Policeman to Speeding Hoover: “Drive On, Brother”

In her eye-opening The Forgotten Man, Amity Shlaes shows that Herbert Hoover, while not the hero of the Great Depression, was hardly the consummate villain that politically correct legend has made him out to be.
The hapless, hated Hoover, after his electoral defeat by the real villain, FDR, drove the countryside seeking tranquility and direction. At one point, in the middle of a hot summer night, Hoover, with his son Allan, sped toward the cooler Palo Alto:

(p. 221) Hurtling down the highway, Hoover looked in the rearview mirror and saw a flashing red light gaining on him. Soon he could hear a siren. Dutifully, he pulled off the highway and fumbled for his license, handing it to the stern police officer. The patrolman looked at the license, then examined it more closely in the illumination of a headlight. Returning to the car window, he placed a foot on the running board and asked Hoover, “Tell me are you that guy?” The ex-president, with a slight grin, said, “Yes, I guess I’m that guy.” The policeman then asked, “Well, does it make you feel any better to drive sixty miles an hour down this Valley Pike in the middle of the night?” Hoover reflected for a moment and replied, “Well, under the circumstances I think it does.” The highway patrolman stepped back from the running board, looked Hoover in the eye, and with a wave of his arm said, “Drive on, brother.”

Source:
Wert, Hal Elliott. Hoover the Fishing President: Portrait of the Private Man and His Life Outdoors. Mechanicsburg, PA: Stackpole Books, 2005.

The reference on Amity Shlaes’s book, is:
Shlaes, Amity. The Forgotten Man: A New History of the Great Depression. New York: HarperCollins, 2007.

After Tort Reform, 7,000 M.D.s Have Gone to Texas

(p. A9) When Sam Houston was still hanging his hat in Tennessee in the 1830s, it wasn’t uncommon for fellow Tennesseans who were packing up and moving south and west to hang a sign on their cabins that read “GTT” – Gone to Texas.

Today obstetricians, surgeons and other doctors might consider reviving the practice. Over the past three years, some 7,000 M.D.s have flooded into Texas, many from Tennessee.
Why? Two words: Tort reform.
In 2003 and in 2005, Texas enacted a series of reforms to the state’s civil justice system. They are stunning in their success. Texas Medical Liability Trust, one of the largest malpractice insurance companies in the state, has slashed its premiums by 35%, saving doctors some $217 million over four years. There is also a competitive malpractice insurance industry in Texas, with over 30 companies competing for business. This is driving rates down.
The result is an influx of doctors so great that recently the State Board of Medical Examiners couldn’t process all the new medical-license applications quickly enough. The board faced a backlog of 3,000 applications. To handle the extra workload, the legislature rushed through an emergency appropriation last year.

For the full commentary, see:

JOSEPH NIXON. “CROSS COUNTRY; Why Doctors Are Heading for Texas.” The Wall Street Journal (Sat., May 17, 2008): A9.

Talking a Good Game is Little Correlated with Getting it Done

Bossidy and Charan’s advice below on hiring managers fits with Christensen and Raynor’s advice to hire managers who have had the right experiences, in preference to those who have the ‘right stuff’ (aka ‘charisma’).

(p. 119) In our experience, there’s very little correlation between those who talk a good game and those who get things done come hell or high water. Too often the second kind are given short shrift. But if you want to build a company that has excellent discipline of execution, you have to select the doer.

Source:
Bossidy, Larry, Ram Charan, and Charles Burck. Execution: The Discipline of Getting Things Done. New York: Crown Business, 2002.

McCraw on Schumpeter

  Source of book image: http://reader2.com/wasp1028

I am in the process of writing a full-length review of McCraw’s book for the annual Research in the History of Economic Thought and Methodology. Suffice it to say that McCraw’s book is very useful and very interesting, and gets a lot right that is important. Most notably, McCraw appreciates that Schumpeter’s central message is that innovation is what matters most about capitalism.

Source of book:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

Solar Energy Costs Soar in Germany

(p. C1) Thanks to its aggressive push into renewable energies, cloud-wreathed Germany has become an unlikely leader in the race to harness the sun’s energy. It has by far the largest market for photovoltaic systems, which convert sunlight into electricity, with roughly half of the world’s total installations. And it is the third-largest producer of solar cells and modules, after China and Japan.
Now, though, with so many solar panels on so many rooftops, critics say Germany has too much of a good thing — even in a time of record oil prices. Conservative lawmakers, in particular, want to pare back generous government incentives that support solar development. They say solar generation is growing so fast that it threatens to overburden consumers with high electricity bills.
. . .
(p. C7) At the heart of the debate is the Renewable Energy Sources Act. It requires power companies to buy all the alternative energy produced by these systems, at a fixed above-market price, for 20 years.
. . .
Christian Democrats, . . . , say the law has been too successful for its own good. Utilities, they note, are allowed to pass along the extra cost of buying renewable energy to customers, and there is no cap on the capacity that can be installed — as exists in other countries to prevent subsidies from mushrooming.
At the moment, solar energy adds 1.01 euros ($1.69) a month to a typical home electricity bill, a modest surcharge that Germans are willing to pay. That will increase to 2.14 euros a month by 2014, according to the German Solar Energy Association.
But the volume of solar-generated energy is rising much faster than originally predicted, and critics contend that the costs will soar. Mr. Pfeiffer, the legislator, said solar power could end up adding 8 euros ($12.32) to a monthly electricity bill, which would alienate even the most green-minded. With no change in the law, he says, the solar industry will soak up 120 billion euros ($184 billion) in public support by 2015.

For the full story, see:
MARK LANDLER. “Solar Valley Rises in an Overcast Land.” The New York Times (Fri., May 16, 2008): C1 & C7.
(Note: ellipses added.)

Acclaimed Playwrite David Mamet Endorses Free Market

MametDavid.gif

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

(p. A18) The American playwright David Mamet wrote a piece for the Village Voice last week titled, “Why I Am No Longer a ‘Brain-Dead Liberal.'” Mr. Mamet, whose characters famously use the f-word as a rhythmic device (I think of it now as the “Mamet-word”), didn’t himself mince words on his transition. He was riding with his wife one day, listening to National Public Radio: “I felt my facial muscles tightening, and the words beginning to form in my mind: ‘Shut the [Mamet-word] up.'” Been known to happen.

Toward the end of the essay, he names names: “I began reading not only the economics of Thomas Sowell (our greatest contemporary philosopher) but Milton Friedman, Paul Johnson, and Shelby Steele, and a host of conservative writers, and found that I agreed with them: a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism.”

For the full commentary, see:
DANIEL HENNINGER. “WONDER LAND; David Mamet’s Revision.” The Wall Street Journal (Thurs., March 20, 2008): A18.

African Farmer-Entrepreneurs, and U.S. Companies, Creating Another Breadbasket

(p. A14) ARSI NEGELE, Ethiopia — Babou Galgo, a 61-year-old farmer, proudly showed off his prized harvest from last season: two shiny gold medals from the regional and federal government and a slick certificate praising his “outstanding performance in increasing agriculture production and productivity.”
What he had done was boost his corn yields on his small farm in southern Ethiopia an eye-popping sevenfold over the past several years. Even more impressive, he had boosted the well-being of his family as well: With the added income, they moved out of a traditional mud-brick tukul and into a brick and concrete house furnished with a refrigerator, television and DVD player, rare luxuries for a farmer in one of the world’s poorest countries.
Indeed, not long ago, Mr. Galgo would have had no need for a refrigerator as meager yields had him struggling to feed his family. “It’s the seeds,” he says, noting the reason for his reversal of fortunes. “Hybrids.”
Africa’s nascent push to finally feed itself is turning the clock back to the early part of 20th-century America. It was in the 1930s and ’40s when Iowa-based Pioneer Hi-Bred International popularized hybrid seeds in the U.S., swelling corn yields throughout the Midwest. Seven decades later, African farmers and U.S. companies are trying to recreate the same boom that turned America into the world’s breadbasket, only this time in the harsh climate — environmental and political — of Ethiopia and greater Africa.
. . .
Farmer Galgo is ready for another upgrade. Sitting in his comfortable living room, beneath wall murals of Jesus and a peace dove, he tells Mr. Admassu, “I want to expand my land and buy a tractor. A big tractor, with a lot of power.”

For the full story, see:

ROGER THUROW. “Agriculture’s Last Frontier; African Farmers, U.S. Companies Try to Create Another Breadbasket With Hybrids.” The Wall Street Journal (Tues., May 27, 2008): A14.

(Note: ellipsis added.)