April 2008 – Page 2 – artdiamondblog.com

Retreat of Ice Is “Opening Up New Possibilities”

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

(p. R12) The Arctic summers have grown longer, raising concerns among scientists and environmentalists that the polar ice cap is melting and that carbon emissions from oil and other fossil fuels are to blame. But for players in the energy industry, the longer summers and the retreat of the permanent ice cover are opening up new possibilities.
. . .
Energy companies already are seeing a “dramatic difference” in the amount of time they can work in the far north, says Mike Watts, exploration director at Cairn Energy PLC, an Edinburgh, Scotland-based company. On Jan. 9 it acquired licenses to explore off the west coast of Greenland, which is a self-governed province of Denmark. Greenland is also considering a sale of east-coast rights in 2012. For the moment, those waters remain choked with ice year-round, but four years from now “that might have changed,” says Mr. Watts.
. . .
Efforts by GustoMSC and other offshore-drilling experts represent the first significant research push into Arctic drilling technology in 20 years. At present, only around five rigs are capable of drilling in Arctic waters more than 300 feet deep, where energy companies are increasingly turning their focus, and even those tend to operate in 2,000 feet of water or less. Rigs now under construction will be able to search for oil in waters up to 12,000 feet. But Bob Long, chief executive at Transocean Inc., the world’s largest offshore driller, estimates it will be 15 years before the supply of deep-water Arctic rigs catches up with demand.
. . .
To create Bully No. 1, GustoMSC took the standard design for its latest generation drillship — which looks like an oil tanker with a derrick on top — and set about winterizing it. The Bully will feature the bow of an icebreaker and be constructed from an ultra-flexible grade of steel to protect the hull from shattering in extreme cold. Heating systems will be installed along every inch of piping. Special heating units will also protect ballast tanks, which use seawater to stabilize the rig and can freeze in extreme cold. Engine vents will be widened and warmed to keep ice from building up.

For the full story, see:
BRIAN BASKIN. “Producers; Northern Exposure; As the Arctic gets warmer, oil and gas producers see the chance for a big expansion. But plenty of technological hurdles remain.” The Wall Street Journal (Mon., February 11, 2008): R12. & R14.
(Note: ellipses added.)

“ARCTIC EXPLORER. The Bully No. 1 drillship, now being built in Shanghai, will start work in 2010.” Source of caption and photo: online version of the WSJ article quoted and cited above.

Ban on DDT is a Lethal Vestige of Colonialism

(p. A16) Environmental leaders must join the 21st century, acknowledge the mistakes Carson made, and balance the hypothetical risks of DDT with the real and devastating consequences of malaria. Uganda has demonstrated that, with the proper support, we can conduct model indoor spraying programs and ensure that money is spent wisely, chemicals are handled properly, our program responds promptly to changing conditions, and malaria is brought under control.
Africa is determined to rise above the contemporary colonialism that keeps us impoverished. We expect strong leadership in G-8 countries to stop paying lip service to African self-determination and start supporting solutions that are already working.

For the full commentary, see:
Sam Zaramba. “Give Us DDT.” Wall Street Journal (Tues., Jun 12, 2007): A16.

“Frustration Opens the Door to Religiosity”

“Ahmed Muhammad Sayyid, center, praying at a Cairo mosque, has drawn religion closer after many disappointments.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Here in Egypt and across the Middle East, many young people are being forced to put off marriage, the gateway to independence, sexual activity and societal respect. Stymied by the government’s failure to provide adequate schooling and thwarted by an economy without jobs to match their abilities or aspirations, they are stuck in limbo between youth and adulthood.
“I can’t get a job, I have no money, I can’t get married, what can I say?” Mr. Sayyid said one day after becoming so overwhelmed that he refused to go to work, or to go home, and spent the day hiding at a friend’s apartment.
In their frustration, the young are turning to religion for solace and purpose, pulling their parents and their governments along with them.
. . .
The wave of religious identification has forced governments that are increasingly seen as corrupt or inept to seek their own public redemption through religion.
. . .
(p. 11) Depression and despair tormented dozens of men and women in their 20s interviewed across Egypt, from urban men like Mr. Sayyid to frustrated village residents like Walid Faragallah, who once hoped education would guarantee him social mobility. Their stifled dreams stoke anger toward the government.
“Nobody cares about the people,” Mr. Sayyid said, slapping his hands against the air, echoing sentiment repeated in many interviews with young people across Egypt. “Nobody cares. What is holding me back is the system. Find a general with children and he will have an apartment for each of them. My government is only close to those close to the government.”
. . .
Mr. Sayyid’s path to stalemate began years ago, in school.
Like most Egyptians educated in public schools, his course of study was determined entirely by grades on standardized tests. He was not a serious student, often skipping school, but scored well enough to go on to an academy, something between high school and a university. He was put in a five-year program to study tourism and hotel operations.
His diploma qualified him for little but unemployment. Education experts say that while Egypt has lifted many citizens out of il-(p. 12)literacy, its education system does not prepare young people for work in the modern world. Nor, according to a recent Population Council report issued in Cairo, does its economy provide enough well-paying jobs to allow many young people to afford marriage.
Egypt’s education system was originally devised to produce government workers under a compact with society forged in the heady early days of President Gamal Abdel Nasser’s administration in the late 1950s and ’60s.
Every graduate was guaranteed a government job, and peasant families for the first time were offered the prospect of social mobility through education. Now children of illiterate peasant farmers have degrees in engineering, law or business. The dream of mobility survives, but there are not enough government jobs for the floods of graduates. And many are not qualified for the private sector jobs that do exist, government and business officials said, because of their poor schooling. Business students often never touch a computer, for example.
On average, it takes several years for graduates to find their first job, in part because they would rather remain unemployed than work in a blue-collar factory position. It is considered a blow to family honor for a college graduate to take a blue-collar job, leaving large numbers of young people with nothing to do.
“O.K., he’s a college graduate,” said Muhammad el-Seweedy, who runs a government council that has tried with television commercials to persuade college graduates to take factory jobs and has provided training to help improve their skills. “It’s done. Now forget it. This is a reality.”
But more widespread access to education has raised expectations. “Life was much more bearable for the poor when they did accept their social status,” said Galal Amin, an economist and the author of “Whatever Happened to the Egyptians?” “But it is unimaginable when you have an education, to have this thought accepted. Frustration opens the door to religiosity.”

For the full story, see:
MICHAEL SLACKMAN. “Generation Faithful; Dreams Stifled, Egypt’s Young Turn to Islamic Fervor.” The New York Times, First Section (Sun., February 17, 2008): 1 & 11-12.
(Note: ellipses added.)
Source of graphic: online version of the NYT article quoted and cited above.

The Free Market Works

The story quoted below tells how outsourcing high-tech jobs to India has bid up the salaries of high-tech Indian engineers, thereby reducing the appeal of further outsourcing. Marvelous how the market works!
Another lesson from the story applies to forecasting: mechanical extrapolation of current trends is inferior to prediction that takes account of predictable changes in prices (in this case, salaries).

(p. A15) Around the century’s turn, when U.S. companies first began flooding to India for its cheap labor, pundits warned that the subcontinent could increasingly rob the U.S. of high-end white-collar jobs. Debate was especially sharp in Silicon Valley, then in a slump, because India annually turns out nearly 500,000 engineering graduates.
. . .
Several years on, the forces of globalization are starting to even things out between the U.S. and India, in sophisticated technology work. As more U.S. tech companies poured in, they soaked up the pool of high-end engineers qualified to work at global companies, belying the notion of an unlimited supply of top Indian engineering talent. In a 2005 study, McKinsey & Co. estimated that just a quarter of India’s computer engineers had the language proficiency, cultural fit and practical skills to work at multinational companies.
The result is increasing competition for the most skilled Indian computer engineers and a narrowing U.S.-India gap in their compensation. India’s software-and-service association puts wage inflation in its industry at 10% to 15% a year. Some tech executives say it’s closer to 50%. In the U.S., wage inflation in the software sector is under 3%, according to Moody’s Economy.com.
Rafiq Dossani, a scholar at Stanford University’s Asia-Pacific Research Center who recently studied the Indian market, found that while most Indian technology workers’ wages remain low — an average $5,000 a year for a new engineer with little experience — the experienced engineers Silicon Valley companies covet can now cost $60,000 to $100,000 a year. “For the top-level talent, there’s an equalization,” he says.

For the full story, see:
Pui-Wing Tam and Jackie Range. “Second Thoughts: Some in Silicon Valley Begin to Sour on India; A Few Bring Jobs Back As Pay of Top Engineers In Bangalore Skyrockets.” Wall Street Journal (Tues., July 3, 2007): A1 & A15.
(Note: ellipsis added.)

Rejecting Environmentalism’s “Politics of Limits”

Source of book image: http://a1055.g.akamai.net/f/1055/1401/5h/images.barnesandnoble.com/images/13180000/13180098.JPG

(p. D5) In survey after survey, American voters say that they care about global warming, but the subject ranks quite low when compared with other concerns (e.g., the economy, health care, the war on terror). Even when Mr. Gore’s Oscar-winning film, “An Inconvenient Truth,” was at the height of its popularity, it did not increase the importance of global warming in the public mind or mobilize greater support for Mr. Gore’s favored remedies–e.g., reducing greenhouse-gas emissions by government fiat. Mr. Gore may seek to make environmental protection civilization’s “central organizing principle,” as he puts it, but there is no constituency for such a regime. Hence even the Democratic Party’s presidential candidates, in their debates, give global warming only cursory treatment, with lofty rhetoric and vague policy proposals.
There is a reason for this political freeze-up. In “Break Through,” Ted Nordhaus and Michael Shellenberger argue that Mr. Gore and the broader environmental movement–in which Mr. Gore plays an almost messianic part–remain wedded to an outmoded vision, seeing global warming as “a problem of pollution to be fixed by a politics of limits.” Such a vision may have worked in the early days of environmentalism, when the first clear-air and clean-water regulations were pushed through Congress, but today it cannot mobilize enough public support for dramatic political change.
What is to be done? Messrs. Nordhaus and Shellenberger want to replace the pollution paradigm with a progressive one. They broached this idea in “The Death of Environmentalism,” a controversial 2004 monograph that ricocheted around the Internet. “Break Through” gives the idea a fuller exposition and even greater urgency. The authors contend that the environmental movement must throw out its “unexamined assumptions, outdated concepts, and exhausted strategies” in favor of something “imaginative, aspirational, and future-oriented.”

For the full review, see:
JONATHAN H. ADLER. “BOOKSHELF; The Lowdown on Doomsday.” The Wall Street Journal (Tuesday, November 27, 2007): D5.

Gates Should Apply His Entrepreneurial Skills to His Philanthropy

From a cogent letter to the editor by Fred Smith:

(p. A13) The tragedy of Gates-style philanthropy is less that it will do little good but, rather, that he has abandoned the entrepreneurial skills used so creatively in his truly significant wealth-creation work at Microsoft. Had he employed similar skills in dealing with the problems of Africa, he would not — as Mr. Barro notes he is largely doing — simply replicate the tried and failed policies of traditional paternalistic aid. Rather, he would be examining the barriers — political, cultural, tribal — that block entrepreneurial activity throughout Africa and explore ways to remove them. Could we, for instance, out-compete the oligarchs and tyrants by creating prizes that would bypass the bureaucracy and achieve success in health- and wealth-creation, in reducing corruption?

For the full letter, see:
Fred L. Smith Jr. “Do Something for Other People by Getting Very, Very Rich.” Wall Street Journal (Fri., Jun 29, 2007): A13.

Entrepreneur Calls 2008 “The Year of the Spaceship”

Burt Rutan’s current design for WhiteKnightTwo, carrying the smaller SpaceShipTwo spaceship. Source of image: http://www.techno-science.net/?onglet=news&news=4993

(p. A18) Virgin Galactic, the company that hopes to fly well-heeled tourists to the edge of space by the end of 2009, provided a peek Wednesday at the craft that will take them there.
During a news conference at the American Museum of Natural History in Manhattan, Richard Branson, the British entrepreneur whose Virgin Airways is the parent company of the project, said 2008 would be “the year of the spaceship.”
Mr. Branson showed models of two vehicles, both created by the airplane designer Burt Rutan. WhiteKnightTwo, a two-fuselage, four-engine plane, is designed to ferry a smaller spacecraft, SpaceShipTwo, high into the sky and release it. The pilot of SpaceShipTwo will then fire the craft’s rocket engine, which burns a combination of nitrous oxide and a rubber-based solid fuel, shooting the vehicle to an altitude of more than 62 miles into the realm of black sky.

For the full story, see:
JOHN SCHWARTZ. “Built to Fly Into Space With the Greatest of Ease (They Hope).” The New York Times (Thurs., January 24, 2008): A18.

Artist’s rendering of SpaceShipTwo spaceship. Source of image: http://www.techno-science.net/?onglet=news&news=4993

Media Futures Market Achieves “Astonishing Accuracy”

The passage below is quoted from a WSJ summary of an article that appeared in the July 9-16, 2007 issue of The New Yorker:

(p. B8) The most successful media prediction market is the Hollywood Stock Exchange. According to a study by Harvard Business School professor Anita Elberse, the markets’ forecasts of box-office performance are off by 16% on average. That’s astonishing accuracy for an industry which, despite all kinds of attempts to predict what will work, assumes that the vast majority of its product will fail at the box office.

For the full summary, see:
“The Informed Reader; Marketing; What’s the Next Big Thing? Prediction Markets Answer.” Wall Street Journal (Mon., July 2, 2007): B8.

Much Health Spending “Does Nothing to Improve Our Health”

Shannon Brownlee is the author of “Overtreated” which “diagnoses the big flaw in medical spending.” Source of caption and photo: online version of the NYT commentary quoted and cited below.

(p. C5) Fortunately — if that’s the right word — there is an obvious candidate for cost-cutting: all that care that brings no health benefit. It’s not hard to find examples. Scientific studies have shown that many treatments, including spinal fusion, routine episiotomies and neonatal intensive care, are overdone. These procedures often help specific subsets of patients. But for a lot of people, and “Overtreated” is full of stories, the treatments are a modern-day version of bloodletting.
“We spend between one fifth and one third of our health care dollars,” writes Ms. Brownlee, a senior fellow at the New America Foundation and former writer for U.S. News & World Report, “on care that does nothing to improve our health.”
Worst of all, overtreatment often causes harm, because even the safest procedures bring some risk. One study found that a group of Medicare patients admitted to high-spending hospitals were 2 to 6 percent more likely to die than a group admitted to more conservative hospitals.

For the rest of the commentary, see:
DAVID LEONHARDT. “ECONOMIC SCENE; No. 1 Book, And It Offers Solutions.” The New York Times (Weds., December 19, 2007): C1 & C5.

Non-Market Health Care Pricing Results in Health Care Shortages

(p. A22) When my Labrador retriever became acutely lame, we were able to locate a veterinary orthopedic expert in Atlanta within 48 hours who was able to repair a ruptured tendon within one week. But my prospects of identifying an endocrinologist who can care for my daughter’s diabetes when she turns 18 are much less promising.
The limited number of endocrine specialists is a not a consequence of limited demand — everyone is aware of the epidemic of diabetes we are facing. There are also shortages of generalists and other specialists, and the reason is the absence of market signals — i.e., market-based prices — for influencing the supply of physicians in various specialties.
The roots of this problem lay in the use of administrative pricing structures in medicine. The way prices are set in health care already distorts the appropriate allocation of efforts and resources in health care today. Unfortunately, many of the suggested reforms of our health care system — including the various plans for universal care, or universal insurance, or a single-payer system, that various policy makers and Democratic presidential candidates espouse — rest on the same unsound foundations, and will produce more of the same.
. . .
One important lesson of the 20th century is that, while markets are far from perfect, more choices are available when people are able to use free markets to interact with each other. Markets may not get the prices exactly correct all the time, but they are capable of self- correction, a capacity that has yet to be demonstrated by administrative pricing.
It tells you something when the supply of and demand for specialist veterinary care is so easily matched when the prices of these services are established on the market — while shortages and oversupplies are common for human medical care when the prices of these services are set by administrators in the public sector. Will health-care reformers — and American citizens — get the message?

For the full commentary, see:
Robert A. Swerlick. “Our Soviet Health System.” Wall Street Journal (Tues., Jun 5, 2007): A22.
(Note: ellipsis added.)

Entrepreneurial Medicine Hunter Seeks Cures in Ethnobotany

Source of photo: screen capture from slide show on online version of the NYT article quoted and cited below.

(p. C1) Part David Attenborough, part Indiana Jones, Mr. Kilham, an ethnobotanist from Massachusetts who calls himself the Medicine Hunter, has scoured remote jungles and highlands for three decades for plants, oils and extracts that can heal. He has eaten bees and scorpions in China, fired blow guns with Amazonian natives, and learned traditional war dances from Pacific Islanders.
But behind the colorful tales lies the prospect of money, lots of money — for Western pharmaceutical companies, impoverished indigenous tribes and Mr. Kilham.
. . .
(p. C5) In Peru, Mr. Kilham is betting on maca, a small root vegetable that grows here in the central highlands — “a turnip that packs a punch,” he says, adding “it imparts energy, sex drive and stamina like nothing else.”
That view is supported by studies carried out at the International Potato Center, a Lima-based research center that is internationally financed and staffed. Studies there show maca improves stamina, reduces the risk of prostate cancer and increases the motility, volume and quality of sperm.
Some peer reviewed studies published in the journal Reproductive Biology and Endocrinology backed up those findings.
. . .
One product, Maca Stimulant, is sold in Wal-Mart under Mr. Kilham’s Medicine Hunter brand. Mr. Kilham earns a retainer from both Naturex and Enzymatic Therapy, in addition to royalties from another Medicine Hunter-branded product at Wal-Mart.
Mr. Kilham says he earns around $200,000 each year in retainers, and sales are so buoyant he expects to make “in the mid-six figures” in royalties next year.
Mr. Kilham insists he is not in the business simply for financial gain. His motivation comes from promoting herbal medicines and helping traditional communities, he said.
“I have financial security and don’t need to make money from this,” he said. “I believe trade is the best way to get good medicines to the public, to help the environment and to help indigenous people.”
He and Mr. Cam pay growers here in Ninacaca a premium of 6 soles (about $2) for a kilo of maca, almost twice the going rate of 3 to 3.40 soles a kilo. They have set up a computer room at the Chakarunas warehouse and a free dental clinic, the town’s first.
Mr. Kilham is clearly adored by the locals in these desolate, wind-swept villages. On a recent visit here, shamans, maca growers and their families flocked to him. Since only maca and potatoes grow at this altitude, they are thankful Mr. Kilham is helping them sell their produce.

For the full story, see:
ANDREW DOWNIE. “On a Remote Path to Cures.” The New York Times (Tues., January 1, 2008): C1 & C5.
(Note: ellipses added.)
Source of photo: screen capture from slide show on online version of the NYT article quoted and cited above.