Luis Locay Offers Advance Praise for Openness to Creative Destruction

Openness to Creative Destruction is first and foremost a great read. Much of the book is devoted to skillfully chosen accounts of usually successful, but occasionally unsuccessful, entrepreneurs to illustrate the author’s arguments. At times these accounts made me feel like I was reading a series of short adventure stories. This use of examples to make the argument for the central role of the creative entrepreneur in generating innovation, and the benefits that can accrue to society from creative destruction, makes the book very accessible to the intelligent layman or beginning student, while its serious ideas will be of interest to professional economists and sophisticated policymakers. The theoretician of entrepreneurship or innovation will find it a one-stop source of real-world examples. I plan to make it required reading in my growth and industrial organization classes.

Luis Locay, Associate Professor of Economics, University of Miami.

Locay’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.

Cow Burps Increase Global Warming More Than Cow Farts

(p. A10) Agriculture was responsible for 9 percent of greenhouse gas emissions in the United States in 2016, according to the Environmental Protection Agency. While the sectors with the most emissions were transportation and electricity generation, at 28 percent each, United States agricultural emissions were still greater than Britain’s total emissions in 2014, according to data from the World Bank.
Cows and other ruminants are responsible for two-thirds of those agricultural emissions. Their guts produce methane, a powerful greenhouse gas that’s more potent at trapping heat in the atmosphere than carbon dioxide, though it also dissipates faster. Cows release some of that methane through their flatulence, but much more by burping.
Deer, camels and sheep also produce methane. But in the United States, it’s cows that primarily account for the 26.9 percent of methane emissions, more than any other source. Natural gas accounts for 25 percent.

For the full story, see:
Pierre-Louis, Kendra. “Source of the Problem, Also Part of the Solution.” The New York Times (Saturday, March 7, 2019): A10.
(Note: the online version of the story has the date March 6, 2019, and has the title “No One Is Taking Your Hamburgers. But Would It Even Be a Good Idea?”)

Last Blockbuster Store Flourishes

(p. B3) The second-to-last Blockbuster, a squat blue-and-yellow slab wedged next to a real estate agency in Western Australia, will stop renting videos on Thursday and shut down for good at the end of the month. Two stores in Alaska, part of the final group of Blockbuster outlets in the United States, closed in July.
That will make the Blockbuster in Bend, Ore., one of a kind: a corporate remnant, just off the highway, near a cannabis retailer and a pet cremation service.
. . .
Some Tower Records stores still thrive in Japan long after their parent company declared bankruptcy and closed all of its American stores. There is a Howard Johnson’s in Lake George, N.Y., that is the lone survivor of what was once the country’s largest restaurant chain.
Such holdouts have bucked the norm in the retail and restaurant industries, which have shed stores by the hundreds in recent years.
. . .
The Bend store became a Blockbuster franchise in 2000. It has about 4,000 active accounts and signs up a few fresh ones each day, Ms. Harding said. Some of the new customers are tourists who have traveled hours out of their way to stop in.
. . .
One possible explanation for the store’s long life: Bend is in a region that the city’s mayor, Sally Russell, describes as having “huge expanses with really small communities” that often do not have easy access to the high-speed internet necessary for content streaming.
Many residents of outlying areas stop at Blockbuster during their weekly trips to town to run errands, drawn in part by the store’s seven-day rental policy, Ms. Russell said, adding that the store’s last-in-the-world status could even give it a lift.
“It’s like with old vinyl, and how everyone wants to have turntables again,” she said. “We get to a place where something out of date comes back in — there’s definitely interest in keeping this almost-extinct way of enjoying movies alive.”

For the full story, see:
Tiffany Hsu. “A 9,000-Store Chain Has Closed 8,999. How Does That Work?” The New York Times (Thursday, March 7, 2019): B3.
(Note: ellipses added.)
(Note: the online version of the story has the date March 6, 2019, and has the title “The World’s Last Blockbuster Has No Plans to Close.”)

Those Who Don’t Like High-Tech Can Buy Low-Tech

(p. A1) Dan Dolar was ready to take a break from the distractions of his smartphone. So he bought another phone.
The 47-year-old IT worker, who lives in Manteca, Calif., now typically carries his new 3.8-inch Palm “companion device” around with him on weekends, leaving his bigger Samsung Galaxy Note 9 at home.
The new gadget helps when he’s “living that dad life,” he said, while reducing the potential distractions. Without his big smartphone, he said, “I’m not compelled to get that dopamine rush.”
Smartphone-fatigued consumers are renegotiating their relationships with their devices. A growing contingent is embracing a new crop of mini-(p. A13)malist phones, priced around $300 to $350, to wean themselves off premium models that keep them constantly connected.
Some are concerned that social media-usage is robbing them of interpersonal connections and making them less attentive. Others are annoyed by recent data privacy scandals at large internet and social-media companies–or they want the simple practicality of carrying a smaller phone.

For the full story, see:
Sarah Krouse. “One Solution for Smartphone Addicts–Another Phone.” The Wall Street Journal (Tuesday, March 12, 2019): A1 & A13.
(Note: the online version has the date March 11, 2019, and has the title “Smartphone Addicts’ New Tactic to Break Their Habit: Buy a Second Phone.”)

“I’ll Stick with You in Failure”

(p. B13) Sidney Sheinberg, an irascible Universal Studios executive who discovered and nurtured Steven Spielberg, putting “Jaws” into production and helping to turn Hollywood into a blockbuster-focused business, died on Thursday [March 7, 2019] at his home in Beverly Hills, Calif.
. . .
Mr. Sheinberg was for much of his career the forthright top deputy to Lew Wasserman, the chairman of MCA, a conglomerate that encompassed Universal. The ultimate mogul, Mr. Wasserman defined power in Hollywood in the decades after World War II.
But Mr. Sheinberg, openly intimidating as president and chief operating officer, kept the gears turning. When the two men left MCA in 1995, Mr. Sheinberg had worked for the company for 36 years, the last 22 as president.
During that time he helped transform Universal into an international entertainment giant, complete with a sprawling theme park empire.
. . .
“Sheinberg dealt with all people like a battering ram: Do it his way or get out of the way,” Dennis McDougal wrote in the 1998 biography “The Last Mogul: Lew Wasserman, MCA, and the Hidden History of Hollywood.”
Most important, Mr. Sheinberg discovered Mr. Spielberg. It was 1968 and the director, in his early 20s, had just completed a short film, “Amblin’,” a love story about hitchhiking hippies. Based on what he saw, Mr. Sheinberg put Mr. Spielberg under contract and gave him a job directing television shows. An episode of “Marcus Welby” was one of the first. In 1971 came “Duel,” Mr. Spielberg’s thrilling TV movie about a commuter terrorized by a truck driver.
With a line that has come to epitomize loyalty in the often fickle movie business, Mr. Sheinberg told his protégé at the time: “A lot of people will stick with you in success. I’ll stick with you in failure.”
Mr. Sheinberg, who could be as tender as he was prickly, was the one who allowed Mr. Spielberg to make “Jaws,” giving him a budget of $3.5 million (about $17 million in today’s money). A problem-plagued shoot pushed the cost to more than twice as much.
But Mr. Sheinberg, developing a father-son relationship with Mr. Spielberg, continued to support the film, which went on to become the prototype for the wide-release summer blockbuster.
. . .
When he opened the first Universal theme park in Orlando, Fla., in 1990 — in a race against Disney, which was building a movie-themed park that is now called Disney’s Hollywood Studios — Mr. Sheinberg and his team incorporated one of Disney’s mouse-ear hats into the “Jaws” ride.
The ears bobbed in the bloody water.

For the full obituary, see:

Brooks Barnes. “Sidney Sheinberg, 84, Dies; Universal Studios Leader Who Discovered Spielberg.” The New York Times (Saturday, March 9, 2019): B13.

(Note: ellipses, and bracketed date, added.)
(Note: the online version of the obituary has the date March 8, 2019, and has the title “Sidney Sheinberg, a Force Behind Universal and Spielberg, Is Dead at 84.” The online version says that the page number of the New York edition was D7. I cite the page number in my National edition.)

The biography of Wasserman, mentioned above, is:
McDougal, Dennis. The Last Mogul: Lew Wasserman, MCA, and the Hidden History of Hollywood. revised ed. Boston, MA: Da Capo Press, 2001.

Absence of For-Profit Hospitals Hurts New York State

(p. A17) House Democrats’ new Medicare for All bill asserts “a moral imperative . . . to eliminate profit from the provision of health care.”
. . .
The Empire State’s hospital industry has been 100% nonprofit or government-owned for more than a decade. It’s a byproduct of longstanding, unusually restrictive ownership laws that squeeze for-profit general hospitals. The last one in the state closed its doors in 2008.
A report last year from the Albany-based Empire Center shows the unhappy results. The state health-care industry’s financial condition is chronically weak, with the second-worst operating margins and highest debt loads in the country. And there’s no evidence that expunging profit has reduced costs. New York’s per capita hospital spending is 18% higher than the national average.
The overall quality of New York’s hospitals, even factoring in Manhattan’s flagship institutions, is poor. Their average score on the federal government’s Hospital Compare report card was 2.18 stars out of five–last out of 50 states. Their collective safety grades from the Leapfrog Group and Consumer Reports magazine have also been dismal.
The state’s nonprofit hospitals also fall short on accessibility for the uninsured. On average they devoted 1.9% of revenues to charity care in 2015, a third less than privately owned hospitals nationwide.
Finally, New York’s antiprofit policy doesn’t even prevent people from getting rich. Seven-figure salaries are common among the state’s hospital executives. If banning profit is an effective way to improve health-care, there’s no evidence to be found in New York.

For the full commentary, see:
.Bill Hammond. “Banishing Profit Is Bad for Your Health; The Medicare for All proposal from House Democrats follows New York state’s bad example.” The Wall Street Journal (Tuesday, March 19, 2019): A17.
(Note: ellipsis internal to first paragraph, in original; ellipsis between paragraphs, added.)
(Note: the online version of the commentary has the date March 18, 2019.)