Trickle-Down in India

BANGALORE, India, July 4 – It has been a little more than a year since the government of Prime Minister Manmohan Singh came into power promising to embrace those excluded from the country’s new economic prosperity.
While the impact of his government’s efforts to help the poor — like increasing credit to the country’s many farmers and pumping in money for infrastructure, especially in rural areas — will not show for another few years, experts say, the bounty from the expansion in manufacturing and services that has been putting money in the hands of millions of Indians is now noticeably trickling down.
”What is happening is amazing,” said Joe Paul, the founder and chairman of the Uthsaha Society, a networking group that encourages slum dwellers in Bangalore to become financially independent. ”It is a ripple effect.”
. . .
. . . , where the new prosperity is percolating, it spans a broad spectrum and reflects much more than an occasional, isolated success story. A big catalyst is the construction boom in high-tech cities like Bangalore and Madras. Besides the demand for construction workers, workers at factories supplying the building materials, and drivers to transport those products, there is a demand for housekeepers, cooks and drivers to cater to the double-income families who live in the new residential complexes and high-rises. Caterers are needed to supply food to the office workers. Security guards are also in demand. Trained nurses are needed to tend to aging parents of workers traveling overseas or living in other cities.
”The last few years of strong growth has facilitated poverty reduction, even though the fruits of growth were not distributed evenly,” said Ping Chew, a sovereign credit analyst at Standard & Poor’s in Singapore. ”The middle-income group continues to be the biggest beneficiary and this will ensure that the benefits continue to pass on to the lower-income class.”

For the full story, see:
SARITHA RAI. “In India, Economic Prosperity Is Spreading Slowly.” The New York Times (Tuesday, July 5, 2005): C3.

The Open Road

A strong argument could be made that the automobile is one of the two most liberating inventions of the past century, ranking only behind the microchip. The car allowed even the common working man total freedom of mobility — the means to go anywhere, anytime, for any reason. In many ways, the automobile is the most egalitarian invention in history, dramatically bridging the quality-of-life gap between rich and poor. The car stands for individualism; mass transit for collectivism. Philosopher Waldemar Hanasz, who grew up in communist Poland, noted in his 1999 essay “Engines of Liberty” that Soviet leaders in the 1940s showed the movie “The Grapes of Wrath” all over the country as propaganda against the evils of U.S. capitalism and the oppression of farmers. The scheme backfired because “far from being appalled, the Soviet viewers were envious; in America, it seemed, even the poorest had cars and trucks.”
. . .
The simplistic notion taught to our second-graders, that the car is an environmental doomsday machine, reveals an ignorance of history. When Henry Ford first started rolling his Black Model Ts off the assembly line at the start of the 20th century, the auto was hailed as one of the greatest environmental inventions of all time. That’s because the horse, which it replaced, was a prodigious polluter, dropping 40 pounds of waste a day. Imagine what a city like St. Louis smelled like on a steamy summer afternoon when the streets were congested with horses and piled with manure.
. . .
There’s a perfectly good reason that the roads are crammed with tens of millions of cars and that Americans drive eight billion miles a year while spurning buses, trains, bicycles and subways. Americans are rugged individualists who don’t want to cram aboard buses and subways. We want more open roads and highways, and we want energy policies that will make gas cheaper, not more expensive. We want to travel down the road from serfdom and the car is what will take us there.

For the full commentary, see:
Moore, Stephen. “Supply Side; The War Against the Car.” The Wall Street Journal (Fri., November 11, 2005): A10.

Unintended Consequences of Making My Cold Medicine Hard to Get

SudafedColdCcough.jpg
Source of image: http://www.sudafed.com/products/cold_and_cough.html

When I get a cold, nothing keeps me functioning as well as Sudafed Cold and Cough. Unfortunately, the pills contain pseudoephedrine, which apparently is an ingredient that can be used in the process of making meth. So in their zeal to protect people from their own bad choices, governments across the country, including my own Nebraska, have put increasingly severe restrictions on the sale and purchase of medicines like Sudafed Cold and Cough. Many stores that used to carry the medicine, have dropped it, and those that still carry it, have significantly increased the price.
So the government has made life harder for me. But at least they’ve benefitted the meth addicts, right? Read on:

(p. 1A) Restrictions on the sale of cold medicine appear to be reducing seizures of homemade methamphetamine labs in Nebraska and Iowa.
Both states passed laws last year restricting over-the-counter purchases of cold medicines used to make meth – and both report fewer lab discoveries.
But officials in the two states – and others with similar restrictions – now have a new problem: The drop in home-cooked methamphetamine has been met by a flood of crystal methamphetamine coming largely from Mexico.
Sometimes called ice, crystal meth is far purer, and therefore even more highly addictive, than powdered home-cooked meth.
And because crystal meth costs more, the police say thefts are increasing, as people who once cooked at home now have to buy it.
The University of Iowa Burn Center, which in 2004 spent $2.8 million treating people whose skin had been scorched off by the toxic chemicals used to make meth at home, says it now sees hardly any cases of that sort. Drug treatment cen- (p. 3A) ters, on the other hand, say they are treating just as many or more meth addicts.
And although Iowa child welfare officials say they are removing fewer children from homes where parents are cooking the drug, the number of children being removed from homes where parents are using it has more than made up the difference.

For the full story, see:
“Meth labs decline, but ‘ice’ fills gap.” Omaha World-Herald (Sunrise Edition, Mon., January 30, 2006): 1A & 3A.

Apparently the only current substitute for pseudoephedrine in cold medicines is phenylephrine. But it has several drawbacks. Consider:

. . . pharmacologists, who specialize in the properties of medications, say oral phenylephrine has several disadvantages. First, the effects of the current formulations wear off faster than pseudoephedrine — meaning users will need to take a pill after four hours instead of up to six for the shorter-acting pseudoephedrine. Pseudoephedrine also comes in long-acting 12- and 24-hour pills, an option not currently available for over-the-counter phenylephrine.
Another question is whether oral phenylephrine is as effective as pseudoephedrine. There have been no major published head-to-head trials comparing the two, and neither Pfizer nor Germany’s Boehringer Ingelheim GmbH, a major supplier of powder phenylephrine for pills, has studied the matter. In 2003, Pfizer conducted a consumer survey in which 400 mall-goers with stuffy noses were given either standard Sudafed or Sudafed PE. In a telephone survey a week later, about 70% of each group reported “good” or “excellent” results, the company says.
But pharmacologists say there are reasons for caution. For one, oral phenylephrine is heavily absorbed by the intestine and broken down in the liver — so only 6% to 40% of the actual medicine makes it into the blood stream, compared with nearly all of pseudoephedrine, scientists say. Moreover, its use as a decongestant has been far less heavily studied than pseudoephedrine’s. The FDA review cited more than six studies, primarily unpublished work from a single laboratory, which found it effective. The review also cited a nearly equal number of studies from a variety of laboratories that found phenylephrine no better than a placebo — but the agency concluded overall that it does work. Little has been published since then.
The American Heart Association warns that both drugs can raise blood pressure, so people with high blood pressure or heart disease should consult their doctor before taking them. It isn’t known whether phenylephrine poses more or less of a risk than pseudoephedrine, though some experts say phenylephrine has been less tested so may merit more caution.
If a stuffy nose is making you miserable and only the most proven remedy will do, you may want to take the time to look for pseudoephedrine — even if it means you have to wait at the counter.

For the full story, see:
LAURA JOHANNES. ” ACHES & CLAIMS; Choosing a Pill for That Cold.” THE WALL STREET JOURNAL (Tues., December 27, 2005): D4.

Free-Market ‘Chaos’ Versus Planning, in New Orleans

The rebirth of New Orleans does, . . . , require a leap into the unknown. It can’t be meticulously planned. Preserve the old buildings. Rope off the lowlands. But then let imagination takes its course. Unfortunately, Mr. Nagin’s Bring Back New Orleans group is loaded with central planners prescribing a dream city built around such highlights as light-rail transport, a “jazz district” and a neuroscience center. Typical is Michael Cowan, head of the city’s Human Relations Commission, who warned that “the alternative to a ‘good-enough’ plan for the future of our city is free-market chaos, also known . . . as every man for himself and the devil take the hindmost.”
Actually, it was precisely this chaos that made New Orleans a great city in the first place. It was planning — specifically, the horrifying housing projects, largely destroyed in Katrina; the stultifying school system; the Superdome and other wasteful public-works projects — that held the city back.

For the full commentary, see:
JAMES K. GLASSMAN. “CROSS COUNTRY; Back to the Future.” The Wall Street Journal (Thurs., January 12, 2006): A13.

“If you’re giving while you’re living, you’re knowing where it’s going”

The American Council of Trustees and Alumni has published a short book, “The Intelligent Donor’s Guide to College Giving,” that lays out some basic ground rules for donating to higher education. These include placing clear restrictions on gifts, working with a particular professor (and, if possible, bypassing the development office) and avoiding endowments in perpetuity. As Sir John Templeton wisely said: “If you’re giving while you’re living, you’re knowing where it’s going.”
Obviously, this sort of due diligence does require time and effort on the part of the donor, But if even a few more philanthropists were watching where their funds ended up, college officials would surely monitor their programs more carefully. There have been a few celebrated cases in recent years in which donors have asked for their funds to be returned after discovering that they were misused, and these cases have sent a shudder through the academic community.

For the full commentary, see:
JAMES PIERESON. “Only Encouraging Them.” The Wall Street Journal (Fri., November 18, 2005): W13.

“Better Coffee Rockefeller’s Money Can’t Buy”

(p. 263) In the middle of this fierce competition, with its low quality standards and apparent market saturation, a New York nut vendor and restaurateur proved that a new brand stressing quality could triumph.

 . . .

Black understood the power of advertising.  In radio spots, which blanketed the New York metropolitan airwaves,  Black’s second wife, Jean Martin, sang a hummable jingle:

Chock full o’ Nuts is that heavenly coffee,

Heavenly coffee, heavenly coffee.

(p. 264) Chock full o’ Nuts is that heavenly coffee-

Better coffee Rockefeller’s money can’t buy.

By August 1954, less than a year after its debut, Chock full o’ Nuts had grabbed third place among vacuum-packed coffees in New York City.

 

Source: 

Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. New York: Basic Books, 2000.

(Note:  ellipsis added.)

 

The Creation of “Freedom” in Iraq

 

Freedom.jpg "Freedom" (oil painting by Esam Pashwa). Source of image: http://www.artvitae.com/art.asp?art_id=1571&bhcp=1

 

When Saddam Hussein fell, artist Esam Pashwa pulled down a huge poster of Sadam and painted a mural underneath. The gesture, and the art, attracted the attention of art expert Peter Falk, who contacted and encouraged Pashwa. He learned that Pashwa, in addition to his art, has served as a translator for the coalition forces in Iraq. Falk has organized a show of Pashwa’s work in a New York gallery.

As of 2/1/06, the "Freedom" oil painting above was offered for sale through the gallery. For more information: Peter Hastings Falk Hastings Art Management Services, Inc. P.O. Box 833 Madison, CT 06443 203.245.4761 peterfalk@comcast.net

(The source of most of the information in the entry above, was a CNN report/interview entitled "The Art of War" that was broadcast on 2/1/06. It is viewable at CNN.com at: http://www.cnn.com/video/partners/clickability/index.html?url=/video/world/2006/02/01/intv.art.of.war.cnn)

 

“Going Postal” Shows that Free Market Jobs Are Not the Only Ones with Stress

WASHINGTON (AP) – The deadly shootings at a California mail processing plant are a grim reminder of cases in the 1980s and ’90s that raised public concern and brought the post office and its employees and supervisors together in an effort to end violence at work.
Postmaster General John Potter met with union leaders Tuesday to discuss the tragedy, while Deputy Postmaster General Patrick R. Donahoe headed to the scene of the shootings.
Donahoe urged all postal employees to stay vigilant about facility security.
“That’s the best line of defense to keep ourselves safe,” he said, urging workers to make sure all doors close correctly and all locks function properly, and that only authorized people are in postal facilities.
In the California case, the shooter had taken an identification badge from a postal worker at gunpoint, postal officials said.
A 1986 case in Edmond, Okla., resulted in 14 people being killed before a disgruntled carrier took his own life. It was followed by a series of killings stretching into the 1990s that led to the rise of the phrase “going postal.”
In 1992, the post office and several of its unions and supervisors organizations signed a joint statement calling for zero tolerance of violence in the workplace, as well as banning harassment, intimidation, threats or bullying.
Some incidents were traced to disputes between workers and their managers, and in the statement the Postal Service promised that people who do not treat others with dignity or respect would not be rewarded or promoted.

For the full story, see the online version of the Omaha World-Herald:
“Postal Shooting a Grim Reminder of Past.” Omaha World-Herald (Weds., February 1, 2006).

Wal-Mart Is Front-line Soldier in Real War on Poverty

 

BALTIMORE — In Big Labor’s war against Wal-Mart, "collateral damage" — in the form of lost jobs and income for the poor — is starting to add up. Of course, since the unions and their legislative allies claim that their motive is to liberate people from exploitation by Wal-Mart, these unintended effects are often ignored.

Here in Maryland, however, that’s getting hard to do. The consequences of our legislature’s override of Republican Gov. Robert Ehrlich’s veto of their "Fair Share Health Care Act" on Jan. 12 will be tragic for some of the state’s neediest residents. The law will force companies that employ over 10,000 to spend at least 8% of their payroll on health care or kick any shortfall into a special state fund. Wal-Mart would be the only employer in the state to be affected.

Almost surely, therefore, the company will pull the plug on plans to build a distribution center that would have employed 800 in Somerset County, on Maryland’s picturesque Eastern Shore. As a Wal-Mart spokesman has put it, "you have to take a step back and call into question how business-friendly is a state like Maryland when they pass a bill that . . . takes a swipe at one company that provides 15,000 jobs."

 . . .

. . . , legislators should be mindful that companies like Wal-Mart are not the enemy but rather front-line soldiers in a real war on poverty. The profit motive leads them to seek out areas where there is much idle labor and put it to work. Where they are prevented or discouraged from doing so, the alternative job prospect is rarely a cushy spot in the bureaucracy. Rather, it is continued idleness and hardship.

 

For the full commentary, see:

STEVE H. HANKE and STEPHEN J.K. WALTERS. "Cross Country; Hard Line State." The Wall Street Journal (Thurs., January 26, 2006): A11.

 

Using a T-shirt to Tell the Story of Progress


Source of image: Amazon.com

The protests occurred on ”a cold day in February 1999.” Ms. Rivoli was watching as students gathered at the gothic centerpiece of Georgetown to demonstrate against the International Monetary Fund, the World Trade Organization, and other putative villains of international trade. The crowd, Ms. Rivoli noticed with characteristic acuity, had ”a moral certainty, a unity of purpose” that permitted it to distinguish black from white and good from evil ”with perfect clarity.” One woman seized the microphone and asked: ”Who made your T-shirt? Was it a child in Vietnam? Or a young girl from India earning 18 cents per hour? Did you know that she lives 12 to a room? That she shares her bed and has only gruel to eat?”
Ms. Rivoli did not know these things, and she wondered how the woman at the microphone knew. But she decided to find out. In the rest of her narrative, the author tells the story of ”her” T-shirt, which she purchased for $5.99 by the exit of a Walgreen’s in Fort Lauderdale, Fla. ”It was white and printed with a flamboyantly colored parrot, with the word ‘Florida’ scripted beneath.” A company in Miami had engraved the front, after buying the shirt from a factory in China. The Chinese manufacturer had purchased the cotton used to make the shirt from Texas. Eventually it will end up as part of a large but little-known market for used clothing destined for resale in East African ports.
. . .
By looking across history to the shifting center of textile manufacturing from Manchester, England, to Lowell, Mass., to South Carolina to Japan and, finally, the developing nations of Asia, Ms. Rivoli discovers a universal truth. Without making light of the horrors experienced by workers, she asserts that their jobs were a little better than other available options (usually farm work) and, what’s more, that textile factories led to advances in industrialization and, just as dependably, in living standards. It is not too much to say that she uses the T-shirt to tell the story of progress.

For the full commentary on Rivoli’s book, see:
ROGER LOWENSTEIN. “OFF THE SHELF; Travels With My Florida Parrot T-Shirt.” The New York Times, Section 3 (Sun., August 21, 2005): 7.
The book is:
Pietra Rivoli. The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade. John Wiley & Sons, 2005. ISBN: 0471648493

Reagan “the man who championed creative destruction”

ReaganStatueLiberty.jpg Image source: http://www.nytstore.com/ProdDetail.aspx?prodId=2689
From Wooldridge’s review of a book on Ronald Reagan:

Reeves argues that Reagan was a master of both imagination and delegation. He stuck firmly to a small number of clear goals – reducing the size of government, restoring America’s power and pride, and facing down Communism – and then delegated implementation to the “fellas.” He did not so much do things as persuade others to do them for him. But his preference for delegation should not be confused with passivity. He insisted on using the phrase “tear down this wall” against the advice of his underlings, for example.

Wooldridge describes Reagan as, in part:

. . . the man who championed “creative destruction” . . .

The review is:
ADRIAN WOOLDRIDGE. “The Great Delegator.” The New York Times, Section 7 (Sunday, January 29, 2006): 11.
The book being reviewed is:
Richard Reeves. PRESIDENT REAGAN: The Triumph of Imagination. Simon & Schuster, 2005, 571 pp. $30. ISBN: 0743230221