Month: January 2017

Unbinding Entrepreneurs Can Create Jobs and Speed Growth

(p. A21) This week more than 160 countries are celebrating Global Entrepreneurship Week. The Kauffman Foundation, which I once led, created this event eight years ago to encourage other nations to follow the American tradition of bottom-up economic success. Yet this example has been less powerful in recent years, as American entrepreneurship has waned. Fortunately, President-elect Donald Trump has plenty of options if he wants to resurrect America’s startup economy.
Consider the economic situation that the president-elect is inheriting. Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve. More people have joined the ranks of the chronically unemployed, slipping into poverty at alarming rates as their skills decay and dependency on public assistance grows. Considering population growth, America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.
Merely bringing back factories from overseas will not solve this problem. Technology has made every factory more productive. Fewer workers make more goods no matter where they’re located. At the same time, fewer U.S. businesses are being started. New firms are the country’s principal generator of new jobs. Data from the Kauffman Foundation suggest companies less than five years old create more than 80% of new jobs every year. While the nation seems more enthusiastic than ever about the promise of entrepreneurship, fewer than 500,000 new businesses were started in 2015. That is a disastrous 30% decline from 2008.
. . .
What can President Trump do to encourage more entrepreneurship?
. . .
Government must . . . widen the scope of innovation by stepping back and letting the market find the future. By promoting trendy ideas and subsidizing politically favored companies, government dampens diversity in creative business ideas.
. . .
Mr. Trump can also reverse regulatory sprawl and cut government-imposed requirements that add to every entrepreneurs’ costs and risks. Anti-growth policies like ObamaCare and minimum-wage increases make hiring workers prohibitively expensive.
. . .
With these policies in mind, President Trump should set another goal: that his administration will create an environment that enables one million Americans to start companies every year. Such an outcome would assure his target of 4% GDP growth, as well as full employment.

For the full commentary, see:
CARL J. SCHRAMM. “The Entrepreneurial Way to 4% Growth; Trump should set a goal: fix the business climate so a million Americans a year can start companies.” The Wall Street Journal (Weds., Nov. 16, 2016): A21.

Jane Jacobs Studied the “Mess of Everyday Life”

(p. C6) The decidedly unpredictable and unscientific mess of everyday life was the passion of the urban theorist Jane Jacobs. For her, studying the street and the city was the key to understanding how things work. Robert Kanigel’s “Eyes on the Street: The Life of Jane Jacobs” has taken a place on my bookshelf right next to Robert Caro’s landmark biography of her nemesis, Robert Moses.

For Bierut’s full book recommendations, see:
Michael Bierut. “12 Months of Reading.” The Wall Street Journal (Sat., December 10, 2016): C6.
(Note: the online version of the review has the date Dec. 7, 2016, and has the title “Michael Bierut on Jane Jacobs.”)

The book recommended, is:
Kanigel, Robert. Eyes on the Street: The Life of Jane Jacobs. New York: Alfred A. Knopf, 2016.

Not All Secure Jobs Are Good Jobs

(p. C8) The village idiot of the shtetl of Frampol was given the job of waiting at the village gates for the arrival of the Messiah. The pay wasn’t great, he was told, but the work was steady.

For Epstein’s book recommendations, see:
Joseph Epstein. “12 Months of Reading.” The Wall Street Journal (Sat., December 10, 2016): C8.
(Note: the online version of the review has the date Dec. 7, 2016, and has the title “Books of The Times; Review: ‘A Truck Full of Money’ and a Thirst to Put It to Good Use.”)

Estonia Encourages Citizens to Own Guns to Defend Freedom

(p. A4) Since the Ukraine war, Estonia has stepped up training for members of the Estonian Defense League, teaching them how to become insurgents, right down to the making of improvised explosive devices, or I.E.D.s, the weapons that plagued the American military in Iraq and Afghanistan. Another response to tensions with Russia is the expansion of a program encouraging Estonians to keep firearms in their homes.
. . .
(p. A10) Encouraging citizens to stash warm clothes, canned goods, boots and a rifle may seem a cartoonish defense strategy against a military colossus like Russia. Yet the Estonians say they need look no further than the wars in Iraq and Afghanistan to see the effectiveness today, as ever, of an insurgency to even the odds against a powerful army.
Estonia is hardly alone in striking upon the idea of dispersing guns among the populace to advertise the potential for widespread resistance, as a deterrent.
Of the top four nations in the world for private gun ownership — the United States, Yemen, Switzerland and Finland — the No. 3 and 4 spots belong to small nations with a minutemen-style civilian call-up as a defense strategy or with a history of partisan war.
“The best deterrent is not only armed soldiers, but armed citizens, too,” Brig. Gen. Meelis Kiili, the commander of the Estonian Defense League, said in an interview in Tallinn, the capital.
The number of firearms, mostly Swedish-made AK-4 automatic rifles, that Estonia has dispersed among its populace is classified. But the league said it had stepped up the pace of the program since the Ukraine crisis began. Under the program, members must hide the weapons and ammunition, perhaps in a safe built into a wall or buried in the backyard.

For the full story, see:
ANDREW E. KRAMER. “TURI JOURNAL; Wary of Russia’s Ambitions, Estonia Prepares a Nation of Insurgents.” The New York Times (Tues., NOV. 1, 2016): A4 & A10.
(Note: ellipsis added.)
(Note: the online version of the story has the date OCT. 31, 2016, and has the title “TURI JOURNAL; Spooked by Russia, Tiny Estonia Trains a Nation of Insurgents.”)

Invention Requires More than Just Necessity

If necessity is the mother of invention, why did it take 2,000 years for necessity to give birth?

(p. D2) Archaeological evidence suggests that after setting sail from the Solomon Islands, people crossed more than 2,000 miles of open ocean to colonize islands like Tonga and Samoa. But after 300 years of island hopping, they halted their expansion for 2,000 years more before continuing — a period known as the Long Pause that represents an intriguing puzzle for researchers of the cultures of the South Pacific.
“Why is it that the people stopped for 2,000 years?” said Dr. Montenegro. “Clearly they were interested and capable. Why did they stop after having great success for a great time?”
To answer these questions, Dr. Montenegro and his colleagues ran numerous voyage simulations and concluded that the Long Pause that delayed humans from reaching Hawaii, Tahiti and New Zealand occurred because the early explorers were unable to sail through the strong winds that surround Tonga and Samoa. They reported their results last week in the journal of the Proceedings of the National Academy of Sciences.
“Our paper supports the idea that what people needed was boating technology or navigation technology that would allow them to move efficiently against the wind,” Dr. Montenegro said.

For the full story, see:
NICHOLAS ST. FLEUR. “Long Layovers: A 2,000-Year Pause in Exploring Oceania.” The New York Times (Sat., November 8, 2016): D2.
(Note: the online version of the story has the date NOV. 1 [sic], 2016, and has the title “How Ancient Humans Reached Remote South Pacific Islands.” The passages quoted above are from the much-longer online version of the article.)

Montenegro’s academic article, mentioned above, is:
Montenegro, Álvaro, Richard T. Callaghan, and Scott M. Fitzpatrick. “Using Seafaring Simulations and Shortest-Hop Trajectories to Model the Prehistoric Colonization of Remote Oceania.” Proceedings of the National Academy of Sciences 113, no. 45 (Nov. 8, 2016): 12685-90.

Best Entrepreneurs, and Managers, Help Workers Lead Meaningful Lives

(p. C6) In “Payoff,” Dan Ariely makes the strong case that the best way to motivate people, including ourselves, is not through persuasive tactics, however subtle, but by providing the groundwork for meaning in people’s lives.

For Altucher’s full book recommendations, see:
James Altucher. “12 Months of Reading.” The Wall Street Journal (Sat., December 10, 2016): C6.
(Note: the online version of the review has the date Dec. 7, 2016, and has the title “James Altucher on con artists.”)

The book recommended, is:
Ariely, Dan. Payoff: The Hidden Logic That Shapes Our Motivations, Ted Books. New York: Simon & Schuster, Inc., 2016.

Micro-Entrepreneur Worked Hard, Saved, and Has No Regrets

(p. 1) PORT HEDLAND, Australia — A lanky, dark-haired surfer, Lee Meadowcroft modeled on the runways of London, Milan and Singapore, then followed his dream of going home to Australia to sell herbal medicines. His store failed — he had chosen the wrong street, he says — and he lost almost all his savings. By then, the fashion world had found fresher faces.

So like tens of thousands of other Australians, Mr. Meadowcroft went to the mines.

It was late 2004. He plowed his last $4,000 into a two-week course on how to operate a crane. He found companies so desperate for workers that they would send chauffeured cars to pick up prospective welders, electricians and crane operators and deliver them to the nearest airport for their flights to mining country, here on Australia’s remote northwestern coast.

China back then was growing at a breathtaking pace and needed all the Australian rocks it could get. Mine workers like Mr. Meadowcroft kept a punishing schedule: 13 consecutive days of 12-hour shifts, a day off, then another 13 consecutive days of 12-hour (p. 4) shifts. Mining fueled Australia’s surging exports to China, which at their peak reached nearly $100 billion a year — a figure representing $4,300 for every man, woman and child in the country.

Resource-rich places around the world prospered thanks to China, and Mr. Meadowcroft and his fellow Port Hedland equipment jockeys were no exception. By 2011 he was earning $250,000 a year.

. . .

The bust came just as hard and just as fast. China’s economic slowdown left too many mines to feed too many dormant Chinese steel mills. Construction of new mines stopped. Port Hedland’s economy slumped. Mr. Meadowcroft lost his job, then lost a second job. Like thousands of others, he went back home.

Mr. Meadowcroft’s tale could serve as yet another boom-and-bust cautionary tale of the limits of China’s rise. From Russia to Brazil, and Nigeria to Venezuela, resource-rich countries that boomed during China’s surge found their economies shaken when Chinese demand slowed.

Except something unexpected has happened to Australia: It has withstood the global rout. Most mines — lower-cost compared with mines elsewhere — have stayed open. But Australia has also kept thriving, against all expectations, with a different kind of money flowing in from China.

Attracted by clean air, a strong education system and worries about China’s future, more Chinese are spending their money in Australia. Thousands of Chinese families have sent their children to study at costly Australian universities, and Australian food exports to China have boomed. Chinese investment in Australian real estate has increased at least tenfold since 2010; Chinese investors have purchased up to half the new apartments in downtown Melbourne and Sydney.

. . .

. . . for people like Mr. Meadowcroft and others in Western Australia who were cut loose by the mining slump, Chinese money is a blessing. He now lives in the Western Australia capital city of Perth and works as an apprentice plumber in new housing developments aimed at Chinese buyers. He earns just $21,000 a year, but that could double or triple when he finishes his apprenticeship.

. . .

(p. 5) . . . for now, Chinese money is still flowing. Many miners who squandered their earnings during the iron ore boom are now trying to catch up in construction jobs. But many others socked away their money from the boom and have used those savings to buy homes or start small businesses.

“They were micro-entrepreneurs,” said Tom Barratt, a University of Western Australia doctoral student who is doing his thesis on labor markets in the Pilbara hills.

Mr. Meadowcroft is among those savers. He bought a house and soon paid off most of the mortgage. He also married his longtime girlfriend after years of commuting to far-flung mines and ports, and is now raising two children as he learns to be a plumber.

Although his savings account is much smaller now, he has no regrets about the boom years. “That was 12 years of really hard work,” he said, “to achieve what a lot of people don’t achieve in their whole lives.”

For the full story, see:

KEITH BRADSHER. “Money From the Dust.” The New York Times, SundayBusiness Section (Sun., SEPT. 25, 2016): 1 & 4-5.

(Note: ellipses added.)

(Note: the online version of the story has the date SEPT. 24, 2016, and has the title “In Australia, China’s Appetite Shifts From Rocks to Real Estate.”)

“Celebration of Big Data” Becomes “Funeral”

(p. B8) DENVER — At the governor’s mansion here on Friday [November 11, 2016], past the columned entryway and the French chandeliers, Emmy Ruiz placed a hand on the shoulder of a fellow Hillary Clinton operative. “It’s like we’re at a funeral,” said Ms. Ruiz, dressed — perhaps coincidentally — in black.
Just days after Donald J. Trump’s surprise presidential victory, the nation’s professional political forecasters and persuaders — the pollsters, the ad creators, the campaign strategists — gathered in Denver for their annual convention. It was supposed to be a celebration of big data and strategic wizardry for a multibillion-dollar industry that has spent nearly a century packaging political candidates.
Instead, the conference of the International Association of Political Consultants felt like a therapy session for a business in psychological free fall.

For the full story, see:
JULIE TURKEWITZ. “At Conference, Political Consultants Wonder Where They Went Wrong.” The New York Times (Tues., NOV. 15, 2016): B8.
(Note: bracketed date added.)
(Note: the online version of the story has the date NOV. 14, 2016.)

Air-Conditioning Is “a Critical Adaptation” that Saves Lives

(p. A3) Air-conditioning is not just a luxury. It’s a critical adaptation tool in a warming world, with the ability to save lives.
. . .
In our continuing research, my colleagues and I have found that hot days in India have a strikingly big impact on mortality. Specifically, the mortality effects of each additional day in which the average temperature exceeds 95 degrees Fahrenheit are 25 times greater in India than in the United States.
. . .
The effect of very hot days on mortality in the United States is so low in part because of the widespread use of air-conditioning. A recent study I did with colleagues showed that deaths as a result of these very hot days in the United States declined by more than 80 percent from 1960 to 2004 — and it was the adoption of air-conditioning that accounted for nearly the entire decline.

For the full story, see:
Michael Greenstone. “‘India’s Air-Conditioning and Climate Change Quandary.” The New York Times (Thurs., OCT. 27, 2016): A3.
(Note: ellipses added.)
(Note: the online version of the story has the date OCT. 26, 2016.)

The Greenstone study mentioned above on heat mortality in the U.S., is:
Barreca, Alan, Karen Clay, Olivier Deschenes, Michael Greenstone, and Joseph S. Shapiro. “Adapting to Climate Change: The Remarkable Decline in the Us Temperature-Mortality Relationship over the Twentieth Century.” Journal of Political Economy 124, no. 1 (Feb. 2016): 105-59.