Author: Art Diamond

Crisis in Wind Industry Due to Inflation, Regulatory, and Grid Connection Hurdles

(p. B5) The wind business, viewed by governments as key to meeting climate targets and boosting electricity supplies, is facing a dangerous market squall.

After months of warnings about rising prices and logistical hiccups, developers and would-be buyers of wind power are scrapping contracts, putting off projects and postponing investment decisions. The setbacks are piling up for both onshore and offshore projects, but the latter’s problems are more acute.

In recent weeks, at least 10 offshore projects totaling around $33 billion in planned spending have been delayed or otherwise hit the doldrums across the U.S. and Europe.

“At the moment, we are seeing the industry’s first crisis,” said Anders Opedal, chief executive of Equinor, in an interview.

. . .

The holdup of projects that could generate 11.7 gigawatts—enough to power roughly all Texas households and then some—likely pushes 2030 offshore wind targets out of reach for the Biden administration and European governments.

. . .

(p. B11) The list of woes is long: inflation, supply-chain backlogs, rising interest rates, long permit and grid connection timelines. The increasing pace of the energy transition has created a loop of escalating costs.

For the full story, see:

Mari Novik and Jennifer Hiller. “Wind Power Stumbles as Problems Mount.” The Wall Street Journal (Tuesday, Aug. 8, 2023): B5 & B11.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 7, 2023, and has the title “Wind Industry in Crisis as Problems Mount. The online version says that the title of the print version is “Wind Power Stumbles as Cost, Logistical Problems Mount.” But my print version of the national edition had the shorter title “Wind Power Stumbles as Problems Mount.”)

Deregulation “Unleashed Powerful Forces of Innovation and Consumer Benefit”

(p. A13) The railroads harmed small merchants who were tied to the older system of roads and canals. But even those who benefited from railroads—notably farmers and producers of raw materials—feared the power of the enterprises that provided them with large new markets. The anxieties of innumerable small players generated powerful political energy, culminating in the Interstate Commerce Act of 1887, which created the ICC—and with it the template of the independent regulatory commission.

The historian Gabriel Kolko famously argued that the ICC was created by and for the railroads themselves, as a solution to a problem of intense competition. But more-recent research has shown that the interests of shippers were also at play, and by the early 20th century the ICC had essentially been captured by the shippers. The result for the railroads was absurdly low rates of return and an inability to raise capital. The ICC also became a bottleneck through which virtually all railroad business decisions had to pass.

Thus began the long and steady decline of the American railroad industry, which wasn’t arrested until surface freight was deregulated (and the ICC ultimately abolished) in the 1970s. Throughout its life, the ICC repeatedly stood in the way of innovation, including containerized shipping.

. . .

It is fashionable nowadays to dismiss unleashed powerful forces of innovation and consumer benefit of the late 20th century as an unfortunate if fleeting episode of “neoliberalism.” In fact, dismantling some of America’s rigid and retrogressive regulatory institutions unleashed powerful forces of innovation and consumer benefit. Before we attempt to rebuild those structures, we need to examine the lessons of history.

For the full commentary, see:

Richard N. Langlois. “Warren and Graham Emulate History’s Failed Regulators.” The Wall Street Journal (Saturday, Aug. 5, 2023): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 4, 2023, and has the same title as the print version.)

Langlois’s commentary can be viewed as an application of the narrative in his book:

Langlois, Richard N. The Corporation and the Twentieth Century: The History of American Business Enterprise. Princeton: Princeton University Press, 2023.

Psychedelics May Return Brains to More “Plastic” Adaptable Form

(p. C4) New studies suggest that psychedelics, carefully administered in controlled settings with trained therapists, can help treat mental illnesses like depression, addiction and PTSD. But just how do psychedelics achieve these therapeutic effects?

A new study in the journal Nature by the neuroscientist Gul Dolen at Johns Hopkins and colleagues tackles this question.

. . .

. . ., Dolen’s team gave mice a variety of psychedelics and observed their effects. Mice, like people, have what are called “critical periods” for various kinds of development—times when the brain is especially open to new experiences and especially likely to learn and change. After a critical period closes, that type of learning is much harder. These specific critical periods reflect a more general phenomenon: Brains start out more “plastic,” easier to change and more sensitive to experience, and get more efficient but more rigid as people—or mice—grow older.

. . .

As expected, the different drugs acted through different chemical mechanisms. But all of them ultimately activated genes that made the brain more “plastic,” more easily changed.

Other research shows that psychedelics may reopen other kinds of critical periods. For example, amblyopia, or “lazy eye,” must be treated early for the visual cortex to rewire properly. But a 2020 study published in Current Biology found that ketamine reopened the visual critical period in mice, allowing older animals to recover from amblyopia.

These results have important implications for psychedelic therapy. We know that the effects of psychedelics depend on “set and setting”—the context and the attitude of the person who takes them—and that psychedelic experiences can feel wonderful or terrible to the user. The new research suggests that psychedelics work by opening up the brain to new possibilities, allowing it to escape from old ruts, change and learn. That might give humans a chance to change addictive habits or destructive thought patterns.

For the full commentary, see:

Alison Gopnik. “MIND & MATTER; The New Promise of Psychedelics.” The Wall Street Journal (Saturday, July 22, 2023): C4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 20, 2023, and has the same title as the print version.)

The academic article discussed in the passages above is:

Nardou, Romain, Edward Sawyer, Young Jun Song, Makenzie Wilkinson, Yasmin Padovan-Hernandez, Júnia Lara de Deus, Noelle Wright, Carine Lama, Sehr Faltin, Loyal A. Goff, Genevieve L. Stein-O’Brien, and Gül Dölen. “Psychedelics Reopen the Social Reward Learning Critical Period.” Nature 618, no. 7966 (June 14, 2023): 790-98.

Foundations with an End Date May Honor the Donor’s Intent

(p. C6) This year, the William E. Simon Foundation is closing its doors, or “sunsetting,” in the parlance of modern philanthropy. Since it was founded in 1967 by former Treasury Secretary William E. Simon and his wife Carol, the foundation has given away almost $300 million to the causes that mattered to them—faith, family and education.

. . .

Traditionally, sunsetting a foundation has appealed to more conservative donors. Bill Simon, Jr., who manages the Simon Foundation along with his six siblings, says that his late father set a closing date because he had seen “foundations that seemed to veer off of their donor’s intent.” Simon recalls: “Dad trusted his own seven children to know where he would have put his money…But as much as he loved his grandchildren, he did not know them.”

Indeed, Henry Ford II resigned from the Ford Foundation’s board in 1977, writing that its hostility to capitalism had thrown it off course: “Perhaps it is time for the trustees and staff to examine the question of our obligations to our economic system and to consider how the foundation, as one of the system’s most prominent offspring, might act most wisely to strengthen and improve its progenitor.”

For the full commentary, see:

Naomi Schaefer Riley. “Philanthropists Discover the Value of ‘Sunsetting’.” The Wall Street Journal (Saturday, Aug. 5, 2023): C6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 3, 2023, and has the same title as the print version.)

Improved AI Models Do Worse at Identifying Prime Numbers

(p. A2) . . . new research released this week reveals a fundamental challenge of developing artificial intelligence: ChatGPT has become worse at performing certain basic math operations.

The researchers at Stanford University and the University of California, Berkeley said the deterioration is an example of a phenomenon known to AI developers as drift, where attempts to improve one part of the enormously complex AI models make other parts of the models perform worse.

“Changing it in one direction can worsen it in other directions,” said James Zou, a Stanford professor who is affiliated with the school’s AI lab and is one of the authors of the new research. “It makes it very challenging to consistently improve.”

. . .

The goal of the team of researchers, consisting of Lingjiao Chen, a computer-science Ph.D. student at Stanford, along with Zou and Berkeley’s Matei Zaharia, is to systematically and repeatedly see how the models perform over time at a range of tasks.

Thus far, they have tested two versions of ChatGPT: version 3.5, available free online to anyone, and version 4.0, available via a premium subscription.

The results aren’t entirely promising. They gave the chatbot a basic task: identify whether a particular number is a prime number. This is the sort of math problem that is complicated for people but simple for computers.

Is 17,077 prime? Is 17,947 prime? Unless you are a savant you can’t work this out in your head, but it is easy for computers to evaluate. A computer can just brute force the problem—try dividing by two, three, five, etc., and see if anything works.

To track performance, the researchers fed ChatGPT 1,000 different numbers. In March, the premium GPT-4, correctly identified whether 84% of the numbers were prime or not. (Pretty mediocre performance for a computer, frankly.) By June its success rate had dropped to 51%.

. . .

The phenomenon of unpredictable drift is known to researchers who study machine learning and AI, Zou said. “We had the suspicion it could happen here, but we were very surprised at how fast the drift is happening.”

For the full commentary, see:

Josh Zumbrun. “THE NUMBERS; AI Surprise: It’s Unlearning Basic Math.” The Wall Street Journal (Saturday, Aug. 5, 2023): A2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date August 4, 2023, and has the title “THE NUMBERS; Why ChatGPT Is Getting Dumber at Basic Math.”)

The Elite Are Politically Progressive as a Way to Reduce Their Guilt for Rejecting the Uneducated

David Brooks, the author of The New York Times column quoted below, views himself as an anti-Trump member of America’s elite educated class.

(p. A18) Donald Trump seems to get indicted on a weekly basis. Yet he is utterly dominating his Republican rivals in the polls, and he is tied with Joe Biden in the general election surveys. Trump’s poll numbers are stronger against Biden now than at any time in 2020.

What’s going on here? Why is this guy still politically viable, after all he’s done?

. . .

This story begins in the 1960s, when high school grads had to go off to fight in Vietnam but the children of the educated class got college deferments. It continues in the 1970s, when the authorities imposed busing on working-class areas in Boston but not on the upscale communities like Wellesley where they themselves lived.

The ideal that we’re all in this together was replaced with the reality that the educated class lives in a world up here and everybody else is forced into a world down there. Members of our class are always publicly speaking out for the marginalized, but somehow we always end up building systems that serve ourselves.

The most important of those systems is the modern meritocracy. We built an entire social order that sorts and excludes people on the basis of the quality that we possess most: academic achievement. Highly educated parents go to elite schools, marry each other, work at high-paying professional jobs and pour enormous resources into our children, who get into the same elite schools, marry each other and pass their exclusive class privileges down from generation to generation.

Daniel Markovits summarized years of research in his book “The Meritocracy Trap”: “Today, middle-class children lose out to the rich children at school, and middle-class adults lose out to elite graduates at work. Meritocracy blocks the middle class from opportunity. Then it blames those who lose a competition for income and status that, even when everyone plays by the rules, only the rich can win.”

. . .

Members of our class also segregate ourselves into a few booming metro areas: San Francisco, D.C., Austin and so on. In 2020, Biden won only 500 or so counties, but together they are responsible for 71 percent of the American economy. Trump won over 2,500 counties, responsible for only 29 percent. Once we find our cliques, we don’t get out much. In the book “Social Class in the 21st Century,” the sociologist Mike Savage and his co-researchers found that the members of the highly educated class tend to be the most insular, measured by how often we have contact with those who have jobs unlike our own.

. . .

Elite institutions have become so politically progressive in part because the people in them want to feel good about themselves as they take part in systems that exclude and reject.

For the full commentary, see:

David Brooks. “What if We’re the Bad Guys Here?” The New York Times (Friday, August 4, 2023): A18.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Aug. 2, 2023, and has the same title as the print version.)

The books cited by Brooks in the passages quoted above are:

Markovits, Daniel. The Meritocracy Trap: How America’s Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite. New York: Penguin Press, 2019.

Savage, Mike. Social Class in the 21st Century. London: Pelican Books, 2015.

“An Inalienable Right to Sit In AC”

(p. C4) “Let’s sit in AC.” An American friend of mine, recently living in Mumbai, was wildly amused to hear this said in that steamy megalopolis, as if retreating to the tantalizing cool of an air-conditioned room were an activity in itself.

It took me a moment to see what he found so funny. I had grown up with the deprivations of socialist India in the 1980s. I was hardwired to fetishize air-conditioning. It was not an adjunct to life, sewn seamlessly into our daily routines, as it is in the U.S., where 82.7 million homes have central AC. It was, as the philosopher Immanuel Kant would say, the “thing-in-itself,” and to sit “in” AC was something of a national pastime.

. . .

Our first AC was an unbranded gimcrack contraption, jerry-built by a local electrician, but—my god!—how we loved it.

. . .

India loves to assert the demands of belonging through pacts of mutual suffering, and to be in AC was almost to be a little less Indian, as if you had decamped for the West. Even now that the country is the world’s fastest growing market for air-conditioners—projected by the International Energy Agency to be the biggest by 2050—the first line of attack from your average troll is: “What do you know of the realities of India, sitting in AC?”

. . .

. . . this summer, as newspapers report the hottest temperatures ever recorded on Earth and Amazon blasts me with discounts on their best-selling ACs, I cannot help feeling that our turn has come at a bad time. If nothing is done to make air-conditioning more energy-efficient, India alone is projected to use 30 times more electricity in 2030 than it did in 2010. Globally, air conditioning is projected to account for 40% of the growth in energy consumption in buildings by 2050—the equivalent of all the electricity used today in the U.S. and Germany combined. It’s enough to send a chill down the spine of the most ardent of AC evangelists.

The irony of a world made hotter by our need to be cool strikes some as proof of our rapacity. To me, having grown up in the place where so much of the new demand is coming from, I see it as part of a necessary realignment. As the global south gets richer, it will act as a frontier and laboratory. My hope is that it will achieve a miraculous breakthrough in energy efficiency, even as it asserts an inalienable right to sit in AC.

For the full commentary, see:

Aatish Taseer. “My Love Affair With Air- Conditioning.” The Wall Street Journal (Saturday, July 15, 2023): C4.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 14, 2023, and has the same title as the print version.)

Chinese Communists Suppress “A Touching Portrait of Love and Resiliency”

(p. C6) According to reliable news reports, the Chinese government never confirmed having banned Li Ruijun’s quietly heartbreaking feature “Return to Dust,” a touching portrait of love and resiliency in a collapsing rural community of Gansu Province.

Still, the film was pulled last fall from all Chinese movie theaters and streaming services two weeks after a successful domestic debut. It isn’t hard to see why. China’s leadership has a history of suppressing art that spotlights the failings of its ruling class and ideology, which is exactly what Li’s film does, . . .

For the full movie review, see:

Austin Considine. “Return to Dust.” The New York Times (Friday, July 21, 2023): C6.

(Note: the online version of the review has the date July 20, 2023, and has the title “‘Return to Dust’ Review: Grit Against All Odds.”)

Blue Cross of California Seeks to End Drug Rebates and Hidden Fees

(p. A3) A major health insurer says it will jettison the complicated system that Americans use to pay for drugs, and create something that aims to be better, with partners including Amazon.com and the entrepreneur Mark Cuban.

Blue Shield of California said it is dropping CVS Health’s Caremark, the pharmacy-benefit manager it currently uses, which negotiates drug prices and wraps in other services such as a mail-order pharmacy.

. . .

Blue Shield said that, working with its partners, it aims to negotiate prices with pharmaceutical makers in a way that is different from the typical approach—with a simple net price structure that is supposed to eliminate rebates and hidden fees.

Blue Shield executives said that with one company handling many aspects of how drugs are procured through the system, it is often hard to track the flow of payments accurately.

“The current pharmacy supply chain is a forest of opacity and profit,” said Paul Markovich, Blue Shield’s chief executive officer, in an interview with The Wall Street Journal. “It is overwhelmingly complex, it is designed to maximize the earnings of the participants.” His company’s new setup, he said, will be “flipping that on its head.”

For the full story, see:

Anna Wilde Mathews. “Health Insurer Revamps Drug Pricing Model.” The Wall Street Journal (Friday, Aug. 18, 2023): A3.

(Note: ellipsis added.)

(Note: the online version of the story was updated Aug. 17, 2023, and has the title “A Big Health Insurer Is Ripping Up the Playbook on Drug Pricing.”)

Milton Friedman’s “Unflinching Defense” of Libertarianism

(p. A3) . . . [Milton] Friedman was highly influential. In academia, he did pioneering work on consumer behavior, monetary history and the unstable relation between inflation and unemployment. Outside the ivory tower, he is remembered for his unflinching defense of classical liberalism—a position that today is often called libertarianism. “Capitalism and Freedom” is the best entry into Friedman’s lucid mind. You will enjoy reading it even if you disagree with most of his judgments. A socialist student at Harvard once told me it was one of his favorite books. “Why?” I asked. “Because it clearly explains the point of view I have to argue against.”

For the full review, see:

N. Gregory Mankiw. “Five Best: Economics Primers.” The Wall Street Journal (Saturday, Aug. 18, 2023): A3.

(Note: ellipsis, and bracketed name, added.)

(Note: the online version of the review has the date June 2, 2023, and has the title “Five Best: Economics Primers.”)

Friedman’s best popular book, developed from lectures first presented at Wabash College that were co-organized by my mentor Ben Rogge, is:

Friedman, Milton. Capitalism and Freedom. Chicago: The University of Chicago Press, 1962.

Nimbly Use What Is Available Now Rather Than Wait for Adoption of Perfect Global Standards

(p. A9) For more than five decades, Don Bateman led teams of engineers at what is now Honeywell International in creating and enhancing technology that warns pilots of impending disasters.

The result is an array of software and equipment, much of it mandatory, that squawks warnings and flashes digital admonitions if a plane is heading into a mountain, a ridge, a radio tower or some other obstacle.

. . .

Rather than waiting years for global industry standards to be adopted, he always wanted to use whatever technology was available immediately. Ratan Khatwa, a former Honeywell colleague of Bateman, recalled his advice: “You’ve got to work like farmers,” using whatever is available now rather than waiting for perfection.

For the full obituary, see:

James R. Hagerty. “Safety Engineer Helped Pilots Avoid Crashes.” The Wall Street Journal (Saturday, June 3, 2023): A9.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date May 30, 2023, and has the title “Don Bateman, Champion of Airline Safety, Dies at 91.”)