Month: September 2016

Innovations Make It Easier to Form and Run Smaller Firms

(p. B3) Unilever is paying $1 billion for Dollar Shave Club, a five-year-old start-up that sells razors and other personal products for men. Every other company should be afraid, very afraid.
The deal anecdotally shows that no company is safe from the creative destruction brought by technological change. The very nature of a company is fundamentally changing, becoming smaller and leaner with far fewer employees.
. . .
Now it is possible to leverage technology and transportation systems that never existed before. Dollar Shave Club used Amazon Web Services, a cloud computing service started by the online retailing giant in 2006 that encouraged a proliferation of e-commerce companies. Manufacturing now is just as much a line item as is a distribution apparatus. This is the business strategy of many other disruptive companies, including the home-sharing site Airbnb, which upends the idea of needing a hotel. The ride-hailing start-up Uber could never have been possible without a number of inventions including the internet, the smartphone and, most important, location tracking technology, enabling anyone to be a driver.

For the full commentary, see:
STEVEN DAVIDOFF SOLOMON. “Deal Professor; In Comfort of a Close Shave, a Distressing Disruption.” The New York Times (Weds., JULY 27, 2016): B3.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date JULY 26, 2016, and has the title “Deal Professor; $1 Billion for Dollar Shave Club: Why Every Company Should Worry.”)

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

(p. 6) Allostasis is not about preserving constancy; it is about calibrating the body’s functions in response to external as well as internal conditions. The body doesn’t so much defend a particular set point as allow it to fluctuate in response to changing demands, including those of one’s social circumstances. Allostasis is, in that sense, a politically sophisticated theory of human physiology. Indeed, because of its sensitivity to social circumstances, allostasis is in many ways better than homeostasis for explaining modern chronic diseases.
Consider hypertension. Seventy million adults in the United States have it. For more than 90 percent of them, we don’t know the cause. However, we do have some clues. Hypertension disproportionately affects blacks, especially in poor communities.
. . .
Peter Sterling, a neurobiologist and a proponent of allostasis, has written that hypertension in these communities is a normal response to “chronic arousal” (or stress).
. . .
Allostasis is attractive because it puts psychosocial factors front and center in how we think about health problems. In one of his papers, Dr. Sterling talks about how, while canvassing in poor neighborhoods in Cleveland in the 1960s, he would frequently come across black men with limps and drooping faces, results of stroke. He was shocked, but today it is well established that poverty and racism are associated with stroke and poor cardiovascular health.
These associations also hold true in white communities. One example comes from the Whitehall study of almost 30,000 Civil Service workers in Britain over the past several decades. Mortality and poor health were found to increase stepwise from the highest to the lowest levels in the occupational hierarchy: Messengers and porters, for example, had nearly twice the death rate of administrators, even after accounting for differences in smoking and alcohol consumption. Researchers concluded that stress — from financial instability, time pressures or a general lack of job control — was driving much of the difference in survival.

For the full commentary, see:
SANDEEP JAUHAR. “When Blood Pressure Is Political.” The New York Times, SundayReview Section (Sun., AUG. 7, 2016): 6.
(Note: ellipses added.)
(Note: the online version of the review has the date AUG. 6, 2016.)

The commentary quoted above is distantly related to Jauhar’s book:
Jauhar, Sandeep. Doctored: The Disillusionment of an American Physician. New York: Farrar, Straus and Giroux, 2014.

Cutting Taxes Helps Economy More than Increasing Government Spending

I believe the “policy missteps” diagnosis is mainly the right one, but quote some comments on the “secular stagnation” diagnosis because I want to document that for easy access for my book project.

(p. 3) Economists, like physicians, sometimes confront a patient with an obvious problem but no obvious diagnosis. That is precisely the situation we face right now.

. . .
Secular stagnation Lawrence H. Summers, former economic adviser to President Obama, has suggested that the problem predates the recent financial crisis. He points to the long-term decline in inflation-adjusted interest rates as evidence of reduced demand for capital to fund investment projects. He cites several reasons for the change, including lower population growth, lower prices for capital goods and the nature of recent innovations, like the replacement of brick-and-mortar stores with retail websites. The result, he says, is secular stagnation — a persistent inability of the economy to generate sufficient demand to maintain full employment.
His solution? More government spending on infrastructure, like roads, bridges and airports. If the government takes advantage of lower interest rates to make the right investments in public capital — admittedly a big if — the policy would promote employment in the short run as projects are being built and make the economy more productive when they are put into use.
. . .
Policy missteps When Barack Obama took office in 2009, the economy was in the midst of the Great Recession. President Obama’s advisers relied on standard Keynesian theory when they proposed a large increase in government spending to energize the economy. The stimulus package was the administration’s first economic policy initiative. As the economy recovered, the administration supported tax increases to shrink the budget deficit.
But even at the time, there were reasons to doubt this approach. A 2002 study of United States fiscal policy by the economists Olivier Blanchard and Roberto Perotti found that “both increases in taxes and increases in government spending have a strong negative effect on private investment spending.” They noted that this finding is “difficult to reconcile with Keynesian theory.”
Consistent with this, a more recent study of international data by the economists Alberto Alesina and Silvia Ardagna found that “fiscal stimuli based on tax cuts are more likely to increase growth than those based on spending increases.”

For the full commentary, see:
N. GREGORY MANKIW. “Economic View; One Economic Sickness, Five Diagnoses.” The New York Times, SundayBusiness Section (Sun., JUNE 19, 2016): 5.
(Note: ellipses added, bold font in original.)
(Note: the online version of the commentary has the date JUNE 17, 2016.)

A Larry Summers paper on his version of secular stagnation, is:
Summers, Lawrence H. “U.S. Economic Prospects: Secular Stagnation, Hysteresis, and the Zero Lower Bound.” Business Economics 49, no. 2 (April 2014): 65-73.

The Blanchard and Perotti paper mentioned above, is:
Blanchard, Olivier, and Roberto Perotti. “An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output.” The Quarterly Journal of Economics 117, no. 4 (Nov. 2002): 1329-68.

The Alesina and Ardagna paper mentioned above, is:
Alesina, Alberto, and Silvia Ardagna. “Large Changes in Fiscal Policy: Taxes Versus Spending.” In Tax Policy and the Economy. Volume 24, edited by Jeffrey R. Brown. Chicago and London: University of Chicago Press; Cambridge, Mass.: National Bureau of Economic Research, 2010, pp. 35-68.

Greenland Shark Likely to Have Lived to at Least 272 Years Old

(p. A11) The mysterious Greenland shark lives at extreme depths in dark, icy waters, which have long protected it from scientists’ prying eyes.
But now, an international group of researchers has estimated the dark brown cartilaginous fish may live as long as 500 years–which would make it the longest-living vertebrate on the planet.
The work, published Thursday [Aug. 11, 2016] in the journal Science, “offers the first hard evidence of how long-lived this poorly understood shark species can be,” said Steve Campana, a shark expert at the University of Iceland in Reykjavik, who wasn’t involved in the study.
. . .
. . . the 11-person team of researchers turned to math models and radiocarbon dating, a technique typically used to date fossils. They focused their work on the eye lens nucleus of each shark, a structure that stops developing at birth and therefore serves as a rough proxy of birth date. They measured the levels of carbon-14 in the tissue, which animals stop accumulating when they die.
The oldest shark in the study, which measured more than 16 feet, lived an estimated 392 years, according to the scientists. Because the study had a margin of error of 120 years for that fish, the researchers concluded the sharks could live up to about 500 years.

For the full story, see:
DANIELA HERNANDEZ. “Enigmatic Shark Can Live for Centuries, Study Says.” The Wall Street Journal (Fri., Aug. 12, 2016): A12.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date Aug. 11, 2016, and has the title “Mysterious Greenland Shark May Live Hundreds of Years, Scientists Say.” The online version included several additional sentences, interspersed through the article, that were not included in the print version. The sentences quoted above, appeared in both versions, but the formatting of the quotes above, most closely follow the print version.)

The research article reporting findings discussed above, is:
Nielsen, Julius, Rasmus B. Hedeholm, Jan Heinemeier, Peter G. Bushnell, Jørgen S. Christiansen, Jesper Olsen, Christopher Bronk Ramsey, Richard W. Brill, Malene Simon, Kirstine F. Steffensen, and John F. Steffensen. “Eye Lens Radiocarbon Reveals Centuries of Longevity in the Greenland Shark (Somniosus microcephalus).” Science 353, no. 6300 (Aug. 12, 2016): 702-04.

Andreessen Venture Funds Succeed Modestly

In an Andrew Ross Sorkin column, Sean Parker urged successful entrepreneurs to become serial entrepreneurs, rather than to semi-retire as venture capitalists. In that column, Marc Andreessen was quoted as sympathizing with Parker’s view.

(p. A1) Andreessen Horowitz’s first three venture funds have nearly doubled their investment capital or better since inception, according to documents reviewed by The Wall Street Journal that provide a rare look at the performance of one of Silicon Valley’s top venture-capital firms.
But an analysis of its returns, compared with funds from top rivals and industry averages, shows that Andreessen Horowitz hasn’t yet earned its reputation as an elite firm.
The firm, co-founded by web pioneer Marc Andreessen in 2009, is routinely mentioned among the pantheon of great startup investors with the likes of Sequoia Capital, a status that has allowed it to command higher fees than some of its peers.
Sequoia has separated itself from the pack thanks to its consistently high returns. Its 2003 and 2006 venture funds have both risen eightfold net of fees, according to a person familiar with the matter.
. . .
(p. A2) Venture-capital firms raise money from universities, pension funds and other institutions to wager on startups. They typically raise a new fund every few years, operating a handful at the same time with each expected to wind down after 10 years.
Though they fall short of their top-notch rivals, all three Andreessen Horowitz funds–whose bets include Instagram, Airbnb and Pinterest Inc.–have outperformed the average of venture funds raised in the same years, according to benchmark data from investment adviser Cambridge Associates. The earliest fund, raised in 2009, ranks in the top 5% of venture funds from that year; the second fund, raised in 2010, ranks in the top 50%; and the third from 2012 ranks in the top 25%.

For the full story, see:
Winkler, Rolfe. “Andreessen’s Venture Firm Trails Rivals.” The Wall Street Journal (Fri., Sept. 2, 2016): A1-A2.
(Note: ellipsis added.)
(Note: the online version of the article has the date Sept. 1, 2016, and had the title “Andreessen Horowitz’s Returns Trail Venture-Capital Elite.”)

The views of Sean Parker and Marc Andreessen on venture capital, that I mention at the top, are summarized in:
Sorkin, Andrew Ross. “Dealbook; Taking a Risk, and Hoping That Lightning Strikes Twice.” The New York Times (Tues., July 24, 2012): B1 & B4.

Traveling Health Volunteers Often Do Harm

(p. D3) Tens of thousands of religious and secular institutions now send hundreds of thousands of health volunteers from the United States out into the world, generating close to an estimated $1 billion worth of unpaid labor. Volunteers include experienced medical professionals and individuals who can provide only elbow grease; between these extremes of competence are the hordes of students in the health professions, among whom global volunteering has become immensely popular.
. . .
Students may take advantage of the circumstances to attempt tasks well beyond their expertise. Seasoned professionals may cling to standards of practice that are irrelevant or impossible to sustain in poor countries. Unskilled volunteers who do not speak the language may monopolize local personnel with their interpreting needs without providing much of value in return.
Problems may lie with the structure of a program rather than the personnel. Volunteer projects may be choppy and discontinuous, one set of volunteers not knowing what the previous group was up to, and not able to leave suggestions for the next group. Medications may run out. Surgery may be performed with insufficient provisions for postoperative care.
Even well-organized programs may undermine hosting communities in unanticipated ways: For instance, a good volunteer-based clinic may sap confidence in local medical care and, providing free services, threaten to put local physicians out of business.
. . .
A few studies on the long-term effects of short-term good works are ongoing. In the meantime, “there is little evidence that short-term volunteer trips produce the kinds of transformational changes that are often promised,” Dr. Lasker finds.

For the full review, see:
ABIGAIL ZUGER, M.D. “The Folly of the Well-Meaning Traveling Volunteer.” The New York Times (Tues., APRIL 26, 2016): D3.
(Note: ellipses added.)
(Note: the online version of the review has the date APRIL 25, 2016, and has the title “Books; Book Review: ‘Hoping to Help’ Questions Value of Volunteers.”)

The book under review, is:
Lasker, Judith N. Hoping to Help: The Promises and Pitfalls of Global Health Volunteering, The Culture and Politics of Health Care Work. Ithaca, NY: Cornell University Press, 2016.

Feds Use Taxpayer Money to Buy $20 Million of Cheese

(p. C1) U.S. agricultural officials agreed to purchase $20 million of cheese products from struggling dairy farmers who pleaded for a bailout earlier this month.
Around 11 million pounds of food will be donated to families throughout the country through government nutrition-assistance programs, the U.S. Department of Agriculture said.
. . .
The national Milk Producers Federation, a group of roughly 30,000 farmers, on Aug. 12 asked the agency to purchase a much as $150 million of cheese, as a glut of dairy products and other food commodities has sent prices for many farmers to the lowest levels in years.

For the full story, see:
Gee, Kelsy. “U.S. Says Cheese–to Aid Farmers.” The Wall Street Journal (Thurs., Aug. 25, 2016): C1.
(Note: ellipsis added.)
(Note: after much searching on 9/10/16, I could not find an online version of the story on the WSJ site.)

Colorful Coral Reef Is Thriving in Hot Water

(p. D1) In 2003, researchers declared Coral Castles dead.
On the floor of a remote island lagoon halfway between Hawaii and Fiji, the giant reef site had been devastated by unusually warm water. Its remains looked like a pile of drab dinner plates tossed into the sea. Research dives in 2009 and 2012 had shown little improvement in the coral colonies.
Then in 2015, a team of marine biologists was stunned and overjoyed to find Coral Castles, genus Acropora, once again teeming with life. But the rebound came with a big question: Could the enormous and presumably still fragile coral survive what would be the hottest year on record?
This month, the Massachusetts-based research team finished a new exploration of the reefs in the secluded Phoenix Islands, a tiny Pacific archipelago, and were thrilled by what they saw. When they splashed out of an inflatable dinghy to examine Coral Castles closely, they were greeted with a vista of bright greens and purples — unmistakable signs of life.
“Everything looked just magnificent,” said Jan Witting, the expedition’s chief scientist and a researcher at Sea Education Association, based in Woods Hole, Mass.
. . .
(p. D6) If Coral Castles can continue to revive after years of apparent lifelessness, even as water temperatures rise, there might be hope for other reefs with similar damage, said another team member, Randi Rotjan, a research scientist who led and tracked the Phoenix Islands expedition from her base at the New England Aquarium in Boston.
No one actually knows what drives reef resilience or even what a coral reef looks like as it is rebounding. In remote, hard-to-get-to places, our understanding of coral is roughly akin to a doctor’s knowing only what a patient looks like in perfect health and after death, Dr. Rotjan said.

For the full story, see:
KAREN WEINTRAUB. “In Splash of Colors, Signs of Hope for Coral Reefs.” The New York Times (Tues., AUG. 16, 2016): D1 & D6.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date AUG. 15, 2016, and has the title “Giant Coral Reef in Protected Area Shows New Signs of Life.” The print version gave incorrect affiliation for Jan Witting. The version above is the online version.)

FDA Blocking Stem-Cell Therapies from Those With No Other Hope

(p. D2) Research is exploding into ways stem cells might be harnessed to cure diseases, mend damaged tissue, even grow replacement organs.
. . .
Jeffrey Weiss, a retinal surgeon in Margate, Fla., has treated about 570 patients with retinal and optic nerve diseases with stem cells taken from patients’ bone marrow as part of a study, and says that about 60% have had meaningful improvement. Patients pay $19,000 to $21,000 to receive the injections.
Shawn Rockafellow, a 31-year old truck dispatcher in Chandler, Ariz., started rapidly losing his vision in 2014 to a genetic disease and says he was told to accept that he was going blind. His mother read about Dr. Weiss’s work. Mr. Rockafellow raised the $20,000 fee on GoFundMe, a personal charity website, and had the treatment in both eyes in January.
After three months, the vision in his right eye went from roughly 20/1,000 to 20/400. After six months, it was 20/300. His left eye hasn’t improved as much, so he wants to try the treatment again. His regular ophthalmologist, Scott Markham, says “the fact that he’s not worsening is fantastic.”
. . .
Mark Berman, a Beverly Hills, Calif., cosmetic surgeon who co-founded a network of stem-cell clinics, says “fundamentally, all we are doing is a simple, surgical procedure. This is not witch-doctor stuff. We are repairing cell damage with people’s own stem cells.” He says the member clinics in 25 states have treated about 5,000 patients to date, with no significant adverse events.
SammyJo Wilkinson, a former dot-com executive, developed multiple sclerosis in 1995 and was confined to a wheelchair by 2011. She says her symptoms started to improve almost immediately after receiving a high-dose stem cell treatment at a Houston clinic in 2012. When the FDA blocked access to that form of therapy, Ms. Wilkinson went to Cancún, Mexico, for follow-ups. After a total of five treatments for $90,000, she says she has far less pain, can exercise and walk short distances with the help of a walker.
At the FDA hearing, Ms. Wilkinson, who founded a patient group called Patients for Stem Cells, plans to appeal for a faster approval process for stem-cell therapies and a registry to monitor patient outcomes. “Patients will never get these treatments if they have to go the traditional double-blind placebo-controlled trial route. That takes 10 years and $1 billion,” she says. “There’s got to be a middle ground, where you don’t shut off treatment, you just keep track of it.”

For the full story, see:
Beck, Melinda. “Stem-Cell Treatments Become More Available, and Face More Scrutiny.” The Wall Street Journal (Tues., Aug. 30, 2016): D2.
(Note: ellipses added.)
(Note: the online version of the story has the date Aug. 29, 2016, and has the title “Stem-Cell Treatments Become More Available, and Face More Scrutiny.” There are minor differences in wording between the online and print versions. The sentences quoted above, follow the online version.)

“Practice Makes Perfect, but It Doesn’t Make New”

(p. 12) Child prodigies rarely become adult geniuses who change the world. We assume that they must lack the social and emotional skills to function in society. When you look at the evidence, though, this explanation doesn’t suffice: Less than a quarter of gifted children suffer from social and emotional problems. A vast majority are well adjusted — as winning at a cocktail party as in the spelling bee.
What holds them back is that they don’t learn to be original. They strive to earn the approval of their parents and the admiration of their teachers. But as they perform in Carnegie Hall and become chess champions, something unexpected happens: Practice makes perfect, but it doesn’t make new.
. . .
In adulthood, many prodigies become experts in their fields and leaders in their organizations. Yet “only a fraction of gifted children eventually become revolutionary adult creators,” laments the psychologist Ellen Winner. “Those who do must make a painful transition” to an adult who “ultimately remakes a domain.”
Most prodigies never make that leap. They apply their extraordinary abilities by shining in their jobs without making waves. They become doctors who heal their patients without fighting to fix the broken medical system or lawyers who defend clients on unfair charges but do not try to transform the laws themselves.

For the full commentary, see:
Grant, Adam. “How to Raise a Creative Child.” The New York Times, SundayReview Section (Sun., JAN. 31, 2016): 12.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date JAN. 16, 2016, and has the title “How to Raise a Creative Child. Step One: Back Off.”)

Grant’s commentary is related to his book:
Grant, Adam. Originals: How Non-Conformists Move the World. New York: Viking, 2016.

College Admissions Process Encourages Superficial Service

(p. 3) This summer, as last, Dylan Hernandez, 17, noticed a theme on the social media accounts of fellow students at his private Catholic high school in Flint, Mich.
“An awfully large percentage of my friends — skewing towards the affluent — are taking ‘mission trips’ to Central America and Africa,” he wrote to me in a recent email. He knows this from pictures they post on Snapchat and Instagram, typically showing one of them “with some poor brown child aged 2 to 6 on their knee,” he explained. The captions tend to say something along the lines of, “This cutie made it so hard to leave.”
But leave they do, after as little as a week of helping to repair some village’s crumbling school or library, to return to their comfortable homes and quite possibly write a college-application essay about how transformed they are.
. . .
Hernandez reached out to me because he was familiar with writing I had done about the college admissions process. What he described is something that has long bothered me and other critics of that process: the persistent vogue among secondary-school students for so-called service that’s sometimes about little more than a faraway adventure and a few lines or paragraphs on their applications to selective colleges.
It turns developing-world hardship into a prose-ready opportunity for growth, empathy into an extracurricular activity.
And it reflects a broader gaming of the admissions process that concerns me just as much, because of its potential to create strange habits and values in the students who go through it, telling them that success is a matter of superficial packaging and checking off the right boxes at the right time. That’s true only in some cases, and hardly the recipe for a life well lived.
. . .
Richard Weissbourd, a child psychologist and Harvard lecturer who has studied the admissions process in the interest of reforming it, recalled speaking with wealthy parents who had bought an orphanage in Botswana so their children could have a project to write and talk about. He later became aware of other parents who had bought an AIDS clinic in a similarly poor country for the same reason.
“It becomes contagious,” he said.
A more recent phenomenon is teenagers trying to demonstrate their leadership skills in addition to their compassion by starting their own fledgling nonprofit groups rather than contributing to ones that already exist — and that might be more practiced and efficient at what they do.
. . .
In many cases they are compelled. Tara Dowling, the director of college counseling at the Rocky Hill School in East Greenwich, R.I., said that many secondary schools (including, as it happens, Dylan Hernandez’s) now require a minimum number of hours of service from students, whose schedules — jammed with sports, arts, SAT prep and more — leave little time for it.
Getting it done in one big Central American swoop becomes irresistible, and if that dilutes the intended meaning of the activity, who’s to blame: the students or the adults who set it up this way?

For the full commentary, see:
Bruni, Frank. “To Get to Harvard, Go to Haiti?” The New York Times, SundayReview Section (Sun., AUG. 14, 2016): 3.
(Note: ellipses added.)
(Note: the online version of the commentary has the date AUG. 13, 2016.)