Category: Economics

Consumers Vote “No” on Costly Organic Smoothies “Made of Swiss Chard, Cashew Milk and Himalayan Salt”

(p. D1) As recently as last month, one could hardly throw a lentil in New York City without hitting an Organic Avenue storefront, with its orange banner, stick-figure logo and promise of better living through $9 cayenne-infused lemonade.
Kat Schamens, a yoga teacher and fitness-apparel designer, liked it that way. “I would always think, ‘I can’t wait to go in and get my chickpea soup,’ ” she said.
In mid-October, Ms. Schamens learned that Organic Avenue’s 10 stores had been shuttered and that the company had filed for bankruptcy. “I kind of freaked out,” she said. “I was distraught. I lost my yoga for a minute.”
. . .
(p. D7) The loyalty of devotees like Ms. Schamens and Ms. Kerin notwithstanding, there is an admitted emperor’s new clothes quality to paying $25 for a lunch of vegetable shavings and a smoothie made of Swiss chard, cashew milk and Himalayan salt.
“You can’t get people to crave this food,” the former investor said. “You can’t build a long-term business off what Gwyneth Paltrow likes.”
Some researchers began to publish studies questioning the necessity and safety of juice cleanses. And the fashion world started to feel pushback from nutritionists and eating-disorder activists against its support of juicing in early 2013, after the Council of Fashion Designers of America announced a 50 percent discount for models on Organic Avenue juices during New York Fashion Week.

For the full story, see:
KATHERINE ROSMAN. “How Organic Avenue Lost All Its Juice.” The New York Times (Sun., NOV. 5, 2015): D1 & D7.
(Note: ellipsis added.)
(Note: the online version of the story has the date NOV. 4, 2015.)

Hungry Suffer Due to G.M.O. Bans by Europe’s “Coalition of the Ignorant”

(p. 6) CALL it the “Coalition of the Ignorant.” By the first week of October [2015], 17 European countries — including Austria, Denmark, France, Germany, Greece, Hungary, Italy, the Netherlands and Poland — had used new European Union rules to announce bans on the cultivation of genetically modified crops.
. . .
I have spent time with malnourished children in Tanzania whose families were going hungry because cassava crops were wiped out by brown-streak disease. That was particularly painful because in neighboring Uganda I had recently visited trial plots of genetically modified cassava that demonstrated complete resistance to the virus. The faces of the hungry children come to mind every time I hear European politicians boast about their country’s G.M.O. ban and demand that the rest of the world follow suit — as Scotland’s minister did in August.
Thanks to Europe’s Coalition of the Ignorant, we are witnessing a historic injustice perpetrated by the well fed on the food insecure. Europe’s stance, if taken up internationally, risks marginalizing a critically important technology that we must surely employ if humanity is to feed itself sustainably in an increasingly difficult and challenging future. I can only hope that the Continent’s policy makers come to their senses before it is too late.

For the full commentary, see:
MARK LYNAS. “With G.M.O. Policies, Europe Turns Against Science.” The New York Times, SundayReview Section (Sun., OCT. 25, 2015): 6.
(Note: ellipsis, and bracketed year, added.)
(Note: the online version of the commentary was updated on OCT. 24, 2015, and has the title “With G.M.O. Policies, Europe Turns Against Science.”)

FDA Forces Child to Go to London to Get Drug to Fight His Cancer

(p. A15) How far would you go to get a drug that could save your child’s life? Across an ocean? That is exactly what the federal government is forcing some American families with dying children to do.
In 2012, when Diego Morris was 11 years old, he was diagnosed with a deadly cancer in his leg called osteosarcoma. Doctors at St. Jude Children’s Research Hospital in Memphis, Tenn., removed the tumor, but the prognosis was poor. There was a significant risk that even extensive chemotherapy after surgery would not prevent the cancer from returning.
Fortunately, a team of doctors at MD Anderson Cancer Center in Houston and Memorial Sloan Kettering Cancer Center in New York City had developed a revolutionary new drug, mifamurtide (MTP), that can prevent osteosarcoma from coming back. A study by Dr. Eugenie Kleinerman of MD Anderson and Dr. Paul Meyers of Sloan Kettering showed the drug resulted in a 30% reduction in the osteosarcoma mortality rate at eight years after diagnosis.
The drug was approved in 2009 by the European Medicines Agency and is currently the standard of care in Europe, Israel and many other countries. In 2012 it received the prestigious Prix Galien Award, the gold medal for pharmaceutical research and development in the United Kingdom.
MPT was exactly what Diego needed. But there was one problem: The drug was not available in America because the Food and Drug Administration had rejected it, demanding additional studies. That meant that Diego had to travel from Phoenix to London to get the drug he needed to save his life–a drug that was available in almost every industrialized nation and should have been available in the U.S.

For the full commentary, see:

DARCY OLSEN. “Winning the Right to Save Your Own Life; As the FDA dawdles, 24 states pass ‘right-to-try’ laws giving terminally ill patients access to drugs.” The Wall Street Journal (Fri., Nov. 27, 2015): A15.
(Note: the online version of the commentary has the date Nov. 26, 2015.)

Olsen’s commentary is related to her book:
Olsen, Darcy. The Right to Try: How the Federal Government Prevents Americans from Getting the Lifesaving Treatments They Need. New York: HarperCollins Publishers, 2015.

Cuomo Bans the Fracking that Could Revive New York’s Southern Tier

(p. A25) CONKLIN, N.Y. — The main grocery store here was replaced by a Family Dollar store, already faded. The historic front of the town hall, a castle no less, is crumbling, and donations are being solicited. The funds earmarked to strip off the lead paint from the castle’s exterior went instead to clear mold from the basement.
This town of roughly 5,500 residents looks alarmingly like dozens of other towns and cities in New York’s Southern Tier, a vast part of the state that runs parallel to Pennsylvania. Years ago, the region was a manufacturing powerhouse, a place where firms like General Electric and Westinghouse thrived. But over time companies have downsized, or left altogether, lured abroad or to states with lower taxes and fewer regulations.
. . .
In western New York, . . . , Gov. Andrew M. Cuomo, a Democrat, pledged $1 billion in 2012 to support economic development. Since then, he has poured hundreds of millions of dollars into numerous Buffalo-area projects.
The Southern Tier has proved to be a harder fix. It is predominantly rural and lacks a significant population core that typically attracts the private sector.
The region is resource rich, but landowners are angry the government will not let them capitalize on it. Some had pinned their hopes of an economic revival on the prospect of the state’s authorizing hydraulic fracturing, known as fracking; many of them can recite the payment formula gas companies were proposing: $500 a month per acre.
But the Cuomo administration, citing health risks, decided last year to ban the practice, leaving some farmers contemplating logging the timber on their land, a move that could destroy swaths of pristine forest.

For the full story, see:
SUSANNE CRAIG. “Former Hub of Manufacturing Ponders Next Act.” The New York Times (Weds., SEPT. 30, 2015): A20-A21.
(Note: ellipses added.)
(Note: the online version of the story has the date SEPT. 29, 2015, and has the title “New York’s Southern Tier, Once a Home for Big Business, Is Struggling.”)

Hawaiian Culture Changed Swiftly in Century After 1777

(p. C1 & C6) It’s startling just how swiftly change came to Hawaii after Capt. James Cook first sighted the island of Kauai in 1777: In little more than a century, Ms. Moore writes, “a closed and isolated culture, bound by superstition and religious ritual, with no understanding of individual freedom or private property,” had been transformed into “a society of thriving capitalism, Protestant values, and democratic institutions.”

For the full review, see:
MICHIKO KAKUTANI. “Hard Truths in the Past of a Tropical Eden.” The Wall Street Journal (Tues., SEPT. 22, 2015): C1 & C6.
(Note: ellipses added.)
(Note: the online version of the review has the date SEPT. 21, 2015, and has the title “Review: ‘Paradise of the Pacific,’ the Hard Truths of Hawaii’s History.”)

The book under review, is:
Moore, Susanna. Paradise of the Pacific: Approaching Hawaii. New York: Farrar, Straus and Giroux, 2015.

“The Market for Greek Philosophers Has Tightened”

(p. A25) Senator Marco Rubio sent fact-checkers aflutter when he said at the Republican presidential debate on Tuesday that philosophy majors would be better off going into welding. The value of a vocational degree, he argued, was greater than the payoff that comes with contemplating the cosmos.
“Welders make more money than philosophers,” Mr. Rubio said. “We need more welders and less philosophers.”
. . .
On Wednesday [November 9, 2015] Mr. Rubio doubled down on his assertion, sending out a fund-raising email with the subject line “more welders” and calling for the overpriced higher education system to be dismantled.
The argument echoed one he makes frequently on the stump, which the senator admits probably irks some intellectuals: “You deserve to know that the market for Greek philosophers has tightened over the last 2,000 years.”

For the full story, see:

Alan Rappeport. “Philosophers Say View of Their Skills Is Dated.” The New York Times (Thurs., Nov. 12, 2015): A25.
(Note: ellipsis, and bracketed date, added. The last two quoted paragraphs were combined into one paragraph in the print version.)
(Note: the online version of the story has the date Nov. 11, 2015, and has the title “Philosophers (and Welders) React to Marco Rubio’s Debate Comments.”)

Those Who Try Japanese Toilets, Praise Them with “Cultish Devotion”

(p. D12) Last year, Bennett Friedman, who owns a plumbing showroom in Manhattan called AF New York, took a business trip to Milan. On the morning of his return he faced a choice: stop in the bathroom there or wait until he got home. The flight was nine hours. He waited.
The move seems almost masochistic. But in his home and office bathrooms, Mr. Friedman had installed a Toto washlet. To sit upon a standard commode, he said, would be like “going back to the Stone Age.”
“It feels very uncivilized,” he said.
For those who own Japanese toilets, there is a cultish devotion. They boast heated seats, a bidet function for a rear cleanse and an air-purifying system that deodorizes during use. The need for toilet paper is virtually eliminated (there is an air dryer) and “you left the lid up” squabbles need never take place (the seat lifts and closes automatically in many models).
. . .
Most washlet owners, then, are converted after trying one out in the world. At a boutique hotel, say, or on a trip to Asia.
Such was the case with Robert Aboulache. Before he and his family went on a vacation to Japan, he said, friends who had visited the country told him he would love the toilets. “I thought, ‘How great can the toilets be?'” Mr. Aboulache said. “They were amazing. Some have noisemakers to cover up the sound. You can pivot that little sprayer. The water can be heated or not. We got home, and I thought, ‘This is not the same.'”
Three days later, Mr. Aboulache went online and bought a Toto washlet, which he installed in the shared upstairs bathroom of his home in Los Angeles as a surprise for his wife and son.
“We’ve been delighted,” he said. “It’s our favorite toilet.”
. . .
Mr. Friedman, too, is an enthusiastic proselytizer for washlets, in his showroom and out in social situations, something you gather he would do even if he didn’t sell them.
Whenever he talks about their virtues, he said, “I feel like one of the Apostles passing the word of God.”

For the full story, see:
STEVEN KURUTZ. “For Its Devotees, the Seat of Luxury.” The New York Times (Thurs., NOV. 19, 2015): D12.
(Note: ellipses added.)
(Note: the online version of the story has the date NOV. 18, 2015, and has the title “The Cult of the Toto Toilet.”)

Health Care Mandate “Freezes You at a Time When You Need to Be Moving Fast”

(p. B4) When LaRonda Hunter opened a Fantastic Sams hair salon 10 years ago in Saginaw, Tex., a suburb of Fort Worth, she envisioned it as the first of what would eventually be a small regional collection of salons. As her sales grew, so did her business, which now encompasses four locations — but her plans for a fifth salon are frozen, perhaps permanently.

Starting in January, the Affordable Care Act requires businesses with 50 or more full-time-equivalent employees to offer workers health insurance or face penalties that can exceed $2,000 per employee. Ms. Hunter, who has 45 employees, is determined not to cross that threshold. Paying for health insurance would wipe out her company’s profit and the five-figure salary she pays herself from it, she said.
“The margins are not big enough within our industry to support it,” she said. “It’s not that I don’t want to — I love my employees, and I want to do everything I can for them — but the numbers just don’t work.”
. . .
For some business owners on the edge of the cutoff, the mandate is forcing them to weigh very carefully the price of growing bigger.
“There’s kind of a deer-in-headlights moment for those who say, ‘I have this new potential client, but if I bring them on, I have to hire five additional people,'” said Philip P. Noftsinger, the payroll unit president at CBIZ, a financial services provider for businesses. “They’re really trying to assess how much the 50th employee is going to cost.”
. . .
For businesses that use many seasonal, variable-hour or temporary workers, like those in the hospitality industry, simply figuring out how many qualifying employees they have can be a challenge.
“I think companies are going to have to work with their payroll processor for the basic data, and then their accountant or attorney about what certain items mean,” Mr. Prince said.
The expense and distraction of all that paperwork is one of the biggest frustrations for one business owner, Joseph P. Sergio. His industrial cleaning company, Polar Clean, which is based in South Bend, Ind., but dispatches teams nationally, has just under 50 core employees. One of its business lines is disaster restoration, and after a flood or hurricane, its temporary staff balloons.
Mr. Sergio offers health insurance to his permanent staff, but the premiums have risen so quickly that he had to switch to a more restrictive plan, with a higher deductible. He is reluctant to go over the 50-employee line and incur all of the new rules that come with it. That makes bidding for new jobs an arduous and risky exercise.
“I’ve had to pull my controller and a couple of top people to sit and spend days going through this,” he said. “If you ramp up, and it pushes you over 50, there’s all these unknown costs and complicated rules. Are we really going to be able to benefit from going after that opportunity? It freezes you at a time when you need to be moving fast.”

For the full story, see:
STACY COWLEY. “ENTREPRENEURSHIP; Health Care Law Leads Business Owners to Rethink Plans for Growth.” The New York Times (Thurs., NOV. 19, 2015): B4.
(Note: ellipses added.)
(Note: the online version of the story has the date NOV. 18, 2015, and has the title “ENTREPRENEURSHIP; Health Care Law Forces Businesses to Consider Growth’s Costs.”)

How Democratic Operatives Fight Innovation-Crushing Regulations

(p. B1) SAN FRANCISCO — Over the last few years, so-called sharing companies like Airbnb and Uber — online platforms that allow strangers to pay one another for a room or a ride — have established footholds in thousands of communities well before local regulators have figured out how to deal with them.

. . .
Chris Lehane, a Washington political operative who now serves as Airbnb’s head of global policy and public affairs, framed Proposition F (p. B10) as a hotel-industry-led attack on the middle class.
In this city of about 840,000 people, roughly $8 million was raised by groups opposed to Proposition F — about eight times the amount raised by the proposition’s backers, according to records filed with the San Francisco Ethics Commission.
Much of that money was spent mobilizing Airbnb hosts and users, Mr. Lehane said. Still, he repeatedly homed in on one of the company’s most important talking points: Airbnb’s victory was a win for the middle class.
“Cities recognize where the world is going, right, they understand that you’re either going to go forward or you’re going to go backward,” he said. “They understand that in a time of economic inequality, this is a question of whose side are you on: Do you want to be on the side of the middle class, or do you want to be opposed to the middle class?”
. . .
Companies like Airbnb and Uber have become multibillion-dollar companies by employing a kind of guerrilla growth strategy in which they set up a modest team of workers in a city and immediately start providing their services to the public, whether local laws allow them to or not.
. . .
Mr. Lehane, a former political operative in the Clinton administration, was nicknamed the Master of Disaster for his no-holds-barred approach to winning political fights. David Plouffe, a former adviser to President Obama, is now a senior adviser to Uber and a member of its board.
Mr. Lehane and Mr. Plouffe have both tried to frame their companies as middle-class saviors in a moment of economic anxiety and income inequality — themes that are playing out in the presidential election as well. Jeb Bush and other Republicans have bragged about their Uber rides on the campaign trail, praising these companies as the future of self-sufficient employment.

For the full story, see:
CONOR DOUGHERTY and MIKE ISAAC. “Airbnb and Uber Mobilize Vast User Base to Sway Policy.” The New York Times (Thurs., NOV. 5, 2015): B1 & B10.
(Note: ellipses added.)
(Note: the online version of the story has the date NOV. 4, 2015.)

The Morality of Denying Hope to 30 Million Guanggun

(p. A4) One wife, many husbands.
That’s the solution to China’s huge surplus of single men, says Xie Zuoshi, an economics professor at the Zhejiang University of Finance and Economics, whose recent proposal to allow polyandry has gone viral.
. . .
By 2020, China will have an estimated 30 million bachelors — called guanggun, or “bare branches.” Birth control policies that since 1979 have limited many families to one child, a cultural preference for boys and the widespread, if illegal, practice of sex-selective abortion have contributed to a gender imbalance that hovers around 117 boys born for every 100 girls.
Though some could perhaps detect a touch of Jonathan Swift in the proposal, Mr. Xie wrote that he was approaching the problem from a purely economic point of view.
Many men, especially poor ones, he noted, are unable to find a wife and have children, and are condemned to living and dying without offspring to support them in old age, as children are required to do by law in China. But he believes there is a solution.
. . .
“With so many guanggun, women are in short supply and their value increases,” he wrote. “But that doesn’t mean the market can’t be adjusted. The guanggun problem is actually a problem of income. High-income men can find a woman because they can pay a higher price. What about low-income men? One solution is to have several take a wife together.”
He added: “That’s not just my weird idea. In some remote, poor places, brothers already marry the same woman, and they have a full and happy life.”
. . .
On Sunday [October 25, 2015], he published an indignant rebuttal on one of his blogs, accusing his critics of being driven by empty notions of traditional morality that are impractical and selfish — even hypocritical.
“Because I promoted the idea that we should allow poor men to marry the same woman to solve the problem of 30 million guanggun, I’ve been endlessly abused,” he wrote. “People have even telephoned my university to harass me. These people have groundlessly accused me of promoting immoral and unethical ideas.
“If you can’t find a solution that doesn’t violate traditional morality,” he continued, “then why do you criticize me for violating traditional morality? You are in favor of a couple made up of one man, one woman. But your morality will lead to 30 million guanggun with no hope of finding a wife. Is that your so-called morality?”

For the full story, see:
DIDI KIRSTEN TATLOW. “Bachelor Glut in China Leads to a Proposal: Share Wives.” The New York Times (Tues., OCTOBER 27, 2015): A4.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date OCTOBER 26, 2015, and has the title “Not Enough Women in China? Let Men Share a Wife, an Economist Suggests.”)

Climate Change Likely to Be Slower and Less Harmful than Feared

(p. A11) . . . , we are often told by journalists that the science is “settled” and there is no debate. But scientists disagree: They say there is great uncertainty, and they reflected this uncertainty in their fifth and latest assessment for the United Nations Intergovernmental Panel on Climate Change (IPCC). It projects that temperatures are likely to be anything from 1.5 to 4.5 degrees Celsius (2.7 to 8.1 degrees Fahrenheit) warmer by the latter part of the century–that is, anything from mildly beneficial to significantly harmful.
As for the impact of that future warming, a new study by a leading climate economist, Richard Tol of the University of Sussex, concludes that warming may well bring gains, because carbon dioxide causes crops and wild ecosystems to grow greener and more drought-resistant. In the long run, the negatives may outweigh these benefits, says Mr. Tol, but “the impact of climate change does not significantly deviate from zero until 3.5°C warming.”
Mr. Tol’s study summarizes the effect we are to expect during this century: “The welfare change caused by climate change is equivalent to the welfare change caused by an income change of a few percent. That is, a century of climate change is about as good/bad for welfare as a year of economic growth. Statements that climate change is the biggest problem of humankind are unfounded: We can readily think of bigger problems.” No justification for prioritizing climate change over terrorism there.
. . .
To put it bluntly, climate change and its likely impact are proving slower and less harmful than we feared, while decarbonization of the economy is proving more painful and costly than we hoped. The mood in Paris will be one of furious pessimism among the well-funded NGOs that will attend the summit in large numbers: Decarbonization, on which they have set their hearts, is not happening, and they dare not mention the reassuring news from science lest it threaten their budgets.
Casting around for somebody to blame, they have fastened on foot-dragging fossil-fuel companies and those who make skeptical observations, however well-founded, about the likelihood of dangerous climate change. Scientific skeptics are now routinely censored, or threatened with prosecution. One recent survey by Rasmussen Reports shows that 27% of Democrats in the U.S. are in favor of prosecuting climate skeptics. This is the mentality of religious fanaticism, not scientific debate.

For the full commentary, see:
MATT RIDLEY And BENNY PEISER. “Your Complete Guide to the Climate Debate; At the Paris conference, expect an agreement that is sufficiently vague and noncommittal for all countries to claim victory.” The Wall Street Journal (Sat., Nov. 28, 2015): A11.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Nov. 27, 2015.)

The Tol working paper mentioned above, is:
Tol, Richard S. J. “Economic Impacts of Climate Change.” University of Sussex Economics Working Paper No. 75-2015.