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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.")






May 27, 2014

Warren Buffett Lately Low on Alpha



(p. 3) Warren Buffett is probably the most famous investor of his generation, and for good reason: His track record over the long term is a thing of beauty.

He has beaten the market by a wide margin over 49 years, a record so impressive that it's used in finance classes as a textbook example of "alpha."

Alpha is an elusive quality. Very simply put, it is the ability to beat an index fund without adding risk to a portfolio. Investment managers are always seeking it. If it exists, Warren Buffett surely has had it.

A new statistical analysis of Mr. Buffett's long-term record at Berkshire Hathaway has just been done, and it's come up with some fascinating insights about his abilities, past and present, and about the chances that the rest of us have for beating the market. Using a series of statistical measures, the study suggests that Mr. Buffett has indeed been blessed with an impressively big dose of alpha over a very long career.

But it also reveals something that isn't impressive at all: For four of the last five years, Mr. Buffett has been doing worse than the typical, no-frills Standard & Poor's 500-stock index fund -- so much worse that it's unlikely to be a matter of a string of bad luck. Mr. Buffett has begun to behave like an investor with no alpha at all.


. . .


A vast majority of individuals, including most people now working in finance, do not have alpha, Mr. Mehta says. It doesn't matter whether they have studied finance or have prodigious math skills; the statistics show that they are unlikely to have the ability to beat the market.

That has a serious implication for individual investors, he says: True investing skill is so rare that the rest of us shouldn't even try to emulate those who have it. In addition, he says, we probably shouldn't bother trying to hire the few outperformers to invest our money. Why? Because we aren't likely to be able to identify them.



For the full commentary, see:

JEFF SOMMER. "Strategies; The Oracle of Omaha, Lately Looking a Bit Ordinary." The New York Times, SundayBusiness Section (Sun., APRIL 6, 2014): 3.

(Note: ellipsis added.)

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






May 8, 2014

Government Pushed Kiewit to Ignore Worker Safety



TrappedUnderTheSeaBK2014-04-25.jpg

















Source of book image: http://d202m5krfqbpi5.cloudfront.net/books/1369819962l/17934699.jpg



(p. C9) Boston Harbor's filth is legendary. It was mock-celebrated in the 1966 song "Dirty Water." The city's water-treatment plants were hopelessly inadequate, and barely treated sewage had been pouring into the harbor for decades.


. . .


The Deer Island Sewage Treatment Plant was supposed to solve these problems. Begun in 1990, the $3.8 billion facility would process human and industrial waste on a small island in Boston Harbor and then send it through a 9.5-mile tunnel into the deep waters of the Atlantic. Fifty-five vertical pipes called risers spurred off the tunnel's final section to further diffuse waste before releasing it into the sea. Temporary safety plugs, likened to giant salad bowls, had been placed near the bottom of each riser to keep water from seeping in before construction was complete.

These plugs were a source of conflict between the tunnel's owner, the Massachusetts Water Resources Authority (MWRA), and the company they hired to build it, Kiewit, "the Omaha-based construction giant" that, Mr. Swidey notes, "had built more miles of the U.S. highway system than any other contractor." The director of MWRA, Doug MacDonald, had left a job as a partner in a Boston law firm to take over the authority, a behemoth of 1,700 employees and, at the peak of harbor cleanup, an additional 3,000 construction workers. Mr. MacDonald's job included mollifying various parties who disagreed about how the Deer Island project would reach completion: Kiewit; the tunnel's designers, mostly out of the picture by 1998; ICF Kaiser Engineers, hired by MWRA to protect its interests and act as Mr. MacDonald's eyes and ears; the union "sandhogs" who bored out 2.4 million tons of rock to create the tunnel; the Occupational Safety and Health Administration, ostensibly looking out for worker safety but seeming more interested in handing out fines; and, though federal funds for harbor cleanup had long since dried up, "a bow-tied federal judge who served as the cleanup project's robed referee, threatening stiff fines or worse if the deadlines he imposed were not met."


. . .


The problem weighed most heavily on Kiewit. The firm was contractually obligated to deliver on time, subject to late-fee penalties of $30,000 a day, and to cover cost overruns. More, Kiewit had fronted the construction costs and would only be paid by selling the tunnel, piece by piece, to MWRA. The contract further obligated Kiewit to provide "lighting and ventilation (or breathing apparatus) for the personnel" that pulled the plugs but, in what seemed a senseless conflict, mandated that the plugs "could be removed only after the tunnel was completed," writes Mr. Swidey, "meaning after the sandhogs had cleared out, taking their extensive ventilation, transportation, and electrical systems with them."

Kiewit protested that clearing the tunnel of its life-sustaining infrastructure would make "the risk of catastrophe [to the workers pulling the plugs] . . . exponentially higher !" They offered several sound alternatives. In response, ICF Kaiser accused them of just wanting their payday. After a "year-long memo war," Kiewit capitulated, cleared the tunnel and hired a commercial dive team to go into a pitch-black airless tube.



For the full review, see:

NANCY ROMMELMANN. "BOOKS; One Mile Down, Ten Miles Out; Their oxygen was starting to get thin. On the verge of passing out, Hoss radioed back to the Humvees. The reply was an expletive, and the line went dead." The Wall Street Journal (Sat.,March 15, 2014): C9.

(Note: ellipses between paragraphs, added; ellipsis inside last paragraph, in original.)

(Note: the online version of the review has the date March 14, 2014, and has the title "BOOKSHELF; Book Review: 'Trapped Under the Sea' by Neil Swidey; In 1999, five deep-sea welders had to traverse a tunnel beneath Boston Harbor with no breathable air, no light and no chance for rescue should things go horribly wrong." )


The book under review is:

Swidey, Neil. Trapped under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles into the Darkness. New York: Crown Publishers, 2014.






January 2, 2014

Free Agent Entrepreneur Mr. C Exuded a Zest for Life



CanigliaYanoMisterC2013-11-27.jpg "In a 2000 photo, Sebastiano "Yano" Caniglia, a member of one of Omaha's largest restaurant families, stands outside his Mister C's Steakhouse, which operated from 1953 until 2007." Source of caption and photo: online version of the Omaha World-Herald obituary quoted and cited below.



In the current draft of my book Openness to Creative Destruction, I use Mr. C as my example of a "free agent entrepreneur." An evening at Mr. C's was as much about spirit and experience and entertainment as it was about food. Mr. C's was on the other side of town, but we tried to get there at least once a year, usually around the holidays. When my daughter was young, she would run over to the wonderful diorama that included Frank Sinatra, Mr. C, and the Pope. I remember the strolling violinist, the accordion player and the clown. And the time Mr. C stopped by our table to show us his singing potted flower. This time of year, I remember the thousands of small twinkling Christmas lights throughout the restaurant. Mr. C exuded a wonderful childlike enthusiasm and zest for life.



(p. 1B) "He was only at Hospice House for a few hours," said his son. "He was singing to the nurses, telling them stories and ­having a wonderful day when he dropped."


. . .


(p. 2B) David Caniglia said his father had a simple business model that included "good, old-fashioned hard work."

"He was sincere when people came into the restaurant. They were more than just customers, they were coming into his home," he said.

On the last day for Mister C's, Yano Caniglia told The World-Herald: "I couldn't wait to get to work every day. I never wanted it to end."

A reporter in 1983 described Mr. C in his restaurant:

"If it was your first visit, you probably were still recovering from the dazzle of thousands of Christmas lights that festoon the place when he bustled up to your table, welcomed you in his booming voice and, if there were kids in your party, deftly twisted balloon animals for them."



For the full obituary, see:

Sue Story Truax. "Man Behind Mister C's Success, Sebastiano Caniglia, Dies at 89." Omaha World-Herald (Friday, November 15, 2013): 1B-2B.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date Thursday, November 14, 2013, and has the title "Yano Caniglia was the mister in Mr. C's Steakhouse.")






December 18, 2013

Buffett's Berkshire Buys More of Dubious DaVita



A case has been made on CNN that DaVita has committed Medicare fraud costing taxpayers many millions of dollars. DaVita has been discussed in previous blog entries on November 30, 2012, May 18, 2013, and June 11, 2013.



(p. 3D) Omaha investor Warren Buffett's company bought nearly 3.7 million more shares of DaVita Inc. after the dialysis provider reported its earnings . . . [in the first week of November 2013].

Berkshire Hathaway Inc. said in documents filed with the Securities and Exchange Commission on Friday that it owns 35.1 million shares of DaVita.



For the full story, see:

THE ASSOCIATED PRESS. "Berkshire buys 3.7 million more shares of DaVita after report." Omaha World-Herald (Mon., November 11, 2013): 3D.

(Note: ellipsis and bracketed words added.)






November 26, 2013

Nebraska Teenager Becomes the "George Clooney of YouTube"



(p. 263) Google also became more aggressive in connecting sponsors for popular videos. A paragon of YouTube's business model was "Fred," a video channel created by a Columbus, Nebraska, teenager named Lucas Cruikshank. The teen pretended to be a six-year-old kid named Fred Figglehorn in a series of two-minute videos. "Fred is the George Clooney of YouTube," says Hunter Walk. "He was the first one with a million subscribers. He uploads videos, and we put ads against them. Sometimes he sells product placement ads. Fred makes a million dollars a year. He just signed a movie deal." The Fred videos-- generally manic rants in which Cruikshank portrays a hyperactive, possibly brain-damaged child who speaks like one of Ross Bagdasarian's chipmunks-- often sported commercial messages for sponsors such as Samsung, the Food Channel, and Bratz on an overlay at the bottom of the window. Since he started in 2008, at age fourteen, Fred's (p. 264) YouTube videos have chalked up over half a billion viewings. Though Fred's success was solely a product of YouTube, people in the company never met the phenom. "We sent him a cake once," says Walk.

YouTube helped Fred's youthful creator not just by selling ads but by providing analytics, the same way it did for AdSense publishers. (This was a result of an initiative called the YouTube Insight project, developed by engineers in Google's Zurich center.) Such data helped creators learn what was working and where. "They're like, 'Oh my God, I'm big in the U.K.! I never knew I had a London following!'" says Walk. Superusers such as Cruikshank were so successful in exploiting YouTube's business initiatives that corporations such as Sony were studying their methodology and even paid some of them consultant fees to help them understand the digital world.



Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.






November 24, 2013

Fed Regulations Are "a Wild Card" Since "Regulators Have a Lot of Leeway"



(p. 1D) The president of First National of Nebraska, the nation's largest privately held banking firm, said new federal regulatory and com­pliance efforts stand to cost the company as much as $30 million this year.

"It is a big uncertainty in the banking world," said Dan O'Neill, speaking Wednesday at the com­pany's annual meeting in Omaha. "They are not operating off of concrete rules. A lot of it is their interpretation."

The federal Consumer Fi­nancial Protection Bureau was formed as a result of the federal Dodd-Frank laws passed in 2010 after widespread bank failures and bailouts using taxpayer money.


. . .


The bureau, he said, worries banks because there is not a "clear body of rules" from which the regulator is operating in eval­uating the fairness of a bank's business practices. He said the agency's regulators have a lot of leeway in deciding what to do af­-(p. 2D)ter examining a bank; penalties for running afoul include fines.

"So it is a bit of a wild card," he said.



For the full story, see:

RUSSELL HUBBARD. "ANNUAL MEETING; First National Chief Says Regulatory Costs Mounting." Omaha World-Herald (Thurs., June 20, 2013): 1D-2D.

(Note: ellipsis added.)






October 22, 2013

Dohrmann and Quevedo Survive Creative Destruction of Inacom



DohrmannHokampQuevedoCosentry2013-10-07.jpg "Cosentry, an Omaha-based provider of data center storage and managed technology services, has a new CEO, Brad Hokamp, center. With him at the Cosentry data center in Papillion are company founders Kevin Dohrmann, left, and Manny Quevedo." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.


Innovation through creative destruction brings us the new products and processes that make our lives longer, richer and more satisfying. The major downside of creative destruction is the job loss of those working for firms that are creatively destroyed. Sometimes, in class, I use Omaha's Inacom as a concrete example. Inacom was a value-added retailer of computer equipment. They would buy PCs from IBM, Compaq and the like, then add software and hardware, and re-sell and install for firms, at a mark-up. They were creatively destroyed by Dell's process innovation of customizing and selling direct, at much lower prices than Inacom charged. When I arrived in Omaha, Inacom was one of a handful of Fortune 500 firms. Now Inacom is gone. But just because a firm is creatively destroyed does not imply that all those who worked for the firm are creatively destroyed. Dohrmann and Quevedo were executives at Inacom. They had the skills, knowledge, resilience and work ethic to create their own entrepreneurial startup that has thrived. Not everyone can do what Dohrmann and Quevedo did. But everyone should be able to improve their skills, knowledge, resilience, and work ethic, so that if creative destruction destroys the firm that employs them, they will still survive and possibly thrive.


(p. 1D) Cosentry's regional data center footprint has grown far from its "humble beginnings" 12 years ago of just 4,000 square feet in the old Southroads Mall in Bellevue.

"Everyone saw it as a mall that was in deterioration, and I walked in and saw the most beautiful building in Omaha," co-founder Manny Quevedo said, (p. 3D) remembering solid walls and below-grade space for computer systems.

Investments from Omaha firms Waitt Co. and McCarthy Capital along the way helped the firm grow; it was sold in 2011 to Boston private equity firm TA Associates but still has its headquarters at 127th Street and West Dodge Road.


. . .


The company's workforce has approximately doubled in the last five years to nearly 200, more than half of them in Nebraska, and will continue to grow gradually with the expansion as Cosentry hires more engineers and technicians, Quevedo said.

Today the company has six data centers, including two each in the Kansas City and Sioux Falls, S.D., metropolitan areas. If you use utilities or health care services or do any shopping or banking in the region, there's a chance some of your information has been stored or processed through Cosentry's servers.

Cosentry started with what Quevedo said was a handful of clients and grew to hundreds within its first five years.


. . .


(p. 3D) Cosentry Timeline

2001: With investment from Waitt Co., Cosentry is started by Manny Quevedo and Kevin Dohrmann, former employees of InaCom, the former Omaha Fortune 500 computer dealer that began as a division of Valmont Industries but merged with VanStar of Atlanta in 2000 and later declared bankruptcy. Cosentry creates a data center in Bellevue.

2005: Cosentry, also called IPR Inc., sold its IP Revolution division to a Kansas firm, Choice Solutions. IP Revolution sold voice and data communications services and systems. Cosentry doubles the size of its Bellevue data center and expands to the Kansas City and Sioux Falls, S.D., markets.

2008: Omaha investment firm McCarthy Capital invests in the firm. At the time, Cosentry had 95 employees.

2010: Cosentry cuts the ribbon on the $26 million Midlands Data Center in Papillion, a joint project with Alegent Health, which uses the center to store electronic medical records.

2011: Boston investment firm TA Associates buys Cosentry for an undisclosed amount from McCarthy and Waitt. The local management team continues to operate and have an ownership stake in Cosentry. The firm expands with second data centers in both the Sioux Falls and Kansas City markets.

2013: Cosentry refinances its credit facilities to provide up to $100 million to enable expansion, including the expansion of the Midlands Data Center. Today, Cosentry has nearly 200 employees and six data centers in three metropolitan areas.



For the full story, see:

Barbara Soderlin. "A Growing Tech Footprint: As Businesses' Data Storage Needs Expand, Cosentry Adds to Its Papillion Center." Omaha World-Herald (MONDAY, AUGUST 26, 2013): 1D & 3D.

(Note: ellipses added; bold in original print version of article.)

(Note: the online version of the article has the title "As Businesses' Data Storage Needs Expand, Cosentry Adds to Its Papillion Center.")




CosentryScottCappsAtPapillionDataCenterCoolingSystem2013-10-07.jpg






"Scott Capps of Cosentry's Papillion data center with the cooling system that helped Cosentry earn an Energy Star certification, which is given by the Environmental Protection Agency based on energy efficiency and lower emissions. It's the only data center in Nebraska with the certification." Source of caption and photo: the archive online version of the Omaha World-Herald article quoted and cited above.






October 6, 2013

Former Economics of Entrepreneurship and Economics of Technology Student Luis López Voted Crowd Favorite at Straight Shot Startup Accelerator Demo Day



LopezLuisPitchesCardioSys2013-10-05.jpg "Luis López pitches his startup, CardioSys, to investors during Demo Day at Aksarben Cinema this week. The event was the culmination of a 90-day Straight Shot startup accelerator program that offered new companies networking opportunities, advisers and investment dollars. Seven startups were in the inaugural accelerator class." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.


Luis López, the entrepreneur who is featured in the article quoted below, was a student of mine in both my Economics of Entrepreneurship and my Economics of Technology seminars (and before that, in micro principles). I cannot say that I taught him everything he knows, but it appears that I did not do him much harm.


(p. 1D) The same day Luis López and his brother, Danny, were accepted into Omaha's Straight Shot startup accelerator for their new company, corporate America called.

The 25-year-old Central High grad had received a job offer from Gallup. But he turned it down, choosing to take an entrepreneurial risk over a predictable salary and benefits.

"I can always apply for a job in the corporate world," he said, but it's not every day that one's company is accepted into an accelerator program that offers $20,000 in investment, more than 300 mentors and more than $75,000 in in-kind services.

The risk paid off, López said last week as the 90-day program wrapped up. The López brothers' startup, CardioSys -- which uses predictive analytics to calculate a person's risk of developing conditions like heart disease and diabetes based on factors such as age, blood pressure and lipid profiles -- came out of the program with a group of nine advisers.


. . .


(p. 2D) Luis López said CardioSys is hoping to land some investment in the next month or two, and is now looking at applying for a short-term health industry-focused incubator program in California, which the founders were connected with via Straight Shot.

In the long term, however, López said that with its strong community of medical and insurance providers, Omaha is CardioSys' home. At Demo Day, the startup was voted crowd favorite. "I was surprised. It's an honor to have people excited about what we're doing," he said.



For the full story, see:

Paige Yowell. "Straight Shot at Success; Accelerator's First Startups Make Their Pitches." Omaha World-Herald (SATURDAY, OCTOBER 5, 2013): 1D & 2D.

(Note: ellipses added.)

(Note: the online version of the story has the title "Straight Shot Accelerator's First Startups Make Their Pitches.")




LopezLuisCoFounderCardioSys2013-10-05.jpg






"Luis Lopez, who with his brother Danny Lopez, created CardioSys, gives his pitch at Demo Day." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited above.







October 3, 2013

Early Funding for Ameritrade Was a Loan Secured by Joe Ricketts' House and Car



(p. 1D) Even the oldest and most established companies were once a back-of-the-envelope glimmer of an idea.

That was the message Wednesday night from First National Bank's Clark Lauritzen, president of the company's FNN Wealth Management.


. . .


TD Ameritrade founder Joe Ricketts, Lauritzen said, started his company in 1975 with a First National loan secured by his car and house; the first office was in the bank's basement. Now, the online stock brokerage employs 2,000 people in Omaha and is an industry leader.

"Joe reinvested his profits in the business year after year," Lauritzen said.



For the full story, see:

Russell Hubbard. "Even Big Businesses Start Small, Says First National's Clark Lauritzen:." Omaha World-Herald (THURSDAY, AUGUST 29, 2013): 1D.

(Note: ellipsis added.)

(Note: the online version of he article has the title "First National's Clark Lauritzen: Even Big Businesses Start Small.")





August 12, 2013

If Terry Were from Texas, He Might Oppose Federal Ethanol Mandates



(p. 1A) WASHINGTON -- The ethanol industry is again under fire from critics who want to eliminate the federal mandate that oil companies blend biofuels into the gasoline supply.

The House Energy and Commerce Committee is holding hearings on the Renewable Fuel Standard [RFS], which called for 15 billion gallons of biofuels to be used in 2012. The requirements reach 36 billion gallons by 2022.


. . .


(p. 2A) Rep. Lee Terry, R-Neb., a member of the Energy and Commerce Committee, said it's clear that members from Texas and Louisiana will be targeting the usage requirements.


. . .


Terry has been a champion of the Keystone XL pipeline, making him an ally of Gulf Coast lawmakers and the oil industry on that issue.

Their split over the ethanol issue causes some awkward moments, he said.

"I say, 'You do realize I'm from the Cornhusker State,'" Terry said. "If I was from Dallas, you know, who knows? I'd have a different view on the RFS."



For the full story, see:

Joseph Morton. "Big Oil Revs Up Efforts to Repeal Rules Forcing Ethonal in the Mix." Omaha World-Herald (MONDAY, JULY 8, 2013): 1A-2A.

(Note: ellipses and bracketed abbreviation added.)

(Note: the online version of the article has the title "RENEWABLE FUEL STANDARD; Ethanol Critics Rev Up Efforts to Repeal Biofuel Rules on Gas.")






June 27, 2013

$30 Million First National Bank Regulatory Costs Due to Dodd-Frank Replacing Clear Rules with Regulator "Wild Card" Leeway



(p. 1D) The president of First National of Nebraska, the nation's largest privately held banking firm, said new federal regulatory and compliance efforts stand to cost the company as much as $30 million this year.

"It is a big uncertainty in the banking world," said Dan O'Neill, speaking Wednesday at the company's annual meeting in Omaha. "They are not operating off of concrete rules. A lot of it is their interpretation."

The federal Consumer Financial Protection Bureau was formed as a result of the federal Dodd-Frank laws passed in 2010 after widespread bank failures and bailouts using taxpayer money. . . .


. . .


The bureau, he said, worries banks because there is not a "clear body of rules" from which the regulator is operating in evaluating the fairness of a bank's business practices. He said the agency's regulators have a lot of leeway in deciding what to do af-(p. 2D)ter examining a bank; penalties for running afoul include fines.

"So it is a bit of a wild card," he said.



For the full story, see:

Russell Hubbard. "First National Chief Says Regulatory Costs Mounting." Omaha World-Herald (THURSDAY, JUNE 20, 2013): 1D-2D.

(Note: ellipses added.)






June 14, 2013

Federal Food Regs Drive Sharon Penner to Stop Baking for Nebraska Children



PennerSharonSlicesHerBakedBread2013-06-11.jpg "Sharon Penner slices fresh bread, which she bakes a few times a week for Hampton, Neb., students. Penner, who has fed the town's schoolchildren for 43 years, saw new school nutrition rules that cut many of her goodies as a sign it was time to retire. With her in the school kitchen is assistant Judy Hitzemann." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.



Have we gone too far when the preferences of Michelle Obama rule over the preferences of the parents of Hampton, Nebraska? And is it clear that the parents are wrong in thinking that fresh-baked bread (see photo above) and a timely pat on the shoulder (see photo below), are worth some extra calories?



(p. 1A) HAMPTON, Neb. -- Blame the broccoli. Blame the mandarin oranges. Blame all their cousins, from apples to yams, for removing Mrs. Penner's butter bars from the school lunch counter.

Then blame Mrs. Obama for removing Mrs. Penner.

So goes the thinking in this no-stoplight village of 423 people about 20 minutes northwest of York.

When the new federal school nutrition mandates went into effect this year, championed by first lady Michelle Obama, fresh-baked brownies, cookies and other sugary goodies disappeared from the school menu. And Sharon Penner, who has been feeding schoolchildren here for 43 years, decided it was a sign from above to retire.

Friday [May 17, 2013] will be the last school lunch the 70-year-old prepares for the Hampton Hawks.

Mrs. Penner is hanging up her apron.

"She is?" asked an incredulous sixth-grader named Treavar Pekar. (p. 2A) He stopped cold from scrubbing some of the six tables in the small cafeteria when I broke the news after lunch.

"NOOOOO!!!!!"

That about sums up the community response.



For the full story, see:

Grace, Erin. "Time to Hang Up Her Purple Apron." Omaha World-Herald (FRIDAY, MAY 17, 2013): 1A-2A.

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

(Note: the online version of the article has the title "Grace: Hampton lunch lady ready to hang up apron.")




PennerSharonComfortsBryceJoseph2013-06-11.jpg "Sharon Penner with Bryce Joseph, who needed some help after dropping his breakfast tray." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited above.






June 11, 2013

Berkshire Agrees to Buy No More than 25% of DaVita, Firm Accused of Medicare Fraud




Warren Buffett's Berkshire Hathaway has agreed to cap its ownership of DaVita Healthcare Partners at 25%. A previous entry on this blog quoted a story saying that Ted Weschler is behind Berkshire's purchases of DaVita stock. An even earlier entry on this blog discussed accusations that DaVita Healthcare Partners has committed substantial healthcare fraud by charging the taxpayer millions of dollars for medicine that is needlessly thrown away.



(p. 2D) Berkshire agreed not to buy more than 25 percent of DaVita HealthCare Partners Inc., a national network of medical infusion clinics.

Berkshire investment manager Ted Weschler has been buying DaVita stock for Berkshire since joining the Omaha investment company last year, totaling about 14 percent of the company, Bloomberg reported.

Weschler and DaVita President Javier Rodriguez signed a "standstill agreement" last week, a document often intended to clarify whether an investor wants to acquire controlling interest in a business. Some have speculated that Berkshire wants to acquire all of DaVita's stock, which artificially inflates the price of its shares.

DaVita legal officer Kim Rivera said Berkshire is a "supportive investor with a long-term view."



For the full story, see:

Steve Jordon. "WARREN WATCH; At Berkshire meeting, See's candymaker outshines Warren Buffett." Omaha World-Herald (SUNDAY, MAY 12, 2013): 1D & 2D.






May 18, 2013

Berkshire Buys Big into DaVita, Firm Accused of Medicare Fraud




Warren Buffett's Berkshire Hathaway apparently has a large stake in DaVita Healthcare Partners. An earlier entry on this blog discussed accusations that DaVita Healthcare Partners has committed substantial healthcare fraud by charging the taxpayer millions of dollars for medicine that is needlessly thrown away. Apparently the DaVita investment is due to Ted Weschler, one of two deputies to whom Buffett has delegated the investment of some of Berkshire's funds.


(p. 3D) Weschler is believed to be behind Berkshire's aggressive move into DaVita Healthcare Partners -- a stock he owned when he ran his own hedge fund. Berkshire bought 10.9 million shares last year, becoming Da-Vita's largest stakeholder with 15.7 percent of the company. DaVita provides kidney dialy­sis services and is seen as a consistent cash-flow genera­tor. In November, the company closed its $4.7 billion purchase of Healthcare Partners, one of the country's largest operators of medical groups and physi­cian networks. DaVita shares rose more than 35 percent in the past 12 months.


For the full story, see:


MarketWatch . "Buffett was avid hunter of 6 stocks last year; Wells Fargo, GM and DirecTV top Berkshire's list." Omaha World-Herald (Tues., March 12, 2013): 1D & 3D.






May 7, 2013

Imagining Oscar Wilde's 1882 Visit to Omaha



SheLovesMeNotBK2013-05-04.jpg



















Source of image: http://images.amazon.com/images/P/1451617585.01.LZZZZZZZ.jpg



(p. 10) Hansen's first collection, "Nebraska," which appeared in 1989, was a work that in its wrought realism, its ways of culling grim beauty from the often harsh history of his native place, achieved a memorable intensity. "She Loves Me Not" republishes seven of those stories, but to suggest that he's recycling would miss the larger point. Instead, he has used this early work as the basis for what becomes a very different, exploded, view of a place. In these pages, Nebraska -- Omaha in particular -- is both rendered and reappropriated, registered and riffed on through a range of tonalities.

The first story, "Wilde in Omaha," is, as its title suggests, a playful reimagining of Oscar Wilde's actual visit to that city in March of 1882. Recounted by a bumbling, fame-besotted journalist, the British writer's short stay among the arts-avid, cornfed Nebraska bourgeoisie becomes a delightful anthology of some of this famed raconteur's best bits. For Wilde will make no conversational response to any question that isn't an epigram, as often as not a well-known one. Hansen's setup lines can be almost groaningly obvious. When a Mr. Rosewater of The Daily Bee asks him, apropos of nothing, "Are you a hunter?" Wilde gets to deliver one of his celebrated bons mots: "Are you asking if I gallop after foxes in the shires? Indeed not. I consider that the unspeakable in pursuit of the uneatable." Didn't Monty Python run a similar shtick some years before? They did. But Hansen isn't pretending otherwise.

"Wilde in Omaha" is followed by a string of stories from the "Nebraska" collection, and what a shift it is to go from that highly arch patter to the cruel horror of the blizzard of 1888 -- a mere six years, but in terms of the circuit of human experience the very antipodes. "Wickedness" consists of a series of episodic encounters of farm people and townspeople with the completely unexpected -- and unprecedented -- storm. It's mainly a catalog of last hours and final moments, but the detailing, the staging, is unsurpassed. Every moment is fully imagined. "A tin water pail rang in a skipping roll to the horse path." A wife who has gone out to look for her husband is found "standing up in her muskrat coat and black bandanna, her scarf-wrapped hands tightly clenching the top strand of rabbit wire that was keeping her upright, her blue eyes still open but cloudily bottled by a half inch of ice, her jaw unhinged as though she'd died yelling out a name."




For the full review, see:

SVEN BIRKERTS. "Odes to Omaha." The New York Times Book Review (Sun., November 11, 2012): 10.

(Note: the online version of the review has the date November 9, 2012.)






June 14, 2012

"Under a Mountain in Omaha"



(p. 170) lnformatics had been run from the top down. Here's a story typical of the way the company worked. They had a trainer at headquarters who was told to educate the troops at the Federal Systems Division in northern California, which was run by Geno Tolari, a tough-minded football player from Pittsburgh. When the trainer arrived and announced, "I'm here to train your people," Geno shot back, "You can't train my people."

The trainer got haughty. After all, he was from headquarters. "I'm the education department. I train your people."

But Geno insisted, "You can't train my people because you don't know what they do."

So now the trainer asked, "Okay, what do they do?"

Geno answered, "I don't know."

The trainer thought Geno was joking with him, and insisted, "I'm the trainer; I need to know what they do."

That's when Geno confessed, "I can't tell you because I don't (p. 171) know. They're under a mountain in Omaha, and it's a military secret, and the Air Force won't tell us what they do."



Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.






June 3, 2012

Entrepreneurs Should Seek Problems, Not Opportunities



McKelveyJimEntrepreneurBig2012-06-02.jpg "Jim McKelvey drew on experiences as a businessman and glassblower in his speech at Big Omaha 2012." Source of caption and photo: online version of Macy Koch, "Jim McKelvey: "Just go ahead and build it"." Silicon Prairie News. (Thursday May 10, 2012).



(p. 2D) The dynamics of the glass-blowing industry changed when a new, smaller version of the traditional glass-blowing furnace was developed. The economics of glass-blowing suddenly changed.

But as McKelvey's glass-blowing skills grew and as he developed more products, including a patented glass water faucet, another barrier emerged: access to the financial system.

At one point, McKelvey was about to sell one of his faucets. The customer wanted to pay with an American Express credit card, but McKelvey couldn't accept it without the requisite hardware. The sale fell through.

McKelvey then had a problem he needed to solve: Why wasn't there a way to accept payments on a smartphone?

So he teamed up with Jack Dorsey, a co-founder of Twitter who worked with McKelvey at Mira, to start Square, which allows users to accept payments through their phones.
It was an idea that tackled a problem, McKelvey said, suggesting to attendees: "Go out there and seek problems. Don't look for opportunities."



For the full story, see:

Ross Boettcher. "Traveling the Road to Innovation; A former 'Quitter' and Others Offer tips at the Big Omaha Conference." Omaha World-Herald (Fri., May 11, 2012): 1D & 2D.

(Note: the online version of the article has the title "Many roads to innovation at Big Omaha.")




McKelveyJimEntrepreneur2012-06-01.jpg











""Go out there and seek problems. Don't look for opportunities." Jim McKelvey, co-founder of Square." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited above.









January 15, 2012

In Supporting Bailouts Buffett Was More Bootlegger than Baptist



ThrowThemAllOutBK.jpg














Source of book image: online version of the Omaha World-Herald review quoted and cited below.




(p. 9A) Peter Schweizer's new book, "Throw Them All Out" (Houghton Mifflin Harcourt, 211 pages, $26) mostly goes after members of Congress for profiting from inside information and making investments that are legal for them but would be illegal for almost anyone else.

But Chapter 6 is titled, "Warren Buffett: Baptist and Bootlegger."

Buffett is neither an actual Baptist nor a bootlegger, of course. Schweizer's reference is to the alliance of churchgoers and illegal marketers of liquor who both favored laws to limit the legal sale of alcohol, although for different reasons.

Schweizer wrote that during the 2008-09 financial crisis, Buffett pushed for government action and called attention to the problems, looking like a noble Baptist, but profited from the bailouts, like a bootlegger, through investments in Goldman Sachs, General Electric, Wells Fargo and other financial companies.

"Buffett needed the bailout," Schweizer wrote. "He began immediately to campaign for the $700 billion TARP rescue plan that was being hammered together in Washington." Several senators, including Ben Nelson, D-Neb., are Berkshire shareholders, Schweizer wrote, "and they had to know that passing the bailout bill would bring big returns for their Berkshire stock."

"There were many legitimate reasons to support the bill, and it can hardly be said that Buffett's support was the deciding factor," Schweizer wrote. "But his Baptist-bootlegger position was noteworthy for its strength in both directions: a lot of people followed his advice, and he and they made (p. 10A) a lot of money by pushing for the bailout. . . .

"Warren Buffett is a financial genius. But even more important for his portfolio, he's a political genius."



For the full story, see:

Steve Jordon. "Warren Watch: Author Says Buffett Is a 'Political Genius'." Omaha World-Herald (Sunday, November 20, 2011): 9A -10A.

(Note: ellipsis in original.)

(Note: the online version of the article has the title "Warren Watch: A 'Political Genius'.")


Steve Jordan is discussing the book:

Schweizer, Peter. Throw Them All Out. New York: Houghton Mifflin Harcourt Trade, 2011.


Bruce Yandle is the former President of APEE and the author of the classic article on how bootleggers and Baptists often become allies in calling for government action:

Yandle, Buce. "Bootleggers and Baptists: The Education of a Regulatory Economist." Regulation 7, no. 3 (1983): 12-16.





December 18, 2011

When Christopher Hitchens Will Visit Nebraska



HitchensChristopherAfterTreatment2011-11-10.jpg











"Christopher Hitchens, after being released from the Texas hospital where he was treated for esophageal cancer." Source of caption and photo: online version of the NYT article quoted and cited below.




A few times I have had the pleasure of seeing Christopher Hitchens interviewed. His wit is always wonderful and he skewers much that deserves skewering. I admire his perseverance at being productive, even as he battles a difficult cancer. And I admire him for sticking to his reasoned principles, even when it might be easier to accept Pascal's Wager.

I have enjoyed the few reviews by Hitchens that I have read. I have purchased, but not yet read, two of his books---when I have read, I will write.

ADDENDUM: I wrote the above words back on November 10th, scheduled to run today. Yesterday I saw in the paper that Hitchens died on Thursday, December 15, 2011.



(p. C1) HOUSTON -- Christopher Hitchens, probably the country's most famous unbeliever, received the Freethinker of the Year Award at the annual convention of the Atheist Alliance of America here on Saturday. Mr. Hitchens was flattered by the honor, he said a few days beforehand, but also a little abashed. "I think being an atheist is something you are, not something you do," he explained, adding: "I'm not sure we need to be honored. We don't need positive reinforcement. On the other hand, we do need to stick up for ourselves, especially in a place like Texas, where they have laws, I think, that if you don't believe in Jesus Christ you can't run for sheriff."

Mr. Hitchens, a prolific essayist and the author of "God Is Not Great: How Religion Poisons Everything," discovered in June 2010 that he had Stage 4 esophageal cancer.


. . .


(p. C5) On balance, he reflected, the past year has been a pretty good one. He won a National Magazine Award, published "Arguably," debated Tony Blair in front of a huge audience and added two states to the list of those he has visited. "I lack only the Dakotas and Nebraska," he said, "though I may not get there unless someone comes up with some ethanol-based cancer treatment in Omaha."



For the full story, see:

CHARLES McGRATH. "A Voice, Still Vibrant, Reflects on Mortality." The New York Times (Mon., October 10, 2011): C1 & C5.

(Note: ellipsis added.)






October 2, 2011

Kiewit Corporation Earned Bonus from Los Angeles for Avoiding "Carmageddon"



MulhollandBridgeEndedEarly2011-08-10.jpg

"Los Angeles Mayor Antonio Villaraigosa, at left of group, and other officials celebrate the demolition of two lanes of the Mulholland Drive bridge over Interstate 405 ahead of schedule last weekend. The event that many feared would result in epic traffic jams ended early and calmly." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.


(p. 6A) They paid Kiewit to build the Mulholland Bridge.

Now they're paying Kiewit to tear it down.

And they'll pay Kiewit to build it again.

It's all part of the billion-dol­lar Interstate 405 improvement project in Los Angeles, which caught national attention last weekend when the busy freeway shut down for 36 hours so work­ers could remove the first chunk of the bridge that spans the Sepulveda Pass.

Omaha-based Kiewit Corp.'s Kiewit Infrastructure West Co. is the main contractor for the project.

Traffic officials in Southern California, who had predicted "Carmageddon" and warned motorists to stay away, were relieved when the closure of one of the nation's busiest freeways -- the stretch is traveled by an estimated 500,000 vehicles on a typical weekend -- ended on 11:30 a.m. Sunday instead of 5 a.m. Monday as originally planned.

Kiewit reportedly got a (p. 7A) $300,000 bonus for beating the deadline.



For the full story, see:

STEVE JORDON. "KIEWIT WORK ON 'CARMAGEDDON' BRIDGE; IT'S UP, DOWN AND UP." Omaha World-Herald (Sat., July 23, 2011): 6A-7A.






September 22, 2011

Deregulation Revived Railroads



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"ALL ABOARD: The Wasp magazine in 1881 lampooned railroad moguls as having regulators in the palms of their hands." Source of caricature: online version of the WSJ article quoted and cited below.




(p. C8) Mr. Klein has written thoroughly researched and scrupulously objective biographies of the previously much maligned Jay Gould and E.H. Harriman, remaking their public images by presenting them in full. Now he has published the third and final volume of his magisterial history of the Union Pacific railroad, taking the company from 1969 to the present day.

Union Pacific--the only one of the transcontinentals to remain in business under its original name--is now a flourishing business. Thanks to a series of mergers, it is one of the largest railroads in the world, with more than 37,000 miles of track across most of the American West. Thanks to its investment in new technology, it is also among the most efficient.

In 1969, though, the future of American railroading was in doubt as the industry struggled against competition from airplanes, automobiles and trucks--all of which were in effect heavily subsidized through the government's support for airports and the Interstate Highway System.

Another major factor in the decline of the railroads had been the stultifying hand of the Interstate Commerce Commission. The ICC had come into existence in the late 19th century to limit the often high-handed ways of the railroads as they wrestled with the difficult economics of an industry that has very high fixed costs. ( . . . .) But the ICC soon evolved into a cartel mechanism that discouraged innovation and wrapped the railroad industry in a cocoon of stultifying rules.

Mr. Klein notes that in 1975 he wrote a gloomy article about the sad state of an industry with a colorful past: "Unlike many other historical romances," he wrote back then, "the ending did not promise to be a happy one."

Fortunately, a deregulation movement that began under the Carter administration--yes, the Carter administration--limited the power of the ICC and then abolished it altogether. As Mr. Klein shows in the well-written "Union Pacific," the reduction of government interference left capitalism to work its magic and produce--with the help of dedicated and skillful management--the modern, efficient and profitable railroad that is the Union Pacific.



For the full review, see:

JOHN STEELE GORDON. "Tracks Across America." The Wall Street Journal (Sat., JUNE 11, 2011): C8.

(Note: ellipsis added.)


Book reviewed in the part of the review quoted above:

Klein, Maury. Union Pacific: The Reconfiguration: America's Greatest Railroad from 1969 to the Present. New York: Oxford University Press, USA, 2011.






September 21, 2011

Coralville Police Close 4-Year-Old Abigail's Lemonade Stand



(p. 2B) CORALVILLE -- Police closed down a lemonade stand in Coralville, telling its 4-year-old operator and her dad that she didn't have a permit.


. . .


Abigail's dad, Dustin Krutsinger, said the ordinance and its enforcers are going too far if they force a 4-year-old to abandon her lemonade stand.



For the full story, see:

AP. "Coralville shuts down girl's lemonade stand." Omaha World-Herald [Iowa Edition] (Weds., August 3, 2011): 2B.

(Note: ellipsis added.)

(Note: the online version of the article is dated August 2, 2011 and has the title "Girl's lemonade stand shut down.")



The next day, the Iowa Edition of the Omaha World-Herald ran an update:


(p. 2B) CORALVILLE -- Four-year-old Abigail Krutsinger wasn't the only lemonade stand operator who was closed down when RAGBRAI bicyclists poured into Coralville last week.

At least three stands run by children were closed down because they hadn't obtained permits and health inspections.



For the full story, see:

AP. "Coralville defends closing kids' stands." Omaha World-Herald [Iowa Edition] (Thurs., August 4, 2011): 2B.

(Note: the online version of the article is dated August 3, 2011, and has the title "More lemonade stands shuttered.")






July 23, 2011

$130,000 Federal Stimulus Used by Omaha Public Schools for Manual Attacking American Institutions



(p. 1A) The Omaha Public Schools used more than $130,000 in federal stimulus dollars to buy each teacher, administrator and staff member a manual on how to become more culturally sensitive.

The book by Virginia education consultants could raise some eyebrows with its viewpoints.

The authors assert that American government and institutions create advantages that "channel wealth and power to white people," that color-blindness will not end racism and that educators should "take action for social justice."

The book says that teachers should acknowledge historical systemic oppression in schools, including racism, sexism, homophobia and "ableism," defined by the authors as discrimination or prejudice against people with disabilities.

The authors argue that public school teachers must raise their cultural awareness to better serve minority students and improve academic achievement.



For the full story, see:

Joe Dejka. "OPS Says It Won't Go totally by the Book." Omaha World-Herald (Sunday, July 10, 2011): 1A & 2A.

(Note: the online version of the article has the title "OPS buys 8,000 diversity manuals.")





May 2, 2011

Omaha's Mayor Suttle Proposes Toilet Paper Tax



(p. 1A) Mayor Jim Suttle went to Washington Tuesday flush with ideas for how federal officials could help cities like Omaha pay for multibillion-dollar sewer projects.

Among the items on his brainstorming list: a proposal for a 10-cent federal tax on every roll of toilet paper you buy.

Based on the four-pack price for Charmin double rolls Tuesday at a midtown Hy-Vee, such a tax would add more than 10 percent to the per-roll price, pushing it over a buck.



For the full story, see:

MAGGIE O'BRIEN. "Mayor unrolls a novel way to wipe out sewer costs ■ His suggestion-- a toilet paper tax -- strikes some city industries as a gentler approach." Omaha World-Herald (Weds., March 23, 2011): 1A.

(Note: the online version has the slightly different title "Mayor unrolls a novel way to wipe out sewer costs ■ His idea-- a toilet paper tax -- strikes some city industries as a gentler approach.")





April 4, 2011

Father of Cornhusker Kickback Is Named "2010 Porker of the Year"



(p. 6A) Sen. Ben Nelson can't shake the "Cornhusker Kickback."

This week, a government watchdog group named the Nebraska Democrat its "2010 Porker of the Year," based on an online poll.

Citizens Against Government Waste included Nelson in the poll, citing his role negotiating a pro­vision of the federal health care bill that would have exempted Nebraska from paying the added costs of the law's expanded Med­icaid coverage. That provi­sion was later dropped in fa­vor of relief for all states, which Nelson has said was his goal all along.

Nelson cast the decisive 60th vote for the bill in late 2009.


. . .


Mark Fahleson, chairman of the Nebraska Republican Party, said Nelson was trying to rewrite history. "The fact is he's the fa­ther of the Cornhusker Kick­back," he said.



For the full story, see:

MICHAEL O'CONNOR. "Nelson rejects group's 'Porker of Year' label." Omaha World-Herald (Fri., March 4, 2011): 6A.

(Note: ellipsis added.)





January 31, 2011

Feds Protect Us from Freshly Baked Cookies



MastersElementaryBakeSale2011-01-30.jpg
"Schools like Omaha's Masters Elementary, which held a recent holiday bake sale, count on the profits from selling cupcakes, caramel corn and other goodies to raise money for field trips and other activities." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.



(p. 1A) A business club at Millard West High School peddles freshly baked cookies, raking in $15,000 annually to help send students to national conferences.

At Omaha's Masters Elementary, cupcakes, fudge and other bake-sale treats raise $500 for field trips, rain jackets for the safety patrol and playground equipment.

But the federal government could slam the brakes on those brownies and lower the boom on the lemon bars.

A child nutrition bill passed recently by Congress gives a fed­eral agency the power to limit the frequency of school bake sales and other school-sponsored fundraisers that sell unhealthy food.

To some, the bake sale provision makes about as much sense as leav­ing the marshmallows out of Rice Krispies treats.

It maybe makes sense for the fed­eral government to monitor the qual­ity of ground beef, eggs and milk sold in grocery stores. But caramel corn and snicker doodles whipped up by parents for school bake sales?

"Aren't there more important (p. 2A) things for them to be wor­ried about?" Sandy Hatcher, president of Masters' parent organization, said of the fed­eral government.



For the full story, see:

MICHAEL O'CONNOR. "Putting the brakes on bake sales; New federal rules on frequency during school day may affect fundraising." Omaha World-Herald (Sun., December 12, 2010): 1A-2A.






November 6, 2010

Chinese Government Fines BYD and Seizes BYD Factory Site



WangMungerBuffettBYD2010-10-23.jpg"BYD Chairman Wang Chuanfu, left, at a celebration last month in Shenzhen city with Berkshire Hathaway's Charles Munger, center, and Warren Buffett." Source of caption and photo: online version of the WSJ article quoted and cited below.


(p. B3) BEIJING--China's central government ordered BYD Co. to surrender land in a zoning dispute, a decision that is likely to slow the Chinese battery and auto maker's push to expand in the nation's growing auto market.

China's Ministry of Land and Resources also hit BYD with a 2.95 million yuan ($442,000) fine, the ministry said on its website Wednesday. The ministry confiscated 121 acres of land in the central Chinese city of Xian, where BYD executives said the company has been building a car assembly plant. BYD had hoped to start production at the complex as early as next year.

The ministry said zoning for the land was "illegally adjusted" to industrial use from agricultural use but didn't elaborate. The decision comes as some government officials have shown concern about excess capacity in the auto industry.


. . .


Mid American Energy Holdings Co., a unit of Warren Buffett's Berkshire Hathaway Inc., owns 10% of BYD.



For the full story, see:

NORIHIKO SHIROUZU. "China Deals a Setback to BYD." The Wall Street Journal (Thurs., OCTOBER 14, 2010): B3.

(Note: ellipsis added.)

(Note: the online version of the article has the title "Beijing Halts Construction of BYD Auto Plant.")





November 4, 2010

Consumers Sack Noisy Green Bags



SunChips2010-10-23.jpg














"Frito-Lay aims to quell complaints about SunChips bags by dumping the new bags for the old packaging." Source of caption and photo: online version of the Omaha World-Herald article cited below.



The Omaha World-Herald ran a similar article to the WSJ article quoted below, in which they noted that the noisy Sun Chip bags are made from Inego which is a plastic made from corn at a Cargill facility in Blair, Nebraska.


(p. B8) Frito-Lay, the snack giant owned by PepsiCo Inc., says it is pulling most of the biodegradable packaging it uses for its Sun Chips snacks, following an outcry from consumers who complained the new bags were too noisy.

Touted by Frito-Lay as 100% compostable, the packaging, made from biodegradable plant material, began hitting store shelves in January. Sales of the multigrain snack have since tumbled.


. . .


Consumers have posted videos on the Web poking fun at the new bags and lodged fierce complaints on social-networking sites. Since January, year-on-year sales of Sun Chips have decreased each month, according to SymphonyIRI, a Chicago market-research firm that tracks sales at retailers.



For the full story, see:

SUZANNE VRANICA. "Sun Chips Bag to Lose Its Crunch." The Wall Street Journal (Weds., OCTOBER 6, 2010): B8.

(Note: ellipsis added.)

(Note: I noticed the "sack" pun in a commentary by Eric Felton, WSJ, 10/8/2010.)


The Omaha World-Herald article mentioned above, is:

AP. "Frito-Lay Is Pulling Most Noisy Bags from Shelves." Omaha World-Herald (Tuesday, October 5, 2010): 1D & 2D.

(Note: the online version of the article has the title "Frito-Lay pulls most noisy bags.")





October 21, 2010

Joe Ricketts Stands Tall Against Earmarks



RickettsJoe2010-10-01.jpg







Entrepreneur Joe Ricketts. Source of photo: online version of the Omaha World-Herald article quoted and cited below.



I used to teach an Economics of Technology course in the UNO EMBA program (until a curriculum committee axed the course). As a long-shot I once invited Joe Ricketts to speak to the class. I was surprised that he accepted, and maybe also surprised that he clearly invested some time and thought in his presentation. The class was riveted not only by the story of his own entrepreneurial challenges, but also of his views of the policy issues of the day. I remember his good-natured persistence in arguing with one student who challenged him on his view of the importance of tort-reform.

From his manner, and some of the stories he told, he seemed to be the sort of entrepreneur who exemplified George Gilder's view that great entrepreneurs have a kind of humility that leaves them open to learning, at least in key areas related to their business goals. By all accounts, Sam Walton was another example. And I heard Charles Koch speak this summer and saw him interact with some of his executives; he also gave the impression of being down-to-earth, and open to learning.

(Of course, then there's Steve Jobs and Larry Ellison---generalizations on entrepreneurship are hard to come by!)

Ricketts and Koch also share another trait---this one too rare among successful entrepreneurs. They are both willing to invest a considerable part of their hard-earned wealth in order to preserve and protect the institutions of limited government that will make it possible for future entrepreneurs to succeed. In Ricketts' case, for example:


(p. 7A) WASHINGTON -- Joe Ricketts wants to bring down at least one Capitol Hill lawmaker who seeks earmarks so he can get the rest of Congress' attention.

The founder and former CEO of what is now TD Ameritrade has started a new organization called Taxpayers Against Earmarks, which will seek to highlight what he describes as the evils of legislators setting aside money for pet projects back home.


. . .


Ricketts said that while some earmarks support worthy projects, he is against them all because the process is flawed. He compared those who support earmarks to addicts and criminals.

"I'm sure that all over the country there are people that like earmarks and people come to defend earmarks, and those are the people that are on the dope," he said.

Ricketts said those who seek earmarks are asking legislators to spend other people's money for their purposes.

"That's theft," he said. "As Tom Coburn says, that's intergenerational theft. So those people that like earmarks, you can consider thieves."


. . .


Ricketts said . . . the process encourages lawmakers to throw their support behind other spending bills to gain other lawmakers' support for their earmarks.

"A lot of elected officials like the earmarks, but they've never had anybody like me or anybody else push back. ... So now the scales are going to balance a little bit," he said. "I'm going to spend as many years and as many dollars as it takes to be successful."



For the full story, see:

Joseph Morton. "Joe Ricketts Will Put Up Big Bucks to Fight Earmarks." Omaha World-Herald (Friday, October 1, 2010): 7A.

(Note: all ellipses added, except for the last one which was in the original.)

(Note: the online version of the article has the title "Joe Ricketts will help fight earmarks.")





September 27, 2010

Twitter CEO Returned to Nebraska to Found First Company



WilliamsEvanTwitter2010-09-02.jpg











Evan Williams, Twitter CEO. Source of photo: online version of the NYT article quoted and cited below.



(p. 9) I GREW up on a farm in Nebraska, where we grew mostly corn and soybeans. During the summers I was responsible for making sure the crops were irrigated.

After high school, I enrolled at the University of Nebraska at Lincoln, but I stayed only a year and a half. I felt college was a waste of time; I wanted to start working. I moved to Florida, where I did some freelance copywriting. After that I moved to Texas and stayed with my older sister while I figured out what to do next. In 1994, I returned to Nebraska and started my first company with my dad.

We didn't know anything about the Internet, but I thought it was going to be a big deal. We produced CD-ROMs and a video on how to use the Internet, and we did some Web hosting. I recruited some friends and we tossed around some ideas, but none of us knew how to write software and we didn't have much money. We watched what entrepreneurs in California were doing and tried to play along.

. . .


My life has been a series of well-orchestrated accidents; I've always suffered from hallucinogenic optimism. I was broke for more than 10 years. I remember staying up all night one night at my first company and looking in couch cushions the next morning for some change to buy coffee. I've been able to pay my father back, which is nice, and my mother doesn't worry about me as much since I got married a year and a half ago.



For the full story, see:

EVAN WILLIAMS. "The Boss; For Twitter C.E.O., Well-Orchestrated Accidents." The New York Times, SundayBusiness Section (Sun., March 8, 2009): 9.

(Note: the online version of the story is dated March 7, 2009.)





June 7, 2010

Class Action Suit Did Little for Class Members, But "Enriched" Attorneys



Many attorneys are good people, including my late father, one of my brothers, and one of my favorite former students.

But a few attorneys must be conscience-challenged; for instance the ones "representing" the class in the case described below.

More importantly, class-action litigation increases the costs and uncertainty of doing business, and thereby increases the prices of the products and services we buy.

In speaking to one of my classes a few years ago, Omaha entrepreneur Joe Ricketts made a strong case for tort reform. it is hard to disagree, unless, like the Democratic Party, you are receiving large contributions from trial lawyers.


(p. B1) . . . , a 2008 settlement of a class action against Ford Motor Co., involving incidents in which Firestone tires exploded on Ford Explorers, offered certain Explorer owners coupons worth $500 toward the purchase of a new Explorer and $300 toward the purchase of any other Ford vehicle.

As of March, only 148 people had redeemed a coupon out of 1,647 people eligible. The plaintiffs' attorneys who led that litigation collected about $19 million in fees.

"It was rather absurd," said Julie Hamilton Webber of Glendale, Calif., a class member who has a 1993 Ford Explorer. "The net result was the attorneys were enriched and did nothing for the class."



For the full story, see:

DIONNE SEARCEY. "Toyota Owners May Reap Little." The Wall Street Journal (Thurs., MAY 20, 2010): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the article has the slightly different title "Toyota Owners May See Little.")





May 26, 2010

Reid on Ben Nelson's Cornhusker Kickback: "He Got This for Him­self; He Wanted It"



(p. 5A) WASHINGTON -- Senate Ma­jority Leader Harry Reid this week defended the now-defunct Nebraska Medicaid exemption that was tucked into the Senate health care bill as Reid sought the support of Sen. Ben Nelson, D-Neb.

Nelson has said that he never asked for the exemption and that his goal all along was to provide relief for all states.

Tagged with the derisive moni­ker "Cornhusker kickback," the arrangement quickly proved po­litically toxic.


. . .


Asked why he didn't offer the same deal to every state from the start, Reid said, "Because I didn't have it for everybody at that time. I thought I could get it as we moved along in the legisla­tion, and I did."

Van Susteren said: "You're telling me that when Ben Nelson got that, when the two of you sat down together, you said, 'Ben, we'll do it this way. ... Nebraska's got it now, but after we get this passed we're going to go for ev­erybody?' " "No, no, no. He got this for him­self. He wanted it," Reid said.



For the full story, see:

JOSEPH MORTON. "Reid thought Nelson should boast of 'kickback'; The Senate leader says it was a "terrific" Medicaid deal that all states now share." Omaha World-Herald (Weds., April 7, 2010): 5A.

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





May 25, 2010

Walter Scott Endorses Nuclear as Only Economically Viable Green Energy Source



SokolScottAbelBuffett2010-05-18.jpg
















"MidAmerican shareholders. David Sokol, Walter Scott, Greg Abel and Warren Buffett." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below. (Note: bold added.)


(p. 1D) Despite recent steps to encourage wind-generated electricity in Nebraska, Omaha businessman and philanthropist Walter Scott said Thursday that nuclear power is the only economically viable way to generate electricity without carbon-dioxide emissions.

"To me, that is the ultimate answer if you want to reduce carbon dioxide," Scott told about 150 people at a breakfast session of the Omaha chapter of the Association for Corporate Growth, held at Happy Hollow Club.

Solar and wind-generated electricity require government subsidies, Scott said. And because the 1979 accident at Three Mile Island, Pa., shut down nuclear energy construction in the United States, this country will have to buy its new nuclear-generating equipment from France and Japan, which dominate that industry, he said.

"Isn't that a wonderful thing?" asked Scott, who also said electric vehicles eventually will capture a significant market.

The Three Mile Island accident "shook people up" even though no one was killed and the containment vessel worked as designed by engineers to prevent radioactive material from spreading, said Scott, chairman-emeritus of Peter Kiewit Sons' Inc. and a director of several corporations, including Berkshire Hathaway Inc.

Kiewit has been involved in the energy industry for decades, he noted, and Berkshire's energy division, MidAmerican Energy Holdings Co., has substantial wind farms in Iowa and several other states. But those wind farms are viable only because they operate under government rules that guarantee a return on investment, even with their higher costs, Scott said.



For the full story, see:

Steve Jordon. To Cut Carbon, Go Nuclear; It's the Ultimate Answer for Reducing Emissions, the Kiewit Official Suggests in a Speech." Omaha World-Herald (Friday, May 14, 2010): 1D-2D.

(Note: the online version of the article had the title "Scott: To go green, go nuclear.")





May 23, 2010

Ben "Kickback" Nelson Seeks More Earmarks



NelsonBenEarmarksGraph2010-05-18.jpg Source of graph and photo: online version of the Omaha World-Herald article quoted and cited below.


(p. 1A) WASHINGTON -- In the battle to secure federal earmarks for Nebraska, Sen. Ben Nelson is feeling lonely this year.

The Nebraska Democrat is seeking 51 earmarks worth $183.1 million. The four other members of the Nebraska con­gressional delegation, all Republicans, have submitted no requests this year, three of them agreeing to a House GOP moratorium.

That's a big change from 2009, when Rep. Lee Terry re­quested 11 earmarks totaling more than $85 million, Rep. Jeff Fortenberry sought 28 earmarks totaling more than $75 million and Rep. Adrian Smith sought two earmarks to­taling $1.2 million.

Sen. Mike Johanns has abstained from seeking earmarks since joining the Senate in 2009.


. . .


(p. 2A) Johanns has criticized ear­marking as a method of direct­ing taxpayer money based on lawmaker clout rather than a project's merits. He said last week that the process would be better if lawmakers had to jus­tify their individual earmarks at hearings.




For the full story, see:

JOSEPH MORTON . "Nelson stands alone on earmark requests; He is seeking $183 million for Nebraska projects while the state's GOP lawmakers sit out this round." Omaha World-Herald (Tues., May 18, 2010): 1A & 2A.

(Note: ellipsis added.)





May 17, 2010

CNN Says Omaha Economy is Strong Because Citizens "Living Within Their Means"





"Why Omaha, Nebraska, is seeing a small business boom and boasts of having one of the lowest unemployment rates." Source of caption and video: http://money.cnn.com/video/news/2010/05/06/n_omaha_economy.cnnmoney/



Several days ago, CNN Money ran a very nice clip focusing on why Omaha's economy has fared better than the economies of many other U.S. cities. The piece was mainly brief fluff, though pleasant, complementary fluff.

But the one message of substance was that Nebraskans, and usually Nebraska governments, work harder at not spending more than we take in.

(The reporter for the piece is CNN Money's Poppy Harlow. Posted by CNN on May 6, 2010. Run time: 02:09.)





May 8, 2010

FDR's Bad Bet on Aksarben



The "RA" mentioned in the passage quoted below, refers to FDR's "Resettlement Administration" program.

"Aksarben" is much better known to Nebraskans today as a much-beloved, but now defunct, horse racing track in Omaha, than as Nebraska's part in FDR's government housing debacle.


(p. 69) With a staff of (p. 70) 13,000 and a mammoth $250 million to spend, Tugwell made plans for resettling thousands of tenants and marginal farmers into new model communities.

The result was a disaster. "It was all done awkwardly and wastefully," Tugwell later confessed about the work of the RA. Even Roosevelt himself conceded, "I don't think we have a leg to stand on," when confronted with the high costs of the model towns Tugwell was building. Drawing model communities on paper was one thing, but it was another thing to relocate real tenant farmers into affordable houses far away in real towns with functioning services. One of Tugwell's model communities was Arthurdale in West Virginia. A major problem there was that the ready-made houses could not fit their foundations. Once that problem was solved, the planners discovered that most residents, people from poor backgrounds, could not afford to live there. That protest became a common one in model communities all over the nation. Finding meaningful and profitable work for unskilled laborers was another recurring complaint.24

What that meant was that sometimes the RA had communities built, but no residents either willing or able to move in. An example of this was Ak-Sar-Ben (Nebraska spelled backward), a "dream city" of thirty-eight green-shuttered houses, each on seven acres of land twenty miles west of Omaha on the Platte River. The problem was that no one wanted to move in. Ak-Sar-Ben became deserted. Nearby farmer Henry C. Glissman observed this project and drew this conclusion: "I predict that in time these homes will all be abandoned and stand as a gruesome monument to a government's inefficiency and folly in fostering a movement that to a practical mind has the earmarks of failure from the start."




Source:

Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR's Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.

(Note: ellipses in original.)





April 20, 2010

"We Don't Lie Out Here; We Just Remember Big"



(p. W11) Americans love a winner and they remember what they want to remember, and so let us now remember the Central Overland California & Pike's Peak Express Co.--known from the day it began 150 years ago on April 3, 1860, as the Pony Express.

We remember the Pony Express as one of the most enduring and endearing of American stories, a tale of the frontier, a story of bold entrepreneurs, daring young horsemen, true riders of the purple sage and all that. In truth, the venture hemorrhaged money from day one, was doomed by technology (another particularly American story), lasted a mere 78 weeks, ruined its backers and then disappeared into what historian Bernard DeVoto called "the border land of fable." Across the wide Missouri, fact and fantasy collided and the Pony Express became "a tale of truth, half-truth and no truth at all," as another historian observed.


. . .


The service was shut down in the flash of a telegrapher's key when the transcontinental telegraph was completed in October 1861. The records of the business, if there were any records, were lost. That would prove liberating for later chroniclers.


. . .


If the Pony Express continues to thrill and baffle us, consider the words of an old horseman in western Nebraska who advised me when I expressed some concerns about the pedigree of this yarn. "We don't lie out here," he explained kindly. "We just remember big."




For the full commentary, see:

CHRISTOPHER CORBETT. "Real (and Fake) Hoofbeats of the Pony Express." The Wall Street Journal (Fri., APRIL 2, 2010): W11.

(Note: ellipses added.)





April 15, 2010

Taxpayers Taking a Haircut as States "Scramble" to Find Something New to Tax



HaircutTaxpayer2010-04-05.jpg"A LITTLE OFF THE TOP; Michigan residents may have to pay a 5.5 percent tax for haircuts. States across the nation are considering similar taxes on services to solve their budget problems." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. 1) In the scramble to find something, anything, to generate more revenue, states are considering new taxes on virtually everything: garbage pickup, dating services, bowling night, haircuts, even clowns.

"It's hard enough doing what we do," grumbled John Luke, a plumber in the Philadelphia suburbs. His services would, for the first time, come with an added tax if the governor has his way.

Opponents of imposing taxes on services like funerals, legal advice, helicopter rides and dry cleaning argue that this push comes as businesses are barely clinging to life and can ill afford to see customers further put off by new taxes. This is especially true, they say, in states like Michigan and Pennsylvania, where some of the most sweeping proposals are being considered this spring.

But this is also a period of economic gloom for states. Pension funds are in the red, federal stimulus help will soon vanish, and revenues from traditional sources like income and property taxes are slumping ever lower, with few elected officials willing to risk voter wrath by raising them.


. . .


(p. 20) But from coast to coast, desperate governments are looking to tap into new revenue streams.

In Nebraska, a lawmaker has introduced a bill to tax armored car services, farm equipment repairs, shoe shines, taxidermy, reflexology and scooter repairs. In Kentucky, Jim Wayne, a state representative, and some fellow Democrats are proposing taxing high-end services: golf greens fees, limousine and hot-air-balloon rides, and private landscaping.

In June, voters in Maine will decide whether to accept a state overhaul of its tax system that would newly tax services like tailor alterations, blimp rides, and entertainment provided by clowns, comedians and jugglers.




For the full story, see:

MONICA DAVEY. "States Seeking Cash Hope to Expand Taxes to Services." The New York Times, First Section (Sun., ed: March 28, 2010): 1 & 20.

(Note: ellipsis added.)

(Note: the online version of the article is dated March 27, 2010, and has the title "States Seeking Cash Hope to Expand Taxes to Services.")


ServicesTaxedGraph2010-04-05.jpg Source of graph: online version of the NYT article quoted and cited above.






March 5, 2010

Arnold on Ben Nelson's Cornhusker Kickback: "He Got the Corn; We Got the Husk"



(p. A16) Senator Ben Nelson, Democrat of Nebraska, has been under fire in recent days for winning some plum provisions for his home state in exchange for voting for his party's big health care legislation.


. . .


In perhaps the most pointed criticism yet, Gov. Arnold Schwarzenegger of California, in his State of the State address on Wednesday, said: "California's Congressional delegation should either vote against this bill that is a disaster for California or get in there and fight for the same sweetheart deal Senator Nelson of Nebraska got for the Cornhusker State. He got the corn; we got the husk."




For the full story, see:

DAVID M. HERSZENHORN. "Prescriptions; Making Sense of the Health Care Debate; Spreading the Golden Corn." The New York Times (Fri., January 8, 2010): A16.

(Note: the online version of the story had the very different title: "Prescriptions; Making Sense of the Health Care Debate; Nelson to Fight for All States" and had the date January 7, 2010.")

(Note: ellipsis added.)





March 2, 2010

Light in "Meet Me in St. Louis"



MeetMeInSaintLouisLights2010-02-07.jpgSource of photo: http://www.thejudyroom.com/louis/pictures/mmisldvd%23674.html


As Brad DeLong has noted, we take for granted the spectacular technological advances of the last 200, and especially, the last 100 years. One of the more notable of these, the spread of electricity that allowed electric illumination, occurred around the year 1900.

We forget how electric illumination made cities safer, and increased our freedom to choose the timing of work and leisure activities.

The awe inspired by electric lights also usually has been forgotten, but is occasionally recalled. One good source is a segment of a documentary produced by UNO television in 1998, to mark the centennial of Omaha's long-forgotten Trans-Mississippi Exposition.

I recently ran across another in viewing the closing scenes of the Judy Garland classic "Meet Me in St. Louis." In the final scene, the family finally makes it to the St. Louis Fair, and observes the display of electric lights.


For DeLong's comment, peruse the early pages of his marvelous draft:

DeLong, J. Bradford. "Cornucopia: The Pace of Economic Growth in the Twentieth Century." NBER Working Paper w7602, March 2000.

The UNO documentary had the unfortunate title "Westward the Empire: Omaha's World Fair of 1898."



MeetMeInSaintLouisViewingLights2010-02-07.jpgSource of photo: http://www.thejudyroom.com/louis/pictures/judytomlarge.html





January 11, 2010

NSF Study Shows Many Himalayan Glaciers Growing Larger



HimalayasWesternIce2010-01-07.jpg"This photo taken from the International Space Station in 2004 shows the abundance of ice in the Himalayas, upon which much of the continent of Asia relies for water." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.


(p. 1A) Two UNO professors have discovered that some glaciers in Pakistan are growing in size -- a discovery that could toss them into the center of a climate-change controversy.


. . .


(p. 2A) News of the research is beginning to leak into science publications. "Science" magazine, for instance, mentioned the as-yet unpublished University of Nebraska at Omaha research in a November story about the debate over Himalayan glaciers.

The UNO research team will attract more attention Friday, when Shroder and Bishop give their presentation at the American Geophysical Union's annual conference.

What they'll present is decades in the making: Shroder first received federal funding to study Afghanistan's geography and geology in 1977, and he has taken 20 research trips to Pakistan since then.

Using a grant from the U.S. National Science Foundation, Shroder and Bishop and a team of graduate students trekked to a group of glaciers clustered around K2, the second-highest mountain in the world, in 2005.

What they found was startling: Their on-the-ground research and satellite images show that many of the glaciers are growing in the rugged, mostly uninhabited region on the Pakistani-Chinese border.


. . .


Shroder achieved brief fame in intelligence circles when he snuck from Kabul to the Salang Pass in northern Afghanistan in the 1980s. There, he took photos of North Korean troops who had crossed the border to support the Red Army -- knowledge that American intelligence agencies didn't have until Shroder handed over the photos.

Now the veteran professor is bracing himself for a potential backlash when the UNO team's research paper comes out in the next few weeks.




For the full story, see:

Matthew Hansen. "UNO Scientists Pinpoint Global Warming Oddity in Himalayas." Omaha World-Herald (Thurs., December 17, 2009): 1A-2A.

(Note: ellipses added.)

(Note: the online version of the article had the title "These glaciers are growing.")



ShroderJack2010-01-07.jpg












Regents Professor Jack Shroder. Source of photo: http://www.unomaha.edu/glims/img/Portraits/Jack%20shroder-visa.jpg






October 29, 2009

Federal "Stimulus" Money Delays Omaha Road Work



Omaha132ndStreet2009-10-09.jpg "Work has been put on hold for this stretch of 132nd Street between Blondo Street and West Maple Road. Omaha officials say the stimulus funds will be worth the wait, but some nearby residents are upset about the slowdown." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.


We live near the still-two-lane stretch of 132nd pictured above, and were happy to read in the Omaha World-Herald early last spring that the city would be finishing the widening of 132nd, by widening the above stretch during the summer of 2009. As the summer progressed and widening did not, we became more and more puzzled.

Well, after you read the passages quoted below, you will 'know the rest of the story' as Paul Harvey used to say:


(p. 1A) The federal stimulus program, which was designed to accelerate roads projects around the country, instead put the brakes on widening a major Omaha thoroughfare.

The chance to grab $3.5 million in stimulus funds was worth delaying a widening project along 132nd Street between West Maple Road and Blondo Street, Omaha officials decided.

Work was supposed to begin last summer. Now the project between the Champions and Eagle Run golf courses won't begin until next spring.

Preliminary work was begun in March, when utility lines were moved out of the way. Part of the street was closed for that work.

Area residents expected more crews to start work during the summer.

When nothing happened for months, a handful of residents in the nearby Sunridge neighborhood called the city. They com-(p. A2)plained that digging from the utility work was causing mud and rainwater to pool near the subdivision's entrances off 132nd Street.

Resident Mary Ellen Pollard was surprised to find out that the widening work had been put on hold because of the stimulus program.

"I thought that stimulus package was for projects that were ready to go," she said Monday. "If it was ready to go, why didn't they proceed with it? . . . The barricades are up. Let's go get it done."

Plans change, public works officials said.

Meeting federal stimulus guidelines for environmental studies on the 132nd Street project, plus other planning and documentation requirements, took several months, City Engineer Charlie Krajicek said.

"We expected to have some work going this year, but it just didn't work out," he said.



For the full story, see:

Tom Shaw. "Stimulus slows 132nd St. work." Omaha World-Herald (Tuesday October 6, 2009): 1A-2A.

(Note: the online version of the article is dated Weds., October 7 and has the slightly expanded title: "Stimulus Watch: Program slows 132nd St. work.")

(Note: ellipsis in original.)


Omaha132ndStreetMap2009-10-09.jpg


















Source of map: online version of the Omaha World-Herald article quoted and cited above.






October 4, 2009

55% of Nebraskans Favor School Vouchers



The Friedman Foundation mentioned in the passage below, was founded by Nobel Prize winning economist Milton Friedman who is often credited with creating the idea of education vouchers in his classic book Capitalism and Freedom.

Capitalism and Freedom was based on a series of lectures that Friedman delivered at Wabash College at the invitation of my much-missed mentor Ben Rogge. (Before teaching me economics in Indiana, Rogge was a native Nebraskan who earned his bachelor's degree from Hastings College.)


(p. 4B) A majority of Nebraskans are open to school-choice reforms such as school vouchers and tax­-credit scholarships, according to a survey made public Thurs­day by a national school-choice group.

"It really appears Nebraska is ready to start talking about school-choice reform options," said Paul DiPerna, director of partner services for the Fried­man Foundation for Educational Choice, which commissioned the survey.

The group partnered with the Nebraska Catholic Conference and other state and national groups to conduct the telephone survey of 1,200 likely voters.

Fifty-five percent of those sur­veyed said they favored school vouchers and supported a tax­-credit scholarship system, which would give tax credits to indi­viduals and businesses that con­tribute money to nonprofit orga­nizations that distribute private school scholarships.



For the full story, see:

Dejka, Joe. "Support for school choice tax plan seen; An Indianapolis organization says its survey shows Nebraskans would back a pending bill." Omaha World-Herald (Fri., Sept. 18, 2009): 4B.





September 19, 2009

Omaha's MidAmerican Energy "Is Ready to Assist BYD's Foray into the U.S. Auto Market"



WangChuanfuBYDchairman2009--09-7.jpg "Wang Chuanfu, the chairman of Chinese auto maker BYD, with one of the company's cars at the automobile show in Detroit in January." Source of photo and caption: online version of the WSJ article quoted and cited below.


(p. B5) XIAN, China -- BYD Co., the Chinese auto maker part-owned by Warren Buffett's company, is finalizing plans for an all-electric battery car that would be sold in the U.S. next year, ahead of the original schedule, Chairman Wang Chuanfu said.


. . .


One source of Mr. Wang's confidence in attacking the U.S. car market is BYD's ties with MidAmerican Energy Holding Co., the unit of Mr. Buffett's Berkshire Hathaway Inc. that paid about $230 million for a 9.9% stake in BYD.

MidAmerican Chairman David Sokol, who was also interviewed in Xian, said MidAmerican is ready to assist BYD's foray into the U.S. auto market in "any way we could be helpful." MidAmerican also might invest in BYD's new initiatives in the U.S., which, in addition to automobiles, could involve solar panels and battery technology for power utilities.

Mr. Sokol also said MidAmerican hopes to boost its BYD stake if the chance arises. "If in the future there is an opportunity for us to continue to invest in BYD, we will be happy to increase our stake over time, but we will do it in cooperation with BYD," he said. Mr. Wang said an increase is "negotiable."



For the full story, see:

NORIHIKO SHIROUZU. "BYD to Sell Electric Car in U.S. Market Next Year." The Wall Street Journal (Sat., AUGUST 22, 2009): B5.

(Note: ellipsis added.)





July 28, 2009

Most Entrepreneurial Tycoons "Begin as Rebels and Outsiders"



(p. 8) Because entrepreneurship overthrows establishments rather than undergirds them, the entrepreneurial tycoons mostly begin as rebels and outsiders. Often they live in out-of-the-way places-- like Bentonville, Arkansas; Omaha, Nebraska; or Mission Hills, Kansas--mentioned in New York, if at all, as the punch lines of comedy routines. When these entrepreneurs move into high society, they are usually inheritors on the way down.


Source:

Gilder, George. Recapturing the Spirit of Enterprise: Updated for the 1990s. updated ed. New York: ICS Press, 1992.





June 26, 2009

There's Still Space in Diamond's Fall Seminar on the Economics of Entrepreneurship at the University of Nebraska at Omaha



EntrepreneurshipPosterRevised.jpg




February 23, 2009

UNO Economics Students Embrace Entrepreneurship



SstanleyGrant.jpg






"The company was founded with the thought that a recession would happen," said Grant Stanley, founder of marketing analytics firm Contemporary Analysis." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited below.



Grant was a student in my Economics of Technology and Economics of Entrepreneurship classes; Tadd was a student in my Honors Colloquium on Creative Destruction; Luis was a student in my Principle of Economics--Micro class. They have chosen an exciting path, and I wish them well!


(p. 1D) Grant Stanley was studying economics at the University of Nebraska at Omaha last year when he identified a business opportunity in the deteriorating economy.

A company making use of econometrics - a field that combines math, statistics and economics - could help small and midsize businesses make decisions in areas such as hiring, and sales and marketing techniques. Econometrics is widely used in education, government and large companies, Stanley said, but usually isn't applied to smaller businesses.

Stanley thought the need for business forecasting and marketing analytics firms would grow as companies looked for help developing long-term strategies in order to survive an economic downturn.

So Stanley, who was only 20 years old at the time, started Contemporary Analysis, a marketing analytics firm, in March 2008.

"The company was founded with the thought that a recession would happen."

Stanley courted classmate Tadd Wood, who also was 20 and studying economics, to help start the business, but it wasn't an easy task. Wood already had a part-time job and was helping out in his family's business.

"Tadd took months of, 'Hey, want to hang out?'" before he agreed, Stanley said.

The young men met their third partner - Luis Lopez, 20 - through a friend over the summer, and the trio hit the ground running.



For the full story, see:

STEFANIE MONGE. "Pitching a startup in a downturn." Omaha World-Herald (Monday, February 2, 2009): 1D & 3D.


StanleyGrantStartupGroup.jpg "Members of the Contemporary Analysis team at a conference table in the home of Paddy Tarlton. From left are Luis Lopez, Nancy Jimenez, Grant Stanley, Tarlton and Tadd Wood." Source of caption and photo: online version of the Omaha World-Herald article quoted and cited above.





December 27, 2008

How to Run a Business in Nebraska


DeathOfAGunfighterBK.jpg







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

(p. A15) How exactly did Jack get to be so wild? It appears -- and even the redoubtable Mr. Rottenberg acknowledges that the documentation is often sparse -- that Jack got into the freight-hauling business and one thing led to another, including stage coaching, supervising the mails and helping to run the Pony Express. In his heyday, Slade was the boss of the Express's fabled Sweetwater division, said to be the most dangerous stretch of the overland route, from Nebraska to Salt Lake City, 500 hard miles of hard country, hard men, hard weather and unfriendly Indians. One chronicler noted about Slade that "from Fort Kearney, west, he was feared a great deal more than the Almighty."

Freight hauling was not the space program. A man could get into this line of work easily if he had the physical stamina and the nerve. But it was dangerous work. A man might run into some rough customers. Perhaps the most celebrated of these, in Slade's case, was an ornery French-Canadian named Jules Beni, with whom he had a long-standing feud. Jules eventually shot Slade, in 1860, riddling him with bullets and leaving him for dead. But Slade was made of tougher stuff and would settle the score. A year later he killed Beni and carried the dead man's ears around as a souvenir, pulling them out for display from time to time to the alarm of fellow saloon patrons. A previous account of Slade's life was in fact titled "An Ear in His Pocket." Now that's a bad man!



For the full review, see:

CHRISTOPHER CORBETT. "BOOKShelf; A Desperado Rides Again." The Wall Street Journal (Tues., NOVEMBER 11, 2008): A15.

Reference to the book being reviewed:

Rottenberg, Dan. Death of a Gunfighter. Westholme Publishing, 2008.




December 14, 2008

Government Regulation Kills the River City Star



We enjoyed several cruises on the River City Star over the past many years. Apparently no more.

It is silly to think that Homeland Security regulations can make us significantly safer when traveling on the River City Star.

I judge the risks as small, and the best way to prepare for whatever risks there are, would be to take the sorts of steps advocated by Amanda Ripley in her book The Unthinkable. One of the main lessons of her book is that it is not primarily government regulations and professionals that make us safer, but the alertness and preparation of regular people.

Maybe Homeland Security disagrees with my assessment of the risks. But who are they to tell me what risks I am not permitted to take? (That's what they are in effect doing when they increase the costs of sailing the River City Star to the point that it is turned into a non-sailing restaurant.)

(p. 1B) The River City Star will make its final voyage Thursday to a new home in Plattsmouth, where it will become a floating restaurant. Two new riverboats will replace it along Omaha's riverfront.

The Star, previously called the Belle of Brownville, operated as an excursion boat for cruises for more than 40 years.

Larry Richling, the boat's most recent owner, said he decided to sell the boat because federal regulations for boats capable of carrying more than 300 passengers became too costly after the 9/11 terrorist attacks.

The smaller boats, each with a capacity of 149 passengers, fall in a different category with fewer regulations, he said, and will be cheaper to operate.

. . .

(p. 2B) "There's nothing wrong with the boat. The boat is in fantastic condition," Richling said.

Richling said he would have had to invest at least $500,000 in the River City Star to meet Homeland Security Department requirements, but those requirements won't apply if it is permanently docked.



For the full story, see:

CHRISTINE LAUE. "River City Star Going South; Boat Will Become a Plattsmouth Restaurant." Omaha World-Herald (Thursday, December 4, 2008): 1B-2B.

(Note: ellipsis added.)

(Note: the online version of the title was: "River City Star Making Final Voyage.")





September 19, 2008

Obama Has Doubts About Justice of Current 'Affirmative Action' Laws


ObamaHarvardLaw.jpg "Barack Obama at Harvard, where he was the first black president of The Harvard Law Review." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Mr. Obama, a Democrat, has continued to support race-based affirmative action, calling it "absolutely necessary" when he was a state senator in Illinois and criticizing the Supreme Court for curtailing it in his time in the United States Senate. But in his presidential campaign, he has unsettled some black supporters by focusing increasingly on class and suggesting that poor whites should at times be given preference over more privileged blacks.

His ruminations about shifting the balance between race and class in some affirmative action programs raise the possibility that, if elected in November, he might foster a deeper national (p. 16) conversation about an issue that has been fiercely debated for decades. He declined to comment for this article.

"We have to think about affirmative action and craft it in such a way where some of our children who are advantaged aren't getting more favorable treatment than a poor white kid who has struggled more," Mr. Obama said last week in a question-and-answer session at a convention of minority journalists in Chicago.

During a presidential debate in April, Mr. Obama said his two daughters, Malia, 10, and Sasha, 7, "who have had a pretty good deal" in life, should not benefit from affirmative action when they apply to college, particularly if they were competing for admission with poor white students.

. . .

Ward Connerly, a crusader against affirmative action, said he believed that Mr. Obama's remarks would buoy support for his ballot initiatives in Arizona, Colorado and Nebraska in November that would ban preferential treatment on the basis of race, ethnicity and sex in government hiring and public education.

Last week, Mr. Obama's Republican rival, Senator John McCain, announced his support for those measures. . . .

Mr. Obama opposes the ballot initiatives, saying they would derail efforts to break down barriers for women and members of minorities. But Mr. Connerly said Mr. Obama had already helped the cause. "He's advanced the debate," Mr. Connerly said. "He's brought it to a new level."

. . .

A federal judge once asked a friend of Mr. Obama's whether he had been "elected on the merits" as law review president, Mr. Obama told The Journal of Blacks in Higher Education in 2001. He said the question came up again when he applied for a job as a professor at the University of Chicago Law School.

Mr. Obama has not described how he felt then. But as a state senator, he spoke with empathy about accomplished minority students at elite universities who sometimes lived "under a cloud they could not erase."

Over the past few years, Mr. Obama has also voiced sympathy for whites who feel resentful of race-based affirmative action and questioned how long such programs need to continue.

Even as he argued that timetables for minority hiring may be necessary where there is evidence of systemic discrimination, he also warned in his second book, "The Audacity of Hope," that "white guilt has largely exhausted itself in America."

It was 2006 then, and Mr. Obama was a wealthy senator considering a bid for the presidency. He worried that race-based preferences, while necessary, might undermine efforts at building cross-racial coalitions.

Presaging his recent focus on class, Mr. Obama argued that whites were more likely to join blacks in supporting programs that were not racially based.

"An emphasis on universal, as opposed to race-specific programs isn't just good policy," Mr. Obama said in his book. "It's good politics."



For the full story, see:

RACHEL L. SWARNS. "Obama's Path on Preferences, Race and Class ." The New York Times, Section 1 (Sun., August 3, 2008): 1 & 16.

(Note: ellipses added.)

(Note: the online version has minor differences with the print version; the online version is quoted here, except for the article title. The online article title was: "If Elected ... Delicate Obama Path on Class and Race Preferences." The ellipisis in the online title was in the original.)




September 15, 2008

Supporters of Racial Discrimination Fear Allowing People to Vote


(p. A9) A total of 24 states allow voters to change laws on their own by collecting signatures and putting initiatives on the ballot. It's healthy that the entrenched political class should face some real legislative competition from initiative-toting citizens. Unfortunately, some special interests have declared war on the initiative process, using tactics ranging from restrictive laws to outright thuggery.

The initiative is a reform born out of the Progressive Era, when there was general agreement that powerful interests had too much influence over legislators. It was adopted by most states in the Midwest and West, including Ohio and California. It was largely rejected by Eastern states, which were dominated by political machines, and in the South, where Jim Crow legislators feared giving more power to ordinary people.

But more power to ordinary people remains unpopular in some quarters, and nothing illustrates the war on the initiative more than the reaction to Ward Connerly's measures to ban racial quotas and preferences. The former University of California regent has convinced three liberal states -- California, Washington and Michigan -- to approve race-neutral government policies in public hiring, contracting and university admissions. He also prodded Florida lawmakers into passing such a law. This year his American Civil Rights Institute (ACRI) aimed to make the ballot in five more states. But thanks to strong-arm tactics, the initiative has only made the ballot in Arizona, Colorado and Nebraska.

"The key to defeating the initiative is to keep it off the ballot in the first place," says Donna Stern, Midwest director for the Detroit-based By Any Means Necessary (BAMN). "That's the only way we're going to win." Her group's name certainly describes the tactics that are being used to thwart Mr. Connerly.

Aggressive legal challenges have bordered on the absurd, going so far as to claim that a blank line on one petition was a "duplicate" of another blank line on another petition and thus evidence of fraud. In Missouri, Secretary of State Robin Carnahan completely rewrote the initiative's ballot summary to portray it in a negative light. By the time courts ruled she had overstepped her authority, there wasn't enough time to collect sufficient signatures.

Those who did circulate petitions faced bizarre obstacles. In Kansas City, a petitioner was arrested for collecting signatures outside of a public library. Officials finally allowed petitioners a table inside the library but forbade them to talk. In Nebraska, a group in favor of racial preferences ran a radio ad that warned that those who signed the "deceptive" petition "could be at risk for identity theft, robbery, and much worse."

Mr. Connerly says that it's ironic that those who claim to believe in "people power" want to keep people from voting on his proposal: "Their tactics challenge the legitimacy of our system."



For the full commentary, see:

JOHN FUND. "The Far Left's War on Direct Democracy." The Wall Street Journal (Sat., July 26, 2008): A9.




July 11, 2008

University of Nebraska Foundation Contributes to Racial Discrimination


Some of us believe that the government should not discriminate on the basis of race, gender, or religion. Unfortunately, governments in the past and present have sometimes mandated or practiced discrimination. Examples from the past would include the Jim Crow laws that mandated racial discrimination against Afro-Americans.

A present example would be the mis-named "affirmative action" laws that mandate racial discrimination against whites.

In the article quoted below, note who has taken a stand on which side of this issue.

Is it appropriate for the University of Nebraska Foundation to be donating $25,000 to support the continuation of racial discrimination?

Note also the opposing positions of two 2006 Republican candidates for Senate: David Kramer is leading the drive to continue racial discrimination, while Pete Ricketts is contributing to ending racial discrimination.

(p. 1A) LINCOLN -- Leaders of the Nebraska Civil Rights Initiative called their anti-affirmative-action push one of the most successful petition drives in recent state history. But it's not yet known whether their proposed ban will go before voters in November.

"The citizens demand the opportunity to vote on the use of race and gender preferences and discrimination in state hiring, state contracts and state education," said Marc Schniederjans, treasurer of the group that said it submitted more than 167,000 signatures Thursday.

. . .

David Kramer, spokesman for the opposition group Nebraskans United, said he wasn't disheartened by the number of petition signatures or over the prospect that petition organizers said they planned to submit more signatures today.

. . .

(p. 2A) Connerly's American Civil Rights Coalition provided $370,750 of the $467,250 raised by the Nebraska petition group as of June 25. According to state records, the next largest donors were Paul Singer, a New York businessman, $50,000; William Grewcock, a former executive with Peter Kiewit Sons Inc., $25,000; and failed GOP U.S. Senate candidate Pete Ricketts, $25,000.

For Nebraskans United, the largest donations toward that group's $308,167 war chest have come from Omaha billionaire Warren Buffett, $50,000; philanthropist Richard Holland, $50,000; Dianne Lozier, Lozier corporate counsel, $50,000; Wallace Weitz, president of an Omaha-based mutual fund management company, $50,000; the Greater Omaha Chamber of Commerce, $36,250; the University of Nebraska Foundation, $25,000; and the Nebraska State Education Association, $25,000.



For the full story, see:

MARTHA STODDARD. "Petitions Turned In; Fight Far from Over." Omaha World-Herald (Fri., July 4, 2008): 1A-2A.

(Note: ellipses added.)

(Note: the online title of the article is "Anti-affirmative-action petitions turned in; verifying to begin.")




May 1, 2008

Federal Subsidies for "Those Who Choose to Live Far from a City"


SubsidiesAirNebraskaGraphic.jpg Source of graphic: the online version of the Omaha World-Herald article quoted and cited below.

(p. 1A) WASHINGTON -- Opponents of federal air travel subsidies make two points: that subsidized airports are relatively close to regular commercial air service and subsidized flights are used by only a few people a day.

Both are true in Nebraska.

For example, U.S. taxpayers spend nearly $1.4 million a year so that fewer than two dozen travelers a day, on average, can fly out of Grand Island rather than drive the 100 miles to Lincoln.

Taxpayers also chip in $748,635 annually to maintain two daily flights from Alliance to Denver, even though only about a half dozen people a day board the planes.

. . .

(p. 2A) Groups such as Taxpayers for Common Sense and Citizens Against Government Waste say that although the subsidies might have made sense 30 years ago, to prevent communities from losing air service overnight, people know what they're getting into today if they choose to live far from a city with regular air service.

It's a matter of prioritizing public spending, said Steve Ellis, vice president of Taxpayers for Common Sense.

"People have the right to food and clean water," Ellis said. "We don't need to make sure it's a chicken in every pot and air service in every community."



For the full story, see:

JOSEPH MORTON. "Rural travel subsidies still up in the air." Omaha World-Herald (Sunday, February 24, 2008): 1A & 2A.

(Note: ellipses added.)


Federal spending on Essential Air Service
--------------------------------------------------------------------------------
Year     # of communities    Total funding for subsidies *

1998   101   $50
1999   100   $50
2000   106   $50
2001   115   $50
2002   123   $113
2003   126   $101.3
2004   140   $101.7
2005   146   $101.6
2006   151   $109.4
2007   145   $109.4
2008   142   $125

*Figures in millions

Source of data: Government Accountability Office; U.S. Department of Transportation

Source of version of table above: very slightly modified from the online version of the Omaha World-Herald article quoted and cited above.




April 5, 2008

Blindly Imitating a False Vision of Ancient Sculpture


TrojanArcher.jpg "Trojan Archer from the Temple of Aphaia on Aegina." Source of caption and photo: online version of the WSJ article quoted and cited below.

Ayn Rand's Howard Roark in The Fountainhead railed against the mindless imitation of the classics, as embodied for instance in the Parthenon. In sculpture there has also been blind imitation of white classical figures, such as one that has recently been installed next to the Arts and Sciences Building on my campus at the University of Nebraska at Omaha.

One imagines that Rand and Roark would have been amused by the article quoted below, that shows that the classical sculptures were actually rich in color.


(p. D8) The Venus de Milo: white. The Apollo Belvedere: white. The Barberini Faun: white. The passing centuries may have cast their pall of grime, yet ever since the Renaissance rediscovered antiquity, our Platonic ideal of classical statuary has been bare marble: bleached, bone white.

The Greeks and Romans did not see it that way. The current show "Gods in Color: Painted Sculpture of Classical Antiquity" -- through Jan. 20 at the Arthur M. Sackler Museum on Harvard University's campus -- makes a bold attempt to set the record straight. On view are replicas painted in the same mineral and organic pigments used by the ancients: pulverized malachite (green), azurite (blue), arsenic compounds (yellow, orange), cinnabar or "dragon's blood" (red), as well as charred bone and vine (black). At first glance and quite a while after, the unaccustomed palette strikes most viewers as way over the top. But few would deny that these novelties -- archers, goddesses, mythic beasts -- look you straight in the eye.

. . .

By the 18th century, practitioners of the then-new science of archaeology were aware that the ancients had used color. But Johann Joachim Winckelmann, the German prefect of antiquities at the Vatican, preferred white. His personal taste was enshrined by fiat as the "classical" standard. And so it remained, unchallenged except by the occasional eccentric until the late 20th century.


For the full story, see:

MATTHEW GUREWITSCH. "CULTURAL CONVERSATION With Vinzenz Brinkman; Setting the Record Straight About Classical Statues' Hues." The Wall Street Journal (Tues., December 4, 2007): D8.

(Note: ellipsis added.)




December 9, 2007

USDA Sugar Allocations and Tariff System "Keeps the Price at a Fairly High Level"

 

SugarBeatsScottsbluff.jpg   Sugar beats unloaded in Scottsbluff, Nebraska at Western Sugar in 1999.  Source of photo:  online version of the Omaha World-Herald article cited below.

 

In the article excerpted below, why does Chet Mullin of the Omaha World-Herald care only about beat growers, but not about sugar consumers? 

 

The International Sugar Organization predicts a sizable global surplus of the sweet stuff this year. If the prediction comes true, will it hurt sugar beet growers like those in Nebraska's Panhandle?

The answer is no, according to Paul Burgener, agricultural economic research analyst at the University of Nebraska's Panhandle Research and Extension Center in Scottsbluff.

"We have allocations (for sugar production) and we also have a tariff system for imports, and between the two, the USDA manages supply and keeps the price at a fairly high level," Burgener said.

 

For the full story, see: 

CHET MULLIN.  "Sugar surplus won't harm beet growers."  Omaha World-Herald  (Tuesday, July 17, 2007):  1D & 2D.

 




December 8, 2007

Omaha's Westroads Mall Stops Good Guys From Shooting Back

 

John Lott earned his PhD at the University of Chicago in economics.  What he says below is not popular, or politically correct, but it is probably true.  And if it is true, and if we fail to act on its truth, then more good people will continue to be killed, who could have been saved.

 

The horrible tragedy at the Westroads Mall in Omaha, Neb. received a lot of attention Wednesday and Thursday. It should have. Eight people were killed, and five were wounded.

A Google news search using the phrase "Omaha Mall Shooting" finds an incredible 2,794 news stories worldwide for the last day. From India and Taiwan to Britain and Austria, there are probably few people in the world who haven’t heard about this tragedy.

But despite the massive news coverage, none of the media coverage, at least by 10 a.m. Thursday, mentioned this central fact: Yet another attack occurred in a gun-free zone.

Surely, with all the reporters who appear at these crime scenes and seemingly interview virtually everyone there, why didn’t one simply mention the signs that ban guns from the premises?

Nebraska allows people to carry permitted concealed handguns, but it allows property owners, such as the Westroads Mall, to post signs banning permit holders from legally carrying guns on their property.

. . .

The law-abiding, not criminals, are obeying the rules. Disarming the victims simply means that the killers have less to fear. As Wednesday's attack demonstrated yet again, police are important, but they almost always arrive at the crime scene after the crime has occurred.

The longer it takes for someone to arrive on the scene with a gun, the more people who will be harmed by such an attack.

Most people understand that guns deter criminals. If a killer were stalking your family, would you feel safer putting a sign out front announcing, "This Home Is a Gun-Free Zone"? But that is what the Westroads Mall did.

 

For the full commentary, see: 

John R. Lott, Jr.  "Media Coverage of Mall Shooting Fails to Reveal Mall's Gun-Free-Zone Status."  FOXNEWS.COM  (Thurs., December 6, 2007).

(Note:  ellipsis added.)

(Note:  I am grateful to Luis Locay, for forwarding me Lott's commentary.)

 




October 17, 2007

UNO Protects Students from Cupcakes (Whether They Want to Be Protected, or Not)

 

Many years ago, I went along with a group of Exec MBA students to Germany.  Among them was Bill Swanson.  Bill had a sense of humor.

At some point in the trip, I spilled ketchup on my tie.  Bill's response was that normally a ruined tie would be sad, but given my tie, the ketchup was an improvement.

Yes, Bill has a sense of humor; so I'm hoping the story below is a joke.

That's what I hope, but what I fear is that the story below is one more example of the inefficient, sometimes painful (like when an 8th grader can't take aspirin to middle school), and sometimes funny, things that we are driven to do to protect ourselves from being sued, in an economy where congress has empowered personal injury lawyers to frequently sue for huge and unpredictable compensatory and punitive damages.  (When Joe Ricketts, Ameritrade founder, spoke to my Exec MBA class a few years ago, he said that the biggest threat facing the U.S. economy was the proliferation of tort law suits.)

So it's either a bad joke; or (most likely) it's UNO protecting itself against every potential law suit; or it's a third, and worse, alternative---which would be if the story below is to be taken at face value. 

In that case we would have to conclude that some UNO staff have nothing better to do with their time than to paternalistically 'protect' young adults from a minuscule risk of illness from freely choosing to purchase and eat cupcakes being sold by fellow students to raise money for good causes.

 

Here is an excerpt from the page one, lead story, of the Sat., Oct. 6, 2007, Omaha World-Herald:

 

(p. 1A)  Guns. Drugs. Bake sales.

What do these things have in common?

All have been banned at the University of Nebraska at Omaha campus.

Citing safety and health concerns, UNO last week prohibited selling homemade food items at campus fundraisers.

Officials said the prevalence of serious food allergies and the potential for contaminated food — either by accident or deliberately — led UNO to adopt the policy, which then drew complaints from student groups.

"The primary issue is the health of the students and the safety of the students," said Bill Swanson, assistant to the vice chancellor in the Career Exploration and Outreach Office.

No one on the UNO campus has reported problems with contaminated food purchased at a bake sale, Swanson said.

But there have been incidents around the country, he said, and those were enough to prompt a discussion among officials.

The decision has come under fire from students who say the restriction cuts off small student (p. 2A) groups from their primary fundraising source.

The Public Relations Student Society of America traditionally held bake sales once a month to raise money for national conferences, local business luncheons and volunteer work, said the group's president, Katie Dowd.

The group raised about $1,500 a year hawking homemade baked goods donated by members.

"It's a big blow to us," said Dowd, who called the potential for food contamination from her group's offerings "very unlikely."

 

For the full story, see: 

ELIZABETH AHLIN.  "Goodies ban half-baked, UNO students say." Omaha World-Herald  (Saturday, October 6, 2007):  1A & 2A.

 




September 30, 2007

"A Payment System that Rewards Everybody for Staying Busy"

 

  Source of map:  online version of the NYT article cited below. 

 

(p. H6) WHY does health care for the average Medicare patient cost nearly twice as much a year in New Jersey, at $8,076, as it does in Hawaii, at $4,529?

The differences are one example of perplexing geographic variations in medical expenses and quality. And in a study that has important implications for the nation’s $2 trillion health care tab, researchers have found that more intensive and expensive care does not necessarily mean better outcomes. In fact, the opposite may be true.

The Dartmouth Atlas of Health Care, a research group that studies variations and costs in medical care, sums it up like this: Geography is destiny. It means that your chances of undergoing certain surgical procedures, visiting the doctor often or even dying in a hospital or at home are related to where you live.

For example, Medicare patients living in Rhode Island undergo knee replacements at a rate of 5 in 1,000 people. In Nebraska, the number rises to 10 in 1,000. Female Medicare enrollees who receive a diagnosis of breast cancer have nearly seven times the chance of having a mastectomy in South Dakota, where the rate is 2 in 1,000, as they do in Vermont, where the rate is .3 in 1,000.

. . .

In communities with surplus hospital beds, research shows, patients do not necessarily get more elective surgery, but they have more hospital stays, more frequent doctor’s visits and are more likely to be referred to specialists.

Dr. Elliott S. Fisher, who studies health care economics and is a member of the Dartmouth research group, said that part of the problem was the way doctors and hospitals were paid.

“In a payment system that rewards everybody for staying busy, every bit of capacity you have, whether it’s the number of specialists or the number of intensive care beds or the M.R.I. scanner, has to stay fully occupied because they bought them already and they have to keep paying for them,” Dr. Fisher said in a telephone interview.

. . .

Paradoxically, the Dartmouth research, which confirms some similar studies, shows that patients in high-cost areas are not necessarily getting better care. Dr. Fisher said that he and his colleagues found higher mortality rates in higher-spending regions.

. . .

Extra care without better outcomes translates into waste in the health care system. Some experts say that waste accounts for as much as if not more than 30 percent of the national spending on health care. Such spending now totals 16 percent of the gross domestic product.  

 

For full story, see: 

STEPHANIE SAUL.  "TREATMENTS; Need a Knee Replaced? Check Your ZIP Code."  The New York Times  (Mon., June 11, 2007):  H6.

(Note:  ellipses added.)

 

     Source of map:  online version of the NYT article cited above.

 




September 10, 2007

When You Need to Know the Difference Between Glacier Creek and Big Thompson River

 

  Is it Glacier Creek, or Big Thompson River?  Source of photo:  me. 

 

On May 17, 2007, in Estes Park, Colorado, I was the co-leader of a "two hour" hike with 15 Montessori middle-schoolers from Omaha, Nebraska.  At some point what we were seeing didn't seem to correspond with what our roughly drawn YMCA map told us we should be seeing--we worried that we had taken a wrong turn and were lost.

II we were on course, then the water beside us should be Glacier Creek.  If we were lost, then it was probably Big Thompson River.  (It's appearance didn't help--it looked a bit larger than a creek, but a lot smaller than a 'big river.')

The first person I found to ask was a tourist who admitted upfront that she was extremely uncertain about where we were.  She pulled out a modest map, and pointed to where she thought we might be, which was along the Big Thompson River.

Seeking confirmation, I apologetically interrupted a fellow teaching his girl-friend how to fly fish.  This fellow was dressed as an outdoors-man, and exuded confidence.  He talked about hiking on a glacier the day before.  He helpfully strode back to his SUV with me and pulled a detailed, authoritative-looking map.  With no doubt, he pointed on the map to where we were, on Glacier Creek, as I had hoped.  As we walked back to where he had been fishing, he pointed in the direction that we had been hiking, and said that without question, we should continue to hike in that direction.

The scenery was fantastic, but Cindy began to worry whether we were going in the right direction, pointing out that there didn't seem to be any opening in the mountains in the direction in which we were supposing the YMCA camp should be.  I agreed with her observation, but said that there must be some non-obvious route, because the fellow who pointed us in this direction had exuded credibility.

We finally got to a small museum.  There, an old park service employee asked where we were from.  When I said "Omaha" he jokingly asked if knew his old friend Warren Buffet?  He told us that he had lived in this area all his life, and that we were definitely walking along Big Thompson River.  Then he tried to draw a map to show us how to get back.  He scratched his head, discarded his first attempt, and started trying again.  Then he asked us (again) where we were from?  At this point, I was really worried.

But his second attempt at a map was a good one--it got us back to the YMCA camp.

Maybe we should look for advice from those who are self-critical, as the old man was, rather than from those who exude undoubting self-confidence, as the fly fisherman did?  (Or maybe the key was local credentials?)

Maybe, I made a mistake that Christensen and Raynor warn against in their The Innovator's Solution:  looking at charisma and confidence as signs of who to follow.  (In fairness to myself, at the time, I didn't have much else to go on.)

 




August 5, 2007

"Just Because George Bush Said It Doesn't Mean It's Wrong"

 

KerreyBobSenator.jpg   Former Nebraska Senator and Governor Bob Kerrey.  Source of photo:  online version of the Omaha World-Herald article cited below.

 

WASHINGTON - Raising a lonely voice in the Democratic Party, former Sen. Bob Kerrey of Nebraska says he strongly opposes any dramatic U.S. troop withdrawal from Iraq.

Such a retreat, Kerrey says, would hand radical Islamic terrorists a substantial victory and enable them to destroy the fledgling democracy in Iraq.

In an article published Tuesday and in an interview, Kerrey said terrorists would gain safe haven from which to launch further attacks on American citizens like those of Sept. 11, 2001.

Kerrey said that if the United States shows weakness in Iraq, it will "pay a terrible price."

"The forces of al-Qaida have demonstrated a tremendous capacity, and they'll use that capacity if we withdraw from the playing field," said Kerrey, a former two-term U.S. senator.

In the interview, Kerrey also had a message for fellow Democrats: "Just because George Bush said it doesn't mean it's wrong."

 

For the full story, see:

JAKE THOMPSON.  "Kerrey says U.S. mustn't look weak in Iraq."  Omaha World-Herald  (Wednesday, May 23, 2007):  1A & 2A.

 

The link to Kerrey's opinion piece in the Wall Street Journal is:

BOB KERREY.  "The Left's Iraq Muddle."  The Wall Street Journal  (Tues., May 22, 2007):  A15. 

 




June 24, 2007

The Mexicans Are Not What Is Wrong with Mexico

Gerardo on the left; me in the middle; and Jenny in the right lower corner.  Photo by Jeanette (who you can just barely see in the mirror over Gerardo's shoulder).

 

In downtown Cancun we dined at a wonderful restaurant called Labná.  The food was authentic, varied, and delicious.  The service, from Gerardo (above) was attentive and replete with gracious good-will. 

The restaurant itself was an oasis of order in a milieu of disorder and decay.

As one tours Mexico, one has the sense of an enormous waste of human time and talent.  The incentive to act and the ability to get things done, is sucked away by an enormous cadre of parasitical rent-seeking hangers-on, who are either part of the government or who are privileged by government rules and regulations.

When the roof of our home in Nebraska was damaged by hail several years ago, it was replaced by a crew of Mexican workers. 

Our retired neighbor Howard had the habit of carefully monitoring all of our outdoor contractors.  Old, reliable, helpful, curmudgeony Howard (may he rest in peace) was much more likely to offer complaint than praise.  But Howard told me, with genuine respect and admiration in his voice, how impressed he was with how hard the Mexican crew had worked, especially through the oppressive heat of the summer days. 

The Mexicans are not what is wrong with Mexico.  What is wrong with Mexico is the Mexican government. 

In most areas of government activity, the Mexicans would benefit from a lot more of what Edmund Burke called "salutary neglect."

 

(Note:  Leonard Liggio reminded me of the wonderful phrase "salutary neglect" at the April 2007 meetings of the Association of Private Enterprise Education in Cancun.)

(Another note: The address of the Labná restaurant is Margaritas 29.  It is near a run-down park, where I purchased an OK cup of flan from a vendor for 10 pesos--the best flan I ever had for less than a dollar!)





March 31, 2007

UNO Economics RA Talks Personal Finance

McGrathMollyPersonalFinance.jpg   Molly McGrath.  Soure of photo:  online version of the Omaha World-Herald article cited below.

 

Molly was one of our Research Assistants last year in the UNO economics department: 

 

(p. 1D)  Miss Nebraska Molly McGrath has driven more than 25,000 miles since being crowned in June, mostly to schools as she talks about personal finance issues like avoiding debt and using money as a tool to realize dreams.

"There is a drastic need for economic and financial education with all people, but especially in low-income communities and especially among our youth," McGrath told about a dozen people at a recent meeting of the Rotary Club of Omaha-North.

McGrath knows about making ends meet. Her parents could not help her pay for college, so she has used more than $20,000 in scholarships won through the Miss America program. She also cleaned toilets, dorm rooms and apartments as she earned her undergraduate degree at New York University in New York.

"I was known right away at NYU as the girl from Nebraska," McGrath said. "And after I started this cleaning business I was known as the girl from Nebraska who cleans toilets."

 

For the full story, see: 

JOE RUFF.  "Miss Nebraska teaches dollars and sense."  Omaha World-Herald  (Monday, February 26, 2007):  1D & 2D.

 




March 9, 2007

Omaha Public Schools' Attack on Other Districts Costs $12 Million in Lawyer Fees

Source of graphic:  online version of the Omaha World-Herald article cited below.

 

(p. 1A)  Who's winning in the Omaha-area disputes about school finances and boundaries?.

So far, it looks like the lawyers.

Taxpayers have shelled out $12 million to private lawyers hired to handle those matters for Omaha-area school districts and the State of Nebraska, a World-Herald study found.

Nearly all of that has been paid during the past 31/2 years to two Omaha firms: Baird Holm, hired by the Omaha Public Schools, and Fraser Stryker, which was hired by the state and separately by the suburban districts.

The money has been spent on three interconnected items:

• The OPS lawsuit against the state's school funding system, which accounts for most of the $12 million.

• The Omaha district's effort, now on hold, to take over its suburban neighbors.

• And fallout from the Legislature's 2006 law that would break apart OPS and create a two-county "learning community" for the Omaha metro area.

The $12 million doesn't include lobbying costs or staff time for the three matters. And it doesn't include millions of dollars the districts paid lawyers during the same period for routine legal work.

The three items have fueled a stunning increase in OPS payments to lawyers. The district now pays about $400,000 a month in legal fees - four times what it (p. 2A) paid five years ago.

"This seems to me to be crazy," said State Sen. Ron Raikes of Lincoln, who introduced a bill this year aimed at curbing school districts' spending on legal fees.

"These are legal fees, paid pretty much by taxpayers, for a school district to conduct a legal war against another school district or against the state," said Raikes, who heads the Legislature's education committee.

 

For the full story, see:

PAUL GOODSELL.  "Lawyers reap OPS windfall; District, state actions cost taxpayers $12 million, so far."   OMAHA WORLD-HERALD  (Sunday, March 4, 2007):  1A & 2A.

(Note:  the online version had the somewhat different title:  "OPS legal fees cost taxpayers $12 million, so far.")

 




February 14, 2007

Fed Chairman Bernanke's Omaha Speech

     Bernanke in Omaha addressing the Chamber of Commerce (left) and after receiving a plaque officially appointing him as an "admiral" of the Nebraska Navy (right, ha, ha).  Source of the left photo:   http://www.omaha.com/neo-images/photos/large/ap-nenh10102061909.jpg   Source of the right photo:  online version of the NYT article cited below.

 

Last week, on 2/6/07, I attended a large Chamber of Commerce luncheon at which Federal Reserve Chair Ben Bernanke was the featured speaker.  The talk was subtle and restrained, but interesting.  Apparently it was one of the first speeches by Bernanke, since becoming chair, to address an economic issue broader than the macro policy issues that the fed usually addresses.  The headlines in the Omaha World-Herald and the Wall Street Journal missed the main point, I think.

The main point was not to criticize the inequality of the United States economy, but to praise its dynamism.  He pointed out the extent to which living standards have improved as a result of that dynamism.  And he wanted mainly to suggest that when we adopt policies aimed at reducing inequality, we be careful to be sure that the policies do not have the unintended consequence of reducing the dynamism. 

In particular, he suggested that much of the inequality was driven by an increasing skill premium, and that the most constructive way to reduce inequality would be to reduce the skill premium by increasing the supply of skilled labor.  This implies that individuals, and government, invest in increasing skills through increased access to community colleges, universities, online education, and the like.

 

For the full NYT article, see:

"Bernanke Suggests How to Narrow Wage Gap."  The New York Times   (Weds., February 7, 2007):  C13.

For the full WSJ article, see:

DAVID WESSEL.  "Fed Chief Warns of Widening Inequality; Bernanke Urges Steps That Avoid Harm to Economy."  The Wall Street Journal  (Weds., February 7, 2007):  A6.

For the full Omaha World-Herald article, see: 

STEVE JORDON.  "Fed chief says income gap poses problems."  Omaha World-Herald (Wednesday, February 7, 2007):   1D & 2D.

(Note:  the online version of the article had the slightly different title "Growing income gap poses problems, Fed chief says" and is dated 2/6/07.  The article may have first appeared in the paper's evening edition on 2/6/07.  My copy was the morning edition of 2/7/07.)

For the text of Bernanke's "The Level and Distrubution of Economic Well-Being" presentation, see:  http://www.federalreserve.gov/boarddocs/Speeches/2007/20070206/default.htm

   Source of graphic:  online version of the WSJ article cited above.

 

 

 




February 8, 2007

Plastic Pipes Need Less Labor, So Unions Oppose

PipeResidentialPlastic.jpg Residential plastic pipe. Source of photo: http://www.omaha.com/index.php?u_pg=46

 

(p. D1)  The City of Omaha is considering allowing an alternative to copper pipes in residential plumbing, a move the local builders association says could keep new home prices from rising so fast.

. . .

(p.  D2)  "Omaha is kind of unique in not allowing plastic. It's kind of an isolated pocket," said Blas Hernandez, Papillion's chief building official, who also has worked in the Kansas City, Denver, upstate New York and central Nebraska areas.

Mike Lipke, western regional manager for FlowGuard Gold CPVC pipes, agreed. He said Omaha and Chicago stand out among Midwestern cities for not allowing plastic water pipes.

Several people with long tenure in the building industry said they believe Omaha has lagged in adoption of plastics because the material is less labor-intensive to install and organized labor has fought to protect work for its members.

Stephen Andersen, business manager for the 470-member Omaha Plumbers Local 16, said he doesn't think it's necessarily faster to install plastic pipes, and he personally favors copper "because it's such a good product, a proven product."

. . .

With the housing market slowed and copper prices still high, now may be the time to make affordability the most important consideration, said Paul Frazier, president of the Frazier Co. and a member of the Metro Omaha Builders Association's board.

"MOBA is fully behind" the proposed change, President Rocky Goodwin said. Frazier represented MOBA in discussions with the Omaha Plumbing Board.

"We're long overdue for this," Frazier said. "Anything that holds costs down while doing as good or better job is a good thing.

. . .

Lipke, who sells CPVC, said all the model codes and all 50 states approve the use of plastic and plastic has captured two-thirds of the market.

. . .

"People might try it because it's less money, but they won't keep using it if it doesn't work," Lipke said. "It's a good product, and it certainly shouldn't be banned the way it is in Omaha."

 

For the full story, see: 

DEBORAH SHANAHAN.  "Omaha may lift ban on residential plastic pipe."  Omaha World-Herald (Wednesday, January 24, 2007):  D1 & D2. 

(Note:  ellipses added.)

 

[Joseph Schumpeter was born on February 8, 1883.]

 




January 27, 2007

Level 3 Hangs On

   The fiber optic network of Level 3, originally founded in Omaha, Nebraska.  Source of map:  online version of the WSJ article cited below.

 

Ex ante, Level 3 seemed to have a plausible business model.  When they laid fiber optics, they left room to install more, when demand, or a change in technology, made that profitable.  But demand did not rise as expected; and technologists elsewhere found clever ways to cram more bandwidth into existing fiber optics.  So, alas for many in Omaha, ex post, the results are in the graph below.

 

Fiber-optic network operator Level 3 Communications Inc., a high-flyer during the telecommunications bubble, almost went bankrupt after the sector burst in 2000.

Now, it is back, with a stock price that has almost doubled in the past year and bond prices that have risen about 20%.

Behind the gains: Explosive growth in video viewing over the Internet, which requires high-speed networks of the sort Level 3 offers. At the same time, a hearty appetite by investors for risky debt has enabled the company to put itself on firmer footing by refinancing its debt at lower rates. There also are good reasons to believe that Level 3 might be an acquisition candidate, though many feel such speculation is overblown.

But there are reasons to be wary: The company remains saddled with debt, it is in a business that still has excess capacity, and it has reported a quarterly profit just once in its more than 20-year history. With the stock and bonds at lofty levels, it could be that any future possible good news already is priced in.

 

For the full story, see: 

LI YUAN and GREGORY ZUCKERMAN.  "HEARD ON THE STREET; Level 3 Regains Luster Amid Web-Video Boom."  The Wall Street Journal   (Thurs., December 21, 2006):  C1 & C4.

(Note:  the above version is the online version, and differs some from the print version, though not in substance, as far as I noticed.) 

 

 Level3StockPrices.gif   Level 3 stock prices.  Source of graphic:   online version of the WSJ article cited below.

 




December 23, 2006

Schumpeter's "Sarcastic Remark" on Mathematics in Economics

Erich Schneider had been a student of Schumpeter's at the University of Bonn in the late 1920s.  The following sentences are from his lectures on Schumpeter that he published in German in 1970, and that were were translated into English by W.E. Kuhn and published in that form in 1975.

(p. 41) When, after many years of separation, I saw Schumpeter again at Harvard in the fall of 1949 and heard his lectures on economic theory--which he gave at 2 p.m., as in Bonn--I found him to be exactly the same man as before. On that afternoon he talked about the nature of dynamic analysis and about the role of difference equations in the framework of such an analysis.

To the above passage, Schneider adds footnote 3:

(p. 59) He dropped the sarcastic remark: "There are economists who do not know what a difference equation is; but there are also those who know nothing else."

Schneider, Erich.  Joseph A. Schumpeter:  Leben Und Werk Eines Grossen Sozialokonomen (Life and Work of a Great Social Scientist). Lincoln, Neb.:  University of Nebraska--Lincoln Bureau of Business Research, 1975.




December 17, 2006

Your Tax Dollars at Work: Government Protecting Us from Bling-Bling

DentalGrill.jpg  A dental grill, one form of the hip-hop jewelry sometimes called "bling-bling."  Source of image:  http://www.thesmokinggun.com/archive/0410062teeth1.html

 

If all you want for Christmas is to gild your front teeth, you may have to buy the bling-bling somewhere other than the Gold Plaza II kiosk at Crossroads Mall.

That's because an employee of that shop, Bhavin Dalal, faces a felony charge of practicing dentistry without a license.  He's accused of helping customers fit their teeth for glittering mouthpieces known as grills.

It's the first such case in Nebraska involving the hot hip-hop fashion accessory.  And Dalal and his attorney, James Martin Davis, plan to fight it tooth and nail.

Dalal entered a not guilty plea Friday in Douglas County Court.  Davis blasted the Nebraska Health and Human Services System for its investigation of Dalal and the charge that resulted.

"It's overzealousness on the part of a bunch of bureaucrats" who don't want people to wear grills, Davis said.

 

For the full story, see:

CHRISTOPHER BURBACH.  "Dental Grill Seller Feels State Law's Bite."  Omaha World-Herald  (Saturday, December 2, 2006):  1A & 2A. 

(Note:  the slightly different online title for the article is:  "State puts bite on grill seller")

 

 




December 8, 2006

"Nebraskans Preparing for the Imminent Arrival of Several Million New York Refugees"


(p. 12) HOUSING prices are falling on both coasts, and bubble panic is around the corner.  The financial magazines are already grabbing their readers by the throat and taunting them with headlines like:  ''U.S. Housing Crash Continues!'' ''Where Will Housing Prices Fall the Most?'' ''Is It Time to Cash Out?''

What if it is time to cash out?  Where do you go?  If you sell on either coast, then you need to find real estate somewhere that the housing bubble missed.  Guam?  American Samoa?  Wait, how about eastern Nebraska?  Downright frothless when it comes to housing:  the median home price here usually chugs along at the annual rate of inflation and never goes down (up 4 percent last year, up 22 percent over the last five years).

Before you recoil in horror at the thought of living in Omaha, a city of 414,000 souls, consider that this year Money magazine ranked it seventh of the nation's 10 best big cities to live in, ahead of New York City, which ranked 10th.  O.K., now you may recoil in horror.

These compelling statistics have Nebraskans preparing for the imminent arrival of several million New York refugees (victims of post-traumatic bubble anxiety disorder), who will need emergency real estate and housing triage services.

 

For the full commentary, see:

Richard Dooling.  "Sweet Home Omaha."  The New York Times, Section 4 (Sunday, October 29, 2006):  12.






November 28, 2006

Is Variety Good?

Chris Anderson has a stimulating and useful chapter in The Long Tail on why having variety and choice is good.

Not all agree.  My old Wabash economics professor, Ben Rogge, with wry amusement, used to refer us to Alvin Toffler's Future Shock.  Toffler's view was that choice was stressful---visualize the Robin Williams' Russian émigré character in "Moscow on the Hudson," when he collapses in panic on not knowing how to choose amongst the variety of coffees in the Manhattan supermarket aisle.

What amused Rogge was the contrast between the old critics of capitalism, who criticized capitalism for providing too few goods for the proletariat, and the new critics, like Toffler, who criticized capitalism for providing too many goods for the proletariat. 

Although Toffler has recanted his earlier views, others, such as Barry Schwartz in The Paradox of Choice, have picked up the anti-choice banner.

Here's my current two cents worth.  Sometimes we value variety for its own sake, and sometimes not.  I may find the variety of ethnic restaurants exciting, but not the variety of music on I-tunes.

But even when I don't value variety for its own sake, I still may value it because it increases the odds that the product I can find matches the product I want.  Let me explain.

In the language of Clayton Christensen and co-author Raynor, in The Innovator's Solution, generally what I want is a good that does well, a "job" that I want or need to get done.

Some critics of mass production descried the loss of the variety of products produced by pre-industrial craftsmen.  But what good did it do the peasants that no two chairs were quite alike, if all of them were too hard and misshapen for the job of comfortably sitting in them?

Mass production reduced variety, but increased quality, in the sense of bringing (cheaply) to market, products that were far better at doing the jobs that most people wanted/needed to get done. 

If the modern varieties of chairs are a response to differences in the jobs that different consumers need to get done, then I might generally, and accurately, presume that variety is usually good, not because I want to constantly sample a lot of different chairs (like I want to sample a lot of different ethnic foods), but rather because variety increases the odds that I will find the one or two particular chairs that allow me to do the job that I want a chair to do for me.  

Specifically, recently, we were looking for a chair that was firm, spill-resistant, would swivel to allow talking to someone in the kitchen, would recline for watching television, would be dog-chew resistant, and would have a color/fabric complementary to the rest of the furniture.  We shopped at Nebraska Furniture Mart, which is the largest furniture store in the U.S., with the greatest selection, because we hoped to find the one chair that would do all of these jobs.

We came close, but I wish there was a store with even greater selection.

   




September 3, 2006

"If Ethanol Made Economic Sense, It Wouldn't Need a Subsidy"

 

  Source of graphics:  online version of the World-Herald article cited below.

 

(p. 1D)  LINCOLN - David Pimentel, a Cornell University researcher, has been criticized repeatedly since he questioned the energy value of ethanol in 1980.

In a government-funded report, he suggested that ethanol provides less energy than is used to produce it.  Even though that report has been disputed and rejected by other analysts, Pimentel has not backed down.

He said last week that rural developers, farmers and investors will rue the day they put their money, hopes and dreams into the corn-based alternative fuel.

"It is too bad," he said in an interview, "because it would be a tremendous asset to agriculture if this were a true winner."

Pimentel is among the public critics who raise red flags as momentum gathers for dramatic increases in production, especially in the nation's top two ethanol-producing states:  Iowa and Nebraska.

While Pimentel is perhaps the expert most often quoted - in part because he presented his analysis more than 25 years ago - others also raise questions about the energy value of ethanol and its economic benefits and environmental effects.

Ethanol backers defend the fuel as a viable way to help stabilize the nation's fuel supply.  But they haven't convinced Jerry Taylor, an energy policy specialist for the Cato Institute, a conservative think tank in Washington, D.C.

"If ethanol made economic sense, it wouldn't need a subsidy," Taylor said.

 

For the full story, see:

BILL HORD.  "High-octane Clash."  Omaha World-Herald  (Sunday, August 6, 2006):  1D-2D.

 

  Source of graphics:  online version of the World-Herald article cited above.

 




July 19, 2006

Gateway Features artdiamondblog.com

Source of graphic: online version of The Gateway article cited below.

 

The Gateway, the student newspaper at the University of Nebraska at Omaha, ran a nice feature article on artdiamondblog.com on July 18, 2006, as the first installment of a projected series on blogs created by members of the campus community.

 

If you click the citation below, you will arrive at the online version of the feature:

Reed, Charley. "Meet the Blogger: UNO Professor Art Diamond." The Gateway (Tues., July 18, 2006):  3.

 

For your convenience, the text of the feature also appears below.

Continue reading "Gateway Features artdiamondblog.com" »




June 25, 2006

Illegal Immigration Reduces Wages for High School Dropouts by Only 3.6%

ImmigrantEffectOnWages.jpg  Source of graphic:  online version of the NYT article cited below.

 

As Congress debates an overhaul of the nation's immigration laws, several economists and news media pundits have sounded the alarm, contending that illegal immigrants are causing harm to Americans in the competition for jobs.

Yet a more careful examination of the economic data suggests that the argument is, at the very least, overstated.  There is scant evidence that illegal immigrants have caused any significant damage to the wages of American workers.

The number that has been getting the most attention lately was produced by George J. Borjas and Lawrence F. Katz, two Harvard economists, in a paper published last year.  They estimated that the wave of illegal Mexican immigrants who arrived from 1980 to 2000 had reduced the wages of high school dropouts in the United States by 8.2 percent. But the economists acknowledge that the number does not consider other economic forces, such as the fact that certain businesses would not exist in the United States without cheap immigrant labor. If it had accounted for such things, immigration's impact would be likely to look less than half as big.

. . .

. . . , as businesses and other economic agents have adjusted to immigration, they have made changes that have muted much of immigration's impact on American workers.

For instance, the availability of foreign workers at low wages in the Nebraska poultry industry made companies realize that they had the personnel to expand.  So they invested in new equipment, generating jobs that would not otherwise be there.  In California's strawberry patches, illegal immigrants are not competing against native workers; they are competing against pickers in Michoacán, Mexico.  If the immigrant pickers did not come north across the border, the strawberries would.

"Immigrants come in and the industries that use this type of labor grow," said David Card, an economist at the University of California, Berkeley.  "Taking all into account, the effects of immigration are much, much lower."

In a study published last year that compared cities that have lots of less educated immigrants with cities that have very few, Mr. Card found no wage differences that could be attributed to the presence of immigrants.

. . .

When Mr. Borjas and Mr. Katz assumed that businesses reacted to the extra workers with a corresponding increase in investment — as has happened in Nebraska — their estimate of the decline in wages of high school dropouts attributed to illegal immigrants was shaved to 4.8 percent. And they have since downgraded that number, acknowledging that the original analysis used some statistically flimsy data.

Assuming a jump in capital investment, they found that the surge in illegal immigration reduced the wages of high school dropouts by just 3.6 percent.

 

For the full commentary, see:

EDUARDO PORTER.  "ECONOMIC VIEW; Cost of Illegal Immigration May Be Less Than Meets the Eye."  The New York Times, Section 3  (Sunday, April 16, 2006):  3.




April 10, 2006

Ernie Chambers Right in Supporting Parents' Role in Education


For several months, the Omaha community has been roiled by the hostile efforts of the Omaha Public School (OPS) district to seize the schools and territory of long-established suburban school districts. Here ia an email that I sent to my representative in the Nebraska unicam on Sun., 4/9/06:

Dear Mr. Brashear:

I have appreciated your hard work as my representative in the legislature, and I have always voted for your re-election.

We believe strongly in giving our 11 year-old daughter a Montessori education. The Millard School District is the only area district that has had the entrepreneurial initiative to offer such a program, so we filled out the paperwork to option Jenny into the Millard District.

I strongly resent the implication of OPS that those who choose other school districts necessarily do so for racial reasons. We would have been very happy to stay in OPS (and it would have been more logistically convenient), but OPS does not support the diversity of educational options that Millard does.

Ernie Chambers is often wrong, but he is not always wrong. Dividing OPS into three districts would be a modest step toward increasing parental choice. Parents of all races want to be free to choose.

Tomorrow, I hope your vote will be to support freedom and competition.

Thank you for considering my views.

Sincerely,

Art Diamond






March 7, 2006

Enron's Kenneth Rice in Omaha on 9/11/01


Kenneth Rice exiting a Houston federal courthouse on Thursday, Feb. 16, 2006. Source of image: the online version of the Omaha World-Herald article cited below.


A lot of people remember what they were doing when the first jet crashed into the twin towers on 9/11/01. I was listening to a presentation on the potential of broadband given by Kenneth Rice, at a forum sponsored by Creighton University. A day or two earlier, Creighton had presented Rice with a distinguished alumnus award. I don't remember much detail about Rice's presentation, but remember thinking that he gave a clear and informative analysis of the potential and risks of the broadband business.


(p. 1D) HOUSTON (AP) - Kenneth Rice, former chief of Enron Corp.'s struggling broadband unit, testified Thursday that his boss, Jeffrey Skilling, directed him to paint a rosy, misleading picture for the Enron board of directors that was in line with false statements Rice said he already made to financial analysts in 2001.

But Rice, the former CEO of Enron Broadband Services, said in his third day on the stand at the fraud and conspiracy trial of Skilling and founder Kenneth Lay that he had no documents and "only my recollection" to back up a conversation he had with Skilling, Enron's chief executive, as he prepared for a May 2001 meeting of the company's board.

"What I took from meeting with Mr. Skilling was he wanted me to put a presentation together that was more consistent with the analyst conference and less direct on some of the challenges we were facing at EBS," Rice said.

In January 2001, Rice told Wall Street analysts who influenced the company's stock price that the business was well positioned for strong long-term financial performance. In reality, however, Enron's broadband unit was spending $100 million per quarter and generating little revenue and business, he said.


For the full story, see:

"Skilling said paint rosy picture, Rice says." Omaha World-Herald (Friday, February 17, 2006): 1D.




February 6, 2006

Unintended Consequences of Making My Cold Medicine Hard to Get


SudafedColdCcough.jpg
Source of image: http://www.sudafed.com/products/cold_and_cough.html

When I get a cold, nothing keeps me functioning as well as Sudafed Cold and Cough. Unfortunately, the pills contain pseudoephedrine, which apparently is an ingredient that can be used in the process of making meth. So in their zeal to protect people from their own bad choices, governments across the country, including my own Nebraska, have put increasingly severe restrictions on the sale and purchase of medicines like Sudafed Cold and Cough. Many stores that used to carry the medicine, have dropped it, and those that still carry it, have significantly increased the price.

So the government has made life harder for me. But at least they've benefitted the meth addicts, right? Read on:

(p. 1A) Restrictions on the sale of cold medicine appear to be reducing seizures of homemade methamphetamine labs in Nebraska and Iowa.

Both states passed laws last year restricting over-the-counter purchases of cold medicines used to make meth - and both report fewer lab discoveries.

But officials in the two states - and others with similar restrictions - now have a new problem: The drop in home-cooked methamphetamine has been met by a flood of crystal methamphetamine coming largely from Mexico.

Sometimes called ice, crystal meth is far purer, and therefore even more highly addictive, than powdered home-cooked meth.

And because crystal meth costs more, the police say thefts are increasing, as people who once cooked at home now have to buy it.

The University of Iowa Burn Center, which in 2004 spent $2.8 million treating people whose skin had been scorched off by the toxic chemicals used to make meth at home, says it now sees hardly any cases of that sort. Drug treatment cen- (p. 3A) ters, on the other hand, say they are treating just as many or more meth addicts.

And although Iowa child welfare officials say they are removing fewer children from homes where parents are cooking the drug, the number of children being removed from homes where parents are using it has more than made up the difference.



For the full story, see:

"Meth labs decline, but 'ice' fills gap." Omaha World-Herald (Sunrise Edition, Mon., January 30, 2006): 1A & 3A.


Apparently the only current substitute for pseudoephedrine in cold medicines is phenylephrine. But it has several drawbacks. Consider:

. . . pharmacologists, who specialize in the properties of medications, say oral phenylephrine has several disadvantages. First, the effects of the current formulations wear off faster than pseudoephedrine -- meaning users will need to take a pill after four hours instead of up to six for the shorter-acting pseudoephedrine. Pseudoephedrine also comes in long-acting 12- and 24-hour pills, an option not currently available for over-the-counter phenylephrine.

Another question is whether oral phenylephrine is as effective as pseudoephedrine. There have been no major published head-to-head trials comparing the two, and neither Pfizer nor Germany's Boehringer Ingelheim GmbH, a major supplier of powder phenylephrine for pills, has studied the matter. In 2003, Pfizer conducted a consumer survey in which 400 mall-goers with stuffy noses were given either standard Sudafed or Sudafed PE. In a telephone survey a week later, about 70% of each group reported "good" or "excellent" results, the company says.

But pharmacologists say there are reasons for caution. For one, oral phenylephrine is heavily absorbed by the intestine and broken down in the liver -- so only 6% to 40% of the actual medicine makes it into the blood stream, compared with nearly all of pseudoephedrine, scientists say. Moreover, its use as a decongestant has been far less heavily studied than pseudoephedrine's. The FDA review cited more than six studies, primarily unpublished work from a single laboratory, which found it effective. The review also cited a nearly equal number of studies from a variety of laboratories that found phenylephrine no better than a placebo -- but the agency concluded overall that it does work. Little has been published since then.

The American Heart Association warns that both drugs can raise blood pressure, so people with high blood pressure or heart disease should consult their doctor before taking them. It isn't known whether phenylephrine poses more or less of a risk than pseudoephedrine, though some experts say phenylephrine has been less tested so may merit more caution.

If a stuffy nose is making you miserable and only the most proven remedy will do, you may want to take the time to look for pseudoephedrine -- even if it means you have to wait at the counter.



For the full story, see:

LAURA JOHANNES. " ACHES & CLAIMS; Choosing a Pill for That Cold." THE WALL STREET JOURNAL (Tues., December 27, 2005): D4.




January 21, 2006

Land Next to Proposed Ethanol Plant Suddenly Declared "Blighted"


(p. 1A) ORD, Neb. - Carl and Charlene Schauer were upset and more than a little offended when the City Council declared their 50-acre cornfield "blighted and substandard."

Nothing is wrong with the cornfield, located almost five miles outside of town.

Nothing - except its proximity to the site of a proposed $75 million ethanol plant that local officials say will bring 34 jobs to the community of 2,300.

Invented to give cities the power to enlist private development in clearing slums, the "blighted and substandard" designation has become a critical tool for economic development projects across Nebraska.

It allows cities to use property taxes to help pay development costs on behalf of private enterprise, under a mechanism called tax increment financing. That allows increased property taxes generated by improvements of blighted property to be used to help fund the redevelopment.

Blighted land even can be condemned through eminent domain, then turned over to private developers. That practice was upheld by the U.S. Supreme Court last year.

Stunned by that ruling, several Nebraska lawmakers have introduced legislation to prevent local governments from using eminent domain to acquire private property that would be turned over to another private (p. 2A) owner for economic development.

Three bills (Legislative Bills 924, 910 and 799) specifically protect agricultural land, forbidding governments to declare it blighted. A fourth bill (LB 1252) would limit eminent domain to public projects like parks and roads.

And State Sen. Matt Connealy of Decatur proposes a constitutional amendment (LR 272 CA) to remove the requirement that land be designated as substandard and blighted before cities can use property taxes to help private developers pay project costs.

Connealy said it appears some smaller cities are pushing the boundaries of the blight definition.

The Ord ethanol project has been touted by Gov. Dave Heineman, the New York Times and others as an example of small-town hustle and progress.

Carl Schauer's son, Curt, and his wife, Susan, however, have gone to court to try to stop it.

They live directly across Nebraska Highway 11 from Carl Schauer's cornfield. Although not included in the proposed ethanol site, their home is less than 1,000 feet from where the plant would be built. They are worried about noise, smell, traffic and health hazards from the around-the-clock operation.

"I guess we're the sacrificial lambs in the name of economic development," said Susan Schauer, a licensed practical nurse.

A local official said the city does not want to take even the smallest part of Curt Schauer's property if he doesn't want to sell it.

"I don't think anybody in this community would ever do that," said Bethanne Kunz of the Valley County Economic Development Board.

After Schauer rejected an offer to buy a strip of his land for a railcar loading area, Kunz said, the ethanol site was reconfigured to leave out Schauer's property. The field was annexed by the city as part of a redevelopment zone under a Nebraska law that allows small towns and villages to acquire outlying land through "remote annexation."

The Schauer family still doesn't know why the field was declared blighted - and it's worried that the designation could spell trouble. Could their land be taken if another new factory wanted to locate in the area?

"I think it's wrong that government can take private property and turn it over to private enterprise," said State Sen. Tom Baker of Trenton.

Government already offers plenty of help - including grants and tax breaks - to business to encourage development, said State Sen. Deb Fischer of Valentine. "Does government have to give away the farm, too?"



Read the full story at:

REED, LESLIE. "'Blight' label raises concerns." Omaha World-Herald (Sunrise Edition, Saturday, January 21, 2006): A1 & A2.




December 29, 2005

Nebraska Congressman Opposed Government Supporting Agricultural Prices

 

(p. 85) ". . . in March 1911 Nebraskan Representative George W. Norris sponsored a congressional resolution asking the Attorney General to investigate "a monopoly in the coffee industry."  Wickersham replied that he indeed was conducting an ongoing investigation.

(p. 86) In April, Norris lambasted the coffee trust from the floor of the House, summarizing the valorization loan process.  He concluded that "this gigantic combination [has been able] to control the supply and the sale of coffee throughout the civilized world.  [They] sold only in such quantities as would not break the market."  Frustrated by Brazil's involvement, he observed that when a conspiracy to monopolize a product involved a domestic corporation, it was termed a trust and could be broken.  "But if the combination has behind it the power and influence of a great nation, it is dignified with the new term 'valorization.'  Reduced to common language, it is simply a hold-up of the people by a combination."

 

Source:

Mark Pendergrast. Uncommon Grounds: The History of Coffee and How It Transformed Our World. Basic Books, 2000. (ISBN: 0465054676)

 




July 24, 2005

A Case For School Vouchers in Nebraska


Create a marketplace

The solution to the impasse between Omaha Public Schools and the coalition of suburban school districts is to dissolve all school districts and declare each school an independent entity. Then issue vouchers to students and let them and their parents pick the schools of their choice.

There would be another round of consolidation, just as there was with the Baby Bell telephone companies. But it would be market-driven instead of being dictated by political boundaries.

The beneficiaries would be students and parents who would be free to pick schools offering the best educational value with no restrictions due to place of residence.

That's real school choice.

Robert Ranney, Omaha



Source: Omaha-World Herald Public Pulse section, July 17, 2005.





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