August 15, 2017

Code Schools Provide Intense 12 Week Training, and Jobs

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

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

For the full commentary, see:

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

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

August 13, 2017

Petsitting Is Illegal Without a License

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

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

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

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

. . .

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

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

. . .

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

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

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

. . .

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

For the full story, see:

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

(Note: ellipses added.)

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

August 12, 2017

Employment Grows as Productivity Rises

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

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

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

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

. . .

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

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

. . .

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

. . .

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

For the full commentary, see:

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

(Note: ellipses added.)

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

The David Autor paper, mentioned above, is:

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

The Atkinson and Wu report, mentioned above, is:

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

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

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

August 8, 2017

Disney Stories Give Happiness to the Poor

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

. . .

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

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

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

. . .

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

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

. . .

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

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

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

. . .

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

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

. . .

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

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

. . .

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

For the full story, see:

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

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

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

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

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

August 6, 2017

How to Use Dyslexia and ADHD to Become a Better Leader

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

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

. . .

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

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

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

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

For the full interview, see:

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

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

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

August 5, 2017

Regulations, Not Robots, Cause Slower Job Growth

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

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

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

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

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

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

For the full commentary, see:

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

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

August 4, 2017

Illegal Immigration Hurts Low-Wage U.S. Workers

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

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

. . .

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

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

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

. . .

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

. . .

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

. . .

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

For the full commentary, see:

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

(Note: ellipses added.)

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

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

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

August 3, 2017

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

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

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

. . .

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

. . .

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

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

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

For the full commentary, see:

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

(Note: ellipses added.)

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

August 2, 2017

"90 Is the New 65"

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

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

. . .

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

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

. . .

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

For the full review, see:

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

(Note: ellipses added.)

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

July 30, 2017

Workers Are Empowered, Not Threatened, by Robots

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

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

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

. . .

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

For the full commentary, see:

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

(Note: ellipsis added.)

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

July 26, 2017

Silicon Valley "Oligarchs" Block Upward Mobility of Masses

Bill Gates, Jaron Lanier, Tim Berners-Lee, and others have suggested that a fairer system of information technology property rights would enable micropayments for intellectual content posted to blogs and Facebook. This also would allow upward mobility. The value of the intellectual contributions is currently being unfairly appropriated by mega-server companies such as Google and Facebook.

A different kind of socialism

The oligarchs of the Bay Area have a problem: They must square their progressive worldview with their enormous wealth. They certainly are not socialists in the traditional sense. They see their riches not as a result of class advantages, but rather as reflective of their meritocratic superiority. As former TechCrunch reporter Gregory Ferenstein has observed, they embrace massive inequality as both a given and a logical outcome of the new economy.

The nerd estate is definitely not stupid, and like rulers everywhere, they worry about a revolt of the masses, and even the unionization of their companies. Their gambit is to expand the welfare state to keep the hoi polloi in line. Many, including Mark Zuckerberg, now favor an income stipend that could prevent mass homelessness and malnutrition.

How socialism morphs into feudalism

Unlike its failed predecessor, this new, greener socialism seeks not to weaken, but rather to preserve, the emerging class structure. Brown and his acolytes have slowed upward mobility by environment restrictions that have cramped home production of all kinds, particularly the building of moderate-cost single-family homes on the periphery. All of this, at a time when millennials nationwide, contrary to the assertion of Brown's "smart growth" allies, are beginning to buy cars, homes and move to the suburbs.

For the full commentary, see:

KOTKIN, Joel. "California's Descent to Socialism." Orange County Register, Posted: June 11, 2017. URL:

(Note: bold headings in original.)

July 20, 2017

Deregulation Can Stimulate Dynamism and Economic Growth

(p. A15) Various estimates suggest that had U.S. productivity growth not slowed, GDP would be about $3 trillion higher than it is today.

. . .

Many economists contend that properly counting free digital services from companies like Google and Facebook would substantially boost productivity and GDP growth. One of the highest estimates, calculated by economists Austan Goolsbee and Peter Klenow, stands at $800 billion. That's a big number, but not big enough to fill a $3 trillion hole.

. . .

In his 2016 book, "The Rise and Fall of American Growth," Northwestern University economist Robert Gordon contends that the current economy fails to measure up to the great inventions of the past, and that innovation today is more incremental than transformative. He has argued vigorously that the transformative effects of technologies like electric lighting, indoor plumbing, elevators, autos, air travel and television are unlikely to be repeated. Technological innovation, he argues, will not be sufficiently robust to counter the headwinds of slowing population growth, rising inequality and exploding sovereign debt.

Former Treasury Secretary Larry Summers has resurrected Alvin Hansen's 1938 theory of secular stagnation. Morgan Stanley economist Ruchir Sharma has argued that a 2% economy is the new normal. Former Fed Chairman Alan Greenspan has repeatedly said that the growing share of social benefits and entitlements in GDP crowds out national savings and reduces investments required to boost productivity growth.

The growth dividends from disruptive technology often require time before they are widely diffused and used. To Mr. Gordon's point, economic historians respond that the Industrial Revolution did not improve British living standards for almost a century. Likewise the productivity boost spurred by the transformative innovations of the early 20th century took decades to kick in.

In the short term, as companies try to develop online capabilities while maintaining a physical presence, some costs are duplicated.

. . .

It's possible that economic dynamism and entrepreneurship are no longer driving the U.S. economy. Startups are being created at a slower pace. From 1996 to 2007 the ratio of new firms to the total number of firms oscillated between 9.6 and 11.2. Today it has dropped to 7.8. Existing firms do innovate and contribute to improved productivity, but the declining share of young firms suggests a less dynamic economy.

Concurrently, the most recent numbers from the Bureau of Labor Statistics confirm that churn in the U.S. labor market remains weak across industries, regions and age groups. People are simply not moving or changing jobs for better alternatives.

. . .

The real debate is about policies that favor productivity and GDP growth. Predicting future innovation is hazardous, but deregulation and streamlined licensing requirements will facilitate job mobility. Tax reform that encourages and rewards investment should stimulate capital investment.

. . .

These necessary policy changes provide options for improving productivity and GDP growth. Waiting for the data debate to resolve itself gets us nowhere.

For the full commentary, see:

Brian Switek. "The Great Productivity Slowdown; It began long before the financial crisis, and it has worsened markedly in the past six years." The Wall Street Journal (Fri., May 5, 2017): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 4, 2017.)

The Goolsbee and Klenow article mentioned above, is:

Goolsbee, Austan, and Peter J. Klenow. "Valuing Consumer Products by the Time Spent Using Them: An Application to the Internet." American Economic Review 96, no. 2 (May 2006): 108-13.

July 12, 2017

Artificial Intelligence (AI) Cannot Automate All Legal Tasks

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

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

. . .

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

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

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

For the full story, see:

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

(Note: ellipsis added.)

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

The Remus and Levy article, mentioned above, is:

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

June 30, 2017

Amazon Increases Rewards to Live-Video-Content-Creators

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

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

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

. . .

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

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

For the full story, see:

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

(Note: ellipsis added.)

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

June 28, 2017

Retiring Later Improves Health in Old Age

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

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

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

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

For the full commentary, see:

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

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

The article by Börsch-Supan and Schuth, is:

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

June 24, 2017

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

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

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

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

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

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

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

For the full story, see:

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

(Note: bracketed years added.)

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

June 22, 2017

Oregon Gadfly Fined for Practicing Engineering Without a License

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

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

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

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

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

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

For the full story, see:

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

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

June 21, 2017

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

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

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

. . .

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

. . .

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

For the full review, see:

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

(Note: ellipses added.)

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

The book under review, is:

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

June 20, 2017

Government Regulations Suppress Poor Street Entrepreneurs

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

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

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

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

. . .

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

. . .

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

For the full story, see:

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

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

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

June 19, 2017

"The System Is Totally Crazy"

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

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

. . .

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

. . .

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

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

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

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

For the full story, see:

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

(Note: ellipses added.)

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

June 13, 2017

Banks Often Less Transparent and Less Flexible than Bank Alternatives

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

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

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

Servon's book is:

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

June 5, 2017

Going Postal

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

For the full review, see:

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

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

The book under review, is:

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

June 4, 2017

Lower Quality Restaurants Most Hurt by Minimum Wage Hike

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

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

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

For the full commentary, see:

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

(Note: bracketed year added.)

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

The Luca and Luca paper, mentioned above, is:

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

May 29, 2017

Employers Less Likely to Hire Older Workers

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

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

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

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

For the full story, see:

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

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

The Neumark paper mentioned above, is:

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

May 13, 2017

Brits Saw America "as a Place to Dump Their Human Waste"

(p. 11) . . . , Isenberg -- a historian at Louisiana State University whose previous books include a ­biography of Aaron Burr -- provides a cultural ­history of changing concepts of class and inferiority. She argues that British colonizers saw their North American empire as a place to dump their human waste: the idle, indigent and criminal. Richard Hakluyt the younger, one of the many colorful characters who fill these pages, saw the continent as "one giant workhouse," in ­Isenberg's phrase, where the feckless poor could be turned into industrious drudges.

For the full review, see:

THOMAS J. SUGRUE. "'Hicks' and 'Hayseeds'." The New York Times Book Review (Sun., JUNE 26, 2016): 11.

(Note: ellipsis added.)

(Note: the online version of the review has the date JUNE 24, 2016, and has the title "A Look at America's Long and Troubled History of White Poverty.")

The book under review, is:

Isenberg, Nancy. White Trash: The 400-Year Untold History of Class in America. New York: Viking, 2016.

May 11, 2017

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

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

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

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

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

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

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

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

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

. . .

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

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

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

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

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

. . .

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

And that is a sharp uptick in inflation.

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

. . .

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

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

For the full story, see:

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

(Note: ellipses added.)

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

May 7, 2017

Entrepreneur Rothblatt Was Highest-Paid Female CEO in 2013

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

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

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

For the full commentary, see:

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

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

April 25, 2017

Increasing Number of Free Agent Entrepreneurs

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

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

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

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

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

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

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

For the full story, see:

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

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

April 18, 2017

We Want Meaningful Work

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

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

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

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

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

. . .

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

. . .

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

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

For the full commentary, see:

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

(Note: ellipses added.)

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

The commentary is related to Schwartz's book:

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

April 17, 2017

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

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

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

. . .

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

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

. . .

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

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

For the full story, see:

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

(Note: ellipses added.)

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

April 15, 2017

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

(p. 1) Kay Abramowitz has been working, with a few breaks, since she was 14. Now 76, she is a partner in a law firm in Portland, Ore. -- with no intention of stopping anytime soon. "Retirement or death is always on the horizon, but I have no plans," she said. "I'm actually having way too much fun."

The arc of women's working lives is changing -- reaching higher levels when they're younger and stretching out much longer -- according to two new analyses of census, earnings and retirement data that provide the most comprehensive look yet at women's career paths.

. . .

Most striking, women have become significantly more likely to work into their 60s and even 70s, often full time, according to the analyses. And many of these women report that they do it because they enjoy it.

. . .

Nearly 30 percent of women 65 to 69 are working, up from 15 percent in the late 1980s, one of the analyses, by the Harvard economists Claudia Goldin and Lawrence Katz, found. Eighteen per-(p. 4)cent of women 70 to 74 work, up from 8 percent.

. . .

Of those still working, Ms. Goldin said, "They're in occupations in which they really have an identity." She added, "Women have more education, they're in jobs that are more fulfilling, and they stay with them." (Ms. Goldin happens to be an example of the phenomenon, as a 70-year-old professor and researcher.)

For the full story, see:

Claire Cain Miller. "With More Women Fulfilled by Work, Retirement Has to Wait." The New York Times, First Section (Sun., FEB. 12, 2017): 1 & 4.

(Note: ellipses added.)

(Note: the online version of the article has the date FEB. 11, 2017, and has the title "More Women in Their 60s and 70s Are Having 'Way Too Much Fun' to Retire.")

The paper by Goldin and Katz, mentioned above, is:

Goldin, Claudia, and Lawrence F. Katz. "Women Working Longer: Facts and Some Explanations." NBER Working Paper #22607. National Bureau of Economic Research, Inc., Sept. 2016.

April 8, 2017

People Root for Billionaires If They Believe They Also Could Become Billionaires

(p. 22) "Billions" manages the feat of making you want the guy who has everything to have even more.

"People still root for billionaires because it reinforces the idea that they can do it too," Mr. Kirshenbaum said recently. "People don't want to be in a place where there's not a lot of magic left in the equation." Political analysts have long given this explanation for why poor or working-class people vote against tax increases for the wealthy: They want to believe that some day they, too, will have assets to guard.

. . .

Like the TV series, the film "The Big Short" puts you in the position of wanting the investors -- or at least the investors depicted on the screen -- to win. The movie channels your anger at the banks that came up with the perilous financial instruments that devastated the economy, but it leaves you no room to despise the charmingly eccentric rogue geniuses who made hundreds of millions of dollars shorting the housing market. All that hard work, the culling of documents and the fact-gathering trips to endangered Sun Belt real estate markets -- it would be so wrong if they didn't triumph in the end. Institutions are greedy; people are merely obsessed.

For the full commentary, see:

GINIA BELLAFANTE. "Big City; Rooting for the Robber Barons, at Least Those Onscreen." The New York Times, First Section (Sun., MARCH 20, 2016): 22.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date MARCH 18, 2016, and has the title "Big City; Rooting for the Robber Barons, at Least on the Screen.")

April 3, 2017

Government Job Certification Boards Reduce Opportunities for Former Prisoners

(p. A21) . . . while there's been a rightful focus on ending mass incarceration, there has been little public discussion of how we reintegrate this growing population.

. . .

. . . , we should remove unfair barriers to employment. Many jobs now require professional certification, like being a barber in Connecticut or a truck driver in Texas, and state certification boards often bar former prisoners. We should eliminate those blanket prohibitions.

For the full commentary, see:

ROBERT E. RUBIN. "How to Help Former Inmates Thrive." The New York Times (Mon., JUNE 3, 2016): A21.

(Note: ellipses added.)

(Note: the online version of the commentary has the title "The Smart Way to Help Ex-Convicts, and Society.")

March 15, 2017

Decrease in Number of Tech Startups Results in Less Job Creation

(p. A10) Since 2002, the number of technology startups has slowed, hurting job creation. In a 2014 study, economists Javier Miranda, John Haltiwanger and Ian Hathaway said the growth of tech startups accelerated to 113,000 in 2001 from 64,000 in 1992.

That number slumped to 79,000 in 2011 and hasn't recovered, according to the economists' calculations using updated data. The causes include global competition and increased domestic regulation, says Mr. Haltiwanger, an economics professor at the University of Maryland.

For the full story, see:

Jon Hilsenrath and Bob Davis. "'America's Dazzling Tech Boom Has a Downside: Not Enough Jobs." The Wall Street Journal (Thurs., Oct. 13, 2016): A1 & A10.

(Note: the online version of the story has the date Oct. 12, 2016, and has the title "'America's Dazzling Tech Boom Has a Downside: Not Enough Jobs.")

The Haltiwanger paper mentioned above, is:

Haltiwanger, John, Ian Hathaway, and Javier Miranda. "Declining Business Dynamism in the U.S. High-Technology Sector." Feb. 2014.

March 13, 2017

Automation Raises Productivity, Consumer Spending, and Creates New Jobs

(p. B1) Since the 1970s, when automated teller machines arrived, the number of bank tellers in America has more than doubled. James Bessen, an economist who teaches at Boston University School of Law, points to that seeming paradox amid new concerns that automation is "stealing" human jobs. To the contrary, he says, jobs and automation often grow hand in hand.

Sometimes, of course, machines really do replace humans, as in agriculture and manufacturing, says Massachusetts Institute of Technology labor economist David Autor in a succinct and illuminating TED talk, which could have served as the headline for this column. Across an entire economy, however, Dr. Autor says that's never happened.

. . .

(p. B4) . . . a long trail of empirical evidence shows that the increased productivity brought about by automation and invention ultimately leads to more wealth, cheaper goods, increased consumer spending power and ultimately, more jobs.

In the case of bank tellers, the spread of ATMs meant bank branches could be smaller, and therefore, cheaper. Banks opened more branches, and in total employed more tellers, Mr. Bessen says.

For the full commentary, see:

CHRISTOPHER MIMS. "KEYWORDS; Automation Actually Can Lead to More Job Creation." The Wall Street Journal (Mon., Dec. 12, 2016): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Dec. 11, 2016, and has the title "KEYWORDS; Automation Can Actually Create More Jobs.")

Bessen more fully presents his ATM example in his book:

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

March 11, 2017

Venture Capitalists Expect Future Successful Entrepreneurs to Look Like Recent Successful Entrepreneurs

(p. 4) In recent months, the fund-raising atmosphere has cooled as venture capitalists react to the poor stock market performance of some public tech companies and question whether the recent fast pace of investment is sustainable. Venture capitalists are making fewer investments at lower valuations.

"There is this delusion that it's easy to raise money in Silicon Valley," said Sam Altman, president of Y Combinator, a mentorship and investment program for start-ups. "Raising money is incredibly hard."

. . .

Venture capitalists, who hold the keys to success in Silicon Valley by providing start-up money, are even more likely to be white and male than tech company employees are. Theirs is an insular business. Most investors accept pitches only from entrepreneurs who come through an introduction, and they tend to finance people who have succeeded before, or who remind them of those who did.

According to a 2014 study published by the National Academy of Sciences, investors prefer pitches by men, particularly attractive men, to those by women, even when the content of the pitch is the same. In addition to studying the results of three entrepreneurial pitch competitions, the researchers conducted two experiments in which a representative sample of working adults heard identical pitches in male and female voices. Sixty-eight percent of people preferred to finance the company when it was pitched by a male voice, while 32 percent chose the female.

. . .

At the gender discrimination trial last year against Kleiner Perkins Caufield & Byers, which the venture capital firm won, female employees said they were excluded from a ski trip, denied credit for deals they brought to the firm, and told they both didn't speak up enough and talked too much.

"I feel like it's a lot more nuanced and sometimes it's subconscious," said Julia Hu, the founder and chief executive of Lark, which makes a health and weight-loss app. "V.C.s are pattern matchers, and they're just used to seeing men like themselves."

Many women convey confidence and leadership in a different way than men do, she said. As an Asian woman, she said, she was raised to be humble and quiet and felt uncomfortable promoting her skills. "To try to be who I thought they wanted me to be, which was another Mark Zuckerberg, was actually very difficult for me without feeling inauthentic."

For the full story, see:

Miller, Claire Cain. "The Venture Capital Ceiling." The New York Times, SundayBusiness Section (Sun., FEB. 28, 2016): 1 & 4-5.

(Note: ellipses added.)

(Note: the online version of the story has the date FEB. 27, 2016, and has the title "What It's Really Like to Risk It All in Silicon Valley.")

The National Academy of Sciences study mentioned above, is:

Wood Brooks, Alison, Laura Huang, Sarah Wood Kearney, and Fiona E. Murray. "Investors Prefer Entrepreneurial Ventures Pitched by Attractive Men." Proceedings of the National Academy of Sciences of the United States of America 111, no. 12 (March 25, 2014): 4427-31.

March 8, 2017

Pope Francis Has "a Great Allergy to Economic Things"

(p. A7) ABOARD THE PAPAL AIRPLANE -- Pope Francis has dedicated his papacy to the plight of the poor and delivered severe critiques of economic systems that benefit the rich. But flying back to Rome from his eight-day visit to Latin America, Francis admitted he had overlooked a group.

He has delivered few messages for the global middle class.

"Thank you," he replied, after a German journalist, Ludwig Ring-Eifel, asked about the omission. "It's a good correction, thanks. You are right. It's an error of mine not to think about this."

. . .

In fact, the pope expressed "a great allergy to economic things," explaining that his father had been an accountant who often brought work home on weekends.

"I don't understand it very well," he said of economics, even though the issue of economic justice has become central to his papacy.

. . .

"Then, on the middle class, there are some words that I've said -- but a little in passing," he said, musing. "But talking about the common people, the simple people, the workers, that is a great value, no? But I think you're telling me about something I need to do. I need to delve further into this."

For the full story, see:

JIM YARDLEY. "In His Focus on Rich and Poor, Pope Admits to Overlooking the Middle Class." The New York Times (Tues., JULY 14, 2015): A7.

(Note: ellipses added.)

(Note: the online version of the story has the date JULY 13, 2015, and has the title "Pope Francis Says He's Overlooked the World's Middle Class.")

March 2, 2017

1.87 Births Per U.S. Couple in 2015

(p. A2) The U.S. is experiencing a baby lull that looks set to last for years, a shift demographers say will likely ripple through the U.S. economy and have an impact on everything from maternity wards to federal social programs.

. . .

Demographic Intelligence, a Charlottesville, Va., firm that forecasts birth trends, projects there were about 4 million babies born in the U.S. in 2015, up slightly from the 3.99 million babies born the previous year. The total fertility rate--a snapshot that measures the number of births the average woman will have during her lifetime--is expected to rise to 1.87 in 2015 from 1.86 the previous year, according to the firm. It says its projections, which rely on unemployment rates, consumer-confidence measures and other variables, have been about 99% accurate in recent years.

That is well below the relatively strong fertility rates that started during the late 1980s and lasted until 2007, when the total fertility rate peaked at 2.12 babies per woman.

For the full story, see:

JANET ADAMY. "Low Birth Rate Poses Economic Challenge." The Wall Street Journal (Weds., May 11, 2016): A2.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 10, 2016, and has the title "Baby Lull Promises Growing Pains for Economy." The passages quoted above include a sentence (at the end of the second quoted paragraph) that appears in the online, but not in the print, version.)

February 28, 2017

To Save Administrative Costs, Health-Care Providers Give Discounts for Paying Out-of-Pocket

(p. R6) As consumers get savvier about shopping for health care, some are finding a curious trend: More hospitals, imaging centers, outpatient surgery centers and pharmacy chains will give them deep discounts if they pay cash instead of using insurance.

When Nancy Surdoval, a retired lawyer, needed a knee X-ray last year, Boulder Community Hospital in Colorado said it would cost her $600, out of pocket, using her high-deductible insurance, or just $70 if she paid cash upfront.

When she needed an MRI to investigate further, she was offered a similar choice--she could pay $1,100, out of pocket, using her insurance, or $600 if she self-paid in cash.

Rather than feel good about the savings, Ms. Surdoval got angry at her carrier, Blue Cross Blue Shield of Arizona. "I'm paying $530 a month in premiums and I get charged more than someone who just walks in off the street?" says Ms. Surdoval, who divides her time between Boulder and Tucson. "I thought insurance companies negotiated good deals for us. Now things are totally upside down."

Deep discounts
Not long ago, hospitals routinely charged uninsured patients their highest rates, far more than insured patients paid for the same services. Now, in the Alice-in-Wonderland world of health-care prices, the opposite is often true: Patients who pay up front in cash often get better deals than their insurance plans have negotiated for them.

That is partly due to new state and federal rules aimed at protecting uninsured patients from price gouging. (Under the Affordable Care Act, for example, tax-exempt hospitals can't charge financially strapped patients much more than Medicare pays.) Many hospitals also offer discounts if patients pay in cash on the day of service, because it saves administrative work and collection hassles. Cash prices are officially aimed at the uninsured, but people with coverage aren't legally required to use it.

Hospitals, meanwhile, have sought ever-higher rates from commercial insurers to make up for losses on other patients. Insurers pass those negotiated rates on to plan members, and given the growth in high-deductible plans, more Americans are paying those rates in full, out of pocket, than ever before.

For the full story, see:

Beck, Melinda. "Here's a Way to Cut Your Health-Care Bill: Pay Cash." The Wall Street Journal (Tues., Feb. 16, 2016): R6.

(Note: bold heading in original.)

(Note: the online version of the story has the date Feb. 15, 2016, and has the title "How to Cut Your Health-Care Bill: Pay Cash.")

February 26, 2017

Giving $10,000 to Each Adult American Would Cost 13% of GDP

(p. A2) Imagine you're president and Congress gives you a huge chunk of money to spend as you wish. Instead of cutting taxes or splashing out more on health care, infrastructure and defense, why not send a check to every adult?

That's the essence of universal basic income, a centuries-old idea now enjoying a revival across the political spectrum.

. . .

To send every American adult $10,000 a year would cost $2.4 trillion, or 13% of gross domestic product. Junking the current safety net wouldn't come close to paying for this: Scrapping income support for the poor, disabled and unemployed would save just $500 billion. Get rid of health care for the poor (mostly Medicaid), and the savings rise to only $900 billion. Getting rid of Medicare and Social Security would balance the costs, but that would leave the average retiree considerably worse off--politically (and ethically) a nonstarter.

For the full commentary, see:

Ip, Greg. "CAPITAL ACCOUNT; Payout Proposal Ignores Labor Needs." The Wall Street Journal (Thurs., July 14, 2016): A2.

(Note: the online version of the commentary has the date July 13, 2016, and has the title "CAPITAL ACCOUNT; Revival of Universal Basic Income Proposal Ignores Needs of Labor Force.")

February 20, 2017

Firm Success May Depend on Being Allowed to Create Corporate Culture Through Hiring

(p. B1) After submitting an online application, completing a video interview and meeting with a hiring manager, the last thing standing between many applicants and a job at G Adventures Inc. is a roughly two-foot-deep ball pit similar to what you might find at a Chuck E. Cheese's.

Candidates remove their shoes and join three of the Toronto-based tour company's employees, who spin a wheel with questions such as, "What's a signature dance move and will you demonstrate it?"

Sitting in a pool of plastic balls seemingly has little to do with selling package tours, but company founder Bruce Poon Tip says it reveals a lot about who will be successful at the 2,000-employee company.

Culture is "like a tribal thing for us," he says. Lately, many companies seem to agree.

Employers are finding new ways to assess job candidates' cultural suitability as they seek hires who fit in from day one. While few go as far as G Adventures, companies such as Inc. have experimented with tapping "cultural ambassadors" to evaluate finalists for jobs in other departments. Inc. gives company veterans veto power over hires who might not fit in with its staff--even if those hires have the right skills for the job.

Though employment experts warn that fuzzy criteria such as culture fit may permit bias in the hiring process and result in a lack of diversity, companies say culture often determines who succeeds or fails in their workplace.

For the full commentary, see:

RACHEL FEINTZEIG. "'Culture Fit' May Be Key to Your Next Job." The Wall Street Journal (Weds., Oct. 12, 2016): B1 & B6.

(Note: the online version of the commentary has the title "Culture Fit' May Be the Key to Your Next Job.")

February 19, 2017

Jewish Medical Inventor Invested in Human Capital Because That "Could Never Be Taken from Me"

Louis Sokoloff's son Kenneth authored, or co-authored, important papers on how patents aided invention in the 1800s.

(p. A21) Dr. Louis Sokoloff, who pioneered the PET scan technique for measuring human brain function and diagnosing disorders, died on July 30 [2015] in Washington.

. . .

. . . he leapt at the opportunity when he won a scholarship to the University of Pennsylvania, guided by his grandfather's advice.

"He advised me to choose a profession, any one," he wrote, "in which all my significant possessions would reside in my mind because, being Jewish, sooner or later I would be persecuted and I would lose all my material possessions; what was contained in my mind, however, could never be taken from me and would accompany me everywhere to be used again."

. . .

Dr. Sokoloff's wife, the former Betty Kaiser, died in 2003, and his son, Kenneth, an economic historian, died in 2007.

For the full obituary, see:

SAM ROBERTS. "Louis Sokoloff, Pioneer of PET Scan, Dies at 93." The New York Times (Thurs., AUG. 6, 2015): A21.

(Note: ellipses added.)

(Note: the online version of the obituary has the date AUG. 5, 2015.)

February 18, 2017

Government Wastes Millions on Corrupt Nanotech Boondoggle

(p. A19) In Utica, a former industrial hub in upstate New York where the near collapse of manufacturing has made for a scarcity of jobs and a rarity of good news, the announcement in August 2015 that an Austrian chip maker had decided to put down roots in a fabrication plant built by the state was cause for jubilation.

Gov. Andrew M. Cuomo celebrated with an appearance in Utica, promising $585 million in state funds to cement the public-private partnership, which was to create 1,000 jobs. Some in the crowd wept with emotion.

But last week, after months of delays and mismanagement that culminated in September with federal prosecutors revealing a far-reaching bribery and bid-rigging scheme, state and local officials said that the Austrian chip maker, AMS, had abandoned the project.

The Utica project was merely one chunk of the multibillion-dollar investment with which the Cuomo administration has pledged to seed nanotechnology and high-tech industries in upstate cities starved for economic growth.

. . .

For the state, it seems, the strategy developed by Mr. Kaloyeros and trumpeted by Mr. Cuomo -- to lavish hundreds of millions of dollars in state subsidies on corporate partners to create high-tech jobs -- is unblemished. Yet the model has come in for repeated criticism from government watchdogs, who say an economic policy that tries to create risky new industries virtually from scratch, and that spends millions in taxpayer dollars to create every new job, is folly.

"We're incredibly skeptical of the economic logic behind these projects because they're too expensive," said John Kaehny, the executive director of Reinvent Albany, a good-government group. "There is no economic logic to (p. A21) this, really. But there's a huge political logic to it. The governor desperately needs for this to be a success for his political legacy in New York."

For the full story, see:

VIVIAN YEE. "How Missteps Doomed Plan for Growth, Foiling Cuomo." The New York Times (Weds., DEC. 28, 2016): A19.

(Note: ellipsis added.)

(Note: the online version of the story has the date DEC. 27, 2016, and has the title "How Cuomo's Signature Economic Growth Project Fell Apart in Utica.")

February 15, 2017

Where Fidelistas Miss Mr. Hershey's Company Town

(p. A9) This small town on Cuba's northern coast is steeped in memory and wistfulness, a kind of living monument to the intertwined histories of the United States and Cuba and to the successes and failures of Fidel Castro's social revolution.

The town dates to 1916, when Milton S. Hershey, the American chocolate baron, visited Cuba for the first time and decided to buy sugar plantations and mills on the island to supply his growing chocolate empire in Pennsylvania. On land east of Havana, he built a large sugar refinery and an adjoining village -- a model town like his creation in Hershey, Pa. -- to house his workers and their families.

He named the place Hershey.

The village would come to include about 160 homes -- the most elegant made of stone, the more modest of wooden planks -- built along a grid of streets and each with tidy yards and front porches in the style common in the growing suburbs of the United States. It also had a public school, a medical clinic, shops, a movie theater, a golf course, social clubs and a baseball stadium where a Hershey-sponsored team played its home games, residents said.

The factory became one of the most productive sugar refineries in the country, if not in all of Latin America, and the village was the envy of surrounding towns, which lacked the standard of living that Mr. Hershey bestowed on his namesake settlement.

. . .

"I'm a Fidelista, entirely in favor of the revolution," declared Meraldo Nojas Sutil, 78, who moved to Hershey when he was 11 and worked in the plant during the 1960s and '70s. "But slowly the town is deteriorating."

Many residents do not hesitate to draw a contrast between the current state of the town and the way that it looked when "Mr. Hershey," as he is invariably called here, was the boss.

Residents seem amused by, if not proud of, the ties to the United States.

Most still use the village's original name, pronounced locally as "AIR-see." And Hershey signs still hang at the town's train station, a romantic nod to a bygone era, though perhaps also a symbol of hope that the past -- at least, certain aspects of it -- will again become the present.

For the full story, see:

KIRK SEMPLE. "CAMILO CIENFUEGOS JOURNAL; Past Is Bittersweet in Cuban Town That Hershey Built." The New York Times (Thurs., DEC. 7, 2016): A9.

(Note: ellipsis added.)

(Note: the online version of the article has the date DEC. 7, 2016, and has the title "CAMILO CIENFUEGOS JOURNAL; In Cuban Town That Hershey Built, Memories Both Bitter and Sweet.")

February 12, 2017

"Worrying About Overpopulation on Mars"

(p. B4) Reflecting on my own brief experience as an invertebrate neuroscientist, I'd say that today's AI is at the jellyfish stage in the evolution of biological intelligence. Real brains--and genuine intelligence--are so far in the future as to be beyond any reasonable horizon of prediction.

Or, as chief scientist and AI guru Andrew Ng of Chinese search giant Baidu Inc. once put it, worrying about takeover by some kind of intelligent, autonomous, evil AI is about as rational as worrying about overpopulation on Mars.

For the full commentary, see:

CHRISTOPHER MIMS. "KEYWORDS; Artificial Intelligence Has a Way to Go." The Wall Street Journal (Mon., Dec. 5, 2016): B1 & B4.

(Note: the online version of the commentary has the date Dec. 4, 2016, and has the title "KEYWORDS; Artificial Intelligence Makes Strides, but Has a Long Way to Go.")

February 10, 2017

The Case Against "Mindful Dishwashing"

(p. 9) I'm making a failed attempt at "mindful dishwashing," the subject of a how-to article an acquaintance recently shared on Facebook. According to the practice's thought leaders, in order to maximize our happiness, we should refuse to succumb to domestic autopilot and instead be fully "in" the present moment, engaging completely with every clump of oatmeal and decomposing particle of scrambled egg. Mindfulness is supposed to be a defense against the pressures of modern life, but it's starting to feel suspiciously like it's actually adding to them. It's a special circle of self-improvement hell, striving not just for a Pinterest-worthy home, but a Pinterest-worthy mind.

Perhaps the single philosophical consensus of our time is that the key to contentment lies in living fully mentally in the present. The idea that we should be constantly policing our thoughts away from the past, the future, the imagination or the abstract and back to whatever is happening right now has gained traction with spiritual leaders and investment bankers, armchair philosophers and government bureaucrats and human resources departments.

. . .

So does the moment really deserve its many accolades? It is a philosophy likely to be more rewarding for those whose lives contain more privileged moments than grinding, humiliating or exhausting ones. Those for whom a given moment is more likely to be "sun-dappled yoga pose" than "hour 11 manning the deep-fat fryer."

On the face of it, our lives are often much more fulfilling lived outside the present than in it.

. . .

Surely one of the most magnificent feats of the human brain is its ability to hold past, present, future and their imagined alternatives in constant parallel, . . .

. . .

What differentiates humans from animals is exactly this ability to step mentally outside of whatever is happening to us right now, and to assign it context and significance. Our happiness does not come so much from our experiences themselves, but from the stories we tell ourselves that make them matter.

. . .

So perhaps, rather than expending our energy struggling to stay in the Moment, we should simply be grateful that our brains allow us to be elsewhere.

For the full commentary, see:

RUTH WHIPPMAN. "Actually, Let's Not Be in the Moment." The New York Times, SundayReview Section (Sun., NOV. 27, 2016): 9.

(Note: ellipses added.)

(Note: the online version of the commentary has the date NOV. 26, 2016.)

February 7, 2017

Rigid Labor Regulations Hurt Labor in India

(p. A9) . . . rigid and complex regulations have discouraged investment in labor-intensive industries in India, . . . .

Many economists say India's labor laws have encouraged enterprises to stay small, rely on informal labor or substitute capital for workers. A report by the Paris-based Organization for Economic Cooperation and Development said for India to return to a high-growth trajectory, it must "reduce barriers to formal employment by introducing a simpler and more flexible labor law which doesn't discriminate by size of enterprise."

For the full story, see:

NIHARIKA MANDHANA. "India State Tests Labor-Law Overhaul." The Wall Street Journal (Sat., Dec. 6, 2014): A9.

(Note: ellipses added.)

(Note: the online version of the article has the date Dec. 7 [sic], 2014, and has the title "Modi's BJP-Controlled States Become Labs for Contentious Reform.")

February 5, 2017

Innovation Brought Rise of Middle Class and Decline of Aristocracy

(p. C7) Mr. Evans claims that "master narratives" have fallen into disrepute, and he does not aspire to provide one. But he returns repeatedly to such themes as the growth of "public space" as Europe urbanized and communications improved. He likewise describes the "shifting contours of inequality" as the middle classes burgeoned and benefited from the hastening pace of scientific innovation while the aristocracy slowly declined in status (albeit not in creature comforts).

Similarly, Mr. Evans offers an interesting discussion of how various forms of serfdom disappeared, even as the essence of rural immiseration generally did not. He conveys the degradation of existence for the emergent working class of the cities with controlled pathos yet without acknowledging the improvements in living standards that took place in advanced countries during the last decades of the century. He adduces evidence to show that the benefits of improved sanitation and hygiene, health and nutrition, consumer products and home conveniences, as well as longer life expectancy, went at first disproportionately to the urban middle and professional classes, strata that tripled as a fraction of the population in leading countries. Thus even in comparatively prosperous England, well-off adolescents at midcentury stood almost 9 inches taller than their proletarian contemporaries and by 1900 enjoyed a life expectancy 14 years longer.

For the full review, see:

STEPHEN A. SCHUKER. "The European Century." The Wall Street Journal (Sat., December 3, 2016): C7.

(Note: the online version of the review has the date Dec. 2, 2016, and has the title "A Long Century of Peace.")

The book under review, is:

Evans, Richard J. The Pursuit of Power: Europe 1815-1914. New York: Viking, 2016.

January 31, 2017

Increasing Minimum Wage Hurts Low Productivity Workers

(p. B1) CHICAGO -- A growing number of economists have found that many cities and states have considerable room to raise the minimum wage before employers meaningfully cut back on hiring.

But that conclusion may gloss over some significant responses to minimum-wage increases by individual employers, according to two new studies. And those reactions may, in turn, raise questions about the effectiveness of the minimum wage in helping certain workers.

The findings, presented over the weekend at the annual meeting of the American Economic Association, the nation's premier gathering of academic economists, come as many cities and states are raising their minimum wages. California and New York last year approved gradual increases to $15 per hour. Proponents argue that raising the minimum is one of the most practical ways of improving living standards for the working poor and reducing inequality.

To test that proposition, John Horton of New York University conducted an experiment on an online platform where employers post discrete jobs -- including customer service support, data entry, and graphic design -- and workers submit a proposed hourly wage for completing them.

Mr. Horton, working with the platform, was able to impose a minimum wage at random on one-quarter of about 160,000 jobs posted over roughly a (p. B4) month and a half in 2013. If a worker proposed an hourly wage that was below the minimum, the platform's software asked him or her to raise the bid until it cleared the threshold. In some cases the minimum wage was $2 per hour, in some cases $3, and in some cases $4.

At first glance, the findings were consistent with the growing body of work on the minimum wage: While the workers saw their wages rise, there was little decline in hiring. But other results suggested that the minimum wage was having large effects. Most important, the hours a given worker spent on a given job fell substantially for jobs that typically pay a low wage -- say, answering customer emails.

Mr. Horton concluded that when forced to pay more in wages, many employers were hiring more productive workers, so that the overall amount they spent on each job changed far less than the minimum-wage increase would have suggested. The more productive workers appeared to finish similar work more quickly.

For the full story, see:

NOAM SCHEIBER. "Studies Find Higher Minimum Wage May Have Losers." The New York Times (Weds., JAN. 11, 2017): B1 & B4.

(Note: the online version of the article has the date JAN. 10, 2017, and has the title "Higher Minimum Wage May Have Losers.")

The paper that Horton presented at the 2017 AEA meetings in Chicago, is:

Horton, John J. "Evidence from a Minimum Wage Experiment." Working Paper, Leonard N. Stern School of Business. New York University, Jan. 10, 2017.

January 30, 2017

Entrepreneur Hires for Perseverance

Max Levchin, who is quoted below, is an entrepreneur who played an important role in the early days of PayPal.

(p. 2) How do you think your parents and grandparents influenced your leadership style today?

My grandmother was exceptionally formative. She basically was willpower personified. If she wanted something to happen, it would happen. She had this walk-through-walls style where you did not ask for permission or forgiveness; you just did what you needed to get it done. I still judge some of my decisions based on: What would Grandma decide? Was I sufficiently tenacious or not enough?

And one thing I have found over the years is that in hiring, the dominant characteristic I select for is this sense of perseverance in really tough situations. It's like the difference between endurance athletes and sprinters. I think it is a really good predictor for how people behave under severe stress.

Working in a start-up means there is a baseline of stress with occasional spikes. There are people who are really good at handling spikes. In fact, most people are really good at handling spikes. But normal isn't normal. There is constant stress. And so I look for endurance athletes, in the business sense.

For the full interview, see:

ADAM BRYANT. "Corner Office; Looking for Signs of Endurance." The New York Times, SundayBusiness Section (Sun., December 11, 2016): 2.

(Note: bold in original.)

(Note: the online version of the interview has the date DEC. 9, 2016, and has the title "Corner Office; Max Levchin of Affirm: Seeking the Endurance Athletes of Business." The bold words are Adam Bryant's question; the non-bold words are Max Levchin's answer.)

January 25, 2017

Everybody Is Seeking "a Life that Provides Them with Dignity"

(p. A11) I want to end this dramatic year writing of a man whose great and constructive work I discovered in 2016. He is the photojournalist Chris Arnade.

. . .

In his work you see an America that is battered but standing, a society that is atomized--there are lonely people in his pictures--but holding on.

. . .

Mr. Arnade didn't intend to discover virtue in a mighty corporation, but McDonald's "has great value to community." He sees an ethos of patience and respect. "McDonald's is nonjudgmental." If you have nowhere to go all day they'll let you stay, nurse your coffee, read your paper. "The bulk of the franchises leave people alone. There's a friendship that develops between the people who work there and the people who go." "In Natchitoches, La., there's a twice-weekly Bible study group," that meets at McDonald's. "They also have bingo games." There's the Old Man table, or the Romeo Club, for Retired Old Men Eating Out.

I've written of the great divide in America as between the protected and the unprotected--those who more or less govern versus the governed, the facts of whose lives the protected are almost wholly unaware. Mr. Arnade sees the divide as between the front-row kids at school waving their hands to be called on, and the back-row kids, quiet and less advantaged. The front row, he says, needs to learn two things. "One is how much the rest of the country is hurting. It's not just economic pain, it's a deep feeling of meaninglessness, of humiliation, of not being wanted." Their fears and anxieties are justified. "They have been excluded from participating in the great wealth of this country economically, socially and culturally." Second, "The front-row kids need humility. They need to look in the mirror, 'We messed this up, we've been in charge 30 years and haven't delivered much.' " "They need to take stock of what has happened."

Of those falling behind: "They're not lazy and weak, they're dealing with bad stuff. Both conservative and progressive intellectuals say Trump voters are racist, dumb. When a conservative looks at a minority community and says, 'They're lazy,' the left answers, 'Wait a minute, let's look at the larger context, the availability of jobs, structural injustice.' But the left looks at white working-class poverty and feels free to judge and dismiss."

. . .

I asked how he describes his work. I see it as an effort to help America better understand itself. He said he was trying to show that "Everybody is kind of working in the same direction, trying to get by, get a life that provides them with dignity." In this, he suggests, we are more united than we know.

For the full commentary, see:

PEGGY NOONAN. "Shining a Light on 'Back Row' America; Chris Arnade's photos reveal an America that is battered but standing, atomized but holding on." The Wall Street Journal (Sat., Dec. 31, 2016): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Dec. 29, 2016.)

January 22, 2017

Complex Labor Rules Reduce Work Choices for Older Workers

(p. B4) CALL them boomerang retirees: people who exit gracefully after their career at a company, then return shortly afterward to work there part time.

More and more companies are establishing formal programs to facilitate this, for reasons that benefit both the employer and the retiree. Leaving a satisfying job cold-turkey for a life of leisure can be an abrupt jolt to people accustomed to feeling purposeful, earning money and enjoying their colleagues. From the corporate perspective, it is useful to have experienced hands who can train younger people, pass along institutional wisdom and work with fewer strings attached.

"People in the U.S. define themselves by their work, and they like their co-workers," said Roselyn Feinsod, senior partner in the retirement practice at the human resources firm Aon Hewitt, the human resources consultancy. Thus, unlike many retirees from past generations, people from both the blue-collar and white-collar sectors are more eager to retain ties to the familiar working world that they enjoyed (and sometimes loathed).

. . .

. . . , Atlantic Health Systems of Morristown, N.J., is among the growing ranks of employers that sponsor a formal program to invite retirees back into the work force, for no more than 1,000 hours a year. The company's Alumni Club -- formerly known as the 1,000 Hour Club -- was established in 2006, and about 300 Atlantic Health retirees are currently on the company's payroll in various capacities. "They're engaged employees; they're productive," said Lesley Meyer, Atlantic Systems' manager of corporate human resources. "They're a stable talent pool."

. . .

Most boomerang retirees return to work after an informal negotiation with a former boss. Programs like the one at Atlantic Systems are still relatively rare -- for instance, about 8 percent of the 463 companies surveyed by the Society for Human Resource Management in 2015 had one -- but they are on the rise.

They are also tricky to run: Establishing a boomerang retiree program involves a substantial commitment of resources, including systems for navigating complex labor market rules and pension law. Most returning retirees must wait several months before they can come back, and are often limited to that 1,000 hours a year. Companies are increasingly turning to outside staffing firms to manage the nuts and bolts.

. . .

It was a phone call from her former manager that lured Pat Waller, who spent 39 years as an intensive care nurse for Atlantic Health before retiring in 2005 at age 66, back to the work force part time. She joined the Alumni Club in 2007 after the hospital where she had worked, Morristown Medical Center in Morristown, N.J., applied to qualify as a federal center of excellence in knee and hip surgery; her former boss wondered if she would help gather data. Absolutely, she answered.

Since then, Ms. Waller has worked on several projects for Atlantic Health, gigs that easily give her the time to travel with her husband and see her six grandchildren.

Now that she is 77, Ms. Waller works mostly from home, sometimes three to four days a week and other times one to two, depending on the project, "I always said when I was at work I learned something every day," she said. "Since I've come back, I feel the same way."

For the full story, see:

CHRISTOPHER FARRELL. "Boomerang Boom: Firms Tapping Skills of the Recently Retired." The New York Times (Sat., December 17, 2016): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date DEC. 16, 2016, and has the title "Retiring; Boomerang Boom: More Firms Tapping the Skills of the Recently Retired.")

January 15, 2017

Better Policies Can Turn Stagnation into Growth

(p. A19) . . . , now ought to be the time that policy makers in Washington come together to tackle America's greatest economic problem: sclerotic growth. The recession ended more than seven years ago. Unemployment has returned to normal levels. Yet gross domestic product is rising at half its postwar average rate. Achieving better growth is possible, but it will require deep structural reforms.

The policy worthies have said for eight years: stimulus today, structural reform tomorrow. Now it's tomorrow, but novel excuses for stimulus keep coming. "Secular stagnation" or "hysteresis" account for slow growth. Prosperity demands more borrowing and spending--even on bridges to nowhere--or deliberate inflation or negative interest rates. Others advocate surrender. More growth is impossible. Accept and manage mediocrity.

But for those willing to recognize the simple lessons of history, slow growth is not hard to diagnose or to cure. The U.S. economy suffers from complex, arbitrary and politicized regulation. The ridiculous tax system and badly structured social programs discourage work and investment. Even internet giants are now running to Washington for regulatory favors.

. . .

So why is there so little talk of serious growth-oriented policy? Regulated and protected industries and unions, and the politicians who extract support from them in return for favors, will lose enormously. The global policy elite, steeped in Keynesian demand management for the economy as a whole, and microregulation of individual businesses, are intellectually unprepared for the hard project of "structural reform"--fixing the entire economy by cleaning up the thousands of little messes. Even economists fight to protect outdated skills.

For the full commentary, see:

JOHN H. COCHRANE. "Don't Believe the Economic Pessimists; Memo to Clinton and Trump: The U.S. economy can and will grow faster with the right policies." The Wall Street Journal (Mon., Nov. 7, 2016): A19.

(Note: ellipses added.)

January 11, 2017

$19 Billion in Farm Subsidies Mostly Go to Big Farms

(p. A17) President-elect Donald Trump's vow to "drain the swamp" in Washington could begin with the Agriculture Department. Federal aid to farmers is forecast by the Congressional Budget Office to soar to $19 billion in 2017. Farmers will receive twice as much of their income from handouts (25%) this year as they did in 2013, according to the USDA. Whoever Mr. Trump names as his agriculture secretary should target wasteful farm programs for spending cuts.

. . .

While generous government subsidies are defended by invoking the "family farmer," big farmers snare the vast majority of federal handouts. According to a report released this year by the Environmental Working Group, a Washington-based nonprofit research organization, "the top 1 percent of farm subsidy recipients received 26 percent of subsidy payments between 1995 and 2014." The group's analysis of government farm-subsidy data also found that the "top 20 percent of subsidy recipients received 91 percent of all subsidy payments." Fifty members of the Forbes 400 list of wealthiest Americans have received farm subsidies, according to the group, including David Rockefeller Sr. and Charles Schwab.

For the full commentary, see:

JAMES BOVARD. "Living Off the Fat of Washington; If Trump is going to 'drain the swamp,' he might start with wasteful ag subsidies." The Wall Street Journal (Mon., Dec. 12, 2016): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Dec. 11, 2016.)

January 9, 2017

Unbinding Entrepreneurs Can Create Jobs and Speed Growth

(p. A21) This week more than 160 countries are celebrating Global Entrepreneurship Week. The Kauffman Foundation, which I once led, created this event eight years ago to encourage other nations to follow the American tradition of bottom-up economic success. Yet this example has been less powerful in recent years, as American entrepreneurship has waned. Fortunately, President-elect Donald Trump has plenty of options if he wants to resurrect America's startup economy.

Consider the economic situation that the president-elect is inheriting. Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve. More people have joined the ranks of the chronically unemployed, slipping into poverty at alarming rates as their skills decay and dependency on public assistance grows. Considering population growth, America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.

Merely bringing back factories from overseas will not solve this problem. Technology has made every factory more productive. Fewer workers make more goods no matter where they're located. At the same time, fewer U.S. businesses are being started. New firms are the country's principal generator of new jobs. Data from the Kauffman Foundation suggest companies less than five years old create more than 80% of new jobs every year. While the nation seems more enthusiastic than ever about the promise of entrepreneurship, fewer than 500,000 new businesses were started in 2015. That is a disastrous 30% decline from 2008.

. . .

What can President Trump do to encourage more entrepreneurship?

. . .

Government must . . . widen the scope of innovation by stepping back and letting the market find the future. By promoting trendy ideas and subsidizing politically favored companies, government dampens diversity in creative business ideas.

. . .

Mr. Trump can also reverse regulatory sprawl and cut government-imposed requirements that add to every entrepreneurs' costs and risks. Anti-growth policies like ObamaCare and minimum-wage increases make hiring workers prohibitively expensive.

. . .

With these policies in mind, President Trump should set another goal: that his administration will create an environment that enables one million Americans to start companies every year. Such an outcome would assure his target of 4% GDP growth, as well as full employment.

For the full commentary, see:

CARL J. SCHRAMM. "The Entrepreneurial Way to 4% Growth; Trump should set a goal: fix the business climate so a million Americans a year can start companies." The Wall Street Journal (Weds., Nov. 16, 2016): A21.

January 7, 2017

Not All Secure Jobs Are Good Jobs

(p. C8) The village idiot of the shtetl of Frampol was given the job of waiting at the village gates for the arrival of the Messiah. The pay wasn't great, he was told, but the work was steady.

For Epstein's book recommendations, see:

Joseph Epstein. "12 Months of Reading." The Wall Street Journal (Sat., December 10, 2016): C8.

(Note: the online version of the review has the date Dec. 7, 2016, and has the title "Books of The Times; Review: 'A Truck Full of Money' and a Thirst to Put It to Good Use.")

January 4, 2017

Best Entrepreneurs, and Managers, Help Workers Lead Meaningful Lives

(p. C6) In "Payoff," Dan Ariely makes the strong case that the best way to motivate people, including ourselves, is not through persuasive tactics, however subtle, but by providing the groundwork for meaning in people's lives.

For Altucher's full book recommendations, see:

James Altucher. "12 Months of Reading." The Wall Street Journal (Sat., December 10, 2016): C6.

(Note: the online version of the review has the date Dec. 7, 2016, and has the title "James Altucher on con artists.")

The book recommended, is:

Ariely, Dan. Payoff: The Hidden Logic That Shapes Our Motivations, Ted Books. New York: Simon & Schuster, Inc., 2016.

January 3, 2017

Micro-Entrepreneur Worked Hard, Saved, and Has No Regrets

(p. 1) PORT HEDLAND, Australia -- A lanky, dark-haired surfer, Lee Meadowcroft modeled on the runways of London, Milan and Singapore, then followed his dream of going home to Australia to sell herbal medicines. His store failed -- he had chosen the wrong street, he says -- and he lost almost all his savings. By then, the fashion world had found fresher faces.

So like tens of thousands of other Australians, Mr. Meadowcroft went to the mines.

It was late 2004. He plowed his last $4,000 into a two-week course on how to operate a crane. He found companies so desperate for workers that they would send chauffeured cars to pick up prospective welders, electricians and crane operators and deliver them to the nearest airport for their flights to mining country, here on Australia's remote northwestern coast.

China back then was growing at a breathtaking pace and needed all the Australian rocks it could get. Mine workers like Mr. Meadowcroft kept a punishing schedule: 13 consecutive days of 12-hour shifts, a day off, then another 13 consecutive days of 12-hour (p. 4) shifts. Mining fueled Australia's surging exports to China, which at their peak reached nearly $100 billion a year -- a figure representing $4,300 for every man, woman and child in the country.

Resource-rich places around the world prospered thanks to China, and Mr. Meadowcroft and his fellow Port Hedland equipment jockeys were no exception. By 2011 he was earning $250,000 a year.

. . .

The bust came just as hard and just as fast. China's economic slowdown left too many mines to feed too many dormant Chinese steel mills. Construction of new mines stopped. Port Hedland's economy slumped. Mr. Meadowcroft lost his job, then lost a second job. Like thousands of others, he went back home.

Mr. Meadowcroft's tale could serve as yet another boom-and-bust cautionary tale of the limits of China's rise. From Russia to Brazil, and Nigeria to Venezuela, resource-rich countries that boomed during China's surge found their economies shaken when Chinese demand slowed.

Except something unexpected has happened to Australia: It has withstood the global rout. Most mines -- lower-cost compared with mines elsewhere -- have stayed open. But Australia has also kept thriving, against all expectations, with a different kind of money flowing in from China.

Attracted by clean air, a strong education system and worries about China's future, more Chinese are spending their money in Australia. Thousands of Chinese families have sent their children to study at costly Australian universities, and Australian food exports to China have boomed. Chinese investment in Australian real estate has increased at least tenfold since 2010; Chinese investors have purchased up to half the new apartments in downtown Melbourne and Sydney.

. . .

. . . for people like Mr. Meadowcroft and others in Western Australia who were cut loose by the mining slump, Chinese money is a blessing. He now lives in the Western Australia capital city of Perth and works as an apprentice plumber in new housing developments aimed at Chinese buyers. He earns just $21,000 a year, but that could double or triple when he finishes his apprenticeship.

. . .

(p. 5) . . . for now, Chinese money is still flowing. Many miners who squandered their earnings during the iron ore boom are now trying to catch up in construction jobs. But many others socked away their money from the boom and have used those savings to buy homes or start small businesses.

"They were micro-entrepreneurs," said Tom Barratt, a University of Western Australia doctoral student who is doing his thesis on labor markets in the Pilbara hills.

Mr. Meadowcroft is among those savers. He bought a house and soon paid off most of the mortgage. He also married his longtime girlfriend after years of commuting to far-flung mines and ports, and is now raising two children as he learns to be a plumber.

Although his savings account is much smaller now, he has no regrets about the boom years. "That was 12 years of really hard work," he said, "to achieve what a lot of people don't achieve in their whole lives."

For the full story, see:

KEITH BRADSHER. "Money From the Dust." The New York Times, SundayBusiness Section (Sun., SEPT. 25, 2016): 1 & 4-5.

(Note: ellipses added.)

(Note: the online version of the story has the date SEPT. 24, 2016, and has the title "In Australia, China's Appetite Shifts From Rocks to Real Estate.")

December 28, 2016

Middle Class Income Increased 5.2 Percent in 2015

(p. B1) Working families finally got a raise.

Early on Tuesday, the Census Bureau provided some long-awaited good news for the beleaguered working class: The income of the typical American household perched on the middle rung of the income ladder increased a hearty 5.2 percent in 2015, the first real increase since 2007, the year before the economy sank into recession.

Households all the way down the income scale made more money last year. The average incomes of the poorest fifth of the population increased 6.6 percent after three consecutive years of decline. And the official poverty rate declined to 13.5 percent from 14.8 percent in 2014, the sharpest decline since the late 1960s.

The numbers are heartening, confirming that the sluggish yet consistent recovery of the American economy has finally begun to lift all boats.

For the full commentary, see:

Porter, Eduardo. "ECONOMIC SCENE; The Bad News Is the Good News Could Be Better." The New York Times (Mon., SEPT. 14, 2016): B1 & B5.

(Note: the online version of the commentary has the date SEPT. 13, 2016, and has the title "ECONOMIC SCENE; America's Inequality Problem: Real Income Gains Are Brief and Hard to Find.")

December 21, 2016

Udacity Entrepreneur Counters Creeping Credentialism

(p. B2) Udacity, an online learning start-up founded by a pioneer of self-driving cars, is finally taking the wraps off a job trial program it has worked on for the last year with 80 small companies.

The program, called Blitz, provides what is essentially a brief contract assignment, much like an internship. Employers tell Udacity the skills they need, and Udacity suggests a single candidate or a few. For the contract assignment, which usually lasts about three months, Udacity takes a fee worth 10 to 20 percent of the worker's salary. If the person is then hired, Udacity does not collect any other fees, such as a finder's fee.

For small start-ups, a hiring decision that goes bad can be a time-consuming, costly distraction. "This lets companies ease their way into hiring without the hurdle of making a commitment upfront," said Sebastian Thrun, co-founder and chairman of Udacity.

. . .

Mr. Thrun, a former Stanford professor and Google engineer who led the company's effort in self-driving cars, said he was also trying to nudge the tech industry's hiring beyond its elite-college bias.

"For every Stanford graduate, there are hundreds of people without that kind of pedigree who can do just as well," he said.

For the full story, see:

STEVE LOHR. "Udacity, an Education Start-Up, Offers Tech Job Tryouts." The New York Times (Fri., NOV. 18, 2016): B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date NOV. 17, 2016, and has the title "Udacity, an Online Learning Start-Up, Offers Tech Job Trials.")

December 19, 2016

Dignity and Equality Before the Law Unleashes Creativity in the Poor

(p. A23) We can improve the conditions of the working class. Raising low productivity by enabling human creativity is what has mainly worked. By contrast, taking from the rich and giving to the poor helps only a little -- and anyway expropriation is a one-time trick.

. . .

Look at the astonishing improvements in China since 1978 and in India since 1991. Between them, the countries are home to about four out of every 10 humans. Even in the United States, real wages have continued to grow -- if slowly -- in recent decades, contrary to what you might have heard. Donald Boudreaux, an economist at George Mason University, and others who have looked beyond the superficial have shown that real wages are continuing to rise, thanks largely to major improvements in the quality of goods and services, and to nonwage benefits. Real purchasing power is double what it was in the fondly remembered 1950s -- when many American children went to bed hungry.

What, then, caused this Great Enrichment?

Not exploitation of the poor, not investment, not existing institutions, but a mere idea, which the philosopher and economist Adam Smith called "the liberal plan of equality, liberty and justice." In a word, it was liberalism, in the free-market European sense. Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic.

For the full commentary, see:

DEIRDRE N. McCLOSKEY. "Economic View; Equality, Liberty, Justice and Wealth." The New York Times, SundayBusiness Section (Sun., SEPT. 4, 2016): 6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date SEPT. 2, 2016, and has the title "Economic View; The Formula for a Richer World? Equality, Liberty, Justice.")

McCloskey's commentary, quoted above, is related to her book:

McCloskey, Deirdre N. Bourgeois Equality: How Ideas, Not Capital, Transformed the World. Chicago: University of Chicago Press, 2016.

December 2, 2016

Poor Are Exiting High-Housing-Cost Cities

GroupsExitingHighHousingCostCitiesGraph2106-11-18.jpgSource of graph: online version of the WSJ article quoted and cited below.

(p. A3) Americans are leaving the costliest metro areas for more affordable parts of the country at a faster rate than they are being replaced, according to an analysis of census data, reflecting the impact of housing costs on domestic migration patterns.

Those mostly likely to move from expensive to inexpensive metro areas were at the lower end of the income scale, under the age of 40 and without a bachelor's degree, the analysis by home-tracker Trulia found.

. . .

Another study this year from California policy group Next 10 and Beacon Economics found that New York state and California had the largest net losses of domestic migrants between 2007 and 2014, and that lower- and middle-income people were more likely to leave.

For the full story, see:

CHRIS KIRKHAM. "Costly Cities See Exodus." The Wall Street Journal (Thurs., Nov. 3, 2016): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date Nov. 1, 2016, and has the title "More Americans Leave Expensive Metro Areas for Affordable Ones.")

November 30, 2016

About 90% of Current Jobs Include Tasks that Are Hard to Automate

(p. B1) They replaced horses, didn't they? That's how the late, great economist Wassily Leontief responded 35 years ago to those who argued technology would never really replace people's work.

. . .

(p. B6) A research paper published last month by the Organization for Economic Cooperation and Development argued that even the occupations most at risk of being replaced by machines contained lots of tasks that were hard to automate, like face-to-face interaction with customers.

It concluded that only 9 percent of American workers faced a high risk of being replaced by an automaton. Austrians, Germans and Spaniards were the most vulnerable, but only 12 percent of them risked losing their jobs to information technology.

For the full commentary, see:

Porter, Eduardo. "ECONOMIC SCENE; Contemplating the End of Human Workhorse." The New York Times (Weds., JUNE 8, 2016): B1 & B6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date JUNE 7, 2016, and has the title "ECONOMIC SCENE; Jobs Threatened by Machines: A Once 'Stupid' Concern Gains Respect.")

The Organization for Economic Cooperation and Development paper mentioned above, is:

Arntz, Melanie, Terry Gregory, and Ulrich Zierahn. "The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis." OECD Social, Employment and Migration Working Papers, No. 189. Paris: OECD Publishing, 2016.

November 21, 2016

Immigration Depresses Wages of Low-Wage Americans

(p. A11) Mr. Borjas is himself an immigrant, having at age 12 fled from Cuba to Miami with his widowed mother in 1962, just before the Cuban Missile Crisis shut down legal exits. As a labor economist, he has spent much of his academic career studying the effects of immigration on the American jobs market, often arguing that immigration depresses wages, or job opportunities, at the lower end of the scale. Here he notes that, on balance, the added production supplied by immigrants makes a modest contribution to U.S. economic growth. He generously provides readers with arguments on all sides, including Milton Friedman's wry observation that illegal immigrants are of more net benefit to the American economy than legals because they make less use of welfare-state services.

. . .

After totting up the pluses and minuses, Mr. Borjas concludes that immigration has very little effect on the lives of most Americans. He does worry, however, that some future wave might bring along with it the "institutional, cultural and political baggage that may have hampered development in the poor countries" from which immigrants often come, and he sees a need for reforms.

For the full review, see:

GEORGE MELLOAN. "BOOKSHELF; The Immigration Debate We Need." The Wall Street Journal (Weds., Oct. 19, 2016): A11.

(Note: ellipsis added.)

The book under review, is:

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

November 19, 2016

Regulations Cause Sluggish Economy by Slowing Startup Creation

StartupFormationGraph2016-10-27.jpgSource of graph: online version of the WSJ article quoted and cited below.

(p. A2) The U.S. economy is inching along, productivity is flagging and millions of Americans appear locked out of the labor market.

One key factor intertwined with this loss of dynamism: The U.S. is creating startup businesses at historically low rates.

. . .

The share of private firms less than a year old has dropped from more than 12% during much of the 1980s to only about 8% since 2010. In 2014, the most recent year of data, the startup rate was the second-lowest on record, after 2010, according to Census Bureau figures released last month, so there's little sign of a postrecession rebound.

. . .

Rules and regulations also could be at play. Goldman Sachs economists in part blame the cumulative effect of regulations enacted since the Great Recession for reducing the availability of credit and raising the cost of doing business for small firms, making them less competitive.

. . .

There is some disagreement on whether tech firms have fallen into the same doldrums as other startups like mom-and-pop shops. Mr. Haltiwanger and colleagues at the Federal Reserve and Census Bureau find evidence they have, with significant detriment to the economy.

"It may be that we are designing things here in the U.S. as rapidly as ever," Mr. Haltiwanger said. "We're just not producing here. That's not good news for U.S. productivity."

Researchers at the Massachusetts Institute of Technology delved into state business licensing information and found somewhat different but also discouraging results. That is, tech entrepreneurs are generating good ideas and founding companies at a healthy pace, but those ventures aren't breaking out into successful big companies.

"The system for translating good, high-quality foundings into a growth firm, that system seems to have broken," said Scott Stern, an MIT professor and co-author of the study on startups.

For the full commentary, see:

Sparshott, Jeffrey. "THE OUTLOOK; Sputtering Startups Weigh Down Growth." The Wall Street Journal (Mon., Oct. 24, 2016): A2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Oct. 23, 2016 title "THE OUTLOOK; Sputtering Startups Weigh on U.S. Economic Growth." The passages quoted above include a couple of sentences that appeared in the online, but not the print, version of the article.)

November 18, 2016

Land Use Regulations Increase Income Inequality

IncomeAndPopulationInRichAndPoorStatesGraph2016-11-14.jpgSource of graph: online version of the WSJ article quoted and cited below.

(p. A3) In this year's election, candidates have focused blame for rising income inequality on broad economic forces, from globalization to the decline of the American manufacturing base. But a growing body of research suggests a more ordinary factor: the price of the average single-family home for sale, from Fairfield, Conn., to Portland, Ore.

According to research by Daniel Shoag, an associate professor of public policy at Harvard University, and Peter Ganong, a postdoctoral fellow at the National Bureau of Economic Research, a decadeslong trend in which the income gap between the poorest and richest states steadily closed has been upended by growth in land-use regulations.

Moving to a wealthier area in search of job opportunities has historically been a way to promote economic equality, allowing workers to pursue higher-paying jobs elsewhere. But those wage gains lose their appeal if they are eaten up by higher housing costs. The result: More people stay put and lose out on potential higher incomes.

. . .

Messrs. Shoag and Ganong looked at mentions of "land-use" in appeals-court cases and found the number of references began rising sharply around 1970, with some states seeing a much larger increase than others. For example, the share of cases mentioning land use for New York rose 265% between 1950 and 2010 and 644% in California during the same period. By contrast, it increased by only 80% in Alabama.

For the full story, see:

LAURA KUSISTO. "Land Use Rules Under Fire." The Wall Street Journal (Weds., Oct. 19, 2016): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date Oct. 18, 2016, and has the title "As Land-Use Rules Rise, Economic Mobility Slows, Research Says." A few extra words appear in the online version quoted above, that were left out of the print version.)

The research by Ganong and Shoag, mentioned above, is:

Ganong, Peter, and Daniel Shoag. "Why Has Regional Income Convergence in the U.S. Declined?" Harvard University, John F. Kennedy School of Government, Working Paper Series, Jan. 2015.

November 7, 2016

Many Can Have Good Jobs, and Good Lives, Without College

SkillsGapApprenticeshipsGraph2016-09-30.jpgSource of graph: online version of the WSJ article quoted and cited below.

(p. B1) American employers struggling to find enough qualified industrial workers are turning to Germany for a solution to plug the U.S. skills gap: vocational training.

Two million U.S. manufacturing jobs will remain vacant over the next decade due to a shortage of trained workers, according to an analysis by the Manufacturing Institute, a nonprofit advocacy group affiliated with the National Association of Manufacturers, and professional-services firm Deloitte LLP.

While the Obama administration has invested millions of dollars to promote skills-based training, it remains a tough sell in a country where four-year university degrees are seen as the more viable path to good-paying jobs. The Bureau of Labor Statistics said two-thirds of high school graduates who enrolled in college in 2015 opted for four-year degrees.

. . .

In Germany, roughly half of high-school graduates opt for (p. B2) high-octane apprenticeships rather than college degrees. One draw: almost certain employment.

German apprentices spend between three and four days a week training at a company and between one and two days at a public vocational school. The company pays wages and tuition. After three years, apprentices take exams to receive nationally recognized certificates in their occupation. Many continue working full time at the company.

The Labor Department said 87% of apprentices in the U.S. are employed after completing their training programs. Workers who complete apprenticeships earn $50,000 annually on average, or higher than the median U.S. annual wage of $44,720,

For the full story, see:

ELIZABETH SCHULZE. "U.S. Turns to Germany to Fill Jobs." The Wall Street Journal (Tues., Sept. 27, 2016): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date Sept. 26, 2016, and has the title "U.S. Companies Turn to German Training Model to Fill Jobs Gap.")

November 1, 2016

GE Shifts Away from Six Sigma and Toward Innovation

(p. B1) One of the biggest engineering projects under way at General Electric Co. these days isn't a turbine or locomotive. It is reinventing the way the company's employees are assessed, reviewed and even paid.

For decades, an ideal GE worker was one adept at squeezing out product defects and almost allergic to admitting uncertainty.

Now, as the 124-year-old company refocuses itself on industrial businesses, executives say top performers are those willing to take risks, test new ideas with customers and even make mistakes.

Leaders say GE's multiyear effort to remake itself into a leaner, innovation-driven company requires a nimble workforce that can develop products faster and more cheaply. The shift is significant for GE, whose corporate ethos had long been embodied by Six Sigma, a manufacturing system designed to eliminate error, enshrining certainty and consistency.

. . .

(p. B6) The new style of measuring employees has roots in FastWorks, a companywide initiative intended to hasten product development and ensure that customers want new products before GE spends millions building them. It is based on Lean Startup, a management system popularized by Eric Ries, a 37-year-old author and consultant GE brought in with the blessing of Chief Executive Jeff Immelt to help employees get comfortable with trial, error and experimentation.

For the full story, see:

RACHEL EMMA SILVERMAN. "GE Tries to Reinvent the Employee Review, Encouraging Risks." The Wall Street Journal (Weds., June 8, 2016): B1 & B6.

(Note: ellipsis added.)

(Note: the online version of the story has the title "GE Re-Engineers Performance Reviews, Pay Practices.")

Ries's Lean Startup management system is advocated in his book:

Ries, Eric. The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. New York: Crown Business, 2011.

October 23, 2016

Working Longer May Result in Longer Life

(p. D1) Retiring after age 65 may help people live longer, says a study published online in the Journal of Epidemiology & Community Health. The risk of dying from any cause over the study period was 11% lower among people who delayed retirement for one year--until age 66--and fell further among people who retired between the ages of 66 and 72, the study found.

Even workers who retired for health reasons had a lower risk of dying, compared with those leaving work at 65.

The benefits of remaining in the workforce occurred irrespective of gender, lifestyle, education, income and occupation, the analysis showed.

Postponing retirement may delay the natural age-related decline in physical, cognitive and mental functioning, reducing the risk of chronic illness, the study suggests.

For the full story, see:

ANN LUKITS. "RESEARCH REPORT; Retiring After 65 May Extend Life." The Wall Street Journal (Tues., May 3, 2016): D1.

(Note: the online version of the story has the date May 2, 2016, and has the title "RESEARCH REPORT; Retiring After 65 May Help People Live Longer.")

Wu, Chenkai, Michelle C. Odden, Gwenith G. Fisher, and Robert S. Stawski. "Association of Retirement Age with Mortality: A Population-Based Longitudinal Study among Older Adults in the USA." Journal of Epidemiology and Community Health 70, no. 9 (Sept. 2016): 917-23.

October 19, 2016

Uber Drivers Learn to Work Optimal Hours

(p. B1) For nearly 20 years, economists have been debating how cabdrivers decide when to call it a day. This may seem like a trivial question, but it is one that cuts to the heart of whether humans are fundamentally rational -- in this case, whether they earn their incomes efficiently -- as the discipline has traditionally assumed.

In one camp is a group of so-called behavioral economists who have found evidence that many taxi drivers work longer hours on days when business is slow and shorter hours when business is brisk -- the opposite of what economic rationality, to say nothing of common sense, would seem to dictate.

In another camp is a group of more orthodox economists who argue that this perverse habit is largely an illusion in the eyes of certain researchers. Once you consult more precise numbers, they argue, you find that drivers typically work longer hours when it is in their financial interest to do so.

. . .

So who is right? That's where Uber comes in. When one of the company's researchers, using its supremely detailed data on drivers' work time and rides, waded into the debate with a paper this year, the results were intriguing.

Over all, there was little evidence that drivers were driving less when they could make more per hour than usual. But that was not true for a large portion of new drivers. Many of these drivers appeared to have an income goal in mind and stopped when they were near it, causing them to knock off sooner when their hourly wage was high and to work longer when their wage was low.

. . .

"A substantial, although not most, frac-(p. B5)tion of partners do in fact come into the market with income targeting behavior," the paper's author, Michael Sheldon, an Uber data scientist, wrote. The behavior is then "rather quickly learned away in favor of more optimal decision making."

In effect, Mr. Sheldon was saying, the generally rational beings that most economists presume to exist are made, not born -- at least as far as their Uber driving is concerned.

. . .

As for Mr. Sheldon, the Uber paper's author, he attributed his finding to the adventurous nature of many Uber drivers, who were open to running headlong into unfamiliar territory. It's the sheer unfamiliarity of the Uber driving experience, he speculated, that may explain the initial bout of economically irrational behavior.

Mr. Sheldon was less open to the idea that people who did not depend on Uber for their livelihood helped account for his finding. So far as Uber can tell from other research, he said, those who drive irregularly respond more to fare increases than more regular drivers, at any level of earnings.

For the full story, see:

NOAM SCHEIBER. "Are Uber Drivers Rational? Not Always, Economists Say." The New York Times (Mon., SEPT. 5, 2016): B1 & B5.

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

(Note: the online version of the story has the date SEPT. 4, 2016, and has the title "How Uber Drivers Decide How Long to Work.")

The working paper by Michael Sheldon mentioned above, is:

Sheldon, Michael. "Income Targeting and the Ridesharing Market." Working Paper, Feb. 18, 2016.

October 16, 2016

Income Redistribution May Hurt Innovation

(p. A13) Edward Conard is on a dual crusade. First, he is out to prove that technological innovation is the major driver of the creation of wealth. Second, that government programs to redistribute income are at best futile and at worst the enemy of the middle class.

. . .

"The late Steve Jobs," Mr. Conard writes, "may have made huge profits from his innovations, but his wealth was small in comparison with the value of the iPhone and its imitators to their users."

. . .

"Redistribution--whether achieved through taxation, regulatory restrictions, or social norms--appears," he asserts, "to have large detrimental effects on risk-taking, innovation, productivity, and growth over the long run, especially in an economy where innovation produced by the entrepreneurial risk-taking of properly trained talent increasingly drives growth."

For the full review, see:

RICHARD EPSTEIN. "BOOKSHELF; The Necessity of the Rich; Steve Jobs may have earned huge profits from his innovations, but they pale in comparison with the value of the iPhone to its users." The Wall Street Journal (Thurs., Sept. 15, 2016): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 14, 2016, and has the title "BOOKSHELF; The Necessity of the Rich; Steve Jobs may have earned huge profits from his innovations, but they pale in comparison with the value of the iPhone to its users.")

The book under review, is:

Conard, Edward. The Upside of Inequality: How Good Intentions Undermine the Middle Class. New York: Portfolio, 2016.

October 14, 2016

"I Could Lose My Ability to Control My Business"

(p. B4) Small-business owners say they are shouldering higher costs and scaling back expansion plans because of a revised federal rule that gives employees more leverage in settling workplace grievances.

The new policy, intended to hold businesses accountable for labor-law violations against people whose working conditions they control but don't claim as employees, was put in place last year through a ruling by the National Labor Relations Board, . . .

. . .

Businesses say they are in a regulatory limbo because the new standard is vague about what constitutes control.

The previous test measured the direct control one business had over working conditions of people employed by another business. Now, even indirect control can count.

So far the impact seems to be largely on the franchisees. A home health-care business in Wisconsin is taking on $10,000 in annual recruiting costs because its franchiser stopped providing assistance to steer clear of regulators, and a small hotelier in Florida is abandoning expansion plans in small markets because one of its franchisers scaled back worker training it provides. A printing business owner in Washington state said he canceled plans to open an eighth store because he doesn't want to risk the investment until it is clear his franchiser wouldn't be considered a joint-employer.

"I could lose my ability to control my business," said Chuck Stempler, an owner of the seven printing stores that operate under the AlphaGraphics brand in Washington and California.

. . .

Employers say the NLRB is confusing control with contractual relationships that help businesses and workers thrive.

"The NLRB is applying a new legal standard that would undermine a successful American business model that has enabled thousands of families to operate their own small businesses and help support millions of American jobs," McDonald's said in a statement, referring to the franchising business.

For the full story, see:

MELANIE TROTTMAN. "New Labor Law Curbs Small Firms' Plans." The Wall Street Journal (Sat., Aug. 6, 2016): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date Aug. 5, 2016, and has the title "Some Small-Business Owners Trim Expansion Plans, Cite New Labor Law.")

October 7, 2016

Mobile Game Helps When Work Is Absurd Drudgery

(p. A1) SEOUL--When Lee Jin-po was laid off last year for the third time in as many years, the 29-year-old mobile-game programmer expressed his frustration in his own instinctive way: He made a mobile game about it.

In Mr. Lee's "Don't Get Fired!," the object is to rise through the ranks at a nameless corporation by performing an endless string of mind-numbing tasks, while avoiding a long list of fireable offenses.

"It's just like real life," he says.

In South Korea, where youth unemployment has hit an all-time high amid sluggish economic growth, "Don't Get Fired!" has become a certified hit--one in a small raft of mobile games that has found success by embracing the drudgery and absurdity of work.

. . .

(p. A10) Mr. Lee later found volunteers to translate it into 12 languages, helping the international version attract another million downloads. Griffin Crowley, a 20-year-old high-school graduate in a Cleveland suburb, couldn't stop playing after stumbling on it while fiddling with his cellphone. "Sometimes, you just have to laugh at the futility of life," says Mr. Crowley, who recently worked a stint at a telemarketing company.

For the full story, see:

Cheng, Jonathan. "Congratulations Player One, Your Zombie Boss Didn't Fire You; South Korean unemployment inspires games about work; laugh at chief's jokes." The Wall Street Journal (Mon., August 6, 2016): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date August 8 [sic], 2016.)

October 4, 2016

Chernow Is Consumed by His Work "in a Deep, Quiet, Rewarding Way"

(p. 12) I collect art, and the piece I adore most is an 1888 Winslow Homer etching called "Mending the Tears." It depicts two women seated along the shore of an English fishing village. One is mending a net; the other is darning socks. They are consumed by their work, but in a deep, quiet, rewarding way. That's how I feel when I write.

For the full commentary, see:

Ron Chernow (as told to Marc Myers). "HOUSE CALL; Ron Chernow; New York's 'Quietest' Home." The Wall Street Journal (Fri., Aug. 26, 2016): M10.

(Note: the online version of the commentary has the date Aug. 23, 2016, and has the title "HOUSE CALL; Hamilton Biographer Ron Chernow Finds New York's 'Quietest' Home.")

I have learned a lot from these two books by Chernow:

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

Chernow, Ron. Titan: The Life of John D. Rockefeller, Sr. New York: Random House, 1998.

September 29, 2016

Chinese Industry Using Robots to Automate Routine Tasks

(p. B1) China's appetite for European-made industrial robots is rapidly growing, as rising wages, a shrinking workforce and cultural changes drive more Chinese businesses to automation. The types of robots favored by Chinese manufacturers are also changing, as automation spreads from heavy industries such as auto manufacturing to those that require more precise, flexible robots capable of handling and assembling smaller products, including consumer electronics and apparel.

At stake is whether China can retain its dominance in manufacturing.

. . .

(p. B2) China, in 2013, became the world's largest market for industrial robots, surpassing all of Western Europe, according to the International Federation of Robotics. In 2015, Chinese manufacturers bought roughly 67,000 robots, about a quarter of global sales, and demand is projected to more than double to 150,000 robots annually by 2018.

For the full story, see:

Robbie Whelan and Esther Fung. "China's Factories Turn to Robots." The Wall Street Journal (Weds., August 17, 2016): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the story has the date August 16, 2016, and has the title "China's Factories Count on Robots as Workforce Shrinks.")

September 24, 2016

Executive Job-Hopping Increases

(p. B8) Corey Heller often finds himself ordering fresh business cards. The human resources executive has switched employers nine times since 1996--and spent less than three years at six of those workplaces.

In any other era, the 51-year-old Mr. Heller would be viewed as an unstable job hopper. But today, that stigma is starting to fade amid greater pressure for rapid results and decreased workplace loyalty, according to executive recruiters and coaches. The change suggests that companies increasingly believe high-level hires with multiple recent employers bring fresh insights and a mix of experience.

. . .

Brief stints will spread "because of the explosion of online recruiting and opportunistic offers to candidates with strong profiles,'' predicts Stefanie Smith, a New York executive coach.

For the full story, see:

JOANN S. LUBLIN. "Job-Hopping Is Losing Its Stigma." The Wall Street Journal (Weds., July 27, 2016): B8.

(Note: ellipsis added.)

(Note: the online version of the story has the date July 26, 2016, and has the title "Job-Hopping Executives No Longer Pay Penalty.")

September 19, 2016

Innovations Make It Easier to Form and Run Smaller Firms

(p. B3) Unilever is paying $1 billion for Dollar Shave Club, a five-year-old start-up that sells razors and other personal products for men. Every other company should be afraid, very afraid.

The deal anecdotally shows that no company is safe from the creative destruction brought by technological change. The very nature of a company is fundamentally changing, becoming smaller and leaner with far fewer employees.

. . .

Now it is possible to leverage technology and transportation systems that never existed before. Dollar Shave Club used Amazon Web Services, a cloud computing service started by the online retailing giant in 2006 that encouraged a proliferation of e-commerce companies. Manufacturing now is just as much a line item as is a distribution apparatus. This is the business strategy of many other disruptive companies, including the home-sharing site Airbnb, which upends the idea of needing a hotel. The ride-hailing start-up Uber could never have been possible without a number of inventions including the internet, the smartphone and, most important, location tracking technology, enabling anyone to be a driver.

For the full commentary, see:

STEVEN DAVIDOFF SOLOMON. "Deal Professor; In Comfort of a Close Shave, a Distressing Disruption." The New York Times (Weds., JULY 27, 2016): B3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date JULY 26, 2016, and has the title "Deal Professor; $1 Billion for Dollar Shave Club: Why Every Company Should Worry.")

September 18, 2016

Lack of Control at Job Causes Stress, Leading to Cardiovascular Disease

(p. 6) Allostasis is not about preserving constancy; it is about calibrating the body's functions in response to external as well as internal conditions. The body doesn't so much defend a particular set point as allow it to fluctuate in response to changing demands, including those of one's social circumstances. Allostasis is, in that sense, a politically sophisticated theory of human physiology. Indeed, because of its sensitivity to social circumstances, allostasis is in many ways better than homeostasis for explaining modern chronic diseases.

Consider hypertension. Seventy million adults in the United States have it. For more than 90 percent of them, we don't know the cause. However, we do have some clues. Hypertension disproportionately affects blacks, especially in poor communities.

. . .

Peter Sterling, a neurobiologist and a proponent of allostasis, has written that hypertension in these communities is a normal response to "chronic arousal" (or stress).

. . .

Allostasis is attractive because it puts psychosocial factors front and center in how we think about health problems. In one of his papers, Dr. Sterling talks about how, while canvassing in poor neighborhoods in Cleveland in the 1960s, he would frequently come across black men with limps and drooping faces, results of stroke. He was shocked, but today it is well established that poverty and racism are associated with stroke and poor cardiovascular health.

These associations also hold true in white communities. One example comes from the Whitehall study of almost 30,000 Civil Service workers in Britain over the past several decades. Mortality and poor health were found to increase stepwise from the highest to the lowest levels in the occupational hierarchy: Messengers and porters, for example, had nearly twice the death rate of administrators, even after accounting for differences in smoking and alcohol consumption. Researchers concluded that stress -- from financial instability, time pressures or a general lack of job control -- was driving much of the difference in survival.

For the full commentary, see:

SANDEEP JAUHAR. "When Blood Pressure Is Political." The New York Times, SundayReview Section (Sun., AUG. 7, 2016): 6.

(Note: ellipses added.)

(Note: the online version of the review has the date AUG. 6, 2016.)

The commentary quoted above is distantly related to Jauhar's book:

Jauhar, Sandeep. Doctored: The Disillusionment of an American Physician. New York: Farrar, Straus and Giroux, 2014.

September 9, 2016

College Admissions Process Encourages Superficial Service

(p. 3) This summer, as last, Dylan Hernandez, 17, noticed a theme on the social media accounts of fellow students at his private Catholic high school in Flint, Mich.

"An awfully large percentage of my friends -- skewing towards the affluent -- are taking 'mission trips' to Central America and Africa," he wrote to me in a recent email. He knows this from pictures they post on Snapchat and Instagram, typically showing one of them "with some poor brown child aged 2 to 6 on their knee," he explained. The captions tend to say something along the lines of, "This cutie made it so hard to leave."

But leave they do, after as little as a week of helping to repair some village's crumbling school or library, to return to their comfortable homes and quite possibly write a college-application essay about how transformed they are.

. . .

Hernandez reached out to me because he was familiar with writing I had done about the college admissions process. What he described is something that has long bothered me and other critics of that process: the persistent vogue among secondary-school students for so-called service that's sometimes about little more than a faraway adventure and a few lines or paragraphs on their applications to selective colleges.

It turns developing-world hardship into a prose-ready opportunity for growth, empathy into an extracurricular activity.

And it reflects a broader gaming of the admissions process that concerns me just as much, because of its potential to create strange habits and values in the students who go through it, telling them that success is a matter of superficial packaging and checking off the right boxes at the right time. That's true only in some cases, and hardly the recipe for a life well lived.

. . .

Richard Weissbourd, a child psychologist and Harvard lecturer who has studied the admissions process in the interest of reforming it, recalled speaking with wealthy parents who had bought an orphanage in Botswana so their children could have a project to write and talk about. He later became aware of other parents who had bought an AIDS clinic in a similarly poor country for the same reason.

"It becomes contagious," he said.

A more recent phenomenon is teenagers trying to demonstrate their leadership skills in addition to their compassion by starting their own fledgling nonprofit groups rather than contributing to ones that already exist -- and that might be more practiced and efficient at what they do.

. . .

In many cases they are compelled. Tara Dowling, the director of college counseling at the Rocky Hill School in East Greenwich, R.I., said that many secondary schools (including, as it happens, Dylan Hernandez's) now require a minimum number of hours of service from students, whose schedules -- jammed with sports, arts, SAT prep and more -- leave little time for it.

Getting it done in one big Central American swoop becomes irresistible, and if that dilutes the intended meaning of the activity, who's to blame: the students or the adults who set it up this way?

For the full commentary, see:

Bruni, Frank. "To Get to Harvard, Go to Haiti?" The New York Times, SundayReview Section (Sun., AUG. 14, 2016): 3.

(Note: ellipses added.)

(Note: the online version of the commentary has the date AUG. 13, 2016.)

September 7, 2016

When Minimum Wage Rises, So Does Crime

(p. A13) By significantly reducing the available stock of job opportunities at the bottom end of the career ladder, a higher minimum wage increases the likelihood that unemployed teens will seek income elsewhere. A 2013 study by economists at Boston College analyzed increases in state and federal minimum-wage levels between 1997 and 2010. It found that low-skill workers affected by minimum-wage hikes were more likely to lose their jobs, become idle and commit crime. The authors warn that their results "point to the dangers both to the individual and to society from policies that restrict the already limited employment options of this group."

For the full commentary, see:

MARK J. PERRY and MICHAEL SALTSMAN. "The Fight for $15 Will Hit North Philly Hard; Not far from Democrats' soiree, teen unemployment is at 42%. What if the minimum wage doubles?" The Wall Street Journal (Weds., July 27, 2016): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 26, 2016.)

The 2013 study by Boston College economists, mentioned above, was published in 2014. The published version is:

Beauchamp, Andrew, and Stacey Chan. "The Minimum Wage and Crime." B.E. Journal of Economic Analysis and Policy 14, no. 3 (July 2014): 1213-35.

September 5, 2016

RFID Tags Can Enable Process Innovations

(p. A11) The numbers don't look good: Last week the Bureau of Labor Statistics reported that worker productivity dropped 0.5% in the second quarter of 2016--the third quarterly decline in a row. Productivity growth, a key driver of improved living standards, has averaged only 1.3% a year over the past decade, compared with 2.9% from mid-1995 through the end of 2005.

Why the slowdown? One theory is that markets have already wrung the easy efficiencies out of current technology. Federal Reserve Chair Janet Yellen noted in June that some economists "believe that the low-hanging fruit of innovation largely has been picked and that there is simply less scope for further gains."

Count me in the optimistic camp. Low-cost wireless technologies are only beginning to break down the wall between the physical and digital worlds, and early-adopting companies are already achieving astounding productivity gains.

. . .

Employees can take inventory by waving an RFID reader over a shelf or a rack. A 2009 study by the University of Arkansas found scanning 10,000 items took 53 hours using bar codes, but only two hours with RFID. That efficiency allows Macy's to inventory items every month rather than once or twice annually. Pam Sweeney, Macy's senior vice president of logistics systems, tells me that RFID has pushed inventory accuracy in these departments to 95%.

. . .

As the cost of RFID tags falls to only cents apiece, the applications widen. Imagine checking out at the grocery store one day simply by running your cart through a scanner in a few seconds--no bar codes required. How many hours a year would that save consumers and employees both? If you want a million minuscule reasons to be bullish about productivity, look no further than tiny RFID tags.

For the full commentary, see:

MARK ROBERTI. "How Tiny Wireless Tech Makes Workers More Productive; Macy's and Delta are using cheap RFID tags to blend the physical and digital." The Wall Street Journal (Weds., Aug. 17, 2016): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Aug. 16, 2016.)

September 3, 2016

87% of Billionaires Inherited Less than Half of Wealth

(p. C6) Billionaires controlled 3.9% of the world's total household wealth in 2015, slightly down from 4% in 2014, according to Wealth-X, a consulting group that uses public records and research staff to manually track the habits of ultra-high-net-worth individuals, or people valued at more than $30 million.

. . .

For most billionaires, however, it takes more than an inheritance to join the so-called three-comma club, according to the census; 87% of billionaires, up from 81% in 2014, made the majority of their fortunes themselves.

Todd Morgan, senior managing director at Bel Air Investment Advisors LLC in Los Angeles, says several of his billionaire clients are entrepreneurs and they are "very driven" and typically opt to keep working long after they've made their fortune.

"It's not, 'I'm worth a billion, now I'm going to sit on a beach and relax.' It's more of, 'What can I create or achieve next?'" he says.

For the full story, see:

VERONICA DAGHER. "Ranks of Billionaires Grow, and They're Getting Richer." The Wall Street Journal (Weds., Aug. 8, 2016): C6.

(Note: ellipsis added.)

(Note: the online version of the story has the title "The Rich Get Richer as Billionaires Increase in Number." There are minor differences in wording between the online and print versions. The sentences quoted above, follow the online version.)

August 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.")

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 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 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 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 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 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).")

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.

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 23, 2016

Welfare System Hurts Those It Is Intended to Help

I saw part of a C-SPAN 2 presentation, originally broadcast on 3/28/16, of a new book by Harvey and Conyers that appears to argue persuasively that the current American welfare system makes it harder for welfare recipients to transition to employment. It further argues that work is an important part of the good life, usually an important contributor to happiness. As a result, the current welfare system hurts the very people that it is intended to help.

The book discussed above, is:

Harvey, Phil, and Lisa Conyers. The Human Cost of Welfare: How the System Hurts the People It's Supposed to Help. Santa Barbara, CA: Praeger, 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 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.")

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 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 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 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.")

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 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 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 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 17, 2016

A More Dynamic Labor Market May Be the Answer to Italy's "Quo Vado?"

(p. A19) ROME -- A balding government clerk in his late 30s has one true love: "il posto fisso," a job for life. He doesn't want to compete in the labor market; he has no urge to move on. He doesn't even want to earn more. Give him a desk, a chair and a 9-to-5 job in the "pubblica amministrazione," and he's happy. Clocking in late, chatting with colleagues, accepting small bribes from taxpayers (most favored: quail), a regular salary -- that's life!

And, of course, there are rubber stamps. The clerk loves them. Slam! Slam! Slam! When his boss, who wants to get rid of him, asks angrily: "What have you contributed to this department?" he shows her his stamping prowess, and almost demolishes her glass table.

This is, more or less, the story of "Quo Vado?" a new comedy that has smashed Italian box office records. It had its premiere on Jan. 1, and in its first week made $39 million; "Star Wars: The Force Awakens," in three weeks, reached just $23 million. According to The Hollywood Reporter, "Quo Vado?" -- or "Where Am I Going?" a modern spin on the Latin question "Quo vadis?" ("Where are you going?") -- is on course to beat the box-office record for an Italian film in the country, currently at $56 million, set by 2013's "Sole a catinelle."

. . .

Italians aren't afraid of a more dynamic labor market. There is still the dream of making it in the private sector, even if it is less secure than the public-sector jobs that have long been the backbone of the Italian work force. Two out of three workers, according to a recent survey in the Turin newspaper La Stampa, wouldn't mind taking a risk, as long as it meant the prospect of career advancement.

To foster this more proactive mood, Prime Minister Matteo Renzi -- who has seen "Quo Vado?" with his family -- last year introduced labor-market legislation known as the Jobs Act (in English, mysteriously). It makes hiring and firing easier, but only in the private sector. For state jobs, like Checco's, things stay the same. Once you're in, you're in.

For the full commentary, see:

Severgnini, Beppe. "More Popular than 'Star Wars'." The New York Times (Sat., JAN. 16, 2016): A19.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date JAN. 14, 2016, and has the title "The Secret Behind Italy's Favorite New Film." Where there are minor differences between the print and online versions, the version above follows the online version.)

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 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 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 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 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 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:

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 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.")

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 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 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 8, 2015

Bicycles Emancipated Women


"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 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 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 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.)

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:

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 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 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 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.


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

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 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 Bossless 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."


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

(Note: ellipses added.)

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.


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 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.


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

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 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.

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.


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

(Note: bracketed letter in original.)

April 19, 2015

Successful Billionaire Mathematician Would Have Lost Math Contests, But Was Good at Slow Pondering

(p. D1) James H. Simons likes to play against type. He is a billionaire star of mathematics and private investment who often wins praise for his financial gifts to scientific research and programs to get children hooked on math.

But in his Manhattan office, high atop a Fifth Avenue building in the Flatiron district, he's quick to tell of his career failings.

He was forgetful. He was demoted. He found out the hard way that he was terrible at programming computers. "I'd keep forgetting the notation," Dr. Simons said. "I couldn't write programs to save my life."

After that, he was fired.

His message is clearly aimed at young people: If I can do it, so can you.

. . .

(p. D2) "I wasn't the fastest guy in the world," Dr. Simons said of his youthful math enthusiasms. "I wouldn't have done well in an Olympiad or a math contest. But I like to ponder. And pondering things, just sort of thinking about it and thinking about it, turns out to be a pretty good approach."

For the full story, see:

WILLIAM J. BROAD. "Seeker, Doer, Giver, Ponderer; A Billionaire Mathematician's Life of Ferocious Curiosity." The New York Times (Tues., JULY 8, 2014): D3.

(Note: ellipsis added.)

(Note: the online version of the story has the date JULY 7, 2014.)

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.


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

(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,


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

(Note: ellipsis in original.)

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 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 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.

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 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 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 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." )

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 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 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 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.")

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.

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 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 10, 2014

Pay Gap Widest in Jobs that Value Long Hours, Face Time and Being on Call


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.

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 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 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.

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 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.)

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.


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 7, 2014

Nobel-Prize-Winner Views Success as Rigged (Except for Nobel Prizes)

(p. 245) . . . , Solow interprets the evidence on intergenerational mobility as showing that the economy is not very meritocratic. (Oddly, he exempts the economics profession. He seems to believe that lack of success is often the result of bad luck or a rigged system, unless you are an economist, in which case it's your own fault.) Although I noted in my article that those born into extreme poverty face particularly difficult obstacles, I view the rest of the economy as more meritocratic than Solow does. In addition to the Kaplan and Rauh study, I recommend a popular book called The Millionaire Next Door (Stanley and Danko 1996). Written by two marketing professors who extensively surveyed high net worth individuals, the book reports that the typical millionaire is not someone who was born into wealth but rather is someone who has worked hard and lived frugally.


Mankiw, N. Gregory. "Correspondence: Response from N. Gregory Mankiw." Journal of Economic Perspectives 28, no. 1 (Winter 2014): 244-45.

(Note: ellipsis added; italics in original.)

The Stanley and Danko book that Mankiw praises (and I use in my Economics of Entrepreneurship seminar) 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.

July 29, 2014

HR Regulations and Fear of Lawsuits Keep Managers from Firing Workers Who Do Not Work

(p. 1B) The biggest problem in your workplace has a name. His name is Jeff. . . .

Jeff sits two cubicles down from us, or three, or four. His real name may be John, Juan or Joan. He gets to the widget factory late, he leaves early and always mucks up his part of any group project. He complains, loudly, about the smallest things, and when you bring doughnuts for your birthday he probably takes three and then talks with his mouth full, too.

. . .

(p. 2B) . . . , morale suffers greatly when most of a company's employees perceive that their supervisor is failing to deal with their low-performing co-worker, month after month, year after year.

For this, Hoogeveen blames a corporate culture that is so concerned about HR regulations, and the often-imagined threat of litigation, that bosses often fail to take into account how the trouble employee affects the larger climate.

. . .

. . . if Jeff doesn't improve, he needs to be fired. This is perhaps the worst part of a boss's job, Hoogeveen thinks. His eyes mist as he recalls firing an employee whom he liked, but who was simply a bad fit at QLI.

It's human nature to avoid this conflict, to maintain the status quo and let Jeff be, he says. That's what can and does happen at most Omaha companies.

But it's bad for the employees, and it's bad for business.

"A lot of this stuff is incredibly easy to understand," says Omaha's workplace mechanic [Kim Hoogeveen]. "It's incredibly difficult to live."

For the full story, see:

Hansen, Matthew. "Workplace Guru: Don't Let Problem Worker Slide." Omaha World-Herald (Mon., July 21, 2014): 1B-2B.

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

(Note: the online version of the article had the title "Hansen: Don't let Jeff -- the problem worker -- slide, workplace guru says.")

July 28, 2014

Entrepreneur Gutenberg's Press Creatively Destroyed the Jobs of Scribes

(p. 32) Poggio possessed . . . [a] gift that set him apart from virtually all the other book-hunting humanists. He was a superbly well-trained scribe, with exceptionally fine handwriting, great powers of concentration, and a high degree of accuracy. It is difficult for us, at this distance, to take in the significance of such qualities: our technologies for producing transcriptions, facsimiles, and copies have almost entirely erased what was once an important personal achievement. That importance began to decline, though not at all precipitously, even in Poggio's own lifetime, for by the 1430s a German entrepreneur, Johann Gutenberg, began experimenting with a new invention, movable type, which would revolutionize the reproduction and transmission of texts. By the century's end printers, especially the great Aldus in Venice, would print Latin texts in a typeface whose clarity and elegance remain unrivalled after five centuries. That typeface was based on the beautiful handwriting of Poggio and his humanist friends. What Poggio did by hand to produce a single copy would soon be done mechanically to produce hundreds.


Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.

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

July 26, 2014

Countries that Protect Jobs Stifle Economic Growth

(p. 240) In an "Interview" conducted by Jessie Romero, John Haltiwanger discusses changing patterns of job creation and destruction: "But now we're seeing a decline in the entry rate and a pretty stark decline in the share of young businesses. . . . But it's also important to recognize that the decline in the share of young firms has occurred because the impact of entry is not just at the point of entry, it's also over the next five or 10 years. A wave of entrants come in, and some of them grow very rapidly, and some of them fail. That dynamic has slowed down. . . . If you look at young small businesses, or just young businesses period, the 90th percentile growth rate is incredibly high. Young businesses not only are volatile, but their growth rates also are tremendously skewed. It's rare to have a young business take off, but those that do add lots of jobs and contribute a lot to productivity growth. We have found that startups together with high-growth firms, which are disproportionately young, account for roughly 70 percent of overall job creation in the United States. . . . "I think the evidence is overwhelming that countries have tried to stifle the [job] destruction process and this has caused problems. I'm hardly a fan of job destruction per se, but making it difficult for firms to contract, through restricting shutdowns, bankruptcies, layoffs, etc., can have adverse consequences. The reason is that there's so much heterogeneity in productivity across businesses. So if you stifle that destruction margin, you're going to keep lots of low-productivity businesses in existence, and that could lead to a sluggish economy. I just don't think we have any choice in a modern market economy but to allow for that reallocation to go on. Of course, what you want is an environment where not only is there a lot of job destruction, but also a lot of job creation, so that when workers lose their jobs they either immediately transit to another job or their unemployment duration is low." Econ Focus, Federal Reserve Bank of Richmond, Second Quarter 2013, pp. 30-34.


Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 28, no. 1 (Winter 2014): 235-42.

(Note: italics, ellipses, and bracketed word, in original.)

July 14, 2014

Forecasts of Mass Unemployment from Robots Were Wrong

(p. 215) Frank Levy and Richard J. Murnane consider the interaction between workers and machinery in "Dancing with Robots: Human Skills for Computerized Work." "On March 22, 1964, President Lyndon Johnson received a short, alarming memorandum from the Ad Hoc Committee on the Triple Revolution. The memo warned the president of threats to the nation beginning with the likelihood that computers would soon create mass unemployment: 'A new era of production has begun. Its principles of organization are as different from those of the industrial era as those of the industrial era were different from the agricultural. The cybernation revolution has been brought about by the combination of the computer and the automated self-regulating machine. This results in a system of almost unlimited productive capacity which requires progressively less human labor. Cybernation is already reorganizing the economic and social system to meet its own needs.' The memo was signed by luminaries including Nobel Prize winning chemist Linus Pauling, Scientific American publisher Gerard Piel, and economist Gunnar Myrdal (a future Nobel Prize winner). Nonetheless, its warning was only half right. There was no mass unemployment--since 1964 the economy has added 74 million jobs. But computers have changed the jobs that are available, the skills those jobs require, and the wages the jobs pay. For the foreseeable future, the challenge of "cybernation" is not mass unemployment but the need to educate many more young people for the jobs computers cannot do." Third Way, 2013, /publications/714/Dancing-With-Robots.pdf.


Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 27, no. 4 (Fall 2013): 211-18.

(Note: italics in original.)

July 9, 2014

French Protest Amazon, but Buy There for Low Prices

(p. B1) LONDON -- On weekends, Guillaume Rosquin browses the shelves of local bookstores in Lyon, France. He enjoys peppering the staff with questions about what he should be reading next. But his visits, he says, are also a protest against the growing power of Amazon. He is bothered by the way the American online retailer treats its warehouse employees.

Still, as with millions of other Europeans, there is a limit to how much he will protest.

"It depends on the price," said Mr. Rosquin, 49, who acknowledged that he was planning to buy a $400 BlackBerry smartphone on Amazon because the handset was not yet available on rival French websites. "If you can get something for half-price at Amazon, you may put your issues with their working conditions aside."

For the full story, see:

MARK SCOTT. "Principles Are No Match for Europe's Love of U.S. Web Titans." The New York Times (Mon., JULY 7, 2014): B1 & B3.

(Note: the online version of the story has the date JULY 6, 2014.)

June 29, 2014

The Noise of Open-Office Plans Destroys Concentration


Source of book image: DWIGHT GARNER. "Books of The Times; The Office Space We Love to Hate." The New York Times (Fri., APRIL 25, 2014): C21 & C31.

(p. C3) Open-office plans--then as now--mean noise, both visual and aural. People used to private offices couldn't concentrate because of all the chatter and typing. For all the supposed egalitarianism of the office landscape, managers usually allotted themselves more space than junior staff, and the creative use of screens and extra plants often let them carve out ad hoc private offices for themselves. By the 1970s, European workers' councils had rejected open-office plans, insisting that employees across the continent be granted private offices.

In the U.S., however, the open-plan remained unchallenged--until Propst. He concluded that office workers needed autonomy and independence--and therefore offered a flexible, three-walled design that could be reshaped to any given need.

. . .

Many workers I've spoken to in open offices find concentration and privacy elusive--and often miss their cubicles.

For the full commentary, see:

NIKIL SAVAL. "When Office Cubicles Looked Like Progress." The Wall Street Journal (Sat., May 10, 2014): C3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 9, 2014, and has the title "A Brief History of the Dreaded Office Cubicle.")

For more of Saval's observations on the cubicle, see:

Saval, Nikil. Cubed: A Secret History of the Workplace. New York: Doubleday, 2014.

June 25, 2014

Occupational Licensing Hurts Poor and Restricts Innovation and Worker Mobility


Source of book image:

(p. A31) In the 1970s, about 10 percent of individuals who worked had to have licenses, but by 2008, almost 30 percent of the work force needed them.

With this explosion of licensing laws has come a national patchwork of stealth regulation that has, among other things, restricted labor markets, innovation and worker mobility.

. . .

Occupational licensing, moreover, does nothing to close the inequality gap in the United States. For consumers, there is likely to be a redistribution effect in the "wrong" direction, as higher income consumers have more choice among higher quality purveyors of a service and lower income individuals are left with fewer affordable service options.

. . . , government-issued licenses largely protect occupations from competition. Conservatives often see members of the regulated occupation supporting licensing laws under claims of "public health and safety." However, these laws do much more to stop competition and less to enhance the quality of the service.

Also, all consumers do not demand the same level of quality. If licensure "improves quality" by restricting entry into the profession, then some consumers will be forced to pay for more "quality" than they want or need. Not everyone wants a board-licensed hairdresser.

For the full commentary, see:

MORRIS M. KLEINER. "Why License a Florist?" The New York Times (Thurs., MAY 29, 2014): A31.

(Note: the online version of the commentary has the date MAY 28, 2014.)

Kleiner's most recent book on occupational licensing is:

Kleiner, Morris M. Stages of Occupational Regulation: Analysis of Case Studies. Kalamazoo, Michigan: W.E. Upjohn Institute, 2013.

May 31, 2014

When Labor Markets Are Flexible, Workers Need Not Fear New Technology

(p. 6) Driverless vehicles and drone aircraft are no longer science fiction, and over time, they may eliminate millions of transportation jobs. Many other examples of automatable jobs are discussed in "The Second Machine Age," a book by Erik Brynjolfsson and Andrew McAfee, and in my own book, "Average Is Over." The upshot is that machines are often filling in for our smarts, not just for our brawn -- and this trend is likely to grow.

How afraid should workers be of these new technologies? There is reason to be skeptical of the assumption that machines will leave humanity without jobs. After all, history has seen many waves of innovation and automation, and yet as recently as 2000, the rate of unemployment was a mere 4 percent. There are unlimited human wants, so there is always more work to be done. The economic theory of comparative advantage suggests that even unskilled workers can gain from selling their services, thereby liberating the more skilled workers for more productive tasks.

. . .

Labor markets just aren't as flexible these days for workers, especially for men at the bottom end of the skills distribution.

. . .

Across the economy, a college degree is often demanded where a high school degree used to suffice.

. . .

The law is yet another source of labor market inflexibility: The number of jobs covered by occupational licensing continues to rise and is almost one-third of the work force. We don't need such laws for, say, barbers or interior designers, although they are commonly on the books.

. . .

Many . . . labor market problems were brought on by the financial crisis and the collapse of market demand. But it would be a mistake to place all the blame on the business cycle. Before the crisis, for example, business executives and owners didn't always know who their worst workers were, or didn't want to engage in the disruptive act of rooting out and firing them. So long as sales were brisk, it was easier to let matters lie. But when money ran out, many businesses had to make the tough decisions -- and the axes fell. The financial crisis thus accelerated what would have been a much slower process.

Subsequently, some would-be employers seem to have discriminated against workers who were laid off in the crash. These judgments weren't always fair, but that stigma isn't easily overcome, because a lot of employers in fact had reason to identify and fire their less productive workers.

For the full commentary, see:

TYLER COWEN. "Economic View; Automation Alone Isn't Killing Jobs." The New York Times, SundayBusiness Section (Sun., APRIL 6, 2014): 6.

(Note: ellipses added.)

(Note: the online version of the commentary has the date APRIL 5, 2014.)

The Brynjolfsson and McAfee book mentioned is:

Brynjolfsson, Erik, and Andrew McAfee. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York: W. W. Norton & Company, 2014.

The Cowen book that Cowen mentions is:

Cowen, Tyler. Average Is Over: Powering America Beyond the Age of the Great Stagnation. New York: Dutton Adult, 2013.

May 22, 2014

In France "'Liberté, Égalité, Fraternité' Means that What's Yours Should Be Mine"

SantacruzGuillaumeFrenchEntrepreneurInLondon2014-04-27.jpgGuillaume Santacruz is among many French entrepreneurs now using London as their base. He said of his native France, "The economy is not going well, and if you want to get ahead or run your own business, the environment is not good." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Guillaume Santacruz, an aspiring French entrepreneur, brushed the rain from his black sweater and skinny jeans and headed down to a cavernous basement inside Campus London, a seven-story hive run by Google in the city's East End.

. . .

A year earlier, Mr. Santacruz, who has two degrees in finance, was living in Paris near the Place de la Madeleine, working in a boutique finance firm. He had taken that job after his attempt to start a business in Marseille foundered under a pile of government regulations and a seemingly endless parade of taxes. The episode left him wary of starting any new projects in France. Yet he still hungered to be his own boss.

He decided that he would try again. Just not in his own country.

"A lot of people are like, 'Why would you ever leave France?' " Mr. Santacruz said. "I'll tell you. France has a lot of problems. There's a feeling of gloom that seems to be growing deeper. The economy is not going well, and if you want to get ahead or run your own business, the environment is not good."

. . .

(p. 5) "Making it" is almost never easy, but Mr. Santacruz found the French bureaucracy to be an unbridgeable moat around his ambitions. Having received his master's in finance at the University of Nottingham in England, he returned to France to work with a friend's father to open dental clinics in Marseille. "But the French administration turned it into a herculean effort," he said.

A one-month wait for a license turned into three months, then six. They tried simplifying the corporate structure but were stymied by regulatory hurdles. Hiring was delayed, partly because of social taxes that companies pay on salaries. In France, the share of nonwage costs for employers to fund unemployment benefits, education, health care and pensions is more than 33 percent. In Britain, it is around 20 percent.

"Every week, more tax letters would come," Mr. Santacruz recalled.

. . .

Diane Segalen, an executive recruiter for many of France's biggest companies who recently moved most of her practice, Segalen & Associés, to London from Paris, says the competitiveness gap is easy to see just by reading the newspapers. "In Britain, you read about all the deals going on here," Ms. Segalen said. "In the French papers, you read about taxes, more taxes, economic problems and the state's involvement in everything."

. . .

"It is a French cultural characteristic that goes back to almost the revolution and Robespierre, where there's a deep-rooted feeling that you don't show that you make money," Ms. Segalen, the recruiter, said. "There is this sense that 'liberté, égalité, fraternité' means that what's yours should be mine. It's more like, if someone has something I can't have, I'd rather deprive this person from having it than trying to work hard to get it myself. That's a very French state of mind. But it's a race to the bottom."

For the full story, see:

LIZ ALDERMAN. "Au Revoir, Entrepreneurs." The New York Times, SundayBusiness Section (Sun., MARCH 23, 2014): 1 & 5.

(Note: ellipses added.)

(Note: the online version of the story has the date MARCH 22, 2014.)

SegalenDianeFrenchEntrepreneurInLondon2014-04-27.jpg 'Diane Segalen moved most of her executive recruiting practice to London from Paris. In France, she says, "there is this sense that 'liberté, égalité, fraternité' means that what's yours should be mine."" Source of caption and photo: online version of the NYT article quoted and cited above.

May 18, 2014

Russia and China Redistributed Wealth "to Disastrous Effect"


Shane Smith, entrepreneur behind VICE media company. Source of photo: online version of the NYT article quoted and cited below.

(p. 10) You believe that young people worldwide are disenfranchised. Do you think popular uprisings will fix things? No. I'm actually worried, because I believe that it's going to get worse. Look, economic disparity is bad. But we've already tried having governments redistribute wealth. We tried it in Russia and China to disastrous effect.

News Corp. bought a 5 percent stake in Vice, and now James Murdoch is on the board. Why did you sell to them? I've said that I want to be the next MTV, the next CNN, the next ESPN. Cue everyone rolling their eyes. MTV went to Viacom, ESPN went to Disney and Hearst, CNN went to Time Warner. Why? Because to build a global media brand, it's almost impossible to do it alone. James has been involved in one of the largest media companies in the world since he was in short pants.

Do you ever fear that Vice will become legacy media itself? It's our time now. Then, I don't know, it'll be holograms next, and some kid will come up and eat our lunch.

For the full interview, see:

Staley, Willy, interviewer. " 'Have We Unleashed a Monster?': The Vice C.E.O. Shane Smith on His New Kind of News." The New York Times Magazine (Sun., MARCH 23, 2014): 12.

(Note: ellipsis added; bold in original.)

(Note: the online version of the interview has the date MARCH 21, 2014, and has the title "Vice's Shane Smith: 'Have We Unleashed a Monster?'.")

May 10, 2014

Television Improved Test Scores

GentzkowMatthewChicagoBatesClark2014-04-26.jpg "Economist Matthew Gentzkow found media slant to be a function of audience preference." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A2) An economist known for pioneering work on slanted coverage in the news media won the John Bates Clark Medal, one of the profession's most prestigious honors.

Matthew Gentzkow, a professor at the University of Chicago's Booth School of Business, on Thursday was awarded the Clark medal by the American Economic Association, which every year honors the nation's most promising economist under age 40.

. . .

A big theme in Mr. Gentzkow's work is finding innovative ways to tackle questions that expand economists' tool kits.

. . . , in 2008, he and Mr. Shapiro examined the fact that different parts of the U.S. got access to television at different times to gauge TV's effects on high-school students in the 1960s.

The economists found that children who lived in cities that gave them more exposure to TV in early childhood performed better on tests than those with less exposure. The work also suggested TV helped American children in non-English-speaking households do better in school.

For the full story, see:

NEIL SHAH. "Economist Honored for Work on Media Slant." The Wall Street Journal (Fri., April 18, 2014): 12.

(Note: ellipses added.)

(Note: the online version of the story has the date April 17, 2014.)

The Gentzkow and Shapiro paper on the effects of television, is:

Gentzkow, Matthew, and Jesse M. Shapiro. "Preschool Television Viewing and Adolescent Test Scores: Historical Evidence from the Coleman Study." Quarterly Journal of Economics 123, no. 1 (Feb. 2008): 279-323.

May 6, 2014

Aloysius Siow's Obituary for Gary Becker

My friend Aloysius Siow and I were graduate students at the University of Chicago in the mid to late 1970s, where we took courses from Gary Becker, and attended his workshop. In the past, I have posted several entries on Becker on this blog that appear under the Category "Becker, Gary." I expect to write some thoughts on his passing, but am not ready to do so yet. Aloysius drafted an obituary without delay, and kindly said it was OK for me to post it as an entry on this blog.

Obituary: Gary Becker
The Father of Economics Imperialism

By Aloysius Siow, Professor of Economics
University of Toronto
May 4, 2014

Gary Becker, an American economist, died on May 3 at the age of 83.

His major contribution was the systematic application of economics to the analysis of social issues. Before his work, economists primarily studied how markets and market economies worked. He used economics to study discrimination, criminal behavior, human capital, marriage, fertility and other social issues.

He won the Nobel Prize in economics in 1992. He also won the John Bates Clark medal, awarded to the best American economist under 40, in 1967; and the Presidential Medal of Freedom, the highest honor award by the US president to a civilian, in 2007.

Becker's father, Louis William Becker, migrated from Montreal to the United States at age sixteen and moved several times before settling down in Pottsville, Pennsylvania. Becker's mother was Anna Siskind. He was born in Pottsville in 1930. At age five, Gary and his family moved to Brooklyn. He studied in Princeton University as an undergraduate. He did his PhD at the University of Chicago where he met Milton Friedman who would have an enormous influence on his intellectual development. After he obtained his PhD, Becker spent a few years as an assistant professor at the University of Chicago and then moved to Columbia University.

His path breaking 1955 dissertation was on the economics of discrimination. It was the first systematic study of a non-traditional economic topic using economics. In it, he argued that the difference in wages between a majority and a minority group can be used to measure the extent of discrimination in the labor market. When one points out today that it is unfair that women earn 80 percent of what men make, they are channeling Becker. His thesis analyzed how the South African system of apartheid benefited Whites at the expense of Blacks in South Africa. This analysis predated the Anti-apartheid Boycott Movement of the West which started in 1959.

The methodology and concern of his thesis previewed his research career. At the time of the publication of his thesis in 1957, economics was a conservative discipline, restricting itself to the study of the behavior of markets and market economies. Becker set for himself the task of systematically applying the tools of economics to the study of social issues. At the beginning, his work was generally ignored if not actually denigrated within the profession. Economists were supposed to study more important concerns.

After studying discrimination, he provided a modern economic theory of criminal behavior. Together with his study on discrimination, this work inspired the development of the law and economics movement.

At Columbia University, he began a systematic study of human capital, the study of the allocation of time and other topics in labor economics. Together with his colleague Jacob Mincer, they wrote many of the important papers in labor economics and also produced many successful graduate students. For example, their graduate student, Michael Grossman, wrote his thesis on health economics where he applied economics to the study of individual maintenance of health. Today, health economics is a major field of study and a central pillar of health policy. Due to the topics they worked on, they also attracted and successfully supervised many female PhD students. Claudia Goldin of Harvard University is perhaps his most illustrious female PhD student.

In 1970, Becker returned to the University of Chicago where he remained as a professor until his death. He continue to apply his economics to the study of the family, including the behavior of marriage markets, allocation of resources within the family and fertility behavior. The discussion of how economics can affect fertility anticipated government policies which seek to increase their native fertility rates. For example, Singapore has over 30 programs which seeks to increase her fertility rate.

Today, Becker's approach is known as the rational choice approach in the social sciences. As the economics profession grew to appreciate his contributions, other social sciences have mixed feelings about his influence. On the one hand, they appreciate how he led economists to study different social issues. On the other hand, other social scientists often feel threatened by the invasion of economists.

Economists systematically use mathematical methods, statistical analysis and often large data sets. They prioritize cost benefit calculus over other factors which may also affect individual behavior. They had little patience with qualitative studies. Thus some social scientists felt that their contributions were unfairly ignored and so resisted the application of economics to their fields. For example, the Critical Legal Studies movement was developed in the 1970s in part in reaction to the success of the law and economics movement in law schools. In political science, rational choice theory is now a core field of study. Yet there are many political scientists who reject this approach.

Interestingly, motivated by the work of psychologists, economists have also begun to reject the purely rational calculus model of Becker as too narrow. Rather, these behavioral economics researchers argue that individuals have bounded rationality and are subject to systematic biases in their behavior. For example, Robert Shiller, a Nobel economist, has argued that bubbles occur in asset markets due to psychological biases. Thus the success of Becker has led to qualifications which is a hallmark of progress in science.

Contrary to many successful economists, Becker did not spend much time consulting for either the government or business. He was a conservative but unlike his mentor Milton Friedman, his direct influence on policy was minimal. Rather, the various economic fields which he instigated have had and continue to have significant influence on public policy. For example, every politician who wants to spend more resources on public education says that they are investing in the human capital of their society. Today, economists systematically contribute to policy discussions on maternity leaves, subsidies for child care and other social issues.

On a personal note, I was a graduate student at the University of Chicago in the late seventies where I met Gary Becker. I was interested in social issues. But because he was so intimidating as a scholar, I did not write my thesis under him nor was it on those concerns. Ten years after I obtained my PhD, and after I had moved to the University of Toronto, I wrote my first paper on the economics of the family motivated by a discussion in evolutionary psychology. Our interest on the economics of the family overlapped and we subsequently have had many professional interactions. I also began to realize that he did not know everything and that it is fine to work on topics which he had worked on.

Later in his life, he would sometimes introduce me as a former PhD student. At first I would correct him. But later I did not because perhaps he was right.

April 30, 2014

Strategic Conversations: Vital to Creative Adaptation or Reinforcers of Lazy Consensus?


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

(p. A15) "Moments of Impact" is at its best on the importance of promoting different perspectives. Businesses need to look at the world through as many disciplinary lenses as possible if they are to cope with the fast-changing threats that confront them. But day-to-day corporate life is all about fences and silos. Strategic conversations give companies a chance to examine their business models from the outside--and, as the authors put it, to "imagine operating within several different yet plausible environments."

. . .

Mr. Ertel and Ms. Solomon argue that companies increasingly face a choice between what Joseph Schumpeter called creative destruction and what they call creative adaptation--and that strategic conversations are vital to creative adaptation. Perhaps so. But strategic conversations can also reinforce lazy consensus, as people try to justify their jobs and protect their turf. Many bold decisions are driven by the opposite of "conversations"--by senior managers deciding to lop-off functions or take the company in a radically new direction.

For the full review, see:

ADRIAN WOOLDRIDGE. "BOOKSHELF; Go Ahead, Strategize; The best 'strategy meetings' unleash fresh thinking and offer maverick views; the worst and dull, unstructured time-sucks." The Wall Street Journal (Thurs., March 27, 2014): A15.

(Note: ellipsis added.)

(Note: the online version of the review has the date March 26, 2014, and has the title "BOOKSHELF; Book Review: 'Moments of Impact,' by Chris Ertel and Lisa Kay Solomon; The best 'strategy meetings' unleash fresh thinking and offer maverick views; the worst and dull, unstructured time-sucks.")

The book under review is:

Ertel, Chris, and Lisa Kay Solomon. Moments of Impact: How to Design Strategic Conversations That Accelerate Change. New York: Simon & Schuster, 2014.

April 4, 2014

Gary Becker's Grandson Ponders Opportunity Cost of College


"Louis Harboe with his parents, Frederik Harboe and Catherine Becker. Louis, now 18, got his first freelance tech job at age 12. Last year, he attended the Apple Worldwide Developers Conference in San Francisco." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Ryan was headed to South by Southwest Interactive, the technology conference in Austin. There, he planned to talk up an app that he and a friend had built. Called Finish, it aimed to help people stop procrastinating, and was just off its high in the No. 1 spot in the productivity category in the Apple App store.

. . .

Ryan is now 17, a senior at Boulder High. He is among the many entrepreneurially minded, technologically skilled teenagers who are striving to do serious business. Their work is enabled by low-cost or free tools to make apps or to design games, and they are encouraged by tech companies and grown-ups in the field who urge them, sometimes with financial support, to accelerate their transition into "the real world." This surge in youthful innovation and entrepreneurship looks "unprecedented," said Gary Becker, a University of Chicago economist and a Nobel laureate.

Dr. Becker is assessing this subject from a particularly intimate vantage point. His grandson, Louis Harboe, 18, is a friend of (p. 6) Ryan's, a technological teenager who makes Ryan look like a late bloomer. Louis, pronounced Louie, got his first freelance gig at the age of 12, designing the interface for an iPhone game. At 16, Louis, who lives with his parents in Chicago, took a summer design internship at Square, an online and mobile payment company in San Francisco, earning $1,000 a week plus a $1,000 housing stipend.

Ryan and Louis, who met online in the informal network of young developers, are hanging out this weekend in Austin at South by Southwest. They are also waiting to hear from the colleges to which they applied last fall -- part of the parallel universe they also live in, the traditional one with grades and SATs and teenage responsibilities. But unlike their peers for whom college is the singular focus, they have pondered whether to go at all. It's a good kind of problem, the kind faced by great high-school athletes or child actors who can try going pro, along with all the risk that entails.

Dr. Becker, who studies microeconomics and education, has been telling his grandson: "Go to college. Go to college." College, he says, is the clear step to economic success. "The evidence is overwhelming."

But the "do it now" idea, evangelized on a digital pulpit, can feel more immediate than academic empiricism. "College is not a prerequisite," said Jess Teutonico, who runs TEDxTeen, a version of the TED talks and conferences for youth, where Ryan spoke a few weeks ago. "These kids are motivated to take over the world," she said. "They need it fast. They need it now."

For the full story, see:

MATT RICHTEL. "The Youngest Technorati." The New York Times, SundayBusiness Section (Fri., MARCH 9, 2014): 1 & 6.

(Note: ellipsis added.)

(Note: the online version of the story has the date MARCH 8, 2014.)

April 1, 2014

Decline in Hours Worked Shows Weakness in Labor Market

(p. A15) Most commentators viewed the February [2014] jobs report released on March 7 as good news, indicating that the labor market is on a favorable growth path. A more careful reading shows that employment actually fell--as it has in four out of the past six months and in more than one-third of the months during the past two years.

Although it is often overlooked, a key statistic for understanding the labor market is the length of the average workweek. Small changes in the average workweek imply large changes in total hours worked. The average workweek in the U.S. has fallen to 34.2 hours in February from 34.5 hours in September 2013, according to the Bureau of Labor Statistics. That decline, coupled with mediocre job creation, implies that the total hours of employment have decreased over the period.

. . .

. . . , although the U.S. economy added about 900,000 jobs since September, the shortened workweek is equivalent to losing about one million jobs during this same period. The difference between the loss of the equivalent of one million jobs and the gain of 900,000 new jobs yields a net effect of the equivalent of 100,000 lost jobs.

For the full commentary, see:

EDWARD P. LAZEAR. "The Hidden Rot in the Jobs Numbers; Hours worked are declining, resulting in the equivalent of a net loss of 100,000 jobs since September." The Wall Street Journal (Fri., March 17, 2014): A15.

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

(Note: the online version of the commentary has the date March 16, 2014.)

March 28, 2014

Paul Ryan Warns that the Safety Net Can Be a Hammock

(p. A21) . . . Mr. Ryan said two years ago: "We don't want to turn the safety net into a hammock that lulls able-bodied people to lives of dependency and complacency, that drains them of their will and their incentive to make the most of their lives."

For the full commentary, see:

Krugman, Paul. "The Hammock Fallacy." The New York Times (Fri., MARCH 7, 2014): A21.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date MARCH 6, 2014.)

The original source of the Paul Ryan quote appears to be:

"Paul Ryan Wants 'Welfare Reform Round 2'." The Huffington Post (posted 03/20/2012).

Ryan made similar comments in his January 25th official Republican response to the State of the Union speech:

We are at a moment, where if government's growth is left unchecked and unchallenged, America's best century will be considered our past century. This is a future in which we will transform our social safety net into a hammock, which lulls able-bodied people into lives of complacency and dependency.

Depending on bureaucracy to foster innovation, competitiveness, and wise consumer choices has never worked -- and it won't work now.


NPR transcript of Paul Ryan response, January 25, 2011.

March 23, 2014

Disabled Workers Are More Likely to Be Free Agent Entrepreneurs

HartfordKevinEntrepreneurWhoStutters2014-03-10.jpg "Kevin Hartford, right, and a colleague at his factory. He started his business after employers failed to hire him." Source of caption and photo: online version of the NYT article quoted and cited below.

HR departments have incentives to avoid hiring risky employees. But a determined high-risk employee can hire themselves by becoming a free agent entrepreneur. If we want to truly help the disabled, we should remove obstacles to entrepreneurship, such as burdensome regulations and high taxation.

(p. B4) Mr. Hartford, the father of two sons, thrived as a business consultant in his 20s and 30s. He was used to flying first class, staying at swank hotels and advising CEOs. Then the consulting firm unraveled in the mid-1990s. When he began looking for a new job, a stuttering problem--something he had always considered manageable--put off potential employers.

"I applied for job after job after job," says Mr. Hartford, now 58. "I was one of two finalists; I was one of three finalists. But I never got the job."

In the end, Mr. Hartford concluded that his only shot at a satisfying job was to create a company. He is now president and co-owner of Alle-Kiski Industries, which makes parts, such as exhaust pipes for train locomotives and prototype truck wheels, for larger manufacturers, including Alcoa Inc. and General Electric Co.

Like many before him, Mr. Hartford discovered that one option for people who don't fit into large organizations is to start a small one. That is particularly true for people with disabilities. About 11% of disabled workers are self-employed, compared with 6.5% of those with no disabilities, according to Labor Department data.

. . .

The business has grown to 38 employees from a dozen when Messrs. Hartford and Newell started in 2005. They own more than $2 million of equipment used to drill, groove and otherwise shape metal, arrayed in a 27,000-square-foot factory with an American flag hanging from one of the beams. Last year's sales of $6 million were the highest yet, Mr. Hartford says, and the company is building a 4,000-square-foot addition to house more equipment.

For the full story, see:

JAMES R. HAGERTY. "Entrepreneur Let No Impediment Stop Him; Out-of-Work Consultant Started His Own Company After Discovering His Stutter Put Off Employers." The Wall Street Journal (Thurs., Jan. 16, 2014): B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date Jan. 15, 2014.)

March 13, 2014

How the Brain May Be Able to Control Robots


Michio Kaku. Source of photo: online version of the NYT article quoted and cited below.

(p. 2) Michio Kaku is a theoretical physicist and professor at City College of New York. When not trying to complete Einstein's theory of everything, he writes books that explain physics and how developments in the field will shape the future.

. . .

One of the most intriguing things I've read lately was by Miguel Nicolelis, called "Beyond Boundaries: The New Neuroscience of Connecting Brains With Machines," in which he describes hooking up the brain directly to a computer, which allows you to mentally control a robot or exoskeleton on the other side of the earth.

For the full interview, see:

KATE MURPHY, interviewer. "Download; Michio Kaku." The New York Times, SundayReview Section (Sun., FEB. 9, 2014): 2.

(Note: ellipsis added.)

(Note: the first paragraph is an introduction by Kate Murphy; the next paragraph is part of a response by Michio Kaku.)

(Note: the online version of the interview has the date FEB. 8, 2014.)

The book mentioned above is:

Nicolelis, Miguel. Beyond Boundaries: The New Neuroscience of Connecting Brains with Machines---and How It Will Change Our Lives. New York: Times Books, 2011.

March 12, 2014

Small Business Will Fire Workers When Minimum Wage Is Raised

(p. B4) . . . , Charlene Conway is watching her numbers. For 22 years, Ms. Conway and her husband have run Carousel Family Fun Centers in Fairhaven and Whitman, Mass. The business has annual revenue of less than $500,000 and depends exclusively on part-time minimum-wage earners, mostly teenagers, to handle tasks like running the snack bar and maintaining the games.

This year, Massachusetts is considering raising its minimum to $9 an hour, from $8. Should that happen, Ms. Conway said, she will probably need to reduce her staff of 20. Her employees currently make an average of $9 an hour, with managers earning from $10 to $15. Like Ms. Riley, Ms. Conway said that an increase in the minimum would force her to raise pay across the board.

And she, too, is reluctant to raise prices again. In 2011 and 2012, she increased her admission fees by a dollar -- they generally run from $5 to $10 now, based on age and time of day. Another increase, she said, would just make things worse: "We will price ourselves out of business."

In the past, when Massachusetts increased the state's minimum, Ms. Conway responded by increasing the minimum age of her workers to 16 from 14. "I'm not going to pay a 14-year-old $9 an hour with no experience, maturity or work ethic," she said. More recently, she has been hiring 18-year-olds with college experience. "What this does," she said, "is eliminate the opportunity for young people to get started in the work force."

Should minimum wage reach $10 an hour, Ms. Conway said she would reduce her staff to 10 employees and double up on work tasks. "This is a slippery slope that could absolutely cause me to shut down and force me into bankruptcy," she said.

For the full commentary, see:

STACY PERMAN. "SMALL BUSINESS; As Minimum Wages Rise, Businesses Grapple With Consequences." The New York Times (Thurs., Feb. 6, 2014): B4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date FEB. 5, 2014.)

February 20, 2014

The Young, with Managerial Experience, Are Most Likely to Become Entrepreneurs

(p. A13) In a current study analyzing the most recent Global Entrepreneurship Monitor (GEM) survey, my colleagues James Liang, Jackie Wang and I found that there is a strong correlation between youth and entrepreneurship. The GEM survey is an annual assessment of the "entrepreneurial activity, aspirations and attitudes" of thousands of individuals across 65 countries.

In our study of GEM data, which will be issued early next year, we found that young societies tend to generate more new businesses than older societies. Young people are more energetic and have many innovative ideas. But starting a successful business requires more than ideas. Business acumen is essential to the entrepreneur. Previous positions of responsibility in companies provide the skills needed to successfully start businesses, and young workers often do not hold those positions in aging societies, where managerial slots are clogged with older workers.

In earlier work (published in the Journal of Labor Economics, 2005), I found that Stanford MBAs who became entrepreneurs typically worked for others for five to 10 years before starting their own businesses. The GEM data reveal that in the U.S. the entrepreneurship rate peaks for individuals in their late 20s and stays high throughout the 30s. Those in their early 20s have new business ownership rates that are only two-thirds of peak rates. Those in their 50s start businesses at about half the rate of 30-year-olds.

Silicon Valley provides a case in point. Especially during the dot-com era, the Valley was filled with young people who had senior positions in startups. Some of the firms succeeded, but even those that failed provided their managers with valuable business lessons.

My co-author on the GEM study, James Liang, is an example. After spending his early years as a manager at the young and rapidly growing Oracle, he moved back to China to start Ctrip, one of the country's largest Internet travel sites.

For the full commentary, see:

EDWARD P. LAZEAR. "The Young, the Restless and Economic Growth; Countries with a younger population have far higher rates of entrepreneurship." The Wall Street Journal (Mon., Dec. 23, 2013): A13.

(Note: the online version of the commentary has the date Dec. 22, 2013.)

The Lazear paper mentioned above, is:

Lazear, Edward P. "Entrepreneurship." Journal of Labor Economics 23, no. 4 (October 2005): 649-80.

January 31, 2014

70 Percent of Current Jobs May Soon Be Done by Robots

Kelly may be right, but it does not imply that we will all be unemployed. What will happen is that new and better jobs, and entrepreneurial opportunities, will be created for humans.

Robots will do the boring, the dangerous, and the physically exhausting. We will do the creative and the analytic, and the social or emotional

(p. A21) Kevin Kelly set off a big debate with a piece in Wired called "Better Than Human: Why Robots Will -- And Must -- Take Our Jobs." He asserted that robots will soon be performing 70 percent of existing human jobs. They will do the driving, evaluate CAT scans, even write newspaper articles. We will all have our personal bot to get coffee. There's already an existing robot named Baxter, who is deliciously easy to train: "To train the bot you simply grab its arms and guide them in the correct motions and sequence. It's a kind of 'watch me do this' routine. Baxter learns the procedure and then repeats it. Any worker is capable of this show-and-tell."

For the full commentary, see:

DAVID BROOKS. "The Sidney Awards, Part 2." The New York Times (Tues., December 31, 2013): A21. [National Edition]

(Note: the online version of the commentary has the date December 30, 2013.)

The article praised by Brooks is:

Kelly, Kevin. "Better Than Human: Why Robots Will -- and Must -- Take Our Jobs." Wired (Jan. 2013).

January 24, 2014

Artificial Intelligence Is a Complement to Human Intelligence, Not a Substitute for It


Source of book image:

(p. 11) Clive Thompson, a Brooklyn-based technology journalist, uses this tale to open "Smarter Than You Think," his judicious and insightful book on human and machine intelligence. But he takes it to a more interesting level. The year after his defeat by Deep Blue, Kasparov set out to see what would happen if he paired a machine and a human chess player in a collaboration. Like a centaur, the hybrid would have the strength of each of its components: the processing power of a large logic circuit and the intuition of a human brain's wetware. The result: human-machine teams, even when they didn't include the best grandmasters or most powerful computers, consistently beat teams composed solely of human grandmasters or superfast machines.

Thompson's point is that "artificial intelligence" -- defined as machines that can think on their own just like or better than humans -- is not yet (and may never be) as powerful as "intelligence amplification," the symbiotic smarts that occur when human cognition is augmented by a close interaction with computers.

For the full review, see:

WALTER ISAACSON. "Brain Gain." The New York Times Book Review (Sun., November 3, 2013): 11.

(Note: the online version of the review has the date November 1, 2013.)

Book under review:

Thompson, Clive. Smarter Than You Think: How Technology Is Changing Our Minds for the Better. New York: Penguin Press, 2013.

January 23, 2014

Peck Shows that Job Interviews Do Not Identify Good Hires

(p. A18) Don Peck looked at how companies assess potential hires in an essay in The Atlantic called "They're Watching You at Work."

Peck demonstrates something that most of us already sense: that job interviews are a lousy way to evaluate potential hires. Interviewers at big banks, law firms and consultancies tend to prefer people with the same leisure interests -- golf, squash, whatever. In one study at Xerox, previous work experience had no bearing on future productivity.

Now researchers are using data to try again to make a science out of hiring. They watch how potential hires play computer games to see who is good at task-switching, who possesses the magical combination: a strict work ethic but a loose capacity for "mind wandering." Peck concludes that this greater reliance on cognitive patterns and game playing may have an egalitarian effect. It won't matter if you went to Harvard or Yale. The new analytics sometimes lead to employees who didn't even go to college. The question is do these analytics reliably predict behavior? Is the study of human behavior essentially like the study of nonhuman natural behavior -- or is there a ghost in the machine?

For the full commentary, see:

DAVID BROOKS. "The Sidney Awards." The New York Times (Fri., December 27, 2013): A18. [National Edition]

(Note: the online version of the commentary has the date December 26, 2013, and has the title "The Sidney Awards, Part 1.")

The article praised by Brooks is:

Peck, Don. "They're Watching You at Work." The Atlantic (Dec. 2013).

January 22, 2014

Regulators Forbid Doctor from Curing Dentist's Pelvic Pain

DavidsonDaneilPelvicPain2014-01-16.jpg "Dr. Daniel Davidson, an Idaho dentist, has pelvic pain so severe that he cannot sit, and can stand for only limited periods." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A18) After visiting dozens of doctors and suffering for nearly five years from pelvic pain so severe that he could not work, Daniel Davidson, 57, a dentist in Dalton Gardens, Idaho, finally found a specialist in Phoenix who had an outstanding reputation for treating men like him.

Dr. Davidson, whose pain followed an injury, waited five months for an appointment and even rented an apartment in Phoenix, assuming he would need surgery and time to recover.

Six days before the appointment, it was canceled. The doctor, Michael Hibner, an obstetrician-gynecologist at St. Joseph's Hospital and Medical Center, had learned that members of his specialty were not allowed to treat men and that if he did so, he could lose his board certification -- something that doctors need in order to work.

The rule had come from the American Board of Obstetrics and Gynecology. On Sept. 12, it posted on its website a newly stringent and explicit statement of what its members could and could not do. Except for a few conditions, gynecologists were prohibited from treating men. Pelvic pain was not among the exceptions.

Dr. Davidson went home, close to despair. His condition has left him largely bedridden. The pain makes it unbearable for him to sit, and he can stand for only limited periods before he needs to lie down.

"These characters at the board jerked the rug out from underneath me," he said.

For the full story, see:

DENISE GRADY. "Men With Pelvic Pain Find a Path to Treatment Blocked by a Gynecology Board." The New York Times (Weds., December 11, 2013): A18.

(Note: the online version of the story has the date December 10, 2013.)

January 4, 2014

Ending U.S. Sugar Import Quotas Would Create 20,000 U.S. Jobs in Food Manufacturing

CalvoBacciOwnerCandyShop2013-12-j07.jpg "Erin Calvo-Bacci, the owner of a candy shop, the Chocolate Truffle, in Reading, Mass., lamented the cost of American sugar." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A14) READING, Mass. -- Inside the Chocolate Truffle candy shop in this Boston suburb are chocolate pizzas, chocolate buffalo wings, even a chocolate wingtip shoe. The owner, Erin Calvo-Bacci, would like to expand her business close to home, but is instead thinking of moving her operations to Canada, where the sugar essential for her products costs far less.

"We are committed to offering locally made affordable products, but the cost of sugar is driving manufacturers out of the country," Ms. Calvo-Bacci said, echoing other American candy producers, like the maker of Dum Dum lollipops, that are moving jobs to Mexico to take advantage of the lower sugar prices there.

Candy makers say the culprit is the federal sugar program, a combination of import restrictions, production quotas and loan programs dating to the 1930s, all designed to keep the price of American sugar well above that of the world market. Now the program is at the center of an intensifying battle as the House and Senate open formal negotiations this week on a long-delayed farm bill.

The price for one type of sugar, wholesale refined beet sugar, averaged 43.4 cents per pound at Midwest markets last year, the Agriculture Department reported, compared with 26.5 cents per pound for the world refined sugar price.

. . .

. . . sugar producers, bolstered by lawmakers from sugar-beet-producing states like Minnesota and sugarcane states like Florida, have spent an estimated $20 million since 2011 to block efforts to change the program. . . . Small candy makers, bakers and others who have lobbied Congress for lower prices say that taking on the sugar lobby is like taking on Goliath.

"We were no match for the sugar people," said Judy Hilliard McCarthy, an owner of Hilliard's House of Candy, a candy maker just outside Boston. Ms. McCarthy said she had made several trips to Washington to lobby on behalf of the industry.

Government and academic studies support claims by candy makers that the sugar program has had an impact on the industry. A widely cited 2006 study by the Commerce Department and a 2011 Iowa State University study found that the price supports had led to job losses among candy makers.

In particular, the Commerce Department study found that three candy-making jobs were lost for each job growing or processing sugar that was saved by higher prices. The Iowa State study found that eliminating price supports and quotas for sugar would create about 20,000 jobs for American food processors, bakeries and candy makers.

For the full story, see:

RON NIXON. "Candy Makers, Pinched by Inflated Sugar Prices in the U.S., Look Abroad." The New York Times (Thurs., October 31, 2013): A14.

(Note: ellipses added.)

(Note: the online version of the article has the date October 30, 2013, and has the title "American Candy Makers, Pinched by Inflated Sugar Prices, Look Abroad.")

The latest version of the John Beghin Iowa State report, mentioned above, is:

Beghin, John C., and Amani Elobeid. "The Impact of the U.S. Sugar Program Redux." Working Paper No. 13010. Iowa State University, Department of Economics, Staff General Research Papers, May 2013.

SugarPouredForConfection2013-12-07.jpg "Sugar was poured to make a confection for Hilliard's House of Candy, just outside Boston, whose owner has lobbied officials." Source of caption and photo: online version of the NYT article quoted and cited above.

December 16, 2013

Carnegies Liked Pittsburgh Area's Growing Economy and Flexible Labor Market

(p. 32) For all its Old World charms, Dunfermline too had had its epidemics, its scavenging rodents, muddy streets, and clean water shortages. The reason why the Hogans and the Aitkins and the Carnegies and thousands like them had come to the United States in general, and the Pittsburgh area in particular, had less to do with health, hygiene, or the physical environment than with an abundance of well-paid jobs. In this respect, Pittsburgh and Allegheny City were everything that Dunfermline was not: their markets for manufactured goods were expanding rapidly, their economies were diversified, and there were no craft restrictions on the employment of skilled artisans.


Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)

November 15, 2013

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

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

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

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

. . .

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

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

For the full commentary, see:

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

(Note: ellipsis added.)

The Parker and Vissing-Jorgenssen paper is:

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

October 30, 2013

Fed-Mandated High Sugar Prices Drive Candy Jobs Abroad


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

(p. A1) On Friday, [Oct. 18, 2013] the U.S. sugar contract in the futures market settled at 22.28 cents a pound, or 14% higher than the benchmark global price.

U.S. prices can't fall much lower because of a federal government program that guarantees sugar processors a minimum price. The rest of the world also has a surfeit of sugar, but fewer price restrictions, and big growers like Brazil are expecting a record crop for the current season.

The squeeze explains why Atkinson Candy Co. has moved 80% of its peppermint-candy production to a factory in Guatemala that opened in 2010. That means it can sell bite-size Mint Twists to retailers for 10% to 20% less.

"It wasn't like we did it for (p. A14) profit reasons. We did it for survival reasons," said Eric Atkinson, president of the family-owned candy maker, based in Lufkin, Texas. "These are 60 jobs down there...that could be in the U.S.," he added. "It's a damn shame."

Jelly Belly Candy Co. is finishing its second expansion of a factory in Thailand that was opened by the Fairfield, Calif., company in 2007. The sixth-generation family-owned firm sells about 20% of its jelly beans, made in flavors from buttered popcorn to very cherry, outside the U.S.

Sugar makes up about half of the ingredients and cost of a typical jelly bean, said Bob Simpson, Jelly Belly's president and chief operating officer. Thailand is the world's fourth-largest sugar producer and gives Jelly Belly access to cheaper sugar, labor and other raw materials than the candy maker has in the U.S.

"You can't compete shipping finished U.S. goods" anymore, Mr. Simpson said. In the U.S., Jelly Belly has had to raise prices "several times" in the past 10 years due to high sugar prices.

. . .

Three candy-making jobs are lost for each sugar-growing and processing job saved by higher sugar prices, according to a Commerce Department report in 2006.

In a sign that candy makers are taking advantage of lower sugar prices elsewhere, the amount of sugar contained in imported products surged 33% from 2002 to 2012, according to the Agriculture Department.

For the full story, see:

Wexler, Alexandra. "Cheaper Sugar Sends Candy Makers Abroad." The Wall Street Journal (Mon., Oct. 21, 2013): A1 & A14.

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

(Note: the online version of the story has the date Oct. 20, 2013.)


"Jelly Belly, whose facility in Fairfield, Calif., is shown above, is expanding its factory in Thailand." Source of caption and photo: online version of the WSJ article quoted and cited above.

October 23, 2013

Push the Flywheel, in Business and Life

Jim Collins makes wonderful use of the flywheel analogy in his Good to Great book. His point is that many achievements in business require long, gradual work to build to a major achievement that finally gets noticed by the business press and the general public. The business press often assumes that the success is overnight, when it is in fact long-building.

(p. C14) Flywheels - weighted wheels used for absorbing, storing and releasing energy - get used in everything from pottery wheels to car engines. Lately, they have showed up in corporate spin.

"Our more than 19,000 store global footprint, our fast-growing CPG presence and our best-in-class digital, card, loyalty and mobile capabilities are creating a 'flywheel' effect elevating the relevancy of all things Starbucks, and driving profitability," CEO Howard Schultz said in a statement accompanying quarterly earnings last month.

"So we have the flywheel spinning in the right direction because it is spinning one way and letting us generate these margins, contribution margins," said CEO Patrick Byrne last month. "And so now we can give some of that back and that makes it easier to get it spinning faster."

"We are at the one-mile market (sic) in a marathon," commented Symantec CEO Steve Bennett in an earnings call with analysts last week, "and the flywheel is just starting to spin."

For the full story, see:

JUSTIN LAHART. "Overheard." The Wall Street Journal (Weds., Aug 6, 2013): C14.

(Note: the online version of the story has the date Aug 6, 2013, and had the title "Ride a Painted Pony, Let the Spinning Wheel Fly." The print version did not identify an author. The versions were slightly different in two or three places--when different, the version quoted above follows the print version.)

The Collins book, mentioned above, is:

Collins, Jim. Good to Great: Why Some Companies Make the Leap... And Others Don't. New York: HarperCollins Publishers, Inc., 2001.

October 11, 2013

Innovative Entrepreneurs More Likely to Have Engaged in Illicit Activities as Teens

(p. C4) What does it take to be a successful entrepreneur? The signs are obvious in future moguls' teenage years: brains, confidence--and illicit activities.

Those are the surprising findings of a new working paper by economists at the University of California at Berkeley and the London School of Economics. The researchers argue that merely being self-employed isn't a particularly good indicator of entrepreneurship, in the sense of taking big risks and mobilizing capital to create new goods and services.

. . .

. . . the professors sorted the self-employed into those who were incorporated and those who were not, with the researchers regarding the former as the genuine entrepreneurs.

. . .

Despite . . . dubious youthful pursuits, the incorporated tended to come from stable, well-educated families with high incomes in 1979. These entrepreneurs were much more likely to be white, male and well-educated than were salaried workers or the unincorporated self-employed.

For the full story, see:

DANIEL AKST. "The Bad-Boy Entrepreneur." The Wall Street Journal (Sat., August 17, 2013): C4.

(Note: ellipses added.)

(Note: the online version of the review has the date August 16, 2013.)

The working paper discussed is:

Levine, Ross, and Yona Rubinstein. "Smart and Illicit: Who Becomes an Entrepreneur and Does It Pay?" NBER Working Paper # 19276, August 2013.

September 28, 2013

"I Didn't Open My Own Company to Have Someone Else Tell Me How to Run It"

TaylorEdwardEntrepreneur2013-09-25.jpg""They're picking on my employees," Edward Taylor, the president of Down East Seafood, said, referring to the commission." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A16) The day after Jonathan Sanchez was released from prison in 2010 after serving three years for a burglary, he walked into Down East Seafood in Hunts Point in the South Bronx and asked for a job, and a second chance. He got both.

But now Mr. Sanchez must document the past he has tried to leave behind, in an 11-page application for a photo identification card issued by a city agency that is responsible for ferreting out organized crime. He is one of hundreds of food workers who have come under scrutiny in recent years by the agency, the New York City Business Integrity Commission, not because of any known ties to mob bosses but simply because they work for a company in Hunts Point.

. . .

"This was my brand new start," said Mr. Sanchez, 26, who makes $40,000 a year packing lobster orders.

Mr. Sanchez said he worried that his past crime will follow him from job to job and brand him as an ex-con. "I feel violated because I don't think those things have to be asked," he said. "I feel that it could stigmatize me."

. . .

Edward Taylor, the president of Down East Seafood, said more than half of his 60 employees had told him they did not want to complete the application. A couple of them have even said they would instead quit.

Mr. Taylor, who had to answer similar questions himself to register the company, said he would not have moved to Hunts Point from Manhattan in 2005 if he had known about the commission. The company, which he started in 1990 with $500 borrowed from a friend, supplies more than 700 establishments, including Dean & DeLuca, the Harvard and Yale Clubs and the dining rooms at the United Nations.

"They're picking on my employees," he said. "I didn't open my own company to have someone else tell me how to run it."

For the full story, see:

WINNIE HU. "Food Workers Criticize a Commission's Scrutiny." The New York Times (Sat., September 21, 2013): A16.

(Note: ellipses added.)

(Note: the online version of the story has the date September 20, 2013, and has the title "Food Workers in Hunts Point Criticize a Commission's Scrutiny.")

September 22, 2013

Growth of Labor Safety Net Made Great Recession Deeper and Longer


Source of book image:

(p. 309) [Mulligan's empirical results suggest] that employment was dropping not only because of declining demand for the employees' products, but also because employers were substituting capital and other factors for labor. This surprising finding suggests that although a decline in aggregate demand for goods and services was one of the reasons for the decline in labor, other causes were also at play in most sectors of the economy. This fact is consistent with an inward shift in the supply of labor to the marketplace during this period.

In chapter 3, Mulligan introduces the main culprit responsible for this supplycurve shift--the unintended consequences of increases in the social safety net that substantially increased the marginal tax rate on work. In his model, Mulligan operationalizes this force into changes in the replacement rate (the fraction of productivity that the average nonemployed person receives in the form of means-tested benefits) and the self-reliance rate (1 minus the replacement rate), which is the fraction of lost productivity not replaced by means-tested benefits.

His conjecture is that, in a reverse of government policies in the 1990s that made work pay for single mothers by transforming welfare as we knew it into a program that nudged single mothers off the Aid to Families with Dependent Children rolls and into the workforce, "temporary" government program expansions to mitigate the (p. 310) short-run consequences of unemployment and the bursting of the housing bubble made a prolonged paid period of nonwork an offer that many Americans found too tempting to refuse.

Mulligan identifies and incorporates the major expansions in eligibility and benefit amounts for Unemployment Insurance and food stamps into an eligibility index that shows that most of the 199 percent growth in these programs between 2007 and 2009 was due to these changes. He uses this growth rate in a weighted index of overall statutory safety-net generosity to determine the degree to which it has influenced overall employment. He does a similar analysis of the means-tested Home Affordable Modification Program (HAMP), which facilitated substantial lender-provided discounts on home mortgage expenses for unemployment insurance-eligible workers. He finds that these market distortions that increased the marginal tax on work grew substantially in 2008, peaked in 2009--at almost triple their 2007 level--and then modestly fell in 2010 to a level appreciably above the 2007 level.

. . .

But his empirical evidence shows that the implementation of these "recession cures" was primarily responsible for the Great Recession's depth and duration.

For the full review, see:

Burkhauser, Richard V. "Review of: "The Redistributive Recession: How Labor Market Distortions Contracted the Economy" by Casey B. Mulligan." The Independent Review 18, no. 2 (Fall 2013): 308-11.

(Note: ellipsis, and words in brackets, added.)

Book that is under review:

Mulligan, Casey B. The Redistribution Recession: How Labor Market Distortions Contracted the Economy. New York: Oxford University Press, USA, 2012.

September 18, 2013

To Save Lego, CEO Fired Almost a Third of Workers


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

(p. A15) Only 10 years ago, Lego was posting record losses; retailers were backlogged with unsold Lego toys; and it was unclear whether Lego would survive as an independent company. An internal review discovered that 94% of the sets in its product line were unprofitable. The turnaround story that followed is well told by Wharton professor David Robertson in "Brick by Brick."

. . .

Upon coming to power, Mr. Knudstorp cut 30% of Lego's product portfolio, including many of its newer offerings. To stave off financial doom, he also sold the company's headquarters building and moved into simpler accommodations--and, more painfully, let go almost a third of the workforce.

But how to move beyond the rescue stage and toward growth? Based on input from top retailers and a large customer-research study, Lego executives concluded that even though young fans of buildable toys were a minority, there were enough of them to make a worthwhile market--and their parents were willing to pay premium prices. The company would now organize its innovation efforts around its potentially very profitable core audience.

Mr. Robertson, with the benefit of access to staff at Lego and partner companies, provides unusually detailed reporting of the processes that led to Lego's current hits (and, inevitably, some misses). Among the hits is the Mindstorms NXT, the second generation of Lego's robotics set, which hadn't been updated or advertised since 2001. Mr. Robertson describes how Lego navigated between relying on sophisticated users to determine the product's design and relying on its own expertise in the creation of building experiences.

For the full review, see:

DAVID A. PRICE. "BOOKSHELF; The House That Lego Built; Lego balked at licensing warlike 'Star Wars' toys. But then anthropological research convinced company executives that kids like to compete." The Wall Street Journal (Tues., July 23, 2013): A15.

(Note: ellipsis added.)

(Note: the online version of the review has the date July 22, 2013.)

The book under review, is:

Robertson, David. Brick by Brick: How Lego Rewrote the Rules of Innovation and Conquered the Global Toy Industry. New York: Crown Business, 2013.

September 1, 2013

"Inflexible Labor Laws" Lead Indian Firms "to Substitute Machines for Unskilled Labor"

(p. A19) . . . , India is failing to make full use of the estimated one million low-skilled workers who enter the job market every month.

Manufacturing requires transparent rules and reliable infrastructure. India is deficient in both. High-profile scandals over the allocation of mobile broadband spectrum, coal and land have undermined confidence in the government. If land cannot be easily acquired and coal supplies easily guaranteed, the private sector will shy away from investing in the power grid. Irregular electricity holds back investments in factories.

India's panoply of regulations, including inflexible labor laws, discourages companies from expanding. As they grow, large Indian businesses prefer to substitute machines for unskilled labor.

For the full commentary, see:

ARVIND SUBRAMANIAN. "Why India's Economy Is Stumbling." The New York Times (Sat., August 31, 2013): A19.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 30, 2013.)

August 3, 2013

Wittgenstein Heirs Lost Family Wealth and "Found Little Happiness"


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

(p. W10) As he lay dying during Christmas 1912 -- from a gruesome throat cancer -- the Viennese industrialist Karl Wittgenstein no doubt took some comfort in the fact that he was leaving to his heirs one of the largest fortunes in Europe. He had acquired his wealth in just 30 years, the period during which Wittgenstein, an engineer, transformed a small steel mill into Europe's largest steel cartel through a combination of hard work, luck and ruthlessness. As der österreichische Eisenkönig (the "Austrian iron king"), he was the chief executive, principal shareholder or director of dozens of industrial companies and banks that provided the ore, manufacturing and financing for most of the steel products of the Habsburg Empire.

In his spare time, Wittgenstein acquired a spectacular house in Vienna, grandly styled as the family's Palais Wittgenstein.

. . .

Today, though, the Wittgenstein millions are gone and the Palais replaced by a hideous concrete apartment block. "Riches," Adam Smith wrote, ". . . very seldom remain long in the same family." Alexander Waugh's grimly amusing "The House of Wittgenstein" shows how the family fortune was lost and how the family members themselves, despite instances of prodigious talent and accomplishment, found little happiness in their own lives or pleasure in their sibling relations.

For the full review, see:

JAMES F. PENROSE. "BOOKS; A Viennese Blend: Riches and Rancor; Blessed by Musical and Intellectual Gifts, and Lots of Money, a Family Still Struggled to Find Harmony." The Wall Street Journal (Sat., March 1, 2009): W10.

(Note: ellipsis added; italics in original.)

(Note: the online version of the review has the date February 28, 2009.)

The book under review is:

Waugh, Alexander. The House of Wittgenstein: A Family at War. New York: Doubleday, 2009.

August 2, 2013

For Right to Rise, French Youth Must Leave France's "Decrepit, Overcentralized Gerontocracy"

(p. 4) The French aren't used to the idea that their country, like so many others in Europe, might be one of emigration -- that people might actually want to leave. To many French people, it's a completely foreign notion that, around the world and throughout history, voting with one's feet has been the most widely available means to vote at all.

. . .

When the journalist Mouloud Achour, the rapper Mokless and I published a column in the French daily Libération last September, arguing that France was a decrepit, overcentralized gerontocracy and that French youths should pack their bags and go find better opportunities elsewhere in the world, it caused an uproar.

. . .

It was a divide between those who have found their place in the system and believe fervently in defending the status quo, and those who are aware that a country that has tolerated a youth unemployment rate of 25 percent for nearly 30 years isn't a place where the rising generations can expect to rise to much of anything.

For the full commentary, see:

FELIX MARQUARDT. "OPINION; The Best Hope for France's Young? Get Out." The New York Times, SundayReview Section (Sun., June 30, 2013): 4.

(Note: ellipses added.)

(Note: the online version of the commentary is dated June 29, 2013.)

July 17, 2013

"The Million-Dollar Question" for "Our Long Economic Slump": Why "the Severe Downturn in Jobs"?

(p. 5) [There are] . . . two underappreciated aspects of our long economic slump. First, it has exacted the harshest toll on the young -- even harsher than on people in their 50s and 60s, who have also suffered. And while the American economy has come back more robustly than some of its global rivals in terms of overall production, the recovery has been strangely light on new jobs, even after Friday's better-than-expected unemployment report. American companies are doing more with less.

"This still is a very big puzzle," said Lawrence F. Katz, a Harvard professor who was chief economist at the Labor Department during the Clinton administration. He called the severe downturn in jobs "the million-dollar question" for the economy.

For the full commentary, see:

DAVID LEONHARDT. "CAPITAL IDEAS; The Idled Young Americans." The New York Times, SundayReview Section (Sun., May 5, 2013): 5.

(Note: ellipsis, and words in brackets, added.)

(Note: the online version of the commentary has the date May 3, 2013.)

June 28, 2013

Discrete Caution Is Not Always Prudent in Corrupt China


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

(p. A13) When economic reform and the seductive breeze of political liberalization come to China in the 1980s, the author's cautious father tells his children that if they want to succeed they should be discreet. He urges his son, who is at Shanghai's Fudan University, not to waste his time on useless foreign books. When the son first reads Shakespeare, he thinks that the expression "to be or not to be" is taken from Confucius. His father tells him that asking for too much freedom can land you in jail. "If you are not careful the government could crush you like a bug." Not long after this warning, the student democracy movement was smashed apart at Tiananmen Square, though Mr. Huang's father did not live to see it.

In the end, it is the father who suffers as his world collapses. Toward the end of his life he was told by the Party that he was to be rewarded for devising a money-saving program at his state factory with promotion and a better wage. Instead the promotion went to the girlfriend of the local Party secretary, and the firm's bosses split his wage rise among themselves. Embittered and exhausted, he died of a heart attack in 1988, ahead of his mother.

For the full review, see:

MICHAEL FATHERS. "BOOKSHELF; Coming of Age In Mao's China; Death cannot be controlled by the party, but disposing of a body can. So the author's father built a coffin in secret at his mother's request.." The Wall Street Journal (Mon., April 30, 2012): C4.

(Note: ellipsis added.)

(Note: the online version of the article has the date April 29, 2012.)

The book under review, is:

Huang, Wenguang. The Little Red Guard: A Family Memoir. New York: Riverhead Books, 2012..

June 23, 2013

Remedial Ed Does Not Remediate

(p. C4) Two economists looked at the achievements of 453,000 students who took a basic-skills test upon entering both two- and four-year public colleges in Texas in the 1990s. . . .

. . . the authors focused on the 93,000 students who either barely passed or barely failed the test. Those students, with nearly identical skills, got treated very differently: Most who barely failed took remedial courses; most who barely passed took college-level courses.

But there was no difference in subsequent achievement between those two groups. In fact, students who got remedial help were slightly less likely to finish one year of college. The study found no effects of remediation on income seven years after starting college.

For the full story, see:

CHRISTOPHER SHEA. "Week in Ideas; Education; Remedial Ed Needs Help." The Wall Street Journal (Sat., February 5, 2011): C4.

(Note: ellipses added.)

The article summarized in the passages quoted above, is:

Martorell, Paco, and Isaac McFarlin, Jr. "Help or Hindrance? The Effects of College Remediation on Academic and Labor Market Outcomes." Review of Economics and Statistics 93, no. 2 (May 2011): 436-54.

June 15, 2013

Cuban Government Employees "Are Known for Surly Service, Inefficiency, Absenteeism and Pilfering"

(p. A10) However small, . . . , the private sector is changing the work culture on an island where state employees earn meager salaries and are known for surly service, inefficiency, absenteeism and pilfering.

Sergio Alba Marín, who for years managed the restaurants of a state-owned hotel and now owns a popular fast-food restaurant, said he was very strict with his employees and would not employ workers trained by the state.

"They have too many vices -- stealing, for one," said Mr. Alba, who was marching with his 25 employees and two large banners emblazoned with the name of his restaurant, La Pachanga. "You can't change that mentality."

"Even if you could, I don't have time," he added. "I have a business to run."

For the full story, see:

VICTORIA BURNETT. "HAVANA JOURNAL; Amid Fealty to Socialism, a Nod to Capitalism." The New York Times (Thurs., May 2, 2013): A6 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 1, 2013.)

June 6, 2013

Faculty Unions Oppose MOOCs that Might Cost Them Their Jobs in Five to Seven Years

ThrunSabastianUdacityCEO2013-05-14.jpg "Sebastian Thrun, a research professor at Stanford, is Udacity's chief executive officer." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) SAN JOSE, Calif. -- Dazzled by the potential of free online college classes, educators are now turning to the gritty task of harnessing online materials to meet the toughest challenges in American higher education: giving more students access to college, and helping them graduate on time.

. . .

Here at San Jose State, . . . , two pilot programs weave material from the online classes into the instructional mix and allow students to earn credit for them.

"We're in Silicon Valley, we (p. A3) breathe that entrepreneurial air, so it makes sense that we are the first university to try this," said Mohammad Qayoumi, the university's president. "In academia, people are scared to fail, but we know that innovation always comes with the possibility of failure. And if it doesn't work the first time, we'll figure out what went wrong and do better."

. . .

Dr. Qayoumi favors the blended model for upper-level courses, but fully online courses like Udacity's for lower-level classes, which could be expanded to serve many more students at low cost. Traditional teaching will be disappearing in five to seven years, he predicts, as more professors come to realize that lectures are not the best route to student engagement, and cash-strapped universities continue to seek cheaper instruction.

"There may still be face-to-face classes, but they would not be in lecture halls," he said. "And they will have not only course material developed by the instructor, but MOOC materials and labs, and content from public broadcasting or corporate sources. But just as faculty currently decide what textbook to use, they will still have the autonomy to choose what materials to include."

. . .

Any wholesale online expansion raises the specter of professors being laid off, turned into glorified teaching assistants or relegated to second-tier status, with only academic stars giving the lectures. Indeed, the faculty unions at all three California higher education systems oppose the legislation requiring credit for MOOCs for students shut out of on-campus classes.

. . .

"Our ego always runs ahead of us, making us think we can do it better than anyone else in the world," Dr. Ghadiri said. "But why should we invent the wheel 10,000 times? This is M.I.T., No. 1 school in the nation -- why would we not want to use their material?"

There are, he said, two ways of thinking about what the MOOC revolution portends: "One is me, me, me -- me comes first. The other is, we are not in this business for ourselves, we are here to educate students."

For the full story, see:

TAMAR LEWIN. "Colleges Adapt Online Courses to Ease Burden." The New York Times (Tues., April 30, 2013): A1 & A3.

(Note: ellipses added.)

(Note: the online version of the story has the date April 29, 2013.)

KormanikKatieUdacityStudent2013-05-14.jpg "Katie Kormanik preparing to record a statistics course at Udacity, an online classroom instruction provider in Mountain View, Calif." Source of caption and photo: online version of the NYT article quoted and cited above.

June 3, 2013

World Population Growth Rate "Expected to Hit Zero Around 2070"

(p. C4) In the 1960s, some experts feared an exponentially accelerating population explosion, and in 1969, the State Department envisaged 7.5 billion people by the year 2000. In 1994, the United Nations' medium estimate expected the seven-billion milestone to arrive around 2009. Compared with most population forecasts made in the past half century, the world keeps undershooting.

The growth rate of world population has halved since the '60s and is now expected to hit zero around 2070, with population around 10 billion, though some news outlets prefer to focus on the U.N.'s "high" estimate that it "could" reach 15 billion. The truth is, nobody can know, but if it's below 10 billion in 2100, we will have only increased in numbers by 1.5 times in the 21st century, compared with a fourfold increase in the 20th.

For the full commentary, see:

MATT RIDLEY. "MIND & MATTER; Who's Afraid of Seven Billion People?" The Wall Street Journal (Sat., October 29, 2011): C4.

May 30, 2013

MOOCs "Will Really Scale" Once Credible Credentialing Process Is Mastered

A "MOOC" is a "massive open online course."

(p. 1) Last May I wrote about Coursera -- co-founded by the Stanford computer scientists Daphne Koller and Andrew Ng -- just after it opened. Two weeks ago, I went back out to Palo Alto to check in on them. When I visited last May, about 300,000 people were taking 38 courses taught by Stanford professors and a few other elite universities. Today, they have 2.4 million students, taking 214 courses from 33 universities, including eight international ones.

Anant Agarwal, the former director of M.I.T.'s artificial intelligence lab, is now president of edX, a nonprofit MOOC that M.I.T. and Harvard are jointly building. Agarwal told me that since May, some 155,000 students from around the world have taken edX's first course: an M.I.T. intro class on circuits. "That is greater than the total number of M.I.T. alumni in its 150-year history," he said.

. . .

(p. 11) As we look to the future of higher education, said the M.I.T. president, L. Rafael Reif, something that we now call a "degree" will be a concept "connected with bricks and mortar" -- and traditional on-campus experiences that will increasingly leverage technology and the Internet to enhance classroom and laboratory work. Alongside that, though, said Reif, many universities will offer online courses to students anywhere in the world, in which they will earn "credentials" -- certificates that testify that they have done the work and passed all the exams. The process of developing credible credentials that verify that the student has adequately mastered the subject -- and did not cheat -- and can be counted on by employers is still being perfected by all the MOOCs. But once it is, this phenomenon will really scale.

I can see a day soon where you'll create your own college degree by taking the best online courses from the best professors from around the world -- some computing from Stanford, some entrepreneurship from Wharton, some ethics from Brandeis, some literature from Edinburgh -- paying only the nominal fee for the certificates of completion. It will change teaching, learning and the pathway to employment. "There is a new world unfolding," said Reif, "and everyone will have to adapt."

For the full commentary, see:

THOMAS L. FRIEDMAN. "Revolution Hits the Universities." The New York Times, SundayReview Section (Sun., January 27, 2013): 1 & 11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date January 26, 2013.)

April 25, 2013

The Costs of Green Jobs Policies


Source of book image:

I caught part of a C-SPAN presentation on the Regulating to Disaster book. It sounded plausible and intriguing---consistent with other evidence I have seen that "green" jobs have been over-hyped and under-delivered.

Perhaps more important, there are the high opportunity costs of the tax dollars devoted to the "green" jobs, in terms of the non-green jobs that would have been created by entrepreneurs if less of their income had been taxed away.

I hope to look at the book in the near future.

Book discussed:

Furchtgott-Roth, Diana. Regulating to Disaster: How Green Jobs Policies Are Damaging America's Economy. New York: Encounter Books, 2012.

April 20, 2013

"The French Work Force Gets Paid High Wages But Works Only Three Hours"

(p. B1) PARIS -- "How stupid do you think we are?"

With those choice words, and several more similar in tone, the chief executive of an American tire company touched off a furor in France on Wednesday as he responded to a government plea to take over a Goodyear factory slated for closing in northern France.

"I have visited the factory a couple of times," Maurice Taylor Jr., the head of Titan International, wrote to the country's industry minister, Arnaud Montebourg, in a letter published in French newspapers on Wednesday.

"The French work force gets paid high wages but works only three hours. They have one hour for their breaks and lunch, talk for three and work for three."

"I told this to the French unions to their faces and they told me, 'That's the French way!' "

For the full story, see:

LIZ ALDERMAN. "Quel Brouhaha! A Diatribe on Unions Irks the French." The New York Times (Thurs., February 21, 2013): B1 & B6.

(Note: the online version of the story has the date February 20, 2013.)

For a similar account, see:

GABRIELE PARUSSINI. "U.S. CEO to France: "How Stupid Do You Think We Are?" The Wall Street Journal (Thurs., February 21, 2013): B1.

(Note: the online version of the story has the date February 20, 2013, and has the title "U.S. CEO Blasts French Work Habits.")

April 16, 2013

Tax Rates Have Big Effect on Labor Supply and Rate of Entrepreneurial Start-Ups

(p. A23) Higher taxes will produce long-term changes in social norms, behavior and growth. Edward Prescott, a winner of the Nobel Memorial Prize in economics, found that, in the 1950s when their taxes were low, Europeans worked more hours per capita than Americans. Then their taxes went up, reducing the incentives to work and increasing the incentives to relax. Over the next decades, Europe saw a nearly 30 percent decline in work hours.

The rich tend to be more sensitive to tax-rate changes because they've got advisers who are paid to be. Martin Feldstein, an economics professor at Harvard, looked into tax changes in the 1980s and concluded that raising rates causes people to shift compensations to untaxed fringe benefits and otherwise suppresses their economic activity. A study last year by the economists Michael Keane and Richard Rogerson found that tax rates can have a surprisingly large influence on how much people invest in education, how likely they are to create businesses and which professions they go into.

For the full commentary, see:

DAVID BROOKS. "The Progressive Shift." The New York Times (Tues., March 19, 2013): A23.

(Note: the online version of the commentary has the date March 18, 2013.)

The Keane and Rogerson paper summarized by Brooks is:

Keane, Michael, and Richard Rogerson. "Micro and Macro Labor Supply Elasticities: A Reassessment of Conventional Wisdom." Journal of Economic Literature 50, no. 2 (June 2012): 464-76.

March 23, 2013

"The Ante for Being in the Room" at Apple Was Brutal Honesty

The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.

(p. 569) I don't think I run roughshod over people, but if something sucks, I tell people to their face. It's my job to be honest. I know what I'm talking about, and I usually turn out to be right. That's the culture I tried to create. We are brutally honest with each other, and anyone can tell me they think I am full of shit and I can tell them the same. And we've had some rip-roaring arguments, where we are yelling at each other, and it's some of the best times I've ever had. I feel totally comfortable saying "Ron, that store looks like shit" in front of everyone else. Or I might say "God, we really fucked up the engineering on this" in front of the person that's responsible. That's the ante for being in the room: You've got to be able to be super honest. Maybe there's a better way, a gentlemen's club where we all wear ties and speak in this Brahmin language and velvet codewords, but I don't know that way, because I am middle class from California.

I was hard on people sometimes, probably harder than I needed to be. I remember the time when Reed was six years old, coming home, and I had just fired somebody that day, and I imagined what it was like (p. 570) for that person to tell his family and his young son that he had lost his job. It was hard. But somebody's got to do it. I figured that it was always my job to make sure that the team was excellent, and if I didn't do it, nobody was going to do it.


Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

March 21, 2013

Unemployment Increases Risk of Heart Attack

As a defender of the process of innovation through creative destruction, I try to be alert to evidence on creative destruction's benefits and costs. The highest cost is usually viewed as technological unemployment. The evidence below will have to be examined and, if sound, added to the costs.

(p. D6) Unemployment increases the risk of heart attack, a new study reports, and repeated job loss raises the odds still more.

. . .

After adjusting for well-established heart attack risks -- age, sex, smoking, income, hypertension, cholesterol screening, exercise, depression, diabetes and others -- the researchers found that being unemployed also increased the risk of a heart attack, by an average of 35 percent.

For the full story, see:

NICHOLAS BAKALAR. "Job Loss Raises Threat of Heart Attack." The New York Times (Tues., November 27, 2012): D6.

(Note: ellipsis added.)

(Note: the online version of the story has the date November 26, 2012.)

The Dupre article mentioned above, is:

Dupre, Matthew E., Linda K. George, Guangya Liu, and Eric D. Peterson. "The Cumulative Effect of Unemployment on Risks for Acute Myocardial Infarction." Archives of Internal Medicine 172, no. 22 (Dec. 10, 2012): 1731-37.

(Note: the Archives of Internal Medicine has been re-named JAMA Internal Medicine.)

February 27, 2013

Steve Jobs' "Nasty Edge" Helped Him Create an Apple "Crammed with A Players"

(p. 565) . . . I think . . . [Jobs] actually could have controlled himself, if he had wanted. When he hurt people, it was not because he was lacking in emotional awareness. Quite the contrary: He could size people up, understand their inner thoughts, and know how to relate to them, cajole them, or hurt them at will.

The nasty edge to his personality was not necessary. It hindered him more than it helped him. But it did, at times, serve a purpose. Polite and velvety leaders, who take care to avoid bruising others, are generally not as effective at forcing change. Dozens of the colleagues whom Jobs most abused ended their litany of horror stories by saying that he got them to do things they never dreamed possible. And he created a corporation crammed with A players.


Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipses and bracketed "Jobs" added.)

February 16, 2013

IKEA Says Government Bureaucracy Slows Job Creation

OhlssonMikaelCEOofIKEA2013-02-03.jpg "The economy 'will remain challenging for a long time,' says IKEA Chief Executive Mikael Ohlsson." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B3) MALMO, Sweden--IKEA is poised to embark on a global spending spree, but its departing chief executive says red tape is slowing how fast the home-furnishings retailer can open its pocket book.

With the company set to report record sales on Wednesday, CEO Mikael Ohlsson said the amount of time it takes to open a store has roughly doubled in recent years.

"What some years ago took two to three years, now takes four to six years. And we also see that there's a lot of hidden obstacles in different markets and also within the [European Union] that's holding us back," he said in an interview recently at an IKEA store on Sweden's western coast.

. . .

IKEA plans to invest €2 billion in stores, factories and renewable energy this year. But the company fell €1 billion short of its goal of investing €3 billion in new projects last year, largely because of bureaucratic obstacles, he said. For 10 years IKEA has tried unsuccessfully to relocate a store in France, for example. The company also is challenging German policy dictating what can be sold and where, saying the rules are out of sync with EU legislation.

"It's a pity, because it can help create jobs and investments at a time when unemployment is high in many countries," Mr. Ohlsson said. A new IKEA store creates construction and store jobs for about 1,000 workers, he said.

. . .

The company's highest-profile headaches have come in India, an untapped market where IKEA wants to open a first store in at least five years and roll out an additional three soon thereafter.

For the full story, see:

ANNA MOLIN. "IKEA Chief Takes Aim at Red Tape." The Wall Street Journal (Weds., January 23, 2013): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date January 22, 2013.)

February 11, 2013

Apple's Corporate Culture Under Jobs: "Accountability Is Strictly Enforced"

(p. 531) In theory, you could go to your iPhone or any computer and access all aspects of your digital life. There was, however, a big problem: The service, to use Jobs's terminology, sucked. It was complex, devices didn't sync well, and email and other data got lost randomly in the ether. "Apple's MobileMe Is Far Too Flawed to Be Reliable," was the headline on Walt Mossberg's review in the Wall Street Journal.

Jobs was furious. He gathered the MobileMe team in the auditorium on the Apple campus, stood onstage, and asked, "Can anyone tell me what MobileMe is supposed to do?" After the team members offered their answers, Jobs shot back: "So why the fuck doesn't it do that?" Over the next half hour he continued to berate them. "You've tarnished Apple's reputation," he said. You should hate each other for having let each other down. Mossberg, our friend, is no longer writing good things about us." In front of the whole audience, he got rid of the leader of the MobileMe team and replaced him with Eddy Cue, who oversaw all Internet content at Apple. As Fortune's Adam Lashinsky reported in a dissection of the Apple corporate culture, "Accountability is strictly enforced."


Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

February 9, 2013

Ending College Affirmative Action Would Only Cause Minor Lowering in Black Admissions

(p. 113) This research examines the determinants of the match between high school seniors and postsecondary institutions in the United States. I model college application decisions as a nonsequential search problem and specify a unified structural model of college application, admission, and matriculation decisions that are all functions of unobservable individual heterogeneity. The results indicate that black and Hispanic representation at all 4-year colleges is predicted to decline modestly--by 2%--if race-neutral college admissions policies are mandated nationwide. However, race-neutral admissions are predicted to decrease minority representation at the most selective 4-year institutions by 10%.

Source of abstract:

Howell, Jessica S. "Assessing the Impact of Eliminating Affirmative Action in Higher Education." Journal of Labor Economics 28, no. 1 (January 2010): 113-66.

January 20, 2013

Socialism Failed in Jamestown

(p. 226) Stephen Slivinski discusses "Economic History: The Lessons of Jamestown." In the years after the Jamestown settlement of 1607, the settlers often lacked food. "The company sent Sir Thomas Dale, a British naval commander, to take over the office of colony governor in 1611. Yet, upon arrival in May--a time when the farmers should have been tending to their fields--Dale found virtually no planting activity. Instead, the workers were devoted mainly to leisure and 'playing bowls.' . . . All land was owned by the company and farmed collectively. . . . The workers would not hope to reap more compensation from a productive farming of the land any more than the farmers would be motivated by an interest in making their farming operations more efficient and, hence, more profitable. Seeing this, Dale decided to change the labor arrangements: When the seven-year contracts of most of the original surviving settlers were about to expire in 1614, he assigned private allotments of land to them. Each got three acres, 12 acres if he had a family. The only obligation was that they needed to provide two and a half barrels of corn annually to the company so it could be distributed to the newcomers to tide them over during their first year. Dale left Jamestown for good in 1616. By then, however, the new land grants had unleashed a vast increase in agricultural productivity. In fact, upon returning to England with Dale, John Rolfe--one of the colony's former leaders--reported to the Virginia Company that the Powhatans were now asking the colonists to give them corn instead of vice versa."

As quoted in:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 24, no. 4 (Fall 2010): 219-26.

(Note: ellipses added by Taylor.)

The Slivinski article is:

Slivinski, Stephen. "The Lessons of Jamestown." Region Focus 14, no. 1 (First Quarter 2010): 27-29.

January 16, 2013

Descartes Saw that a Great City Is "an Inventory of the Possible"

(p. 226) Joel Kotkin writes about "The Broken Ladder: The Threat to Upward Mobility in the Global City." "A great city, wrote Rene Descartes in the 17th Century, represented 'an inventory of the possible,' a place where people could create their own futures and lift up their families. In the 21st Century--the first in which the majority of people will live in cities--this unique link between urbanism and upward mobility will become ever more critical."


Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 24, no. 4 (Fall 2010): 219-26.

January 5, 2013

Government Job Protection Regulations Reduce Youth Jobs


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

(p. A7) Socialist President François Hollande has come up with a plan to ease the problem: give €4,000 ($5,276) a year for three years to small companies that hire a young person on a permanent contract while committing to keep an employee age 57 or over.

. . .

The French government hopes as many as half a million youths will find permanent jobs over the next five years due to the measure, which could cost the government about €1 billion a year when it is in place.

Economists say the number of real new jobs is likely to be much lower because the government will be subsidizing jobs that would have been created anyway. Only around 100,000 new jobs will be created, according to OFCE, an economic-research think tank in Paris.

French companies say they are reluctant to hire young people on permanent contracts because it gives employees a level of protection the companies say they can't afford to grant--even if they get the subsidy proposed by Mr. Hollande.

"It's great to have €4,000, but if the new recruit isn't good, we don't know how long we'll be stuck with them," said Philippe Lehmann, who runs Lehmann Sarl, a mechanical-parts factory in Molsheim, eastern France that employs seven people.

For the full story, see:

WILLIAM HOROBIN. "France Pins Hopes on Youth Jobs Plan." The Wall Street Journal (Mon., December 24, 2012): A7.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 23, 2012.)

(Note: the online version of the last two paragraphs quoted above contains a few extra words of elaboration at the end of each paragraph, as compared to the print version. I have underlined these words in the passages quoted above.)

January 4, 2013

How Chavez Punished Those Who Opposed Him

(p. 196) In 2004, the Hugo Chávez regime in Venezuela distributed the list of several million voters who had attempted to remove him from office throughout the government bureaucracy, allegedly to identify and punish these voters. We match the list of petition signers distributed by the government to household survey respondents to measure the economic effects of being identified as a Chávez political opponent. We find that voters who were identified as Chávez opponents experienced a 5 percent drop in earnings and a 1.3 percentage point drop in employment rates after the voter list was released.


Hsieh, Chang-Tai, Edward Miguel, Daniel Ortega, and Francisco Rodriguez. "The Price of Political Opposition: Evidence from Venezuela's Maisanta." American Economic Journal: Applied Economics 3, no. 2 (2011): 196-214.

January 2, 2013

Jobs Laid Off 3,000 from Apple to Save It from Bankruptcy

(p. 339) In his first year back, Jobs laid off more than three thousand people, which salvaged the company's balance sheet. For the fiscal year that ended when Jobs became interim CEO in September 1997, Apple lost $1.04 billion. "We were less than ninety days from being insolvent," he recalled.


Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

December 7, 2012

Early Retirement Reduces Cognitive Ability

(p. 136) Early retirement appears to have a significant negative impact on the cognitive ability of people in their early 60s that is both quantitatively important and causal. We obtain this finding using cross-nationally comparable survey data from the United States, England, and Europe that allow us to relate cognition and labor force status. We argue that the effect is causal by making use of a substantial body of research showing that variation in pension, tax, and disability policies explain most variation across countries in average retirement rates.

Further exploration of existing data and new data being collected would allow a considerably deeper exploration of the roles of work and leisure in determining the pace of cognitive aging. For example, the HRS contains considerable information on how respondents use their leisure time that would allow both cross-sectional and longitudinal analysis of changes in cognitive exercise that are associated with (p. 137) retirement. In addition, detailed occupation and industry data could be used to understand differences in the pace of technical change to which workers must adjust during the latter part of their careers. Also, in the 2010 wave, the HRS will be adding measures of other components of fluid intelligence. Future work in this area should be able to separate the effects of the "unengaged lifestyle hypothesis" (that early retirees suffer cognitive declines because the work environment they have left is more cognitively stimulating than the full-time leisure environment they have entered) from the "on-the-job retirement hypothesis" (which holds that incentives to invest among older workers are significantly reduced when they expect to retire at an early age).

During the past decade, older Americans seem to have reversed a century-long trend toward early retirement and have been increasing their labor force participation rates, especially beyond age 65. This is good news for the standard of living of elderly Americans, as well as for the fiscal balance of the Social Security and Medicare systems. Our paper suggests that it may also be good news for the cognitive capacities of our aging nation.


Rohwedder, Susann, and Robert J. Willis. "Mental Retirement." Journal of Economic Perspectives 24, no. 1 (Winter 2010): 119-38.

December 1, 2012

Online Employers Treat Workers More Honestly and Fairly than In-person Employers

(p. 233) John J. Horton surveys "The Condition of the Turking Class: Are Online Employers Fair and Honest?" Amazon Mechanical Turk is a "marketplace for work," as explained at <>. Employers post "Human Intelligence Tasks," which can be tasks like writing keywords that accompany photos or writing bogus product reviews, and workers anywhere in the world can sign up to do them. Horton used Mechanical Turk to survey 200 respondents, who were paid 12 cents apiece for responding to a survey. Of the respondents, 111 were Americans, 58 from India, and the others from other countries. When asked what percentage of employers in their home country treat workers honestly and fairly, the average answer was 64 percent; in comparison, when asked what percentage of Mechanical Turk Requestors treated them (p. 234) fairly, the median answer was 69 percent.


Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 24, no. 2 (Spring 2010): 227-34.

(Note: ellipses in original.)

The published version of the article summarized by Taylor is:

Horton, John J. "The Condition of the Turking Class: Are Online Employers Fair and Honest?" Economics Letters 111, no. 1 (April 2011): 10-12.

November 27, 2012

Entrepreneurial Capitalism Offers the Best Chance "for a Life of Engagement and Personal Growth"

(p. 228) Edmund S. Phelps explores "Refounding Capitalism." "One has to conclude that 'generation of wealth' is not special to capitalism. Corporatist economies are quite good at that. . . . A merit of a well-functioning capitalism (again: I do not mean free-market policy: low tax rates, etc.) is the economic freedoms it offers entrepreneurs, managers, employees and consumers--freedoms that socialist, corporatist and statist systems do not provide. . . . Ordinary people, if they are to find intellectual growth and an engaging life, have to look outside the home: these (p. 229) things can be found only at work, if anywhere. And for these rewards to be available for large numbers of people, the economy must be modern. And as a practical matter, that requires that it be based predominantly on a well-functioning capitalist system. Thanks to the grassroots, bottom-up processes of innovation, capitalism at its best can deliver--far more broadly than Soviet communism, eastern European socialism, and western European corporatism can--chances for the mental stimulation, problem-solving, exploration and discovery required for a life of engagement and personal growth."

Nobel-Prize winner Edmund Phelps as quoted in:

Taylor, Timothy. "Recommendations for Further Reading." Journal of Economic Perspectives 24, no. 2 (Spring 2010): 227-34.

(Note: ellipses in original.)

The original source of the Phelps quotes is:

Phelps, Edmund S. "Refounding Capitalism." Capitalism and Society 4, no. 3 (2009).

November 21, 2012

Sclerotic Doctors Resist Change

(p. 177) Atherosclerosis, referring to a progressive and degenerative process of artery walls, is typically translated for a lay audience as "hardening of the arteries." We've never needed a similar word to describe the medical community. It came with sclerosis built in. Of all the professions represented on the planet, perhaps none is more resistant to change than physicians. If there were ever a group defined by lacking plasticity, it would first apply to doctors.

(p. 178) The inherent "hardness" of physicians and the medical community suggests they will have a difficult time adapting to the digital world. Before the emergence of the Internet, physicians were high priests, holding all the knowledge and expertise, not to be challenged or questioned by the lowly consumer patient. "Doctor knows best" was the pervasive sentiment, shared by patients and especially physicians.


Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.

November 2, 2012

A Rising Tax Gathers No Rolling Stone


Source of book image:

(p. 289) The tax rate in the early '70s on the highest earners was 83 percent, and that went up to 98 percent for investments and so-called unearned income. So that's the same as being told to leave the country. ... The last thing I think the powers that be expected when they hit us with the super-super tax is that we'd say, fine, we'll leave. We'll be another one not paying tax to you. They just didn't factor that in. It made us bigger than ever, and it produced Exile on Main St., which was maybe the best thing we did. They didn't believe we'd be able to continue as we were if we didn't live in England. And in all honesty, we were very doubtful too. We didn't know if we would make it, but if we didn't try, what would we do? Sit in England and they'd give us a penny out of every pound we earned? We had no desire to be closed down. And so we upped and went to France.


Richards, Keith. Life. New York: Little, Brown and Company, 2010.

(Note: I first saw the quote on the back cover of: Journal of Political Economy 119, no. 1 (Feb. 2011).)

(Note: ellipsis added.)

October 23, 2012

Abigail Fisher "Devastated" by "Holistic Review"

FisherAbigailAffirmativeAction2012-10-12.jpg "Abigail Fisher, 22, at the Supreme Court last month. "I probably would have gotten a better job offer had I gone to U.T.," Ms. Fisher said." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) WASHINGTON -- Abigail Fisher is a slight young woman with strawberry blond hair, a smile that needs little prompting, a determined manner and a good academic record. She played soccer in high school, and she is an accomplished cellist.

But the university she had her heart set on, the one her father and sister had attended, rejected her. "I was devastated," she said, in her first news interview since she was turned down by the University of Texas at Austin four years ago.

Ms. Fisher, 22, who is white and recently graduated from Louisiana State University, says that her race was held against her, and the Supreme Court is to hear her case on Wednesday, bringing new attention to the combustible issue of the constitutionality of racial preferences in admissions decisions by public universities.

"I'm hoping," she said, "that they'll completely take race out of the issue in terms of admissions and that everyone will be able to get into any school that they want no matter what race they are but solely based on their merit and if they work hard for it."

. . .

(p. A17) The majority opinion in the Grutter case, written by Justice Sandra Day O'Connor, rejected the use of racial quotas in admissions decisions but said that race could be used as one factor among many, as part of a "holistic review." Justice O'Connor retired in 2006, and her replacement by Justice Samuel A. Alito Jr. may open the way for a ruling cutting back on such race-conscious admissions policies, or eliminating them.

. . .

She said she was trying to come to terms with her role in a case that could reshape American higher education. Asked if she found it interesting or exciting or scary, she said, "All of the above."

But she did not hesitate to say how she would run an admission system. "I don't think," she said, "that we even need to have a race box on the application."

For the full story, see:

ADAM LIPTAK. "Race and College Admissions, Facing a New Test by Justices." The New York Times (Tues., October 9, 2012): A1 & A17.

(Note: ellipses added.)

(Note: the online version of the review has the date October 8, 2012.)

October 18, 2012

Capitalism Is Justified Because It Is an "Engine for Generating Creative Workplaces"

(p. 121) Phelps: . . . Since 2002, I've been trying to develop a new justification for capitalism, at least I think it's new, in which I say that if we're going to have any possibility of intellectual development we're going to have to have jobs offering stimulating and challenging opportunities for problem solving, discovery, exploration, and so on. And capitalism, like it or not, has so far been an extraordinary engine for generating creative workplaces in which that sort of personal growth and personal development is possible; perhaps not for everybody but for an appreciable number of people, so if you think that it's a human right to have that kind of a life, then you have on the face of it a justification for capitalism. There has to be something pretty powerful to overturn or override that.

For the full interview, from which the above is quoted, see:

Vane, Howard R., and Chris Mulhearn, interviewers. "Interview with Edmund S. Phelps." Journal of Economic Perspectives 23, no. 3 (Summer 2009): 109-24.

(Note: ellipsis added.)

October 12, 2012

School Competition Benefits Students

(p. 150) We study competition between two publicly funded school systems in Ontario, Canada: one that is open to all students, and one that is restricted to children of Catholic backgrounds. A simple model of competition between the competing systems predicts greater effort by school managers in areas with more Catholic families who are willing to switch systems. Consistent with this insight, we find significant effects of competitive pressure on test score gains between third and sixth grade. Our estimates imply that extending competition to all students would raise average test scores in sixth grade by 6 percent to 8 percent of a standard deviation.

For the full article, from which the above abstract is quoted, see:

Card, David, Martin D. Dooley, and A. Abigail Payne. "School Competition and Efficiency with Publicly Funded Catholic Schools." American Economic Journal: Applied Economics 2, no. 4 (Oct. 2010): 150-76.

October 8, 2012

Ban of Affirmative Action Does Not Reduce Overall Black Enrollment

(p. 435) Using institutional data on race-specific college enrollment and completion, I examine whether minority students were less likely to enroll in a four-year public college or receive a degree following a statewide affirmative action ban. As in previous studies, I find that black and Hispanic enrollment dropped at the top institutions; however, there is little evidence that overall black enrollment at public universities fell. Finally, despite evidence that fewer blacks and Hispanics graduated from college following a ban, the effects on graduation rates are very noisy.

For the full article, from which the above abstract is quoted, see:

Backes, Ben. "Do Affirmative Action Bans Lower Minority College Enrollment and Attainment?" Journal of Human Resources 47, no. 2 (Spring 2012): 435-55.

October 7, 2012

"Education Bubble": "A Spurious Inflation of the Credentials Required for Many Jobs"


Source of book image:

(p. 17) In June 2008, The Atlantic published an essay by an adjunct instructor of English, identified only as "Professor X," whose job filled him with despair. Although the courses he taught were introductory, success was beyond many of his students, who, he wrote, were "in some cases barely literate." X found giving F's to be excruciating -- "I am the man who has to lower the hammer," he lamented -- in part because he identified with his older students, who seemed to have lost their way in their careers much as X himself had.

. . .

. . . X's function, in the ecology of the colleges where he teaches, is gatekeeper -- most students who fail his classes will drop out -- and he articulates the ethical challenge before him this way: "What grade does one give a college student who progresses from a 6th- to a 10th-grade level of achievement?" X gives F's.

. . .

X and his wife got snookered in the housing bubble, and he wonders if the misery in his classroom might result from a similar education bubble. In 1940, there were 1.5 million college students in America; in 2006, there were 20.5 million. In X's opinion, a glut of degrees has led to a spurious inflation of the credentials required for many jobs. Tuitions are rising, and two-thirds of college graduates now leave school with debt, owing on average about $24,000. A four-year degree is said to increase wages about $450,000 over the course of a lifetime, but X doubts the real value of degrees further down on the hierarchy of prestige. To him, the human cost is more conspicuous.

. . .

Professor X can be caustic about the euphemism and somewhat willed optimism that sometimes befog discussion of how to teach unprepared students. To relieve his and his students' unhappiness, he proposes that employers stop demanding unnecessary degrees: a laudable suggestion, unlikely to be realized until the degree glut has dried up.

For the full review, see:

CALEB CRAIN. "Lost in the Meritocracy." The New York Times Book Review (Sun., May 1, 2011): 17.

(Note: ellipses added.)

(Note: the online version of the review has the date April 29, 2011.)

The full reference for the book under review, is:

X, Professor. In the Basement of the Ivory Tower: Confessions of an Accidental Academic. New York: Viking, 2011.

October 4, 2012

Skilled Immigrants Increase U.S. Patents

(p. 31) We measure the extent to which skilled immigrants increase innovation in the United States. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, due to their disproportionately holding science and engineering degrees. Using a 1940-2000 state panel, we show that a 1 percentage point increase in immigrant college graduates' population share increases patents per capita by 9-18 percent. Our instrument for the change in the skilled immigrant share is based on the 1940 distribution across states of immigrants from various source regions and the subsequent national increase in skilled immigration from these regions.

For the full article, from which the above abstract is quoted, see:

Hunt, Jennifer, and Marjolaine Gauthier-Loiselle. "How Much Does Immigration Boost Innovation?" American Economic Journal: Macroeconomics 2, no. 2 (April 2010): 31-56.

September 30, 2012

A True Tall Tale: Mankiw Lays a Reductio Ad Absurdum on the Egalitarians

(p. 155) Should the income tax system include a tax credit for short taxpayers and a tax surcharge for tall ones? This paper shows that the standard utilitarian framework for tax policy analysis answers this question in the affirmative. This result has two possible interpretations. One interpretation is that individual attributes correlated with wages, such as height, should be considered more widely for determining tax liabilities. Alternatively, if policies such as a tax on height are rejected, then the standard utilitarian framework must in some way fail to capture our intuitive notions of distributive justice.

For the full article, from which the above abstract is quoted, see:

Mankiw, N. Gregory, and Matthew Weinzierl. "The Optimal Taxation of Height: A Case Study of Utilitarian Income Redistribution." American Economic Journal: Economic Policy 2, no. 1 (Feb. 2010): 155-76.

September 18, 2012

Raising Minimum Wage Hurts Working Poor

(p. 592) Using data drawn from the March Current Population Survey, we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates. When we then simulate the effects of a proposed federal minimum wage increase from $7.25 to $9.50 per hour, we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from $5.15 to $7.25 per hour. Assuming no negative employment effects, only 11.3% of workers who will gain live in poor households, compared to 15.8% from the last increase. When we allow for negative employment effects, we find that the working poor face a disproportionate share of the job losses. Our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor.

For the full article, from which the above abstract is quoted, see:

Sabia, Joseph J., and Richard V. Burkhauser. "Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?" Southern Economic Journal 76, no. 3 (Jan. 2010): 592-623.

September 17, 2012

A Marshmallow Now or an Elegant French Pastry Four Years Later


Source of book image:

(p. 19) Growing up in the erratic care of a feckless single mother, "Kewauna seemed able to ignore the day-to-day indignities of life in poverty on the South Side and instead stay focused on her vision of a more successful future." Kewauna tells Tough, "I always wanted to be one of those business ladies walking downtown with my briefcase, everybody saying, 'Hi, Miss Lerma!' "

Here, as throughout the book, Tough nimbly combines his own reporting with the findings of scientists. He describes, for example, the famous "marshmallow experiment" of the psychologist Walter Mischel, whose studies, starting in the late 1960s, found that children who mustered the self-control to resist eating a marshmallow right away in return for two marshmallows later on did better in school and were more successful as adults.

"What was most remarkable to me about Kewauna was that she was able to marshal her prodigious noncognitive capacity -- call it grit, conscientiousness, resilience or the ability to delay gratification -- all for a distant prize that was, for her, almost entirely theoretical," Tough observes of his young subject, who gets into college and works hard once she's there. "She didn't actually know any business ladies with briefcases downtown; she didn't even know any college graduates except her teachers. It was as if Kewauna were taking part in an extended, high-stakes version of Walter Mischel's marshmallow experiment, except in this case, the choice on offer was that she could have one marshmallow now or she could work really hard for four years, constantly scrimping and saving, staying up all night, struggling, sacrificing -- and then get, not two marshmallows, but some kind of elegant French pastry she'd only vaguely heard of, like a napoleon. And Kewauna, miraculously, opted for the napoleon, even though she'd never tasted one before and didn't know anyone who had. She just had faith that it was going to be delicious."

For the full review, see:

ANNIE MURPHY PAUL. "School of Hard Knocks." The New York Times Book Review (Sun., August 26, 2012): 19.

(Note: the online version of the article is dated August 23, 2012.)

The full reference for the book under review, is:

Tough, Paul. How Children Succeed: Grit, Curiosity, and the Hidden Power of Character. Boston, MA: Houghton Mifflin Harcourt, 2012.

September 1, 2012

Mitt Romney on Innovation and Creative Destruction


Source of book image:

(p. 108) Innovation and Creative Destruction

The key to increasing national prosperity is to promote good ideas and create the conditions that can lead them to be fully exploited--in existing businesses as well as new ones. Government is generally not the source of new ideas, although innovations from NASA and the military have provided frequent exceptions. Nor is government where innovation is commercially developed. But government policies do, in fact, have a major impact on the implementation of innovative ideas. The degree to which a nation makes itself productive, and thus how prosperous its citizens become, is determined in large measure by whether government adopts policies that stimulate innovation or that stifle it.

The government policy that has the greatest effect on innovation is simply whether or not the government will allow it. It's sad but true: Government can and often does purposefully prevent innovation and the resulting improvement in productivity. Recall my hypothetical example of a society in which half the farming jobs were lost due to innovation in the use of a plow? Some nations accept and encourage such "creative destruction," recognizing that in the long run it leads to greater productivity and wealth for its citizens. But other nations succumb to the objections of those in danger of becoming unemployed and prevent innovation that may reduce short-term employment.

Two centuries ago, more than three-quarters of our workforce actually did labor on farms. Over the succeeding decades, innovations like irrigation, fertilizer, and tractors were welcomed, and eventually large farming corporations were allowed to prosper, despite protests from family farmers and the often heart-wrenching dislocations that accompanied consolidation of farmlands. The result was the disappearance of millions of agricultural jobs and the large-scale migration of Americans from rural regions to our cities. Once there, they provided the labor that powered America's new industrial age. And at the same time, because farming innovation and productivity were allowed to flourish, America became the leader in agriculture education, research, and industry. Innovations from these sources have enabled us to produce sufficient food to feed not only our growing population but other parts of the world as well.


Romney, Mitt. No Apology: The Case for American Greatness. New York: St. Martin's Press, 2010.

(Note: bold in original.)

July 25, 2012

Joe Biden's Dad Told Him to "Get Up" in Face of Job Loss

Innovative entrepreneurs, through the process of creative destruction, provide us with wonderful new products and services. But sometimes the process also results in job loss. One response to the job loss is to shut down innovation. Another is to preach resilience. Joe Biden's Dad said "get up." (The clip is from a talk that Joe Biden gave to the National Press Club on August 1, 2007. The full talk is posted to the C-SPAN web site.)

A mainly similar presentation of the "get up" message is on p. xxii of Biden's autobiography:

Biden, Joe. Promises to Keep: On Life and Politics. New York: Random House, 2007.

July 21, 2012

Technology Allows Start-Ups to Launch with Fewer Employees

HarelAndShilonOfBiteHunter2012-06-22.jpg "Start-up BiteHunter launched with three employees. Above, co-founders Gil Harel, left, and Ido Shilon." Source of caption and photo: online version of the WSJ article quoted and cited below.

Lower costs to entry means more start-ups and that means more innovation, ceteris paribus. All good. For the labor market, there will be fewer initial jobs per start-up. But there will be more start-ups, and more opportunity for erstwhile laborers to themselves become entrepreneurs. So maybe still all good.

(p. B5) New businesses are getting off the ground with nearly half as many workers as they did a decade ago, as the spread of online tools and other resources enables start-ups to do more with less.

The change, which began before the recession, may be permanent, according to some analysts.

. . .

Rather than purchasing the tools and manpower needed to run their companies, more small firms are renting, sharing or outsourcing resources, typically through online services, according to Steve King, a partner at Emergent Research, a research and consulting firm for small businesses.

. . .

Last year, Gil Harel launched BiteHunter, a search engine for restaurant discounts, with just three employees. Based in New York, the site used shared screens and other communications tools to work with developers in Russia, Uruguay and Israel.

"Just to build the infrastructure to get a business off the ground used to take a lot of money and people. But things that you couldn't do in the past, you can now do on your own," Mr. Harel says.

For the full story, see:

ANGUS LOTEN. "With New Technology, Start-Ups Go Lean; Web-Based Services Mean Fewer Workers Needed." The Wall Street Journal (Thurs., September 15, 2011): B5.

(Note: ellipses added.)

July 18, 2012

Neglecting Valid Stereotypes Has Costs

(p. 169) The social norm against stereotyping, including the opposition to profiling, has been highly beneficial in creating a more civilized and more equal society. It is useful to remember, however, that neglecting valid stereotypes inevitably results in suboptimal judgments. Resistance to stereotyping is a laudable moral position, but the simplistic idea that the resistance is costless is wrong. The costs are worth paying to achieve a better society, but denying that the costs exist, while satisfying to the soul and politically correct, is not scientifically defensible.


Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

July 17, 2012

Web Expedites Labor Market for Small Projects

LangerAndBurksChore2012-06-22.jpg "Liz Langer helped John Burks retrieve his keys." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A1) A new crop of websites and smartphone applications are allowing people to farm out chores to a growing army of temporary personal assistants. These micro-employees are taking the division of labor to once-unthinkable extremes.

. . .

(p. A14) Some investors see dollar signs. Zaarly Inc., an online marketplace for micro-labor and goods based in San Francisco, recently raised $14.1 million from Google Inc. GOOG -2.18% investor and venture-capital firm Kleiner Perkins Caufield & Byers. Actor Ashton Kutcher and clothing designer Marc Ecko have also put in money. In October, Hewlett-Packard Chief Executive Meg Whitman joined the company's board.

After launching six months ago, Zaarly is processing more than 1,000 transactions a week for jobs that cost around $50 a pop. Chief Executive and cofounder Bo Fishback, 33, says about half the requests involve tangible goods, and the rest involve some sort of service. One of his favorites: a person who hired someone to buy a Michael Jackson-themed dog costume for a puppy.

Sometimes the situation can be dire. John Burks, a 30-year-old actor who also runs an arts organization in Chicago, accidentally dropped his keys in a sewer during a rainstorm over the summer. To replace all the keys--including ones to his home, office and Mercedes--could cost well over $100.

After Googling "lost keys down sewer" to see what tactics others had used, Mr. Burks thought he could recover his keys with a fishing rod and a magnet, but had neither. His girlfriend at the time knew someone who worked at Zaarly, so he posted the job on its site. Liz Langer, a 27-year-old neuroscience graduate student and top Zaarly "fulfiller," spotted the job and within an hour arrived with the needed tools. Fifteen minutes later, they fished the keys out of the sewer. (Price: $80.)

"It's like stranger than fiction," Mr. Burks says. "I thought there was a very small chance that anything like that can happen."

For the full story, see:

EMILY GLAZER. "Serfing the Web: Sites Let People Farm Out Their Chores; Workers Choose Jobs, Negotiate Wages; Mr. Kutcher, Anonymously, Asks for Coffee." The Wall Street Journal (Mon., November 28, 2011): A1 & A14.

(Note: ellipsis added.)

July 12, 2012

A Firm's Social Responsibility Is to Make a Profit

(p. B1) Milton Friedman, the Nobel laureate economist, blasted the very idea of corporate social responsibility four decades ago, calling it a "fundamentally subversive doctrine." Speaking for many capitalists then and now, he said, "there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game."

Companies shouldn't spend profits on unrelated job creation or social causes, he said. That money should go to shareholders--the owners of the companies. Pronouncements about corporate social responsibility, he added, are the indulgence of "pontificating executives" who are "incredibly shortsighted and muddleheaded in matters that are outside their businesses." And that indulgence can lead to inefficient markets.

. . .

(p. B2) "Jobs are an input, not an output; they're a cost of doing business, not a goal of doing business," says William Frezza, a Boston-based venture capitalist and fellow at the Competitive Enterprise Institute.

"From the perspective of defending capitalism, if you accept the premise of your opponent that business has to give back to society, you've already lost," he says. "To put sack cloth and ashes on--you've delegitimized capitalism, which is the goal of the protesters. Businesses give back to society every day by pleasing their customers and employing their employees. There's nothing business owes other than selling the best product at the best price."

For the full commentary, see:

JOHN BUSSEY. "THE BUSINESS; Are Companies Responsible for Creating Jobs?." The Wall Street Journal (Fri., October 28, 2011): B1-B2.

(Note: ellipsis added.)

June 29, 2012

A Renting Labor Force Is More Dynamically Mobil


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

(p. C2) The U.S. economy needs the dynamism that renting enables as much as--if not more than--it needs the stability that ownership engenders. In the current economy, there are vast gulfs between the employment pictures in different regions and states, from 12% unemployment in Nevada to 3% unemployment in North Dakota. But a steelworker in Buffalo, or an underemployed construction worker in Las Vegas, can't easily take his skills to where they are needed in North Dakota or Wyoming if he's underwater on his mortgage. Economists, in fact, have found that there is frequently a correlation between persistently high local unemployment rates and high levels of homeownership.

For the full essay, see:

DANIEL GROSS. "Renting Prosperity; Americans are getting used to the idea of renting the good life, from cars to couture to homes. Daniel Gross explores our shift from a nation of owners to an economy permanently on the move--and how it will lead to the next boom.." The Wall Street Journal (Sat., May 5, 2012): C1 & C2.

(Note: the online version of the essay has the date May 4, 2012.)

June 15, 2012

Hatfields and McCoys Show that Idleness Begets Violence


Kevin Costner as the patriarch of the Hatfield clan on the HBO miniseries. Source of photo:

Kevin Costner plausibly suggests that when the productive activities of capitalism and entrepreneurship are not available or sought, people are more likely to let annoyances lead to violence:

(p. 15) Q. What was the root of the feud?

K.C. It's fair to say that the economics of the time were the provocateurs in this story. I think there was a moment when Hatfield and McCoy would have laid down their guns. But these young guys didn't have jobs anymore as we moved toward industrialization. They started to have children, and their families doubled in size, and suddenly they had to feed 26. Young men killing young men -- it really has a lot to do with the offspring not having enough to do. Look, you're talking about alcohol and guns, and you're talking about unemployment, so there's a reason for the bitterness.

For the full interview, see:

Kathryn Shattuck, interviewer. "Firing Bullets Across a Border And a Bloodline." The New York Times, Arts&Leisure Section (Sun., May 27, 2012): 15.

(Note: bold in original.)

June 8, 2012

Happiness Research Undermines European-Style Labor-Market Regulation

Bryan Caplan persuasively pans the book he is revieiwng. But along the way Caplan makes an intriguing observation of his own:

(p. A11) . . . , happiness research makes a powerful case against European-style labor-market regulation. For most economists, the effect on worker well-being is unclear. On the one hand, regulation boosts wages; on the other, it increases the probability that you will have no wages at all. From the standpoint of a happiness researcher, however, this is a no-brainer. A small increase in wages has but a small and ephemeral effect on happiness. A small increase in unemployment, by contrast, has a massive and--unlike most other factors--durable effect on happiness. Supposedly "humane" regulations to boost workers' incomes have a dire cost in terms of human happiness.

For the full review, see:

BRYAN CAPLAN. "BOOKSHELF; Lessons From Cloud Nine; Happiness predicts higher job performance and even future health. But what predicts happiness?" The Wall Street Journal (Tues., August 16, 2011): A11.

(Note: ellipsis added.)

June 5, 2012

Open Offices Create "the Urgent Desire to Throttle One's Neighbor"


John Tierney "at his cubicle with a wall of books." Source of caption quote and photo: online version of John Tierney's NYT article quoted and cited below.

(p. 18) The original rationale for the open-plan office, aside from saving space and money, was to foster communication among workers, the better to coax them to collaborate and innovate. But it turned out that too much communication sometimes had the opposite effect: a loss of privacy, plus the urgent desire to throttle one's neighbor.

"Many studies show that people have shorter and more superficial conversations in open offices because they're self-conscious about being overheard," said Anne-Laure Fayard, a professor of management at the Polytechnic Institute of New York University who has studied open offices. . . .

Take Mr. Udeshi's office, at the N.Y.U.-Poly business incubator, a SoHo loft with dozens of start-up companies housed in low cubicles. The entrepreneurs there say they sometimes get useful ideas from overheard conversations but also find themselves retreating to a bathroom or a broom closet for private chats. When they have to discuss a delicate matter with someone sitting next to them, they often use e-mail or instant messaging.

"You talk to more people in an open office, but I think you have fewer meaningful conversations," said Jonathan McClelland, an energy consultant working in the loft. "You end up getting interrupted a lot by people's random thoughts."

. . .

Researchers at Finland's Institute of Occupational Health have studied precisely how far those conversations carry and analyzed their effect on the unwilling listener: a decline of 5 percent to 10 percent on the performance of cognitive tasks requiring efficient use of short-term memory, like reading, writing and other forms of creative work.

"Noise is the most serious problem in the open-plan office, and speech is the most disturbing type of sound because it is directly understood in the brain's working memory," said Valtteri Hongisto, an acoustician at the institute. He found that workers were more satisfied and performed better at cognitive tasks when speech sounds were masked by a background noise of a gently burbling brook


For the full story, see:

JOHN TIERNEY. "From Cubicles, Cry for Quiet Pierces Office Buzz." The New York Times, First Section (Sun., May 20, 2012): 1 & 18.

(Note: the online version of the article is dated May 19, 2012, and has the title "From Cubicles, Cry for Quiet Pierces Office Buzz.")

May 27, 2012

Private Equity Firms Increase Efficiency and Create as Many Jobs as They Destroy

(p. A23) Forty years ago, corporate America was bloated, sluggish and losing ground to competitors in Japan and beyond. But then something astonishing happened. Financiers, private equity firms and bare-knuckled corporate executives initiated a series of reforms and transformations.

The process was brutal and involved streamlining and layoffs. But, at the end of it, American businesses emerged leaner, quicker and more efficient.

. . .

As Reihan Salam noted in a fair-minded review of the literature in National Review, in any industry there is an astonishing difference in the productivity levels of leading companies and the lagging companies. Private equity firms like Bain acquire bad companies and often replace management, compel executives to own more stock in their own company and reform company operations.

Most of the time they succeed. Research from around the world clearly confirms that companies that have been acquired by private equity firms are more productive than comparable firms.

This process involves a great deal of churn and creative destruction. It does not, on net, lead to fewer jobs. A giant study by economists from the University of Chicago, Harvard, the University of Maryland and the Census Bureau found that when private equity firms acquire a company, jobs are lost in old operations. Jobs are created in new, promising operations. The overall effect on employment is modest.

For the full commentary, see:

DAVID BROOKS. "How Change Happens." The New York Times (Tues., May 22, 2012): A23.

(Note: ellipsis added.)

(Note: the online version of the commentary is dated May 21, 2012.)

The "giant study by economists" mentioned by Brooks is:

Davis, Steven J., John C. Haltiwanger, Ron S. Jarmin, Josh Lerner, and Javier Miranda. "Private Equity and Employment." National Bureau of Economic Research, Inc, NBER Working Papers: # 17399, Sept. 2011.

May 12, 2012

Some Tasks Are Done Better in Private Offices


Source of book image:

(p. 4) When the R.C. Hedreen Company, a real estate development firm based in Seattle, commissioned a renovation of a 10,800-square-foot floor in an old downtown office building five years ago, it specified a perimeter of private offices. Collaborative spaces are provided for creative teamwork, but the traditional offices remain the executives' home ports.

''Individually, a lot of our workday is taken up with tasks that are better served by working alone in private offices,'' says David Thyer, Hedreen's president.

Susan Cain, author of ''Quiet: The Power of Introverts in a World That Can't Stop Talking,'' is skeptical of open-office environments -- for introverts and extroverts alike, though she says the first group suffers much more amid noise and bustle.

Introverts are naturally more comfortable toiling alone, she says, so they will cope by negotiating time to work at home, or by isolating themselves with noise-canceling headphones -- ''which is kind of an insane requirement for an office environment, when you think about it,'' she says.

Ms. Cain also says humans have a fundamental need to claim and personalize space. ''It's the room of one's own,'' she says. ''Your photographs are on the wall. It's the same reason we have houses. These are emotional safety zones.''

For the full story, see:

LAWRENCE W. CHEEK. "Please, Just Give Me Some Space: In New Office Designs, Room to Roam and to Think." The New York Times, SundayBusiness Section (Sun., March 18, 2012): 1 & 4.

The book mentioned is:

Cain, Susan. Quiet: The Power of Introverts in a World That Can't Stop Talking. New York: Crown, 2012.

May 5, 2012

The One Percent's Quick History: "We Worked Hard, We Went to College, We Tried to Better Our Lives"

(p. F1) SOON after the Occupy Wall Street encampment was set up at Zuccotti Park in Manhattan last fall, 26-year-old Ryan Quick told his father, Leslie C. Quick III, a financier, that he might drop by the site.

"Don't you even let me see you over there," the father replied.

The senior Mr. Quick later said that he and his son were both "half-kidding" each other. But he need not have worried about any class rebellion. According to Mr. Quick, his son came back from his visit and said: "It just looks like a Phish concert. It's difficult to get engaged by something that doesn't really have a purpose."

As scions of a family that co-founded Quick & Reilly, a pioneering discount brokerage firm acquired for $1.6 billion by another company in 1997, the Quicks are undoubtedly among the "1 percent" -- the wealthiest 1 percent of Americans targeted by the Occupy Wall Street movement. Indeed, having made their fortune in finance, the Quicks might be particular targets.

. . .

(p. F5) "Almost all my clients are self-made," said Christopher J. Cordaro, chief executive of RegentAtlantic Capital, a wealth management firm based in Morristown, N.J., whose clients have at least $2 million in investable assets. "They're saying, 'We worked hard, we went to college, we tried to better our lives. Isn't that what I'm supposed to do?' "

That is also the Quick family's history. When he joined the year-old family firm after graduating from college in 1975, Leslie Quick recalled, "we didn't know if my father was going to declare bankruptcy or this discount brokerage thing was going to work."

For the full story, see:

FRAN HAWTHORNE. "Color the 1 Percent 99 Percent Conflicted." The New York Times (Thurs., February 9, 2012): F1 & F5.

(Note: ellipsis added.)

(Note: the online version of the article is dated February 8, 2012.)

April 21, 2012

Workers Want to See Compensation Related to Contribution

This is a great example contra (or at least qualifying) Daniel Pink's claim that all you need do for knowledge workers is provide them enough money so that they can provide for the basic needs of themselves and their family.

(p. 145) The public offering process brought details of the intended allocation of Pixar stock options into view. A registration statement and other documents with financial data had to be prepared for the Securities and Exchange Commission and a prospectus needed to be made ready for potential investors. These documents had to be reviewed and edited, and it was here that the word apparently leaked: A small number of people were to receive low-cost options on enormous blocks of stock. Catmull, Levy, and Lasseter were to get options on 1.6 million shares apiece; Guggenheim and Reeves were to get 1 million and 840,000, respectively. If the company's shares sold at the then-planned price of fourteen dollars, the men would be instant multimillionaires.

The revelation was galling. Apart from the money, there was the symbolism: The options seemed to denigrate the years of work everyone else had put into the company. They gave a hollow feel to Pixar's labor-of-love camaraderie, its spirit that everyone was there to do cool work together. Also, it was hard not to notice that Levy, one of the top recipients, had just walked in the door.

"There was a big scene about all that because some people got (p. 146) huge amounts more than other people who had come at the same time period and who had made pretty significant contributions to the development of Pixar and the ability to make Toy Story," Kerwin said. "People like Tom Porter and Eben Ostby and Loren Carpenter--guys that had been there since the beginning and were part of the brain trust."

Garden-variety employees would also get some options, but besides being far fewer, those options would vest over a four-year period. Even employees who had been with the organization since its Lucasfilm days a decade earlier--employees who had lost all their Pixar stock in the 1991 reorganization--would be starting their vesting clock at zero. In contrast, most of the options of Catmull, Lasseter, Guggenheim, and Reeves vested immediately--they could be turned into stock right away.

"I decided, 'Well, gee, I've been at this company eight years, and I'll have been here twelve years before I'm fully vested,' " one former employee remembered. " 'It doesn't sound like these guys are interested in my well-being.' A lot of this piled up and made me say, 'What am I doing? I'm sitting around here trying to make Steve Jobs richer in ways he doesn't even appreciate.' "


Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

For Daniel Pink's views, see:

Pink, Daniel H. Drive: The Surprising Truth About What Motivates Us. New York: Riverhead Books, 2009.

April 20, 2012

Stevenson and Wolfers Find People in Rich Countries Are Happier

StevensonWolfersMaltilda2012-04-04.jpg "Betsey Stevenson and Justin Wolfers are the go-to pair on what some might call "lovenomics," having produced much research on marriage, divorce and child-rearing. They are shown at home with their daughter, Matilda, and family dog, Max." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) . . . when Ms. Stevenson, 40, and Mr. Wolfers, 39, start talking about say, diapers or nursing, the conversation takes an odd turn. Suddenly, words like "inputs" and "outputs" -- the economic kind -- creep in. Mention loading the dishwasher and he tosses out "fungibility." The low cost of two big teddy bears they bought for Matilda gets Ms. Stevenson ruminating on productivity gains.

If they don't quite sound like the rest of us, that's because these two Harvard Ph.D.'s form a sort of power couple in the world of the dismal science, or at least a certain corner of it. Faculty members at the Wharton School of the University of Pennsylvania, and currently visiting fellows at Princeton, Ms. Stevenson and Mr. Wolfers have become the go-to pair on the economics of marriage, divorce and child-rearing. That they are themselves a couple -- unmarried, for tax reasons they regularly cite -- adds to the allure.

. . .

Their research shows that men have grown happier as women have become unhappier. (Why? They don't really know.) Are people in rich countries happier than people in poor countries? (Yes.) And contrary to popular belief, they show that the divorce rate in America has been falling, not rising, for decades. They cite a number of possible reasons, including more balanced expectations between men and women about how a marriage will actually work, as well as the fact that fewer people are marrying in the first place.

. . .

(p. 4) LAST month, Ms. Stevenson and Mr. Wolfers presented new research into what is known as the Easterlin Paradox. First documented by the economist Richard Easterlin in the 1970s, this concept involves the link between economic growth and happiness. The idea is that, within a given country, people with higher incomes are more likely to be happy, and yet, for the most part, the average level of happiness doesn't vary much from rich countries and poor countries. What's more, as countries become richer, their populations don't become happier.

Using a red laser pointer to highlight PowerPoint graphs, Ms. Stevenson told a group of economists, psychologists and other experts gathered at the Russell Sage Foundation on the Upper East Side of Manhattan that earlier research had failed to take into account that as people and countries grow richer, it takes a much bigger amount of absolute dollars to raise incomes, and thus happiness.

So while it could appear that increases in happiness flattened out after incomes reached a certain point, "the richer you are, the more dollars it takes to give you the same increase in well-being," Ms. Stevenson said. "To get a 10 percent increase in income, you need more dollars than when you are poor."

For the full story, see:

MOTOKO RICH. "It's the Economy, Honey." The New York Times, SundayBusiness Section (Sun., February 11, 2012): 1 & 4.

(Note: ellipses added.)

(Note: the online version of the review is dated February 11, 2012.)

April 1, 2012

"Being Able to Work on a Great Project"

(p. 133) Recruiting was brisk; the magnet for talent was not the pay, generally mediocre, but rather the allure of taking part in the first fully computer-animated feature film. "Disney gave us a very modest budget [$17.5 million] for Toy Story," Guggenheim said. "Although that budget went up progressively over time, it didn't afford for very high salaries, unfortunately. We tried to make the other working conditions better. Just the enthusiasm of being able to work on a great project is as often as not what attracts artists and animators."


Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics and brackets in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

March 28, 2012

Innovative Entrepreneurs Need to Be Able to Fire People

(p. 116) Jobs met with the remaining employees soon after the layoffs and brought his reality distortion field with him. "You're seeing your friends packing their stuff up and pushing it out to their cars," Phillips remembered, "and yet somehow he had convinced you that that was the greatest possible thing that could happen."

Within the Silicon Valley community, the talk was not of the way Jobs had handled his former employees at Pixar, but of his having kept Pixar going at all. It seemed to make little sense from a business point of view. For all his bravado about RenderMan, his motivation was likely a matter of status as much as economics. After his rise and fall at Apple, the onus was on him either to create another success story or to leave his peers to conclude that the first one had been a quirk of fate.

"It wasn't really working," Smith said of Pixar's early years. "In fact, that's being kind of gentle. We should have failed. But it seemed to me that Steve just would not suffer a defeat. He couldn't sustain it."


Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

February 15, 2012

Married Batters Paid More than Equally Good Bachelor Batters

(p. C4) Many studies have found that married men earn more than their single peers, but whether they're actually more productive is harder to answer. To settle the question, researchers looked to baseball.

They took a random sample of nearly 3,500 pro hitters, from 1871 through 2007, comparing their batting averages and other statistics with their salaries (as revealed in MLB archives and other sources). Until 1975, when the market for players became freer, there was no link between marriage, productivity and earnings. After 1975, there was some evidence that hitters who begin their careers in the bottom third of the ability spectrum gained a handful of points in batting average when they married, and a bit of salary, but the evidence was statistically weak.

For the full summary, see:

Christopher Shea. "Marriage Moneyball." The Wall Street Journal (Sat., NOVEMBER 5, 2011): C4.

The paper summarized is:

Cornaglia, Francesca, and Naomi E. Feldman. "Productivity, Wages, and Marriage: The Case of Major League Baseball." CEP Discussion Paper # 1081, September 2011.

February 11, 2012

Jobless Rate Appears Lower as Aging Population Leaves Labor Force

(p. A4) As more baby boomers leave the job market, the participation rate should continue to decline--a group of economists at the Federal Reserve projected in 2006 that it would fall to 62.5% by 2015. While that suggests the economy won't need to create as many jobs to bring down the unemployment rate, said Barclays Capital economist Dean Maki, the downside is that it won't have as large a work force to power it along and pay for the needs of an aging population.

"If you have a greater fraction of the population not working, that will make it harder to pay for costs that will be ballooning," he said.

For the full story, see:

JUSTIN LAHART. "Aging Population Eases Jobless Rate." The Wall Street Journal (Sat., November 5, 2011): A4.

February 5, 2012

Study Finds Lack of Control at Office Is Deadly for Men

(p. C12) . . . Israeli scientists found that the factor most closely linked to health was the support of co-workers: Less-kind colleagues were associated with a higher risk of dying. While this correlation might not be surprising, the magnitude of the effect is unsettling. According to the data, middle-age workers with little or no "peer social support" in the workplace were 2.4 times more likely to die during the study.

But that wasn't the only noteworthy finding. The researchers also complicated longstanding ideas about the relationship between the amount of control experienced by employees and their long-term health. Numerous studies have found that the worst kind of workplace stress occurs when people have little say over their day. These employees can't choose their own projects or even decide which tasks to focus on first. Instead, they must always follow the orders of someone else. They feel like tiny cogs in a vast corporate machine.

Sure enough, this new study found that a lack of control at the office was deadly--but only for men. While male workers consistently fared better when they had some autonomy, female workers actually fared worse. Their risk of mortality was increased when they were put in positions with more control.

While it remains unclear what's driving this unexpected effect, one possibility is that motherhood transforms control at the office--normally, a stress reducer--into a cause of anxiety. After all, having a modicum of control means that women must constantly navigate the tensions between work and family. Should they stay late at their job? Or go home and help take care of the kids? This choice is so stressful that it appears to increase the risk of death.

For the full summary, see:

JONAH LEHRER. "HEAD CASE; Your Co-Workers Might Be Killing You; Hours don't affect health much--but unsupportive colleagues do." The Wall Street Journal (Sat., August 20, 2011): C12.

(Note: ellipsis added.)

The paper referred to in the quote from Lehrer's summary is:

Shirom, Arie, Sharon Toker, Yasmin Alkaly, Orit Jacobson, and Ran Balicer. "Work-Based Predictors of Mortality: A 20-Year Follow-up of Healthy Employees." Health Psychology 30, no. 3 (May 2011): 268-75.

January 30, 2012

Creative Destruction Creates as Many New Jobs as It Destroys

(p. 113) It was Joseph Schumpeter who pointed out that the competition which keeps a businessman awake at night is not that from his rivals cutting prices, but that of entrepreneurs making (p. 114) his product obsolete. As Kodak and Fuji slugged it out for dominance in the 35mm film industry in the 1990s, digital photography began to extinguish the entire market for analogue film - as analogue records and analogue video cassettes had gone before. Creative destruction, Schumpeter called it. His point was that there is just as much creation going on as destruction - that the growth of digital photography would create as many jobs in the long run as were lost in analogue, or that the savings pocketed by a Wal-Mart customer are soon spent on other things, leading to the opening of new stores to service those new demands. In America, roughly 15 per cent of jobs are destroyed every year; and roughly 15 per cent created.


Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

January 18, 2012

You Have More Servants than the Sun King

(p. 36) The Sun King had dinner each night alone. He chose from forty dishes, served on gold and silver plate. It took a staggering 498 people to prepare each meal. He was rich because he consumed the work of other people, mainly in the form of their services. He was rich because other people did things for him. At that time, the average French family would have prepared and consumed its own meals as well as paid tax to support his servants in the palace. So it is not hard to conclude that Louis XIV was rich because others were poor.

But what about today? Consider that you are an average person, say a woman of 35, living in, for the sake of argument, Paris and earning the median wage, with a working husband and two children. You are far from poor, but in relative terms, you are immeasurably poorer than Louis was. Where he was the richest of the rich in the world's richest city, you have no servants, no palace, no carriage, no kingdom. As you toil home from work on the crowded Metro, stopping at the shop on the way to buy a ready meal for four, you might be thinking that Louis XIV's dining arrangements were way beyond your reach. And yet consider this. The cornucopia that greets you as you enter the supermarket dwarfs anything that Louis XIV ever experienced (and it is probably less likely to contain salmonella). You can buy a fresh, frozen, tinned, smoked or pre-prepared meal made with beef, chicken, pork, lamb, fish, prawns, scallops, eggs, potatoes, beans, carrots, cabbage, aubergine, kumquats, celeriac, okra, seven kinds of lettuce, cooked in olive, walnut, sunflower or peanut oil and flavoured with cilantro, turmeric, basil or rosemary . . . You may have no chefs, but you can decide (p. 37) on a whim to choose between scores of nearby bistros, or Italian, Chinese, Japanese or Indian restaurants, in each of which a team of skilled chefs is waiting to serve your family at less than an hour's notice. Think of this: never before this generation has the average person been able to afford to have somebody else prepare his meals.

You employ no tailor, but you can browse the internet and instantly order from an almost infinite range of excellent, affordable clothes of cotton, silk, linen, wool and nylon made up for you in factories all over Asia. You have no carriage, but you can buy a ticket which will summon the services of a skilled pilot of a budget airline to fly you to one of hundreds of destinations that Louis never dreamed of seeing. You have no woodcutters to bring you logs for the fire, but the operators of gas rigs in Russia are clamouring to bring you clean central heating. You have no wick-trimming footman, but your light switch gives you the instant and brilliant produce of hardworking people at a grid of distant nuclear power stations. You have no runner to send messages, but even now a repairman is climbing a mobile-phone mast somewhere in the world to make sure it is working properly just in case you need to call that cell. You have no private apothecary, but your local pharmacy supplies you with the handiwork of many thousands of chemists, engineers and logistics experts. You have no government ministers, but diligent reporters are even now standing ready to tell you about a film star's divorce if you will only switch to their channel or log on to their blogs.

My point is that you have far, far more than 498 servants at your immediate beck and call. Of course, unlike the Sun King's servants, these people work for many other people too, but from your perspective what is the difference? That is the magic that exchange and specialisation have wrought for the human species.


Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

(Note: ellipsis in original.)

January 13, 2012

Indian Middle Class: "The State Is Preventing Me from Doing What I Want to Do"

NagParthoIndianEntrepreneur2011-11-14.jpg"Partho Nag, a childhood friend of Shubhrangshu Roy's who lives in the same New Delhi suburb. Mr. Nag, who runs an IT service company out of his home, joined Mr. Roy and other friends as they volunteered at the Hazare protests. "We've been told since our childhoods, 'Politics is bad, don't get into politics,'" Mr. Nag said. "But the point is that somebody has to clean it up. We can't just scold people."" Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) DWARKA, India -- Shubhrangshu Barman Roy and his childhood friends are among the winners in India's economic rise. They have earned graduate degrees, started small companies and settled into India's expanding middle class. They sometimes take vacations together and meet for dinners or parties, maybe to celebrate a new baby or a new business deal.

Yet in August, Mr. Roy and his friends donned white Gandhi caps, boarded a Metro train in this fast-growing suburb of the Indian capital and rode into New Delhi like a band of revolutionaries to join the large anticorruption demonstrations led by the rural activist Anna Hazare. They waved Indian flags, distributed water to the crowds and vented their outrage at India's political status quo.

"I could feel that people really wanted change," Mr. Roy, 36, recalled proudly.

It may seem unlikely that middle-class Indians would crave change. They mostly live in rapidly growing cities and can afford cars, appliances and other conveniences that remain beyond the reach of most Indians. Theirs is the fastest growing demographic group in the country, and their buying power is expected to triple in the next 15 years, making India one of the most important consumer markets in the world.

But buying power is not political power, at least not yet in India. The wealthier India has become, the more politically disillusioned many of the beneficiaries have grown -- an Indian paradox. The middle class has vast economic clout yet often remains politically marginalized in a huge democracy where the rural masses still dominate the outcome of elections and the tycoon class has the ear of politicians.

. . .

(p. 10) "This middle class is less about 'what the state can do for me' than 'the state is preventing me from doing what I want to do,' " said Devesh Kapur, director of the Center for the Advanced Study of India at the University of Pennsylvania.

The Hazare movement rattled India's political establishment because it offered a glimpse of what could happen if the middle class was mobilized across the country. Professionals and college students provided the organizational spine, and money, that brought hundreds of thousands of people of all backgrounds onto the streets in what many described as a political awakening.

. . .

Mr. Roy and his friends, including Mr. Nag, had grown up in New Delhi in the same government housing development. They were all the sons of government bureaucrats who would later offer similar advice: Get a government job.

"He always insisted," Mr. Nag recalled of his father's prodding. "But we had an idea that a government job was too lousy."

They were teenagers in the early 1990s when Indian leaders embarked on the reforms that began dismantling the stifling licensing regulations that had choked the economy. Private enterprise, large and small, would steadily emerge as the engine of Indian growth and the delivery vehicle of growing aspirations. Mr. Nag would open a small IT service firm. Two other friends would start a textile trading company. Mr. Roy would earn graduate degrees and start a consulting firm.

. . .

On a recent afternoon, Mr. Roy pointed to a crude asphalt scar in the road where workers had installed an underground water connection. The scar extended along the road toward Mr. Roy's house, only to abruptly turn left in the direction of another building.

"You see this?" he asked, angrily. "This is a connection that comes here, but it is illegal."

For Mr. Roy, the scar in the street marks the corruption and collusion and the failure of the state to deliver on its end of India's social contract. His family is supposed to get water from a legal connection for $4 a month. Except that water is unusable. For years, his father had paid a fee to fill large jugs from a private water tanker -- until his father slipped while carrying one of them.

Mr. Roy then spent about $1,000 to build an underground water storage tank beside his home. Now, every week a tanker delivers a $30 shipment of water into the tank, while Mr. Roy also buys bottled water for drinking, bringing his monthly bill to about $160. Mr. Roy suspects that local officials, rather than correcting the situation, allow it to continue in exchange for kickbacks from the owners of the private water tankers. In the end, though, he pays.

These tales of petty graft proliferate across India, but especially in cities, analysts say, for the simple reason that cities now have more money.

McKinsey Global Institute, a consulting group, has estimated that India's middle class could grow to nearly 600 million people by 2030. Today, nearly three-quarters of India's gross domestic product comes from cities, where less than a third of India's population lives, an imbalance that correlates with the divide between middle-class economic and political power.

"For politicians, the city has primarily become a site of extraction, and the countryside is predominantly a site of legitimacy and power," Ashutosh Varshney, an India specialist at Brown University, wrote recently. "The countryside is where the vote is; the city is where the money is. Villages do have corruption, but the scale of corruption is vastly greater in cities."

For the full story, see:

JIM YARDLEY. "INDIA'S WAY; Protests Help Awaken a Goliath in India." The New York Times, First Section (Sun., October 30, 2011): 1 & 10.

(Note: ellipses added.)

(Note: the online version of the article is dated October 29, 2011 and has the title "INDIA'S WAY; Protests Awaken a Goliath in India.")

January 11, 2012

Gentle Oshman Inspired Loyalty as He Made Work Fun in Silicon Valley


"M. Kenneth Oshman" Source of caption and photo: online version of the NYT obituary quoted and cited below.

(p. 19) M. Kenneth Oshman, who helped create one of the early successful technology start-up firms in Silicon Valley, one that embodied the informal management style that came to set the Valley apart from corporate America, died on Saturday in Palo Alto, Calif. He was 71.

. . .

In the 1970s and '80s, Rolm was the best example of an emerging Silicon Valley management style that effectively broke down the barrier between work and play. Setting out to recruit the most talented technical minds, Rolm became known as a great place to work, so much so that it was nicknamed "G.P.W."

Early on as chief executive, Mr. Oshman took funds normally used for company Christmas parties and used them to help construct a company recreational center, consisting of swimming pools, racquetball courts, exercise rooms and other amenities to attract new employees and underline the image that Rolm was a fun place to work.

But there was a tradeoff, said Keith Raffel, who left a staff position on Capitol Hill to become an assistant to Mr. Oshman at Rolm before starting his own company.

"The quid pro quo was you would be driven and work really hard," he said.

With a gentle, understated style, Mr. Oshman stood apart from other well-known leaders in Silicon Valley, many of whom were seen as capricious and even tyrannical. He was a mentor to a generation of Silicon Valley technologists and able to inspire a kind of loyalty in his employees not frequently seen in high-tech industries.

For the full obituary, see:

JOHN MARKOFF. "M. Kenneth Oshman, Silicon Valley Mentor, Dies at 71." The New York Times, First Section (Sun., August 10, 2011): A10.

(Note: ellipsis added.)

(Note: the online version of the obituary is dated August 10, 2011 and has the title "M. Kenneth Oshman, Who Brought Fun to Silicon Valley, Dies at 71.")

January 10, 2012

Happiness Depends Most on Being Free to Choose

(p. 27) Getting richer is not the only or even the best way of getting happier. Social and political liberation is far more effective, says the political scientist Ronald Ingleheart: the big gains in happiness come from living in a society that frees you to make choices about your lifestyle - about where to live, who to marry, how to express your sexuality and so on. It is the increase in free (p. 28) choice since 1981 that has been responsible for the increase in happiness recorded since then in forty-five out of fifty-two countries. Ruut Veenhoven finds that 'the more individualized the nation, the more citizens enjoy their life.'


Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

December 31, 2011

Federal Subsidies Create Few Green Jobs

(p. F2) . . . solar power, which makes extensive use of robots in fabricating the cells, and has no moving parts to service once it is up and running, may be an odd choice for job creation.

"It's just not that labor-intensive," said Howard Axelrod, an engineer and economist. And as for the jobs it creates, there may be a price elsewhere, Dr. Axelrod said.

. . .

Build enough solar plants and some coal plants will shut down; that would amount to firing Peter to hire Paul.

. . .

And, economists point out, some of the work that renewable energy creates goes to people who already have jobs -- roofers who install the panels or truck drivers who move them around, or steel workers who make towers for new wind machines.

Some of the jobs could eventually go elsewhere. Two years ago, Evergreen Solar, which got $58 million in aid from Massachusetts for a factory in Devens, said it would shift production to China instead.

. . .

The debate is part of a larger discussion of what constitutes a "green" job. In October 2009, Congress gave the Bureau of Labor Statistics a special appropriation to count them.

. . .

"Driving a bus is driving a bus, right?" said Connie Mack, Republican of Florida. Hilda Solis, the secretary of labor, said they were "green buses." But aides later clarified that the bureau counted any bus driving job as green because it preserved natural resources.

None of this suggests that green is bad, just that it is not particularly job-heavy. In December 2010, Susan Combs, the comptroller of Texas, reported that school districts in her state were giving tax abatements to lure new jobs, but had to give $1.6 million for every wind energy job. Manufacturing jobs could be created for $166,000 each.

For the full story, see:

MATTHEW L. WALD. "Solar Power Industry Falls Short of Hopes in Job Creation." The New York Times (Weds., October 26, 2011): F2.

(Note: ellipses added.)

(Note: the online version of the article has the date October 25, 2011.)

December 30, 2011

More Firms Adopt 'Bring Your Own Device' (BYOD) Policies to Empower Workers and Cut Costs

CitrixSystemsWorkersPickOwnLaptops2011-11-10.jpg"At Citrix Systems, Berkley Reynolds, left, uses his Alienware laptop, and Alan Meridian, his MacBook Pro, paid for with stipends." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) SAN FRANCISCO -- Throughout the information age, the corporate I.T. department has stood at the chokepoint of office technology with a firm hand on what equipment and software employees use in the workplace.

They are now in retreat. Employees are bringing in the technology they use at home and demanding the I.T. department accommodate them. The I.T. department often complies.

Some companies have even surrendered to what is being called the consumerization of I.T. At Kraft Foods, the I.T. department's involvement in choosing technology for employees is limited to handing out a stipend. Employees use the money to buy whatever laptop they want from Best Buy, or the local Apple store.

"We heard from people saying, 'How come I have better equipment at home?' " said Mike Cunningham, chief technology officer for Kraft Foods. "We said, hey, we can address that."

Encouraging employees to buy their own laptops, or bring their mobile phones and iPads from home, is gaining traction in the workplace. A survey published on Thursday by Forrester Research found that 48 percent of information workers buy smartphones for work without considering what their I.T. department supports. By being more flexible, companies are hoping that workers will be more comfortable with their devices and therefore more productive.

"Bring your own device" policies, as they are called, are also shifting the balance of power among electronics makers. Manufacturers good at selling to consumers are increasingly gaining the upper hand, while those focused on bulk corporate sales are slipping.

. . .

(p. B6) Letting workers bring their iPhones and iPads to work can . . . save companies money. In some cases, employees pay for equipment themselves and seek tech help from store staff rather than their company's I.T. department. "You can basically outsource your I.T. department to Apple," said Ben Reitzes, an analyst with Barclays Capital.

A similar B.Y.O.D. program at Citrix Systems, a software maker that also helps its clients implement such programs, saves the company about 20 percent on each laptop over three years. Of the 1,000 or so employees in Citrix's program, 46 percent have bought Mac computers, according to Paul Martine, Citrix's chief information officer. "That was a little bit of a surprise."

For the full story, see:

VERNE G. KOPYTOFF. "More Offices Let Workers Choose Their Own Devices." The New York Times (Fri., September 23, 2011): B1 & B6.

(Note: ellipses added.)

(Note: the online version of the article is dated September 22, 2011.)

December 25, 2011

Fantasizing about Achieving Goals Has Opportunity Cost in Terms of Energy to Actually Achieve Goals

(p. C4) Fantasizing about achieving goals can make people less likely to achieve them, by sapping the energy required to do the necessary work, a study finds.

. . .

The researchers concluded: "Positive fantasies will sap job-seekers of the energy to pound the pavement, and drain the lovelorn of the energy to approach the one they like."

For the full story, see:

Christopher Shea. "Week in Ideas; Psychology; Lost in Fantasy." The Wall Street Journal (Sat., JUNE 4, 2011): C4.

(Note: ellipsis added.)

The article summarized is:

Kappes, Heather Barry, and Gabriele Oettingen. "Positive Fantasies About Idealized Futures Sap Energy." Journal of Experimental Social Psychology 47 (2011): 719-29.