Main


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 Barge Shipping of 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 $720 a year.

By April 1914, the family farm was auctioned off. John Davis, a self-made black man of achievement and stature in his community at the turn of the 20th century, was, by the end of Wilson's first term, a broken man. He died in 1928.

Many black men and women suffered similar fates under Wilson. As the historian Eric S. Yellin of the University of Richmond documents in his powerful book "Racism in the Nation's Service," my grandfather's demotion was part of a systematic purge of the federal government; with Wilson's approval, in a few short years virtually all blacks had been removed from management responsibilities, moved to menial jobs or simply dismissed.

My grandfather died before I was born, but I have learned much about his struggle -- and that of other black civil servants in the federal government -- from his personnel file.


. . .


Consider a letter he wrote on May 16, 1913, barely a month after his demotion. "The reputation which I have been able to acquire and maintain at considerable sacrifice," he wrote, "is to me (foolish as it may appear to those in higher stations of life) a source of personal pride, a possession of which I am very jealous and which is possessed at a value in my estimation ranking above the loss of salary -- though the last, to a man having a family of small children to rear, is serious enough."

And the reply he received? His supervisor said, simply, that my grandfather was unable to "properly perform the duties required (he is too slow)." Yet there had never been any indication of this in his personnel file.

Wilson was not just a racist. He believed in white supremacy as government policy, so much so that he reversed decades of racial progress. But we would be wrong to see this as a mere policy change; in doing so, he ruined the lives of countless talented African-Americans and their families.



For the full commentary, see:

GORDON J. DAVIS. "Wilson, Princeton and Race." The New York Times (Tues., NOV. 24, 2015): A25.

(Note: ellipsis added.)

(Note: the online version of the commentary has the title "What Woodrow Wilson Cost My Grandfather.")


The Yellin book praised in the passage quoted above, is:

Yellin, Eric S. Racism in the Nation's Service: Government Workers and the Color Line in Woodrow Wilson's America. Chapel Hill, NC: The University of North Carolina Press, 2013.


See also:

Patler, Nicholas. Jim Crow and the Wilson Administration: Protesting Federal Segregation in the Early Twentieth Century. Boulder, CO: University Press of Colorado, 2004.






December 4, 2015

While Woodrow Wilson Was President of Princeton, "No Blacks Were Admitted"



(p. A1) PRINCETON, N.J. -- Few figures loom as large in the life of an Ivy League university as Woodrow Wilson does at Princeton.


. . .


But until posters started appearing around campus in September, one aspect of Wilson's legacy was seldom discussed: his racist views, and the ways he acted on them as president of the United States.

The posters, put up by a year-old student group called the Black Justice League, featured some of Wilson's more offensive quotes, including his comment to an African-American leader that "segregation is not humiliating, but a benefit, and ought to be so regarded by you," and led to a remarkable two days at this genteel (p. A17) campus last week.


. . .


Perhaps best known for leading the United States during World War I and for trying to start the League of Nations, Wilson as president rolled back gains blacks had made since Reconstruction, removing black officials from the federal government and overseeing the segregation of rank-and-file workers.

Raised in the South, he wrote of "a great Ku Klux Klan" that rose up to rid whites of "the intolerable burden of governments sustained by the votes of ignorant Negroes."

During Wilson's tenure as president of Princeton, no blacks were admitted -- "The whole temper and tradition of the place are such that no Negro has ever applied," he wrote -- though Harvard and Yale had admitted blacks decades earlier. Princeton admitted its first black student in the 1940s.



For the full story, see:

ANDY NEWMAN. "At Princeton, Woodrow Wilson, a Heralded Alum, Is Recast as an Intolerant One." The New York Times (Mon., NOV. 23, 2015): A1 & A17.

(Note: ellipses added.)

(Note: the online version of the story has the date NOV. 22, 2015.)







December 1, 2015

Only 5% of Gender Pay Differential Is Likely Due to Discrimination



(p. A17) Full-time employment is technically defined as more than 35 hours. This raises an obvious problem: A simple side-by-side comparison of all men and all women includes people who work 35 hours a week, and others who work 45. Men are significantly more likely than women to work longer hours, according to the BLS. And if we compare only people who work 40 hours a week, BLS data show that women then earn on average 90 cents for every dollar earned by men.

Career choice is another factor. Research in 2013 by Anthony Carnevale, a Georgetown University economist, shows that women flock to college majors that lead to lower-paying careers. Of the 10 lowest-paying majors--such as "drama and theater arts" and "counseling psychology"--only one, "theology and religious vocations," is majority male.

Conversely, of the 10 highest-paying majors--including "mathematics and computer science" and "petroleum engineering"--only one, "pharmacy sciences and administration," is majority female. Eight of the remaining nine are more than 70% male.

Other factors that account for earnings differences include marriage and children, both of which cause many women to leave the workforce for years. June O'Neill, former director of the Congressional Budget Office, concluded in a 2005 study that "there is no gender gap in wages among men and women with similar family roles."


. . .


Ms. O'Neill and her husband concluded in their 2012 book, "The Declining Importance of Race and Gender in the Labor Market," that once all these factors are taken into account, very little of the pay differential between men and women is due to actual discrimination, which is "unlikely to account for a differential of more than 5 percent but may not be present at all."



For the full commentary, see:

SARAH KETTERER. "The 'Wage Gap' Myth That Won't Die; You have to ignore many variables to think women are paid less than men. California is happy to try." The Wall Street Journal (Thurs., Oct. 1, 2015): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary was updated on Sept. 30, 2015.)


The O'Neill book mentioned above, is:

O'Neill, June E., and Dave M. O'Neill. The Declining Importance of Race and Gender in the Labor Market: The Role of Employment Discrimination Policies. Washington, D.C.: AEI Press, 2012.






November 30, 2015

Sense of Purpose, Not Greed, Is Reason Multimillionaires Keep Working



(p. 10) I've often wondered why the so-called Masters of the Universe, those C.E.O.s with multimillion-dollar monthly paychecks, keep working. Why, once they have earned enough money to live comfortably forever, do they still drag themselves to the office? The easy answer, the one I had always settled on, was greed.

But as I watched the hours slowly drip by in my cubicle, an alternative reason came into view. Without a sense of purpose beyond the rent money, malaise sets in almost immediately. We all need a reason to get up in the morning, preferably one to which we can attach some meaning. It is why people flock to the scene of a natural disaster to rescue and rebuild, why people devote themselves to a cause, no matter how doomed it may be. In the end, it's the process as much as the reward that nourishes us.



For the full commentary, see:

TED GELTNER. "ON WORK; Bored to Tears by a Do-Nothing Dream Job." The New York Times, SundayBusiness Section (Sun., NOV. 22, 2015): 10.

(Note: the online version of the commentary was updated on NOV. 21, 2015.)






November 29, 2015

For Movies, Film Option Survives Digital Advance



(p. B1) Faced with the possible extinction of the material that made Hollywood famous, a coalition of studios is close to a deal to keep Eastman Kodak Co. in the business of producing movie film.

The negotiations--secret until now--are expected to result in an arrangement where studios promise to buy a set quantity of film for the next several years, even though most movies and television shows these days are shot on digital video.

Kodak's new chief executive, Jeff Clarke, said the pact will allow his company to forestall the closure of its Rochester, N.Y., film manufacturing plant, a move that had been under serious consideration. Kodak's motion-picture film sales have plummeted 96% since 2006, from 12.4 billion linear feet to an estimated 449 million this year. With the exit of competitor Fujifilm Corp. last year, Kodak is the only major company left producing motion-picture film.


. . .


Film and digital video both "are valid choices, but it would be a tragedy if suddenly directors didn't have the opportunity to shoot on film," said Mr. Apatow. director of comedies including "Knocked Up" and "The 40 Year-Old Virgin," speaking from the New York set of his coming movie "Trainwreck," which he is shooting on film. "There's a magic to the grain and the color quality that you get with film."



For the full story, see:

BEN FRITZ. "Movie Film, at Death's Door, Gets a Reprieve." The Wall Street Journal (Weds., July 30, 2014): B1 & B8.

(Note: ellipsis added.)

(Note: the online version of the article was dated July 29, 2014.)






November 28, 2015

Price Theory Paradox When Gas Prices Fall



(p. A3) When gas prices fall, Americans reliably do two things that don't make much sense.

They spend more of the windfall on gasoline than they would if the money came from somewhere else.

And they don't just buy more gasoline. They switch from regular gas to high-octane.

A new report by the JPMorgan Chase Institute, looking at the impact of lower gas prices on consumer spending, finds the same pattern as earlier studies. The average American would have saved about $41 a month last winter by buying the same gallons and grades. Instead, Americans took home roughly $22 a month. People, in other words, used almost half of the windfall to buy more and fancier gas.


. . .


Professors Hastings and Shapiro showed that households adjusted their gas consumption much more sharply in response to changes in gas prices than in response to equivalent changes in overall income. In the fall of 2008, for example, as gas prices fell amid a broad economic collapse, consumers responded as if the decline of gas prices were the more important event, significantly increasing purchases of premium gas.

Moreover, this behavior was prevalent: 61 percent of the households made at least one irrational gas purchase. People "treat changes in gasoline prices as equivalent to very large changes in income when deciding which grade of gasoline to purchase," they wrote.



For the full commentary, see:

Binyamin Appelbaum. "When Gas Becomes Cheaper, Americans Buy Fancier Gas." The New York Times (Thurs., OCT. 20, 2015): A3.

(Note: ellipsis added.)

(Note: the online version of the commentary was updated on OCT. 19, 2015, and has the title "When Gas Becomes Cheaper, Americans Buy More Expensive Gas.")


The Hastings and Shapiro article mentioned above, is:

Hastings, Justine S., and Jesse M. Shapiro. "Fungibility and Consumer Choice: Evidence from Commodity Price Shocks." Quarterly Journal of Economics 128, no. 4 (Nov. 2013): 1449-98.






November 26, 2015

Professors Oppose Diversity by Discriminating Against Conservatives



(p. A23) One of the great intellectual and moral epiphanies of our time is the realization that human diversity is a blessing. It has become conventional wisdom that being around those unlike ourselves makes us better people -- and more productive to boot.

Scholarly studies have piled up showing that race and gender diversity in the workplace can increase creative thinking and improve performance. Meanwhile, excessive homogeneity can lead to stagnation and poor problem-solving.

Unfortunately, new research also shows that academia has itself stopped short in both the understanding and practice of true diversity -- the diversity of ideas -- and that the problem is taking a toll on the quality and accuracy of scholarly work. This year, a team of scholars from six universities studying ideological diversity in the behavioral sciences published a paper in the journal Behavioral and Brain Sciences that details a shocking level of political groupthink in academia. The authors show that for every politically conservative social psychologist in academia there are about 14 liberal social psychologists.

Why the imbalance? The researchers found evidence of discrimination and hostility within academia toward conservative researchers and their viewpoints. In one survey cited, 79 percent of social psychologists admitted they would be less likely to support hiring a conservative colleague than a liberal scholar with equivalent qualifications.



For the full commentary, see:

Arthur C. Brooks. "Academia's Rejection of Diversity." The New York Times (Sat., OCT. 31, 2015): A23.

(Note: the online version of the commentary has the date OCT. 30, 2015.)


The Behavioral and Brain Sciences article mentioned above, is:

Duarte, José L., Jarret T. Crawford, Charlotta Stern, Jonathan Haidt, Lee Jussim, and Philip E. Tetlock. "Political Diversity Will Improve Social Psychological Science." Behavioral and Brain Sciences 38 (Jan. 2015) DOI: http://dx.doi.org.leo.lib.unomaha.edu/10.1017/S0140525X14000041






November 24, 2015

Haiti Stagnates Under Crony Capitalism



(p. A13) A May 2015 World Bank "systematic country diagnostic" on Haiti is instructive.


. . .


As the World Bank report notes, Haiti suffers from crony capitalism that holds back economic growth.


. . .


The record of Haiti's elected politicians, since the transition to democracy at the beginning of the 1990s, is dismal. The political class still uses its power for personal aggrandizement, as the infamous dictators François Duvalier and his son Jean-Claude did for almost 30 years.

Just as discouraging is that after more than two decades of going to the polls, Haitians have yet to taste economic freedom, and emigration has become the only option for those who hope to get ahead by hard work. The World Bank reports that between 1971 and 2013 gross domestic product per capita "fell by .7% per year on average."


. . .


The World Bank authors gently speculate that there is "little competitive pressure." They observe this "could be the result of high legal or behavioral entry barriers" and this "could facilitate tacit agreements among families/groups to allocate markets among themselves, which may harm productivity and incentive to innovate."

This is polite jargon for collusion, which Haitians already know. They also know that absent the political will to open markets to competition, elections won't matter much.



For the full commentary, see:

MARY ANASTASIA O'GRADY. "Diagnosing What Ails Haiti's Economy; The World Bank fingers cronyism, of which Bill Clinton was for years a symbol." The Wall Street Journal (Mon., Oct. 12, 2015): A13.

(Note: ellipses added.)

(Note: the online version of the commentary was updated on Oct. 11, 2015.)


The World Bank report mentioned in the passages quoted above, is:

HAITI: TOWARDS A NEW NARRATIVE SYSTEMATIC COUNTRY DIAGNOSTIC, May 2015.






November 22, 2015

Skills Gap Is Bigger Labor Market Problem than Technology Progress



(p. A17) Technology disrupting the workforce is not a new phenomenon and it has never proved a lasting impediment for those eager to work. The invention of, say, the internal-combustion engine put buggy-whip makers and carriage assemblers out of business, but it created many more jobs in the manufacture, advertising, sales and maintenance of automobiles. Other technologies, from the cotton gin to the airplane, expanded job opportunities and created goods and services that made the hard work worthwhile.

What is unique about today's digital revolution is the suspicion, fanned by progressives, that for the first time technology threatens to make obsolete not only some jobs--as assembly-line robotics has, for instance--but human labor itself.


. . .


That poor schooling, and not some intrinsic human limitation, is the real barrier to full employment seems to be borne out by what economists call the "skills gap." More than nine million Americans are currently looking for work, but 5.4 million job openings continue to sit unfilled, according to the Bureau of Labor Statistics. Most of the largest increases have been in health care or professional and business services.

In a recent study by the large U.S. online job site, CareerBuilder, more than half the employers surveyed had positions for which they could not find qualified candidates: 71% had trouble finding information-technology specialists, 70% engineers, 66% managers, 56% health-care and other specialists, and 52% financial operations personnel. Nearly half of small and medium-size employers say they can find few or no "qualified applicants" for recent vacancies, according to the latest survey by the National Federation of Independent Businesses.

With the Labor Department conceding that help-wanted postings have "remained at a historically high level," this is the time not to rail against technology but to use it to make education more effective: gearing coursework to the learning styles of individual students, identifying and remedying disabilities early on, and providing online access to the best classes in the world.



For the full commentary, see:

LEWIS M. ANDREWS. "Robots Don't Mean the End of Human Labor; The left frets about the impact of technology, but new jobs will be created. The real problem is bad schools." The Wall Street Journal (Mon., Aug. 24, 2015): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary was updated on Aug. 23, 2015.)






November 17, 2015

Inflation of the Co-Authorship Bubble



CoauthorInflationGraph2015-10-30.jpg Source of graphic: online version of the WSJ article quoted and cited below.



(p. A1) . . . , there has been a notable spike since 2009 in the number of technical reports whose author (p. A10) counts exceeded 1,000 people, according to the Thomson Reuters Web of Science, which analyzed citation data. In the ever-expanding universe of credit where credit is apparently due, the practice has become so widespread that some scientists now joke that they measure their collaborators in bulk--by the "kilo-author."

Earlier this year, a paper on rare particle decay published in Nature listed so many co-authors--about 2,700--that the journal announced it wouldn't have room for them all in its print editions. And it isn't just physics. In 2003, it took 272 scientists to write up the findings of the first complete human genome--a milestone in biology--but this past June, it took 1,014 co-authors to document a minor gene sequence called the Muller F element in the fruit fly.


. . .


More than vanity is at stake. Credit on a peer-reviewed research article weighs heavily in hiring, promotion and tenure decisions. "Authorship has become such a big issue because evaluations are performed based on the number of papers people have authored," said Dr. Larivière.


. . .


Michigan State University mathematician Jack Hetherington published a paper in 1975 on low temperature physics in Physical Review Letters with F.D.C. Willard. His colleagues only discovered that his co-author was a siamese cat several years later when Dr. Hetherington started handing out copies of the paper signed with a paw print.

In the same spirit, Shalosh B. Ekhad at Rutgers University so far has published 32 peer-reviewed papers in scientific journals with his co-author Doron Zeilberger. It turns out that Shalosh B. Ekhad is Hebrew for the model number of a personal computer used by Dr. Zeilberger. "The computer helps so much and so often," Dr. Zeilberger said.

Not everyone takes such pranks lightly.

Immunologist Polly Matzinger at the National Institute of Allergy and Infectious Diseases named her dog, Galadriel Mirkwood, as a co-author on a paper she submitted to the Journal of Experimental Medicine. "What amazed me was that the paper went through the entire editorial process and nobody noticed," Dr. Matzinger said. When the journal editor realized he had published work crediting an Afghan hound, he was furious, she recalled.

Physicists may be more open-minded. Sir Andre Geim, winner of the 2010 Nobel Prize in Physics, credited H.A.M.S. ter Tisha as his co-author of a 2001 paper published in the journal Physica B. Those journal editors didn't bat an eye when his co-author was unmasked as a pet hamster. "Not a harmful joke," said Physica editor Reyer Jochemsen at the Leiden University in the Netherlands.

"Physicists apparently, even journal editors, have a better sense of humor than the life sciences," said Dr. Geim at the U.K.'s University of Manchester.



For the full story, see:

ROBERT LEE HOTZ. "Scientists Observe Odd Phenomenon of Multiplying Co-Authors."The Wall Street Journal (Mon., Aug. 10, 2015): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the title "How Many Scientists Does It Take to Write a Paper? Apparently, Thousands.")






November 14, 2015

Good Deflation in Switzerland



(p. A2) It's as close to an economic consensus as you can get: Deflation is bad for an economy, and central bankers should avoid it at all costs.

Then there's Switzerland, whose steady growth and rock-bottom unemployment is chipping away at that wisdom.

At a time of lively global debate about low inflation and its ill effects, tiny Switzerland--with an economy 4% the size of the U.S.--offers a fascinating counterpoint, with some even pointing to what they call "good deflation."

Consumer prices in Switzerland have fallen on an annual basis for most of the past four years. They hit a milestone last month with an annual price drop of 1.4%, the biggest in more than five decades. Even after food and energy prices are stripped out, core prices fell 0.7%.

"It's hard not to call that deflation," said Jennifer McKeown of Capital Economics, referring to the technical term for a sustained slump in consumer prices.

And yet evidence of deflation's pernicious side effects--recession, weak employment, rising debt burdens--is pretty much nonexistent in Switzerland. Its economy is expected to expand this year and next, albeit slowly, in the 1% to 1.5% range. Unemployment was just 3.4% in September. Government debt is low.

"Usually people associate deflation with depression," said Charles Wyplosz, a professor at the Graduate Institute in Geneva. "In the Swiss case, the economy is doing OK."



For the full commentary, see:

BRIAN BLACKSTONE. "THE OUTLOOK; Switzerland Offers Counterpoint on Deflation's Ills." The Wall Street Journal (Mon., Oct. 19, 2015): A2.

(Note: the online version of the commentary has the date Oct. 18, 2015, and the title "THE OUTLOOK; Switzerland Offers Counterpoint on Deflation's Ills.")






November 12, 2015

The Cure for Technology Problems Is Better Technology



(p. D2) The real lesson in VW's scandal -- in which the automaker installed "defeat devices" that showed the cars emitting lower emissions in lab tests than they actually did -- is not that our cars are stuffed with too much technology. Instead, the lesson is that there isn't enough tech in vehicles.

In fact, the faster we upgrade our roads and autos with better capabilities to detect and analyze what's going on in the transportation system, the better we'll be able to find hackers, cheaters and others looking to create havoc on (p. B11) the highways.


. . .


"What happened at Volkswagen had to do with embedded software that's buried deep in the car, and only the supplier knows what's in it -- and it's a black box for everybody else," said Stefan Heck, the founder of Nauto, a new start-up that is introducing a windshield-mounted camera that monitors road conditions for commercial fleets and consumers. The camera uses artificial intelligence to track traffic conditions; over time, as more vehicles use it, it could provide users with traffic and safety information plus data about mileage and other automotive functions.

The end goal for intelligent-car systems, said Dr. Heck, is to create an on-road network with data that is constantly being analyzed to get a sharper picture of what's happening on the road. Sure, companies might still be able to cheat. But with enough independent data sources coming from different places on the road, it would become much more difficult.

He said there really isn't any going back -- software in cars is responsible not just for driver comforts like in-dash navigation, but also for critical safety and performance systems, many of which improve the car's environmental footprint.



For the full commentary, see:

Farhad Manjoo. "STATE OF THE ART; Our Cars Need More Technology." The New York Times (Thurs., Oct. 1, 2015): B1 & B11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date SEPT. 30, 2015, and the title "STATE OF THE ART; VW Scandal Shows a Need for More Tech, Not Less." )






November 10, 2015

Steve Jobs as Demanding Consumer: Jerk or Benefactor?



(p. D2) Mr. Jobs said he wanted freshly squeezed orange juice.

After a few minutes, the waitress returned with a large glass of juice. Mr. Jobs took a tiny sip and told her tersely that the drink was not freshly squeezed. He sent the beverage back, demanding another.

A few minutes later, the waitress returned with another large glass of juice, this time freshly squeezed. When he took a sip he told her in an aggressive tone that the drink had pulp along the top. He sent that one back, too.

My friend said he looked at Mr. Jobs and asked, "Steve, why are you being such a jerk?"

Mr. Jobs replied that if the woman had chosen waitressing as her vocation, "then she should be the best."


. . .


. . . it wasn't until my mother found out that she had terminal cancer in mid-March and was given a prognosis of only two weeks to live that I learned even if a job is just a job, you can still have a profound impact on someone else's life. You just may not know it.


. . .


. . . one evening my mother became incredibly lucid and called for me. She was craving shrimp, she said. "I'm on it," I told her as I ran down to the kitchen. "Shrimp coming right up!"


. . .


The restaurant was bustling. In the open kitchen in the back I could see a dozen men and women frantically slaving over the hot stoves and dishwashers, with busboys and waiters rushing in and out.

While I stood waiting for my mother's shrimp, I watched all these people toiling away and I thought about what Mr. Jobs had said about the waitress from a few years earlier. Though his rudeness may have been uncalled-for, there was something to be said for the idea that we should do our best at whatever job we take on.

This should be the case, not because someone else expects it. Rather, as I want to teach my son, we should do it because our jobs, no matter how seemingly small, can have a profound effect on someone else's life; we just don't often get to see how we're touching them.

Certainly, the men and women who worked at that little Thai restaurant in northern England didn't know that when they went into work that evening, they would have the privilege of cooking someone's last meal.

It was a meal that I would unwrap from the takeout packaging in my mother's kitchen, carefully plucking four shrimp from the box and meticulously laying them out on one of her ornate china plates before taking it to her room. It was a meal that would end with my mother smiling for the last time before slipping away from consciousness and, in her posh British accent, saying, "Oh, that was just lovely."



For the full commentary, see:

NICK BILTON. "Rites of Passage; Life Lessons from Steve Jobs." The New York Times, SundayReview Section (Fri., AUG. 7, 2015): D2.

(Note: ellipses added.)

(Note: the online version of the commentary has the title "Rites of Passage; What Steve Jobs Taught Me About Being a Son and a Father.")






November 9, 2015

Marxist Wrecks Brazil Economy



(p. A6) "The Brazilian model celebrated just a few years ago is turning into a slow-motion train wreck," said Mansueto Almeida, a prominent commentator on economic policy. "Our political leaders want to point fingers at China or some external villain, but they cannot escape the fact that this self-inflicted crisis was made in Brazil."

Even with the country's legacy of economic turmoil, some historians say that Ms. Rousseff's track record on economic growth ranks among the worst of any Brazilian president's over the last century.


. . .


Hoping to prevent Brazil from cooling too much after the sizzling boom of the previous decade, Ms. Rousseff, 67, a former Marxist guerrilla who was tortured during the military dictatorship in the 1970s and took office in 2011, doubled down on bets that she could stave off a severe slowdown by harnessing a web of government-controlled banks and energy companies.

Ms. Rousseff pressured the central bank to reduce interest rates, fueling a credit spree among overstretched consumers who are now struggling to repay loans. She cut taxes for certain domestic industries and imposed price controls on gasoline and electricity, creating huge losses at public energy companies.

Going further, she expanded the sway of Brazil's colossal national development bank, whose lending portfolio already dwarfed that of the World Bank. Drawing funds from the national treasury, the bank, known as the B.N.D.E.S., increased taxpayer-subsidized loans to large corporations at rates that were often significantly lower than those individuals could obtain from their banks.

Ms. Rousseff's critics argue that she also began using funds from giant government banks to cover budget shortfalls as she and her leftist Workers' Party headed into elections.

"They deliberately destroyed the public finances to obtain re-election," said Antônio Delfim Netto, 87, a former finance minister and one of Brazil's most influential economists. Taking note of the government's inability to rein in spending as a budget deficit expands, Mr. Delfim Netto and other economists are warning that officials may simply opt to print more money, stirring ghosts in an economy once ravaged by high inflation.


. . .


Unemployment is expected to climb even higher as the authorities ponder ways to cut a federal bureaucracy that grew almost 30 percent from 2003 to 2013, to 600,000 civil servants.

A pension crisis is also brewing, partly because of laws that allow many Brazilians to start receiving retirement benefits in their early 50s, even though life expectancy has increased and the fertility rate has fallen, limiting the number of young people to support the aging population.

"How can a person who is 52 years old be able to retire with a pension?" Luiz Fernando Figueiredo, a former central bank official, asked reporters. "These things have to be confronted. If not, the country will become another Greece."

Parts of Brazil's business establishment are in revolt, openly expressing disdain. Exame, a leading business magazine, devotes an entire section called "Only in Brazil" to documenting problems with the public bureaucracy.

These examples include a $120 million light-rail system in the city of Campinas that lies abandoned because of poor planning, and a measure requiring companies to obtain a special license before allowing employees to work on Sundays.



For the full story, see:

SIMON ROMERO. "As Boom Fades, Brazil Asks How Sizzle Turned to Fizzle."The New York Times (Fri., SEPT. 11, 2015): A1 & A6.

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

(Note: the online version of the story has the date SEPT. 10, 2015, and has the title "As a Boom Fades, Brazilians Wonder How It All Went Wrong.")






November 3, 2015

Top-Down Aid "Hasn't Worked in Africa"



(p. 2) John Mackey is the co-founder and co-chief executive officer of Whole Foods Market, the nation's largest chain of natural foods supermarkets.

READING . . .

. . . "The Idealist: Jeffrey Sachs and the Quest to End Poverty," by Nina Munk. Sachs is an economist and I'm sure he doesn't like the book because it points out that his top-down aid type of approach hasn't worked in Africa. A more bottom-up approach through entrepreneurship and boot strapping seems to be more effective, which is the approach we take at our Whole Planet Foundation.



For the full interview, see:

KATE MURPHY, interviewer. "Download; John Mackey." The New York Times, SundayReview Section (Sun., NOV. 23, 2014): 2.

(Note: bold in original; ellipses added.)

(Note: the online version of the interview has the date NOV. 22, 2014.)


The book praised in the interview is:

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






October 30, 2015

Exponential Entrepreneurs Get Rich by Innovating (and Fleecing?)




The reviewer's concern about technology platforms fleecing the masses is shared by Jaron Lanier who describes, and tries to solve it, in a thought-provoking book called Who Owns the Future? (Hint: his solution involves an extension of property rights.)



(p. A9) The exponential entrepreneurs are "paving the way for a new world of abundance" by finding big problems and exploiting the "Six D's": digitalization, deception, disruption, demonetization, dematerialization, democratization.

Take the case of Kodak and photography. First came the technology that allowed photographs to be taken and stored digitally rather than on film--digitization. But it seemed too trivial for a giant like Kodak to worry about--an act of self-deception. Then came disruption, when digital photography grew from a tiny niche into a big business and then surpassed print photography. People no longer needed to pay to store or share their photographs because free digital services had sprung up. Kodak found itself demonetized. Then photography was dematerialized, as cameras were built into phones and the physical materials of the darkroom were replaced by digital tools. Finally, the entire process was democratized, since anyone with a phone can (at no additional cost) take pictures, edit them and share them.

In 1996 Kodak employed 140,000 people and had a market value of $28 billion. In January 2012 it filed for bankruptcy. Instagram was founded in October 2010 and was bought by Facebook in April 2012 for $1 billion. It had 13 employees at the time. Instagram was the definition of an exponential organization, one "whose impact (or output)--because of its use of networks or automation and/or its leveraging of the crowd--is disproportionally large compared to its number of employees." The Six D's, the authors make clear, are leaving the poor executives who think in linear rather than exponential fashion in a state of three D's: "distraught, depressed and departed."


. . .


The great lie about so much technology is that it has enabled a more sharing, more democratic age. But too much of the "sharing" that happens online seems to involve people abandoning their livelihoods to the owners of "platforms"--letting the masses be demonetized and dematerialized for the enrichment of a few. Too much of the "democracy" feels like voyeurism or surveillance. The crowd is not just sourcing and funding this new economy; it's also getting fleeced.



For the full review, see:

PHILIP DELVES BROUGHTON. "BOOKSHELF; Go Big Or Go Home." The Wall Street Journal (Tues., Feb. 17, 2015): A9.

(Note: ellipsis added.)

(Note: the online version of the review has the date Feb. 16, 2015.)


The book discussed in the review is:

Diamandis, Peter H., and Steven Kotler. Bold: How to Go Big, Create Wealth and Impact the World. New York: Simon & Schuster, 2015.


The book mentioned by Lanier is:

Lanier, Jaron. Who Owns the Future? pb ed. New York: Simon & Schuster, 2013.






October 29, 2015

World Inequality Declines



(p. 6) Income inequality has surged as a political and economic issue, but the numbers don't show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It's a fact that hasn't been noted often enough.

The finding comes from a recent investigation by Christoph Lakner, a consultant at the World Bank, and Branko Milanovic, senior scholar at the Luxembourg Income Study Center. And while such a framing may sound startling at first, it should be intuitive upon reflection. The economic surges of China, India and some other nations have been among the most egalitarian developments in history.



For the full commentary, see:

TYLER COWEN. "The Upshot; Economic View; All in All, a More Egalitarian World." The New York Times, SundayBusiness Section (Sun., JULY 20, 2014): 6.

(Note: the online version of the commentary has the date JULY 19, 2014, has the title "The Upshot; Economic View; Income Inequality Is Not Rising Globally. It's Falling.")






October 28, 2015

Lax College Accreditors May Be "Doing More Harm than Good"



(p. A19) Most colleges can't keep their doors open without an accreditor's seal of approval, which is needed to get students access to federal loans and grants. But accreditors hardly ever kick out the worst-performing colleges and lack uniform standards for assessing graduation rates and loan defaults.

Those problems are blamed by critics for deepening the student-debt crisis as college costs soared during the past decade. Last year alone, the U.S. government sent $16 billion in aid to students at four-year colleges that graduated less than one-third of their students within six years, according to an analysis by The Wall Street Journal of the latest available federal data.


. . .


(p. A12) Accreditors say their job is to help colleges get better rather than to weed out laggards. Colleges pay for the inspections, which can cost more than $1 million at large institutions.

"You're not there to remove an institution," says Judith Eaton, president of the Council for Higher Education Accreditation, a trade group. "You're there to enhance the operation."

The government has relied on accreditors as watchdogs since the 1950s. Colleges are evaluated by teams of volunteers from similar institutions, who follow standards set by the accreditation group. For example, colleges sometimes are required to collect student-retention data but given the freedom to set their own goals for those numbers.


. . .


Stephen Roderick, former provost at Fort Lewis College in Colorado, says he now has misgivings about his 2013 review of Glenville State College in West Virginia for the Higher Learning Commission. The review team wrote that the college had a "responsible program" to minimize default rates and "demonstrates a commitment" to evaluating graduation data.

Glenville's graduation rate is 30%, while about 22% of students defaulted on loans from 2011 to 2013. Both percentages rank near the bottom 10% of accredited four-year colleges. David Millard, assistant to Glenville's president, says the figures reflect the opportunity offered by the college to students in one of the poorest parts of the U.S.

Mr. Roderick says accreditors are inclined to see the best in colleges like Glenville, but that might not be the best for students. "Sometimes I feel that we're doing more harm than good," he says.



For the full story, see:

ANDREA FULLER and DOUGLAS BELKIN. "Education Watchdogs Rarely Bite; Accreditors keep hundreds of schools with low graduation rates or high loan defaults alive." The Wall Street Journal (Thurs., June 18, 2015): A1 & A12.

(Note: ellipses added.)

(Note: the online version of the article was dated June 17, 2015, and had the title "The Watchdogs of College Education Rarely Bite; Accreditors keep hundreds of schools with low graduation rates or high loan defaults alive.")






October 27, 2015

Those Who Use "Consensus" Argument on Global Warming, Should Endorse Genetically Modified Food



(p. B3) NAIROBI, Kenya -- Mohammed Rahman doesn't know it yet, but his small farm in central Bangladesh is globally significant. Mr. Rahman, a smallholder farmer in Krishnapur, about 60 miles northwest of the capital, Dhaka, grows eggplant on his meager acre of waterlogged land.

As we squatted in the muddy field, examining the lush green foliage and shiny purple fruits, he explained how, for the first time this season, he had been able to stop using pesticides. This was thanks to a new pest-resistant variety of eggplant supplied by the government-run Bangladesh Agricultural Research Institute.

Despite a recent hailstorm, the weather had been kind, and the new crop flourished. Productivity nearly doubled. Mr. Rahman had already harvested the small plot 10 times, he said, and sold the brinjal (eggplant's name in the region) labeled "insecticide free" at a small premium in the local market. Now, with increased profits, he looked forward to being able to lift his family further out of poverty. I could see why this was so urgent: Half a dozen shirtless kids gathered around, clamoring for attention. They all looked stunted by malnutrition.


. . .


I, . . . , was once in [the] . . . activist camp. A lifelong environmentalist, I opposed genetically modified foods in the past. Fifteen years ago, I even participated in vandalizing field trials in Britain. Then I changed my mind.

After writing two books on the science of climate change, I decided I could no longer continue taking a pro-science position on global warming and an anti-science position on G.M.O.s.

There is an equivalent level of scientific consensus on both issues, I realized, that climate change is real and genetically modified foods are safe. I could not defend the expert consensus on one issue while opposing it on the other.



For the full commentary, see:

MARK LYNAS. "How I Got Converted to G.M.O. Food." The New York Times, SundayReview Section (Sun., APRIL 26, 2015): 5.

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

(Note: the online version of the commentary has the date APRIL 24, 2015.)






October 26, 2015

"Plunged Back into a Pre-Industrial Hell"



(p. B1) If you drive a car, or use modern medicine, or believe in man's right to economic progress, then according to Alex Epstein you should be grateful--more than grateful. In "The Moral Case for Fossil Fuels" the author, an energy advocate and founder of a for-profit think tank called the Center for Industrial Progress, suggests that if all you had to rely on were the good intentions of environmentalists, you would be soon plunged back into a pre-industrial hell. Life expectancy would plummet, climate-related deaths would soar, and the only way that Timberland and Whole Foods could ship their environmentally friendly clothing and food would be by mule. "Being forced to rely on solar, wind, and biofuels would be a horror beyond anything we can imagine," writes Mr. Epstein, "as a civilization that runs on cheap, plentiful, reliable energy would see its machines dead, its productivity destroyed, its resources disappearing."


For the full review, see:

PHILIP DELVES BROUGHTON. "BOOKSHELF; Go Ahead, Fill 'Er Up; Renouncing oil and its byproducts would plunge civilization into a pre-industrial hell--a fact developing countries keenly realize." The Wall Street Journal (Tues., Dec. 2, 2014): A15.

(Note: the online version of the review has the date Dec. 1, 2014, and has the title "BOOKSHELF; Making 'The Moral Case for Fossil Fuels'; Renouncing oil and its byproducts would plunge civilization into a pre-industrial hell--a fact developing countries keenly realize.")


The book praised in the review is:

Epstein, Alex. The Moral Case for Fossil Fuels. New York: Portfolio, 2014.






October 25, 2015

Bernanke Not Clear if His Zero Interest Rate Policy Increased Inequality



(p. B3) . . . it is striking to find Mr. Bernanke . . . receptive to a . . . critique: that the bond-purchasing efforts, known as quantitative easing, increased economic inequality.

"Monetary policy is a blunt tool which certainly affects the distribution of income and wealth, although whether the net effect is to increase or reduce inequality is not clear," Mr. Bernanke wrote in a blog post on Monday.

This was not a white flag. Mr. Bernanke went on to argue that the stimulus campaign was justified irrespective of the impact on inequality. But it struck a surprisingly hesitant note on a day when the Brookings Institution, Mr. Bernanke's new home, hosted a conference on the same subject that was largely devoted to evidence that the Fed's efforts had reduced economic inequality.


. . .


Current Fed officials share Mr. Bernanke's judgment about the basic economic impact of the program. "Did these policies work?" Stanley Fischer, the Fed's vice chairman, asked rhetorically during a speech on Monday in Toronto. "The econometric evidence says yes. So does the evidence of one's eyes."

But the "eye test" has also suggested to many that the wealthy have benefited disproportionately. The stock market has soared, and investors have prospered, even as wage growth has stagnated. Kevin Warsh, a former Fed governor, has memorably described the Fed's current role as a "reverse Robin Hood," rewarding the rich at the expense of the poor.



For the full commentary, see:

Binyamin Appelbaum. "The Upshot; Ben Bernanke Says Fed Can't Get Caught Up in Inequality Debate." The New York Times (Tues., JUNE 2, 2015): B3.

(Note: ellipses added.)

(Note: the online version of the article has the date JUNE 1, 2015 and has the title "The Upshot; Ben Bernanke Says Fed Can't Get Caught Up in Inequality Debate.")






October 24, 2015

China Looks to Innovation to Increase Growth



(p. 6) Wrapping up the 11-day session at a news conference on Sunday [March 15, 2015], Premier Li Keqiang said that while the economy faced downward pressure, the government has room to step in and has "more tools in our toolbox" should growth flag and affect employment.


. . .


As exports, investment and infrastructure become more ineffective in generating economic growth, China's leadership is looking to innovation and entrepreneurship to pick up the slack.

Toward that end, Mr. Li said Beijing will continue to reduce regulatory interference. The number of government approvals required to begin a new venture has roughly halved to 50 to 60 steps in recent years, he said, although this level still raises costs and damps enthusiasm for startups.

But the Chinese state retains an oversized role in the economy and many of the outlined moves to limit its role are difficult to verify.



For the full story, see:

MARK MAGNIER. "Beijing Plans More Action to Spur Growth." The Wall Street Journal (Mon., March 16, 2015): A9.

(Note: ellipsis, and bracketed date, added. Where there was a small difference in paragraph structure, the quoted passages follow the print version.)

(Note: the online version of the story has the date March 15, 2015, has the title "China Plans More Action to Spur Growth.")






October 22, 2015

"Bring Prosperity to Billions of People"



(p. B1) If you're feeling down about the world, the book, "Resource Revolution: How to Capture the Biggest Business Opportunity in a Century," is an antidote. Mr. Rogers and Mr. Heck outline how emerging advances -- among them 3-D printing, autonomous vehicles, modular construction systems and home automation -- might in time alter some of the world's largest industries and (p. B7) bring prosperity to billions of people.

They put forward a rigorous argument bolstered by mountains of data and recent case studies. And once you start looking at Silicon Valley their way, your mind reels at the far-reaching potential of the innovations now spreading through society.



For the full commentary, see:

Farhad Manjoo. "STATE OF THE ART; The Future Could Work, if We Let It." The New York Times (Thurs., AUG. 28, 2014): B1 & B7.

(Note: the online version of the commentary has the date AUG. 27, 2014.)


The book praised in the commentary is:

Heck, Stefan, and Matt Rogers. Resource Revolution: How to Capture the Biggest Business Opportunity in a Century. New York: Melcher Media, 2014.






October 20, 2015

Workers May Prefer to Have More Workcations than Fewer Vacations



(p. B6) . . . for various reasons, people might choose or need to work from remote destinations, and logging in from the beach may be more relaxing than clocking into the office.

Adds Kenneth Matos, senior director of research at the Families and Work Institute: "Is the workcation detracting from the vacation you were going to have, or is it enabling the vacation you otherwise wouldn't have had?"


. . .


For Bill Raymond, Disney World proved an ideal workcation destination. In February, Mr. Raymond and his wife flew from their suburban Boston home to Orlando, where they spent a couple of days touring the theme park.

For the next two days, Mr. Raymond, a solutions architect at enterprise search firm Voyager Search, clocked full workdays from the Orlando resort, hunkering down with his laptop and taking sales calls by the pool.

Mr. Raymond even wrote a post on his personal blog with tips on how to be a productive "workcationer" at Disney, pinpointing locations at the resort that offer fewer distractions. (Among his top picks were the pool at the Disney Port Orleans French Quarter resort, which he says wasn't "overrun with kids being kids.")

Brian Goldin, Voyager's chief executive and Mr. Raymond's boss, was "totally fine" with the arrangement. "The idea of the traditional office environment doesn't really exist that much," Mr. Goldin says.


. . .


The working vacation kept Ms. Granzella Larssen, 32 years old, current with her email; she also felt more productive in a tropical setting because she wasn't being pulled into impromptu meetings. And despite being by the beach, "I felt completely plugged in."



For the full commentary, see:

RACHEL EMMA SILVERMAN. "This Summer, How About a Workcation?" The Wall Street Journal (Weds., June 24, 2015): B1 & B6.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 23, 2015, has the title "This Summer, How About a Workcation?")






October 17, 2015

Affluent Are More Likely to Work During Retirement




That the affluent are more than twice as likely to work past retirement, may be a sign that the better paying jobs are also the more satisfying jobs.



(p. B9) But retirement isn't for everyone. Affluent individuals are more than twice as likely as other people to keep working in retirement, according to a July survey by Bank of America's Merrill Lynch and Age Wave, a research firm based in Emeryville, Calif., that specializes in aging populations.

Some 33% of retirees with $1 million to $5 million in assets are working, as are 29% of those with more than $5 million. Most say they do so because they want to, not because they have to, according to the survey.

Half of affluent working retirees have shifted to a different line of work, most often because of greater flexibility of scheduling, the opportunity to experience new things, and the pursuit of a passion or interest, the survey found.

The results show how important it is to consider what you will do with your time and to think hard about whether that will be satisfying.



For the full commentary, see:

LIZ MOYER. "Can You Afford to Retire Early?" The Wall Street Journal (Sat., Aug. 2, 2014): B7 & B9.

(Note: the online version of the commentary has the date Aug. 1, 2014.)






October 16, 2015

"We Embrace New Technology"



(p. 2D) . . . , the first digital images created by the earliest digital cameras "were terrible," Rockbrook's Chuck Fortina said. "These were real chunky images made by big, clunky cameras."

Viewing those results, some retailers dismissed the new digital technology and clung doggedly to film. But Rockbrook Camera began stocking digital cameras alongside models that used film, Fortina said.

"Film sales were great, but we just knew digital was going to take over," Fortina said. As those cameras and their images improved, the retailer saw a huge opportunity. ''Instead of thinking this is going to kill our business, we were thinking people are going to have to buy all new gear," Fortina said of the switch from analog to digital.

"By 2000, film was over," he said. Companies that didn't refocus their business found themselves struggling or forced to close their doors.

Today, Rockbrook Camera is constantly scouring the Internet, attending trade shows and quizzing customers and employees in search of new technologies, Fortina said. "We embrace new technology," he said.



For the full story, see:

Janice Podsada. "More Ready than Not for Tech Shifts; How 3 Omaha-area businesses altered course and thrived amid technological changes." Omaha World-Herald (SUNDAY, SEPTEMBER 27, 2015 ): 1D-2D.

(Note: ellipsis added.)

(Note: the online version of the story has the title "How 3 Omaha-area businesses altered course and thrived amid technological changes.")






October 12, 2015

French Billionaire Entrepreneur Starts Small and Cuts Costs




On Mon., October 13, 2014, Iliad dropped its bid for T-Mobile, after lack of interest from some of the T-Mobile board and from the majority owner, Deutsche Telekom AG.



(p. B1) Iliad wants to improve T-Mobile US's cost structure by applying its own ultraslim cost base, under which it has kept costs to a minimum in everything from IT services to back office to equipment purchases. Iliad estimates it will be able to save about $2 billion annually by cutting out costs such as sending paper bills, and savings on equipment and IT systems, Mr. Niel said.


. . .


(p. B4) . . . before Mr. Niel can execute his American dream, Iliad has to win over T-Mobile US's board, which could prove a formidable challenge.


. . .


He says he is sticking to the same principle that has guided his ascent from a teenage computer programmer in a working class Paris suburb to one of France's richest men.

"I always follow the same idea: Start small and disrupt to create something big," he said.



For the full story, see:

RUTH BENDER. "Will This Billionaire Bring $3-a-Month Phone Plans to U.S.?" The Wall Street Journal (Sat., Aug. 2, 2014): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the story says it was updated on Aug. 4, 2014.)






October 11, 2015

Feds Constrain Startups



(p. A15) Virtually every state has suffered a drop in startups, which suggests that this is a national, and not a regional or state, problem.


. . .


If history is any indication, many of today's economic heavyweights will ultimately decline as new businesses take their place. Research by the Kaufman Foundation shows that only about half of the 1995 Fortune 500 firms remained on the list in 2010.

Startups also have declined in high technology. John Haltiwanger of the University of Maryland reports that there are fewer startups in high technology and information-processing since 2000, as well as fewer high-growth startups--annual employment growth of more than 25%--across all sectors. Even more troubling is that the smaller number of high-growth startups is not growing as quickly as in the past.


. . .


Surveys by John Dearie and Courtney Gerduldig, authors of "Where the Jobs Are: Entrepreneurship and the Soul of the American Economy" (2013), show that entrepreneurs report being hamstrung by difficulties in finding skilled workers, by a complex tax code that penalizes small business, by regulations that raise the costs of doing business, and by difficulties in obtaining financing that have worsened since 2008.



For the full story, see:

EDWARD C. PRESCOTT and LEE E. OHANIAN. "Behind the Productivity Plunge: Fewer Startups; New businesses were created at a 30% lower rate in 2012 than the annual average rate in the 1980s." The Wall Street Journal (Thurs., June 26, 2014): A15.

(Note: ellipses added.)

(Note: the online version of the story has the date June 25, 2014.)






October 9, 2015

Smugglers Respond to Putin's Ban on Cheese



(p. A4) When the Russian government banned dairy products from a host of nations, including the United States and members of the European Union, last year in response to Western economic sanctions imposed over Russia's military meddling in Ukraine, President Vladimir V. Putin said the restrictions would create a profitable opportunity for domestic industries.

Instead they appear to have created an opening for forgers and smugglers. The "cheese ring" was busted with an estimated $30 million worth of the stuff, nearly 500 tons, according to the Interior Ministry police.



For the full story, see:

NEIL MacFARQUHAR. "A Crackdown in Russia on a Creamy Contraband." The New York Times (Weds., AUG. 19, 2015): A4.

(Note: the online version of the story has the date AUG. 18, 2015, and has the title "Russian Police Get Tough on Illicit Cheese.")






October 8, 2015

Bicycles Emancipated Women



BicycleWomanIn1890s.jpg










"A portrait from the 1890s at the Smithsonian Institution's National Museum of American History. Susan B. Anthony said cycling did more to emancipate women than anything else in the world." Source of caption and photo: online version of the NYT article quoted and cited below.







(p. D1) . . . , Twain promoted the new sport of cycling with characteristic rhubarb tartness. "Get a bicycle," he urged readers. "You will not regret it, if you live."


. . .


The full-bore bicycle fever was brief, and by the early 20th century it had given way to fascination with the automobile. Yet, as a new exhibit at the Smithsonian Institution's National Museum of American History makes clear, the impact of the bicycle on the nation's industrial, cultural, emotional and even moral landscape has been deep and long lasting.

In addition to air-filled rubber tires, we can thank the bicycle for essential technologies like ball bearings, originally devised to reduce friction in the bicycle's axle and steering column; for wire spokes and wire spinning generally; for differential gears that allow connected wheels to spin at different speeds.

And where would our airplanes, tent poles and lawn furniture be without the metal tubing developed to serve as the bicycle frame? "The hollow steel tube is a great form," said Jim Papadopoulos, an assistant teaching professor of mechanical and industrial engineering at Northeastern University in Boston. "It's tremendously structurally efficient, light and strong, and it came into being for the bicycle."


. . .


(p. D4) Bicycles also gave birth to our national highway system, as cyclists outside major cities grew weary of rutted mud paths and began lobbying for the construction of paved roads. The car connection goes further still: Many of the bicycle repair shops that sprang up to service the wheeling masses were later converted to automobile filling stations, and a number of pioneers in the auto industry, including Henry Ford and Charles Duryea, started out as bicycle mechanics. So, too, did the Wright brothers.

"The pre-story is so important," said Eric S. Hintz, a historian with the Smithsonian's Lemelson Center for the Study of Invention and Innovation. "You don't get automobiles unless you first have bikes."


. . .


By the mid-1890s, some 300 American companies were churning out well over a million bicycles a year, making the safety bike one of the first mass-produced items in history. Among the most exuberant customers were women, who discovered in the bicycle a sense of freedom they had rarely experienced before.


. . .


Bicycles allowed young men and women to tool around the countryside unsupervised, and relationships between the sexes grew more casual and spontaneous. With a bicycle at her disposal, a young woman could also venture forth in search of work.

Small wonder that Susan B. Anthony said of cycling, "I think it has done more to emancipate women than any one thing in the world."



For the full story, see:

NATALIE ANGIER. "Basics; A Ride to Freedom." The New York Times (Tues., JULY 14, 2015): D1 & D4.

(Note: ellipses added.)

(Note: the online version of the story has the date JULY 13, 2015, and has the title "Basics; The Bicycle and the Ride to Modern America.")






October 7, 2015

Analyst Conflict of Interest in Predicting Tesla Stock Price



(p. A1) Just like the Internet stocks of yore, Tesla has its own Wall Street cheerleader: Adam Jonas, Morgan Stanley's auto analyst. Jonas could not be less interested in mundane factors like earnings per share; indeed, he has had to lower his 2015 earnings estimates several times; he now predicts the company will lose $2.70 a share. But never mind: In the future that he envisions, Tesla will be the most important car company on earth.

Just a few weeks ago, in fact, Jonas raised his share price target for Tesla from $280 to $465, which would make Tesla more valuable than General Motors or Ford. Had anything fundamental changed for Tesla? Of course not!

Jonas based his new target on something he labeled Tesla Mobility, which he describes as "an app based, on-demand mobility service." Where did he learn about Tesla Mobility? Who knows? Tesla, a company hardly averse to hype, has never acknowledged its existence.

And that's not the worst of it. No, the worst is the timing of his call. It came days after Tesla announced that it would be issuing stock to raise yet more money -- and that Morgan Stanley was among the underwriters. (The company raised close to $800 million.)



For the full commentary, see:

Joe Nocera. "The Tesla Cheerleader." The New York Times (Sat., AUG. 29, 2015): A1 & A19.

(Note: ellipsis added.)

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






October 5, 2015

Belgian Government Mandates Mayo to Be No Less than 80% Fat



(p. A1) BRUSSELS--Mayonnaise here is a sauce celebre, so important that a 60-year-old royal decree governs what goes in it.


. . .


Belgian mayonnaise must contain at least 80% fat and 7.5% egg yolk. European rivals are permitted to sell mayo with a mere 70% fat and 5% egg yolk.



For the full story, see:

TOM FAIRLESS. "No Yolk, Belgian Food Producers Fed Up with Mayonnaise Rules; But effort to relax royal recipe doesn't go down well with chefs; yellow peas." The Wall Street Journal (Mon., Sept. 20, 2015): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date Sept. 20, 2015 and the title "In Belgium, Mayonnaise Makers Want a New Recipe; But effort to relax royal recipe doesn't go down well with chefs; yell;ow peas.")






October 3, 2015

Recent Job Losses from City Minimum Wage Hikes



(p. A13) The city councils in Seattle, San Francisco and Los Angeles have already voted to increase their minimum wage to $15 an hour over several years. For large employers in Seattle, the first increase to $11 from $9.47 took effect in April. In San Francisco a hike to $12.25 from $10.74 began in May. Los Angeles rolled out a minimum wage for hotel workers of $15.37 in July.

It's still early to know how the hikes are affecting the job market, but the preliminary data aren't good. Mark Perry of the American Enterprise Institute, Adam Ozimek of Moody's Analytics and Stephen Bronars of Edgewood Economics reported last month that the restaurant and hotel industries have lost jobs in all three cities. Mr. Bronars crunched the numbers and discovered that the "first wave of minimum wage increases appears to have led to the loss of over 1,100 food service jobs in the Seattle metro division and over 2,500 restaurant jobs in the San Francisco metro division." That is a conservative estimate, he notes, as the data include areas outside city limits, where the minimum wage didn't increase.

This comes as no surprise. In 2014 the Congressional Budget Office found that increasing the minimum wage to $10.10 an hour would result in employment falling by 500,000 jobs nationally. By the way, less than 20% of the earning benefits would flow to people living below the poverty line, as University of California-Irvine economist David Neumark has pointed out.



For the full commentary, see:

ANDY PUZDER. "A Post-Labor Day, Minimum-Wage Hangover; The evidence is already coming in: Mandatory increases in Los Angeles, San Francisco and Seattle have cost thousands of jobs." The Wall Street Journal (Tues., Sept. 8, 2015): A13.

(Note: the online version of the commentary has the date Sept. 7, 2015.)






October 1, 2015

Evidence Minimum Wage Causes Job Loss



(p. A1) Some economists have reported that there is no longer any evidence that raising wages will cost jobs.

Unfortunately, that last claim is inaccurate. There are in fact many studies on each side of the issue. David Neumark of the University of California, Irvine and William Wascher of the Federal Reserve have done their own studies and point to dozens of others showing significant job losses.

Recently, Michael Wither and Jeffrey Clemens of the University of California, San Diego looked at data from the 2007 federal minimum-wage hike and found that it reduced the national employment-to-population ratio by 0.7 percentage points (which is actually a lot), and led to a six percentage point decrease in the likelihood that a low-wage worker would have a job.

Because low-wage workers get less work experience under a higher minimum-wage regime, they are less likely to transition to higher-wage jobs down the road. Wither and Clemens found that two years later, workers' chances of making $1,500 a month was reduced by five percentage points.

Many economists have pointed out that as a poverty-fighting measure the minimum wage is horribly targeted. A 2010 study by Joseph Sabia and Richard Burkhauser found that only 11.3 percent of workers who would benefit from raising the wage to $9.50 an hour would come from poor households. An earlier study by Sabia found that single mothers' employment dropped 6 percent for every 10 percent increase in the minimum wage.

A study by Thomas MaCurdy of Stanford built on the fact that there are as many individuals in high-income families making the minimum wage (teenagers) as in low-income families. MaCurdy found that the costs of raising the wage are passed on to consumers in the form of higher prices. Minimum-wage workers often work at places that disproportionately serve people down the income scale. So raising the minimum wage is like a regressive consumption tax paid for by the poor to subsidize the wages of workers who are often middle class.



For the full commentary, see:

David Brooks. "Minimum Wage Muddle." The New York Times (Fri., JULY 24, 2015): A25.

(Note: ellipsis added.)

(Note: the online version of the article has the title "The Minimum-Wage Muddle.")






September 29, 2015

Smart and Energetic Young Adults in France Find Opportunity in England, Australia or the U.S.



(p. A6) The income gap between generations is even more severe in France than in the United States, said Louis Chauvel, a French sociologist who has also worked in America on income inequality and other issues. On top of that, Mr. Chauvel added, the United States economy has been rebounding, while unemployment in France has been rising since 2008 and has hovered around 10 percent for the last two years.

"In the U.S., the young 25-year-olds have lots of opportunities," he said. "It's generally much better to be relatively young in the United States than to be aging.

"In France, we face a completely different trend: We have more and more educated young French citizens, and they face economic scarcity, even though they have more education than their parents."

Young adults in France see their taxes going to finance social benefits for retirees that they believe they will never receive, Mr. Chauvel added. The most energetic and smartest among them do find jobs, he said, but often they can do it only by leaving France for Britain, Australia or the United States.



For the full story, see:

ALISSA J. RUBIN and AURELIEN BREEDEN. "'Song for French Charity Strikes Discordant Note." The New York Times (Weds., MARCH 4, 2015): A6.

(Note: the online version of the story has the date MARCH 3, 2015, and has the title "'Toute La Vie,' Song for French Charity, Strikes Discordant Note.")






September 26, 2015

112 Years of Spectacular Progress Started With Wilbur Wright



PlutoYouthfulMountains2015-08-16.jpg
"New close-up images of a region near Pluto's equator reveal a giant surprise: a range of youthful mountains." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A1) LAUREL, Md. -- The first close-up image of Pluto has revealed mountains as tall as the Rockies, and an absence of craters -- discoveries that, to their delight, baffled scientists working on NASA's New Horizons mission and provided punctuation for a journey nine and a half years in the making.

Only 112 years after the Wright Brothers were barely able to get their airplane off the ground, a machine from Earth has crossed the solar system to a small, icy world three billion miles away. The flyby on Tuesday, when New Horizons buzzed within 7,800 miles of the former ninth planet, came 50 years to the day after NASA's Mariner 4 spacecraft made a similar first pass by Mars.



For the full story, see:

KENNETH CHANG. "Pluto's Portrait From New Horizons: Ice Mountains and No Craters." The New York Times (Thurs., JULY 16, 2015): A1 & A17.

(Note: the online version of the article has the date JULY 15, 2015.)






September 25, 2015

"If You Get Too Cold, I'll Tax the Heat"



(p. A11) George Harrison knew what he was talking about when he wrote the song "Taxman" for the Beatles: "If you get too cold, I'll tax the heat / If you take a walk, I'll tax your feet." Had the Internet been around in 1966, they might have added: "If you use the Web, I'll tax your tweet."


For the full commentary, see:

OHN THUNE and AJIT PAI. "Taxman, Won't You Please Spare The Internet?; A moratorium on taxing online access has been an unqualified success. Let's make it permanent." The Wall Street Journal (Fri., July 18, 2014): A11.

(Note: the online version of the commentary has the date July 17, 2014.)






September 23, 2015

Venezuelans Irritated by Short Supply of Cerveceria Polar Beer



(p. 5A) CARACAS, Venezuela (AP) -- Venezuelans are facing the prospect of a heat wave without their favorite beer, the latest indignity in a country that has seen shortages of everything from disposable diapers to light bulbs.

Cerveceria Polar, which distributes 80 percent of the beer in the socialist South American country, began shutting down breweries this week because of a lack of barley, hops and other raw materials, and has halted deliveries to Caracas liquor stores.

"This is never-never land," said Yefferson Ramirez, who navigated a rush of disgruntled customers Thursday behind the counter at a corner store in posh eastern Caracas. The shop has been out of milk and bottled water for months, but the beer shortfall is provoking a new level of irritation.



For the full story, see:

Associated Press. "Venezuela's top beer scarce amid heat wave." Omaha World-Heraldl (Sat., Aug. 8, 2015): 5A.

(Note: the online version of the story has the date Aug. 7, 2015.)






September 22, 2015

Venezeuelan Socialists Seize Warehouses of Cerveceria Polar Beer



PolarWorkersProtestSocialistsSeizingProperty.jpg "Polar workers protested the government's decision to expropriate warehouse land in Caracas on Thursday [July 30, 2015]." Source of caption and photo: online version of the WSJ article quoted and cited below.



(p. A7) CARACAS, Venezuela--The government ordered major food companies, including units of PepsiCo and Nestlé Inc., to evacuate warehouses in an area where the state plans to expropriate land to build low-cost housing.


. . .


Manuel Larrazábal, a director at Polar, said he hoped the government would reconsider the measure. "We don't doubt that they need to construct housing, which is so important, but we ask why it has to affect active industrial facilities."


. . .


Some workers painted messages including "No to expropriation" and "Let us work" onto the walls of the industrial park and on dozens of trucks that lined the streets outside, which were blocked by police and National Guard. Polar said the move would affect some 600 workers, as well as 1,400 employees who transport their goods around Caracas and two neighboring states.


. . .


Polar suspended operations at its facility after getting the order Wednesday night. The expropriation order extends a history of shaky relations between it and the government, which began under the late leader Hugo Chávez and continues under his protégé, Mr. Maduro.

In recent months, the company, which is the largest beer maker in Venezuela, said it had to halt work at several plants and breweries due to labor strife. It has also struggled with difficulties in acquiring raw materials and U.S. dollars to pay overseas suppliers, a process controlled by the government due to complicated currency regulations.



For the full story, see:

KEJAL VYAS . "Venezuela Takeover Order Riles Companies; Maduro's government wants industrial zone to build housing for poor." The Wall Street Journal (Fri., July 31, 2015): A7.

(Note: ellipses added.)

(Note: the online version of the story has the date July 30, 2015.)






September 15, 2015

More Danger from Existing Artificial Stupidity than from Fictional Artificial Intelligence



(p. B6) In the kind of artificial intelligence, or A.I., that most people seem to worry about, computers decide people are a bad idea, so they kill them. That is undeniably bad for the human race, but it is a potentially smart move by the computers.

But the real worry, specialists in the field say, is a computer program rapidly overdoing a single task, with no context. A machine that makes paper clips proceeds unfettered, one example goes, and becomes so proficient that overnight we are drowning in paper clips.

In other words, something really dumb happens, at a global scale. As for those "Terminator" robots you tend to see on scary news stories about an A.I. apocalypse, forget it.

"What you should fear is a computer that is competent in one very narrow area, to a bad degree," said Max Tegmark, a professor of physics at the Massachusetts Institute of Technology and the president of the Future of Life Institute, a group dedicated to limiting the risks from A.I.

In late June, when a worker in Germany was killed by an assembly line robot, Mr. Tegmark said, "it was an example of a machine being stupid, not doing something mean but treating a person like a piece of metal."


. . .


"These doomsday scenarios confuse the science with remote philosophical problems about the mind and consciousness," Oren Etzioni, chief executive of the Allen Institute for Artificial Intelligence, a nonprofit that explores artificial intelligence, said. "If more people learned how to write software, they'd see how literal-minded these overgrown pencils we call computers actually are."

What accounts for the confusion? One big reason is the way computer scientists work. "The term 'A.I.' came about in the 1950s, when people thought machines that think were around the corner," Mr. Etzioni said. "Now we're stuck with it."

It is still a hallmark of the business. Google's advanced A.I. work is at a company it acquired called DeepMind. A pioneering company in the field was called Thinking Machines. Researchers are pursuing something called Deep Learning, another suggestion that we are birthing intelligence.


. . .


DeepMind made a program that mastered simple video games, but it never took the learning from one game into another. The 22 rungs of a neural net it climbs to figure out what is in a picture do not operate much like human image recognition and are still easily defeated.



For the full story, see:

QUENTIN HARDY. "The Real Threat Computers Pose: Artificial Stupidity, Not Intelligence." The New York Times (Mon., JULY 13, 2015): B6.

(Note: ellipses added.)

(Note: the online version of the story has the date JULY 11, 2015, and has the title "The Real Threat Posed by Powerful Computers.")






September 14, 2015

How Jack Dorsey Achieves Work-Life Balance: "I Don't Have a Family"



(p. B1) Maybe Jack Dorsey needs to clone himself.

On July 1, the technology entrepreneur took on the challenge of turning around Twitter, the social media site that he co-founded and that he was asked to run as interim chief executive. At the same time, Mr. Dorsey has filed confidential paperwork to sell stock to the public in the other company where he is chief executive, Square, a mobile payments provider, a person briefed on the action said on Friday [July 24, 2015].

The collision of events adds fodder to one of Silicon Valley's hottest topics: how Mr. Dorsey will juggle the companies, and whether he will forgo responsibilities at one to concentrate on the other.


. . .


(p. B2) On Tuesday [July 28, 2015], Mr. Dorsey will face Twitter investors when he reports the San Francisco-based company's quarterly earnings. The executive has been preparing for the event, where his performance will be scrutinized.

Mr. Dorsey has also spent time at Square, which has offices about a block away from Twitter's on Market Street in San Francisco. Last week, he moderated a panel discussion on women in technology at Square's twice-monthly staff meeting, featuring three women -- Sarah Friar, Alyssa Henry and Francoise Brougher -- who head finance, engineering and business operations, respectively, at the mobile payments company.

During a part of the session that focused on parenting, according to a person who attended the meeting, Mr. Dorsey was asked how he managed to achieve work-life balance. He told the audience, "Uh, I don't have a family."



For the full story, see:

MIKE ISAAC and VINDU GOEL. "Square's Filing Turns Talk to Dorsey's Juggling Skills." The New York Times (Sat., JULY 25, 2015): B1-B2.

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

(Note: the online version of the obituary has the date JULY 24, 2015.)







September 13, 2015

The Dynamism of Venturesome New Yorkers: "If You Want Country Living, Move to the Country"



(p. A18) One cannot live any closer to the terminals of La Guardia Airport than the residents of East Elmhurst, Queens. Some homes sit only a few hundred yards away from the control tower, on the opposite side of the Grand Central Parkway. The new $4 billion airport hub envisioned for the site, announced this week by Gov. Andrew M. Cuomo and Vice President Joseph R. Biden, would be even closer.

So it might be assumed that the promise of years of heavy-duty construction and the associated noise, traffic and dust would fill residents with dread.

Not quite.

"We live in New York City, honey," said Michele Mongeluzo, 56, whose house sits on a rise just south of the parkway, offering an unobstructed view of the airport and the proposed construction site. "If you want country living, move to the country."

In interviews this week along the blocks closest to the airport, residents almost universally said that they not only had no trepidation about the construction but that they also actually welcomed it. Improvements, they said, were long overdue.

Furthermore, they suggested, what was a little construction on top of the aural challenges -- the roaring jet engines, the chop of helicopter rotors, the incessant highway traffic -- that they had already contended with and apparently overcome?

"If it's noisy, I'm used to it," said Freddy Fuhrtz, 75, who retired as an employee in the cargo division of Pan Am and still lives in the two-story house on 92nd Street where he grew up and raised his children. "It's progress."



For the full story, see:

KIRK SEMPLE. "Construction Plans Don't Faze Airport Neighbors." The New York Times (Fri., JULY 31, 2015): A18 & A21.

(Note: the online version of the story has the date JULY 30, 2015, and has the title "Construction Plans for La Guardia Airport Don't Faze Its Neighbors.")






September 11, 2015

Refugee Walks Nearly 30 Miles Across English Channel, Dodging Hurtling Trains in Dark, Before His Arrest



(p. A1) LONDON -- For one African migrant, there was nothing left to lose.

The migrant, Abdul Rahman Haroun, 40, risked his life this week by climbing four fences, evading international search teams and as many as 400 security cameras, and walking about 30 miles in the darkness of the Channel Tunnel in an effort to reach Britain from Calais, France. He dodged trains traveling to London from Paris as they hurtled by at up to 100 miles per hour.

He had made it nearly to the other side, Folkestone, England, before he was caught and arrested on Tuesday [August 4, 2015].

Three days later news of Mr. Haroun's perilous journey was still reverberating in Britain, a country polarized by a spiraling migration crisis. Though much about him remains unknown -- the police said he is Sudanese and has no fixed address -- his story of determination had reduced the sprawling migration crisis to a human scale, . . .



For the full story, see:

DAN BILEFSKY. "In a First, a Sudanese Migrant Nearly Crosses the English Channel on Foot." The New York Times (Sat., AUG. 8, 2015): A1 & A8.

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

(Note: the online version of the story has the date AUG. 7, 2015.)






September 9, 2015

"I'll Be Lucky When I'm in England"



(p. A4) CALAIS, France -- The sun had barely set when a 23-year-old Eritrean woman who gave her name as Akbrat fell into step with dozens of other men and women and started scaling the fence surrounding the entrance to the French side of the Channel Tunnel.

The barbed wire cut her hands, but she did not feel the pain. The police seemed to be everywhere. She thought of her 5-year-old son back in Africa and ran, zigzag through the falling shadows, once almost colliding with an officer in a helmet.

Then she was alone. She slipped under the freight train and waited, clambering out just as it began moving.

But before she could hurl herself onto the train bed transporting trucks filled with Britain-bound produce, a French officer caught up with her, she recalled in an interview on Thursday. Blinded by tear gas, she stumbled and bruised her right ankle. After being ejected from the complex around the tunnel, it took her five hours to limp the nine miles back to the refugee camp of makeshift shelters that its 3,000 inhabitants call the "jungle."

"You're lucky you weren't killed," someone told her.

"I'm not lucky," she responded. "I'll be lucky when I'm in England."


. . .


For many of the migrants who have been coming to the Continent from Africa, the Middle East and beyond, Calais, a mere 21 miles from the white cliffs of Dover, is their last stop. If they make it across to Britain, many believe they will have reached safety and a better life.



For the full story, see:

KATRIN BENNHOLD and ALISSA J. RUBIN. "Migrants Taste Freedom at Tunnel's Door." The New York Times (Fri., JULY 31, 2015): A4 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date JULY 30, 2015, and has the title "Migrants in Calais Desperately Rush the Channel Tunnel to England, Night After Night.")



See also:

ALISSA J. RUBIN. "Hundreds of Migrants Try to Clamber Onto Trains and Cross Channel to England." The New York Times (Fri., JULY 29, 2015): A6.

(Note: the online version of the story has the date JULY 28, 2015, and has the title "Hundreds of Migrants Try to Cross English Channel on Freight Trains.")


MATTHIAS VERBERGT and NOEMIE BISSERBE. "Migrant Crisis Continues at U.K.-France Border; Up to about 1,000 migrants spotted Wednesday night near the Eurotunnel terminal site." The Wall Street Journal (Fri., JULY 31, 2015): A7.

(Note: the online version of the story has the date JULY 30, 2015.)







September 8, 2015

"The Countryside Was Romantic Only to People Who Didn't Have to Live There"



(p. C4) Mr. Meyer's motivation for writing his book is simple and straightforward. "Since 2000, a quarter of China's villages had died out, victims of migration or the redrawing of municipal borders," as the country urbanizes, he notes early on, adding: "Before it vanished I wanted to experience a life that tourists, foreign students, and journalists (I had been, in order, all three) only viewed in passing."

"In Manchuria" shifts back and forth among various genres. It is part travelogue, part sociological study, part reportage and part memoir, but it is also a love offering to Mr. Meyer's wife, Frances, who grew up in the unfortunately named Wasteland, the village that Mr. Meyer chooses as his base near the start of this decade, and to the unborn son she is carrying by the time "In Manchuria" ends.


. . .


After a year in Wasteland, Mr. Meyer was ready to move on, and he now divides his time between Singapore and Pittsburgh, where he teaches nonfiction writing. But his interlude in Manchuria clearly taught him many lessons, perhaps the most fundamental being this: "The countryside was romantic only to people who didn't have to live there."



For the full review, see:

LARRY ROHTER. "A Vanishing Way of Life for Peasants in China." The New York Times Book Review (Mon., MARCH 8, 2015): C4.

(Note: ellipsis added.)

(Note: the online version of the review has the date MARCH 8, 2015, and has the title "Review: Michael Meyer's 'In Manchuria' Documents a Changing Rural China.")


The book under review, is:

Meyer, Michael. In Manchuria: A Village Called Wasteland and the Transformation of Rural China. New York: Bloomsbury Press, 2015.






September 3, 2015

Dynamism "in Danger of Being Stultified by Planners"



(p. A25) . . . , the attempt to tame the market will end up stultifying it. Everybody knows that capitalism's creative destruction can be rough. But over the last few decades, a ragged version of global capitalism in places ranging from China to Nigeria has brought about the greatest reduction in poverty in human history. America's fluid style of capitalism attracts driven and talented immigrants and creates vast waves of technological innovation. This dynamism is always in danger of being stultified by planners who think they can tame it and by governing elites who want to rig it. We should not take it for granted.

The coming debate about capitalism will be between those who want to restructure the underlying system and those who want to help people take advantage of its rough intensity. It will be between people who think you need strong government to defeat oligarchy and those who think you need open competition.



For the full commentary, see:

David Brooks. "Two Cheers for Capitalism." The New York Times (Fri., July 31, 2015): A25.

(Note: ellipsis added.)






September 2, 2015

Communist Party Destroying Dissenting Civic Groups in China



YangZiliTransitionInstituteChina2015-07-05.jpg"Yang Zili of the Transition Institute of Social and Economic Research went into hiding." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A4) BEIJING -- First, the police took away the think tank's former graphic designer, then the young man who organized seminars, and eventually its founder. Another employee fled China's capital, fearing he would be forced to testify against his colleagues in rigged trials.

"The anxiety is overwhelming, not knowing if they are coming for you," said the employee, Yang Zili, a researcher at the Transition Institute of Social and Economic Research in Beijing, who has been in hiding since November. "It's frightening because as they disappear, one friend after another, the police are not following any law. They just do as they please."

These are perilous days for independent civic groups in China, especially those that take on politically contentious causes like workers' rights, legal advocacy and discrimination against people with AIDS. Such groups have long struggled to survive inside China's ill-defined, shifting margins of official tolerance, but they have served as havens for socially committed citizens.

Under President Xi Jinping, however, the Communist Party has forcefully narrowed the bounds of accepted activity, setting off fears that these pockets of greater openness in China's generally restrictive political landscape may soon disappear.


. . .


The campaign has focused on groups deemed sanctuaries for dissent. From its cramped offices in the university district of northwest Beijing, the Transition Institute championed a mix of free market economics and support for the downtrodden, conducting research on the exploitation of taxi drivers, school policies that shortchange rural children and the environmental costs of the massive Three Gorges Dam on the Yangtze River. But the institute also attracted advocates of democratic reform, some of whom had prior run-ins with the authorities.

"We always hoped to eke out survival in tough circumstances," said Mr. Yang, 43, the researcher now in hiding, who spent eight years in prison for holding informal discussions with a group of friends about multiparty elections and a free press. "But the more independent NGOs," he added, referring to nongovernmental organizations, "especially the ones that criticize government policies or don't help the government's image, have encountered a policy of containment, even destruction."


. . .


(p. A6) With his colleagues disappearing one by one, Mr. Yang decided to go underground. He was in the institute office one morning in late November when a police officer called and told him to go to a station for questioning. Instead, Mr. Yang left an Internet message for his wife, shut off his cellphone, and slipped away, taking only the clothes on his back. "It was a spur-of-the-moment decision," he said in an interview.

Meeting with a reporter at a location several hours' drive from Beijing, he said he missed his wife and 4-year-old son, and visibly nervous, he talked about his fear of being returned to prison.

Mr. Yang said he would turn himself in should a warrant be issued for his arrest, but he was not interested in cooperating with what he described as an extralegal persecution of his colleagues.

"I still don't understand what we did wrong," he said. "We were just trying to help improve China."



For the full story, see:

ANDREW JACOBS and CHRIS BUCKLEY. "In China, Civic Groups' Freedom, and Followers, Are Vanishing." The New York Times (Fri., FEB. 27, 2015): A4 & A6.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 26, 2015.)






September 1, 2015

Keeping Growth Rate High in China Achieved by More Misallocation of Capital



(p. A11) . . . , it is Beijing's recent moves to ease fiscal policy that will ensure that this year's growth target can be met. Unlike traditional Keynesian stimulus programs, which are typically conducted at the central-government level, in China fiscal easing primarily involves providing additional state-bank money to local governments.

This has a more immediate and powerful effect on GDP growth and job creation, but it comes at a high cost: overinvestment in local projects and the misallocation of capital. China's landscape is littered with unused highways and airports, redundant steel and cement plants, unnecessary municipal office buildings and "ghost cities" filled with empty high-rises and deserted shopping malls.

From 2009-13, "ineffective investment" amounted to a stunning 41.8 trillion yuan ($6.8 trillion), according to research published in 2014 by Xu Ce of China's National Development and Reform Commission and Wang Yuan of the Academy of Macroeconomic Research.

That China is heading down this path again can only mean that it has no other way to reach its growth target. It is also an indication of how little the economic system has changed despite the leadership's much vaunted reform initiatives and efforts to tackle corruption at all levels of government.



For the full commentary, see:

MARK A. DEWEAVER. "Why China Will Still Reach Its Target Growth Rate; The stock market crash won't stop Beijing from shoveling trillions into wasteful local projects.'" The Wall Street Journal (Fri., July 31, 2015): A11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date July 30, 2015.)






August 29, 2015

From Self-Funding, and Sony, Khanna Builds PlayStation Supercomputer to Advance Science



KhannaGauravPlaystationSupercomputer2015-07-05.jpg"Gaurav Khanna with a supercomputer he built at the University of Massachusetts Dartmouth physics department using 200 Playstation 3 consoles that are housed in a refrigerated shipping container." Source of caption: print version of the NYT article quoted and cited below. Source of photo: online version of the NYT article quoted and cited below.



(p. D3) This spring, Gaurav Khanna noticed that the University of Massachusetts Dartmouth physics department was more crowded than usual. Why, he wondered, were so many students suddenly so interested in science?"

It wasn't a thirst for knowledge, it turns out. News of Dr. Khanna's success in building a supercomputer using only PlayStation 3 video game consoles had spread quickly; the students, a lot of them gamers, just wanted to gape at the sight of nearly 200 consoles stacked on one another.


. . .


Making a supercomputer requires a large number of processors -- standard desktops, laptops or the like -- and a way to network them. Dr. Khanna picked the PlayStation 3 for its viability and cost, currently, $250 to $300 in stores. Unlike other game consoles, the PlayStation 3 allows users to install a preferred operating system, making it attractive to programmers and developers. (The latest model, the PlayStation 4, does not have this feature.)

"Gaming had grown into a huge market," Dr. Khanna said. "There's a huge push for performance, meaning you can buy low-cost, high-performance hardware very easily. I could go out and buy 100 PlayStation 3 consoles at my neighborhood Best Buy, if I wanted."

That is just what Dr. Khanna did, though on a smaller scale. Because the National Science Foundation, which funds much of Dr. Khanna's research, might not have viewed the bulk buying of video game consoles as a responsible use of grant money, he reached out to Sony Computer Entertainment America, the company behind the PlayStation 3. Sony donated four consoles to the experiment; Dr. Khanna's university paid for eight more, and Dr. Khanna bought another four. He then installed the Linux operating system on all 16 consoles, plugged them into the Internet and booted up the supercomputer.

Lior Burko, an associate professor of physics at Georgia Gwinnett College and a past collaborator with Dr. Khanna, praised the idea as an "ingenious" way to get the function of a supercomputer without the prohibitive expense.

"Dr. Khanna was able to combine his two fields of expertise, namely general relativity and computer science, to invent something new that allowed for not just a neat new machine, but also scientific progress that otherwise might have taken many more years to achieve," Dr. Burko said.


. . .


His team linked the consoles, housing them in a refrigerated shipping container designed to carry milk. The resulting supercomputer, Dr. Khanna said, had the computational power of nearly 3,000 laptop or desktop processors, and cost only $75,000 to make -- about a tenth the cost of a comparable supercomputer made using traditional parts.



For the full story, see:

LAURA PARKER "An Economical Way to Save Progress." The New York Times (Tues., DEC. 23, 2014): D3.

(Note: ellipses added.)

(Note: the online version of the story has the date DEC. 22, 2014, and has the title "That Old PlayStation Can Aid Science.")






August 28, 2015

No Increase in Public's Concern with Income Inequality Since 1978



(p. 4A) DENVER (AP) -- Income inequality is all the rage in public debate nowadays. Political figures from Sen. Elizabeth Warren on the left to Republican presidential prospect Jeb Bush on the right are denouncing the widening gap between the wealthy and everyone else.

But ordinary Americans don't seem as fascinated by the issue as their would-be leaders. The public's expressed interest in income inequality has remained stagnant over the past 36 years, according to the General Social Survey, which measures trends in public opinion.

In 2014 polling, Republicans' support for the government doing something to narrow the rich-poor gap reached an all-time low. Even Democrats were slightly less interested in government action on the issue than they were two years ago.

The survey is conducted by the independent research organization NORC at the University of Chicago. Because of its long-running and comprehensive questions, it is a highly regarded source on social trends.

In the latest survey, made public last week, less than half of Americans -- 46 percent -- said the government ought to reduce income differences between the rich and the poor. That level has held fairly steady since 1978. Thirty-seven percent said the government shouldn't concern itself with income differences, and the rest didn't feel strongly either way.



For the full story, see:

AP. "Income Inequality? Pols Want to Talk about It; Public Yawns." Omaha World-Herald (Monday, March 23, 2015): 4A.


For more details on the National Opinion Research Center (NORC) General Social Survey (GSS) results through 2014, see:

Inequality: Trends in Americans' Attitudes URL: http://www.apnorc.org/projects/Pages/HTML%20Reports/inequality-trends-in-americans-attitudes0317-6562.aspx#study






August 26, 2015

Pentagon Seeks Innovation from Private Start-Ups Since "They've Realized that the Old Model Wasn't Working Anymore"



(p. A3) SAN FRANCISCO -- A small group of high-ranking Pentagon officials made a quiet visit to Silicon Valley in December to solicit national security ideas from start-up firms with little or no history of working with the military.

The visit was made as part of an effort to find new ways to maintain a military advantage in an increasingly uncertain world.

In announcing its Defense Innovation Initiative in a speech in California in November, Chuck Hagel, then the defense secretary, mentioned examples of technologies like robotics, unmanned systems, miniaturization and 3-D printing as places to look for "game changing" technologies that would maintain military superiority.

"They've realized that the old model wasn't working anymore," said James Lewis, director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington. "They're really worried about America's capacity to innovate."

There is a precedent for the initiative. Startled by the Soviet launch of the Sputnik satellite in 1957, President Dwight D. Eisenhower created the Advanced Research Projects Agency, or ARPA, at the Pentagon to ensure that the United States would not be blindsided by technological advances.

Now, the Pentagon has decided that the nation needs more than ARPA, renamed the Defense Advanced Research Projects Agency, or Darpa, if it is to find new technologies to maintain American military superiority.


. . .


The Pentagon focused on smaller companies during its December visit; it did not, for example, visit Google. Mr. Welby acknowledged that Silicon Valley start-ups were not likely to be focused on the Pentagon as a customer. The military has captive suppliers and a long and complex sales cycle, and it is perceived as being a small market compared with the hundreds of millions of customers for consumer electronics products.

Mr. Welby has worked for three different Darpa directors, but he said that Pentagon officials now believed they had to look beyond their own advanced technology offices.

"The Darpa culture is about trying to understand high-risk technology," he said. "It's about big leaps." Today, however, the Pentagon needs to break out of what can be seen as a "not invented here" culture, he said.

"We're thinking about what the world is going to look like in 2030 and what tools the department will need in 20 or 30 years," he added.



For the full story, see:

JOHN MARKOFF. "Pentagon Shops in Silicon Valley for Game Changers." The New York Times (Fri., FEB. 27, 2015): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date FEB. 26, 2015.)






August 23, 2015

Starting in Late Middle Ages the State Tried "to Control, Delineate, and Restrict Human Thought and Action"



(p. C6) . . . transregional organizations like Viking armies or the Hanseatic League mattered more than kings and courts. It was a world, as Mr. Pye says, in which "you went where you were known, where you could do the things you wanted to do, and where someone would protect you from being jailed, hanged, or broken on the wheel for doing them."


. . .


This is a world in which money rules, but money is increasingly an abstraction, based on insider information, on speculation (the Bourse or stock market itself is a regional invention) and on the ability to apply mathematics: What was bought or sold was increasingly the relationships between prices in different locations rather than the goods themselves.

What happened to bring this powerful, creative pattern to a close? The author credits first the reaction to the Black Death of the mid-14th century, when fear of contamination (perhaps similar to our modern fear of terrorism) justified laws that limited travel and kept people in their place. Religious and sectarian strife further limited the free flow of ideas and people, forcing people to choose one identity to the exclusion of others or else to attempt to disappear into the underground of clandestine and subversive activities. And behind both of these was the rise of the state, a modern invention that attempted to control, delineate, and restrict human thought and action.



For the full review, see:

PATRICK J. GEARY. "Lighting Up the Dark Ages." The Wall Street Journal (Sat., May 30, 2015): C6.

(Note: ellipses added.)

(Note: the online version of the review has the date May 29, 2015.)


The book under review, is:

Pye, Michael. The Edge of the World: A Cultural History of the North Sea and the Transformation of Europe. New York: Pegasus Books LLC, 2014.






August 21, 2015

More Tech Stars Skip College, at Least for a While



(p. B1) The college dropout-turned-entrepreneur is a staple of Silicon Valley mythology. Steve Jobs, Bill Gates and Mark Zuckerberg all left college.

In their day, those founders were very unusual. But a lot has changed since 2005, when Mr. Zuckerberg left Harvard. The new crop of dropouts has grown up with the Internet and smartphones. The tools to create new technology are more accessible. The cost to start a company has plunged, while the options for raising money have multiplied.

Moreover, the path isn't as lonely.


. . .


Not long ago, dropping out of school to start a company was considered risky. For this generation, it is a badge of honor, evidence of ambition and focus. Very few dropouts become tycoons, but "failure" today often means going back to school or taking a six-figure job at a big tech company.


. . .


(p. B5) There are no hard numbers on the dropout trend, but applicants for the Thiel Fellowship tripled in the most recent year; the fellowship won't disclose numbers.


. . .


It has tapped 82 fellows in the past five years.

"I don't think college is always bad, but our society seems to think college is always good, for everyone, at any cost--and that is what we have to question," says Mr. Thiel, a co-founder of PayPal and an early investor in Facebook.

Of the 43 fellows in the initial classes of 2011 and 2012, 26 didn't return to school and continued to work on startups or independent projects. Five went to work for large tech firms, including a few through acquisitions. The remaining 12 went back to school.

Mr. Thiel says companies started by the fellows have raised $73 million, a record that he says has attracted additional applicants. He says fellows "learned far more than they would have in college."



For the full story, see:

DAISUKE WAKABAYASHI. "College Dropouts Thrive in Tech." The Wall Street Journal (Thurs., June 4, 2015): B1 & B10.

(Note: ellipses added. The phrase "the fellowship won't disclose numbers" was in the online, but not the print, version of the article.)

(Note: the online version of the article has the date June 3, 2015, and has the title "College Dropouts Thrive in Tech.")






August 20, 2015

The Complementarity of Humans and Robots in Education



(p. 6) Computers and robots are already replacing many workers. What can young people learn now that won't be superseded within their lifetimes by these devices and that will secure them good jobs and solid income over the next 20, 30 or 50 years? In the universities, we are struggling to answer that question.


. . .


Some scholars are trying to discern what kinds of learning have survived technological replacement better than others. Richard J. Murnane and Frank Levy in their book "The New Division of Labor" (Princeton, 2004) studied occupations that expanded during the information revolution of the recent past. They included jobs like service manager at an auto dealership, as opposed to jobs that have declined, like telephone operator.

The successful occupations, by this measure, shared certain characteristics: People who practiced them needed complex communication skills and expert knowledge. Such skills included an ability to convey "not just information but a particular interpretation of information." They said that expert knowledge was broad, deep and practical, allowing the solution of "uncharted problems."


. . .


When I arrived at Yale in 1982, there were no undergraduate courses in finance. I started one in the fall of 1985, and it continues today. Increasingly, I've tried to connect mathematical theory to actual applications in finance.

Since its beginnings, the course has gradually become more robotic: It resembles a real, dynamic, teaching experience, but in execution, much of it is prerecorded, and exercises and examinations are computerized. Students can take it without need of my physical presence. Yale made my course available to the broader public on free online sites: AllLearn in 2002, Open Yale in 2008 and 2011, and now on Coursera.

The process of tweaking and improving the course to fit better in a digital framework has given me time to reflect about what I am doing for my students. I could just retire now and let them watch my lectures and use the rest of the digitized material. But I find myself thinking that I should be doing something more for them.

So I continue to update the course, thinking about how I can integrate its lessons into an "art of living in the world." I have tried to enhance my students' sense that finance should be the art of financing important human activities, of getting people (and robots someday) working together to accomplish things that we really want done.



For the full commentary, see:

ROBERT J. SHILLER. "Economic View; What to Learn in College to Stay One Step Ahead of Computers." The New York Times, SundayBusiness Section (Sun., MAY 24, 2015): 6.

(Note: ellipses added.)

(Note: the online version of the commentary has the date MAY 22, 2015, and has the title "Economic View; What to Learn in College to Stay One Step Ahead of Computers.")


The Levy and Murnane book mentioned above, is:

Levy, Frank, and Richard J. Murnane. The New Division of Labor: How Computers Are Creating the Next Job Market. Princeton, NJ: Princeton University Press, 2004.

Some of the core of the Levy and Murnane book can be found in:

Levy, Frank, and Richard Murnane. "Book Excerpt: The New Division of Labor." Milken Institute Review 6, no. 4 (Dec. 2004): 61-82.






August 18, 2015

"Buy Local" Inefficiently Wastes Resources



(p. 8) Much is . . . made about the eco-friendliness of handmade.

"Buying handmade (especially really locally) can greatly reduce your carbon footprint on the world," reads a post on the popular website Handmadeology.

But few economists give much credence to the idea that buying local necessarily saves energy. Most believe that the economies of scale inherent in mass production outweigh the benefits of nearness. These same economies of scale most likely make a toothbrush factory less wasteful, in terms of materials, than 100 individual toothbrush makers each handcrafting 10 toothbrushes a day.



For the full commentary, see:

EMILY MATCHA. "OPINION; It's Chic. Not Morally Superior. That Handmade Scarf Won't Save the World." The New York Times, SundayReview Section (Sun., MAY 3, 2015): 8.

(Note: ellipses added.)

(Note: the online version of the coomentary has the date MAY 2, 2015, and has the title "OPINION; Sorry, Etsy. That Handmade Scarf Won't Save the World.")






August 15, 2015

Spread of Robots Creates New and Better Human Jobs



(p. A11) The issues at the heart of "Learning by Doing" come into sharp relief when James Bessen visits a retail distribution center near Boston that was featured on "60 Minutes" two years ago. The TV segment, titled "Are Robots Hurting Job Growth?," combined gotcha reporting with vintage movie clips--scary-looking Hollywood robots--to tell a chilling tale of human displacement and runaway job loss.

Mr. Bessen isn't buying it. Although robots at the distribution center have eliminated some jobs, he says, they have created others--for production workers, technicians and managers. The problem at automated workplaces isn't the robots. It's the lack of qualified workers. New jobs "require specialized skills," Mr. Bessen writes, but workers with these skills "are in short supply."

It is a deeply contrarian view. The conventional wisdom about robots and other new workplace technology is that they do more harm than good, destroying jobs and hollowing out the middle class. MIT economists Erik Brynjolfsson and Andrew McAfee made the case in their best-selling 2014 book, "The Second Machine Age." They describe a future in which software-driven machines will take over not just routine jobs--replacing clerks, cashiers and warehouse workers--but also tasks done by nurses, doctors, lawyers and stock traders. Mr. Bessen sets out to refute the arguments of such techno-pessimists, relying on economic analysis and on a fresh reading of history.



For the full review, see:

TAMAR JACOBY. "BOOKSHELF; Technology Isn't a Job Killer; Many predicted ATMs would eliminate bank tellers, but the number of tellers in the U.S. has risen since the machines were introduced." The Wall Street Journal (Thurs., May 21, 2015): A11.

(Note: the online version of the review has the date May 20, 2015.)


The book under review, is:

Bessen, James. Learning by Doing: The Real Connection between Innovation, Wages, and Wealth. New Haven, CT: Yale University Press, 2015.






August 14, 2015

Computer Programs "Lack the Flexibility of Human Thinking"



(p. A11) . . . let's not panic. "Superintelligent" machines won't be arriving soon. Computers today are good at narrow tasks carefully engineered by programmers, like balancing checkbooks and landing airplanes, but after five decades of research, they are still weak at anything that looks remotely like genuine human intelligence.

. . .


Even the best computer programs out there lack the flexibility of human thinking. A teenager can pick up a new videogame in an hour; your average computer program still can only do just the single task for which it was designed. (Some new technologies do slightly better, but they still struggle with any task that requires long-term planning.)



For the full commentary, see:

GARY MARCUS. "Artificial Intelligence Isn't a Threat--Yet; Superintelligent machines are still a long way off, but we need to prepare for their future rise." The Wall Street Journal (Sat., Dec. 13, 2014): A11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Dec. 11, 2014.)







August 13, 2015

Cultural and Institutional Differences Between Europe and U.S. Keep Europe from Having a Silicon Valley



(p. B7) "They all want a Silicon Valley," Jacob Kirkegaard, a Danish economist and senior fellow at the Peterson Institute for International Economics, told me this week. "But none of them can match the scale and focus on the new and truly innovative technologies you have in the United States. Europe and the rest of the world are playing catch-up, to the great frustration of policy makers there."

Petra Moser, assistant professor of economics at Stanford and its Europe Center, who was born in Germany, agreed that "Europeans are worried."

"They're trying to recreate Silicon Valley in places like Munich, so far with little success," she said. "The institutional and cultural differences are still too great."


. . .


There is . . . little or no stigma in Silicon Valley to being fired; Steve Jobs himself was forced out of Apple. "American companies allow their employees to leave and try something else," Professor Moser said. "Then, if it works, great, the mother company acquires the start-up. If it doesn't, they hire them back. It's a great system. It allows people to experiment and try things. In Germany, you can't do that. People would hold it against you. They'd see it as disloyal. It's a very different ethic."

Europeans are also much less receptive to the kind of truly disruptive innovation represented by a Google or a Facebook, Mr. Kirkegaard said.

He cited the example of Uber, the ride-hailing service that despite its German-sounding name is a thoroughly American upstart. Uber has been greeted in Europe like the arrival of a virus, and its reception says a lot about the power of incumbent taxi operators.

"But it goes deeper than that," Mr. Kirkegaard said. "New Yorkers don't get all nostalgic about yellow cabs. In London, the black cab is seen as something that makes London what it is. People like it that way. Americans tend to act in a more rational and less emotional way about the goods and services they consume, because it's not tied up with their national and regional identities."


. . .


With its emphasis on early testing and sorting, the educational system in Europe tends to be very rigid. "If you don't do well at age 18, you're out," Professor Moser said. "That cuts out a lot of people who could do better but never get the chance. The person who does best at a test of rote memorization at age 17 may not be innovative at 23." She added that many of Europe's most enterprising students go to the United States to study and end up staying.

She is currently doing research into creativity. "The American education system is much more forgiving," Professor Moser said. "Students can catch up and go on to excel."

Even the vaunted European child-rearing, she believes, is too prescriptive. While she concedes there is as yet no hard scientific evidence to support her thesis, "European children may be better behaved, but American children may end up being more free to explore new things."



For the full story, see:

JAMES B. STEWART. "Common Sense; A Fearless Culture Fuels Tech." The New York Times (Fri., JUNE 19, 2015): B1 & B7.

(Note: ellipses added.)

(Note: the online version of the story has the date JUNE 18, 2015, and has the title "Common Sense; A Fearless Culture Fuels U.S. Tech Giants.")







August 11, 2015

"The Great Fact" of "the Ice-Hockey Stick"



(p. 2) Economic history has looked like an ice-hockey stick lying on the ground. It had a long, long horizontal handle at $3 a day extending through the two-hundred-thousand-year history of Homo sapiens to 1800, with little bumps upward on the handle in ancient Rome and the early medieval Arab world and high medieval Europe, with regressions to $3 afterward--then a wholly unexpected blade, leaping up in the last two out of the two thousand centuries, to $30 a day and in many places well beyond.


. . .


(p. 48) The heart of the matter is sixteen. Real income per head nowadays exceeds that around 1700 or 1800 in, say, Britain and in other countries that have experienced modern economic growth by such a large factor as sixteen, at least. You, oh average participant in the British economy, go through at least sixteen times more food and clothing and housing and education in a day than an ancestor of yours did two or three centuries ago. Not sixteen percent more, but sixteen multiplied by the old standard of living. You in the American or the South Korean economy, compared to the wretchedness of former Smiths in 1653 or Kims in 1953, have done even better. And if such novelties as jet travel and vitamin pills and instant messaging are accounted at their proper value, the factor of material improvement climbs even higher than sixteen--to eighteen, or thirty, or far beyond. No previous episode of enrichment for the average person approaches it, not the China of the Song Dynasty or the Egypt of the New Kingdom, not the glory of Greece or the grandeur of Rome.

No competent economist, regardless of her politics, denies the Great Fact.



Source:

McCloskey, Deirdre N. Bourgeois Dignity: Why Economics Can't Explain the Modern World. Chicago: University of Chicago Press, 2010.

(Note: ellipsis added.)






August 7, 2015

Steven Johnson Is Advocate of Collaboration in Innovation



(p. A13) Theories of innovation and entrepreneurship have always yo-yoed between two basic ideas. First, that it's all about the single brilliant individual and his eureka moment that changes the world. Second, that it's about networks, collaboration and context. The truth, as in all such philosophical dogfights, is somewhere in between. But that does not stop the bickering. This controversy blew up in a political context during the 2012 presidential election, when President Obama used an ill-chosen set of words ("you didn't build that") to suggest that government and society had a role in creating the setting for entrepreneurs to flourish, and Republicans berated him for denigrating the rugged individualists of American enterprise.

Through a series of elegant books about the history of technological innovation, Steven Johnson has become one of the most persuasive advocates for the role of collaboration in innovation. His latest, "How We Got to Now," accompanies a PBS series on what he calls the "six innovations that made the modern world." The six are detailed in chapters titled "Glass," "Cold," "Sound," "Clean," "Time" and "Light." Mr. Johnson's method is to start with a single innovation and then hopscotch through history to illuminate its vast and often unintended consequences.



For the full review, see:

PHILIP DELVES BROUGHTON. "BOOKSHELF; Unintended Consequences; Gutenberg's printing press sparked a revolution in lens-making, which led to eyeglasses, microscopes and, yes, the selfie." The Wall Street Journal (Tues., Sept. 30, 2014): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 29, 2014, and has the title "BOOKSHELF; Book Review: 'How We Got to Now' by Steven Johnson; Gutenberg's printing press sparked a revolution in lens-making, which led to eyeglasses, microscopes and, yes, the selfie." )


The book under review, is:

Johnson, Steven. How We Got to Now: Six Innovations That Made the Modern World. New York: Riverhead Books, 2014.






August 3, 2015

Tesla Cars Are Built on Government Subsidies



(p. A13) Nowhere in Mr. Vance's book, . . . , does the figure $7,500 appear--the direct taxpayer rebate to each U.S. buyer of Mr. Musk's car. You wouldn't know that 10% of all Model S cars have been sold in Norway--though Tesla's own 10-K lists the possible loss of generous Norwegian tax benefits as a substantial risk to the company.

Barely developed in passing is that Tesla likely might not exist without a former State Department official whom Mr. Musk hired to explore "what types of tax credits and rebates Tesla might be able to drum up around its electric vehicles," which eventually would include a $465 million government-backed loan.

And how Tesla came by its ex-Toyota factory in California "for free," via a "string of fortunate turns" that allowed Tesla to float its IPO a few weeks later, is just a thing that happens in Mr. Vance's book, not the full-bore political intrigue it actually was.

The fact is, Mr. Musk has yet to show that Tesla's stock market value (currently $32 billion) is anything but a modest fraction of the discounted value of its expected future subsidies. In 2017, he plans to introduce his Model 3, a $35,000 car for the middle class. He expects to sell hundreds of thousands a year. Somehow we doubt he intends to make it easy for politicians to whip away the $7,500 tax credit just when somebody besides the rich can benefit from it--in which case the annual gift from taxpayers will quickly mount to several billion dollars each year.

Mother Jones, in a long piece about what Mr. Musk owes the taxpayer, suggested the wunderkind could be a "bit more grateful, a bit more humble." Unmentioned was the shaky underpinning of this largess. Even today's politicized climate modeling allows the possibility that climate sensitivity to carbon dioxide is far less than would justify incurring major expense to change the energy infrastructure of the world (and you certainly wouldn't begin with luxury cars). Were this understanding to become widespread, the subliminal hum of government favoritism could overnight become Tesla's biggest liability.



For the full commentary, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; The Savior Elon Musk; Tesla's impresario is right about one thing: Humanity's preservation is a legitimate government interest." The Wall Street Journal (Sat., May 30, 2015): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 29, 2015.)


The book discussed in the commentary is:

Vance, Ashlee. Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. New York: Ecco, 2015.


The Mother Jones article discussing government subsidies for Musk's Tesla, is:

Harkinson, Josh. "Free Ride." Mother Jones 38, no. 5 (Sept./Oct. 2013): 20-25.






August 1, 2015

Little Progress Toward Complex Autonomous Robots



(p. A8) [In June 2015] . . . , the Defense Advanced Research Projects Agency, a Pentagon research arm, . . . [held] the final competition in its Robotics Challenge in Pomona, Calif. With $2 million in prize money for the robot that performs best in a series of rescue-oriented tasks in under an hour, the event . . . offer[ed] what engineers refer to as the "ground truth" -- a reality check on the state of the art in the field of mobile robotics.

A preview of their work suggests that nobody needs to worry about a Terminator creating havoc anytime soon. Given a year and a half to improve their machines, the roboticists, who shared details about their work in interviews before the contest in June, appear to have made limited progress.


. . .


"The extraordinary thing that has happened in the last five years is that we have seemed to make extraordininary progress in machine perception," said Gill Pratt, the Darpa program manager in charge of the Robotics Challenge.

Pattern recognition hardware and software has made it possible for computers to make dramatic progress in computer vision and speech understanding. In contrast, Dr. Pratt said, little headway has been made in "cognition," the higher-level humanlike processes required for robot planning and true autonomy. As a result, both in the Darpa contest and in the field of robotics more broadly, there has been a re-emphasis on the idea of human-machine partnerships.

"It is extremely important to remember that the Darpa Robotics Challenge is about a team of humans and machines working together," he said. "Without the person, these machines could hardly do anything at all."

In fact, the steep challenge in making progress toward mobile robots that can mimic human capabilities is causing robotics researchers worldwide to rethink their goals. Now, instead of trying to build completely autonomous robots, many researchers have begun to think instead of creating ensembles of humans and robots, an approach they describe as co-robots or "cloud robotics."

Ken Goldberg, a University of California, Berkeley, roboticist, has called on the computing world to drop its obsession with singularity, the much-ballyhooed time when computers are predicted to surpass their human designers. Rather, he has proposed a concept he calls "multiplicity," with diverse groups of humans and machines solving problems through collaboration.

For decades, artificial-intelligence researchers have noted that the simplest tasks for humans, such as reaching into a pocket to retrieve a quarter, are the most challenging for machines.

"The intuitive idea is that the more money you spend on a robot, the more autonomy you will be able to design into it," said Rodney Brooks, an M.I.T. roboticist and co-founder two early companies, iRobot and Rethink Robotics. "The fact is actually the opposite is true: The cheaper the robot, the more autonomy it has."

For example, iRobot's Roomba robot is autonomous, but the vacuuming task it performs by wandering around rooms is extremely simple. By contrast, the company's Packbot is more expensive, designed for defusing bombs, and must be teleoperated or controlled wirelessly by people.



For the full story, see:

JOHN MARKOFF. "A Reality Check for A.I." The New York Times (Tues., MAY 26, 2015): D2.

(Note: ellipses, and bracketed expressions, added. I corrected a misspelling of "extraordinary.")

(Note: the date of the online version of the story is MAY 25, 2015, and has the title "Relax, the Terminator Is Far Away.")






July 30, 2015

Institutional Improvements Can Sometimes Be Designed, Rather than Only Spontaneous



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


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

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



For the full review, see:

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

(Note: ellipses added.)

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


The book under review is:

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






July 29, 2015

How Home Solar Panel Subsidies Increase Inequality



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

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

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



For the full commentary, see:

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

(Note: ellipses added.)

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






July 26, 2015

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



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

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


. . .


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

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


. . .


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

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


. . .


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

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



For the full review, see:

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

(Note: ellipses added.)

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


The book under review is:

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






July 25, 2015

Computers Lack Intuition about How to Handle Novel Situations



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

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


. . .


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


. . .


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


. . .


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



For the full commentary, see:

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

(Note: ellipses added.)






July 13, 2015

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



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

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



For the full commentary, see:

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

(Note: ellipsis added.)

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


One of the relevant papers by Acharya and Richardson is:

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






July 8, 2015

Not Clear If Net Neutrality Is Good for Consumers



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

. . .


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



For the full story, see:

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

(Note: ellipsis added.)

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






July 6, 2015

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



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

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


. . .


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



For the full review, see:

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

(Note: ellipsis added.)

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


The book under review, is:

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






July 1, 2015

"Secure in the Knowledge that She Has Other Opportunities"



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

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

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


. . .


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



For the full commentary, see:

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

(Note: ellipses added.)

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







June 25, 2015

More Detailed Rules Reduce Ability to Improvise, and Result in More Deaths



(p. 41) How do wildland firefighters make decisions in life-threatening situations when, for instance, a fire explodes and threatens to engulf the crew? They are confronted with endless variables, the most intense, high-stakes atmosphere imaginable, and the need to make instant decisions. Psychologist Karl Weick found that traditionally, successful firefighters kept four simple survival guidelines in mind:

1. Build a backfire if you have time.
2. Get to the top of the ridge where the fuel is thinner, where there are stretches of rock and shale, and where winds usually fluctuate.
3. Turn into the fire and try to work through it by piecing together burned-out stretches.
4. Do not allow the fire to pick the spot where it hits you, because it will hit you where it is burning fiercest and fastest.

But starting in the mid-1950s, this short list of survival rules was gradually replaced by much longer and more detailed ones. The current lists, which came to exceed forty-eight items, were designed to specify in greater detail what to do to survive in each particular circumstance (e.g., fires at the urban-wildland interface).

Weick reports that teaching the firefighters these detailed lists was a factor in decreasing the survival rates. The original short list was a general guide. The firefighters could easily remember it, but they knew it needed to be interpreted, modified, and embellished based on (p. 42) circumstance. And they knew that experience would teach them how to do the modifying and embellishing. As a result, they were open to being taught by experience. The very shortness of the list gave the firefighters tacit permission-- even encouragement-- to improvise in the face of unexpected events. Weick found that the longer the checklists for the wildland firefighters became, the more improvisation was shut down. Rules are aids, allies, guides, and checks. But too much reliance on rules can squeeze out the judgment that is necessary to do our work well. When general principles morph into detailed instructions, formulas, unbending commands-- wisdom substitutes-- the important nuances of context are squeezed out. Better to minimize the number of rules, give up trying to cover every particular circumstance, and instead do more training to encourage skill at practical reasoning and intuition.



Source:

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






June 23, 2015

"Brazen Federal Overreach" Blocks Wine Process Innovation



(p. A13) On May 27, our Napa Valley winery will pull eight cases of Cabernet Sauvignon out of Charleston Harbor in South Carolina. We placed them there six months ago, protected from the elements, following similar experiments in the past two years. The cold water and the tides seem to expedite the aging process, and we believe that our ocean-aged fine wine--which we've trademarked as Aquaoir--could revolutionize how vintners around the world think about winemaking. The only obstacle: the federal government.

For more than a year, our winery has been targeted by the Treasury Department, specifically, the Alcohol and Tobacco Tax and Trade Bureau. The agency believes our product is unfit for human consumption, despite an utter lack of evidence, and it has threatened to revoke our winemaking license. Washington doesn't recognize this wine for what it is: the product of entrepreneurship and experimentation.


. . .


We don't envision expanding into vast underwater wine-storage development. We simply want to try to understand the ocean-aging effects so that we can try to simulate them on dry land. It would be lamentable if brazen federal overreach blocked the potential for innovation in an industry that could be on the cusp of a true sea change. Only in Washington could you raise a glass to that.



For the full commentary, see:

JIM DYKE JR. "The Wine-Dark Sea of Regulation; We aged wine at the bottom of the ocean--then the feds threatened our license." The Wall Street Journal (Thurs., May 21, 2015): A13.

(Note: ellipsis added.)

(Note: the date of the online version of the commentary is MAY 20, 2015.)






June 20, 2015

Early Standard Oil Executive Preserved Shakespeare First Folios



(p. 17) "The Millionaire and the Bard," by Andrea Mays, is an American love story. It is the engaging chronicle of a sober, hard-working, respectably married industrialist of the Gilded Age who became obsessed with the object of his desire. Though generally frugal and self-­disciplined, he was willing to pay extraordinary sums in order to put his hands on his mistress, to gaze at her lovingly and longingly, to caress her. To possess her only once was not enough for him; he craved the experience again and again, without limit.


. . .


I am, as readers have probably surmised, speaking of the peculiar passion of book collecting. The lover in question was Henry Clay Folger, who made his fortune as one of the presidents and, by 1923, the chairman of the board of Standard Oil of New York. And the beloved, which he pursued with unflagging ardor, was a single book: "Mr. William Shakespeares Comedies, Histories, & Tragedies, Published according to the True Originall Copies." Printed in London in 1623, seven years after the author's death, it is the book known to all lovers of Shakespeare simply as the First Folio.


. . .


Andrea Mays is a professor of economics, and the great strength of her book is an unflagging interest in exactly how Folger played the game.


. . .


Rarely has a mad passion brought forth such a splendid and enduring fruit.



For the full review, see:

STEPHEN GREENBLATT. "In Love with Shakespeare." The New York Times Book Review (Sun., MAY 24, 2015): 17.

(Note: ellipses added.)

(Note: the online version of the review has the date MAY 22, 2015, and has the title "'The Millionaire and the Bard,' by Andrea E. Mays.")


The book under review, is:

Mays, Andrea E. The Millionaire and the Bard: Henry Folger's Obsessive Hunt for Shakespeare's First Folio. New York: Simon & Schuster, 2015.






June 14, 2015

Jury Out on Whether Bossless Zappos Will Succeed



(p. A1) Brironni Alex was so good at answering telephone calls and emails from customers at Zappos.com Inc. that the company promoted her to customer-service manager.

But when the online retailer adopted a management philosophy called Holacracy, she lost her job title and responsibility for performance reviews. Since the end of April, Zappos has zero managers to oversee employees, who are supposed to decide largely for themselves how to get their work done.

"I am managing the work, but before I was managing the worker," says Ms. Alex, 26 years old, now part of a team implementing Holacracy throughout Zappos. Ex-managers haven't been guaranteed another job and could have their pay cut next year, though Zappos says that is unlikely. Ms. Alex says the changes give her more time for a workplace diversity committee and to perform on the Zappos dance team.

The shake-up has been jarring even for a company famous for doing things differently. Earlier this month, Zappos said about 14%, or 210, of its roughly 1,500 employees had decided Holacracy wasn't for them, and they will leave the retailer.

They were offered at least three months of severance pay by Zappos Chief Executive Tony Hsieh, who wrote in a 4,700-word memo in March that the company hadn't "made fast enough progress towards self-management."


. . .


(p. A10) Mr. Hsieh, 41, concedes that Holacracy "takes time and a lot of trial and error." He still has faith that the system empowers employees "to act more like entrepreneurs" and stokes faster "idea flow," collaboration and innovation, he says.


. . .


Research shows that the value of flat organizations is mixed, though highly motivated workers who thrive on creativity generally are best suited for going bossless.

The results at Zappos will be watched closely because it has long embraced employee independence even while striving to meet exacting customer-service standards. "Delivering Happiness," a 2010 book by Mr. Hsieh, was a best seller and spawned a management consulting firm.


. . .


"They are adopting Holacracy as more how to get to the next level, as opposed to how to fix something broken in their system, which is actually one of their unique challenges," says Brian Robertson, 36, the inventor of Holacracy. The term comes from the word "holarchy," coined by writer Arthur Koestler for self-organizing units that combine to form a larger organization.



For the full story, see:

RACHEL EMMA SILVERMAN. "Going Boseless Backfires at Zappos." The Wall Street Journal (Thurs., May 21, 2015): A1 & A10.

(Note: ellipses added.)

(Note: the date of the online version of the story is MAY 20, 2015, and has the title "At Zappos, Banishing the Bosses Brings Confusion.")






June 13, 2015

Ed Telling's Band of Irregulars Had the Freedom to Perform



(p. 482) . . . Bill Sanders, Charlie Bacon's replacement as the head of corporate personnel, . . . had once served Telling in the East despite having hair that flowed far below his ears. Sanders had grown his hair out in order to irritate an old-school store manager who exercised his sovereign rights by refusing to hire any man not sporting a crew cut. The fact that Telling never told Sanders to cut his hair was an early indication to others in the East that Ed Telling was much more interested in people who could do the job and who exhibited a healthy contempt for the status quo than he was in appearances.


. . .


(p. 492) It was more than dumb luck that his band of loyalists happened to include several supersensitive and insecure men, some deeply religious men, some obsessively ambitious men, several quite short men, and others, from secretaries to former window-dressers, who never fit into the status quo until Ed Telling discovered them and helped them flourish among his private band of irregulars. Along the way, the Eastern Territory troupe was joined by others. Whether they were bright-button kids from Utah itching to accomplish an act that truly counted on a large scale, or frustrated wordsmiths so enamored of the metaphors of power that the practice of management appeared to them in Biblical panoramas, they all had a part. All irregulars were welcome, and in his quiet way Ed Telling played them all. Telling could sense through instinct which people were willing to submit and which ones were willing to fight. Far from being unaware of his motivational skills, Telling would on occasion call Pat Jamieson into his office after one of his managers left, then convey to Pat the elliptical words he'd uttered to the manager, and predict the number of days it would take the officer to come back with the problem ironed out. He was rarely off by more than twenty-four hours. He said his management style involved giving subordinates a great deal of freedom, "the freedom," he called it, "to perform."



Source:

Katz, Donald R. The Big Store: Inside the Crisis and Revolution at Sears. New York: Viking Adult, 1987.

(Note: ellipses added.)






June 11, 2015

Having Your Intellectual Property Stolen, Modifies Your Views on Piracy



(p. C18) Dear Dan,

My nephew has been downloading music and movies illegally from the Internet. Without sounding self-righteous, how can I get him to respect intellectual-property rights?

--Patricia

My own view on illegal downloads was deeply modified the day that my book on dishonesty was published--when I learned that it had been illegally downloaded more than 20,000 times from one overseas website. (The irony did not escape me.) My advice? Get your nephew to create something and then, without his knowing, put it online and download it many, many times. I suspect that will make it much harder for him to keep up his blithe attitude toward piracy.



For the full advice column by Dan Ariely, professor of behavioral economics at Duke , see:

DAN ARIELY. "ASK ARIELY; It's Risky to Rely on Retirement Questionnaires." The Wall Street Journal (Sat., May 23, 2015): C18.

(Note: italics in original.)

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






June 9, 2015

Sears Democratized the Washing Machine



(p. 301) The pieces of a new dream had finally been drawn in--big, diverse businesses that could combine as a sum greater than the proverbial parts. Now Sears could continue to "democratize" products that were previously too expensive or sophisticated for everyday people.

The automatic washing machine was an artifact owned only by the rich until Sears democratized the machine in 1942: $37.95--three bucks down and four more a month on time. The process was at the core of the entire industrial revolution-the humbling of products: buckles, buttons, and beer--and the efficient distribution of previously unattainable things to the huge pools of human desire called markets. Now the possibility stood before them of starting the cycle all over again.

Sears could spin a grand, gilded net for the people that included housing, mortgages, all manner of insurance, variations on banking sources, investment services, and, of course, consumer goods. People could get a house from Sears again. When the system was up and running, they could even get the money to buy the house; get the stuff that goes in the house; and the services that ensure the sustenance of the house if something unforeseen happens.



Source:

Katz, Donald R. The Big Store: Inside the Crisis and Revolution at Sears. New York: Viking Adult, 1987.






June 7, 2015

Merton Miller Applauded Bankers Who Cleverly Evaded Government Interference with Free Markets



(p. 12) . . . Merton Miller, a Nobel laureate economist at the University of Chicago, . . . was in many ways the father of financial innovation. Miller praised complex financial instruments, in large part because they helped institutions avoid the law. He applauded bankers for cleverly avoiding government attempts to interfere with markets.


For the full review, see:

FRANK PARTNOY. "Societal Bonds." The New York Times Book Review (Sun., MAY 10, 2015): 28.

(Note: ellipses added.)

(Note: the online version of the review has the date MAY 8, 2015, and has the title "'Smart Money,' by Andrew Palmer.")






June 3, 2015

A Highly Mathematical Model Endorses Friedman's View that Feds Directed Economics toward Highly Mathematical Models



(p. 1138) . . . , in many areas, the existing organization of research is characterized by large research institutions staffed with hundreds of
researchers and national funding agencies who set the research agenda for the field. Given the size of such institutions, if they decide to launch a new research program, then the critical mass of scholars can be reached with certainty, and individual researchers need not fear the coordination risk. Researchers should thus choose to work on that research topic, provided that they perceive an expected reward that is larger than s. (p. 1139) Unfortunately, if the large institution selects a poor idea (with a small or even negative θ), it would then be responsible for the emergence of a strand of research with modest scientific value. As an example, Diamond (1996) recalls Milton Friedman's criticism of the U.S. National Science Foundation, which, in his opinion, has directed the economics profession toward a highly mathematical model.12

. . .


12. Ironically, his opinion is endorsed in this paper by a "highly mathematical model."



Source:

Besancenot, Damien, and Radu Vranceanu. "Fear of Novelty: A Model of Scientific Discovery with Strategic Uncertainty." Economic Inquiry 53, no. 2 (April 2015): 1132-39.

(Note: ellipses added; italics in original.)


The 1996 Diamond article mentioned above, is:

Diamond, Arthur M., Jr. "The Economics of Science." Knowledge and Policy 9, nos. 2/3 (Summer/Fall 1996): 6-49.






June 1, 2015

Ed Telling's Nimble, Intuitive Labor Decisions at Sears



(p. 49) Telling rarely gave a direct order, so the Searsmen near him knew they had to listen hard and learn to read his arcane signals. You had to understand his gnomic comments and apparent throwaway lines, for you would only hear what Telling thought about something twice. The requirement made people scared, because the third time he spoke you were gone. "No need to beat a horse if he's not able to pull," he'd say. "Let's get another horse."

He had a habit he said he couldn't do anything about of judging the utility and character of a man the first time he looked into his eyes. Quick-draw decisions like this were a part of the general managerial ethos at Sears. The practice might have descended from the store master's knack for spotting at fifteen paces a shopper in the mood to spend freely.



Source:

Katz, Donald R. The Big Store: Inside the Crisis and Revolution at Sears. New York: Viking Adult, 1987.






May 30, 2015

Skill Differences Cause Four Times Inequality as Wealth Concentration



(p. A25) "What I find destructive," says David Autor of the Massachusetts Institute of Technology, "is the message that if you don't get into the top 1 percent then you're out of the game. That's deeply, deeply incorrect."

Autor's own research shows that skills differences are four times more important than concentration of wealth in driving inequality. If we could magically confiscate and redistribute the above-average income gains that have gone to the top 1 percent since 1979, that would produce $7,000 more per household per year for the bottom 99 percent. But if we could close the gap so that high-school-educated people had the skills of college-educated people, that would increase household income by $28,000 per year.



For the full commentary, see:

David Brooks. "The Temptation of Hillary." The New York Times (Fri., MARCH 6, 2015): A25.






May 29, 2015

Studebaker Competed with "Unique Designs and Powerful Engines"



LangeGregWithStudebakerPresident2015-04-25.jpg

"Greg Lange, 53, with his two-tone 1955 Studebaker President, near his home in Edmonds, Wash." Source of caption and photo: online version of the WSJ article quoted and cited below.



(p. D4) I've always rooted for underdogs.


. . .


Studebaker wasn't a big Detroit corporation. It was a smaller company out of South Bend, Ind., and had to be highly imaginative to compete with Ford and General Motors. This resulted in unique designs and powerful engines. The one in my President is called a Passmaster (a 259 cubic inch V8); the meaning is obvious.



For the full interview, see:

Greg Lange as told to interviewer A.J. BAIME. "Studebaker: President Still in Office." The Wall Street Journal (Weds., April 8, 2015): D4.

(Note: ellipsis added.)

(Note: the online version of the interview has the date April 7, 2015, and has the title "Studebaker: Still Stands Out After 60 Years." Where the online version differs from the print version, the quoted passage follows the online version.)






May 26, 2015

Voters Want Texas-Style Economic Dynamism



(p. A23) Surveys and interviews give us some sense of what's going on. Voters have a lot of economic anxieties. But they also have a template in their heads for what economic dynamism looks like.

That template does not include a big role for government. Polls show that faith in government is near all-time lows. In a Gallup survey, voters listed dysfunctional government as the nation's No. 1 problem. In fact, American voters' traditional distrust has morphed and hardened. They used to think it was bloated and ineffective. Now they think it is bloated and ineffective and rigged to help those who need it least.

When many of these voters think of economic dynamism, they think of places like Texas, the top job producer in the nation over the past decade, and, especially, places like Houston, a low-regulation, low-cost-of-living place. In places like Wisconsin, voters in the middle class private sector support candidates who cut state pensions and pass right-to-work laws, so that economic governance can be more Texas-style.



For the full commentary, see:

David Brooks. "The Field Is Flat." The New York Times (Fri., MARCH 27, 2015): A23.






May 25, 2015

To FDA Aging Is Not a Disease, So FDA Will Not Approve Drugs that Extend Life



(p. D1) Some of the top researchers on aging in the country are trying to get an unusual clinical trial up and running.


. . .


The trial aims to test the drug metformin, a common medication often used to treat Type 2 diabetes, and see if it can delay or prevent other chronic diseases. (The project is being called Targeting/Taming Aging With Metformin, or TAME.) Metformin isn't necessarily more promising than other drugs that have shown signs of extending life and reducing age-related chronic diseases. But metformin has been widely and safely used for more than 60 years, has very few side effects and is inexpensive.

The scientists say that if TAME is a well-designed, large-scale study, the Food and Drug Administration might be persuaded to consider aging as an indication, or preventable condition, a move that could spur drug makers to target factors that contribute to aging.


. . .


(p. D4) Fighting each major disease of old age separately isn't winnable, said S. Jay Olshansky, another TAME project planner and a professor at the school of public health at the University of Illinois at Chicago. "We lower the risk of heart disease, somebody lives long enough to get cancer. If we reduce the risk of cancer, somebody lives long enough to get Alzheimer's disease."

"We are suggesting that the time has arrived to attack them all by going after the biological process of aging," Dr. Olshansky said.

Sandy Walsh, an FDA spokeswoman, said the agency's perspective has long been that "aging" isn't a disease. "We clearly have approved drugs that treat consequences of aging," she said. Although the FDA currently is inclined to treat diseases prevalent in older people as separate medical conditions, "if someone in the drug-development industry found something that treated all of these, we might revisit our thinking."



For the full story, see:

SUMATHI REDDY. "To Grow Old Without Disease." The Wall Street Journal (Tues., March 17, 2015): D1 & D4.

(Note: ellipses added.)

(Note: the online version of the story has the date March 16, 2015, and has the title "Scientists' New Goal: Growing Old Without Disease.")






May 24, 2015

Sears CEO Ed Telling Opposed the "Sloppiness" of Across-the-Board Layoffs



(p. 46) It was never that layoffs were anathema to Telling as such; he just resented the sloppiness of a 10-percent across-the-board layoff when some areas of the company should have been cut by 40 percent and some built up by half.


Source:

Katz, Donald R. The Big Store: Inside the Crisis and Revolution at Sears. New York: Viking Adult, 1987.






May 23, 2015

Henry Paulson Fears Chinese Economy "Will Face a Reckoning"



(p. B1) About 340 pages into Henry M. Paulson's new book on China, a sentence comes almost out of nowhere that stops readers in their tracks.

"Frankly, it's not a question of if, but when, China's financial system," he writes, "will face a reckoning and have to contend with a wave of credit losses and debt restructurings."


. . .


(p. B2) Like the United States crisis in 2008, Mr. Paulson worries that in China "the trigger would be a collapse in the real estate market," and he declared in an interview that China is experiencing a real estate bubble. He noted that debt as a percentage of gross domestic product in China rose to 204 percent in June 2014 from 130 percent in 2008.

"Slowing economic growth and rapidly rising debt levels are rarely a happy combination, and China's borrowing spree seems certain to lead to trouble," he wrote.

Mr. Paulson's analysis in his book, "Dealing With China: An Insider Unmasks the New Economic Superpower," is all the more remarkable because he has long been a bull on China and has deep friendships with its senior leaders, who could frown upon his straightforward comments.



For the full commentary, see:

Andrew Ross Sorkin. "DEALBOOK; A Veteran of the Crisis Tells China to Be Wary." The New York Times (Tues., APRIL 21, 2015): B1-B2.

(Note: the online version of the review has the date APRIL 20, 2015, and has the title "DEALBOOK; A Veteran of the Financial Crisis Tells China to Be Wary.")


The book discussed above is:

Paulson, Henry M. Dealing with China: An Insider Unmasks the New Economic Superpower. New York: Twelve, 2015.






May 22, 2015

Longevity and Frugality Allow More Happiness Through New "Second Act" Jobs



(p. B7) Research suggests that happiness over the course of our lives is U-shaped, with our satisfaction deteriorating through our 20s and 30s, hitting bottom in our 40s and then bouncing back from there.

What causes the decline in our happiness during our early adult years? We don't know for sure. It might be the stress of juggling work and home life, or it could be the gradual realization that we won't fulfill all of our youthful ambitions.

But for some, midlife dissatisfaction may reflect growing disenchantment with their chosen career. The good news: Today, thanks to our longer life expectancy, we have time for a second act.

In fact, that second act may be necessary if we are laid off. Our new career could prove more fulfilling, but it might come with a smaller paycheck.

This is a reason to start saving as soon as we enter the workforce. If we do that, we likely will have the financial flexibility to swap into a less lucrative job. What if we haven't been good savers? We may be stuck in a job we have come to hate.



For the full commentary, see:

JONATHAN CLEMENTS. "Can You Afford a Long Life?" The Wall Street Journal (Sat., APRIL 25, 2015): B7.

(Note: the online version of the commentary has the date APRIL 23, 2015, and has the title "What Long Life Spans Mean for Your Money and Career.")






May 14, 2015

Automation Anxieties Unjustified



(p. 5B) In 1964, technology anxieties caused President Lyndon Johnson to create a national commission on automation. When it reported in 1966, the unemployment rate had dropped to 3.8 percent.

"Technological shocks have been happening for decades, and ... the U.S. economy has been adapting to them," writes economist Timothy Taylor (whose website recounts the 1960s episode).


. . .


Human contact is wanted or needed in places where it seems obsolete. Logically, ATMs should have decimated bank tellers. In reality, the number of tellers (about 600,000) is slightly above its 1990 level, notes Taylor, citing a study by James Bessen of Boston University law school.



For the full commentary, see:

ROBERT J. SAMUELSON. "Must we fear robots in workplace?" Omaha World-Herald (Mon., March 23, 2015): 5B.

(Note: ellipsis internal to quote, in original; ellipsis between paragraphs, added.)


The article by Bessen mentioned above, is:

Bessen, James. "Toil and Technology." Finance and Development 94, no. 1 (March 2015): 16-19.






May 12, 2015

Aaron Burr Gave Jeremy Bentham a Copy of The Federalist Papers




(p. 720) For four years, the disgraced Burr traveled in Europe, resorting occasionally to the pseudonym H. E. Edwards to keep creditors at bay. Sometimes he lived in opulence with fancy friends and at other times languished in drab single rooms. This aging roué sampled opium and seduced willing noblewomen and chambermaids with a fine impartiality. All the while, he cultivated self-pity. "I find that among the great number of Americans here and there all are hostile to A.B.-- All-- What a lot of rascals they must be to make war on one whom they do not know, on one who never did harm or wished harm to a human being," he recorded in his diary. He befriended the English utilitarian philosopher Jeremy Bentham and spoke to him with remarkable candor. "He really meant to make himself emperor of Mexico," Bentham recalled. "He told me I should be the legislator and he would send a ship of war for me. He gave me an account of his duel with Hamilton. He was sure of being able to kill him, so I thought it little better than murder." Always capable of irreverent surprises, Burr gave Bentham a copy of The Federalist. The shade of Alexander Hamilton rose up to haunt Burr at unexpected moments. In Paris, he called upon Talleyrand, who instructed his secretary to deliver this message to the uninvited caller: "I shall be glad to see Colonel Burr, but please tell him that a portrait of Alexander Hamilton always hangs in my study where all may see it." Burr got the message and left.


Source:

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.

(Note: italics in original.)






May 9, 2015

Incandescents Better than LEDs at Allowing a Good Night's Sleep



(p. D6) Studies have shown that such light, especially from the blue part of the spectrum, inhibits the body's production of melatonin, a hormone that helps people fall asleep.


. . .


Devices such as smartphones and tablets are often illuminated by light-emitting diodes, or LEDs, that tend to emit more blue light than incandescent products.



For the full story, see:

KATE GALBRAITH. "WIRED WELL; Can Orange Glasses Help You Sleep Better?" The New York Times (Tues., APRIL 7, 2015): D6.

(Note: ellipsis added.)

(Note: the online version of the story has the title "WIRED WELL; Can Orange Glasses Help You Sleep Better?")






May 7, 2015

Frugal Entrepreneurs May Be Able to Self-Finance Their Innovations




In my Economics of Entrepreneurship seminar we spend part of an evening reading the summary chapter of The Millionaire Next Door, discussed in the tribute below. In the seminar I suggest that at key early moments, innovative entrepreneurs may need to self-finance their innovations. They will be more likely to be able to do so if they have followed Stanley and Danko's advice on how to live frugally.


(p. B1) . . . the enduring lesson of the classic personal finance book, "The Millionaire Next Door," is this: Most of the rich grow wealthy because of modesty, thrift and prudence. They live happily in starter homes. They don't subsidize irresponsible adult children. They have an allergy to luxury automobiles.


. . .


The book, which has sold more than three million copies since its publication in 1996, made its co-author, William D. Danko, a millionaire himself and helped Mr. Stanley achieve similar security and leave academia for research and writing.


. . .


(p. B2) . . . even Mr. Danko, who ought to know better, has not always been able to resist the siren call of the Germans and their advertising. He bought one older Mercedes from a widowed friend, but his other one came new. "I was planning on buying a used one again, but the salesman was very good, and I was weak," he said. "These luxury cars are clearly overrated when you have to get your oil changed, and it costs $200."


. . .


. . . I was curious that Mr. Stanley died behind the wheel of a 2013 Corvette, rammed by another driver who might soon face charges in the accident. Mr. Stanley too, it turns out, couldn't help but have a taste for the finer things in life.

So does that make him a hypocrite? Or just a human being? All the best research tells us that we get much more joy out of doing things than having things, and a weekend drive in a car that goes really fast probably falls into both categories. But he earned that drive -- and that car -- by putting untold numbers of readers in a position where they'd be lucky enough to have that same choice themselves.



For the full commentary, see:

RON LIEBER. "YOUR MONEY; A Tribute to the 'Millionaire Next Door'." The New York Times (Sat., MARCH 7, 2015): B1-B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date MARCH 6, 2015, and has the title "YOUR MONEY; Paying Tribute to Thomas Stanley and His 'Millionaire Next Door'.")


The book under discussion is:

Stanley, Thomas J., and William D. Danko. The Millionaire Next Door: The Surprising Secrets of America's Wealthy. First ed. Atlanta: Longstreet Press, 1996.






May 6, 2015

Economic Growth Depends on the Talented Becoming Entrepreneurs Instead of Rent Seekers



(p. 6) In an influential paper, the economists Kevin M. Murphy and Robert W. Vishny, both at the University of Chicago Booth School of Business, and Andrei Shleifer at Harvard University argue that countries suffer when talented people become what we economists call "rent seekers." Instead of creating wealth, rent seekers simply transfer it -- from others to themselves.

Job titles don't tell you whether someone is primarily a rent seeker. A lawyer who helps draft precise contracts may actually be helping the wheels of commerce turn, and so creating wealth. But trial lawyers in a country with poorly functioning tort systems may simply be extracting rents: They can make money by pursuing frivolous lawsuits.



For the full commentary, see:

SENDHIL MULLAINATHAN. "Economic View; Maximizing the Social Returns to a Career in Finance." The New York Times, SundayBusiness Section (Sun., APRIL 12, 2015): 6.

(Note: the online version of the commentary has the date APRIL 10, 2015, and has the title "Economic View; Why a Harvard Professor Has Mixed Feelings When Students Take Jobs in Finance.")


The paper praised and summarized above, is:

Murphy, Kevin M., Andrei Shleifer, and Robert W. Vishny. "The Allocation of Talent: Implications for Growth." Quarterly Journal of Economics 106, no. 2 (May 1991): 503-30.






May 3, 2015

Social Security "Produces Inequality Systematically"



(p. B5) Mr. Kotlikoff, 64, did not set out to become Dr. Social Security. Two decades ago, he and a colleague were studying the adequacy of life insurance. To do so, you need to know something about Social Security. Soon, Mr. Kotlikoff was developing a computer model for various payouts from the government program and realized that consumers might actually pay to use it.

From that instinct, a service called Maximize My Social Security was born, though it wasn't easy to do and get it right. "We had to develop very detailed code, and the whole Social Security rule book is written in geek," he said. "It's impossible to understand."

Because of that, most people filing for benefits have to get lucky enough to encounter a true expert in their social circle, at a Social Security office or on its hotline. They are rare, and this information dissymmetry offends Mr. Kotlikoff. "We have a system that produces inequality systematically," he said. It's not because of what the beneficiaries earned, either; it's simply based on their (perhaps random) access to those who have a deep understanding of the rules.


. . .


"Get What's Yours" is a useful book. Indeed, we all need better instruction guides for the many parts of our financial lives that only grow more complex over time.



For the full commentary, see:

RON LIEBER. "YOUR MONEY; The Social Security Maze and Other U.S. Mysteries." The New York Times (Sat., MARCH 14, 2015): B1 & B5.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date MARCH 13, 2015.)


The book under discussion is:

Kotlikoff, Laurence J., Philip Moeller, and Paul Solman. Get What's Yours: The Secrets to Maxing out Your Social Security. New York: Simon & Schuster, 2015.






May 2, 2015

Fongoli Chimps, Where Prey Is Scarce, Show "Respect of Ownership"



(p. A10) The Fongoli chimpanzees live in a mix of savanna and woodlands where prey is not as abundant as in rain forests. There are no red colobus monkeys, and although the chimps do hunt young vervet monkeys and baboons, the much smaller bush babies are their main prey.

Dr. Pruetz argues that less food may have prompted both technological and social innovation, resulting in new ways to hunt and new social interactions as well. Humans evolved in a similar environment, and, as she and her colleagues write in Royal Society Open Science, "tool-assisted hunting could have similarly been important for early hominins."


. . .


By and large, said Dr. Pruetz, the adult males, which could take away a kill, show a "respect of ownership." Theft rates are only about 5 percent. The chimps she studies also have more mixed-sex social groups than chimp bands in East Africa.

Travis Pickering, an anthropologist at the University of Wisconsin, said that with less food available it seems that the Fongoli chimps, "have to be more inventive" and that "these hunting weapons even the playing field for non-adults and females."

Early hominins may have been in a similar situation, he said.



For the full story, see:

JAMES GORMAN. "Hunter Chimps Offer New View on Evolution." The New York Times (Fri., APRIL 15, 2015): A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date APRIL 14, 2015, and has the title "Chimps That Hunt Offer a New View on Evolution.")


The academic article discussed above is:

Pruetz, Jill D., Paco Bertolani, K. Boyer Ontl, S. Lindshield, M. Shelley, and E. G. Wessling. "New Evidence on the Tool-Assisted Hunting Exhibited by Chimpanzees (Pan Troglodytes Verus) in a Savannah Habitat at Fongoli, Sénégal." Royal Society Open Science 2, no. 4 (Weds., April 15, 2015), URL: http://rsos.royalsocietypublishing.org/content/2/4/140507.abstract .






May 1, 2015

Resilient Italian Entrepreneur Planned to Build Trattoria and Ended Up Building Museum



FaggianoAndSonsDigToFixPipe2015-04-19.jpg "Luciano Faggiano and his sons were digging to fix a pipe in Lecce, Italy. They found a buried world tracing back before Jesus." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A1) LECCE, Italy -- All Luciano Faggiano wanted when he purchased the seemingly unremarkable building at 56 Via Ascanio Grandi was to open a trattoria. The only problem was the toilet.

Sewage kept backing up. So Mr. Faggiano enlisted his two older sons to help him dig a trench and investigate. He predicted the job would take about a week.

If only.

"We found underground corridors and other rooms, so we kept digging," said Mr. Faggiano, 60.

His search for a sewage pipe, which began in 2000, became one family's tale of obsession and discovery. He found a subterranean world tracing back before the birth of Jesus: a Messapian tomb, a Roman granary, a Franciscan chapel and even etchings from the Knights Templar. His tratto-(p. A8)ria instead became a museum, where relics still turn up today.


. . .


If this history only later became clear, what was immediately obvious was that finding the pipe would be a much bigger project than Mr. Faggiano had anticipated. He did not initially tell his wife about the extent of the work, possibly because he was tying a rope around the chest of his youngest son, Davide, then 12, and lowering him to dig in small, darkened openings.


. . .


Mr. Faggiano still dreamed of a trattoria, even if the project had become his white whale. He supported his family with rent from an upstairs floor in the building and income on other properties.

"I was still digging to find my pipe," he said. "Every day we would find new artifacts."


. . .


Today, the building is Museum Faggiano, an independent archaeological museum authorized by the Lecce government. Spiral metal stairwells allow visitors to descend through the underground chambers, while sections of glass flooring underscore the building's historical layers.

His docent, Rosa Anna Romano, is the widow of an amateur speleologist who helped discover the Grotto of Cervi, a cave on the coastline near Lecce that is decorated in Neolithic pictographs. While taking an outdoor bathroom break, the husband had noticed holes in the ground that led to the underground grotto.

"We were brought together by sewage systems," Mr. Faggiano joked.


. . .


"I still want it," he said of the trattoria. "I'm very stubborn."



For the full story, see:

JIM YARDLEY. "Home Repair Opens a Portal to Italy's Past." The New York Times (Fri., APRIL 15, 2015): A1 & A8.

(Note: ellipses added.)

(Note: the online version of the story has the date APRIL 14, 2015, and has the title "Centuries of Italian History Are Unearthed in Quest to Fix Toilet.")






April 30, 2015

Hamilton Fostered the Preconditions for Capitalism




(p. 345) In a nation of self-made people, Hamilton became an emblematic figure because he believed that government ought to promote self-fulfillment, self-improvement, and self-reliance. His own life offered an extraordinary object lesson in social mobility, and his unstinting energy illustrated his devout belief in the salutary power of work to develop people's minds and bodies. As treasury secretary, he wanted to make room for entrepreneurs, whom he regarded as the motive force of the economy. Like Franklin, he intuited America's special genius for business: "As to whatever may depend on enterprise, we need not fear to be outdone by any people on earth. It may almost be said that enterprise is our element."

Hamilton did not create America's market economy so much as foster the cultural and legal setting in which it flourished. A capitalist society requires certain preconditions. Among other things, it must establish a rule of law through enforceable contracts; respect private property; create a trustworthy bureaucracy to arbitrate legal disputes; and offer patents and other protections to promote invention. The abysmal failure of the Articles of Confederation to provide such an atmosphere was one of Hamilton's principal motives for promoting the Constitution. "It is known," he wrote, "that the relaxed conduct of the state governments in regard to property and credit was one of the most serious diseases under which the body politic laboured prior to the adoption of our present constitution and was a material cause of that state of public opinion which led to its adoption." He converted the new Constitution into a flexible instrument for creating the legal framework necessary for economic growth. He did this by activating three still amorphous clauses--the necessary-and-proper clause, the general-welfare clause, and the commerce clause--making them the basis for government activism in economics.



Source:

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.






April 28, 2015

Creativity Was Permissionless on the Internet Before Obama Made It a Regulated Utility



(p. A15) Critics of President Obama's "net neutrality" plan call it ObamaCare for the Internet.

That's unfair to ObamaCare.

Both ObamaCare and "Obamanet" submit huge industries to complex regulations. Their supporters say the new rules had to be passed before anyone could read them. But at least ObamaCare claimed it would solve long-standing problems. Obamanet promises to fix an Internet that isn't broken.


. . .


Utility regulation was designed to maintain the status quo, and it succeeds. This is why the railroads, Ma Bell and the local water monopoly were never known for innovation. The Internet was different because its technologies, business models and creativity were permissionless.

This week Mr. Obama's bureaucrats will give him the regulated Internet he demands. Unless Congress or the courts block Obamanet, it will be the end of the Internet as we know it.



For the full commentary, see:

L. GORDON CROVITZ. "INFORMATION AGE; From Internet to Obamanet; BlackBerry and AT&T are already making moves that could exploit new 'utility' regulations." The Wall Street Journal (Mon., Feb. 23, 2015): A15.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Feb. 22, 2015,)






April 26, 2015

Hamilton "Was the Clear-Eyed Apostle of America's Economic Future"




(p. 344) The American Revolution and its aftermath coincided with two great transformations in the late eighteenth century. In the political sphere, there had been a repudiation of royal rule, fired by a new respect for individual freedom, majority rule, and limited government. If Hamilton made distinguished contributions in this sphere, so did Franklin, Adams, Jefferson, and Madison. In contrast, when it came to the parallel economic upheavals of the period--the industrial revolution, the expansion of global trade, the growth of banks and stock exchanges--Hamilton was an American prophet without peer. No other founding father straddled both of these revolutions--only Franklin even came close--and therein lay Hamilton's novelty and greatness. He was the clear-eyed apostle of America's economic future, setting forth a vision that many found enthralling, others unsettling, but that would ultimately prevail. He stood squarely on the modern side of a historical divide that seemed to separate him from other founders. Small wonder he aroused such fear and confusion.


Source:

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.






April 24, 2015

Remaining Airline Regulations Increase Fares and Reduce Services



(p. 256) Kenneth Button makes the case for "Really Opening Up the American Skies." "The deregulation of the 1970s, by removing entry quantitative controls, led to a considerable increase in services. It also increased the capability of individuals to access a wider range of destinations from their homes via the hub-and-spoke system of routings that emerged. This pattern has been reversed since 2007. The largest 29 airports in the United States lost 8.8 percent of their scheduled flights between 2007 and 2012, but medium-sized airports lost 26 percent and small airports lost 21.3 percent. . . . In sum, the 1978 Airline Deregulation Act only partially liberalized the U.S. domestic airline market. One important restriction that remains is the lack of domestic competition from foreign carriers. The U.S. air traveler benefited from the country being the first mover in deregulation, and this provided lower fares and consumer-driven service attributes some 15-20 years before they were enjoyed in other markets; the analogous reforms in Europe only fully materialized after 1997. But the world has changed, and so have the demands of consumers and the business models adopted by the airlines. . . . But remaining regulations still limit the amount of competition in the market and, with this, the ability of travelers to enjoy even lower fares and a wider range of services." Regulation, Spring 2014, pp. 40-45 http://object.cato.org/sites/cato.org/files/serials/files/regulation/2014/4/regulation-v37n1-8.pdf.


Source:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 249-56.

(Note: ellipses in original.)


The article quoted by Taylor is:

Button, Kenneth. "Really Opening up the American Skies." Regulation 37, no. 1 (Spring 2014): 40-45.






April 20, 2015

International Evidence that Young Firms Create Most Jobs



(p. 252) Chiara Criscuolo, Peter N. Gal, and Carlo Menon compile empirical evidence concerning "The Dynamics of Employment Growth: New Evidence from 18 Countries." "[N]ot all small businesses are net job creators, showing that only young businesses--predominantly small--create a disproportionate number of jobs, confirming recent evidence for the United States. When disentangling the role of entry from the role of expansion of incumbent young firms, the data clearly shows that entry explains most of the contribution to job creation, followed by startups (i.e., firms that are less than three year old). While this remains true even during the recent great recession, the data shows a sharp decline in the contribution of entry and young firms to aggregate employment growth during the recession. More generally, the findings point to a decline in start-up rates over the past decade across all countries considered, which gives cause for concern, given their strong contribution to job creation." OECD Science, Technology and Industry Policy Papers No. 14, May 21, 2014. http://www.oecd-ilibrary.org/science-and-technology/the-dynamics-of-employment-growth_5jz417hj6hg6-en.


Source:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 249-56.

(Note: bracketed letter in original.)






April 16, 2015

Occupational Licensing Creates Cartels



(p. 251) Aaron Edlin and Rebecca Haw discuss "Cartels by Another Name: Should Licensed Occupations Face Antitrust Scrutiny?" "Once limited to a few learned professions, licensing is now required for over 800 occupations. And once limited to minimum educational requirements and entry exams, licensing board restrictions are now a vast, complex web of anticompetitive rules and regulations. . . . State-level occupational licensing is on the rise. In fact, it has eclipsed unionization as the dominant organizing force of the U.S. labor market. While unions once claimed 30% of the country's working population, that figure has since shrunk to below 15%. Over the same period of time, the number of workers subject to state-level licensing requirements has doubled; today, 29% of the U.S. workforce is licensed and 6% is certified by the government. The trend has important ramifications. Conservative estimates suggest that licensing raises consumer prices by 15%. There is also evidence that professional licensing increases the wealth gap; it tends to raise the wages of those already in high-income occupations while harming low-income consumers who cannot afford the inflated prices." "We contend that the state action doctrine should not prevent antitrust suits against state licensing boards that are comprised of private competitors deputized to regulate and to outright exclude their own competition, often with the threat of criminal sanction." University of Pennsylvania Law Review, April 2014, pp. 1093-1164. http://www.pennlawreview.com/print/162-U-Pa-L-Rev-1093.pdf.


Source:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 249-56.

(Note: ellipsis in original.)






April 15, 2015

New Evidence on the Antikythera Mechanism




The Antikythera Mechanism was recovered in about 1901 and is believed to date from about 200 BC. Its complicated gear mechanism is believed to have been used to generate calendars or predict astronomical events. The technology never spread to benefit ordinary people. It was forgotten and mechanical gears had to be re-invented.

The Antikythera Mechanism raises a question: how is it that technologies with the potential to benefit humankind can fail to be adopted? This issue of the causes of technology adoption is an important issue for economic growth.



(p. D3) A riddle for the ages may be a small step closer to a solution: Who made the famed Antikythera Mechanism, the astronomical calculator that was raised from an ancient shipwreck near Crete in 1901?


. . .


. . . a new analysis of the dial used to predict eclipses, which is set on the back of the mechanism, provides . . . another clue to one of history's most intriguing puzzles. Christián C. Carman, a science historian at the National University of Quilmes in Argentina, and James Evans, a physicist at the University of Puget Sound in Washington, suggest that the calendar of the mysterious device began in 205 B.C., just seven years after Archimedes died.


. . .


Starting with the ways the device's eclipse patterns fit Babylonian eclipse records, the two scientists used a process of elimination to reach a conclusion that the "epoch date," or starting point, of the Antikythera Mechanism's calendar was 50 years to a century earlier than had been generally believed.


. . .


. . . Archimedes was killed by a Roman soldier in 212 B.C., while the commercial grain ship carrying the mechanism is believed to have sunk sometime between 85 and 60 B.C. The new finding suggests the device may have been old at the time of the shipwreck, but the connection to Archimedes now seems even less likely.

An inscription on a small dial used to date the Olympic Games refers to an athletic competition that was held in Rhodes, according to research by Paul Iversen, a Greek scholar at Case Western Reserve University.

"If we were all taking bets about where it was made, I think I would bet what most people would bet, in Rhodes," said Alexander Jones, a specialist in the history of ancient mathematical sciences at New York University.



For the full story, see:

JOHN MARKOFF. "On the Trail of an Ancient Mystery." The New York Times (Tues., NOV. 25, 2014): D3.

(Note: ellipses added.)

(Note: the online version of the story has the date NOV. 24, 2014.)






April 14, 2015

"The Most Celebrated Meal in American History"




(p. 328) If we are to credit Jefferson's story, the dinner held at his lodgings on Maiden Lane on June 20, 1790, fixed the future site of the capital. It is perhaps the most celebrated meal in American history, the guests including Jefferson, Madison, Hamilton, and perhaps one or two others. For more than a month, Jefferson had been bedeviled by a migraine headache, yet he presided with commendable civility. Despite his dislike of assumption, he knew that the stalemate over the funding scheme could shatter the union, and, as secretary of state, he also feared the repercussions for American credit abroad.

Madison restated his familiar argument that assumption punished Virginia and other states that had duly settled their debts. But he agreed to support assumption--or at least not oppose it--if something was granted in exchange. Jefferson recalled, "It was observed... that as the pill would be a bitter one to the southern states, something should be done to soothe them." The sedative measure was that Philadelphia would be the temporary capital for ten years, followed by a permanent move to a Potomac site. In a lucrative concession for his home state, Madison also seems to have extracted favorable treatment for Virginia in a final debt settlement with the central government. In return, Hamilton agreed to exert his utmost efforts (p. 329) to get the Pennsylvania congressional delegation to accept Philadelphia as the provisional capital and a Potomac site as its permanent successor.

The dinner consecrated a deal that was probably already close to achievement. The sad irony was that Hamilton, the quintessential New Yorker, bargained away the city's chance to be another London or Paris, the political as well as financial and cultural capital of the country. His difficult compromise testified to the transcendent value he placed on assumption. The decision did not sit well with many New Yorkers. Senator Rufus King was enraged when Hamilton told him that he "had made up his mind" to jettison the capital to save his funding system. For King, Hamilton's move had been high-handed and secretive, and he ranted privately that "great and good schemes ought to succeed not by intrigue or the establishment of bad measures."



Source:

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.

(Note: ellipsis in original.)






April 13, 2015

Italian Traditional Family Stunts Individual Enterprise



(p. 15) Hooper's book, both sweeping in scope and generous with detail, makes persuasive arguments for how geography, history and tradition have shaped Italy and its citizens, for better and sometimes for worse. Roman Catholicism, for example, has indelibly conditioned Italian society, even as the Vatican's restrictions are widely ignored. Catholicism's great allowance for human frailty has translated into a great propensity for forgiveness, as evinced in the Italian justice system, but also resistance to the notion of accountability. It's a word, Hooper adds, that has no counterpart in the Italian language.


. . .


There's . . . mammismo, the propensity of young Italians to remain too closely tied to the maternal apron strings. But while "the traditional family has been at the root of much of what Italy has achieved," Hooper writes, dependence on the family can infantilize, and lack of individual enterprise has held the country back. Indeed, various sections of Hooper's book return to Italy's economic decline and its underlying causes.

He notes that the paperwork and formalities of Italy's cumbersome bureaucracy rob the average Italian of 20 days a year. And he wonders what other country could ever have had a Minister for Simplification to deal with its plethora of often conflicting laws and regulations.

Circumventing some of that bureaucracy partly answers another common question: Why is Italy so prone to corruption? After all, Italians are masters at sidestepping regulations, or, as the saying goes, "Fatta la legge, trovato l'inganno" ("Make the law, then find a way around it"). It's no wonder foreign investment in Italy is so low.



For the full review, see:

LISABETTA POVOLEDO. "Under the Italian Sun." The New York Times Book Review (Sun., March 1, 2015): 15.

(Note: ellipses added; italics in original.)

(Note: the online version of the review has the date FEB. 27, 2015, and has the title "'The Italians,' by John Hooper.")


The book under review is:

Hooper, John. The Italians. New York: Viking, 2015.






April 12, 2015

For Some, Apprenticeships Could Be Less Expensive Path to Good Jobs



(p. 250) Melissa S. Kearney and Benjamin H. Harris have edited an e-book, Policies to Address Poverty in America, with 14 short essays on specific policies. As one example, Robert I. Lerman advocates "Expanding Apprenticeship Opportunities in the United States." "Today apprentices make up only 0.2 percent of the U.S. labor force, far less than in Canada (2.2 percent), Britain (2.7 percent), and Australia and Germany
(3.7 percent). . . . While total annual government funding for apprenticeship in the United States is only about $100 to $400 per apprentice, federal, state, and local annual government spending per participant for two-year public colleges is approximately $11,400. Not only are government outlays sharply higher, but the cost differentials are even greater after accounting for the higher earnings (and associated taxes) of apprentices compared to college students." "Stimulating a sufficient increase in apprenticeship slots is the most important challenge. Although it is easy to cite examples of employer reluctance to train, the evidence from South Carolina and Britain suggests that a sustained, business-oriented marketing effort can persuade a large number of employers to participate in apprenticeship training. Both programs (p. 251) were able to more than quadruple apprenticeship offers over about five to six years." Hamilton Project, Brookings Institution. 2014, http://www.brookings.edu/~/media/research/files/papers/2014/06/19_hamilton_policies_addressing_poverty/policies_address_poverty_in_america_full_book.


Source:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 249-56.

(Note: ellipsis in original.)






April 10, 2015

In Hamilton's Financial System the "Cogs and Wheels Meshed Perfectly Together"




(p. 302) Much later, Daniel Webster rhapsodized about Hamilton's report as follows: "The fabled birth of Minerva from the brain of Jove was hardly more sudden or more perfect than the financial system of the United States as it burst forth from the conception of Alexander Hamilton." This was the long view of history and of many contemporaries, but detractors were immediately vocal. They were befuddled by the complexity of Hamilton's plan and its array of options for creditors. Opponents sensed that he was moving too fast, on too many fronts, for them to grasp all his intentions. He had devised his economic machinery so cunningly that its cogs and wheels meshed perfectly together. One could not tamper with the parts without destroying the whole. Hamilton later said of this ingenious structure, "Credit is an entire thing. Every part of it has the nicest sympathy with every other part. Wound one limb and the whole tree shrinks and decays."


Source:

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.

(Note: italics in original.)






April 9, 2015

Federal Government Main Cause of 2008 Financial Crisis



(p. A11) How much did the federal government contribute to the financial crisis? The question is quantitative, and the answer requires the kind of number crunching and careful thinking than cannot fit into an op-ed or television interview. Peter J. Wallison 's "Hidden in Plain Sight," is the book that answers the question most meticulously of any written since 2008.

At this point, seven years on, most readers of this newspaper will recognize that the federal government's role has been to force American taxpayers to subsidize trillions of dollars of risky lending. But each reader of Mr. Wallison's book will come away a bit embarrassed at having neglected or forgot about one or more of Washington's many contributions to the financial crisis.


. . .


In my opinion, a financial crisis is not only a likely consequence of implicit subsidies for risky lending but a necessary one because that is when implicit guarantees ultimately become real-life bailouts and trigger the taxpayer payments necessary to fund Washington's longstanding lending goals. Mr. Wallison gives taxpayers the inside story of how housing policy was like a siphon hidden inside their wallets--and why it hurt so much.



For the full review, see:

CASEY B. MULLIGAN. "BOOKSHELF; Capitol Hill Pickpockets; Risky loans made by Fannie and Freddie were the biggest factor that led to the financial crisis--and the direct result of federal policy." The Wall Street Journal (Weds., Feb. 25, 2015): A11.

(Note: ellipsis added.)

(Note: the online version of the review has the date Feb. 24, 2015.)


The book under review is:

Wallison, Peter J. Hidden in Plain Sight: What Really Caused the World's Worst Financial Crisis and Why It Could Happen Again. New York: Encounter Books, 2015.






April 8, 2015

Annual Benefits of NAFTA: Canada $50 Billion, United States $127 Billion, Mexico $170 Billion



(p. 249) Gary Clyde Hufbauer, Cathleen Cimino, and Tyler Moran evaluate "NAFTA at 20: Misleading Charges and Positive Achievements." . . . "Ample econometric evidence documents the substantial payoff from expanded two-way trade in goods and services. Through multiple channels, benefits flow both from larger exports and larger imports. . . . The (p. 250) channels include more efficient use of resources through the workings of comparative advantage, higher average productivity of surviving firms through 'sifting and sorting,' and greater variety of industrial inputs and household goods. . . . As a rough rule of thumb, for advanced nations, like Canada and the United States, an agreement that promotes an additional $1 billion of two-way trade increases GDP by $200 million. For an emerging country, like Mexico, the payoff ratio is higher: An additional $1 billion of two-way trade probably increases GDP by $500 million. Based on these rules of thumb, the United States is $127 billion richer each year thanks to 'extra' trade growth, Canada is $50 billion richer, and Mexico is $170 billion richer. For the United States, with a population of 320 million, the pure economic payoff is almost $400 per person." Peterson Institute for International Economics, May 2014, Number PB14-13. http://www.piie.com/publications/pb/pb14-13.pdf.


Source:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 249-56.

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






April 7, 2015

"Red Tape Is Good for the Government but Not for Us Chinese People"



(p. A8) China's seven million public servants have long been a target of scorn by citizens who accuse them of endemic laziness and corruption. Last year, a municipal water official in Hebei Province with a history of turning off the taps of customers who refused to pay kickbacks -- including an entire village -- was detained after investigators found $20 million hidden in his home.

In the southwestern province of Yunnan, officials at a local land reclamation bureau often leave for lunch around 10:30 a.m., returning after 3 p.m. "It simply gets too hot to do any work," Pan Yuwen, an agricultural adviser, said one rainy day last month when the temperature was a less-than-sultry 60 degrees Fahrenheit.

But more than lackadaisical bureaucrats, it is the head-spinning tangle of regulations that infuriates many ordinary Chinese. At the heart of their ire is the hukou, or family registration, an onerous system akin to an internal passport that often tethers services like public education, subsidized health care and pensions to a Chinese citizen's parents' birthplace -- even if he or she never lived there.


. . .


One recent afternoon, Li Ying, 39, sat in a fluorescent-lit Beijing government office, waiting for her number to be called so she could apply for a temporary residence permit that would allow her 6-year-old son to enroll in school.

Although Ms. Li moved to Beijing with her parents as a child in 1981, her hukou is registered in a distant town, meaning her son will be shut out of the city's public schools without the permit.

Among the 14 required documents, Ms. Li must provide her hukou certificate, proof of residence, a diploma, a job contract, a marriage license, her husband's identity card, his hukou, a certificate proving that she has only one child and a company document detailing her work performance and tax payments.

"What a headache," she said, a pile of paperwork balanced on her lap. "Red tape is good for the government but not for us Chinese people."



For the full story, see:

DAN LEVIN. "China's Middle Class Chafes Against Maze of Red Tape." The New York Times (Sat., MARCH 14, 2015): A4 & A8.

(Note: ellipsis added.)

(Note: the online version of the story has the date MARCH 13, 2015.)







April 6, 2015

"He Used the Rich for a Purpose that Was Greater than Their Riches"




(p. 299) Hamilton's interest was not in enriching creditors or cultivating the privileged class so much as in insuring the government's stability and survival. Walter Lippmann later said of Hamilton, "He used the rich for a purpose that was greater than their riches."


Source:

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.






April 5, 2015

Railroad Regulation Helped Kill Passenger Service



(p. 1179) By 1970, passenger service was a not only losing money, but had deteriorated to such an extent that it was no more the elegant transportation mode as it once was. No more were the Hollywood stars long distance rail passengers. No more movies like "North by Northwest," which featured the New York Central's Twentieth Century Limited service from New York to Chicago. The book highlights the factors causing the decline of private rail passenger service and the creation of AMTRAK. The authors cite ICC regulation, the growth in alternative modes, which were heavily subsidized, the mix of freight and passenger service on the same lines, and public policy, which favored the airline industry.


. . .

One public policy that government got right is deregulation. This started with the 3R Act, then the 4R Act and then the Staggers Rail Act of 1980, which had a massive impact on the industry. Deregulation culminated in the ICC Elimination Act, in which the ICC was replaced by the Surface Transportation Board--or STB--with substantially diminished regulatory power. Gallamore worked in government when much of this legislation was passed and gives a firsthand account of the debates that took place in Congressional (p. 1180) hearings and the discussions in and out of government on the merits of deregulation.

In the concluding chapter of the over 500-page book, entitled "Decline and Renaissance of American Railroads in the Twentieth Century" the authors provide a summary of the history of the railroads and the lessons for public policy in the future. This chapter is such a great summary, that the reader may be best off starting with it, before reading the book. But don't forget the afterword, which provides the authors' recommendations for future U.S. policies for the railroads. It is a very insightful chapter.


. . .


American Railroads should be on the reading list of economists interested in transportation and logistics, economic historians, government officials, and rail fans who would like to know more about the history of the railroads in the twentieth century, and are interested in understanding the economics of the industry and the problems of government regulation. Gallamore and Meyer, at the end of the book, sum up why it should be read:

This book's authors love railroads because they have a great history, fascinating operations, intriguing technology and untold opportunity for the future, but we also love them because no other enterprises illustrate elegant economic principles quite so well (p. 435).


For the full review, see:

Pagano, Anthony M. "American Railroads: Decline and Renaissance in the Twentieth Century." Journal of Economic Literature 52, no. 4 (Dec. 2014): 1178-80.

(Note: ellipses added.)


The book under review is:

Gallamore, Robert E., and John R. Meyer. American Railroads: Decline and Renaissance in the Twentieth Century. Cambridge, MA: Harvard University Press, 2014.






April 4, 2015

Heckman Thinks that Economists Who Are Only Economists May Be Dangerous




The Journal of Political Economy, edited by the University of Chicago economics department, is one of the three or four most prestigious journals in the economics profession. For the last 20 years or so (if memory serves) the back cover of each issue has had a funny quote or interesting or unusual anecdote, related to some aspect of economics.

I was surprised to see that the quote from the October 2014 issue as "suggested by James J. Heckman." Heckman is a Nobel-Prize-winner who is known mainly for developing new econometric techniques in the area of labor economics. When I was a graduate student at Chicago, his graduate students tended to be among those who were most oriented to formalism and technique. So I was surprised to see that he had suggested the following quote from neo-Austrian economist and fellow Nobel-Prize-winner F.A. Hayek:



(p. 463) But nobody can be a great economist who is only an economist---and I am even tempted to add that the economist who is only an economist is likely to become a nuisance if not a positive danger.


Source:

Hayek, F. A. "The Dilemma of Specialization." In The State of the Social Sciences, edited by Leonard D. White. Chicago: University of Chicago Press, 1956.

(Note: I do not have the book, and cannot find the page range of Hayek's article in the book.)






April 3, 2015

Chinese Communists Crush Innovative Entrepreneurs by Banning Open Internet



(p. A1) BEIJING -- Jing Yuechen, the founder of an Internet start-up here in the Chinese capital, has no interest in overthrowing the Communist Party. But these days she finds herself cursing the nation's smothering cyberpolice as she tries -- and fails -- to browse photo-sharing websites like Flickr and struggles to stay in touch with the Facebook friends she has made during trips to France, India and Singapore.

Gmail has become almost impossible to use here, and in recent weeks the authorities have gummed up Astrill, the software Ms. Jing and countless others depended on to circumvent the Internet restrictions that Western security analysts refer to as the Great Firewall.

By interfering with Astrill and several other popular virtual private networks, or V.P.N.s, the government has complicated the lives of Chinese astronomers seeking the latest scientific data from abroad, graphic designers shopping for clip art on Shutterstock and students submitting online applications to American universities.

If it was legal to protest and throw rotten eggs on the street, I'd definitely be up for that," Ms. Jing, 25, said.

China has long had some of the world's most onerous Internet restrictions. But until now, the authorities had effectively tolerated the proliferation of V.P.N.s as a lifeline for millions of people, from archaeologists to foreign investors, who rely heavily on less-fettered access to the Internet.

But earlier this week, after a number of V.P.N. companies, including StrongVPN and Golden Frog, complained that the Chi-(p. A6)nese government had disrupted their services with unprecedented sophistication, a senior official for the first time acknowledged its hand in the attacks and implicitly promised more of the same.

The move to disable some of the most widely used V.P.N.s has provoked a torrent of outrage among video artists, entrepreneurs and professors who complain that in its quest for so-called cybersovereignty -- Beijing's euphemism for online filtering -- the Communist Party is stifling the innovation and productivity needed to revive the Chinese economy at a time of slowing growth.

"I need to stay tuned into the rest of the world," said Henry Yang, 25, the international news editor of a state-owned media company who uses Facebook to follow American broadcasters. "I feel like we're like frogs being slowly boiled in a pot."


. . .


The vast majority of Chinese Internet users, especially those not fluent in English and other foreign languages, have little interest in vaulting the digital firewall. But those who require access to an unfiltered Internet are the very people Beijing has been counting on to transform the nation's low-end manufacturing economy into one fueled by entrepreneurial innovation.


. . .


Avery Goldstein, a professor of contemporary Chinese studies at the University of Pennsylvania, said the growing online constraints would not only dissuade expatriates from relocating here, but could also compel ambitious young Chinese studying abroad to look elsewhere for jobs.

"If they aren't able to get the information to do their jobs, the best of the best might simply decide not to go home," he said.

For those who have already returned to China and who crave membership in an increasingly globalized world, the prospect of making do with a circumscribed Internet is dispiriting. Coupled with the unrelenting air pollution and the crackdown on political dissent, a number of Chinese said the blocking of V.P.N.s could push them over the edge.

"It's as if we're shutting down half our brains," said Chin-Chin Wu, an artist who spent almost a decade in Paris and who promotes her work online. "I think that the day that information from the outside world becomes completely inaccessible in China, a lot of people will choose to leave."



For the full story, see:

ANDREW JACOBS. "China Further Tightens Grip on the Internet." The New York Times (Fri., JAN. 30, 2015): A1 & A12.

(Note: ellipses added.)

(Note: the online version of the story has the date JAN. 29, 2015.)






April 2, 2015

Hamilton Thought "Contracts Formed the Basis of Public and Private Morality"




(p. 297) Hamilton argued that the security of liberty and property were inseparable and that governments should honor their debts because contracts formed the basis of public and private morality: "States, like individuals, who observe their engagements are respected and trusted, while the reverse is the fate of those who pursue an opposite conduct." The proper handling of government debt would permit America to borrow at affordable interest rates and would also act as a tonic to the economy. Used as loan collateral, government bonds could function as money--and it was the scarcity of money, Hamilton observed, that had crippled the economy and resulted in severe deflation in the value of land. America was a young country rich in opportunity. It lacked only liquid capital, and government debt could supply that gaping deficiency.

The secret of managing government debt was to fund it properly by setting aside revenues at regular intervals to service interest and pay off principal. Hamilton refuted charges that his funding scheme would feed speculation. Quite the contrary: if investors knew for sure that government bonds would be paid off, the prices would not fluctuate wildly, depriving speculators of opportunities to exploit. What mattered was that people trusted the government to make good on repayment: "In nothing are appearances of greater moment than in whatever regards credit. Opinion is the soul of it and this is affected by appearances as well as realities." Hamilton intuited that public relations and confidence building were to be the special burdens of every future treasury secretary.



Source:

Chernow, Ron. Alexander Hamilton. New York: The Penguin Press, 2004.






April 1, 2015

Is There "a Fortune to Be Made" in Selling to the Poor?



(p. B1) For years, multinational companies had little interest in lower-end consumers, figuring no money was to be made. Now, they are increasingly attractive to all types of industries, from consumer product makers to technology businesses. Google just announced plans to sell a stripped-down, cheaper version of its Android phone in India.

A decade ago, C. K. Prahalad, a University of Michigan business professor, in his book "The Fortune at the Bottom of the Pyramid," detailed the potential, contending that such households were every bit as discriminating and aspirational as their counterparts at the other end of the income spectrum.

Mr. Prahalad, now dead, estimated there were four billion such consumers in a market worth $13 trillion. "People were saying, 'There's a fortune to be made. Let's go,' " said Mark B. Milstein, director of the Cen-(p. B6)ter for Sustainable Global Enterprise at Cornell University.

But many of the first efforts failed. "There was not much thinking about what those consumers needed or wanted or how they might be different from consumers with more disposable income," Mr. Milstein said.



For the full story, see:

STEPHANIE STROM. "Billions of Buyers." The New York Times (Thurs., Sept. 18, 2014): B1 & B6.

(Note: the online version of the story has the date SEPT. 17, 2014, and has the title "Multinational Companies Court Lower-Income Consumers.")


The book highlighted in the passage quoted is:

Prahalad, C. K. Fortune at the Bottom of the Pyramid Eradicating Poverty through Profits. Revised ed. Philadelphia, PA: Wharton School Publishing, 2009.






March 30, 2015

How a Chavista Uses Her Chávez T-Shirt



(p. A1) CARACAS, Venezuela -- Mary Noriega heard there would be chicken.

She hated being herded "like cattle," she said, standing for hours in a line of more than 1,500 people hoping to buy food, as soldiers with side arms checked identification cards to make sure no one tried to buy basic items more than once or twice a week.

But Ms. Noriega, a laboratory assistant with three children, said she had no choice, ticking off the inventory in her depleted refrigerator: coffee and corn flour. Things had gotten so bad, she said, that she had begun bartering with neighbors to put food on the table.

"We always knew that this year would start badly, but I think this is super bad," Ms. Noriega said.

Venezuelans have put up with shortages and long lines for years. But as the price of oil, the country's main export, has plunged, the situation has grown so dire that the government has sent troops to patrol huge lines snaking for blocks. Some states have barred people from waiting outside stores overnight, and government officials are posted near entrances, ready to arrest shoppers who cheat the rationing system.


. . .


One of the nation's most prestigious public hospitals shut down its heart surgery unit for weeks (p. A12) because of shortages of medical supplies. Some drugs have been out of stock for months, and at least one clinic performed heart operations only by smuggling in a vital drug from the United States. Diapers are so coveted that some shoppers carry the birth certificates of their children in case stores demand them.


. . .


The shortages and inflation present another round of political challenges for President Nicolás Maduro, who has vowed to continue the Socialist-inspired revolution begun by his predecessor, the charismatic leftist Hugo Chávez.

"I've always been a Chavista," said Ms. Noriega, using a term for a loyal Chávez supporter. But "the other day, I found a Chávez T-shirt I'd kept, and I threw it on the ground and stamped on it, and then I used it to clean the floor. I was so angry. I don't know if this is his fault or not, but he died and left us here, and things have been going from bad to worse."



For the full commentary, see:

WILLIAM NEUMAN. "Oil Cash Waning, Venezuelan Shelves Lie Bare." The New York Times (Fri., JAN. 30, 2015): A1 & A12.

(Note: ellipses added.)

(Note: the online version of the commentary has the date JAN. 29, 2015.)






March 28, 2015

Most of Benefits of Minimum Wage Increases Do Not Go to the Poor



(p. A11) A higher minimum wage raises wages of low-wage workers, and even though most evidence points to job losses from higher minimum wages, the evidence doesn't point to widespread employment declines. Thus, consistent with a recent Congressional Budget Office report, many more low-wage workers will get a raise than will lose their jobs. But that argument is about low-wage workers, not low-income families. Minimum wages are ineffective at helping poor families because such a small share of the benefits flow to them.

One might think that low-wage workers and low-income families are the same. But data from the U.S. Census Bureau show that there is only a weak relationship between being a low-wage worker and being poor, for three reasons.

First, many low-wage workers are in higher-income families--workers who are not the primary breadwinners and often contribute a small share of their family's income. Second, some workers in poor families earn higher wages but don't work enough hours. And third, about half of poor families have no workers, in which case a higher minimum wage does no good. This is simple descriptive evidence and is not disputed by economists.

A historical perspective is instructive. Assembling Census Bureau data over nearly seven decades, Richard Burkhauser and Joseph Sabia have shown that in 1939, just after the federal minimum wage was established, 85% of low-wage workers (those earning less than one-half the private-sector wage) were in poor families. Such a high percentage implies that, in that year, the new minimum wage targeted poor families well. However, as the public safety net expanded, family structure changed and more people in families began working, this percentage fell sharply over time--to around 17% by the early 2000s.

In contrast, as of the early 2000s 34% of low-wage workers were in families that were far from poor, with incomes more than three times the poverty line. In other words, for every poor minimum-wage worker who might directly benefit from the minimum wage, two workers in families with incomes more than three times the poverty line would benefit.



For the full commentary, see:

DAVID NEUMARK. "Who Really Gets the Minimum Wage; Obama's $10.10 target would steer only 18% of the benefits to poor families; 29% would go to families with incomes three times the poverty level." The New York Times (Mon., July 7, 2014): A11.

(Note: the online version of the commentary has the date July 6, 2014.)


For more of Neumark on minimum wages, see:

Neumark, David, and William L. Wascher. Minimum Wages. Cambridge, MA: The MIT Press, 2008.






March 27, 2015

Recovery Slows When Start-Ups Are Taxed to Pay for Bailouts of Failed Firms




Vernon Smith, whose views are quoted below, won the Nobel Prize in economics in 2002.



(p. A11) The rescue of incumbent investors in the government bailout of the largest U.S. banks in the autumn of 2008 has been widely viewed as unfair, as indeed it was in applying different rules to different players. . . .


. . .


The rescue, . . . , had a hidden cost for the economy that is difficult to quantify but can be crippling. New economic activity is hobbled if it is not freed from the burden of sharing its return with investors who bore risks that failed. The demand for new economic activity is enlarged when its return does not have to be shared with former claimants protected from the consequences of their risk-taking. This is the function of bankruptcy in an economic system organized on loss as well as profit principles of motivation.


. . .


Growth in both employment and output depends vitally on new and young companies. Unfortunately, U.S. firms face exceptionally high corporate income-tax rates, the highest in the developed world at 35%, which hobbles growth and investment. Now the Obama administration is going after firms that reincorporate overseas for tax purposes. Last week Treasury Secretary Jack Lew wrote a letter to the chairman of the House Ways and Means Committee urging Congress to "enact legislation immediately . . . to shut down this abuse of our tax system."

This is precisely the opposite of what U.S. policy makers should be doing. To encourage investment, the U.S. needs to lower its corporate rates by at least 10 percentage points and reduce the incentive to escape the out-of-line and unreasonably high corporate tax rate. Ideally, since young firms generally reinvest their profits in production and jobs, such taxes should fall only on business income after it is paid out to individuals. As long as business income is being reinvested it is growing new income for all.

There are no quick fixes. What we can do is reduce bureaucratic and tax barriers to the emergence and growth of new economic enterprises, which hold the keys to a real economic recovery.



For the full commentary, see:

VERNON L. SMITH. "The Lingering, Hidden Costs of the Bank Bailout; Why is growth so anemic? New economic activity has been discouraged. Here are some ways to change that." The Wall Street Journal (Thurs., July 24, 2014): A11.

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

(Note: the online version of the commentary has the date July 23, 2014.)






March 20, 2015

Moral Progress Accelerated in the 18th Century



(p. A11) For hundreds of years, people flocked to public hangings as a form of entertainment. Onlookers crowded into town squares and brought their families, reveling in the carnival atmosphere. Today most people are sickened at the idea of merriment at an execution. (Many are disturbed that executions take place at all.) We recoil from other once-common practices, too: slavery, the mistreatment of children, animal cruelty. Such shifts in attitude or belief surely constitute a form of moral progress and suggest, for once, that civilization is advancing and not receding.


. . .


Mr. Shermer defines moral progress as an "increase in the survival and flourishing of sentient beings," which he illustrates with graphs and charts that reveal, among other things, a decline in war-related deaths, the expansion of the food supply, the reduction in major epidemics, the growth of world GDP and the spread of democracy.

Humanitarian achievements in the West, Mr. Shermer notes, began in earnest [in] the 18th century. Yet the ability to reason ethically is not a product of the Enlightenment. A moral instinct seems to be present at birth: Even infants possess innate intuitions about fairness and reciprocity, as Mr. Shermer explains. All societies punish free riders. The Golden Rule and Babylon's Code of Hammurabi (advocating proportionate punishment) predate the ancient Greeks. So why did we need an Enlightenment to jump-start our moral progress?



For the full review, see:

SALLY SATEL. "BOOKSHELF; Getting Better All the Time; Crowds once flocked to watch executions. Now we recoil at the idea. What causes such transformations of ethical standards?" The Wall Street Journal (Tues., Jan. 20, 2015): A11.

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

(Note: the online version of the review has the date Jan. 19, 2015.)


The book under review is:

Shermer, Michael. The Moral Arc: How Science and Reason Lead Humanity toward Truth, Justice, and Freedom. New York: Henry Holt and Co., 2015.






March 19, 2015

Over-Regulation Could Stifle Drones' Potential to Revolutionize Our Lives



(p. A15) In the early days of the automobile, Vermont enacted a law requiring someone to walk one-eighth of a mile in front of every car and wave a red flag to warn pedestrians. Iowa directed all motorists to call ahead to warn each town on their route that they were coming. Some jurisdictions set speed limits so low that drivers who obeyed them risked having their engines stall.

Those laws seem humorously quaint, but if they had been widely adopted and enforced, the automobile revolution might have been shut down and its manifold benefits denied to millions. Today over-regulation could stifle the development of drones, which have the potential to revolutionize many parts of the economy and our everyday lives.

To cite a few examples: Amazon hopes to launch Prime Air, which would use drones to deliver packages in less than 30 minutes after an order is placed. Texas Equusearch, which organizes missing-person recovery efforts, can replace the labor of 100 volunteers with one drone. Clayco Inc., a construction firm, intends to use drones for aerial imaging of construction projects--replacing either helicopters, which burn fossil fuels and can be dangerous to those below, or construction workers, who risk serious injury through falls when they must climb to reach high, hard-to-reach places to take photos.



For the full commentary, see:

JOSEPH R. PALMORE and CHRISTOPHER J. CARR. "Overregulated Drones Struggle for Take-Off; The FAA has been slow and stuck in the past--precisely what the technology is not." The Wall Street Journal (Mon., Feb. 23, 2015): A15.

(Note: the online version of the commentary has the date Feb. 22, 2015,)






March 18, 2015

Technology Getting Bum Rap for Job Woes




The job market has been anemic in a variety of ways, for several years. Some, as below, want to pin this on the advance of technology. I argue, to the contrary, that it is mainly due to our discouraging start-ups by bad policies (such as over-regulating and over-taxing). Start-ups, as Haltiwanger and his colleagues have been showing, are the main source of new jobs.



(p. A1) Lawrence H. Summers, the former Treasury secretary, recently said that he no longer believed that automation would always create new jobs. "This isn't some hypothetical future possibility," he said. "This is something that's emerging before us right now."

Erik Brynjolfsson, an economist at M.I.T., said, "This is the biggest challenge of our society for the next decade."

Mr. Brynjolfsson and other experts say they believe that society has a chance to meet the challenge in ways that will allow technology to be mostly a positive force. In addition to making some jobs obsolete, new technologies have also long complemented people's skills and enabled them (p. A3) to be more productive -- as the Internet and word processing have for office workers or robotic surgery has for surgeons.

More productive workers, in turn, earn more money and produce goods and services that improve lives.

"It is literally the story of the economic development of the world over the last 200 years," said Marc Andreessen, a venture capitalist and an inventor of the web browser. "Just as most of us today have jobs that weren't even invented 100 years ago, the same will be true 100 years from now."


. . .


There are certain human skills machines will probably never replicate, like common sense, adaptability and creativity, said David Autor, an economist at M.I.T. Even jobs that become automated often require human involvement, like doctors on standby to assist the automated anesthesiologist, called Sedasys.


. . .


Whether experts lean toward the more pessimistic view of new technology or the most optimistic one, many agree that the uncertainty is vast. Not even the people who spend their days making and studying new technology say they understand the economic and societal effects of the new digital revolution.

When the University of Chicago asked a panel of leading economists about automation, 76 percent agreed that it had not historically decreased employment. But when asked about the more recent past, they were less sanguine. About 33 percent said technology was a central reason that median wages had been stagnant over the past decade, 20 percent said it was not and 29 percent were unsure.

Perhaps the most worrisome development is how poorly the job market is already functioning for many workers. More than 16 percent of men between the ages of 25 and 54 are not working, up from 5 percent in the late 1960s; 30 percent of women in this age group are not working, up from 25 percent in the late 1990s. For those who are working, wage growth has been weak, while corporate profits have surged.



For the full story, see:

Claire Cain Miller. "Rise of Robot Work Force Stokes Human Fears." The New York Times (Tues., DEC. 16, 2014): A1 & A3.

(Note: ellipses are added.)

(Note: the online version of the story has the date DEC. 15, 2014, and has the title "As Robots Grow Smarter, American Workers Struggle to Keep Up.")


A relevant Haltiwanger paper is:

Haltiwanger, John C., Ron S. Jarmin, and Javier Miranda. "Who Creates Jobs? Small Vs. Large Vs. Young." Review of Economics and Statistics 95, no. 2 (May 2013): 347-61.






March 16, 2015

Fishing with Mosquito Nets, Where Food Is the Binding Constraint



(p. 1) BANGWEULU WETLANDS, Zambia -- Out here on the endless swamps, a harsh truth has been passed down from generation to generation: There is no fear but the fear of hunger.

With that always weighing on his mind, Mwewa Ndefi gets up at dawn, just as the first orange rays of sun are beginning to spear through the papyrus reeds, and starts to unclump a mosquito net.

Nets like his are widely considered a magic bullet against malaria -- one of the cheapest and most effective ways to stop a disease that kills at least half a million Africans each year. But Mr. Ndefi and countless others are not using their mosquito nets as global health experts have intended.

Nobody in his hut, including his seven children, sleeps under a net at night. Instead, Mr. Ndefi has taken his family's supply of anti-malaria nets and sewn them together into a gigantic sieve that he uses to drag the bottom of the swamp ponds, sweeping up all sorts of life: baby catfish, banded tilapia, tiny mouthbrooders, orange fish eggs, water bugs and the occasional green frog.

"I know it's not right," Mr. Ndefi said, "but without these nets, we wouldn't eat."

Across Africa, from the mud flats of Nigeria to the coral reefs off Mozambique, mosquito-net fishing is a growing problem, an unintended consequence of one of the biggest and most celebrated public health campaigns in recent years.

The nets have helped save millions of lives, but scientists worry about the collateral damage: Africa's fish.


. . .


"The nets go straight out of the bag into the sea," said Isabel Marques da Silva, a marine biologist at Universidade Lúrio in Mozambique. "That's why the inci-(p. 10)dence for malaria here is so high. The people don't use the mosquito nets for mosquitoes. They use them to fish."

But the unsparing mesh, with holes smaller than mosquitoes, traps much more life than traditional fishing nets do. Scientists say that could imperil already stressed fish populations, a critical food source for millions of the world's poorest people.


. . .


In many places, fish are dried for hours in direct sunlight on treated mosquito nets. Direct sunlight can break down the insecticide coating. Anthony Hay, an associate professor of environmental toxicology at Cornell University, said fish could absorb some of the toxins, leaving people to ingest them when they eat the fish.

"It's just another one of these 'white man's burdens,' " Mr. Hay said, referring to William Easterly's well-known book critical of foreign aid by the West. "We think we have a solution to everybody's problems, and here's an example of where we're creating a new problem."


. . .


For Mr. Ndefi, it is a simple, if painful, matter of choice. He knows all too well the dangers of malaria. His own toddler son, Junior, died of the disease four years ago. Junior used to always be there, standing outside his hut, when Mr. Ndefi came home from fishing.

Mr. Ndefi hopes his family can survive future bouts of the disease. But he knows his loved ones will not last long without food.



For the full story, see:

JEFFREY GETTLEMAN. "Meant to Keep Mosquitos Out, Nets Are Used to Haul Fish In." The New York Times, First Section (Sun., JAN. 25, 2015): 1 & 10.

(Note: ellipses are added.)

(Note: the online version of the story has the date JAN. 24, 2015, and has the title "Meant to Keep Malaria Out, Mosquito Nets Are Used to Haul Fish In.")


The book referenced by Professor Hay, is:

Easterly, William. The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good. New York: The Penguin Press, 2006.






March 11, 2015

Occupational Licensing Raises Costs for Consumers and Reduces Jobs



(p. B1) What lesson should we draw from the success of Uber?

Customers have flocked to its service. In the final three months of last year, its so-called driver-partners made $656.8 million, according to an analysis of Uber data released last week by the Princeton economist Alan B. Krueger, who served as President Obama's chief economic adviser during his first term, and Uber's Jonathan V. Hall.

Drivers like it, too. By the end of last year, the service had grown to over 160,000 active drivers offering at least four drives a month, from near zero in mid-2012. And the analysis by Mr. Krueger and Mr. Hall suggests they make at least as much as regular taxi drivers and chauffeurs, on flexible hours. Often, they make more.

This kind of exponential growth confirms what every New Yorker and cab riders in many other cities have long suspected: Taxi service is woefully inefficient. It also raises a question of broader relevance: Why stop here?


. . .


(p. B5) . . . like taxi medallions, state licenses required to practice all sorts of jobs often serve merely to cordon off occupations for the benefit of licensed workers and their lobbying groups, protecting them from legitimate competition.

This comes at a substantial social cost. "Lower-income people suffer from licensing," Professor Krueger told me. "It raises the costs of many services and prevents low-income people from getting into some professions."

In a study commissioned by the Brookings Institution's Hamilton Project, Morris Kleiner of the University of Minnesota found that almost three out of 10 workers in the United States need a license from state governments to do their jobs, up from one in 20 in the 1950s. By cordoning off so many occupations, he estimates, professional licensing by state governments ultimately reduces employment by up to 2.8 million jobs.



For the full commentary, see:

Eduardo Porter. "Job Licenses in Spotlight as Uber Rises." The New York Times (Weds., JAN. 28, 2015): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date JAN. 27, 2015.)



The working paper co-authored by Krueger, is:

Hall, Jonathan V., and Alan B. Krueger. "An Analysis of the Labor Market for Uber's Driver-Partners in the United States." Working paper. January 22, 2015.



Kleiner's working paper at Brookings, is:

Kleiner, Morris M. "Reforming Occupational Licensing Policies." In The Hamilton Project, Brookings, Discussion Paper 2015-01, January 2015.






March 10, 2015

Over-Taxed and Over-Regulated Castles for Sale in Italy



(p. A3) While castles and historic mansions in Italy have long been family inheritances, today dozens of them are for sale, even in one of the most conservative real estate markets in Europe.


. . .


On historic buildings, where owners used to pay little as compensation for the elevated costs of maintaining centuries-old structures, the taxes increased by 20 or 30 times, depending on the property's location.

On some buildings, taxes spiked from 3,000 euros (about $3,400) in 2011 to 75,000 euros (about $84,000) by 2013. That might be a small figure for castle dwellers in the United Kingdom, but it is a burden for Italian pockets, especially in regions where the property's market value or tourism interest is low.

The trends, to many here, are indicative of Italy's place as a country caught between its past glory and its modern difficulty in producing an innovative climate capable of ensuring its future.


. . .


. . . buyer beware: Living a nobleman's life in Italy comes at a cost, even for many tycoons. New owners face the same onerous bureaucracy as Italians to make even minimal changes to many older properties.

Under Italian law, the owner of a historic building is its custodian, bound to maintain it and grant its security and, in some cases, its use to the public. Many buyers give up on properties of great historic value, but in bad condition, for this reason, brokers said.

"This is a problem for possible investors, who want to have modern comforts like a spa, air-conditioning or a lift," said Mr. Pallavicini, of the Italian Historic Houses Association.

"We no longer live like in 1800," he added. "But 99 percent of those changes are either impossible or extremely bureaucratic and complicated in an Italian historic building."



For the full story, see:

GAIA PIANIGIANI. "PONTASSIEVE JOURNAL; Life of Italian Nobility for Sale, Complete With Regulations and Taxes." The New York Times (Weds., JAN. 28, 2015): A11.

(Note: ellipses are added.)

(Note: the online version of the story has the date JAN. 27, 2015.)






March 8, 2015

Progress Depends on Removing Barriers to Innovation




In the quotation below, Bill Gates is referring to the late, and way-under-appreciated, economist Julian Simon.



(p. A3) ". . . Simon's view was that humans would have to change to innovate," Mr. Gates said. Innovation, in other words, is not preordained. Indeed, it's happened much more in some societies than in others. And it has happened, Mr. Gates was arguing, because people and institutions took steps to remove the barriers to progress.


. . .


. . . , much of the world is enjoying one of history's most rapid increases in prosperity. Life expectancy has risen more than six years just since 1990. The world, to quote the title of a book by the economist Charles Kenny, is "Getting Better." As Mr. Gates says: "The world is actually improving a lot. We're trying to deliver both the good news on the progress and the possibility to do more."



For the full commentary, see:

David Leonhardt. "Africa's Economy Is Rising, and Focus Turns to Food." The New York Times (Thurs., JAN. 22, 2015): A3.

(Note: ellipses added.)

(Note: the online version of the commentary has the title "Africa's Economy Is Rising. Now What Happens to Its Food?")


The book mentioned by Charles Kenny is:

Kenny, Charles. Getting Better: Why Global Development Is Succeeding--and How We Can Improve the World Even More. Philadelphia, PA: Basic Books, 2011.


One of the great books by Julian Simon is:

Moore, Stephen, and Julian L. Simon. It's Getting Better All the Time: 100 Greatest Trends of the Last 100 Years. Washington, D.C.: Cato Institute, 2000.






March 4, 2015

Depression of 1920-21 Ended Quickly, Without Government Stimulus or Bailouts



(p. C3) Beginning in January 1920, something much worse than a recession blighted the world. The U.S. suffered the steepest plunge in wholesale prices in its history (not even eclipsed by the Great Depression), as well as a 31.6% drop in industrial production and a 46.6% fall in the Dow Jones Industrial Average. Unemployment spiked, and corporate profits plunged.


. . .


In the absence of anything resembling government stimulus, a modern economist may wonder how the depression of 1920-21 ever ended. Oddly enough, deflation turned out to be a tonic. Prices--and, critically, wages too--were allowed to fall, and they fell far enough to entice consumers, employers and investors to part with their money. Europeans, noticing that America was on the bargain counter, shipped their gold across the Atlantic, where it swelled the depression-shrunken U.S. money supply. Shares of profitable and well-financed American companies changed hands at giveaway valuations.

Of course, the year-and-a-half depression must have seemed interminable for all who were jobless or destitute. It was, however, a great deal shorter than the 43 months of the Great Depression of 1929-33. Then too, the 1922 recovery would bring tears of envy to today's central bankers and policy makers: Passenger-car production shot up by 63%, for instance, and the Dow jumped by 21.5%. "From practically all angles," this newspaper judged in a New Year's Day 1923 retrospective, "1922 can be recorded as the renaissance of prosperity."

In 2008, as Lehman Brothers toppled, the Great Depression monopolized the market on historical analogies. To avoid a recurrence of the 1930s, officials declared, the U.S. had to knock down interest rates, manipulate stock prices to go higher, repave the highways and trade in the clunkers.

The forgotten depression teaches a very different lesson. Sometimes the best stimulus is none at all.



For the full commentary, see:

JAMES GRANT. "The Depression Fixed by Doing Nothing; The agonizing but often forgotten 1920-21 economic crisis suggests that sometimes the best stimulus is none at all." The Wall Street Journal (Sat., Jan. 3, 2015): C3.

(Note: ellipsis added.)

(Note: the online version of the review has the date Jan. 2, 2015, and has the title "The Depression That Was Fixed by Doing Nothing; The often forgotten 1920-21 economic crisis suggests that sometimes the best stimulus is none at all.")


Grant's commentary is elaborated on in his book:

Grant, James. The Forgotten Depression: 1921, the Crash That Cured Itself. New York: Simon & Schuster, 2014.






February 25, 2015

Wall Street Democrats Question Hillary Clinton's Views on Job Creation



(p. B1) "Hillary said what?"

That was the question whispered among some of Wall Street's most prominent Democratic supporters over the weekend after Hillary Rodham Clinton spoke on the campaign trail for Martha Coakley, the Democratic candidate for governor of Massachusetts.

"Don't let anybody tell you that it's corporations and businesses that create jobs," Mrs. Clinton said on Friday in Boston.



For the full commentary, see:

ANDREW ROSS SORKIN. "Wall St. Wonders About Hillary Clinton." The New York Times (Tues., OCTOBER 28, 2014): B1 & B6.

(Note: the online version of the commentary has the date OCTOBER 27, 2014, and has the title "Hillary Clinton's Comment on Jobs Raises Eyebrows on Wall St.")






February 23, 2015

Piketty Prefers Reform Instead of Receiving Legion of Honor



(p. A16) PARIS--French economist Thomas Piketty, author of the best-selling book "Capital in the Twenty-First Century," has turned down the Legion of Honor, saying the government should focus on reviving the country's anemic economy rather than "decide who is honorable."

Mr. Piketty's refusal of one of France's highest distinctions--announced via a short declaration to the Agence France-Presse news agency--is a snub to the government a day after President François Hollande cited the global influence of French scholars as evidence of the country's unfailing might.



For the full story, see:

INTI LANDAURO. "French Economist Refuses State Honor." The Wall Street Journal (Fri., Jan. 2, 2015): A16.

(Note: the online version of the story has the date Jan. 1, 2015, and has the title "French Economist Thomas Piketty Refuses Legion of Honor.")






February 20, 2015

High Costs of Public Sector Unions



(p. A11) . . . the costs of public-sector unions are great. "The byproduct of political management of the economy is waste," the author notes. Second, pension and benefit obligations weigh down our cities. Trash disposal in Chicago costs $231 per ton, versus $74 in non-union Dallas. Increasingly, such a burden is fatal. When Detroit declared bankruptcy in 2013, a full half of the city's$18.2 billion long-term debt was owed for employee pensions and health benefits. Even before the next downturn, other cities and some states will find themselves faltering because of similarly massive obligations.

There is something grotesque about public workers fighting for benefits whose provision will hurt the public. Citizens who vote Democratic may choose not to acknowledge the perversity out of party loyalty. But over the years a few well-known Democrats have sided against the public-sector unions. "The process of collective bargaining as usually understood cannot be transplanted into the public service," a Democratic politician once declared. His name? Franklin Roosevelt.



For the full review, see:

AMITY SHLAES. "BOOKSHELF; Public Unions vs. the Public; Pension and benefit obligations weigh down our cities. Trash disposal in Chicago costs $231 per ton, versus $74 in non-union Dallas." The Wall Street Journal (Fri., Jan. 16, 2015): A11.

(Note: ellipsis added.)

(Note: the online version of the review has the date Jan. 15, 2015.)


The book under review is:

DiSalvo, Daniel. Government against Itself: Public Union Power and Its Consequences. New York: Oxford University Press, 2015.






February 18, 2015

Private Power Lights the Darkness



(p. A10) NUSEIRAT CAMP, Gaza Strip--It was just after sunset when the power went out in this Palestinian refugee camp. Within seconds, Ali al-Majdalawi flipped a switch on a blue generator in his backyard and the lights in 500 homes flickered back on again.

The 64-year-old patriarch runs what he calls the A. Majdalawi Electricity Co., a pop-up utility that consists of three generators and a spider's web of power lines radiating from an empty lot he owns in the camp.

Mr. Majdalawi has no license to operate his company. But he does have an invoice pad at the ready and boasts a long list of customers including five mosques, a library and a police station.


. . .


Along with three partners, Mr. Majdalawi, a retired school official for the U.N., invested $80,000 of their savings to buy several diesel-powered generators two years ago and set about building their own power-delivery network.

The community of about 65,000 began in 1948, the year of Israel's creation, when hundreds of families displaced by war between Jews and Arabs set up rows of temporary dwellings. Decades later, the refugees and their descendants still live here, tightly packed among schools run by the United Nations and a cemetery built into a sand dune at the center of town.

Because his company is private, Mr. Majdalawi couldn't use municipal power polls to string up lines. He and his sons asked neighbors to let them use the walls of their homes for the wiring and allow crews to come in for periodic maintenance.

In most other respects, the business runs much like any other electricity company. Customers apply to join the grid and if approved, one of Mr. Majdalawi's sons enters their names into a computer for monthly billing. Most clients request two amperes, enough to run lights, a television and a computer during blackouts. The price is 120 shekels a month, about $30.

"It is an alternate grid," explained Mr. Majdalawi's son, Rafet, the company's chief accountant.

Deya Shaheen, a 25-year-old barber, said Mr. Majdalawi's electricity has kept his year-old shop in business. The electric razors and the lights he uses to light the shop when customers drop in at night are powered on the three amperes he receives from the grid.On many nights, his shop is filled with young men looking for somewhere to watch soccer matches on television.

"Look, the power thing destroys your life," he said. "People go to bed early not because they are sleepy, but because there is no power. There is nothing to do, no TV, no Internet. It is just dark."



For the full story, see:

NICHOLAS CASEY. "Entrepreneur Fills in Gaza Electricity Gap; Palestinian Territory's One Power Plant Meets Barely a Quarter of Demand, Posing an Obstacle in Reconstruction Efforts." The Wall Street Journal (Weds., DEC. 24, 2014): A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date DEC. 23, 2014, and has the title "Entrepreneur Fills in Gaps in Gaza Electricity Supplies; Palestinian Territory's One Power Plant Meets Barely a Quarter of Demand.")






February 17, 2015

Congress Appropriates Funds to Test Concussion Theory of Rain



(p. 190) the first century A.D., when the Greek moralist Plutarch came up with the notion that rain followed military battles. Napoleon believed as much and fired cannons and guns at the sky to muddy up the ground between him and his attackers. Civil War veterans who wallowed in cold slop believed that ceaseless, close-range artillery fire had opened up the skies. In the late 1890s, as the first nesters started to dig their toeholds on the dry side of the one hundredth meridian, Congress had appropriated money to test the concussion theory in Texas. The tests were done by a man named Dyrenforth. He tried mightily, with government auditors looking over (p. 191) his shoulder, but Dyrenforth could not force a drop from the hot skies of Texas. From then on, he was called "Dry-Henceforth."

Government-sponsored failure didn't stop others from trying. A man who called himself "the moisture accelerator," Charles M. Hatfield, roamed the plains around the turn of the century. A Colonel Sanders of rainmaking, Hatfield had a secret mixture of ingredients that could be sent to the sky by machine. In the age before the widespread use of the telephone, it was hard to catch up with the moisture accelerator after he had fleeced a town and moved on.



Source:

Egan, Timothy. The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl. Boston: Houghton Mifflin, 2006.






February 16, 2015

Smart Phones Bring Power to the Patient



(p. A11) We instinctively reach for our smartphones when we need to take pictures, get directions, deposit checks or reserve a table. Eric Topol, a cardiologist and digital pioneer, thinks that they are ready to perform at least one more task: revolutionize health care. In "The Patient Will See You Now," he argues that smartphones will democratize medicine by bringing data and control directly to the people.

The power of doctors, says Dr. Topol, "can be likened to that of religious leaders and nobility" in centuries past, when knowledge and authority belonged to a small elite. He notes that we've never seen "a discrete challenge to the medical profession" akin to Luther 's challenge to the Roman Catholic Church or democracy's challenge to monarchy and despotism. "But we've not had the platform or landscape for that to be accomplished. Until now." Smartphones, he says, enable a range of medical applications to move from the hospital to the home, and they shift medicine's locus of control from doctor to patient.



For the full review, see:

DAVID A. SHAYWITZ. "BOOKSHELF; Doctor Android; In the same way that Luther challenged the Catholic Church, smartphones are poised to upend the medical profession." The Wall Street Journal (Tues., Jan. 13, 2015): A11.

(Note: the online version of the review has the date Jan. 12, 2015.)


The book under review is:

Topol, Eric. The Patient Will See You Now: The Future of Medicine Is in Your Hands. New York: Basic Books, 2015.






February 15, 2015

Police Unions Make It Harder to Get Rid of Bad Cops



(p. A29) A small percentage of cops commit most of the abuses. A study by WNYC News in New York found that, since 2009, 40 percent of the "resisting arrest" charges were filed by just 5 percent of New York Police Department officers. In other words, most officers rarely get in a confrontation that leads to that charge, but a few officers often get in violent confrontations.

But it's very hard to remove the bad apples from the force. Trying to protect their members, unions have weakened accountability. The investigation process is softer on police than it would be on anyone else. In parts of the country, contract rules stipulate that officers get a 48-hour cooling-off period before having to respond to questions. They have access to the names and testimony of their accusers. They can be questioned only by one person at a time. They can't be threatened with disciplinary action during questioning.

More seriously, cops who are punished can be reinstated through a secretive appeals process that favors job retention over public safety. In The Atlantic, Conor Friedersdorf has a riveting piece with egregious stories of cops who have returned to the force after clear incompetence. Hector Jimenez was an Oakland, Calif., cop who shot and killed an unarmed 20-year-old man in 2007. Seven months later, he killed another unarmed man, shooting him in the back three times while he ran away. The city paid damages. Jimenez was fired. But he appealed through his union and was reinstated with back pay.



For the full commentary, see:

David Brooks. "The Union Future." The New York Times (Fri., DEC. 19, 2014): A29.

(Note: the online version of the commentary has the date DEC. 18, 2014. )






February 14, 2015

Delta and Atlanta Protect Their Huge Hartsfield-Jackson Airport from Little Silver Comet Field



(p. B6) DALLAS, Ga. -- Airports do not get much smaller than Silver Comet Field at Paulding Northwest Atlanta Airport, where an undeveloped two-lane road weaves to a church-quiet setting framed by small hills.

On a recent weekday morning, four small business jets were planted on the tarmac, if it can be called that. Nine automobiles dotted the parking lot, most of them driven there for a meeting. Outside the two-story building that serves as the terminal, which was reminiscent of a lodge in off-peak season, there was no sign of human life.

Only 50 miles away sits the world's most bustling airport, Hartsfield-Jackson. It maintains a monopoly on commercial flights in Atlanta, the largest metropolitan region without a secondary airport.

Paulding Northwest would like to change that grip on the market. The airport has applied for a commercial license so it can introduce two flights a week, and has since encountered stiff opposition.

Leading the charge against the bid is the Atlanta-based Delta Air Lines, which averages about 1,000 daily departures from its sprawling hub.

But the airport's supporters are crying foul, saying that Delta, along with the city of Atlanta, which owns Hartsfield-Jackson, has managed to throw up a series of barriers, legal and political, against the bid.



For the full story, see:

MIKE TIERNEY. "Fighting for 2 Fights a Week." The New York Times (Tues., DEC. 23, 2014): B6.

(Note: the online version of the story has the date DEC. 22, 2014, and has the title "Tiny Airport Fights for Sliver of Atlanta Market.")






February 11, 2015

Ways Technology May Decrease Inequality



(p. 7) As the previous generation retires from the work force, many more people will have grown up with intimate knowledge of computers. And over time, it may become easier to work with computers just by talking to them. As computer-human interfaces become simpler and easier to manage, that may raise the relative return to less-skilled labor.

The future may also extend a growing category of employment, namely workers who team up with smart robots that require human assistance. Perhaps a smart robot will perform some of the current functions of a factory worker, while the human companion will do what the robot cannot, such as deal with a system breakdown or call a supervisor. Such jobs would require versatility and flexible reasoning, a bit like some of the old manufacturing jobs, but not necessarily a lot of high-powered technical training, again because of the greater ease of the human-computer interface. That too could raise the returns to many relatively unskilled workers.



For the full commentary, see:

TYLER COWEN "TheUpshot; Economic View; The Technological Fix to Inequality." The New York Times, SundayBusiness Section (Sun., DEC. 7, 2014): 7.

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

(Note: the online version of the commentary has the date DEC. 6, 2014, and has the title "TheUpshot; Economic View; How Technology Could Help Fight Income Inequality." )






February 9, 2015

The "Miracle Machines" of Farming



(p. 75) Nobody had washing machines, vacuum cleaners, or incandescent light bulbs. But the farmers did have their miracle machines. In fifteen years, the Lucas family had gone from a walking plow pulled along behind a mule, to a riding plow, in which horses carried the blade through the soil, to a fine-tuned internal combustion plow.

"Machinery is the new Messiah," said Henry Ford, and though that sounded blasphemous to a devout sodbuster, there was something to it. Every ten seconds a new car came off Ford's factory line, and some of them were now parked next to dugouts in No Man's Land.



Source:

Egan, Timothy. The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl. Boston: Houghton Mifflin, 2006.






February 7, 2015

Marxist Chinese Education Minister Bans "Western Values" from Textbooks and Lectures



(p. D8) This week [the week starting Sun. January 25, 2015], China's ideological drive against Western liberal ideas broadened to take in a new target: foreign textbooks.

Meeting in Beijing with the leaders of several prominent universities, Education Minister Yuan Guiren laid out new rules restricting the use of Western textbooks and banning those sowing "Western values."

"Strengthen management of the use of original Western teaching materials," Mr. Yuan said at a meeting with university officials, according to Xinhua, the state news agency. "By no means allow teaching materials that disseminate Western values in our classrooms."

The strictures on textbooks are the latest of a succession of measures to strengthen the Communist Party's control of intellectual life and eradicate avenues for spreading ideas about rule of law, liberal democracy and civil society that it regards as dangerous contagions, which could undermine its hold on power.

On Jan. 19, the leadership issued guidelines demanding that universities make a priority of ideological loyalty to the party, Marxism and Mr. Xi's ideas.

Mr. Yuan's message this week spelled out how universities should do that.

"Never allow statements that attack and slander party leaders and malign socialism to be heard in classrooms," he said, according to the Xinhua report. "Never allow teachers to grumble and vent in the classroom, passing on their unhealthy emotions to students."



For the full story, see:

CHRIS BUCKLEY. "China Warns Against 'Western Values' in Imported Textbooks." The New York Times (Sat., JAN. 31, 2015): A9.

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

(Note: the online version of the story has the date JAN. 30, 2015.)






February 3, 2015

"Valuable Things Should Be Paid For . . . Music Should Not Be Free"



(p. R10) Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It's my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album's price point is. I hope they don't underestimate themselves or undervalue their art.


For the full commentary, see:

Swift, Taylor. "WSJ 125 (A Special Report): Music --- it's Too Soon to Write Off the Album: Yes, Musicians Aren't Selling as Many of them; but Taylor Swift Argues that the Best Artists Will always Find Ways to Break through to the Audience." Wall Street Journal (Tues., July 8, 2014): R10.

(Note: the online version of the commentary has the date July 7, 2014, and has the title "For Taylor Swift, the Future of Music Is a Love Story.")






January 31, 2015

Ezra Pound, a Major Literary Figure of the 20th Century, "Loved the Movies of Walt Disney"



(p. C5) "Mussolini asked," in A. David Moody 's retelling, "what was his aim in writing The Cantos, and Pound replied, 'to put my ideas in order'; and Mussolini said, 'What do you want to do that for?' " When the poet turned from this dismissal to economic policy, which had lately become the central obsession of his life, the dictator was unimpressed by Pound's list of 18 proposals, alighting particularly on his assertion that "in the Fascist state taxes were no longer necessary": "Have to think about THAT," Mussolini said and ended the interview. To the fascist dictator, Pound, by any measure one of the 20th century's major literary figures, merited hardly more bother than a fly.


. . .


(p. C7) . . . he was not always an elitist. He loved the movies of Walt Disney, . . .



For the full review, see:

DAVID MASON. "The Makers of Modernism; Pound's generous spirit looms over 20th-century literature, and in the early years his megalomania seemed harmless." The Wall Street Journal (Sat., Dec. 6, 2014): C5 & C7.

(Note: ellipses added; italics in original.)

(Note: the online version of the review has the date Dec. 5, 2014, and has the title "The Tragic Hero of Literary Modernism; Ezra Pound's generous spirit looms over 20th-century literature, and in the early years his megalomania seemed harmless." The first part of the title in the print version was intended to cover both the review of the Pound biography and an accompanying review of a biography of the writer and publisher James Laughlin.)


The book under review is:

Moody, A. David. Ezra Pound: Poet: Volume II: The Epic Years. Oxford, UK: Oxford University Press, 2014.






January 30, 2015

Lower Cost LEDs Will Reduce Light Prices, and Increase Quantity Consumed (Yes, Virginia, There Really Is a Law of Demand)



(p. A29) The growing evidence that low-cost efficiency often leads to faster energy growth was recently considered by both the Intergovernmental Panel on Climate Change and the International Energy Agency. They concluded that energy savings associated with new, more energy efficient technologies were likely to result in significant "rebounds," or increases, in energy consumption. This means that very significant percentages of energy savings will be lost to increased energy consumption.


. . .


That's not a bad thing. Most people in the world, still struggling to achieve modern living standards, need to consume more energy, not less. Cheap LED and other more efficient energy technologies will be overwhelmingly positive for people and economies all over the world.



For the full commentary, see:

MICHAEL SHELLENBERGER and TED NORDHAUS. "The Problem With Energy Efficiency." The New York Times (Thurs., OCT. 9, 2014): A29.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date OCT. 8, 2014.)






January 23, 2015

"It Is the Individual Who Is the Agent of the Action"



(p. C6) Mr. Mischel begins by describing how, in the late 1960s, he and his colleagues devised a straightforward experiment to measure self-control at the Bing Nursery School at Stanford University. In its simplest form, children between the ages of 4 and 6 were given a choice between one marshmallow now or two marshmallows if they waited 15 minutes. Some kids ate the marshmallow right away, but most would engage in unintentionally hilarious attempts to overcome temptation.

. . . About a third of the original subjects, the researchers reported, deferred gratification long enough to get the second treat.

. . . in 2006, . . . Mr. Mischel published a new paper in the prestigious journal Psychological Science. The researchers had done a follow-up study with the students they had tested 40 years before, examining the sort of adults they had grown into. They found that the children who were able to delay gratification had higher SAT scores entering college, higher grade-point averages at the end of college and made more money after college. Perhaps not surprisingly, they also tended to have a lower body-mass index.


. . .


In his commencement address, Adm. McRaven explained his final life lesson with an anecdote: "In SEAL training there is a bell," he explained. "A brass bell that hangs in the center of the compound for all the students to see. All you have to do to quit--is ring the bell. Ring the bell and you no longer have to wake up at 5 o'clock. Ring the bell and you no longer have to do the freezing cold swims. Ring the bell and you no longer have to do the runs, the obstacle course, the PT--and you no longer have to endure the hardships of training. Just ring the bell." To ring the bell is to give up.

Interestingly, one of Mr. Mischel's lesser-known marshmallow experiments had a similar setup, with a bell that the children could ring to call back the experimenter and save them from themselves. For the children, though, ringing the bell was not giving up but calling in the cavalry. His book is an encouraging reminder that, despite all the factors that urge us to indulge, "at the end of that causal chain, it is the individual who is the agent of the action and decides when to ring the bell." You are ultimately in control of your self.



For the full review, see:

MICHAEL SHERMER. "Willpower and Won't Power; To resist the tempting treat, kids looked away, squirmed, sang or simply pretended to take a bite." The Wall Street Journal (Sat., Sept. 20, 2014): C6.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 19, 2014, and has the title "Book Review: 'The Marshmallow Test' by Walter Mischel; To resist the tempting treat, kids looked away, squirmed, sang or simply pretended to take a bite.")


The book under review is:

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






January 22, 2015

As with Airplanes, Lives Must Be Risked to Achieve Routine Safety in Spaceships



(p. A21) SEATTLE -- ONE clear winter day in 1909, in Hampshire, England, a young man named Geoffrey de Havilland took off in a twin-propeller motorized flying machine of his own design, built of wood, piano wire and stiff linen hand-stitched by his wife. The launch was flawless, and soon he had an exhilarating sensation of climbing almost straight upward toward the brilliant blue sky. But he soon realized he was in terrible trouble.

The angle of ascent was unsustainable, and moments later de Havilland's experimental plane crashed, breaking apart into a tangled mass of shards, splinters and torn fabric, lethal detritus that could easily have killed him even if the impact of smashing into the ground did not. Somehow, he survived and Sir Geoffrey -- he was ultimately knighted as one of the world's great aviation pioneers -- went on to build an astonishing array of military and civilian aircraft, including the world's first jet airliner, the de Havilland Comet.

I thought immediately of de Havilland on Friday when I heard that Virgin Galactic's SpaceShipTwo, a rocket-powered vehicle designed to take well-heeled tourists to the edge of space, had crashed on a flight over the Mojave Desert, killing one test pilot and seriously injuring the other.


. . .


Certainly the Wright brothers and others like de Havilland were involved in what we now view as an epic quest, but many experts of the day were certain that flight, however interesting, was destined to be not much more than a rich man's hobby with no practical value.

"The public has greatly over-estimated the possibilities of the aeroplane, imagining that in another generation they will be able to fly over to London in a day," said a Harvard expert in 1908. "This is manifestly impossible." Two other professors patiently explained that while laymen might think that "because a machine will carry two people another may be constructed that will carry a dozen," in fact "those who make this contention do not understand the theory of weight sustentation in the air."


. . .


There will be tragedies like the crash of SpaceShipTwo and nonlethal setbacks such as the fiery explosion, also last week, of a remote-controlled rocket intended for a resupply mission to the International Space Station. There will be debates about how to improve regulation without stifling innovation. Some will say private industry can't do the job -- though it's not as if the NASA-sponsored Apollo or space shuttle missions went off without a hitch (far from it, sadly).

But at the heart of the enterprise there will always be obsessives like Sir Geoffrey, who forged ahead with his life's work of building airplanes despite his own crash and, incredibly, the deaths of two of his three sons while piloting de Havilland aircraft, one in an attempt to break the sound barrier. Getting to routine safety aloft claimed many lives along the way, and a hundred years from now people will agree that in that regard, at least, spaceships are no different from airplanes.



For the full commentary, see:

SAM HOWE VERHOVEK. "Not a Flight of Fancy." The New York Times (Tues., NOV. 4, 2014): A21.

(Note: ellipses added.)

(Note: the online version of the commentary has the date NOV. 3, 2014.)






January 21, 2015

Obamacare Advisor Says Obscure Law Passed Due to "Stupidity of the American Voter"



(p. A4) Jonathan Gruber, the economist at the heart of a fresh debate about the Affordable Care Act, has had more than a dozen appointments to visit the White House since Democrats began drafting the health law in 2009, records show.

The visits included at least one group meeting with President Barack Obama , as well as appointments with senior administration officials who helped shape the 2010 law that expanded health insurance to millions of Americans.

The White House in recent days has tried to distance itself from Mr. Gruber, a 49-year-old Massachusetts Institute of Technology economist, since a 2013 video surfaced last week in which he said the law passed because of the "huge political advantage" of the legislation's lacking transparency. He also referred to the "stupidity of the American voter."

Republicans have seized on the comments as evidence that supporters of the law purposely misled the public about its costs.

"It is amusing to watch Washington liberals discount Mr. Gruber's truth-telling as a gaffe and disown" his involvement in the law, said Sen. Orrin Hatch (R., Utah).



For the full story, see:

STEPHANIE ARMOUR and COLLEEN MCCAIN NELSON. "Health Adviser Gruber Logged Regular White House Visits." The Wall Street Journal (Tues., Nov. 18, 2014): A4.

(Note: the online version of the story has the date Nov. 17, 2014.)






January 19, 2015

Leading Computability Expert Says Humans Can Do What Computers Cannot



(p. B4) What does Turing's research tell us?

"There is some scientific basis for the view that humans are doing something that a machine isn't doing--and that we don't even want our machine to do," says S. Barry Cooper, a mathematician at Leeds and the foremost scholar of Turing's work.

The math behind this is deep, but here's the short version: Humans seem to be able to decide the validity of statements that should stump us, were we strictly computers as Turing described them. And since all modern computers are of the sort Turing described, well, it seems that we've won the race against the machines before it's even begun.


. . .


The future of technology isn't about replacing humans with machines, says Prof. Cooper--it's about figuring out the most productive way for the two to collaborate. In a real and inescapable way, our machines need us just as much as we need them.



For the full commentary, see:

Mims, Christopher. "KEYWORDS; Why Humans Needn't Fear the Machines All Around Us; Turing's Heirs Realize a Basic Truth: The Machines We Create Are Not, Indeed Cannot Be, Replacements for Humans." The Wall Street Journal (Tues., DEC. 1, 2014): B4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Nov. 30, 2014, and has the title "KEYWORDS; Why We Needn't Fear the Machines; A Basic Truth: Computers Can't Be Replacements for Humans.")



One of the major books by the Turing and computability expert quoted in the passages above, is:

Cooper, S. Barry. Computability Theory, Chapman Hall/CRC Mathematics Series. Boca Raton, Florida: Chapman and Hall/CRC Mathematics, 2003.






January 14, 2015

Bezos Devices Aim to Create a Virtuous Cycle 'Flywheel'



(p. B1) Amazon now makes four different kinds of devices. There are dedicated e-readers, multipurpose tablets and, starting this year, a TV streaming device and a smartphone, the Fire Phone. Just this week, Amazon introduced another streaming machine, the Fire TV Stick, a $39 gadget that is the size of a USB stick and promises to turn your television into an Amazon-powered video service.


. . .


(p. B9) What is Amazon's endgame with all these devices? Mr. Bezos has always said that his mission, with hardware, is to delight users with devices that are priced fairly. The devices also contribute to Mr. Bezos's famous "flywheel," the virtuous cycle by which greater customer satisfaction leads to more sellers in his store, which leads to more products, greater efficiencies, lower prices and, in turn, more customers.

"Everything is about getting that flywheel spinning, and it isn't necessarily about building a big and successful tablet business of their own," said Benedict Evans, an analyst who works at the investment firm Andreessen Horowitz and has studied Amazon closely. "Whether they actually drive meaningful commerce isn't entirely clear, but Amazon is rigorously focused on data, so if they're doing it, you can trust that there must be data that justifies it."

And if this year's devices don't take off, you can bet that Mr. Bezos will try a slightly different tack next year.



For the full commentary, see:

Farhad Manjoo. "STATE OF THE ART; Amazon's Grand Design for Devices." The New York Times (Thurs., OCT. 30, 2014): B1 & B9.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date OCT. 29, 2014, and has the title "STATE OF THE ART; Amazon's Grand Design in Devices.")


Bezos's enthusiasm for Jim Collins's "flywheel" idea is discussed in:

Stone, Brad. The Everything Store: Jeff Bezos and the Age of Amazon. New York: Little, Brown and Company, 2013.






January 11, 2015

Solution to Problems of Retirement: Don't Retire



(p. A13) Unsurprisingly, one response to the retirement challenge is: Don't do it. Not, at least, until you really must. As Mr. Farrell argues (with plenty of supporting evidence), there is no magic element of personal doom attached to one's 65th birthday or whatever age is believed to separate honest labor from a twilight of idleness. If you like what you do well enough, can perform your tasks competently and could use the income, why not keep working? The satisfactions of work are too often unrecognized in the popular imagination. Without it, a lot people wouldn't know what to do.

And the longer you work, of course, the more money you will have when you eventually do retire, a strategy that works to the good of society too, since your paychecks will be contributing to FICA and will help keep the system running.



For the full review, see:

GEOFFREY NORMAN. "BOOKSHELF; Second Acts After 65; People who could be playing golf and doting on their grandchildren are starting businesses. One senior launched a coffee house in Detroit." The Wall Street Journal (Weds., Sept. 24, 2014): A13.

(Note: the online version of the review has the date Sept. 23, 2014, and has the title "BOOKSHELF; Book Review: 'Unretirement' by Chris Farrell; People who could be playing golf and doting on their grandchildren are starting businesses. One senior launched a coffee house in Detroit.")


The book under review is:

Farrell, Chris. Unretirement: How Baby Boomers Are Changing the Way We Think About Work, Community, and the Good Life. New York: Bloomsbury Press, 2014.







January 10, 2015

Inequality Much Less If You Count Government Transfers as Part of Income




Despite the gratuitous jab contained in the "fanciful assumptions" phrase, what is notable about the passages quoted below is that Porter is mainly, though grudgingly, granting Burkhauser's main point: including government transfers reduces allegedly high inequality.



(p. B1) Washington already redistributes income from the rich to the poor. Richard Burkhauser and Philip Armour from Cornell and Jeff Larrimore from the Joint Committee on Taxation have become heroes to the right by trying to establish that government redistribution has, in fact, erased the trend of increasing inequality.

While these claims rest on fanciful assumptions about what counts as income, their analysis of taxes and government programs does support the argument that the government does more than it has in a long time to protect lower-income Americans from the blows of the market economy.


. . .


(p. B5) "Substantial changes in tax and transfer policies during the Bush and Obama administrations have increased dramatically the resources available at the middle of the distribution and at the bottom more so," Professor Burkhauser told me.


. . .


Research by Leslie McCall of Northwestern University finds that . . . American voters remain lukewarm about government interventions to reduce income inequality, . . .



For the full commentary, see:

Eduardo Porter. "Seeking New Tools to Address a Wage Gap." The New York Times (Weds., NOV. 5, 2014): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date NOV. 4, 2014.)


The Burkhauser co-authored paper summarized above, is:

Armour, Philip, Richard V. Burkhauser, and Jeff Larrimore. "Levels and Trends in U.S. Income and Its Distribution: A Crosswalk from Market Income Towards a Comprehensive Haig-Simons Income Approach." Southern Economic Journal 81, no. 2 (Oct. 2014): 271-93.


I believe that the research being to referred to by McCall is in her book:

McCall, Leslie. The Undeserving Rich: American Beliefs About Inequality, Opportunity, and Redistribution. New York: Cambridge University Press, 2013.






January 9, 2015

French Entrepreneurs Protest Government Crushing Them with Taxes and Regulations



FrenchBossesProtest2014-12-26.jpg "Protesting business owners in Paris brandished locks and chains to signify the constraints they said the government imposed on French businesses." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. B3) PARIS -- They jammed the boulevards, blowing whistles, tossing firecrackers, wearing locks and chains around their necks, and shouting into megaphones: "Enough is enough!"

In France, where protest marches are a well-practiced tradition, it is usually workers who take to the streets. But in a twist on Monday, thousands of French bosses demonstrated in Paris and Toulouse, the opening act in a weeklong revolt against government regulations and taxes that they say are straitjacketing companies, discouraging hiring and choking the economy.

"We feel like we're being taken hostage," said Laurence Manabre, owner of a home-maintenance business that has 28 workers -- but could employ many more, she said, if not for onerous government-imposed labor rules.

Ms. Manabre marched with the throng toward the Finance Ministry, brandishing a bronze lock, a symbol that hundreds of other bosses wore to signify the constraints they said the Socialist government imposed on French businesses. "Between regulations, taxes, new laws, and razor-thin margins," she said, "we're being crushed little by little."


. . .


. . . there are . . . entrenched parts of the French labor code, which employers say make it a difficult, lengthy process to lay off employees, and make bosses reluctant to take on new workers, especially with permanent contracts.

"France has high unemployment," Ms. Manabre said. "But the French labor code is incomprehensible, and it just keeps getting more complex. How can I possibly hire more people?"


. . .


Mr. Roland has 35 employees, and his son is supposed to take over the business when he retires. But now his son is thinking of leaving the country, Mr. Roland said, because "France doesn't seem to have a future, and the conditions for entrepreneurs are difficult."

Mr. Roland said he did not plan to hire more workers, out of concern that coming regulations would menace his already-thin profit margins.



For the full story, see:

LIZ ALDERMAN. "In Twist on French Tradition, Bosses Take to Streets in Protest." The New York Times (Tues., DEC. 2, 2014): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date DEC. 1, 2014,)






January 7, 2015

Pentagon Bureaucracy "Hindered Progress" on Drones



(p. A13) Compared with, say, a B-2 Bomber, drones are simple things. An empty B-2 weighs 158,000 pounds. The largest version of the Predator--the unmanned aerial vehicle now playing a critical role in every theater where the American military is engaged--weighs just under 5,000. Yet these small aircraft are revolutionizing warfare. Given the simplicity of drones, why did it take so long to put them into operation?


. . .


The most alarming take-away from Mr. Whittle's history is the persistent opposition of officials in the Pentagon who, for bureaucratic reasons, hindered progress at every step of the way.

A case in point: Two months after 9/11, the Predator was employed to incinerate one of al Qaeda's senior operatives, Mohammed Atef. The same blast also incinerated--metaphorically--a study released two weeks earlier by the Pentagon's office of operational testing and evaluation. The study had declared Predator "not operationally effective or suitable" for combat. If one seeks to understand why the drone revolution was late in coming--too late to help avert 9/11--the hidebound mentality behind that Pentagon document is one place to start.



For the full review, see:

Gabriel Schoenfeld. "BOOKSHELF; Building Birds of Prey; Red tape at the Pentagon prevented the development of a drone that could have helped avert the attacks of Sept. 11, 2001." The Wall Street Journal (Tues., Sept. 16, 2014): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date Sept. 15, 2014, and has the title "BOOKSHELF; Book Review: 'Predator' by Richard Whittle; Red tape at the Pentagon prevented the development of a drone that could have helped avert the attacks of Sept. 11, 2001.")


The book under review is:

Whittle, Richard. Predator: The Secret Origins of the Drone Revolution. New York, NY: Henry Holt and Co., 2014.






January 6, 2015

Netflix Proved TV Programs Can Be Delivered on Web



(p. B1) Netflix pointed a way forward by not only establishing that programming could be reliably delivered over the web, but showing that consumers were more than ready to make the leap. The reaction of the incumbents has been fascinating to behold.

As a reporter, I watched as newspapers, books and music all got hammered after refusing to acknowledge new competition and new consumption habits. They fortified their defenses, doubled down on legacy approaches and covered their eyes, hoping the barbarians would recede. That didn't end up being a good idea.

Television, partly because its files are so much larger and tougher to download, was insulated for a time, and had the benefit of having seen what happens when you sit still -- you get run over.


. . .


For any legacy business under threat of disruption, the challenge is to get from one room -- the one with the tried and true profitable approach -- to another, (p. B5) where consumers are headed and innovators are setting up shop. To get there, you have to enter a long, dark hallway, a scary place.



For the full commentary, see:

David Carr. "The Stream Finally Cracks the Dam of Cable TV." The New York Times (Mon., OCT. 20, 2014): B1 & B5.

(Note: bolded words, and last ellipsis, in original; other ellipses, and bracketed date, added.)

(Note: the online version of the commentary has the date OCT. 19, 2014.)






January 5, 2015

Inequality Increased by Lack of Investment Knowledge or Discipline



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




(p. A2) Millions of Americans inadvertently made a classic investment mistake that contributed to today's widening economic inequality: They bought high and sold low.


. . .


. . . the data suggest some investors simply sold at the wrong moment. "Even at the worst of the recession, most people still had jobs," said Mr. Maki. "Certainly, some of the people who got out of the equity market were doing it because of fear rather than need."

That's also the finding of new research from economists Bing Chen and Frank Stafford at the University of Michigan. They plumbed the Panel Study of Income Dynamics, a survey that tracks the same households over time, to evaluate the factors behind their fluctuating incomes and wealth.

Households with the highest education and strong portfolios to begin with were likely to keep buying stocks during the decline, they found. Those with less education and smaller account balances were more likely to sell during the downturn.

When the subsequent rebound happened, the already rich got even richer.


. . .


". . . there certainly is a widening gap there in terms of the return that higher-income people are receiving in the market," said Mr. Akabas [an economist at the Bipartisan Policy Center in Washington who works on the center's Personal Savings Initiative]. "Lower- to middle-income people aren't privy to those gains. That's exacerbated by the fact that many of them have taken their money out of the stock market."



For the full commentary, see:

JOSH ZUMBRUN. "THE OUTLOOK; Market Missteps Fuel Inequality." The Wall Street Journal (Mon., Oct. 27, 2014): A2.

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

(Note: the online version of the commentary has the date Oct. 26, 2014, and has the title "THE OUTLOOK; Bad Stock-Market Timing Fueled Wealth Disparity.")






January 2, 2015

Somewhere in a Garage Is the Next Google



(p. B6) . . . Monday [Oct. 13, 2014] Eric Schmidt, Google's executive chairman used a speech in Berlin to talk about Amazon's success in search, how Facebook crushed Google on social networking and his conviction that somewhere in the world there is a garage-based company that will take out Google.


. . .


Here are some excerpts from Mr. Schmidt's speech:


. . .


THE NEXT GOOGLE: "But more important, someone, somewhere in a garage is gunning for us. I know, because not long ago we were in that garage. ... The next Google won't do what Google does, just as Google didn't do what AOL did."



For the full story, see:

CONOR DOUGHERTY. "Google Chairman on Competition." The New York Times (Mon., OCT. 20, 2014): B6.

(Note: bolded words, and last ellipsis, in original; other ellipses, and bracketed date, added.)

(Note: the online version of the story has the date OCT. 14, 2014, and has the title "Google Executive Chairman: Amazon Is a Lovely Place to Shop and Search." There are minor differences between the print and online versions. In the passages quoted above, where the two differ, I follow the print version.)






January 1, 2015

FAA Requires Drones to Carry Onboard Manuals



(p. B1) BERLIN--In four years, Service-drone.de GmbH has emerged as a promising player here in the rapidly expanding commercial-drone industry. The 20-employee startup has sold more than 400 unmanned aircraft to private-sector companies and now is pitching its fourth-generation device.

Over the same period, Seattle-based Applewhite Aero has struggled to get permission from the Federal Aviation Administration just to fly its drones, which are designed for crop monitoring. The company, founded the same year as Service-drone, has test-flown only one of its four aircraft, and is now moving some operations to Canada, where getting flight clearance is easier.

"We had to petition the FAA to not carry the aircraft manual onboard," said Applewhite founder Paul Applewhite. "I mean, who's supposed to read it?" Mr. Applewhite, like many of his U.S. peers, fears the drone industry "is moving past the U.S., and we're just getting left behind."



For the full story, see:

JACK NICAS. "U.S. Rules Clips Drone Makers' Wings." The Wall Street Journal (Mon., Oct. 6, 2014): B1 & B4.

(Note: the online version of the story has the date Oct. 5, 2014, and has the title "Regulation Clips Wings of U.S. Drone Makers.")






December 28, 2014

"Milestone of Dubious Distinction:" Venezuela Joins North Korea and Cuba in Food Rationing



(p. A15) MARACAIBO, Venezuela--Amid worsening shortages, Venezuela recently reached a milestone of dubious distinction: It has joined the ranks of North Korea and Cuba in rationing food for its citizens.

On a recent, muggy morning, Maria Varge stood in line outside a Centro 99 grocery store, ready to scour the shelves for scarce items like cooking oil and milk. But before entering, Ms. Varge had to scan her fingerprint to ensure she wouldn't buy more than her share.

Despite its technological twist on the old allotment booklet, Venezuela's new program of rationing is infuriating consumers who say it creates tiresome waits, doesn't relieve shortages and overlooks the far-reaching economic overhauls the country needs to resolve the problem.

"These machines make longer lines," said Ms. Varge, 50, as she was jostled by people in line, "but you get inside, and they still don't have what you want."



For the full story, see:

SARA SCHAEFER MUÑOZ. "WORLD NEWS; Despite Riches, Venezuela Starts Food Rationing; Government Rolls Out Fingerprint Scanners to Limit Purchases of Basic Goods; 'How Is it Possible We've Gotten to This Extreme'." The Wall Street Journal (Thurs., Oct. 23, 2014): A15.

(Note: the online version of the story has the date Oct. 22, 2014.)






December 26, 2014

How "the Credentials Arms-Race" Now "Defines Young Adulthood"



(p. A11) . . . "Excellent Sheep" is a cri de coeur against the credentials arms-race that now defines young adulthood--and even childhood--for many Americans. But you don't have to take his word for it: The book features interviews and correspondence with students and recent graduates of elite institutions. Beyond their glowing transcripts and the fact that they have become "accomplished adult-wranglers," these students are anxious, depressed and searching for some deeper meaning in their lives. "For many students, rising to the absolute top means being consumed by the system. I've seen my peers sacrifice health, relationships, exploration, activities that can't be quantified and are essential for developing souls and hearts, for grades and resume building," one Stanford student told the author. A Yalie put it more succinctly: "I might be miserable, but were I not miserable, I wouldn't be at Yale."


For the full review, see:

EMILY ESFAHANI SMITH. "BOOKSHELF; The Credentials Arms-Race; Students sacrifice all to grades and resume building--'I might be miserable,' a Yalie noted, 'but were I not miserable, I wouldn't be at Yale.'." The Wall Street Journal (Thurs., Aug. 21, 2014): A11.

(Note: ellipsis added.)

(Note: the online version of the review has the date Aug. 20, 2014, and has the title "BOOKSHELF; Book Review: 'Excellent Sheep: The Miseducation of the American Elite' by William Deresiewicz; Students sacrifice all to grades and resume building--'I might be miserable,' a Yalie noted, 'but were I not miserable, I wouldn't be at Yale.'.")


The book under review is:

Deresiewicz, William. Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life. New York, NY: Free Press, 2014.






December 25, 2014

U.S. Patents and Start-Ups Fall When We Exclude Tech Immigrants



(p. A19) The process of bringing skilled immigrants to the U.S. via H-1B visas and putting them on the path to eventual citizenship has been a political football for at least a decade. It has long been bad news for those immigrants trapped in this callous process. Now the U.S. economy is beginning to suffer, too.

Every year, tens of thousands of disappointed tech workers and other professionals give up while waiting for a resident visa or green card, and go home--having learned enough to start companies that compete with their former U.S. employers. The recent historic success of China's Alibaba IPO is a reminder that a new breed of companies is being founded, and important innovation taking place, in other parts of the world. More than a quarter of all patents filed today in the U.S. bear the name of at least one foreign national residing here.

The U.S. no longer has a monopoly on great startups. In the past, the best and brightest people would come to the U.S., but now they are staying home. In Silicon Valley, according to a 2012 survey by Duke and Stanford Universities and the University of California at Berkeley, the percentage of new companies started by foreign-born entrepreneurs has begun to slide for the first time--down to 43.9% during 2006-12, from 52.4% during 1995-2005.



For the full commentary, see:

MICHAEL S. MALONE. "OPINION; The Self-Inflicted U.S. Brain Drain; Up to 1.5 million skilled workers are stuck in immigration limbo. Many give up and go home." The Wall Street Journal (Thurs., OCT. 16, 2014): A19.

(Note: the online version of the commentary has the date OCT. 15, 2014.)


The 2012 survey is discussed further in:

Wadhwa, Vivek, AnnaLee Saxenian, and F. Daniel Siciliano. "Then and Now: America's New Immigrant Entrepreneurs, Part VII." Ewing Marion Kauffman Foundation, October 2012.


An in-depth discussion of the issues raised by Malone can be found in:

Wadhwa, Vivek. The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent. pb ed. Philadelphia, PA: Wharton Digital Press, 2012.






December 24, 2014

How Creative Destruction Reuses Capital



(p. B1) The Internet is moving to a shopping center near you.

In Fort Wayne, Ind., a vacated Target store is about to be home to rows of computer servers, network routers and Ethernet cables courtesy of a local data-center operator. In Jackson, Miss., a former McRae's department store will get the same treatment next year. And one quadrant of the Marley Station Mall south of Baltimore is already occupied by a data-center company that last year offered to buy out the rest of the building.

As America's retailers struggle to keep up with online shopping, the Internet is starting to settle into some of the very spaces where brick-and-mortar customers used to shop.



For the full story, see:

DREW FITZGERALD and PAUL ZIOBRO. "This Used to Be a Shopping Mall." The Wall Street Journal (Tues., NOV. 4, 2014): B1 & B6.

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

(Note: the online version of the story has the date NOV. 3, 2014, and has the title "Malls Fill Vacant Stores With Server Rooms.")






December 22, 2014

Charismatic Prophets of Technological and Organizational Innovation



(p. C7) Walter Isaacson's last book was the best-selling biography of Steve Jobs --the charismatic business genius of Apple Computer and one of the beatified icons of modern technology and entrepreneurship. Mr. Isaacson's fine new book, "The Innovators," is a serial biography of the large number of ingenious scientists and engineers who, you might say, led up to Jobs and his Apple co-founder Steve Wozniak --"forerunners" who, over the past century or so, produced the transistor, the microchip and microprocessor, the programmable computer and its software, the personal computer, and the graphic interface.


. . .


Mr. Isaacson's heart is with the engineers: the wizards of coding, the artists in electrons, silicon, copper, networks and mice. But "The Innovators" also gives space to the revolutionary work done with men as well as mice: experiments in the organizational forms in which creativity might be encouraged and expressed; in the aesthetic design of personal computers, phones and graphical fonts; in predicting and creating what consumers did not yet know they wanted; and in the advertising and marketing campaigns that make them want those things. Not the least of the revolutionaries' inventions was their own role as our culture's charismatic prophets, uniquely positioned to pronounce on which way history was going and then to assemble the capital, the motivated workers and the cheering audiences that helped them make it go that way.



For the full review, see:

ALEXANDRA KIMBALL. "The Best Way to Predict the Future." The Wall Street Journal (Sat., Oct. 4, 2014): C9.

(Note: ellipsis added. The first word of the title in the print version was "They." Above, I have corrected the typo.)

(Note: the online version of the review has the date Oct. 3, 2014, and has the title "Book Review: 'The Innovators' by Walter Isaacson.")


The book under review is:

Isaacson, Walter. The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution. New York: Simon & Schuster, 2014.






December 18, 2014

The Washing Machine Is a Great Bulwark of Women's Liberation



(p. C9) If the past is foreign country because they do things differently there, we're lucky to have such a knowledgeable cicerone as Ruth Goodman.


. . .


"I like to put time and effort into studying the objects and tools that people made and used, and I like to try methods and approaches out for myself," she writes in "How to Be a Victorian." This sounds straightforward enough but hardly hints at the leaps of imaginative empathy the author is so good at: When she visits a museum to examine a Victorian farm worker's wool coat, for example, she sees both the husband "who sweated and left stains on his clothes, who physically felt the cold" and the wife who "spent hours carefully and neatly sewing up the tear."

Ms. Goodman observes that the wife's technique for repair matches one taught in working-class textbooks, a fact that raises questions in her mind. "How widespread was such needlework education, and was it likely to have been women who carried out such repairs?" she wonders. "If it takes me over an hour to do the work, would my Victorian forebears have been quicker? When would they have fitted such a chore into their day?" That little rip in the man's coat, it turns out, is like a tiny window into "the great sweeps of political and economic life" that in turn "bring us back to the personal." Trade disruptions in textiles during the American Civil War, for instance, "pushed up the price of the labourer's coat, making that repair more necessary."


. . .


Many, many things about daily life are far better now: "My own historical laundry experiences have led me to see the powered washing machine as one of the great bulwarks of women's liberation, an invention that can sit alongside contraception and the vote."



For the full review, see:

ALEXANDRA KIMBALL. "Living Like a Queen; You might get used to using soot to brush your teeth. But steel corsets? Never." The Wall Street Journal (Sat., Oct. 4, 2014): C9.

(Note: ellipses added.)

(Note: the online version of the review has the date Oct. 3, 2014, and has the title "Book Review: 'How to Be a Victorian" by Ruth Goodman; You might get used to using soot to brush your teeth. But steel corsets? Never.")


The book under review is:

Goodman, Ruth. How to Be a Victorian: A Dawn-to-Dusk Guide to Victorian Life. New York: Liveright Publishing Corporation, 2014.






December 17, 2014

Most Venture Capital Firms Do Not Back "Ambitious, Long-Shot Projects"



(p. B4) Successful venture capitalism is about managing risk, so partners at most VC firms invest in businesses they think will become viable, or at least worthy of an acquisition, in the shortest time possible.

That doesn't leave much appetite among VCs for startups working on ambitious, long-shot projects, the sort that require basic research, and that's a shame.



For the full commentary, see:

CHRISTOPHER MIMS. "KEYWORDS; Our Last Great Hope: Venture Capital." The Wall Street Journal (Tues., Oct. 21, 2014): B1 & B4.

(Note: italics in original.)

(Note: the online version of the commentary has the date Oct. 20, 2014, and the title "KEYWORDS; Humanity's Last Great Hope: Venture Capitalists.")






December 14, 2014

"What Valuable Company Is Nobody Building?"



(p. A15) Peter Thiel is larger than life even for a Silicon Valley billionaire. He co-founded PayPal, was the first investor in Facebook , and funded LinkedIn, Spotify, SpaceX and Airbnb. Now he has written a much-needed explanation of the information economy, masquerading as a breezy how-to book for entrepreneurs. "Zero to One: Notes on Startups, or How to Build the Future" is based on lectures Mr. Thiel gave at Stanford.

He hopes more entrepreneurs will focus on big ideas for health, energy and transportation; his venture firm's tag line is "They promised us flying cars and all we got was 140 characters," a reference to Twitter. His explanation of innovation is also a primer on how free markets work. He encourages entrepreneurs to ask: "What valuable company is nobody building?"



For the full commentary, see:

L. GORDON CROVITZ. "INFORMATION AGE; Three Cheers for 'Creative Monopolies'." The Wall Street Journal (Mon., Oct. 13, 2014): A15.

(Note: the online version of the commentary has the date Oct. 12, 2014.)


The book praised in the passage quoted above is:

Thiel, Peter, and Blake Masters. Zero to One: Notes on Startups, or How to Build the Future. New York: Crown Business, 2014.






December 13, 2014

Economic Hope Cures Terrorism



(p. C1) As the U.S. moves into a new theater of the war on terror, it will miss its best chance to beat back Islamic State and other radical groups in the Middle East if it doesn't deploy a crucial but little-used weapon: an aggressive agenda for economic empowerment. Right now, all we hear about are airstrikes and military maneuvers--which is to be expected when facing down thugs bent on mayhem and destruction.

But if the goal is not only to degrade what President Barack Obama rightly calls Islamic State's "network of death" but to make it impossible for radical leaders to recruit terrorists in the first place, the West must learn a simple lesson: Economic hope is the only way to win the battle for the constituencies on which terrorist groups feed.

I know something about this. A generation ago, much of Latin America was in turmoil. By 1990, a Marxist-Leninist terrorist organization called Sendero Luminoso, or Shining Path, had seized control of most of my home country, Peru, where I served as the president's principal adviser. Fashionable opinion held that the people rebelling were the impoverished or underemployed wage slaves of Latin America, that capitalism couldn't work outside the West and that Latin cultures didn't really understand market economics.

The conventional wisdom proved to be wrong, however. Reforms in Peru gave indigenous entrepreneurs and farmers control over their assets and a new, more accessible legal framework in which to run businesses, make contracts and borrow--spurring an unprecedented rise in living standards.



For the full commentary, see:

HERNANDO DE SOTO. "The Capitalist Cure for Terrorism; Military might alone won't defeat Islamic State and its ilk. The U.S. needs to promote economic empowerment and entrepreneurship to give the Arab world another path." The Wall Street Journal (Sat., Oct. 11, 2014): C1-C2.

(Note: italics in original.)

(Note: the online version of the commentary has the date Oct. 10, 2014, and the title "The Capitalist Cure for Terrorism; Military might alone won't defeat Islamic State and its ilk. The U.S. needs to promote economic empowerment.")


Soto's masterpiece is:

Soto, Hernando de. The Other Path: The Invisible Revolution in the Third World. New York: Basic Books, 1989.






December 10, 2014

Churchill Was More than an Epiphenomenon



(p. C2) It is easy to see why so many historians and historiographers have taken the Tolstoyan line, that the story of humanity isn't the story of great people and shining deeds. It has been fashionable to say that those so-called great men and women are just epiphenomena, meretricious bubbles on the vast tides of social history. The real story, on this view, is about deep economic forces, technological advances, changes in the price of sorghum, the overwhelming weight of an infinite number of mundane human actions.

The story of Winston Churchill is a pretty withering retort to all that malarkey.



For the full essay, see:

BORIS JOHNSON. "He Still Stands Alone." The Wall Street Journal (Sat., Nov. 8, 2014): C1-C2.

(Note: the online version of the essay has the date Nov. 7, 2014, and has the title "Churchill Still Stands Alone.")


The passage quoted above is related to Johnson's book:

Johnson, Boris. The Churchill Factor: How One Man Made History. New York: Riverhead, 2014.






December 4, 2014

Consumers Cannot Count on Regulators for Safety



(p. A1) WASHINGTON -- The nation's top auto regulator faced withering criticism across Capitol Hill on Tuesday over its failure to identify a deadly defect in General Motors cars -- even as its top official tried again and again to shift the blame back to the automaker.

Hours after a House committee released a scathing report about the agency's yearslong failure to spot the ignition-stalling defect that has now been linked to 19 deaths, a Senate subcommittee hearing turned angry and tense. Lawmakers from both parties accused the agency, the National Highway Traffic Safety Administration, of overlooking evidence that could have saved lives and of deferring to the auto industry rather than standing up to it.

The agency was "more interested in singing 'Kumbaya' with the manufacturers than being a cop on the beat," said Senator Claire McCaskill, the subcommittee's chairwoman, in sharp questioning reminiscent of her interrogation of G.M.'s chief executive, Mary T. Barra, in a hearing before the same panel in the spring.


. . .

(p. B2) "You want to obfuscate responsibility, rather than take responsibility," Ms. McCaskill, a Missouri Democrat, said, her voice rising. "We've all said shame on G.M." She added, "You've got to take some responsibility that this isn't being handled correctly."


. . .


Watching from a seat just behind Mr. Friedman [deputy administrator of the N.H.T.S.A.] was Laura Christian, the birth mother of Amber Rose, a teenager who was killed in 2005 when her Cobalt ran off the road, into a tree, and the air bags did not deploy.

As Mr. Friedman continued to speak, Ms. Christian said she could feel herself getting flushed and increasingly upset over the agency's lack of remorse.

"It was extremely frustrating to hear David Friedman go on about how his agency was this wonderful thing," she said. "All along they missed the glaringly obviously defects."



For the full story, see:

HILARY STOUT and AARON M. KESSLER. "Congress Castigates Auto Regulator Over a Deadly G.M. Defect." The New York Times (Weds., SEPT. 17, 2014): A1 & B2.

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

(Note: the online version of the story has the date SEPT. 16, 2014, and has the title "Senators Take Auto Agency to Task Over G.M. Recall." In the Midwest edition that I receive, this article started on p. A1; according to the indexes, and the online edition, in the New York edition, the article started on p. B1.)






December 2, 2014

Lippmann Attacked FDR's Socialist National Industrial Recovery Act



(p. A13) . . . Duke economic historian Craufurd D. Goodwin employs the writings of the once-famous newspaper columnist Walter Lippmann to describe the fervid U.S. debates that began with the 1929 stock-market crash.


. . .


Lippmann established his intellectual credentials in the 1920s, writing several well-received books. They included "Public Opinion," which excoriated the press for sloppy coverage of government policies and actions. The book is often seen as a call for top-down rule by experts, but Mr. Goodwin argues that Lippmann had something else in mind--that he was eager for expert opinion and "reasoned study" to be widely disseminated so that self-government would be more fully informed and the citizenry less easily manipulated.


. . .


At first, Lippmann embraced the Keynesian argument that government could ameliorate downswings in business cycles through deficit spending, but he later had second thoughts about economic engineering and became more attuned to the free-market ideas of Friedrich Hayek, whom he knew and consulted.   . . .    Lippmann attacked as ill-conceived the most ambitious New Deal brainstorm, the 1933 National Industrial Recovery Act, which attempted to organize all business and industry into cartels to boost prices.



For the full review, see:

GEORGE MELLOAN. "BOOKSHELF; The Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise." The Wall Street Journal (Tues., Oct. 14, 2014): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date Oct. 13, 2014, and has the title "BOOKSHELF; Walter Lippmann: Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise.")


The book under review, is:

Goodwin, Craufurd D. Walter Lippmann: Public Economist. Cambridge, MA: Harvard University Press, 2014.






November 30, 2014

Esther Dyson Sees a Lot of Silicon Valley as Just Motivated to Make Money



(p. C11) The U.S. Commerce Department recently said that it plans to relinquish its oversight of Icann, handing that task to an international body of some kind. The details are still being worked out, but Ms. Dyson hopes that governments won't be the new regulators. . . .

For now, she thinks there are many Silicon Valley Internet companies with inflated market values. "There is the desire to make money that motivates a lot of that in Silicon Valley, and yes, I think it's totally a bubble," she says. "It's not like the last bubble in that there are a lot of real companies there [now], but there are a lot of unreal companies and...many of them will disappear." She thinks too many people are starting similar companies. "You have people being CEOs of teeny little things who would be much better as marketing managers of someone else's company," she says.

And though her work often takes her to California, she's happy to stay in New York. These days, she finds Silicon Valley "very fashionable," she says, "and I don't really like fashion."



For the full interview, see:

ALEXANDRA WOLFE, interviewer. "WEEKEND CONFIDENTIAL; Esther Dyson's Healthy Investments; The investor is hoping to produce better health through technology with a new nonprofit." The Wall Street Journal (Sat., May 3, 2014): C11.

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

(Note: the online version of the interview has the date May 2, 2014, and has the title "WEEKEND CONFIDENTIAL; Esther Dyson's Healthy Investments; The investor is hoping to produce better health through technology with a new nonprofit.")






November 29, 2014

Einthoven Tried to Share Prize Money with His Assistant



(p. 194) One event that occurred after Einthoven received the Nobel Prize in Physiology or Medicine in 1924 speaks volumes about his integrity. In the construction of his string galvanometer and laboratory experiments over many years, Einthoven was rather clumsy with his hands and relied very much on the collaboration of his chief assistant K. F. L. van der Woerdt. Years later, when he received the $40,000 in Nobel Prize money, Einthoven wished to share it with his assistant but soon learned that the man had died. He sought out the man's two surviving sisters, who were living in genteel poverty in a kind of almshouse. He journeyed there by train and gave them half of the award money.


Source:

Meyers, Morton A. Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade Publishing, 2007.






November 28, 2014

When Pirates Were More Enlightened than Most Governments



(p. A11) While slaves were oppressed by the social order, Mr. Rediker argues, pirates on the high seas were remaking it. An estimated 2,500 buccaneers prowled the Atlantic and the Caribbean at any given time during the first half of the 18th century. The great majority were former merchant seamen, or deserters from the Royal Navy. They were aged between 14 and 50, though most were in their 20s. Married men were not welcome for fear that they might desert and compromise an entire pirate crew.

Here, Mr. Rediker suggests, egalitarianism was being practiced at sea half a century before it became a catch-cry of the French Revolution. And, he adds, there was a striking uniformity of rules and customs on all pirate vessels. At the start of each voyage, or whenever a new captain was chosen, a wide-ranging social compact would be drawn up listing rights and responsibilities. The articles would allocate authority, deal with the distribution of plunder, and set the rules of punishment to enforce discipline. Booty was usually allocated according to skills and duties--the captain might be given two shares; gunners, boatswains, mates, carpenters and medics one and a half shares; and the rest of the crew a share each. In times of battle, the crew gave the captain unquestioned authority whether fighting, chasing or being chased. What perhaps set the pirates most apart from their former colleagues in the Merchant Navy and the Royal Navy was punishment. The lash, for example, was rarely used. Fighting was not allowed on board and disputes between crew had to be settled ashore by sword or pistol. This brought an unusual degree of harmony to the pirate ship. Incorrigible trouble makers were unceremoniously dumped and left behind on deserted islands. Vengeance was also freely taken upon captives, and woe betide any ship's captain who had tyrannized and abused his crew.



For the full review, see:

MICHAEL FATHERS. "BOOKSHELF; Motley Crew at the Helm; Egalitarianism was being acted out at sea by pirates half a century before it became a catch-cry of the French Revolution. The Wall Street Journal (Fri., Aug. 22, 2014): A11.

(Note: ellipsis in original.)

(Note: the online version of the review has the date Aug. 21, 2014, and has the title "BOOKSHELF; Book Review: 'Outlaws of the Atlantic' by Marcus Rediker; Egalitarianism was being acted out at sea by pirates half a century before it became a catch-cry of the French Revolution.")


Book under review:

Rediker, Marcus. Outlaws of the Atlantic: Sailors, Pirates, and Motley Crews in the Age of Sail. Boston, MA: Beacon Press, 2014.






November 26, 2014

Robotic Milkers Are Less Costly, Easier to Manage and More Humane to Cows



(p. A1) EASTON, N.Y. -- Something strange is happening at farms in upstate New York. The cows are milking themselves.

Desperate for reliable labor and buoyed by soaring prices, dairy operations across the state are charging into a brave new world of udder care: robotic milkers, which feed and milk cow after cow without the help of a single farmhand.

Scores of the machines have popped up across New York's dairy belt and in other states in recent years, changing age-old patterns of daily farm life and reinvigorating the allure of agriculture for a younger, tech-savvy -- and manure-averse -- generation.


. . .


The cows seem to like it, too.

Robots allow the cows to set their own hours, lining up for automated milking five or six times a day -- turning the predawn and late-afternoon sessions (p. A19) around which dairy farmers long built their lives into a thing of the past.

With transponders around their necks, the cows get individualized service. Lasers scan and map their underbellies, and a computer charts each animal's "milking speed," a critical factor in a 24-hour-a-day operation.


. . .


The Bordens and other farmers say a major force is cutting labor costs -- health insurance, room and board, overtime, and workers' compensation insurance -- particularly when immigration reform is stalled in Washington and dependable help is hard to procure.

The machines also never complain about getting up early, working late or being kicked.

"It's tough to find people to do it well and show up on time," said Tim Kurtz, who installed four robotic milkers last year at his farm in Berks County, Pa. "And you don't have to worry about that with a robot."

The Bordens say the machines allow them to do more of what they love: caring for animals.

"I'd rather be a cow manager," Tom Borden said, "than a people manager."



For the full story, see:

JESSE McKINLEY. "With Farm Robotics, the Cows Decide When It's Milking Time." The New York Times (Weds., APRIL 23, 2014): A1 & A19.

(Note: ellipses added.)

(Note: the online version of the story has the date APRIL 22, 2014.)






November 24, 2014

Affordable Care Act Reduces GDP, Employment and Labor Income



(p. A17) Whether the Affordable Care Act lives up to its name depends on how, or whether, you consider its consequences for the wider economy.


. . .


I estimate that the ACA's long-term impact will include about 3% less weekly employment, 3% fewer aggregate work hours, 2% less GDP and 2% less labor income. These effects will be visible and obvious by 2017, if not before. The employment and hours estimates are based on the combined amount of the law's new taxes and disincentives and on historical research on the aggregate effects of each dollar of taxation. The GDP and income estimates reflect lower amounts of labor as well as the law's effects on the productivity of each hour of labor.


. . .


The Affordable Care Act is weakening the economy. And for the large number of families and individuals who continue to pay for their own health care, health care is now less affordable.



For the full commentary, see:

CASEY B. MULLIGAN. "OPINION; The Myth of ObamaCare's Affordability; The law's perverse incentives will have the nation working fewer hours, and working those hours less productively." The Wall Street Journal (Tues., SEPTEMBER 9, 2014): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date SEPTEMBER 8, 2014.)


Mulligan's research on the effects of Obamacare is detailed in his Kindle e-book:

Mulligan, Casey B. Side Effects: The Economic Consequences of the Health Reform. Flossmoor, IL: JMJ Economics, 2014.






November 22, 2014

Socialist Price Setting Causes Shortages of Corn Flour, Car Batteries and Toilet Paper



(p. B1) Venezuela's prices on everything from butter to flat-screen TVs are set without warning by the government, which also caps corporate profits at 30%. Any profits evaporate quickly, however, because inflation is almost double that.

And expanded price controls imposed by Venezuelan President Nicolas Maduro, who succeeded late leftist firebrand Hugo Chávez in April 2013, have exacerbated shortages of basic items such as corn flour, car batteries and toilet paper, triggering violent street protests since early February.



For the full story, see:

MAXWELL MURPHY and KEJAL VYAS. "CFO JOURNAL; Currency Chaos in Venezuela Portends Write-Downs." The Wall Street Journal (Tues., May 27, 2014): B1 & B6.

(Note: the online version of the story has the date May 26, 2014.)






November 18, 2014

Japanese Try to Sell the iPhone of Toilets in United States



(p. B8) TOKYO--Yoshiaki Fujimori wants to be the Steve Jobs of toilets.

Like iPhones, app-packed commodes are objects of desire in Mr. Fujimori's Japan. The lids lift automatically. The seats heat up. Built-in bidets make cleanup a breeze. Some of them even sync with users' smartphones via Bluetooth so that they can program their preferences and play their favorite music through speakers built into the bowl.

Three-quarters of Japanese homes contain such toilets, most of them made by one of two companies: Toto Ltd., Japan's largest maker of so-called sanitary ware, or Lixil Corp., where Mr. Fujimori is the chief executive.

Now Mr. Fujimori is leading a push to bring them to the great unwashed. In May, Lixil plans to add toilets with "integrated bidets" to the lineup of American Standard Brands, which Lixil acquired last year for $542 million, including debt.


. . .


Few people realized they needed smartphones until Apple's iPhone came along. So it will be in the U.S. with American Standard's new toilets, Mr. Fujimori said.

"Industry presents iPhone--industry presents shower toilet," Mr. Fujimori said in an interview at Lixil's headquarters in Tokyo. "We can create the same type of pattern."


. . .


Mr. Fujimori maintained that once American consumers try such toilets, they won't go back.

"This improves your standard of living," he said. "It doesn't hurt you. People like comfort, they like ease, they like automatic. And people like clean."



For the full story, see:

ERIC PFANNER and ATSUKO FUKASE. "Smart Toilets Arrive in U.S." The Wall Street Journal (Tues., May 27, 2014): B8.

(Note: ellipses added.)

(Note: the online version of the story has the date May 26, 2014.)






November 14, 2014

High Skill Foreign Workers Raise Wages for Native Workers



WageGrowthRelatedToChangesInForeignSTEMworkersGraph2014-10-08.jpgSource of graph: online version of the WSJ article quoted and cited below.



(p. A6) "A lot of people have the idea there is a fixed number of jobs," said . . . , Giovanni Peri of the University of California, Davis. "It's completely turned around."

Immigrants can boost the productivity of the overall economy, he said, "because then the pie grows and there are more jobs for other people as well and there's not a zero-sum trade-off between natives and immigrants."

Mr. Peri, along with co-authors Kevin Shih at UC Davis, and Chad Sparber at Colgate University, studied how wages for college- and noncollege-educated native workers shifted along with immigration. They found that a one-percentage-point increase in the share of workers in STEM fields raised wages for college-educated natives by seven to eight percentage points and wages of the noncollege-educated natives by three to four percentage points.

Mr. Peri said the research bolsters the case for raising, or even removing, the caps on H-1B visas, the program that regulates how many high-skilled foreign workers employers can bring into the country.



For the full story, see:

JOSH ZUMBRUN and MATT STILES. "Study: Skilled Foreign Workers a Boon to Pay." The Wall Street Journal (Fri., May 23, 2014): A6.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 22, 2014, and has the title "Skilled Foreign Workers a Boon to Pay, Study Finds.")


The paper discussed in the passage quoted above, is:

Peri, Giovanni, Kevin Shih, and Chad Sparber. "Foreign Stem Workers and Native Wages and Employment in U.S. Cities." National Bureau of Economic Research, Inc, NBER Working Paper Number 20093, May 2014.






November 12, 2014

FDR Ruthlessly Manipulated Political Process



(p. D8) Michael C. Janeway, a former editor of The Boston Globe and executive editor of The Atlantic Monthly who wrote two books chronicling what he saw as the intertwined decline of democracy and journalism in the United States, died on Thursday [April 17, 2014] at his home in Lakeville, Conn.


. . .


The second book, "The Fall of the House of Roosevelt: Brokers of Ideas and Power From FDR to LBJ," published in 2004, measured some of the ideas in his first book against the history of the New Deal. It focused on President Franklin D. Roosevelt's inner circle of advisers, a group of political operatives and thinkers often called Roosevelt's "brain trust," who helped conceive ideas like the minimum wage, Social Security and federal bank deposit insurance.

Mr. Janeway's father, Eliot Janeway, an economist, Democratic hand and columnist for Time magazine (a portfolio not unheard-of in those days), was a prominent member of that group.

Michael Janeway suggested that in undertaking the radical changes necessary to yank the "shattered American capitalist system into regulation and reform," Roosevelt and his team manipulated the political process with a level of ruthlessness that may have been justified by the perils of the times. But in the years that followed, he wrote, the habit of guile and highhandedness devolved into the kind of arrogance that defined -- and doomed -- the presidency of Lyndon B. Johnson, Roosevelt's last political heir.



For the full obituary, see:

PAUL VITELLO. "Michael Janeway, 73, Former Editor of The Boston Globe." The New York Times (Sat., APRIL 19, 2014): D8.

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

(Note: the online version of the obituary has title "Michael Janeway, Former Editor of The Boston Globe, Dies at 73.")


The book mentioned in the passage quoted above is:

Janeway, Michael. The Fall of the House of Roosevelt: Brokers of Ideas and Power from FDR to LBJ, Columbia Studies in Contemporary American History. New York: Columbia University Press, 2004.






November 10, 2014

Pay Gap Widest in Jobs that Value Long Hours, Face Time and Being on Call



GenderGapProfessionsGraph2014-10-08.jpg





















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


















(p. B3) "The gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours and worked particular hours," [Harvard economist Claudia Goldin] . . . wrote in a paper published [in April 2014] . . . in The American Economic Review.

Occupations that most value long hours, face time at the office and being on call -- like business, law and surgery -- tend to have the widest pay gaps. That is because those employers pay people who spend longer hours at the office disproportionately more than they pay people who don't, Dr. Goldin found. A lawyer who works 80 hours a week at a big corporate law firm is paid more than double one who works 40 hours a week as an in-house counsel at a small business.

Jobs in which employees can easily substitute for one another have the slimmest pay gaps, and those workers are paid in proportion to the hours they work.

Pharmacy is Dr. Goldin's favorite example. A pharmacist who works 40 hours a week generally earns double the salary of a pharmacist who works 20 hours a week, and as a result, the pay gap for pharmacists is one of the smallest.

Pharmacy became such an equitable profession not because of activism but because of changes in the labor market (fewer self-owned pharmacies and more large corporations) and changes in technology (storing patient records on computers where they are easily accessible by any pharmacist).



For the full story, see:

Claire Cain Miller. "Pay Gap Is Because of Gender, Not Jobs." The New York Times (Thurs., APRIL 24, 2014): B3.

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

(Note: the online version of the story has the date APRIL 23, 2014.)


The Goldin academic paper mentioned above, is:

Goldin, Claudia. "A Grand Gender Convergence: Its Last Chapter." American Economic Review 104, no. 4 (April 2014): 1091-119.






November 7, 2014

Wal-Mart Nimbly Evades Bank Industry Efforts to Restrict Competition



(p. B3) Here comes Wal-Bank.

After years of thwarted efforts to break into banking, Walmart is making its biggest foray yet into everyday financial services.

Walmart, the nation's largest retailer, is teaming up with Green Dot, known for its prepaid payment cards, to supply checking accounts to almost anyone over 18 who passes an ID check.


. . .


. . . the new Walmart initiative will be the first full-blown, off-the-shelf checking account. To help attract customers, Walmart and Green Dot will forgo a screening system many banks use to vet potential customers and rely instead on a proprietary system. The model is expected to allow almost any consumer who passes an identification check to open an account in minutes, according to Green Dot.

In the past, Walmart has tried to secure a federal bank charter to become a deposit-taking bank, but abandoned that effort in 2007 in the face of opposition from the banking industry. Since then, the retailer has assembled an array of services that could be offered without a charter, as well as partnerships with financial service companies like Green Dot.



For the full story, see:

HIROKO TABUCHI and JESSICA SILVER-GREENBERG. "Finding a Door Into Banking, Walmart Prepares to Offer Checking Accounts." The New York Times (Weds., SEPT. 24, 2014): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date SEPT. 23, 2014, and has the title "Walmart Prepares to Offer Low-Cost Checking Accounts.")






October 27, 2014

China May Have Higher Incomes, But India Has Freedom and Hope



(p. A11) The author remains generally optimistic about India's prospects. Economic reforms that began in 1991 have quickened growth. On average, GDP has grown nearly 7% a year since then. Thanks to a media revolution that began in the 1990s and has exploded over the past decade, a state-owned monopoly over television news has given way to upward of 450 raucous channels that make Fox News look staid by comparison. The author argues that together these two trends have sparked a kind of virtuous cycle: Better-educated and better-fed Indians are demanding more from their politicians. A take-no-prisoners media will keep them on their toes.


. . .


Educated Indians can't stop complaining about the politicians who lead them. Yet, echoing the historian Ramachandra Guha, Mr. Denyer argues that India's main success since its independence in 1947 has been political rather than economic. It has strengthened its democratic institutions and nurtured religious and cultural pluralism. Despite the fact that the average Indian earned $1,500 last year, less than a fourth of the average Chinese, it is in New Delhi, not Beijing, that you can afford to call the president (or prime minister) a blithering idiot without worrying about a midnight knock on the door.



For the full review, see:

SADANAND DHUME. "BOOKSHELF; Book Review: 'Rogue Elephant' by Simon Denyer; The average Indian earns less than the average Chinese. But it's in New Delhi--not Beijing--where you can call the prime minister an idiot without worrying about a knock on the door." The Wall Street Journal (Mon., July 28, 2014): A11.

(Note: ellipsis added.)

(Note: the online version of the review has the date July 27, 2014, and has the title "BOOKSHELF; Book Review: 'Rogue Elephant' by Simon Denyer; The average Indian earns less than the average Chinese. But it's in New Delhi--not Beijing--where you can call the prime minister an idiot without worrying about a knock on the door.")


The book being reviewed is:

Denyer, Simon. Rogue Elephant: Harnessing the Power of India's Unruly Democracy. New York: Bloomsbury Press, 2014.






October 25, 2014

American Poor Are Richer Now than in the Past



PriceChangesBySectorGraph2014-10-07.jpgSource of graph: online version of the NYT article quoted and cited below.



(p. A1) WASHINGTON -- Is a family with a car in the driveway, a flat-screen television and a computer with an Internet connection poor?

Americans -- even many of the poorest -- enjoy a level of material abundance unthinkable just a generation or two ago.


. . .


(p. B2) Two broad trends account for much of the change in poor families' consumption over the past generation: federal programs and falling prices.

Since the 1960s, both Republican and Democratic administrations have expanded programs like food stamps and the earned-income tax credit. In 1967, government programs reduced one major poverty rate by about 1 percentage point. In 2012, they reduced the rate by nearly 13 percentage points.

As a result, the differences in what poor and middle-class families consume on a day-to-day basis are much smaller than the differences in what they earn.

"There's just a whole lot more assistance per low-income person than there ever has been," said Robert Rector, a senior research fellow at the conservative Heritage Foundation. "That is propping up the living standards to a considerable degree," he said, citing a number of statistics on housing, nutrition and other categories.


. . .


. . . another form of progress has led to what some economists call the "Walmart effect": falling prices for a huge array of manufactured goods.

Since the 1980s, for instance, the real price of a midrange color television has plummeted about tenfold, and televisions today are crisper, bigger, lighter and often Internet-connected. Similarly, the effective price of clothing, bicycles, small appliances, processed foods -- virtually anything produced in a factory -- has followed a downward trajectory. The result is that Americans can buy much more stuff at bargain prices.



For the full story, see:

ANNIE LOWREY. "Changed Life of the Poor: Better Off, but Far Behind." The New York Times (Mon., May 1, 2014): A1 & B2 (sic).

(Note: ellipses added.)

(Note: the online version of the story has the date APRIL 30, 2014, and has the title "Changed Life of the Poor: Better Off, but Far Behind.")






October 23, 2014

The Invention of the Vacuum Tube as a Revolutionary Event



(p. A11) Mr. Bryce's engrossing survey has two purposes. The first is to refute pessimists who claim that technology-driven economic growth will burn through the planet's resources and lead to catastrophe. "We are living in a world equipped with physical-science capabilities that stagger the imagination," he writes. "If we want to bring more people out of poverty, we must embrace [technological innovation], not reject it." The book's other purpose is to persuade climate-change fundamentalists that they are standing on the wrong side of history. Instead of saving the planet by going backward to Don Quixote's windmills, they need to take a progressive approach to technology itself, he says, striving to make nuclear power safer, for instance, and using the hydrocarbon revolution sparked by fracking and deep-offshore exploration to bridge the way to the future.


. . .


Mr. Bryce focuses in particular on the vacuum tube, designed in 1906 by Lee de Forest, the man also credited with inventing the radio.

The discovery of the vacuum tube, Mr. Bryce says, was a revolutionary event. By trapping the energy generated from the free flow of electrons and directing it to boost a small AC current into a much larger one, de Forest created electric amplification--which the transistor and integrated circuit would multiply exponentially.



For the full review, see:

ARTHUR HERMAN. "BOOKSHELF; How to Defuse the Power Elite; To compel the switch from fossil fuels to wind and solar power is to consign billions of people to a life of poverty and darkness." The Wall Street Journal (Thurs., May 22, 2014): A11.

(Note: ellipsis added.)

(Note: the online version of the review has the date May 21, 2014, and has the title "BOOKSHELF; Book Review: 'Smaller Faster Lighter Denser Cheaper' by Robert Bryce; To compel the switch from fossil fuels to wind and solar power is to consign billions of people to a life of poverty and darkness.")


The book being reviewed is:

Bryce, Robert. Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong. New York: PublicAffairs, 2014.






October 22, 2014

Nevada Government Lets Tesla Sell Directly to Consumers



(p. A13) . . . in addition to rubber-stamping the agreement that waived Tesla's property, sales and business taxes for a decade or more--while throwing in discount power rates--the Nevada legislature also approved a bill last week that would exempt the auto maker from franchising regulations outlawing the company's retail approach. The state's auto dealers, who only weeks ago threatened to sue over the matter, shifted gears and endorsed the legislation.

"My car dealers want to assist in any way they can," John Sande of the Nevada Franchise Auto Dealers Association told the Reno Gazette Journal. "Nevada law does not allow Tesla to come in and sell directly to the consumer, so we are going to have to come in and change it so they can sell directly to the consumer."

No doubt the dealers balanced the pros and cons of agitating for their own self-interest against overwhelming political support for the deal and the spending potential of thousands of new, well-paid workers who may prefer a Ford or Chevy pickup over a $70,000 Tesla Model S. But the fact that Nevada legislators so quickly jettisoned a key provision of the state's dealership-franchise provisions speaks volumes about how essential these statutes really are to the well-being of their constituents.

There is no rational reason Tesla--or any other automobile manufacturer--should be restricted from selling new cars directly to those who seek to buy them.



For the full commentary, see:

JOHN KERR. "OPINION; Tesla Breaks the Auto Dealer Cartel; Nevada lets the electric car maker sell directly to consumers. Too bad everyone else still can't." The Wall Street Journal (Weds., Sept. 17, 2014): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Sept. 16, 2014.)







October 21, 2014

Apprenticeships as an Alternative to Education Credentials



(p. R3) College degrees and internships don't produce the same quality of worker as intensive, on-the-job apprenticeships, says Brad Neese, director of Apprenticeship Carolina, a program of the South Carolina Technical College System. Employers are seeing "a real lack of applicability in terms of skill level" from college graduates, Mr. Neese says. "Interns do grunt work, generally." In contrast, he says, "an apprenticeship is a real job."


. . .


"The apprenticeship model helps us show people there's a career path within this company," says Robby Hill, owner of HillSouth, a Florence, S.C., technology consulting firm taking advantage of South Carolina's on-the-job training program. New employees see the opportunities ahead, along with a clearly delineated ladder of skill acquisition and salary increases, says Mr. Hill, whose 22-person firm offers apprenticeships for IT and administrative-support employees. The company also asks employees to sign noncompete agreements as they get accredited for new skills.



For the full story, see:

LAUREN WEBER. "JOURNAL REPORTS: LEADERSHIP IN HR; Here's One Way to Solve the Skills Gap. Apprenticeships Can Help Give Companies the Employees They Need. So Why Aren't There More of Them." The Wall Street Journal (Mon., April 28, 2014): R3.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 27, 2014, and has the title "JOURNAL REPORTS: LEADERSHIP; Apprenticeships Help Close the Skills Gap. So Why Are They in Decline? Some States Try Extending the Practice to More Professions.")






October 17, 2014

French Socialist Wants to Encourage Entrepreneurs by Reducing Regulations



MacronFrenchSocialist2014-10-07.jpg "Emmanuel Macron, France's new economy minister, has been a major force behind a recent shift by President François Hollande toward a more centrist economic policy." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. B3) . . . , what is important, Mr. Macron said, as a late train from the nearby Gare de Lyon rumbled beneath his window, is that France continue to streamline and modernize the welfare state.

"For me being a Socialist today is about defending the unemployed, but also defending businessmen who want to create a company, and those who need jobs," he said. "We have to shift the social model from a lot of formal protections toward loosening bottlenecks in the economy."



For the full story, see:

LIZ ALDERMAN. "France's 36-Year-Old Economy minister Is Face of the New Socialism." The New York Times (Tues., OCT. 7, 2014): B3.

(Note: ellipsis added.)

(Note: the online version of the story has the date OCT. 6, 2014, and has the title "Emmanuel Macron, Face of France's New Socialism.")






October 15, 2014

We Feel Safer When We Have More Personal Control



(p. C3) So how should we approach risk? The numbers can help, especially if we simplify them. For acute risks, a good measure is the MicroMort, devised by Stanford's Ronald A. Howard in the 1970s. One MicroMort (1 MM) is equal to a one-in-a-million chance of death.


. . .


In truth, "Don't do that, it's dangerous!" is about much more than the numbers. We must also reflect on the full basis for our preferences--such as, to take one small psychological characteristic among many, what we value in life, as well as what we fear.


. . .


In fact, the numbers tend to have the effect of highlighting the psychological factors. Take traveling. For 1 MM, you can drive 240 miles in the U.S., fly 7,500 miles in a commercial aircraft or fly just 12 miles in a light aircraft. We tend to feel safer if we feel more personal control, but we have no control whatsoever in a passenger jet, the safest of all (notwithstanding last week's terrible tragedy). You could take that as evidence of human irrationality. We take it as evidence that human motives matter more than the pure odds allow.



For the full commentary, see:

MICHAEL BLASTLAND and DAVID SPIEGELHALTER. "Risk Is Never a Strict Numbers Game; We tell children to shun ecstasy but don't fret about horseback riding--and other foibles of our view of danger." The Wall Street Journal (Sat., July 19, 2014): C3.

(Note: ellipses in original.)

(Note: the online version of the commentary has the date July 18, 2014.)


The passages quoted above were from a commentary adapted from the book:

Blastland, Michael, and David Spiegelhalter. The Norm Chronicles: Stories and Numbers About Danger and Death. New York: Basic Books, 2014.






October 14, 2014

Boring Jobs Cause Stress and Lower Productivity



(p. B4) A study published this year in the journal Experimental Brain Research found that measurements of people's heart rates, hormonal levels and other factors while watching a boring movie -- men hanging laundry -- showed greater signs of stress than those watching a sad movie.

"We tend to think of boredom as someone lazy, as a couch potato," said James Danckert, a professor of neuroscience at the University of Waterloo in Ontario, Canada, and a co-author of the paper. "It's actually when someone is motivated to engage with their environment and all attempts to do so fail. It's aggressively dissatisfying."

It's not just the amount of work, Professor Spector said, also but the type.   . . .

"You can be very busy and a have a lot to do and still be bored," he said. The job -- whether a white-collar managerial position or blue-collar assembly line role -- also needs to be stimulating.


. . .


In a 2011 paper based on the doctoral dissertation of his student Kari Bruursema, Professor Spector and his co-authors found that the stress of boredom can lead to counterproductive work behavior, like calling in sick, taking long breaks, spending time on the Internet for nonwork-related reasons, gossiping about colleagues, playing practical jokes or even stealing. While most workers engage in some of these activities at times, the bored employee does it far more frequently, he said.



For the full story, see:

ALINA TUGEND. "Shortcuts; The Contrarians on Stress: It Can Be Good for You." The New York Times (Sat., OCT. 4, 2014): B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date OCT. 3, 2014.)


The Experimental Brain Research study mentioned above, is:

Merrifield, Colleen, and James Danckert. "Characterizing the Psychophysiological Signature of Boredom." Experimental Brain Research 232, no. 2 (Feb. 2014): 481-91.


The article mentioned above, that is co-authored by Spector, is:

Bruursema, Kari, Stacey R. Kessler, and Paul E. Spector. "Bored Employees Misbehaving: The Relationship between Boredom and Counterproductive Work Behaviour." Work & Stress 25, no. 2 (April 2011): 93-107.






October 13, 2014

Mexicans Abandon Government Subsidized Housing Developments



(p. A5) ZUMPANGO, Mexico -- In an enormous housing development on the edge of this scrappy commuter town, Lorena Serrano's 11-foot-wide shoe box of a home is flanked by abandoned houses. The neighborhood has two schools, a few bodegas and a small community center that offers zumba classes.

There is very little else.

"There are no jobs, no cinema, no cantina," said Ms. Serrano of the 8,000-home development, called La Trinidad. Her husband's commute to the capital, Mexico City, about 35 miles south, takes two hours each way by bus and consumes a quarter of his salary, she said. "We're in the middle of nowhere."

Ms. Serrano, 39, is among more than five million Mexicans who, over the past decade, bought houses through a government program that made mortgages available to low-income buyers.

The program, initially hailed by some experts as the answer to Mexico's chronic housing deficit, fueled a frenzy of construction and helped inspire similar efforts in Latin America and beyond, including Brazil's "My House, My Life," which aims to build at least 3 million homes by this year.

But the concrete sprawl around Mexico City and other big towns grew faster than demand. Commutes proved unbearable, and residents abandoned their homes.



For the full story, see:

VICTORIA BURNETT. "ZUMPANGO JOURNAL; They Built It. People Came. Now They Go." The New York Times (Tues., SEPT. 9, 2014): A5.

(Note: the online version of the story has the date SEPT. 8, 2014.)






October 10, 2014

Labor Process Innovations Increased Productivity



(p. 6) . . . , Greg Clark, a professor of economics at the University of California, Davis, has gone so far as to argue that the Industrial Revolution was in part a self-control revolution. Many economists, beginning with Adam Smith, have argued that factories -- an important innovation of the Industrial Revolution -- blossomed because they allowed workers to specialize and be more productive.

Professor Clark argues that work rules truly differentiated the factory. People working at home could start and finish when they wanted, a very appealing sort of flexibility, but it had a major drawback, he said. People ended up doing less work that way.

Factories imposed discipline. They enforced strict work hours. There were rules for when you could go home and for when you had to show up at the beginning of your shift. If you arrived late you could be locked out for the day. For workers being paid piece rates, this certainly got them up and at work on time. You can even see something similar with the assembly line. Those operations dictate a certain pace of work. Like a running partner, an assembly line enforces a certain speed.

As Professor Clark provocatively puts it: "Workers effectively hired capitalists to make them work harder. They lacked the self-control to achieve higher earnings on their own."

The data entry workers in our study, centuries later, might have agreed with that statement. In fact, 73 percent of them did agree to this statement: "It would be good if there were rules against being absent because it would help me come to work more often."

Of course with newer forms of technology, showing up for work on time need not mean being physically at a given workplace. A study by the economists Nicholas Bloom, John Roberts and Zhichun Ying of Stanford and James Liang of Peking University looked at call center workers in China. In their experiment, some workers were randomly assigned to work at home, others worked in group call centers. The work habits of both groups were carefully monitored electronically, and the workers knew it. The researchers found that those working at home were 13 percent more productive than those in call centers. With modern technology, we now have so many ways to quantify, track and motivate productivity. We do not need to lock factory doors or even have a factory. Yet we have not yet begun to scratch the surface of motivating production in this way.



For the full commentary, see:

SENDHIL MULLAINATHAN. "Economic View; Looking at Productivity as a State of Mind." The New York Times, SundayBusiness Section (Sun., SEPT. 28, 2014): 6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date SEPT. 27, 2014.)


The article mentioned above by Clark is:

Clark, Gregory. "Factory Discipline." Journal of Economic History 54, no. 1 (March 1994): 128-63.


The article mentioned above by Bloom, Liang, Roberts and Ying is:

Bloom, Nicholas, James Liang, John Roberts, and Zhichun Jenny Ying. "Does Working from Home Work? Evidence from a Chinese Experiment." August 18, 2014.






October 9, 2014

Feds Allow Hollywood to Use Drones



(p. B1) LOS ANGELES -- The commercial use of drones in American skies took a leap forward on Thursday [Sept. 25, 2014] with the help of Hollywood.

The Federal Aviation Administration, responding to applications from seven filmmaking companies and pressure from the Motion Picture Association of America, said six of those companies could use camera-equipped drones on certain movie and television sets. Until now, the F.A.A. has not permitted commercial drone use except for extremely limited circumstances in wilderness areas of Alaska.

Put bluntly, this is the first time that companies in the United States will be able to legally use drones to fly over people.

The decision has implications for a broad range of industries including agriculture, energy, real estate, the news media and online retailing. "While the approval for Hollywood is very limited in scope, it's a message to everyone that this ball is rolling," said Greg Cirillo, chairman of the aviation practice at Wiley Rein, a law firm in Washington.

Michael P. Huerta, the administrator of the F.A.A., said at least 40 similar applications were pending from companies beyond Hollywood. One is Amazon, which wants permission to move forward with a drone-delivery service. Google has acknowledged "self-flying vehicle" tests in the Australian outback.

"Today's announcement is a significant milestone in broadening commercial use," Anthony R. Foxx, secretary of transportation, told reporters in a conference call.



For the full story, see:

BROOKS BARNES. "Drone Exemptions for Hollywood Pave the Way for Widespread Use." The New York Times (Fri., SEPT. 26, 2014): B1 & B7.

(Note: bracketed date added.)

(Note: the online version of the story has the date SEPT. 25, 2014.)






October 6, 2014

Shellshock Bug Shows Low Quality of Open Source Software



(p. B1) Long before the commercial success of the Internet, Brian J. Fox invented one of its most widely used tools.

In 1987, Mr. Fox, then a young programmer, wrote Bash, short for Bourne-Again Shell, a free piece of software that is now built into more than 70 percent of the machines that connect to the Internet. That includes servers, computers, routers, some mobile phones and even everyday items like refrigerators and cameras.

On Thursday [Sept. 25, 2014], security experts warned that Bash contained a particularly alarming software bug that could be used to take control of hundreds of millions of machines around the world, potentially including Macintosh computers and smartphones that use the Android operating system.

The bug, named "Shellshock," drew comparisons to the Heartbleed bug that was discovered in a crucial piece of software last spring.

But Shellshock could be a bigger threat. While Heartbleed could be used to do things like steal passwords from a server, Shellshock can be used to take over the entire machine. And Heartbleed went unnoticed for two years and affected an estimated 500,000 machines, but Shellshock was not discovered for 22 years.


. . .


Mr. Fox maintained Bash -- which serves as a sort of software interpreter for different commands from a user -- for five years before handing over the reins to Chet Ramey, a 49-year-old programmer who, for the last 22 years, has maintained the software as an unpaid hobby. That is, when he is not working at his day job as a senior technology architect at Case Western Reserve University in Ohio.


. . .


(p. 2) The mantra of open source was perhaps best articulated by Eric S. Raymond, one of the elders of the open-source movement, who wrote in 1997 that "given enough eyeballs, all bugs are shallow." But, in this case, Steven M. Bellovin, a computer science professor at Columbia University, said, those eyeballs are more consumed with new features than quality. "Quality takes work, design, review and testing and those are not nearly as much fun as coding," Mr. Bellovin said. "If the open-source community does not develop those skills, it's going to fall further behind in the quality race."



For the full story, see:

NICOLE PERLROTH. "Flaw in Code Puts Millions At Big Risk." The New York Times (Fri., SEPT. 26, 2014): B1-B2.

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

(Note: the online version of the story has the date SEPT. 25, 2014, and has the title "Security Experts Expect 'Shellshock' Software Bug in Bash to Be Significant.")






October 5, 2014

Feds Protect Us from Baby Photos



(p. 1) Pictures of smiling babies crowd a bulletin board in a doctor's office in Midtown Manhattan, in a collage familiar to anyone who has given birth. But the women coming in to have babies of their own cannot see them. They have been moved to a private part of the office, replaced in the corridors with abstract art.

"I've had patients ask me, 'Where's your baby board?' " said Dr. Mark V. Sauer, the director of the office, which is affiliated with Columbia University Medical Center. "We just tell them the truth, which is that we no longer post them because of concerns over privacy."

For generations, obstetricians and midwives across America have proudly posted photographs of the babies they have delivered on their office walls. But this pre-digital form of social media is gradually going the way of cigars in the waiting room, because of the federal patient privacy law known as Hipaa.

Under the law, the Health Insurance Portability and Accountability Act, baby photos are a type of protected health information, no less than a medical chart, birth date or Social Security number, according to the Department of Health and Human Services. Even if a parent sends in the photo, it is considered private unless the parent also sends written authorization for its posting, which almost no one does.



For the full story, see:

ANEMONA HARTOCOLLIS. "Baby Pictures at the Doctor's? Cute, Sure, but Illegal." The New York Times, First Section (Sun., AUG. 10, 2014): 1 & 19.

(Note: the online version of the story has the date AUG. 9, 2014.)






October 2, 2014

Regulations Deter Start-Ups, Creating a "Senile Economy"



(p. 5B) We may have a "senile economy," says economist Robert Litan of the Brookings Institution. That's senile as in old, rigid and undynamic.


. . .


Litan is not just blowing smoke. In a new study, he and Ian Hathaway measured the age of American businesses. They were astonished by what they found: From 1992 to 2011, the share of U.S. firms that were 16 and older jumped from 23 percent to 34 percent.


. . .


What happened to all the entrepreneurs? Good question.

"We do not have an explanation," write the University of Maryland and the Census Bureau economists. Neither does Litan. "One theory is that the cumulative effect of regulations," he says, discriminates against new businesses and favors "established firms that have the experience and resources to deal with it." What allegedly deters and hampers startups is not any one regulation but the cost and time of complying with a blizzard of them.



For the full commentary, see:

ROBERT J. SAMUELSON. "Fewer entrepreneurs spells trouble." Omaha World-Herald (Mon., August 11, 2014): 5B.

(Note: ellipses added.)


The article mentioned above by Hathaway and Litan is:

Hathaway, Ian, and Robert E. Litan. "The Other Aging of America: The Increasing Dominance of Older Firms." In Economic Studies at Brookings, The Brookings Institution (July 2014): 1-17.






September 28, 2014

Pause in Global Warming Invalidates Climate-Change Models



(p. A13) When the climate scientist and geologist Bob Carter of James Cook University in Australia wrote an article in 2006 saying that there had been no global warming since 1998 according to the most widely used measure of average global air temperatures, there was an outcry. A year later, when David Whitehouse of the Global Warming Policy Foundation in London made the same point, the environmentalist and journalist Mark Lynas said in the New Statesman that Mr. Whitehouse was "wrong, completely wrong," and was "deliberately, or otherwise, misleading the public."

We know now that it was Mr. Lynas who was wrong. Two years before Mr. Whitehouse's article, climate scientists were already admitting in emails among themselves that there had been no warming since the late 1990s. "The scientific community would come down on me in no uncertain terms if I said the world had cooled from 1998," wrote Phil Jones of the University of East Anglia in Britain in 2005. He went on: "Okay it has but it is only seven years of data and it isn't statistically significant."

If the pause lasted 15 years, they conceded, then it would be so significant that it would invalidate the climate-change models upon which policy was being built. A report from the National Oceanic and Atmospheric Administration (NOAA) written in 2008 made this clear: "The simulations rule out (at the 95% level) zero trends for intervals of 15 yr or more."

Well, the pause has now lasted for 16, 19 or 26 years--depending on whether you choose the surface temperature record or one of two satellite records of the lower atmosphere. That's according to a new statistical calculation by Ross McKitrick, a professor of economics at the University of Guelph in Canada.



For the full commentary, see:

MATT RIDLEY. "OPINION; Whatever Happened to Global Warming? Now come climate scientists' implausible explanations for why the 'hiatus' has passed the 15-year mark." The Wall Street Journal (Fri., Sept. 5, 2014): A13.

(Note: the online version of the commentary has the date Sept. 4, 2014.)


The article mentioned above by economist McKitrick is:

McKitrick, Ross R. "HAC-Robust Measurement of the Duration of a Trendless Subsample in a Global Climate Time Series." Open Journal of Statistics 4 (2014): 527-35. http://dx.doi.org/10.4236/ojs.2014.47050


For a possible deeper explanation of the McKitrick results, you may consult:

McMillan, David G., and Mark E. Wohar. "The Relationship between Temperature and CO2 Emissions: Evidence from a Short and Very Long Dataset." Applied Economics 45, no. 26 (2013): 3683-90.






September 24, 2014

Less Time in Office Leaves Workers Happier, Less Stressed and Equally Productive



(p. 4) A recent study, published in The American Sociological Review, aimed to see whether the stress of work-life conflicts could be eased if employees had more control over their schedules, including being able to work from home.   . . .

The study, financed by the National Institutes of Health and the Centers for Disease Control and Prevention, involved the information technology department of a large corporation.   . . .

As part of the research, department managers received training to encourage them to show support for employees' family and personal lives, said Erin Kelly, a sociology professor at the University of Minnesota and one of the lead authors of the study. Then employees were given much more control over their schedules than before. They "were free to work where and when they preferred, as long as the work got done," she said.

The results: The employees almost doubled the amount of time they worked at home, to an average of 19.6 hours from 10.2 hours. Total work hours remained roughly the same. Focusing on results rather than time spent at the office, and cutting down on "low value" meetings and other tasks, helped employees achieve more flexibility, Professor Kelly said.

Compared with another group that did not have the same flexibility, employees interviewed by the researchers said they felt happier and less stressed, had more energy and were using their time more effectively, Professor Kelly said. There was no sign that the quality of the work improved or declined with the changed schedules, she added.



For the full story, see:

PHYLLIS KORKKI. "Yes, Flexible Hours Ease Stress. But Is Everyone on Board?." The New York Times, SundayBusiness Section (Sun., AUG. 24, 2014): C4.

(Note: the online version of the story has the date AUG. 23, 2014.)


The study mentioned above is:

Kelly, Erin L., Phyllis Moen, and Eric Tranby. "Changing Workplaces to Reduce Work-Family Conflict: Schedule Control in a White-Collar Organization." American Sociological Review 76, no. 2 (April 2011): 265-90.






September 20, 2014

Modelers Can Often Obtain the Desired Result




(p. A13) After earning a master's degree in environmental engineering in 1982, I spent most of the next 10 years building large-scale environmental computer models. My first job was as a consultant to the Environmental Protection Agency. I was hired to build a model to assess the impact of its Construction Grants Program, a nationwide effort in the 1970s and 1980s to upgrade sewer-treatment plants.

The computer model was huge--it analyzed every river, sewer treatment plant and drinking-water intake (the places in rivers where municipalities draw their water) in the country. I'll spare you the details, but the model showed huge gains from the program as water quality improved dramatically. By the late 1980s, however, any gains from upgrading sewer treatments would be offset by the additional pollution load coming from people who moved from on-site septic tanks to public sewers, which dump the waste into rivers. Basically the model said we had hit the point of diminishing returns.

When I presented the results to the EPA official in charge, he said that I should go back and "sharpen my pencil." I did. I reviewed assumptions, tweaked coefficients and recalibrated data. But when I reran everything the numbers didn't change much. At our next meeting he told me to run the numbers again.

After three iterations I finally blurted out, "What number are you looking for?" He didn't miss a beat: He told me that he needed to show $2 billion of benefits to get the program renewed. I finally turned enough knobs to get the answer he wanted, and everyone was happy.


. . .


There are no exact values for the coefficients in models such as these. There are only ranges of potential values. By moving a bunch of these parameters to one side or the other you can usually get very different results, often (surprise) in line with your initial beliefs.



For the full commentary, see:

ROBERT J. CAPRARA. "OPINION; Confessions of a Computer Modeler; Any model, including those predicting climate doom, can be tweaked to yield a desired result. I should know." The Wall Street Journal (Weds., July 9, 2014): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date July 8, 2014.)






September 17, 2014

Bill Gates on Xerox's Inventions and Mistakes



(p. C3) Not long after I first met Warren Buffett back in 1991, I asked him to recommend his favorite book about business. He didn't miss a beat: "It's 'Business Adventures,' by John Brooks, " he said. "I'll send you my copy." I was intrigued: I had never heard of "Business Adventures" or John Brooks.

Today, more than two decades after Warren lent it to me--and more than four decades after it was first published--"Business Adventures" remains the best business book I've ever read. John Brooks is still my favorite business writer. (And Warren, if you're reading this, I still have your copy.)


. . .


One of Brooks's most instructive stories is "Xerox Xerox Xerox Xerox." (The headline alone belongs in the Journalism Hall of Fame.) The example of Xerox is one that everyone in the tech industry should study. Starting in the early '70s, Xerox funded a huge amount of R&D that wasn't directly related to copiers, including research that led to Ethernet networks and the first graphical user interface (the look you know today as Windows or OS X).

But because Xerox executives didn't think these ideas fit their core business, they chose not to turn them into marketable products. Others stepped in and went to market with products based on the research that Xerox had done. Both Apple and Microsoft, for example, drew on Xerox's work on graphical user interfaces.

I know I'm not alone in seeing this decision as a mistake on Xerox's part. I was certainly determined to avoid it at Microsoft. I pushed hard to make sure that we kept thinking big about the opportunities created by our research in areas like computer vision and speech recognition. Many other journalists have written about Xerox, but Brooks's article tells an important part of the company's early story. He shows how it was built on original, outside-the-box thinking, which makes it all the more surprising that as Xerox matured, it would miss out on unconventional ideas developed by its own researchers. (To download a free e-book of "Xerox Xerox Xerox Xerox," go to GatesNotes.com.)



For the full review, see:

BILL GATES. "My Favorite Business Book." The Wall Street Journal (Sat., July 12, 2014): C3.

(Note: ellipsis added.)

(Note: the last quoted sentence is in the location, and has the wording, of the printer version, not the online version.)

(Note: the online version of the review has the date July 11, 2014, and has the title "Bill Gates's Favorite Business Book.")


The book being reviewed is:

Brooks, John. Business Adventures: Twelve Classic Tales from the World of Wall Street. pb ed. New York: Open Road Integrated Media, Inc., 2014.






September 16, 2014

Structural Reforms Needed to Increase Innovation



(p. A13) . . . , a lack of "demand" is no longer the problem.


. . .


Where, instead, are the problems? John Taylor, Stanford's Nick Bloom and Chicago Booth's Steve Davis see the uncertainty induced by seat-of-the-pants policy at fault. Who wants to hire, lend or invest when the next stroke of the presidential pen or Justice Department witch hunt can undo all the hard work? Ed Prescott emphasizes large distorting taxes and intrusive regulations. The University of Chicago's Casey Mulligan deconstructs the unintended disincentives of social programs. And so forth. These problems did not cause the recession. But they are worse now, and they can impede recovery and retard growth.

These views are a lot less sexy than a unicausal "demand," fixable by simple, magic-bullet policies. They require us to do the hard work of fixing the things we all agree need fixing: our tax code, our cronyist regulatory state, our welter of anticompetitive and anti-innovative protections, education, immigration, social program disincentives, and so on. They require "structural reform," not "stimulus," in policy lingo.



For the commentary, see:

JOHN H. COCHRANE. "OPINION; The Failure of Macroeconomics; When models don't yield the spending policies they want, some Keynesians abandon models--but not the spending." The Wall Street Journal (Thur., July 3, 2014): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 2, 2014.)






September 5, 2014

"Malthus Was Wrong"



(p. 20) The biggest problem with Malthusiasm, as Mayhew addresses at length, is that Malthus was wrong. He thought England was nearing the limits of its ability to provide for its growing population. But as that population continued to grow in the 19th century, the country proved more than able to feed itself by increasing agricultural productivity and importing food that it could easily pay for with its industrial wealth. And toward the end of the century, birthrates began falling and population growth slowed.


. . .


There is evidence enough in this book for a pretty withering attack on Malthusianism, if not on Malthus. Mayhew, however, prefers the role of calm and evenhanded guide. At the end he's even hinting that today's Malthusian prophets of environmental doom are on to something. They may be: Just because Malthus was wrong about nature's limits in 1798 doesn't prove we won't ever hit those limits. Past performance is no guarantee of future results. Still, you'd think it would put more of a damper on people's Malthusiasm.



For the full review, see:

JUSTIN FOX. "Head Count." The New York Times Book Review (Sun., Aug. 3, 2014): 20.

(Note: ellipsis added.)

(Note: the online version of the review has the date Aug. 1, 2014. )


The book being reviewed is:

Mayhew, Robert J. Malthus: The Life and Legacies of an Untimely Prophet. Cambridge, MA: Belknap Press, 2014.






September 3, 2014

Predictors of Technological Doom Have "All Been Wrong"



GrowingAndDecliningJobsGraph2014.jpgSource of graph: online version of the NYT article quoted and cited below.



(p. 4) JUST over 50 years ago, the cover of Life magazine breathlessly declared the "point of no return for everybody." Above that stark warning, a smaller headline proclaimed, "Automation's really here; jobs go scarce."

As events unfolded, it was Life that was nearing the point of no return -- the magazine suspended weekly publication in 1972. For the rest of America, jobs boomed; in the following decade, 21 million Americans were added to the employment rolls.

Throughout history, aspiring Cassandras have regularly proclaimed that new waves of technological innovation would render huge numbers of workers idle, leading to all manner of economic, social and political disruption.

As early as 1589, Queen Elizabeth I refused a patent on a knitting machine for fear it would put "my poor subjects" out of work.

In the 1930s, the great John Maynard Keynes predicted widespread job losses "due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour."

So far, of course, they've all been wrong. But that has not prevented a cascade of shrill new proclamations that -- notwithstanding centuries of history -- "this time is different": . . .



For the full commentary, see:

Steven Rattner. "Fear Not the Coming of the Robots." The New York Times, SundayReview Section (Sun., JUNE 22, 2014): 4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date June 21, 2014.)






September 1, 2014

"The Metric System Can Be Our Operating System Without Being Our Interface"



(p. C6) The outcome was perhaps foreshadowed, as Mr. Marciano points out, when President Ford, using a customary unit, noted that American industries were "miles ahead" when it came to adopting the metric system.

Mr. Marciano tells his story more or less without editorializing, until the end. Surveying the centuries of fights over measurement, he finishes on a rather intriguing point: Standardization no longer matters that much.


. . .


. . . , with the computerization of life, we don't have to worry about converting from one measurement to another; our software does this for us. We can still speak in pounds or feet, even if everything in the world of manufacturing and technology is really, at bottom, done in the metric system. In the evocative terminology of Mr. Marciano, "the metric system can be our operating system without being our interface."



For the full review, see:

SAMUEL ARBESMAN. "Liters and Followers; Gerald Ford once proudly declared the country was 'miles ahead' in converting to the metric system." The Wall Street Journal (Sat., Aug. 2, 2014): C6.

(Note: ellipses added.)

(Note: the online version of the review has the date Aug. 1, 2014, and has the title "Book Review: 'Whatever Happened to the Metric System?' by John Bemelmans Marciano; Gerald Ford once proudly declared the country was 'miles ahead' in converting to the metric system." )


The book being reviewed is:

Marciano, John Bemelmans. Whatever Happened to the Metric System?: How America Kept Its Feet. New York: Bloomsbury USA, 2014.






August 28, 2014

"A Few Really Good Artisanal Cheese Shops Is No Substitute for a Strong School System"



(p. 836) Moretti's writing on the "creative class" takes issue with policies associated with Richard Florida, who has exerted a considerable influence on local policymakers worldwide. Moretti uses the example of Berlin, which is a cool place full of creative types but still isn't much of an economic powerhouse, to make the case against Florida's recommendations.


. . .


A problem exists if city governments start thinking that their main job is to be hip rather than competent. Having a few really good artisanal cheese shops is no substitute for a strong school system. Local leaders would do well to remember that an externality-creating skilled resident is as likely to be a forty-two-year-old mother who works in (p. 837) a lab as a twenty-five-year-old looking for a good time. The forty-two-year-old's tastes in local amenities are likely to be quite different from those of the twenty-five-year-old. If Moretti's caution against creative class policies achieves that end, then it will have done something quite positive.



For the full review, see:

Glaeser, Edward. "A Review of Enrico Moretti's the New Geography of Jobs." Journal of Economic Literature 51, no. 3 (Sept. 2013): 825-37.

(Note: ellipsis added.)


The book under review is:

Moretti, Enrico. The New Geography of Jobs. New York: Houghton Mifflin Harcourt Publishing Co., 2012.






August 27, 2014

Big Increase in Costs of Adhering to Moore's Law



(p. 219) Harald Bauer, Jan Veira, and Florian Weig consider "Moore's Law: Repeal or Renewal?" "Moore's law states that the number of transistors on integrated circuits doubles every two years, and for the past four decades it has set the pace for progress in the semiconductor industry. . . . Adherence to Moore's law has led to continuously falling semiconductor prices. Per-bit prices of dynamic random-access memory chips, for example, have fallen by as much as 30 to 35 percent a year for several decades. . . . Some estimates ascribe up to 40 percent of the global productivity growth achieved during the last two decades to the expansion of information and communication technologies made possible by semiconductor performance and cost improvements." But this continued technological progress comes at an ever-higher price. "A McKinsey analysis shows that moving from 32nm (p. 220) to 22nm nodes on 300-millimeter (mm) wafers causes typical fabrication costs to grow by roughly 40 percent. It also boosts the costs associated with process development by about 45 percent and with chip design by up to 50 percent. These dramatic increases will lead to process-development costs that exceed $1 billion for nodes below 20nm. In addition, the state-of-the art fabs needed to produce them will likely cost $10 billion or more. As a result, the number of companies capable of financing next-generation nodes and fabs will likely dwindle." McKinsey Global Institute, December 2013, http://www.mckinsey.com/insights/high_tech_telecoms_internet/moores_law_repeal_or_renewal.


Source:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 2 (Spring 2014): 213-20.

(Note: ellipses in original.)






August 23, 2014

The Vagueness and Regulatory Discretion of Dodd-Frank Is "a Recipe for Cronyism"



(p. 218) Aaron Steelman has an "Interview" with John Cochrane. On Dodd-Frank: "I think Dodd-Frank repeats the same things we've been trying over and over again that have failed, in bigger and bigger ways. . . . The deeper problem is the idea that we just need more regulation--as if regulation is something you pour into a glass like water--not smarter and better designed regulation. Dodd-Frank is pretty bad in that department. It is a long and vague law that spawns a mountain of vague rules, which give regulators huge discretion to tell banks what to do. It's a recipe for cronyism and for banks to game the system to limit competition." On how to stop bailing out large financial institutions: "You have to set up the system ahead of time so that you either can't or won't need to conduct bailouts. Ideally, both. . . . The worst possible system is one in which everyone thinks bailouts are coming, but the government in fact does not have the legal authority to bail out." . . . Econ Focus, Federal Reserve Bank of Richmond, Third Quarter 2013, pp. 34-38. https://www.richmondfed
.org/publications/research/econ_focus/2013/q3/pdf/interview.pdf
.


Source:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 1 (Winter 2014): 235-42.

(Note: italics, and first two ellipses, are in original; the last ellipsis is added.)






August 19, 2014

Political Entrepreneurs Can Find Ways to Overcome Vested Interests



[p. 202] In their recent book, Leighton and López (2013) place special emphasis on political entrepreneurship in making policy reform possible. For new ideas to overcome vested interests, they write (p. 134), it must be the case that "entrepreneurs notice and exploit those loose spots in the structure of ideas, institutions, and incentives." They provide four case studies of this process: spectrum license auctions, airline deregulation, welfare reform, and housing finance. In their words (p. 178): "[T]he public face of political change may be that of a madman, an intellectual, or an academic scribbler. But whatever form these leaders may take, they are political entrepreneurs--people whose ideas and actions are focused on producing change." As these authors stress, political entrepreneurship can be socially harmful, as when the pursuit of individual rents comes at the expense of overall inefficiency. But the returns from shifting the political transformation frontier out can be very large as well.


. . .


(p. 206) I owe a special debt to the recent book by Edward López and Wayne Leighton (2012 sic) for stimulating me to put down on paper a number of ideas I had been mulling over for some time.



Source:

Rodrik, Dani. "When Ideas Trump Interests: Preferences, Worldviews, and Policy Innovations." Journal of Economic Perspectives 28, no. 1 (Winter 2014): 189-208.

(Note: the bracketed page number refers to the Rodrik article; the page number in parentheses refers to the Leighton and López book; ellipsis added; italics, and the bracketed letter, in the original.)


The book Rodrik discusses is:

Leighton, Wayne A., and Edward J. López. Madmen, Intellectuals, and Academic Scribblers: The Economic Engine of Political Change. Stanford, CA: Stanford University Press, 2013.






August 16, 2014

Process Innovations, Allowed by Deregulation, Creatively Destroyed Railroads



(p. A11) In "American Railroads: Decline and Renaissance in the Twentieth Century," transportation economists Robert E. Gallamore and John R. Meyer provide a comprehensive account of both the decline and the revival.   . . .    They point to excessive government regulation of railroad rates and services as the catalyst for the industry's decay.


. . .


. . . deregulation, Mr. Gallamore and Meyer demonstrate, was a process of creative destruction. Conrail was created by the government in 1976 in a risky, last-ditch attempt to rescue Penn Central and other bankrupt Eastern railroads. It was quickly losing $1 million a day, and its plight helped make the case for the major revamp of railroad regulation that came in 1980. A wave of mergers followed, and the new companies slashed routes and employees on the way to profitability. The shrinking of the national rail system helped, too, as freight companies consolidated traffic on a smaller (and therefore cheaper) network. Freight-train crews were cut to two or three people from four or five. Cabooses were replaced by electronic gear at the end of freight trains.



For the full review, see:

DANIEL MACHALABA. "BOOKSHELF; Long Train Runnin'; Track conditions got so bad in the 1970s that stationary freight cars were falling off the rails thanks to rotting crossties." The Wall Street Journal (Weds., July 9, 2014): A11.

(Note: ellipses added.)

(Note: the online version of the review has the date July 8, 2014, and has the title "BOOKSHELF; Book Review: 'American Railroads' by Robert E. Gallamore and John R. Meyer; Track conditions got so bad in the 1970s that stationary freight cars were falling off the rails thanks to rotting crossties.")


The book under review is:

Gallamore, Robert E., and John R. Meyer. American Railroads: Decline and Renaissance in the Twentieth Century. Cambridge, MA: Harvard University Press, 2014.






August 15, 2014

Flexibility of System of Industrial Relations Makes German Economy Strong



(p. 183) We have argued that the remarkable transformation of the German economy from the "sick man of Europe" to a lean and highly competitive economy within little more than a decade is rooted in the inherent flexibility of the German system of industrial relations. This system allowed German industry to react appropriately and flexibly over time to the demands of German unification, and the global challenges of a new world economy.


Source:

Dustmann, Christian, Bernd Fitzenberger, Uta Schoenberg, and Alexandra Spitz-Oener. "From Sick Man of Europe to Economic Superstar: Germany's Resurgent Economy." Journal of Economic Perspectives 28, no. 1 (Winter 2014): 167-88.






August 13, 2014

"In the Name of God and of Profit"




Writing of the period of the mid to late 1300s in the area of Florence:


(p. 114) The surviving archive of a single great merchant of this period, Francesco di Marco Datini of nearby Prato--not, by any means, the greatest of these early capitalists--contains some 150,000 letters, along with 500 account books or ledgers, 300 deeds of partnership, 400 insurance policies, several thousand bills of lading, letters of advice, bills of exchange, and checks. On the first pages of Datini's ledgers were inscribed the words: "In the name of God and of profit."


Source:

Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.






August 11, 2014

Lynas Apologizes for Organizing Anti-GM (Genetic Modification) Movement