Infrastructure Costs Often Exceed Benefits

(p. A13) Most federal infrastructure spending is done by sending funds to state and local governments. For highway programs, the ratio is usually 80% federal, 20% state and local. But that means every local district has an incentive to press the federal authorities to fund projects with poor national returns. We all remember Alaska’s infamous “bridge to nowhere.”
In other words, if a local government is putting up only 20% of the funds, it needs the benefits to its own citizens to be only 21% of the total national cost. Yet every state and every locality has potential infrastructure needs that it would like the rest of the country to pay for. That leads to the misallocation of federal funds and infrastructure projects that benefit the few at the cost of the many.
. . .
Japan tried infrastructure-heavy serial fiscal stimuli for decades and is trying again under Prime Minister Shinzo Abe. Yes, Japan now has many new bridges, roads and paved drainage ditches, but the spending has done little to improve Japan’s meager growth rate.

For the full story, see:
MICHAEL J. BOSKIN. “All Aboard the Infrastructure Boondoggle; Whoever wins on Nov. 8, a flood of public-works money is coming. Cost-benefit tests are crucial.” The Wall Street Journal (Tues., Nov. 1, 2016): A13.
(Note: ellipsis added.)
(Note: the online version of the article has the date Oct. 31, 2016.)

Blockchain Can Cut Out Financial Middlemen

(p. A9) Blockchains are basically a much better way of managing information. They are distributed ledgers, run on multiple computers all over the world, for recording transactions in a way that is fast, limitless, secure and transparent. There is no central database overseen by a single institution responsible for auditing and recording what goes on. If you and I were to engage in a transaction, it would be executed, settled and recorded on the blockchain and evident for all to see, yet encrypted so as to be villain-proof. “The new platform enables a reconciliation of digital records regarding just about everything in real time,” write the Tapscotts. No more waiting for that check to clear. It would all be done and recorded for eternity before you know it.
The digital currency bitcoin is currently the best-known blockchain technology. If I wanted to pay you using bitcoin, I would start with a bitcoin wallet on my computer or phone and buy bitcoins using dollars. I would then send you a message identifying the bitcoin I would like to send you and sign the transaction using a private key. The heavily encrypted reassignment of the bitcoin to your wallet is recorded and verified in the bitcoin ledger for all to see, and they are now yours to spend. The transaction is likely more secure and cheaper than a traditional bank transfer.
. . .
The layman, . . . , might want to wait for a more penetrable explanation of blockchains to come along–as one surely will if the authors’ predictions are even one-zillionth right.​

For the full review, see:
PHILIP DELVES BROUGHTON. “BOOKSHELF; Bitcoin Is Just The Beginning; Imagine a personal-identity service that gives us control over selling our personal data. Right now, Google and Facebook reap the profit.” The Wall Street Journal (Fri., May 27, 2016): A9.
(Note: ellipses added.)
(Note: the online version of the review has the date May 26, 2016.)

The book under review, is:
Tapscott, Don, and Alex Tapscott. Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World. New York: Portfolio, 2016.

Tesla Fights Car Dealership Monopoly

(p. B4) Tesla Motors Inc. filed an application for a dealership license in Michigan, setting up a potential legal fight over the state’s ban on selling cars directly to consumers.
. . .
About a year ago, Michigan passed a law prohibiting car makers from selling directly to customers in the state without an independent dealer as an intermediary. Tesla has opposed such dealer-franchise laws, calling them anticompetitive. Tesla allows customers to order vehicles directly from the company, something that other manufacturers are prohibited from doing.
A formal denial of its application by Michigan could prompt Tesla to pursue additional legal avenues to fight a law it calls “very harmful.”
“Tesla is committed to being able to serve its customers in Michigan, and is working with the legislature to accomplish that. The existing law in Michigan is very harmful to consumers,” a Tesla spokeswoman said. “Tesla will take all appropriate steps to fix this broken situation.”
. . .
Michigan and Texas are among a small group of states that have a flat prohibition on any direct sales. The laws were created to prevent car makers from building their own stores that would ​then ​compete with independent​dealerships. Michigan Automotive Dealers Association couldn’t immediately be reached for comment.
Such competition could potentially undercut independent dealerships’ prices and undermine investments made in their stores, according to lawyers and economists who have scrutinized dealer-franchise laws.

For the full story, see:
Ramsey, Mike. “Tesla Seeks License to Sell Cars in Michigan.” The Wall Street Journal (Tues., Feb. 2, 2016): B4.
(Note: ellipses added.)
(Note: the online version of the article has the date Feb. 1, 2016, and has the title “Tesla Motors Files for a Dealership License in Michigan.” The online version is slightly different from the print version. The passage quoted above is from the online version.)

Udacity Entrepreneur Counters Creeping Credentialism

(p. B2) Udacity, an online learning start-up founded by a pioneer of self-driving cars, is finally taking the wraps off a job trial program it has worked on for the last year with 80 small companies.
The program, called Blitz, provides what is essentially a brief contract assignment, much like an internship. Employers tell Udacity the skills they need, and Udacity suggests a single candidate or a few. For the contract assignment, which usually lasts about three months, Udacity takes a fee worth 10 to 20 percent of the worker’s salary. If the person is then hired, Udacity does not collect any other fees, such as a finder’s fee.
For small start-ups, a hiring decision that goes bad can be a time-consuming, costly distraction. “This lets companies ease their way into hiring without the hurdle of making a commitment upfront,” said Sebastian Thrun, co-founder and chairman of Udacity.
. . .
Mr. Thrun, a former Stanford professor and Google engineer who led the company’s effort in self-driving cars, said he was also trying to nudge the tech industry’s hiring beyond its elite-college bias.
“For every Stanford graduate, there are hundreds of people without that kind of pedigree who can do just as well,” he said.

For the full story, see:
STEVE LOHR. “Udacity, an Education Start-Up, Offers Tech Job Tryouts.” The New York Times (Fri., NOV. 18, 2016): B2.
(Note: ellipsis added.)
(Note: the online version of the story has the date NOV. 17, 2016, and has the title “Udacity, an Online Learning Start-Up, Offers Tech Job Trials.”)

Farmer and Mechanic Invented Pivot Irrigation System

(p. D1) LINDSAY, Neb. — Paul Zimmerer’s contribution to agriculture is now forever immortalized.
A recent ceremony in Lindsay dedicated a memorial to the late inventor whose irrigation system dots the landscape throughout the country.
Zimmerer, inventor of the Zimmatic Pivot Irrigation System, died July 31, 2008, at the age of 94.
. . .
Dave Albracht, chairman of the Lindsay Village Board, said Lloyd Castner, a member of the Platte County Historical Society, first approached him about a memorial.
“I’m sure everybody knows that the small towns struggle, and Lindsay wouldn’t be where we’re at if it wasn’t for the Paul Zimmerer family,” he said.
. . .
Zimmerer opened a blacksmith shop in 1955 and sold modified car engines to be used on irrigation wells. His idea became the foundation of one of northeast Nebraska’s largest companies, Lindsay Corp.
He was a farmer and mechanic and owned Zimmerer Auto Repair and Gas Station in Lindsay before founding Lindsay Manufacturing Co., which is now Lindsay Corp.”

For the full story, see:
Patrick Murphy. “Memorial dedicated to Zimmatic Pivot inventor.” Omaha World-Herald (Fri., Nov. 25, 2016): 4D.
(Note: ellipses added.)

Dignity and Equality Before the Law Unleashes Creativity in the Poor

(p. A23) We can improve the conditions of the working class. Raising low productivity by enabling human creativity is what has mainly worked. By contrast, taking from the rich and giving to the poor helps only a little — and anyway expropriation is a one-time trick.
. . .
Look at the astonishing improvements in China since 1978 and in India since 1991. Between them, the countries are home to about four out of every 10 humans. Even in the United States, real wages have continued to grow — if slowly — in recent decades, contrary to what you might have heard. Donald Boudreaux, an economist at George Mason University, and others who have looked beyond the superficial have shown that real wages are continuing to rise, thanks largely to major improvements in the quality of goods and services, and to nonwage benefits. Real purchasing power is double what it was in the fondly remembered 1950s — when many American children went to bed hungry.
What, then, caused this Great Enrichment?
Not exploitation of the poor, not investment, not existing institutions, but a mere idea, which the philosopher and economist Adam Smith called “the liberal plan of equality, liberty and justice.” In a word, it was liberalism, in the free-market European sense. Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic.

For the full commentary, see:
DEIRDRE N. McCLOSKEY. “Economic View; Equality, Liberty, Justice and Wealth.” The New York Times, SundayBusiness Section (Sun., SEPT. 4, 2016): 6.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date SEPT. 2, 2016, and has the title “Economic View; The Formula for a Richer World? Equality, Liberty, Justice.”)

McCloskey’s commentary, quoted above, is related to her book:
McCloskey, Deirdre N. Bourgeois Equality: How Ideas, Not Capital, Transformed the World. Chicago: University of Chicago Press, 2016.

Wind Turbines Kill Bats

(p. D2) Wind power can help the world fight climate change, but it’s not so great for bats.
A new study of wind turbines in Britain found that each turbine killed one to two bats each month on average, with some killing more than 60. The researchers said that the efforts that are required in many countries to assess the environmental effect of planned wind farms have proved faulty and inadequate in measuring the risk to bats.

For the full story, see:

JOHN SCHWARTZ. “Kind to the Planet, Not to Bats.” The New York Times (Tues., Nov. 15, 2016): D2.

(Note: the online version of the article has the date NOV. 7 [sic], 2016, and has the title “When Bats Look for Meals Near Wind Power, Bats Die.” The online version is much longer than the print version, and differs somewhat, even where they overlap. The passage quoted above is from the online version.)

The “study” summarized in the passage above, is:
Lintott, Paul R., Suzanne M. Richardson, David J. Hosken, Sophie A. Fensome, and Fiona Mathews. “Ecological Impact Assessments Fail to Reduce Risk of Bat Casualties at Wind Farms.” Current Biology 26, no. 21 (Nov., 7, 2016): R1135-R1136.