Author: Art Diamond

A Tale of Two Bookstores: New York City Subsidizes Amazon and Regulates the Strand

(p. A22) Since it opened in 1927, the Strand bookstore has managed to survive by beating back the many challenges — soaring rents, book superstores, Amazon, e-books — that have doomed scores of independent bookshops in Manhattan.
With its “18 Miles of Books” slogan, film appearances and celebrity customers, the bibliophile’s haven has become a cultural landmark.
Now New York City wants to make it official by declaring the Strand’s building, at the corner of Broadway and 12th Street in Greenwich Village, a city landmark.
There’s only one problem: The Strand does not want the designation.
Nancy Bass Wyden, who owns the Strand and its building at 826 Broadway, said landmarking could deal a death blow to the business her family has owned for 91 years, one of the largest book stores in the world.
So at a public hearing on Tuesday before the city’s Landmarks Preservation Commission, her plea will be simple, she said: “Do not destroy the Strand.”
Like many building owners in New York, Ms. Wyden argues that the increased restrictions and regulations required of landmarked buildings can be cumbersome and drive up renovation and maintenance costs.
“By landmarking the Strand, you can also destroy a piece of New York history,” she said. “We’re operating on very thin margins here, and this would just cost us a lot more, with this landmarking, and be a lot more hassle.”
. . .
Another rich twist, Ms. Wyden said, was that the move coincides with the announcement that Amazon — not exactly beloved by brick-and-mortar booksellers — plans to open a headquarters in Queens, after city and state leaders offered upwards of $2 billion in incentives to Amazon and its multibillionaire chief executive, Jeff Bezos.
“The richest man in America, who’s a direct competitor, has just been handed $3 billion in subsidies. I’m not asking for money or a tax rebate,” Ms. Wyden said. “Just leave me alone.”
. . .
Owners of buildings with landmark status are in many cases barred from using plans, materials and even paint colors that vary from the original design without the commission’s approval.
. . .
Ms. Wyden — who is married to Senator Ron Wyden of Oregon, whom she met at the similarly renowned Powell’s book store in Portland — is a third-generation owner of the Strand, which stocks roughly 2.5 million used, rare and new books and employs 230 people.
. . .
While she would not divulge the bookstore’s finances, she said that she could make more money renting out the Strand’s five floors, but she loves the family business too much.
She accused city officials of trying to hurry the landmarking process, leaving her little time to prepare a defense, especially during the holiday rush.
“It’s our busiest time of year, and we should be focused on customers and Christmas, which is where we make our most money,” Ms. Wyden said. “But they have no sympathy for that.”

For the full story, see:
Corey Kilgannon. “‘Declaring Strand Bookstore a Landmark Would Kill It, Says Strand.” The New York Times (Tuesday, Dec. 4, 2018): A22.
(Note: ellipses added.)
(Note: the online version of the story has the date Dec. 3, 2018, and has the title “Declare the Strand Bookstore a City Landmark? No Thanks, the Strand Says.” The online version says that the New York print edition appeared on p. A20 and had the title: “A Bid to Preserve Strand Bookstore Would Destroy It, Owner Says.” The page and title in the citation I give further above, is from the National print edition that I receive.)

George Bittlingmayer Offers Advance Praise for Openness to Creative Destruction

For tens of thousands of years, before the Age of Innovation, human beings merely survived by hunting, gathering or tilling, and lived in caves or dirty, squalid huts. In marked contrast, the average person alive today enjoys a standard of living and access to entertainment, medical services, travel, and communications technology that our ancestors would have regarded as miraculous. Art Diamond skillfully shows how we got the many wonders we take for granted – everything from indoor plumbing to SUVs to iPhones – by telling the stories of the determined tinkerers, iconoclasts and visionaries who wouldn’t take “no” for an answer. They succeeded because they were willing to wage the good fight and because they could draw on flawed but ultimately supportive legal, cultural and economic institutions. Diamond also addresses the question of whether the Age of Innovation has run its course, and he provides a timely warning about the dangers that current political and intellectual forces pose to the many potential innovations yet to come. The Age Innovation may end, but whether it does is largely in our hands.

George Bittlingmayer, Economist, Angel Investor, and Professor Emeritus, University of Kansas.

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

Patent Troll Is Bankrupt After Victims Fight Back

(p. B5) Shipping & Transit LLC sued more than 100 mostly small companies in 2016, making it the largest filer of patent lawsuits that year. But when the Florida company recently declared bankruptcy, it valued its U.S. patents at just $1.
Its demise followed three cases where companies fought back and were awarded legal fees after Shipping & Transit decided not to pursue the patent claims against them. Judges in the cases awarded a total of more than $245,000 in attorneys’ fees and costs to businesses in 2017.
Shipping & Transit doesn’t sell tracking systems or anything else. Instead, it claims to own patents “for providing status messages for cargo, shipments and people,” according to court filings. The company typically demanded licensing fees of $25,000 to $45,000 from companies it said were infringing on its patents. Most agree to pay small amounts to avoid costly litigation.
. . .
In one ruling, a U.S. district judge in Santa Ana, Calif., called Shipping & Transit’s patent claims “objectively unreasonable” in light of a 2014 Supreme Court decision that held that certain kinds of abstract ideas weren’t patentable.
. . .
Patent assertions by companies that don’t make products and are primarily focused on making money off of patents have declined since the Supreme Court decision, but still “remain extremely high,” said Shawn Ambwani, chief operating officer of Unified Patents, which specializes in challenging these types of assertions.
In another of the cases from 2017, a federal magistrate judge in West Palm Beach, Fla., said Shipping & Transit’s actions suggest that the company’s “strategy is predatory and aimed at reaping financial advantage from defendants who are unwilling or unable to engage in the expense of patent litigation.”.

For the full commentary, see:
Ruth Simon. “Company That Filed Patent Suits Derails.” The Wall Street Journal (Monday, Dec. 17, 2018): B5.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Dec. 16, 2018, and has the title “Pushback Derails Company That Thrived on Patent Lawsuits.”)

“Profit Feeds Impact at Scale”

(p. 1) Eric Reynolds will tell you that he is on the verge of freeing much of humanity from the deadly scourge of the cooking fire. He can halt the toxic smoke wafting through African homes, protect what is left of the continent’s forest cover and help rescue the planet from the wrath of climate change.
He is happy to explain, at considerable length, how he will systematically achieve all this while constructing a business that can amass billions in profit from an unlikely group of customers: the poorest people on earth.
He will confess that some people doubt his hold on reality.
“A lot of people think it’s too good to be true,” says Mr. Reynolds, a California-born entrepreneur living in Rwanda. “Most people think I am pretty out there.”
The company he is building across Rwanda, Inyenyeri, aims to replace Africa’s overwhelming dependence on charcoal and firewood with clean-burning stoves powered by wood pellets. The business has just a tad more than 5,000 customers and needs perhaps 100,000 to break even. Even its chief operating officer, Claude Mansell, a veteran of the global consulting company Capgemini, wonders how the story will end.
“Do we know that it’s going to work?” he asks. “I don’t know. It’s never been done before.”
Inyenyeri presents a real-world test of an idea gaining traction among those focused on economic development — that profit-making businesses may be best positioned to deliver critically needed services to the world’s poorest communities.
Governments in impoverished countries lack the finance to attack threats to public health, and many are riddled with corruption (though, by reputation, not Rwanda’s). Philanthropists and international aid organizations play key roles in areas such as immunizing children. But turning plans for basic services into mass-market realities may require the potent incentives of capitalism. It is a notion that has provoked the creation of many businesses, most of them failures.
“Profit feeds impact at scale,” says Mr. Reynolds, now in the midst of a global tour (p. 8) as he courts investment on top of the roughly $12 million he has already raised. “Unless somebody gets rich, it can’t grow.”
More than four decades have passed since Mr. Reynolds embarked on what he portrays as an accidental life as an entrepreneur, an outgrowth of his fascination with mountaineering. He dropped out of college to start Marmot, the outdoor gear company named for the burrowing rodent. There, he profited by protecting Volvo-driving, chardonnay-sipping weekend warriors against the menacing elements of Aspen. Now, he is trying to build a business centered on customers for whom turning on a light switch is a radical act of upward mobility.
. . .
To succeed, a stove had to be so convenient and clean burning that women preferred it over their existing cooking method.
Mr. Reynolds began testing stoves made in Italy, India, the United States and China. He tried making his own.
He came to realize that the magic was in the combination of stove and fuel. He experimented with making charcoal out of corncobs. (“A stupid idea,” he says.) He tried burning banana leaves. Then he discovered wood pellets, which involve compressing wood and eliminating water, the element that produces much of the smoke.
He settled on a Dutch-made stove that reduces wood down to clean-burning gases. Using pellets reduced the need for wood by 90 percent compared with charcoal. But those stoves cost more than $75.
Then came the epiphany: Inyenyeri could supply the stoves for free while collecting revenue from subscriptions for pellets. Rwanda was urbanizing rapidly, and city dwellers rely on charcoal. They would be eager to switch to pellets, which were 30 to 50 percent cheaper.
. . .
(p. 9) The business model would get more attractive as the cost of charcoal climbed, and as innovation inevitably made stoves more efficient. Inyenyeri would also stand to collect revenue from an arrangement it later entered into with the World Bank to sell credits for reducing emissions.
In 2010, Mr. Reynolds sold his house in Boulder and went all in on Inyenyeri. He unloaded his wine cellar, liquidated his retirement accounts and moved to Rwanda with no plan to leave.
. . .
“This business model will happen,” he says. “If it’s not Inyenyeri that’s the first mover, then it will be someone else who learns from our mistakes and does it better. It’s too big of an opportunity.”

For the full story, see:
Peter S. Goodman. “‘A Low-Cost Fix for Africa’s Silent Killer.” The New York Times, SundayBusiness Section (Sunday, Dec. 6, 2018): 1 & 8-9.
(Note: ellipses added.)
(Note: the online version of the story has the date Dec. 5, 2018, and has the title “Toxic Smoke Is Africa’s Quiet Killer. An Entrepreneur Says His Fix Can Make a Fortune.”)

Children Younger Than Peers in Class Are More Likely to Be Mis-Diagnosed

(p. A14) Diagnosing attention-deficit hyperactivity disorder is inherently subjective. New research highlights how this can get especially tricky with young children.
It shows that ADHD rates are significantly higher among children who are the youngest in their class compared with those who are the oldest.
ADHD is characterized by difficulty concentrating and constantly active, sometimes disruptive behavior. The study, published in the New England Journal of Medicine last week, found that the youngest children in early elementary school grades have a 32% higher risk of being diagnosed with ADHD than the oldest children.
. . .
“We’re asking children to concentrate and focus when they don’t really have the ability to concentrate and focus yet,” says R. Scott Benson, a child psychiatrist in Pensacola, Fla. “We really want to be more careful, as we get more academic in these younger and younger grades, that we don’t mistake a slight developmental delay as ADHD.”
. . .
Tim Layton, an assistant professor of health-care policy at Harvard Medical School and first author on the study, says the research highlights the importance of pausing before calling a doctor about a child’s unusual behavior. “In fact, it may be the case that that behavior is completely normal, even though it may be disruptive or make the teaching environment difficult,” he says.

For the full commentary, see:
Sumathi Reddy. “YOUR HEALTH; The ADHD Diagnosis Problem.” The Wall Street Journal (Tuesday, Dec. 4, 2018): A14.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Dec. 3, 2018, and has the title “YOUR HEALTH; A Reason to Think Twice About Your Child’s ADHD Diagnosis.”)

The ADHD study mentioned above, is:
Layton, Timothy J., Michael L. Barnett, Tanner R. Hicks, and Anupam B. Jena. “Attention Deficit-Hyperactivity Disorder and Month of School Enrollment.” New England Journal of Medicine 379, no. 22 (Nov. 29, 2018): 2122-30.

Politicians and Special Interests “Are Joined at the Hip”

(p. A15) In August 1979, when Paul Volcker began what would prove to be an eight-year stint as chairman of the Federal Reserve, inflation was running at a rate of more than 11% a year.
. . .
Before Jay Powell and Janet Yellen, before Ben Bernanke and Alan Greenspan, there was “tall Paul,” the thrifty, 6-foot-7 career civil servant who smoked cheap cigars and fished for trout with a fly rod. His policy, announced in an extraordinary Saturday press conference just two months after he took office, was the polar opposite of the radical “stimulus” imposed after the downfall of Lehman Brothers in 2008.
. . .
“Good government” and “sound” money are Mr. Volcker’s themes, in life as in print.
. . .
Washington in the early 1960s was a “comfortable, convenient medium-sized city,” he writes; its law firms were “entirely local and small, occupying maybe a floor or two in a K Street office building.” Today the capital is “a very different, unpleasant, place, dominated by wealth and lobbyists who are joined at the hip with the Congress and too many officials. I stay away.”
Humility is one of the charms of both the man and his book (written with Christine Harper, editor in chief of Bloomberg Markets). Though his kindergarten teacher, Miss Palmer, saw in young Paul a worrying lack of self-confidence, the grown man stuck to his anti-inflationary guns, let joblessness mount, bankruptcies climb and brickbats rain down. Refusing to flinch, he made the paper dollar, if not actually sound, then respectable. Tall Paul, indeed.

For the full review, see:
James Grant. “BOOKSHELF; The Last Monetary Hero; The Fed under Ben Bernanke opened the monetary spigots; the Fed under Paul Volcker shut them off–and ended an inflation crisis.” The Wall Street Journal (Monday, Nov. 26, 2018): A15.
(Note: ellipses added.)
(Note: the online version of the review has the date Nov. 25, 2018, and has the title “BOOKSHELF; ‘Keeping At It’ Review: The Last Monetary Hero; The Fed under Ben Bernanke opened the monetary spigots; the Fed under Paul Volcker shut them off–and ended an inflation crisis.”)

The book under review, is:
Volcker, Paul. Keeping at It: The Quest for Sound Money and Good Government. New York: PublicAffairs, 2018.

“The Key Is Freedom”

(p. A17) . . . Ronald Reagan, in the last year of his presidency, delivered one of his most magnificent speeches . . . before a packed auditorium of students at Moscow State University.
. . .
Reagan’s ultimate aim was to plant the seed of freedom in the newly receptive furrows of a cracking totalitarianism.
. . .
Reagan delivered his Moscow speech standing before a gigantic scowling bust of Lenin and a mural of the Russian Revolution. He incorporated them as props in his address. “Standing here before a mural of your revolution,” he said, “I want to talk about a very different revolution,” a technological and “information revolution” that was transforming the world. How much progress had already been realized! But progress was not foreordained. “The key,” Reagan said, “is freedom–freedom of thought, freedom of information, freedom of communication.”

For the full commentary, see:
Roger Kimball. “‘When Reagan Met Lenin.” The Wall Street Journal (Thursday, May 31, 2018): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date May 30, 2018.)

Global Warming Allows “Visionary Entrepreneurs” to Grow More “Superb” Sparkling Wine

(p. D4) . . . England, now in its third decade as a sparkling wine producer, is demonstrating that its bubbly output can be superb.
. . .
The early pioneers of English sparkling wine were bold, though idiosyncratic in the way of visionary entrepreneurs.
. . .
The growth in English sparkling wine is apparent all over the south of England. From Kent in the east through East and West Sussex, Hampshire, Dorset and as far west as Cornwall, new vineyards for sparkling wine are being planted at a dizzying rate. Winemakers who once imagined they were bound for France or Australia are instead staying home in England to make sparkling wine.
. . .
Nobody would mistake an English vineyard for one in Champagne. Walking through Gusbourne’s Boot Hill Vineyard with the winemaker Charlie Holland on a blustery, misty fall day, I noted that the rows of vines were far wider than one would find in Champagne, and the vines trained higher on their trellises.
In order to achieve ripeness in the colder English climate, the vines need to be planted less densely than in France, Mr. Holland said, to minimize the competition. And the vines need to have a denser canopy of leaves to promote photosynthesis, so the rows have to be wider apart so the leaves in one row won’t shade the fruit in another.
“It’s not the same parameters as in Champagne, and not the same ripeness levels,” Mr. Holland said.
Indeed, the Champagne region was once considered a marginal climate, on the blurry edge of the line at which grapes could reliably ripen. Thirty years ago, it was a struggle. Now, with climate change, the issue is whether Champagne is getting too warm.
The edge has now moved up to the south of England, where everybody agrees that the 2018 vintage was the biggest and best ever for sparkling wine.
“It was a fantastic, happy year for English wine,” said Tamara Roberts, chief executive of Ridgeview Estate in Sussex, a family operation that planted its first vines in the South Downs in 1995. It was so good that many estates spent the harvest scrambling for vats and tanks to hold the unexpected volume of wine.

For the full commentary, see:
Eric Asimov. “THE POUR; Great Bubbly From England, Believe It or Not.” The New York Times (Wednesday, Dec. 26, 2018): D4.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Dec. 20, 2018.”)

Richest Man in World in 1836 Died of an Infection that Modern Antibiotics Cure

(p. A2) Rising incomes alone cannot capture how much better life has gotten. “Nathan Rothschild was surely the richest man in the world when he died in 1836,” economists Max Roser and Esteban Ortiz-Ospina wrote in 2017. “But the cause of his death was an infection–a condition that can now be treated with antibiotics sold for less than a couple of cents. Today, only the very poorest people in the world would die in the way that the richest man of the 19th century died.”
Mr. Roser is the founder of Our World in Data, a website that tracks the evolution of human welfare over the last few centuries. Scroll through the charts, articles and data sets, and you will be stunned by how much better life has become in just the last few decades: Child mortality, illiteracy and deaths from violence have all plummeted, and life expectancy has gone up.

For the full commentary, see:
Greg Ip. “Stop Calling It ‘Vocational Training’; How we speak about education reflects class prejudice.” The Wall Street Journal (Wednesday, January 3, 2019): A2.
(Note: the online version of the commentary has the date Jan. 2, 2019, and has the title “CAPITAL ACCOUNT; The World Is Getting Quietly, Relentlessly Better.”)

The Roser and Oritz-Ospina piece mentioned above, is:
Max Roser and Esteban Ortiz-Ospina (2018) – “Global Extreme Poverty”. Published online at OurWorldInData.org. Retrieved from: ‘https://ourworldindata.org/extreme-poverty’ [Online Resource]

Michael Barrier Offers Advance Praise for Openness to Creative Destruction

Walt Disney has been written about as an artist and an entrepreneur. The central virtue of Art Diamond’s book is that he not only writes about Disney in both roles, but he also explains how Disney’s success in each role strengthened his success in the other.

Michael Barrier, animation historian. Author of The Animated Man: A Life of Walt Disney, and other works

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

Learning Skills Should Not Be Demeaned as “Training”

(p. A13) One of the few lessons that stuck with me from all the courses I took on the way to earning my Ed.D. came during a classroom discussion that sparked my passion for changing the way we talk about education. I’ll never forget how the professor responded to a student who used the word “training.” Training, the professor admonished, was for animals. Humans receive an education.
We can’t keep speaking of people as if they are animals. Whether an individual acquires a skill credential, a bachelor’s degree, a postgraduate degree or anything in between, it’s all education. We need to think about the words we use and why we use them if we are to break the stigma around all forms of education. If we don’t, we will never overcome the abiding sense of inequality and unfairness that so many Americans feel.

For the full commentary, see:
Virginia Foxx. “Stop Calling It ‘Vocational Training’; How we speak about education reflects class prejudice.” The Wall Street Journal (Wednesday, January 2, 2019): A13.
(Note: the online version of the commentary has the date Dec. 31, 2018.)