Category: Economics

High Costs of Public Sector Unions

(p. A11) . . . the costs of public-sector unions are great. “The byproduct of political management of the economy is waste,” the author notes. Second, pension and benefit obligations weigh down our cities. Trash disposal in Chicago costs $231 per ton, versus $74 in non-union Dallas. Increasingly, such a burden is fatal. When Detroit declared bankruptcy in 2013, a full half of the city’s$18.2 billion long-term debt was owed for employee pensions and health benefits. Even before the next downturn, other cities and some states will find themselves faltering because of similarly massive obligations.
There is something grotesque about public workers fighting for benefits whose provision will hurt the public. Citizens who vote Democratic may choose not to acknowledge the perversity out of party loyalty. But over the years a few well-known Democrats have sided against the public-sector unions. “The process of collective bargaining as usually understood cannot be transplanted into the public service,” a Democratic politician once declared. His name? Franklin Roosevelt.

For the full review, see:
AMITY SHLAES. “BOOKSHELF; Public Unions vs. the Public; Pension and benefit obligations weigh down our cities. Trash disposal in Chicago costs $231 per ton, versus $74 in non-union Dallas.” The Wall Street Journal (Fri., Jan. 16, 2015): A11.
(Note: ellipsis added.)
(Note: the online version of the review has the date Jan. 15, 2015.)

The book under review is:
DiSalvo, Daniel. Government against Itself: Public Union Power and Its Consequences. New York: Oxford University Press, 2015.

Private Power Lights the Darkness

(p. A10) NUSEIRAT CAMP, Gaza Strip–It was just after sunset when the power went out in this Palestinian refugee camp. Within seconds, Ali al-Majdalawi flipped a switch on a blue generator in his backyard and the lights in 500 homes flickered back on again.
The 64-year-old patriarch runs what he calls the A. Majdalawi Electricity Co., a pop-up utility that consists of three generators and a spider’s web of power lines radiating from an empty lot he owns in the camp.
Mr. Majdalawi has no license to operate his company. But he does have an invoice pad at the ready and boasts a long list of customers including five mosques, a library and a police station.
. . .
Along with three partners, Mr. Majdalawi, a retired school official for the U.N., invested $80,000 of their savings to buy several diesel-powered generators two years ago and set about building their own power-delivery network.
The community of about 65,000 began in 1948, the year of Israel’s creation, when hundreds of families displaced by war between Jews and Arabs set up rows of temporary dwellings. Decades later, the refugees and their descendants still live here, tightly packed among schools run by the United Nations and a cemetery built into a sand dune at the center of town.
Because his company is private, Mr. Majdalawi couldn’t use municipal power polls to string up lines. He and his sons asked neighbors to let them use the walls of their homes for the wiring and allow crews to come in for periodic maintenance.
In most other respects, the business runs much like any other electricity company. Customers apply to join the grid and if approved, one of Mr. Majdalawi’s sons enters their names into a computer for monthly billing. Most clients request two amperes, enough to run lights, a television and a computer during blackouts. The price is 120 shekels a month, about $30.
“It is an alternate grid,” explained Mr. Majdalawi’s son, Rafet, the company’s chief accountant.
Deya Shaheen, a 25-year-old barber, said Mr. Majdalawi’s electricity has kept his year-old shop in business. The electric razors and the lights he uses to light the shop when customers drop in at night are powered on the three amperes he receives from the grid.On many nights, his shop is filled with young men looking for somewhere to watch soccer matches on television.
“Look, the power thing destroys your life,” he said. “People go to bed early not because they are sleepy, but because there is no power. There is nothing to do, no TV, no Internet. It is just dark.”

For the full story, see:
NICHOLAS CASEY. “Entrepreneur Fills in Gaza Electricity Gap; Palestinian Territory’s One Power Plant Meets Barely a Quarter of Demand, Posing an Obstacle in Reconstruction Efforts.” The Wall Street Journal (Weds., DEC. 24, 2014): A10.
(Note: ellipsis added.)
(Note: the online version of the story has the date DEC. 23, 2014, and has the title “Entrepreneur Fills in Gaps in Gaza Electricity Supplies; Palestinian Territory’s One Power Plant Meets Barely a Quarter of Demand.”)

Congress Appropriates Funds to Test Concussion Theory of Rain

(p. 190) the first century A.D., when the Greek moralist Plutarch came up with the notion that rain followed military battles. Napoleon believed as much and fired cannons and guns at the sky to muddy up the ground between him and his attackers. Civil War veterans who wallowed in cold slop believed that ceaseless, close-range artillery fire had opened up the skies. In the late 1890s, as the first nesters started to dig their toeholds on the dry side of the one hundredth meridian, Congress had appropriated money to test the concussion theory in Texas. The tests were done by a man named Dyrenforth. He tried mightily, with government auditors looking over (p. 191) his shoulder, but Dyrenforth could not force a drop from the hot skies of Texas. From then on, he was called “Dry-Henceforth.”
Government-sponsored failure didn’t stop others from trying. A man who called himself “the moisture accelerator,” Charles M. Hatfield, roamed the plains around the turn of the century. A Colonel Sanders of rainmaking, Hatfield had a secret mixture of ingredients that could be sent to the sky by machine. In the age before the widespread use of the telephone, it was hard to catch up with the moisture accelerator after he had fleeced a town and moved on.

Source:
Egan, Timothy. The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl. Boston: Houghton Mifflin, 2006.

Smart Phones Bring Power to the Patient

(p. A11) We instinctively reach for our smartphones when we need to take pictures, get directions, deposit checks or reserve a table. Eric Topol, a cardiologist and digital pioneer, thinks that they are ready to perform at least one more task: revolutionize health care. In “The Patient Will See You Now,” he argues that smartphones will democratize medicine by bringing data and control directly to the people.
The power of doctors, says Dr. Topol, “can be likened to that of religious leaders and nobility” in centuries past, when knowledge and authority belonged to a small elite. He notes that we’ve never seen “a discrete challenge to the medical profession” akin to Luther ‘s challenge to the Roman Catholic Church or democracy’s challenge to monarchy and despotism. “But we’ve not had the platform or landscape for that to be accomplished. Until now.” Smartphones, he says, enable a range of medical applications to move from the hospital to the home, and they shift medicine’s locus of control from doctor to patient.

For the full review, see:
DAVID A. SHAYWITZ. “BOOKSHELF; Doctor Android; In the same way that Luther challenged the Catholic Church, smartphones are poised to upend the medical profession.” The Wall Street Journal (Tues., Jan. 13, 2015): A11.
(Note: the online version of the review has the date Jan. 12, 2015.)

The book under review is:
Topol, Eric. The Patient Will See You Now: The Future of Medicine Is in Your Hands. New York: Basic Books, 2015.

Police Unions Make It Harder to Get Rid of Bad Cops

(p. A29) A small percentage of cops commit most of the abuses. A study by WNYC News in New York found that, since 2009, 40 percent of the “resisting arrest” charges were filed by just 5 percent of New York Police Department officers. In other words, most officers rarely get in a confrontation that leads to that charge, but a few officers often get in violent confrontations.
But it’s very hard to remove the bad apples from the force. Trying to protect their members, unions have weakened accountability. The investigation process is softer on police than it would be on anyone else. In parts of the country, contract rules stipulate that officers get a 48-hour cooling-off period before having to respond to questions. They have access to the names and testimony of their accusers. They can be questioned only by one person at a time. They can’t be threatened with disciplinary action during questioning.
More seriously, cops who are punished can be reinstated through a secretive appeals process that favors job retention over public safety. In The Atlantic, Conor Friedersdorf has a riveting piece with egregious stories of cops who have returned to the force after clear incompetence. Hector Jimenez was an Oakland, Calif., cop who shot and killed an unarmed 20-year-old man in 2007. Seven months later, he killed another unarmed man, shooting him in the back three times while he ran away. The city paid damages. Jimenez was fired. But he appealed through his union and was reinstated with back pay.

For the full commentary, see:
David Brooks. “The Union Future.” The New York Times (Fri., DEC. 19, 2014): A29.
(Note: the online version of the commentary has the date DEC. 18, 2014. )

Delta and Atlanta Protect Their Huge Hartsfield-Jackson Airport from Little Silver Comet Field

(p. B6) DALLAS, Ga. — Airports do not get much smaller than Silver Comet Field at Paulding Northwest Atlanta Airport, where an undeveloped two-lane road weaves to a church-quiet setting framed by small hills.
On a recent weekday morning, four small business jets were planted on the tarmac, if it can be called that. Nine automobiles dotted the parking lot, most of them driven there for a meeting. Outside the two-story building that serves as the terminal, which was reminiscent of a lodge in off-peak season, there was no sign of human life.
Only 50 miles away sits the world’s most bustling airport, Hartsfield-Jackson. It maintains a monopoly on commercial flights in Atlanta, the largest metropolitan region without a secondary airport.
Paulding Northwest would like to change that grip on the market. The airport has applied for a commercial license so it can introduce two flights a week, and has since encountered stiff opposition.
Leading the charge against the bid is the Atlanta-based Delta Air Lines, which averages about 1,000 daily departures from its sprawling hub.
But the airport’s supporters are crying foul, saying that Delta, along with the city of Atlanta, which owns Hartsfield-Jackson, has managed to throw up a series of barriers, legal and political, against the bid.

For the full story, see:
MIKE TIERNEY. “Fighting for 2 Fights a Week.” The New York Times (Tues., DEC. 23, 2014): B6.
(Note: the online version of the story has the date DEC. 22, 2014, and has the title “Tiny Airport Fights for Sliver of Atlanta Market.”)

Ways Technology May Decrease Inequality

(p. 7) As the previous generation retires from the work force, many more people will have grown up with intimate knowledge of computers. And over time, it may become easier to work with computers just by talking to them. As computer-human interfaces become simpler and easier to manage, that may raise the relative return to less-skilled labor.
The future may also extend a growing category of employment, namely workers who team up with smart robots that require human assistance. Perhaps a smart robot will perform some of the current functions of a factory worker, while the human companion will do what the robot cannot, such as deal with a system breakdown or call a supervisor. Such jobs would require versatility and flexible reasoning, a bit like some of the old manufacturing jobs, but not necessarily a lot of high-powered technical training, again because of the greater ease of the human-computer interface. That too could raise the returns to many relatively unskilled workers.

For the full commentary, see:
TYLER COWEN “TheUpshot; Economic View; The Technological Fix to Inequality.” The New York Times, SundayBusiness Section (Sun., DEC. 7, 2014): 7.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the commentary has the date DEC. 6, 2014, and has the title “TheUpshot; Economic View; How Technology Could Help Fight Income Inequality.” )

The “Miracle Machines” of Farming

(p. 75) Nobody had washing machines, vacuum cleaners, or incandescent light bulbs. But the farmers did have their miracle machines. In fifteen years, the Lucas family had gone from a walking plow pulled along behind a mule, to a riding plow, in which horses carried the blade through the soil, to a fine-tuned internal combustion plow.
“Machinery is the new Messiah,” said Henry Ford, and though that sounded blasphemous to a devout sodbuster, there was something to it. Every ten seconds a new car came off Ford’s factory line, and some of them were now parked next to dugouts in No Man’s Land.

Source:
Egan, Timothy. The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl. Boston: Houghton Mifflin, 2006.

Marxist Chinese Education Minister Bans “Western Values” from Textbooks and Lectures

(p. D8) This week [the week starting Sun. January 25, 2015], China’s ideological drive against Western liberal ideas broadened to take in a new target: foreign textbooks.
Meeting in Beijing with the leaders of several prominent universities, Education Minister Yuan Guiren laid out new rules restricting the use of Western textbooks and banning those sowing “Western values.”
“Strengthen management of the use of original Western teaching materials,” Mr. Yuan said at a meeting with university officials, according to Xinhua, the state news agency. “By no means allow teaching materials that disseminate Western values in our classrooms.”
The strictures on textbooks are the latest of a succession of measures to strengthen the Communist Party’s control of intellectual life and eradicate avenues for spreading ideas about rule of law, liberal democracy and civil society that it regards as dangerous contagions, which could undermine its hold on power.
On Jan. 19, the leadership issued guidelines demanding that universities make a priority of ideological loyalty to the party, Marxism and Mr. Xi’s ideas.
Mr. Yuan’s message this week spelled out how universities should do that.
“Never allow statements that attack and slander party leaders and malign socialism to be heard in classrooms,” he said, according to the Xinhua report. “Never allow teachers to grumble and vent in the classroom, passing on their unhealthy emotions to students.”

For the full story, see:
CHRIS BUCKLEY. “China Warns Against ‘Western Values’ in Imported Textbooks.” The New York Times (Sat., JAN. 31, 2015): A9.
(Note: ellipsis, and bracketed words, added.)
(Note: the online version of the story has the date JAN. 30, 2015.)

“Valuable Things Should Be Paid For . . . Music Should Not Be Free”

(p. R10) Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art.

For the full commentary, see:
Swift, Taylor. “WSJ 125 (A Special Report): Music — it’s Too Soon to Write Off the Album: Yes, Musicians Aren’t Selling as Many of them; but Taylor Swift Argues that the Best Artists Will always Find Ways to Break through to the Audience.” Wall Street Journal (Tues., July 8, 2014): R10.
(Note: the online version of the commentary has the date July 7, 2014, and has the title “For Taylor Swift, the Future of Music Is a Love Story.”)

Ezra Pound, a Major Literary Figure of the 20th Century, “Loved the Movies of Walt Disney”

(p. C5) “Mussolini asked,” in A. David Moody ‘s retelling, “what was his aim in writing The Cantos, and Pound replied, ‘to put my ideas in order’; and Mussolini said, ‘What do you want to do that for?’ ” When the poet turned from this dismissal to economic policy, which had lately become the central obsession of his life, the dictator was unimpressed by Pound’s list of 18 proposals, alighting particularly on his assertion that “in the Fascist state taxes were no longer necessary”: “Have to think about THAT,” Mussolini said and ended the interview. To the fascist dictator, Pound, by any measure one of the 20th century’s major literary figures, merited hardly more bother than a fly.
. . .
(p. C7) . . . he was not always an elitist. He loved the movies of Walt Disney, . . .

For the full review, see:
DAVID MASON. “The Makers of Modernism; Pound’s generous spirit looms over 20th-century literature, and in the early years his megalomania seemed harmless.” The Wall Street Journal (Sat., Dec. 6, 2014): C5 & C7.
(Note: ellipses added; italics in original.)
(Note: the online version of the review has the date Dec. 5, 2014, and has the title “The Tragic Hero of Literary Modernism; Ezra Pound’s generous spirit looms over 20th-century literature, and in the early years his megalomania seemed harmless.” The first part of the title in the print version was intended to cover both the review of the Pound biography and an accompanying review of a biography of the writer and publisher James Laughlin.)

The book under review is:
Moody, A. David. Ezra Pound: Poet: Volume II: The Epic Years. Oxford, UK: Oxford University Press, 2014.