Economics – Page 154 – artdiamondblog.com

Lippmann Attacked FDR’s Socialist National Industrial Recovery Act

(p. A13) . . . Duke economic historian Craufurd D. Goodwin employs the writings of the once-famous newspaper columnist Walter Lippmann to describe the fervid U.S. debates that began with the 1929 stock-market crash.
. . .
Lippmann established his intellectual credentials in the 1920s, writing several well-received books. They included “Public Opinion,” which excoriated the press for sloppy coverage of government policies and actions. The book is often seen as a call for top-down rule by experts, but Mr. Goodwin argues that Lippmann had something else in mind–that he was eager for expert opinion and “reasoned study” to be widely disseminated so that self-government would be more fully informed and the citizenry less easily manipulated.
. . .
At first, Lippmann embraced the Keynesian argument that government could ameliorate downswings in business cycles through deficit spending, but he later had second thoughts about economic engineering and became more attuned to the free-market ideas of Friedrich Hayek, whom he knew and consulted. . . . Lippmann attacked as ill-conceived the most ambitious New Deal brainstorm, the 1933 National Industrial Recovery Act, which attempted to organize all business and industry into cartels to boost prices.

For the full review, see:
GEORGE MELLOAN. “BOOKSHELF; The Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise.” The Wall Street Journal (Tues., Oct. 14, 2014): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date Oct. 13, 2014, and has the title “BOOKSHELF; Walter Lippmann: Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise.”)

The book under review, is:
Goodwin, Craufurd D. Walter Lippmann: Public Economist. Cambridge, MA: Harvard University Press, 2014.

Esther Dyson Sees a Lot of Silicon Valley as Just Motivated to Make Money

(p. C11) The U.S. Commerce Department recently said that it plans to relinquish its oversight of Icann, handing that task to an international body of some kind. The details are still being worked out, but Ms. Dyson hopes that governments won’t be the new regulators. . . .
For now, she thinks there are many Silicon Valley Internet companies with inflated market values. “There is the desire to make money that motivates a lot of that in Silicon Valley, and yes, I think it’s totally a bubble,” she says. “It’s not like the last bubble in that there are a lot of real companies there [now], but there are a lot of unreal companies and…many of them will disappear.” She thinks too many people are starting similar companies. “You have people being CEOs of teeny little things who would be much better as marketing managers of someone else’s company,” she says.
And though her work often takes her to California, she’s happy to stay in New York. These days, she finds Silicon Valley “very fashionable,” she says, “and I don’t really like fashion.”

For the full interview, see:
ALEXANDRA WOLFE, interviewer. “WEEKEND CONFIDENTIAL; Esther Dyson’s Healthy Investments; The investor is hoping to produce better health through technology with a new nonprofit.” The Wall Street Journal (Sat., May 3, 2014): C11.
(Note: first ellipsis added; second ellipsis in original.)
(Note: the online version of the interview has the date May 2, 2014, and has the title “WEEKEND CONFIDENTIAL; Esther Dyson’s Healthy Investments; The investor is hoping to produce better health through technology with a new nonprofit.”)

Einthoven Tried to Share Prize Money with His Assistant

(p. 194) One event that occurred after Einthoven received the Nobel Prize in Physiology or Medicine in 1924 speaks volumes about his integrity. In the construction of his string galvanometer and laboratory experiments over many years, Einthoven was rather clumsy with his hands and relied very much on the collaboration of his chief assistant K. F. L. van der Woerdt. Years later, when he received the $40,000 in Nobel Prize money, Einthoven wished to share it with his assistant but soon learned that the man had died. He sought out the man’s two surviving sisters, who were living in genteel poverty in a kind of almshouse. He journeyed there by train and gave them half of the award money.

Source:
Meyers, Morton A. Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade Publishing, 2007.

When Pirates Were More Enlightened than Most Governments

(p. A11) While slaves were oppressed by the social order, Mr. Rediker argues, pirates on the high seas were remaking it. An estimated 2,500 buccaneers prowled the Atlantic and the Caribbean at any given time during the first half of the 18th century. The great majority were former merchant seamen, or deserters from the Royal Navy. They were aged between 14 and 50, though most were in their 20s. Married men were not welcome for fear that they might desert and compromise an entire pirate crew.
Here, Mr. Rediker suggests, egalitarianism was being practiced at sea half a century before it became a catch-cry of the French Revolution. And, he adds, there was a striking uniformity of rules and customs on all pirate vessels. At the start of each voyage, or whenever a new captain was chosen, a wide-ranging social compact would be drawn up listing rights and responsibilities. The articles would allocate authority, deal with the distribution of plunder, and set the rules of punishment to enforce discipline. Booty was usually allocated according to skills and duties–the captain might be given two shares; gunners, boatswains, mates, carpenters and medics one and a half shares; and the rest of the crew a share each. In times of battle, the crew gave the captain unquestioned authority whether fighting, chasing or being chased. What perhaps set the pirates most apart from their former colleagues in the Merchant Navy and the Royal Navy was punishment. The lash, for example, was rarely used. Fighting was not allowed on board and disputes between crew had to be settled ashore by sword or pistol. This brought an unusual degree of harmony to the pirate ship. Incorrigible trouble makers were unceremoniously dumped and left behind on deserted islands. Vengeance was also freely taken upon captives, and woe betide any ship’s captain who had tyrannized and abused his crew.

For the full review, see:
MICHAEL FATHERS. “BOOKSHELF; Motley Crew at the Helm; Egalitarianism was being acted out at sea by pirates half a century before it became a catch-cry of the French Revolution. The Wall Street Journal (Fri., Aug. 22, 2014): A11.
(Note: ellipsis in original.)
(Note: the online version of the review has the date Aug. 21, 2014, and has the title “BOOKSHELF; Book Review: ‘Outlaws of the Atlantic’ by Marcus Rediker; Egalitarianism was being acted out at sea by pirates half a century before it became a catch-cry of the French Revolution.”)

Book under review:
Rediker, Marcus. Outlaws of the Atlantic: Sailors, Pirates, and Motley Crews in the Age of Sail. Boston, MA: Beacon Press, 2014.

Robotic Milkers Are Less Costly, Easier to Manage and More Humane to Cows

(p. A1) EASTON, N.Y. — Something strange is happening at farms in upstate New York. The cows are milking themselves.
Desperate for reliable labor and buoyed by soaring prices, dairy operations across the state are charging into a brave new world of udder care: robotic milkers, which feed and milk cow after cow without the help of a single farmhand.
Scores of the machines have popped up across New York’s dairy belt and in other states in recent years, changing age-old patterns of daily farm life and reinvigorating the allure of agriculture for a younger, tech-savvy — and manure-averse — generation.
. . .
The cows seem to like it, too.
Robots allow the cows to set their own hours, lining up for automated milking five or six times a day — turning the predawn and late-afternoon sessions (p. A19) around which dairy farmers long built their lives into a thing of the past.
With transponders around their necks, the cows get individualized service. Lasers scan and map their underbellies, and a computer charts each animal’s “milking speed,” a critical factor in a 24-hour-a-day operation.
. . .
The Bordens and other farmers say a major force is cutting labor costs — health insurance, room and board, overtime, and workers’ compensation insurance — particularly when immigration reform is stalled in Washington and dependable help is hard to procure.
The machines also never complain about getting up early, working late or being kicked.
“It’s tough to find people to do it well and show up on time,” said Tim Kurtz, who installed four robotic milkers last year at his farm in Berks County, Pa. “And you don’t have to worry about that with a robot.”
The Bordens say the machines allow them to do more of what they love: caring for animals.
“I’d rather be a cow manager,” Tom Borden said, “than a people manager.”

For the full story, see:
JESSE McKINLEY. “With Farm Robotics, the Cows Decide When It’s Milking Time.” The New York Times (Weds., APRIL 23, 2014): A1 & A19.
(Note: ellipses added.)
(Note: the online version of the story has the date APRIL 22, 2014.)

Affordable Care Act Reduces GDP, Employment and Labor Income

(p. A17) Whether the Affordable Care Act lives up to its name depends on how, or whether, you consider its consequences for the wider economy.
. . .
I estimate that the ACA’s long-term impact will include about 3% less weekly employment, 3% fewer aggregate work hours, 2% less GDP and 2% less labor income. These effects will be visible and obvious by 2017, if not before. The employment and hours estimates are based on the combined amount of the law’s new taxes and disincentives and on historical research on the aggregate effects of each dollar of taxation. The GDP and income estimates reflect lower amounts of labor as well as the law’s effects on the productivity of each hour of labor.
. . .
The Affordable Care Act is weakening the economy. And for the large number of families and individuals who continue to pay for their own health care, health care is now less affordable.

For the full commentary, see:
CASEY B. MULLIGAN. “OPINION; The Myth of ObamaCare’s Affordability; The law’s perverse incentives will have the nation working fewer hours, and working those hours less productively.” The Wall Street Journal (Tues., SEPTEMBER 9, 2014): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date SEPTEMBER 8, 2014.)

Mulligan’s research on the effects of Obamacare is detailed in his Kindle e-book:
Mulligan, Casey B. Side Effects: The Economic Consequences of the Health Reform. Flossmoor, IL: JMJ Economics, 2014.

Socialist Price Setting Causes Shortages of Corn Flour, Car Batteries and Toilet Paper

(p. B1) Venezuela’s prices on everything from butter to flat-screen TVs are set without warning by the government, which also caps corporate profits at 30%. Any profits evaporate quickly, however, because inflation is almost double that.
And expanded price controls imposed by Venezuelan President Nicolas Maduro, who succeeded late leftist firebrand Hugo Chávez in April 2013, have exacerbated shortages of basic items such as corn flour, car batteries and toilet paper, triggering violent street protests since early February.

For the full story, see:
MAXWELL MURPHY and KEJAL VYAS. “CFO JOURNAL; Currency Chaos in Venezuela Portends Write-Downs.” The Wall Street Journal (Tues., May 27, 2014): B1 & B6.
(Note: the online version of the story has the date May 26, 2014.)

Japanese Try to Sell the iPhone of Toilets in United States

(p. B8) TOKYO–Yoshiaki Fujimori wants to be the Steve Jobs of toilets.
Like iPhones, app-packed commodes are objects of desire in Mr. Fujimori’s Japan. The lids lift automatically. The seats heat up. Built-in bidets make cleanup a breeze. Some of them even sync with users’ smartphones via Bluetooth so that they can program their preferences and play their favorite music through speakers built into the bowl.
Three-quarters of Japanese homes contain such toilets, most of them made by one of two companies: Toto Ltd., Japan’s largest maker of so-called sanitary ware, or Lixil Corp., where Mr. Fujimori is the chief executive.
Now Mr. Fujimori is leading a push to bring them to the great unwashed. In May, Lixil plans to add toilets with “integrated bidets” to the lineup of American Standard Brands, which Lixil acquired last year for $542 million, including debt.
. . .
Few people realized they needed smartphones until Apple’s iPhone came along. So it will be in the U.S. with American Standard’s new toilets, Mr. Fujimori said.
“Industry presents iPhone–industry presents shower toilet,” Mr. Fujimori said in an interview at Lixil’s headquarters in Tokyo. “We can create the same type of pattern.”
. . .
Mr. Fujimori maintained that once American consumers try such toilets, they won’t go back.
“This improves your standard of living,” he said. “It doesn’t hurt you. People like comfort, they like ease, they like automatic. And people like clean.”

For the full story, see:
ERIC PFANNER and ATSUKO FUKASE. “Smart Toilets Arrive in U.S.” The Wall Street Journal (Tues., May 27, 2014): B8.
(Note: ellipses added.)
(Note: the online version of the story has the date May 26, 2014.)

High Skill Foreign Workers Raise Wages for Native Workers

Source of graph: online version of the WSJ article quoted and cited below.

(p. A6) “A lot of people have the idea there is a fixed number of jobs,” said . . . , Giovanni Peri of the University of California, Davis. “It’s completely turned around.”

Immigrants can boost the productivity of the overall economy, he said, “because then the pie grows and there are more jobs for other people as well and there’s not a zero-sum trade-off between natives and immigrants.”
Mr. Peri, along with co-authors Kevin Shih at UC Davis, and Chad Sparber at Colgate University, studied how wages for college- and noncollege-educated native workers shifted along with immigration. They found that a one-percentage-point increase in the share of workers in STEM fields raised wages for college-educated natives by seven to eight percentage points and wages of the noncollege-educated natives by three to four percentage points.
Mr. Peri said the research bolsters the case for raising, or even removing, the caps on H-1B visas, the program that regulates how many high-skilled foreign workers employers can bring into the country.

For the full story, see:
JOSH ZUMBRUN and MATT STILES. “Study: Skilled Foreign Workers a Boon to Pay.” The Wall Street Journal (Fri., May 23, 2014): A6.
(Note: ellipsis added.)
(Note: the online version of the story has the date May 22, 2014, and has the title “Skilled Foreign Workers a Boon to Pay, Study Finds.”)

The paper discussed in the passage quoted above, is:
Peri, Giovanni, Kevin Shih, and Chad Sparber. “Foreign Stem Workers and Native Wages and Employment in U.S. Cities.” National Bureau of Economic Research, Inc, NBER Working Paper Number 20093, May 2014.

FDR Ruthlessly Manipulated Political Process

(p. D8) Michael C. Janeway, a former editor of The Boston Globe and executive editor of The Atlantic Monthly who wrote two books chronicling what he saw as the intertwined decline of democracy and journalism in the United States, died on Thursday [April 17, 2014] at his home in Lakeville, Conn.
. . .
The second book, “The Fall of the House of Roosevelt: Brokers of Ideas and Power From FDR to LBJ,” published in 2004, measured some of the ideas in his first book against the history of the New Deal. It focused on President Franklin D. Roosevelt’s inner circle of advisers, a group of political operatives and thinkers often called Roosevelt’s “brain trust,” who helped conceive ideas like the minimum wage, Social Security and federal bank deposit insurance.
Mr. Janeway’s father, Eliot Janeway, an economist, Democratic hand and columnist for Time magazine (a portfolio not unheard-of in those days), was a prominent member of that group.
Michael Janeway suggested that in undertaking the radical changes necessary to yank the “shattered American capitalist system into regulation and reform,” Roosevelt and his team manipulated the political process with a level of ruthlessness that may have been justified by the perils of the times. But in the years that followed, he wrote, the habit of guile and highhandedness devolved into the kind of arrogance that defined — and doomed — the presidency of Lyndon B. Johnson, Roosevelt’s last political heir.

For the full obituary, see:
PAUL VITELLO. “Michael Janeway, 73, Former Editor of The Boston Globe.” The New York Times (Sat., APRIL 19, 2014): D8.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the obituary has title “Michael Janeway, Former Editor of The Boston Globe, Dies at 73.”)

The book mentioned in the passage quoted above is:
Janeway, Michael. The Fall of the House of Roosevelt: Brokers of Ideas and Power from FDR to LBJ, Columbia Studies in Contemporary American History. New York: Columbia University Press, 2004.

Pay Gap Widest in Jobs that Value Long Hours, Face Time and Being on Call

Source of graph: online version of the NYT article quoted and cited below.

(p. B3) “The gender gap in pay would be considerably reduced and might vanish altogether if firms did not have an incentive to disproportionately reward individuals who labored long hours and worked particular hours,” [Harvard economist Claudia Goldin] . . . wrote in a paper published [in April 2014] . . . in The American Economic Review.

Occupations that most value long hours, face time at the office and being on call — like business, law and surgery — tend to have the widest pay gaps. That is because those employers pay people who spend longer hours at the office disproportionately more than they pay people who don’t, Dr. Goldin found. A lawyer who works 80 hours a week at a big corporate law firm is paid more than double one who works 40 hours a week as an in-house counsel at a small business.
Jobs in which employees can easily substitute for one another have the slimmest pay gaps, and those workers are paid in proportion to the hours they work.
Pharmacy is Dr. Goldin’s favorite example. A pharmacist who works 40 hours a week generally earns double the salary of a pharmacist who works 20 hours a week, and as a result, the pay gap for pharmacists is one of the smallest.
Pharmacy became such an equitable profession not because of activism but because of changes in the labor market (fewer self-owned pharmacies and more large corporations) and changes in technology (storing patient records on computers where they are easily accessible by any pharmacist).

For the full story, see:
Claire Cain Miller. “Pay Gap Is Because of Gender, Not Jobs.” The New York Times (Thurs., APRIL 24, 2014): B3.
(Note: ellipses, and bracketed information, added.)
(Note: the online version of the story has the date APRIL 23, 2014.)

The Goldin academic paper mentioned above, is:
Goldin, Claudia. “A Grand Gender Convergence: Its Last Chapter.” American Economic Review 104, no. 4 (April 2014): 1091-119.