employee rack up the rarefied and acute skills--writing, coding, scouring the latest mergers and acquisitions--that make someone indispensable? His answer? Expanding your capacity for "deep work," ruthlessly weeding out distractions and regularly carving out stretches of time to sharpen abilities. Mr. Newport explains why honing an ability to concentrate can yield enormous professional payouts. Then he lays out rules for becoming one such rare bird.

Most corporate workers, Mr. Newport argues, don't have clear feedback about how to spend their time. As a result, employees use "busyness as a proxy for productivity," which Mr. Newport describes aptly as "doing lots of stuff in a visible manner"--blasting out emails, for instance, or holding meetings on superficial progress on some project.


. . .


The book's best example is the Pulitzer Prize winning Lyndon Johnson biographer Robert A. Caro, known for working on a meticulous schedule in his Manhattan office dressed in a coat and tie "so that he never forgets when he sits down with his research that he is going to work," as one profile of Mr. Caro put it.



For the full review, see:

KATE BACHELDER. "BOOKSHELF; Will You Please Be Quiet, Please?; Yes, open offices cultivate camaraderie--among coworkers who all cringe as a colleague shouts at her soon-to-be ex-husband over the phone." The Wall Street Journal (Weds., Jan. 20, 2016): A11.

(Note: ellipsis added, italics in original.)

(Note: the online version of the review has the date Jan. 19, 2016.)


The book under review, is:

Newport, Cal. Deep Work: Rules for Focused Success in a Distracted World. New York: Grand Central Publishing, 2016.






January 24, 2016

"Hey You, Get Busy" Bolted in Place



(p. D8) Most scientists rely on grants from the federal government and private foundations to finance their work. Michael W. Davidson turned to neckties.

Mr. Davidson, who died on Dec. 24 [2015] at 65, used sophisticated microscopes to create stunning, psychedelic images of crystallized substances like DNA and hormones, and he contributed to Nobel Prize-honored research about the inner workings of cells. His images were on the covers of scientific journals and, as unlikely as it might seem, on neckwear.

They found their way into men's apparel in the early 1990s, when Mr. Davidson called Irwin Sternberg, the president of the necktie company Stonehenge Ltd., proposing a series of ties using his ultramagnified, wildly colorful images of vitamins. Mr. Sternberg, though skeptical, agreed to take a look.

"When I saw Michael's work, I started to think I couldn't get a designer more talented," Mr. Sternberg said in an interview.

Stonehenge released a line of "vitamin ties" in September 1993. A year later, neckties with Mr. Davidson's images of moon rocks were released on the 25th anniversary of Apollo 11, the first manned lunar mission. Ties with images of cocktails, beer and wine followed. Millions of ties were sold, and a slice of the profits -- millions of dollars -- went to charity. Mr. Davidson's share went to his laboratory work at Florida State University in Tallahassee.


. . .


Mr. Davidson started college at Georgia Southern University, then attended Oglethorpe University in Georgia before earning a chemistry degree at Georgia State.

He arrived at Florida State in the early 1980s as a graduate student. He quit to start a business chrome-plating auto parts.

A few years later, Mr. Davidson returned to Florida State as a microscopy technician for a materials research laboratory. "He just came in and said, 'I think there are things we can do,' and he got hired," said Kirby Kemper, a retired Florida State physics professor who was then associate chairman of the physics department.

To produce his work, Mr. Davidson hired an army of assistants. Some were undergraduates. Others were out of school with no credentials in the field. But the work helped propel many of them to successful jobs in academia and industry.

Eric Clark had been a nurse when Mr. Davidson hired him as an assistant in 1999. Now, as an application developer, he is continuing Mr. Davidson's educational website and scientific illustration operations. (The molecular biology laboratory was disbanded.)

Mr. Davidson worked seven days a week, and he expected the same of the people who worked with him. On his door was a large metal sign that said, "Hey you, get busy." MagLab officials told him to take it down. Mr. Davidson bolted it in place, and it is still there.



For the full obituary, see:

KENNETH CHANG. "Michael W. Davidson, 65, a Scientist Who Had an Artist's Eye for Detail." The New York Times (Sat., JAN. 16, 2016): D8.

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

(Note: the online version of the obituary has the date JAN. 12, 2016, and has the title "Michael W. Davidson, a Success in Microscopes and Neckwear, Dies at 65.")






January 22, 2016

Regulations Slow Eradication of Cancer



(p. D3) . . . the triumph of chemotherapy for Hodgkin's and then for many other tumors opened an interlocking series of dilemmas. In the clinic and the hospital, the new protocols demanded that doctors muster the courage to make their patients very sick in order to make them well. But how sick was too sick? The risks and benefits of the powerful treatments now needed careful, deliberate assessment at every stage of the disease.

Similar questions dogged those who developed, evaluated and regulated the drugs. How poisonous could these agents safely be? How assiduously should desperate patients be saved by their government from pharmaceutical risk?

Dr. DeVita stands firmly among those affirming cancer patients' right to aggressive treatment. One particular exchange summarizes his philosophy: "Do your patients speak to you after you do this to them?" one skeptic asked him early on. "The answer is yes," he replied, "and for a lot longer."

The regulatory caution of the Food and Drug Administration has been a thorn in his side for decades: "I'd like to be able to say that as cancer drugs have become increasingly more complex and sophisticated, the F.D.A. has as well. But it has not." In fact, he writes, "the rate-limiting step in eradicating cancer today is not the science but the regulatory environment we work in."



For the full review, see:

ABIGAIL ZUGER, M.D. "An Unbowed Warrior." The New York Times (Tues., Dec.. 1, 2015): D3.

(Note: ellipsis added.)

(Note: the online version of the review has the date NOV. 30, 2015, and has the title "Review: Science and Politics Collide in 'The Death of Cancer'.")


The book under review, is:

DeVita, Vincent T., and Elizabeth DeVita-Raeburn. The Death of Cancer: After Fifty Years on the Front Lines of Medicine, a Pioneering Oncologist Reveals Why the War on Cancer Is Winnable--and How We Can Get There. New York: Sarah Crichton Books, 2015.






January 19, 2016

Private Start-Ups Pursue Fusion Approaches Ignored by Government



(p. B5) Fusion reactions release no carbon dioxide. Their fuel, derived from water, is abundant. Compared with contemporary nuclear reactors, which produce energy by splitting atoms apart, a fusion plant would produce little radioactive waste.

The possibilities have attracted Jeffrey P. Bezos, founder of Amazon.com. He has invested in General Fusion, a start-up in British Columbia, through Bezos Expeditions, the firm that manages his venture capital investments. Paul Allen, a co-founder of Microsoft, is betting on another fusion company, Tri Alpha Energy, based in Foothill Ranch, Calif., an hour south of Los Angeles, through his venture arm, Vulcan Capital.

Peter Thiel -- the co-founder of PayPal, who once lamented the superficiality of the technology sector by saying, "We were promised flying cars and we got 140 characters" -- has invested in a third fusion start-up, Helion Energy, based near Seattle, through Mithril Capital Management.

Government money fueled a surge in fusion research in the 1970s, but the fusion budget was cut nearly in half over the next decade. Federal research narrowed on what scientists saw as the most promising prototype -- a machine called a tokamak, which uses magnets to contain and fuse a spinning, doughnut-shape cloud of hydrogen.

Today's start-ups are trying to perfect some of the ideas that the government left by the wayside.

After earning his doctorate from the University of California, Irvine, in the mid-1990s, Michl Binderbauer had trouble securing federal funds to research an alternative approach to fusion that the American government briefly explored -- one that adds the element boron into the hydrogen fuel. The advantage of the mixture is that the reaction does not fling off neutrons that, like shrapnel, can wear down machine parts and make them radioactive.

Mr. Binderbauer, along with his Ph.D. adviser, Norman Rostoker, founded Tri Alpha Energy, eventually raising money from the venture capital arms of Mr. Allen and the Rockefeller family. The company has raised over $200 million.



For the full story, see:

DINO GRANDONI. "Start-Ups Take on Challenge of Fusion." The New York Times (Mon., OCT. 26, 2015): B1 & B5.

(Note: the online version of the story has the date OCT. 25, 2015, and has the title "Start-Ups Take On Challenge of Nuclear Fusion.")






January 14, 2016

Koch Employees Motivated by the Fulfillment of Meaningful Work



(p. A11) . . . , Mr. Koch defines "principled entrepreneurship" as the effort to maximize profit by "creating superior value," as well as by "acting lawfully and with integrity." What is good for business, he says, is good for society--another aspect of good profit.

The culture of a company is formed, Mr. Koch observes, when employees internalize such principles and practices. Although employees should be urged, he says, to be agents of change, to think critically and, when necessary, to challenge the decisions of their bosses, they will find that their most significant motivation is a sense of accomplishment and fulfillment. "We cannot ignite a passion for creating the greatest value," Mr. Koch writes, "if there is no meaning in our work."



For the full review, see:

JOSEPH MACIARIELLO. "BOOKSHELF; The Company He Keeps; Respect means treating people on their merits--not according to the rigid categories of identity politics. Merit will always create value." The Wall Street Journal (Fri., Oct. 23, 2015): A11.

(Note: ellipsis added.)

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


The book under review, is:

Koch, Charles G. Good Profit: How Creating Value for Others Built One of the World's Most Successful Companies. New York: Crown Business, 2015.






January 13, 2016

Focused Investing by Entrepreneurs Can Create Illiquid Wealth that Is Large But Precarious



The implications of the point made in the passages quoted below, were boldly drawn out by George Gilder in his article "The Enigma of Entrepreneurial Wealth."



(p. B4) Wealth-X found that from July 2014 to July 2015, 45 percent of the ultrawealthy in the United States lost some part of their wealth; 11 percent lost more than half of it.

The reasons for the drop in wealth differed. But why so many ultra-wealthy people -- defined as those with more than $30 million -- lost so much of their wealth so quickly offers lessons in financial management, no matter how much money you have.

Sure, this group still has a lot of money. But those who lost a lot of money made similar mistakes: Too much of their money was tied up in one investment and too little of their money was in cash or some other liquid investment. And too often, they didn't think enough about the likelihood that something could go wrong.


. . .


"A lot of people have this view that wealth is inherited," said Mykolas Rambus, chief executive of Wealth-X. "That's very much not the case." Most are successful entrepreneurs who built fortunes, he said, "And most of their money is in privately held companies, not your Googles and Facebooks."

He said 75 percent of the world's wealth, when real estate is included, was privately held.

In the period examined by Wealth-X, overconcentration and illiquidity were big factors when someone lost a fortune.

Curtis James Jackson III, better known as the rapper 50 Cent, was worth $240 million in May 2014 and about $50 million last month, according to Wealth-X. The precipitous drop was caused almost entirely by the falling values of four of his companies, with interests ranging from clothing to film production. They declined to $7.2 million from $150 million in 12 months, according to Wealth-X's research.

The same could be said for Mr. Charney, who was ousted from his company American Apparel, which later filed for bankruptcy protection. His share of the company was estimated at over $65 million in May 2014 and is now virtually worthless. At American Apparel's height, in 2007, Forbes put Mr. Charney's stake at $550 million.

"Every financial adviser in the United States says you've got to diversify," Mr. Rambus said. "There is a lesson here about volatility and concentration. Rewind to the dot-com crash. There were plenty of folks who were seriously overexposed to tech and lost their shirts."

But there's a paradox here. Generally, it was overconcentration in one, illiquid company -- whose value rose exponentially -- that made people ultrawealthy in the first place.



For the full story, see:

PAUL SULLIVAN . "Wealth Matters; Reversal of Fortunes for Some Superrich." The New York Times (Sat., DEC. 12, 2015): B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date DEC. 11, 2015, and has the title "Wealth Matters; The Bad Fortune of Some Ultrawealthy People.")


The Gilder article praised above, is:

Gilder, George. "The Enigma of Entrepreneurial Wealth." Inc. 14, no. 10 (Oct. 1992): 161-64, 66 & 68.






January 12, 2016

North Dakota Plans a Drone Silicon Valley



For many years state governments and universities have been trying to plan the creation of new Silicon Valleys in their own backyards. Success has been elusive. Now North Dakota is tying to create a drone Silicon Valley. My take: Silicon Valleys cannot be planned, though they can be encouraged by low taxes and limited regulations.



(p. A1) FARGO, N.D. -- "California and New York want what we've got," said Shawn Muehler, a 30-year-old Fargo resident, gazing at a horizon of empty fields, silos, windbreak trees and hardly any people. A winged craft traces the air, mapping a field with pinpoint accuracy for his start-up, a drone software company called Botlink. "They like drones, but they've got a steep learning curve ahead."

For years, entrepreneurs have come here to farm and to drill for oil and natural gas. Now a new, tech-savvy generation is grabbing a piece of the growing market for drone technology and officials want to help them do it here, where there is plenty of open space and -- unlike in other sparsely populated states -- lots of expertise already in place.

Silicon Valley has the big money and know-how, Mr. Muehler and others say, but North Dakota can take unmanned aerial vehicles, as the officials prefer to call drones, from a fast-growing hobby to an industry. And just as Silicon Valley got its start with military contracts, entrepreneurs and cooperative universities, they believe they can do the same with drones.

"The potential up here is tremendous," said Jack Dalrymple, the state's governor. "It's not about supporting a company or two; it's creating the leading edge of an industry."

North Dakota has spent about (p. B7) $34 million fostering the state's unmanned aerial vehicle business, most notably with a civilian industrial park for drones near Grand Forks Air Force Base. The base, a former Cold War installation, now flies nothing but robot aircraft for the United States military and Customs and Border Protection.



For the full story, see:

QUENTIN HARDY. "A Silicon Valley for Drone Craft in Great Plains." The New York Times (Sat., DEC. 26, 2015): A1 & B7.

(Note: the online version of the story has the date DEC. 25, 2015, and has the title "A Silicon Valley for Drones, in North Dakota.")






January 9, 2016

Behavioral Economists Ignore Biases and Irrationalities of Governments



(p. A4) . . . it is quite a leap between acknowledging markets sometimes fail and arguing they are inherently flawed. Policy makers who work from the second assumption risk overreaching, by seeing market failure where there is none and ignoring their own behavioral biases, in either case leaving people worse off, not better. Public trust in free markets hasn't wavered notably in the U.S. or Britain from precrisis levels and even in the pope's native Argentina, attitudes aren't much more negative than in 2009.


. . .


. . . , consumers don't seem irrational when they evaluate fuel economy; one study found changes in gasoline prices are closely reflected in the relative prices of less fuel-efficient used cars.

Besides, as Mr. Viscusi and Mr. Gayer note, the government has behavioral biases of its own. Courts and regulators assign more value to the potential harm of a new drug than its potential benefits. Politicians take actions out of proportion to the risks, for example by closing schools during the Ebola scare or imposing onerous airline-security checks to prevent terrorist hijackings.



For the full commentary, see:

GREG IP. "Market Critics Shouldn't Overreach." The Wall Street Journal (Thurs., Sept. 24, 2015): A2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Sept. 23, 2015, and has the title "Critics of Free Market Shouldn't Overreach." Where there are minor differences between the print and online versions of the article, the sentences quoted above follow the online version.)


The Vicusi and Gayer paper mentioned above, is:

Viscusi, W. Kip, and Ted Gayer. "Behavioral Public Choice: The Behavioral Paradox of Government Policy." Harvard Journal of Law & Public Policy 38, no. 3 (Summer 2015): 973-1007.






January 8, 2016

How to Monopolize a Dead Technology



(p. C3) LOS ANGELES -- When Quentin Tarantino's "The Hateful Eight" is released in a special roadshow version (with overture, intermission and additional footage) on Dec. 25, it will represent a feat worthy of the heist in the director's "Jackie Brown."

The film is scheduled to open on 96 screens in the United States and four in Canada, all in 70-millimeter projection, a premium format associated with extravaganzas of the 1950s and 1960s.

Yet from a theatrical standpoint, the technology is nearly obsolete. Last year, "Interstellar" opened in 70 millimeter at only 11 comparable locations. There were only 16 in 2012 for "The Master," which renewed interested in the format. No film has opened with 100 70-millimeter prints since 1992. According to the National Association of Theater Owners, 97 percent of the 40,000 screens in the United States now use digital projection.


. . .


"We looked around for anybody who was selling them," said Erik Lomis, Weinstein's president of theatrical distribution and home entertainment. "We tried to keep it as quiet as possible as to why. Eventually word leaked out why we were looking for them, and then the price went up."


. . .


"We've been accused of actually cornering the market on 70-millimeter projectors," Mr. Cutler said. "It's probably pretty true. There probably aren't too many out there that we didn't find." Most of them were destroyed, he added, during the conversion to digital projection.


. . .


Ultra Panavision also produces subtle aesthetic effects, unusual even to viewers familiar with 70 millimeter. The lens "for lack of a better word is a softer lens," Mr. Sasaki said. During a screening of test footage for the film, he pointed out the impressionistic qualities of the focus and explained how the image catered to our eyes' natural depth cues.

With projectors found and lenses made, the next hurdle is labor: Most theaters no longer have projectionists with a working knowledge of these machines. Mr. Cutler's company will provide training for each site. "One way or the other, we will fulfill this need," he said. "It will be a combination of house staff that we can train, professional projectionists that we can bring in, projectionists that we can find locally, and potentially some technical staff that we'll bring in." Every theater showing the film will get a spare set of belts, fuses and light bulbs, and instructions. Mr. Cutler's staff will also be standing by for calls.



For the full story, see:

BEN KENIGSBERG. "In a World Gone Digital, Room for a Lost Format." The New York Times (Thurs., NOV. 12, 2015): C3.

(Note: ellipses added.)

(Note: the online version of the story has the date NOV. 11, 2015, and has the title "Tarantino's 'The Hateful Eight' Resurrects Nearly Obsolete Technology.")






January 5, 2016

Fewer Startups and Slower Growth Among the Fewer: Double Whammy to Economic Growth



(p. 7B) Previous studies have shown that, despite the success of firms like Facebook, the number of startups has dropped sharply, from about 13 percent of all firms in the late 1980s to about 8 percent in 2011. Now, a new study from the National Bureau of Economic Research reports that the expansion of the remaining startups -- which traditionally has been much faster than the growth of existing companies -- has slowed considerably. By some measures, it now barely exceeds the average of older companies.

So there's a double whammy: fewer startups and slower growth among the survivors. This could be one reason why the recovery from the Great Recession has been so sluggish, with the economy's growth averaging about 2 percent annually from 2010 to 2014, much slower than earlier post-World War II recoveries.



For the full commentary, see:

Robert J. Samuelson. "Our rate of startups is stalling at an inopportune time." Omaha World-Herald (Sun., Dec. 20, 2015): 7B.


I strongly suspect, but am not sure, that the NBER working paper referred to above, is:

Decker, Ryan, John Haltiwanger, Ron Jarmin, and Javier Miranda. "Where Has All the Skewness Gone? The Decline in High-Growth (Young) Firms in the U.S." NBER Working Paper # 21776, Dec. 2015.






January 4, 2016

"We're from the Streets and We Want Change"



(p. A9) CARACAS, Venezuela -- On a sunny afternoon, Jorge Millán, an opposition candidate for congress, walked through the narrow streets of a lower-middle-class neighborhood, pressing the flesh in what was once a no man's land for people like him.


. . .


With the economy sinking under the weight of triple-digit inflation, a deep recession, shortages of basic goods and long lines at stores despite the nation's vast oil reserves, the opposition has its best chance in years to win a legislative majority.


. . .


"I was a Chavista, but Chávez isn't here anymore," said Mr. Omaña, referring to the followers of the former president.

"It's this guy," he said, referring to Mr. Maduro. "It's not the same."

Mr. Omaña complained about having to stand in long lines to buy food and about the fast-rising prices, saying that for the first time since Mr. Chávez was elected in 1998 he would vote for an opposition candidate.

"Enough is enough," he said. "We need something good for Venezuela."

Venezuelan politics was dominated after 1998 by Mr. Chávez and the movement he started, which he called the Bolivarian revolution, after the country's independence hero, Simón Bolívar. Mr. Chávez died in 2013, and his disciple, Mr. Maduro, was elected to succeed him, vowing to continue Mr. Chávez's socialist-inspired policies.


. . .


Opposition candidates said one of the biggest surprises of the campaign has been the warm reception they have received in what were once hostile pro-government strongholds.

Carlos Mendoza, 53, a motorcycle taxi driver and former convict who works in the district where Mr. Millán is running, said that he belongs to a group, known as a colectivo, that in the past was paid by the government to help out during campaigns, attend rallies and drive voters to the polls. Such groups were also often used to intimidate opposition supporters.

"They called us again this time," Mr. Mendoza said. "I told them, 'No way, you're not using me again.' "

"We're from the streets," he said, "and we want change."



For the full story, see:

WILLIAM NEUMAN. "Venezuela's Economic Pain Gives Opposition Lift Before Vote." The New York Times (Sat., DEC. 5, 2015): A9.

(Note: ellipses added.)

(Note: the online version of the story has the date DEC. 4, 2015, and has the title "Venezuela's Economic Woes Buoy Opposition Before Election.")






January 3, 2016

Affirmative Action Reduces Number of Black Scientists



Malcolm Gladwell, in chapter three of David and Goliath, persuasively argues that science students who would thrive at a solid public university, may be at the bottom of their class at Harvard, and in discouragement switch to an easier non-science major. Gladwell's argument has implications for affirmative action, as noted by Gail Heriot in the passages quoted below.



(p. A13) . . . , numerous studies--as I explain in a recent report for the Heritage Foundation--show that the supposed beneficiaries of affirmative action are less likely to go on to high-prestige careers than otherwise-identical students who attend schools where their entering academic credentials put them in the middle of the class or higher. In other words, encouraging black students to attend schools where their entering credentials place them near the bottom of the class has resulted in fewer black physicians, engineers, scientists, lawyers and professors than would otherwise be the case.

But university administrators don't want to hear that their support for affirmative action has left many intended beneficiaries worse off, and they refuse to take the evidence seriously.

The mainstream media support them on this. The Washington Post, for instance, recently featured a story lamenting that black students are less likely to major in science and engineering than their Asian or white counterparts. Left unstated was why. As my report shows, while black students tend to be a little more interested in majoring in science and engineering than whites when they first enter college, they transfer into softer majors in much larger numbers and so end up with fewer science or engineering degrees.

This is not because they don't have the right stuff. Many do--as demonstrated by the fact that students with identical entering academic credentials attending somewhat less competitive schools persevere in their quest for a science or engineering degree and ultimately succeed. Rather, for many, it is because they took on too much, too soon given their level of academic preparation.



For the full commentary, see:

GAIL HERIOT. "Why Aren't There More Black Scientists? The evidence suggests that one reason is the perverse impact of university racial preferences." The Wall Street Journal (Thurs., Oct. 22, 2015): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary was updated on Oct. 21, 2015.)


Heriot's report for the Heritage Foundation, is:

Heriot, Gail. "A "Dubious Expediency": How Race-Preferential Admissions Policies on Campus Hurt Minority Students." Heritage Foundation Special Report #167, Aug. 31, 2015.


Gladwell's book, mentioned above, is:

Gladwell, Malcolm. David and Goliath: Underdogs, Misfits, and the Art of Battling Giants. New York, NY: Little, Brown and Company, 2013.






January 1, 2016

"Growing Emphasis on Climate Aid Is Immoral"



(p. A13) . . . aid is being diverted to climate-related matters at the expense of improved public health, education and economic development. The Organization for Economic Cooperation and Development has analyzed about 70% of total global development aid and found that about one in four of those dollars goes to climate-related aid.

In a world in which malnourishment continues to claim at least 1.4 million children's lives each year, 1.2 billion people live in extreme poverty, and 2.6 billion lack clean drinking water and sanitation, this growing emphasis on climate aid is immoral.



For the full commentary, see:

BJORN LOMBORG. "This Child Doesn't Need a Solar Panel; Spending billions of dollars on climate-related aid in countries that need help with tuberculosis, malaria and malnutrition." The Wall Street Journal (Thurs., Oct. 22, 2015): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary was updated on Oct. 21, 2015.)






December 31, 2015

Consumers Vote "No" on Costly Organic Smoothies "Made of Swiss Chard, Cashew Milk and Himalayan Salt"



(p. D1) As recently as last month, one could hardly throw a lentil in New York City without hitting an Organic Avenue storefront, with its orange banner, stick-figure logo and promise of better living through $9 cayenne-infused lemonade.

Kat Schamens, a yoga teacher and fitness-apparel designer, liked it that way. "I would always think, 'I can't wait to go in and get my chickpea soup,' " she said.

In mid-October, Ms. Schamens learned that Organic Avenue's 10 stores had been shuttered and that the company had filed for bankruptcy. "I kind of freaked out," she said. "I was distraught. I lost my yoga for a minute."


. . .


(p. D7) The loyalty of devotees like Ms. Schamens and Ms. Kerin notwithstanding, there is an admitted emperor's new clothes quality to paying $25 for a lunch of vegetable shavings and a smoothie made of Swiss chard, cashew milk and Himalayan salt.

"You can't get people to crave this food," the former investor said. "You can't build a long-term business off what Gwyneth Paltrow likes."

Some researchers began to publish studies questioning the necessity and safety of juice cleanses. And the fashion world started to feel pushback from nutritionists and eating-disorder activists against its support of juicing in early 2013, after the Council of Fashion Designers of America announced a 50 percent discount for models on Organic Avenue juices during New York Fashion Week.



For the full story, see:

KATHERINE ROSMAN. "How Organic Avenue Lost All Its Juice." The New York Times (Sun., NOV. 5, 2015): D1 & D7.

(Note: ellipsis added.)

(Note: the online version of the story has the date NOV. 4, 2015.)







December 30, 2015

Hungry Suffer Due to G.M.O. Bans by Europe's "Coalition of the Ignorant"



(p. 6) CALL it the "Coalition of the Ignorant." By the first week of October [2015], 17 European countries -- including Austria, Denmark, France, Germany, Greece, Hungary, Italy, the Netherlands and Poland -- had used new European Union rules to announce bans on the cultivation of genetically modified crops.


. . .


I have spent time with malnourished children in Tanzania whose families were going hungry because cassava crops were wiped out by brown-streak disease. That was particularly painful because in neighboring Uganda I had recently visited trial plots of genetically modified cassava that demonstrated complete resistance to the virus. The faces of the hungry children come to mind every time I hear European politicians boast about their country's G.M.O. ban and demand that the rest of the world follow suit -- as Scotland's minister did in August.

Thanks to Europe's Coalition of the Ignorant, we are witnessing a historic injustice perpetrated by the well fed on the food insecure. Europe's stance, if taken up internationally, risks marginalizing a critically important technology that we must surely employ if humanity is to feed itself sustainably in an increasingly difficult and challenging future. I can only hope that the Continent's policy makers come to their senses before it is too late.



For the full commentary, see:

MARK LYNAS. "With G.M.O. Policies, Europe Turns Against Science." The New York Times, SundayReview Section (Sun., OCT. 25, 2015): 6.

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

(Note: the online version of the commentary was updated on OCT. 24, 2015, and has the title "With G.M.O. Policies, Europe Turns Against Science.")






December 29, 2015

FDA Forces Child to Go to London to Get Drug to Fight His Cancer



(p. A15) How far would you go to get a drug that could save your child's life? Across an ocean? That is exactly what the federal government is forcing some American families with dying children to do.

In 2012, when Diego Morris was 11 years old, he was diagnosed with a deadly cancer in his leg called osteosarcoma. Doctors at St. Jude Children's Research Hospital in Memphis, Tenn., removed the tumor, but the prognosis was poor. There was a significant risk that even extensive chemotherapy after surgery would not prevent the cancer from returning.

Fortunately, a team of doctors at MD Anderson Cancer Center in Houston and Memorial Sloan Kettering Cancer Center in New York City had developed a revolutionary new drug, mifamurtide (MTP), that can prevent osteosarcoma from coming back. A study by Dr. Eugenie Kleinerman of MD Anderson and Dr. Paul Meyers of Sloan Kettering showed the drug resulted in a 30% reduction in the osteosarcoma mortality rate at eight years after diagnosis.

The drug was approved in 2009 by the European Medicines Agency and is currently the standard of care in Europe, Israel and many other countries. In 2012 it received the prestigious Prix Galien Award, the gold medal for pharmaceutical research and development in the United Kingdom.

MPT was exactly what Diego needed. But there was one problem: The drug was not available in America because the Food and Drug Administration had rejected it, demanding additional studies. That meant that Diego had to travel from Phoenix to London to get the drug he needed to save his life--a drug that was available in almost every industrialized nation and should have been available in the U.S.



For the full commentary, see:


DARCY OLSEN. "Winning the Right to Save Your Own Life; As the FDA dawdles, 24 states pass 'right-to-try' laws giving terminally ill patients access to drugs." The Wall Street Journal (Fri., Nov. 27, 2015): A15.

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


Olsen's commentary is related to her book:

Olsen, Darcy. The Right to Try: How the Federal Government Prevents Americans from Getting the Lifesaving Treatments They Need. New York: HarperCollins Publishers, 2015.






December 26, 2015

Cuomo Bans the Fracking that Could Revive New York's Southern Tier



(p. A25) CONKLIN, N.Y. -- The main grocery store here was replaced by a Family Dollar store, already faded. The historic front of the town hall, a castle no less, is crumbling, and donations are being solicited. The funds earmarked to strip off the lead paint from the castle's exterior went instead to clear mold from the basement.

This town of roughly 5,500 residents looks alarmingly like dozens of other towns and cities in New York's Southern Tier, a vast part of the state that runs parallel to Pennsylvania. Years ago, the region was a manufacturing powerhouse, a place where firms like General Electric and Westinghouse thrived. But over time companies have downsized, or left altogether, lured abroad or to states with lower taxes and fewer regulations.


. . .


In western New York, . . . , Gov. Andrew M. Cuomo, a Democrat, pledged $1 billion in 2012 to support economic development. Since then, he has poured hundreds of millions of dollars into numerous Buffalo-area projects.

The Southern Tier has proved to be a harder fix. It is predominantly rural and lacks a significant population core that typically attracts the private sector.

The region is resource rich, but landowners are angry the government will not let them capitalize on it. Some had pinned their hopes of an economic revival on the prospect of the state's authorizing hydraulic fracturing, known as fracking; many of them can recite the payment formula gas companies were proposing: $500 a month per acre.

But the Cuomo administration, citing health risks, decided last year to ban the practice, leaving some farmers contemplating logging the timber on their land, a move that could destroy swaths of pristine forest.



For the full story, see:

SUSANNE CRAIG. "Former Hub of Manufacturing Ponders Next Act." The New York Times (Weds., SEPT. 30, 2015): A20-A21.

(Note: ellipses added.)

(Note: the online version of the story has the date SEPT. 29, 2015, and has the title "New York's Southern Tier, Once a Home for Big Business, Is Struggling.")






December 25, 2015

Hawaiian Culture Changed Swiftly in Century After 1777



(p. C1 & C6) It's startling just how swiftly change came to Hawaii after Capt. James Cook first sighted the island of Kauai in 1777: In little more than a century, Ms. Moore writes, "a closed and isolated culture, bound by superstition and religious ritual, with no understanding of individual freedom or private property," had been transformed into "a society of thriving capitalism, Protestant values, and democratic institutions."


For the full review, see:

MICHIKO KAKUTANI. "Hard Truths in the Past of a Tropical Eden." The Wall Street Journal (Tues., SEPT. 22, 2015): C1 & C6.

(Note: ellipses added.)

(Note: the online version of the review has the date SEPT. 21, 2015, and has the title "Review: 'Paradise of the Pacific,' the Hard Truths of Hawaii's History.")


The book under review, is:

Moore, Susanna. Paradise of the Pacific: Approaching Hawaii. New York: Farrar, Straus and Giroux, 2015.






December 24, 2015

"The Market for Greek Philosophers Has Tightened"



(p. A25) Senator Marco Rubio sent fact-checkers aflutter when he said at the Republican presidential debate on Tuesday that philosophy majors would be better off going into welding. The value of a vocational degree, he argued, was greater than the payoff that comes with contemplating the cosmos.

"Welders make more money than philosophers," Mr. Rubio said. "We need more welders and less philosophers."

. . .


On Wednesday [November 9, 2015] Mr. Rubio doubled down on his assertion, sending out a fund-raising email with the subject line "more welders" and calling for the overpriced higher education system to be dismantled.

The argument echoed one he makes frequently on the stump, which the senator admits probably irks some intellectuals: "You deserve to know that the market for Greek philosophers has tightened over the last 2,000 years."



For the full story, see:

Alan Rappeport. "Philosophers Say View of Their Skills Is Dated." The New York Times (Thurs., Nov. 12, 2015): A25.

(Note: ellipsis, and bracketed date, added. The last two quoted paragraphs were combined into one paragraph in the print version.)

(Note: the online version of the story has the date Nov. 11, 2015, and has the title "Philosophers (and Welders) React to Marco Rubio's Debate Comments.")






December 16, 2015

Those Who Try Japanese Toilets, Praise Them with "Cultish Devotion"



(p. D12) Last year, Bennett Friedman, who owns a plumbing showroom in Manhattan called AF New York, took a business trip to Milan. On the morning of his return he faced a choice: stop in the bathroom there or wait until he got home. The flight was nine hours. He waited.

The move seems almost masochistic. But in his home and office bathrooms, Mr. Friedman had installed a Toto washlet. To sit upon a standard commode, he said, would be like "going back to the Stone Age."

"It feels very uncivilized," he said.

For those who own Japanese toilets, there is a cultish devotion. They boast heated seats, a bidet function for a rear cleanse and an air-purifying system that deodorizes during use. The need for toilet paper is virtually eliminated (there is an air dryer) and "you left the lid up" squabbles need never take place (the seat lifts and closes automatically in many models).


. . .


Most washlet owners, then, are converted after trying one out in the world. At a boutique hotel, say, or on a trip to Asia.

Such was the case with Robert Aboulache. Before he and his family went on a vacation to Japan, he said, friends who had visited the country told him he would love the toilets. "I thought, 'How great can the toilets be?'" Mr. Aboulache said. "They were amazing. Some have noisemakers to cover up the sound. You can pivot that little sprayer. The water can be heated or not. We got home, and I thought, 'This is not the same.'"

Three days later, Mr. Aboulache went online and bought a Toto washlet, which he installed in the shared upstairs bathroom of his home in Los Angeles as a surprise for his wife and son.

"We've been delighted," he said. "It's our favorite toilet."


. . .


Mr. Friedman, too, is an enthusiastic proselytizer for washlets, in his showroom and out in social situations, something you gather he would do even if he didn't sell them.

Whenever he talks about their virtues, he said, "I feel like one of the Apostles passing the word of God."



For the full story, see:

STEVEN KURUTZ. "For Its Devotees, the Seat of Luxury." The New York Times (Thurs., NOV. 19, 2015): D12.

(Note: ellipses added.)

(Note: the online version of the story has the date NOV. 18, 2015, and has the title "The Cult of the Toto Toilet.")






December 14, 2015

Health Care Mandate "Freezes You at a Time When You Need to Be Moving Fast"



(p. B4) When LaRonda Hunter opened a Fantastic Sams hair salon 10 years ago in Saginaw, Tex., a suburb of Fort Worth, she envisioned it as the first of what would eventually be a small regional collection of salons. As her sales grew, so did her business, which now encompasses four locations -- but her plans for a fifth salon are frozen, perhaps permanently.

Starting in January, the Affordable Care Act requires businesses with 50 or more full-time-equivalent employees to offer workers health insurance or face penalties that can exceed $2,000 per employee. Ms. Hunter, who has 45 employees, is determined not to cross that threshold. Paying for health insurance would wipe out her company's profit and the five-figure salary she pays herself from it, she said.

"The margins are not big enough within our industry to support it," she said. "It's not that I don't want to -- I love my employees, and I want to do everything I can for them -- but the numbers just don't work."


. . .


For some business owners on the edge of the cutoff, the mandate is forcing them to weigh very carefully the price of growing bigger.

"There's kind of a deer-in-headlights moment for those who say, 'I have this new potential client, but if I bring them on, I have to hire five additional people,'" said Philip P. Noftsinger, the payroll unit president at CBIZ, a financial services provider for businesses. "They're really trying to assess how much the 50th employee is going to cost."


. . .


For businesses that use many seasonal, variable-hour or temporary workers, like those in the hospitality industry, simply figuring out how many qualifying employees they have can be a challenge.

"I think companies are going to have to work with their payroll processor for the basic data, and then their accountant or attorney about what certain items mean," Mr. Prince said.

The expense and distraction of all that paperwork is one of the biggest frustrations for one business owner, Joseph P. Sergio. His industrial cleaning company, Polar Clean, which is based in South Bend, Ind., but dispatches teams nationally, has just under 50 core employees. One of its business lines is disaster restoration, and after a flood or hurricane, its temporary staff balloons.

Mr. Sergio offers health insurance to his permanent staff, but the premiums have risen so quickly that he had to switch to a more restrictive plan, with a higher deductible. He is reluctant to go over the 50-employee line and incur all of the new rules that come with it. That makes bidding for new jobs an arduous and risky exercise.

"I've had to pull my controller and a couple of top people to sit and spend days going through this," he said. "If you ramp up, and it pushes you over 50, there's all these unknown costs and complicated rules. Are we really going to be able to benefit from going after that opportunity? It freezes you at a time when you need to be moving fast."



For the full story, see:

STACY COWLEY. "ENTREPRENEURSHIP; Health Care Law Leads Business Owners to Rethink Plans for Growth." The New York Times (Thurs., NOV. 19, 2015): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date NOV. 18, 2015, and has the title "ENTREPRENEURSHIP; Health Care Law Forces Businesses to Consider Growth's Costs.")






December 12, 2015

How Democratic Operatives Fight Innovation-Crushing Regulations



(p. B1) SAN FRANCISCO -- Over the last few years, so-called sharing companies like Airbnb and Uber -- online platforms that allow strangers to pay one another for a room or a ride -- have established footholds in thousands of communities well before local regulators have figured out how to deal with them.


. . .


Chris Lehane, a Washington political operative who now serves as Airbnb's head of global policy and public affairs, framed Proposition F (p. B10) as a hotel-industry-led attack on the middle class.

In this city of about 840,000 people, roughly $8 million was raised by groups opposed to Proposition F -- about eight times the amount raised by the proposition's backers, according to records filed with the San Francisco Ethics Commission.

Much of that money was spent mobilizing Airbnb hosts and users, Mr. Lehane said. Still, he repeatedly homed in on one of the company's most important talking points: Airbnb's victory was a win for the middle class.

"Cities recognize where the world is going, right, they understand that you're either going to go forward or you're going to go backward," he said. "They understand that in a time of economic inequality, this is a question of whose side are you on: Do you want to be on the side of the middle class, or do you want to be opposed to the middle class?"


. . .


Companies like Airbnb and Uber have become multibillion-dollar companies by employing a kind of guerrilla growth strategy in which they set up a modest team of workers in a city and immediately start providing their services to the public, whether local laws allow them to or not.


. . .


Mr. Lehane, a former political operative in the Clinton administration, was nicknamed the Master of Disaster for his no-holds-barred approach to winning political fights. David Plouffe, a former adviser to President Obama, is now a senior adviser to Uber and a member of its board.

Mr. Lehane and Mr. Plouffe have both tried to frame their companies as middle-class saviors in a moment of economic anxiety and income inequality -- themes that are playing out in the presidential election as well. Jeb Bush and other Republicans have bragged about their Uber rides on the campaign trail, praising these companies as the future of self-sufficient employment.



For the full story, see:

CONOR DOUGHERTY and MIKE ISAAC. "Airbnb and Uber Mobilize Vast User Base to Sway Policy." The New York Times (Thurs., NOV. 5, 2015): B1 & B10.

(Note: ellipses added.)

(Note: the online version of the story has the date NOV. 4, 2015.)






December 10, 2015

The Morality of Denying Hope to 30 Million Guanggun



(p. A4) One wife, many husbands.

That's the solution to China's huge surplus of single men, says Xie Zuoshi, an economics professor at the Zhejiang University of Finance and Economics, whose recent proposal to allow polyandry has gone viral.

. . .


By 2020, China will have an estimated 30 million bachelors -- called guanggun, or "bare branches." Birth control policies that since 1979 have limited many families to one child, a cultural preference for boys and the widespread, if illegal, practice of sex-selective abortion have contributed to a gender imbalance that hovers around 117 boys born for every 100 girls.

Though some could perhaps detect a touch of Jonathan Swift in the proposal, Mr. Xie wrote that he was approaching the problem from a purely economic point of view.

Many men, especially poor ones, he noted, are unable to find a wife and have children, and are condemned to living and dying without offspring to support them in old age, as children are required to do by law in China. But he believes there is a solution.


. . .


"With so many guanggun, women are in short supply and their value increases," he wrote. "But that doesn't mean the market can't be adjusted. The guanggun problem is actually a problem of income. High-income men can find a woman because they can pay a higher price. What about low-income men? One solution is to have several take a wife together."

He added: "That's not just my weird idea. In some remote, poor places, brothers already marry the same woman, and they have a full and happy life."


. . .

On Sunday [October 25, 2015], he published an indignant rebuttal on one of his blogs, accusing his critics of being driven by empty notions of traditional morality that are impractical and selfish -- even hypocritical.

"Because I promoted the idea that we should allow poor men to marry the same woman to solve the problem of 30 million guanggun, I've been endlessly abused," he wrote. "People have even telephoned my university to harass me. These people have groundlessly accused me of promoting immoral and unethical ideas.

"If you can't find a solution that doesn't violate traditional morality," he continued, "then why do you criticize me for violating traditional morality? You are in favor of a couple made up of one man, one woman. But your morality will lead to 30 million guanggun with no hope of finding a wife. Is that your so-called morality?"



For the full story, see:

DIDI KIRSTEN TATLOW. "Bachelor Glut in China Leads to a Proposal: Share Wives." The New York Times (Tues., OCTOBER 27, 2015): A4.

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

(Note: the online version of the story has the date OCTOBER 26, 2015, and has the title "Not Enough Women in China? Let Men Share a Wife, an Economist Suggests.")






December 8, 2015

Climate Change Likely to Be Slower and Less Harmful than Feared



(p. A11) . . . , we are often told by journalists that the science is "settled" and there is no debate. But scientists disagree: They say there is great uncertainty, and they reflected this uncertainty in their fifth and latest assessment for the United Nations Intergovernmental Panel on Climate Change (IPCC). It projects that temperatures are likely to be anything from 1.5 to 4.5 degrees Celsius (2.7 to 8.1 degrees Fahrenheit) warmer by the latter part of the century--that is, anything from mildly beneficial to significantly harmful.

As for the impact of that future warming, a new study by a leading climate economist, Richard Tol of the University of Sussex, concludes that warming may well bring gains, because carbon dioxide causes crops and wild ecosystems to grow greener and more drought-resistant. In the long run, the negatives may outweigh these benefits, says Mr. Tol, but "the impact of climate change does not significantly deviate from zero until 3.5°C warming."

Mr. Tol's study summarizes the effect we are to expect during this century: "The welfare change caused by climate change is equivalent to the welfare change caused by an income change of a few percent. That is, a century of climate change is about as good/bad for welfare as a year of economic growth. Statements that climate change is the biggest problem of humankind are unfounded: We can readily think of bigger problems." No justification for prioritizing climate change over terrorism there.


. . .


To put it bluntly, climate change and its likely impact are proving slower and less harmful than we feared, while decarbonization of the economy is proving more painful and costly than we hoped. The mood in Paris will be one of furious pessimism among the well-funded NGOs that will attend the summit in large numbers: Decarbonization, on which they have set their hearts, is not happening, and they dare not mention the reassuring news from science lest it threaten their budgets.

Casting around for somebody to blame, they have fastened on foot-dragging fossil-fuel companies and those who make skeptical observations, however well-founded, about the likelihood of dangerous climate change. Scientific skeptics are now routinely censored, or threatened with prosecution. One recent survey by Rasmussen Reports shows that 27% of Democrats in the U.S. are in favor of prosecuting climate skeptics. This is the mentality of religious fanaticism, not scientific debate.



For the full commentary, see:

MATT RIDLEY And BENNY PEISER. "Your Complete Guide to the Climate Debate; At the Paris conference, expect an agreement that is sufficiently vague and noncommittal for all countries to claim victory." The Wall Street Journal (Sat., Nov. 28, 2015): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Nov. 27, 2015.)


The Tol working paper mentioned above, is:

Tol, Richard S. J. "Economic Impacts of Climate Change." University of Sussex Economics Working Paper No. 75-2015.






December 6, 2015

Hunter-Gatherers Use Division of Labor



(p. D4) The division of labor in hunter-gatherer communities is complex and sophisticated, and crucial to their economic success, researchers report.

A paper in the journal Philosophical Transactions B looks at two hunter-gatherer groups: the Tsimane game hunters of lowland Bolivia, and the Jenu Kuruba honey collectors of South India.

"In contrast to the simple cave man view of a hunter-gatherer, we found that it requires a tremendous amount of skill, knowledge and training," said Paul Hooper, an anthropologist at Emory University and one of the study's authors.


. . .


When Jenu Kuruba men go in search of honey, Dr. Hooper said, "there's one man who specializes in making smoke to subdue the bees, another that climbs the trees, and others that act as support staff to lower combs."



For the full story, see:

SINDYA N. BHANOO. "Observatory; Nothing Simple About Hunter-Gatherer Societies." The New York Times (Tues., OCT. 27, 2015): D4.

(Note: ellipsis added.)

(Note: the online version of the story has the date OCT. 26, 2015.)


The academic article mentioned in the passage quoted above, is:

Hooper, Paul L., Kathryn Demps, Michael Gurven, Drew Gerkey, and Hillard S. Kaplan. "Skills, Division of Labour and Economies of Scale among Amazonian Hunters and South Indian Honey Collectors." Philosophical Transactions of the Royal Society of London B: Biological Sciences 370, no. 1683 (Oct. 2015), DOI: 10.1098/rstb.2015.0008.






December 5, 2015

"Racist" Woodrow Wilson Adopted "White Supremacy as Government Policy"



(p. A25) In 1882, soon after graduating from high school, the young John Davis secured a job at the Government Printing Office.

Over a long career, he rose through the ranks from laborer to a position in midlevel management. He supervised an office in which many of his employees were white men. He had a farm in Virginia and a home in Washington. By 1908, he was earning the considerable salary -- for an African-American -- of $1,400 per year.

But only months after Woodrow Wilson was sworn in as president in 1913, my grandfather was demoted. He was shuttled from department to department in various menial jobs, and eventually became a messenger in the War Department, where he made only