Laws to Protect Car Dealers, Keep Car Prices High

TeslaGalleryVirginia2013-07-23.jpg “Tesla ‘galleries’ such as this one in McLean, Va., can show but not sell cars.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B1) RALEIGH, N.C.–Elon Musk made a fortune disrupting the status quo in online shopping and renewable energy. Now he’s up against his toughest challenge yet: local car dealers.

Mr. Musk, the billionaire behind PayPal and now Tesla Motors Inc., wants to sell his $70,000 Tesla electric luxury vehicles directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.
The latest battleground is North Carolina, where the Republican-controlled state Senate last month unanimously approved a measure that would block Tesla from selling online, its only sales outlet here. Tesla has staged whiz-bang test drives for legislators in front of the State House and hired one of the state’s most influential lobbyists to stave off a similar vote in the House before the legislative session ends in early July.
The focus of the power struggle between Mr. Musk and auto dealers is a thicket of state franchise laws, many of which go back to the auto industry’s earliest days when industry pioneer Henry Ford began turning to eager entrepreneurs to help sell his Model T.
Dealers say laws passed over the decades to prevent car makers from selling directly to consumers are justified because without them auto makers could use their economic clout to sell vehicles for less than their independent franchisees.

For the full story, see:
MIKE RAMSEY and VALERIE BAUERLEIN. “Tesla Clashes With Car Dealers; Electric-Vehicle Maker Wants to Sell Directly to Consumers; Critics Say Plan Violates Franchise Laws.” The Wall Street Journal (Tues., June 18, 2013): B1-B2.

Great-Grandson of Cornelius Vanderbilt Privately Built First Highway Dedicated to Cars

TheLongIslandMotorParkwayBK2013-07-21.jpg

Source of book image: https://lihj.cc.stonybrook.edu/wp-content/uploads/2011/07/Motor-Parkway_review.jpg

(p. 13) It survives only as segments of other highways, as a right of way for power lines and as a bike trail, but the Long Island Motor Parkway still holds a sense of magic as what some historians say is the country’s first road built specifically for the automobile. It opened 100 years ago last Friday as a rich man’s dream.

As detailed in a new book, “The Long Island Motor Parkway” by Howard Kroplick and Al Velocci (Arcadia Publishing), the parkway ran about 45 miles across Long Island, from Queens to Ronkonkoma, and was created by William Kissam Vanderbilt II, the great-grandson of Cornelius Vanderbilt.

. . .

The younger Vanderbilt was a car enthusiast who loved to race. He had set a speed record of 92 miles an hour in 1904, the same year he created his own race, the Vanderbilt Cup.
But his race came under fire after a spectator was killed in 1906, and Vanderbilt wanted a safe road on which to hold the race and on which other car lovers could hurl their new machines free of the dust common on roads made for horses. The parkway would also be free of “interference from the authorities,” he said in a speech.
So he created a toll road for high-speed automobile travel. It was built of reinforced concrete, had banked turns, guard rails and, by building bridges, he eliminated intersections that would slow a driver down. The Long Island Motor Parkway officially opened on Oct. 10, 1908, and closed in 1938.
. . .
But by the end of Vanderbilt’s life (he died in 1944), the public had come to feel entitled to car ownership. And there was growing pressure for public highways, like the parkways that the urban planner Robert Moses was building.

. . .

In 1938, Moses refused Vanderbilt’s appeal to incorporate the motor parkway into his new parkway system. The motor parkway just could not compete with the public roads, even after the toll was reduced to 40 cents, and Moses eventually gained control of Vanderbilt’s pioneering road for back taxes of about $80,000. The day of public roads had come, supplanting private highways.
. . .
The parkway marked the beginning of a process: the road was designed for the car. But in offering higher speeds, the parkway and other modern roads would push cars to their technical limits and beyond, inspiring innovation. In that sense, the first modern automobile highway helped to create the modern automobile.

For the full story, see:
PHIL PATTON. “A 100-Year-Old Dream: A Road Just for Cars.” The New York Times, SportsSunday Section (Sun., October 12, 2008): 13.
(Note: the centered bold ellipses were in the original; the other ellipses were added.)
(Note: the online version of the article has the date October 9, 2008.)

The book mentioned in the article, is:
Kroplick, Howard, and Al Velocci. The Long Island Motor Parkway. Mount Pleasant, SC: Arcadia Publishing, 2008.

LongIslandMotorParkwayRouteMap2013-07-21.jpg “Approximate Route of Long Island Motor Parkway.” Source of caption and map: online version of the NYT article quoted and cited above.

“The Million-Dollar Question” for “Our Long Economic Slump”: Why “the Severe Downturn in Jobs”?

(p. 5) [There are] . . . two underappreciated aspects of our long economic slump. First, it has exacted the harshest toll on the young — even harsher than on people in their 50s and 60s, who have also suffered. And while the American economy has come back more robustly than some of its global rivals in terms of overall production, the recovery has been strangely light on new jobs, even after Friday’s better-than-expected unemployment report. American companies are doing more with less.
“This still is a very big puzzle,” said Lawrence F. Katz, a Harvard professor who was chief economist at the Labor Department during the Clinton administration. He called the severe downturn in jobs “the million-dollar question” for the economy.

For the full commentary, see:
DAVID LEONHARDT. “CAPITAL IDEAS; The Idled Young Americans.” The New York Times, SundayReview Section (Sun., May 5, 2013): 5.
(Note: ellipsis, and words in brackets, added.)
(Note: the online version of the commentary has the date May 3, 2013.)

Record Companies Refused to See Efficiency of Napster Distribution System

AppetiteForSelfDestructionBK2013-07-13.jpg

Source of book image: online version of the WSJ review quoted and cited below.

(p. A15) . . . the central character in “Appetite for Self-Destruction” is technological change.
. . .
Record labels scrambled to negotiate with Napster and develop a legal version of the service with multiple revenue streams. The attempts all failed. In Mr. Knopper’s telling, there were unreasonable demands on all sides. But he faults music executives for “cling[ing] to the old, suddenly inefficient model of making CDs and distributing them to record stores. . . . In this world, the labels controlled — and profited from — everything.” In the new world being ushered in by Napster, he writes, control was shifting “to a snot-nosed punk and his crazy uncle.”
The labels’ inability to reach an agreement with Napster destroyed “the last chance for the record industry as we know it to stave off certain ruin,” Mr. Knopper writes in a typically overheated passage. Had a deal been consummated, he suggests, a legal version of Napster might have generated revenues of $16 billion in 2002 and saved the industry. Whether or not the author’s estimate is accurate, his larger point remains: The music industry’s big mistake was trying to protect a business model that no longer worked. Litigation would not keep music consumers offline.

For the full review, see:
JEREMY PHILIPS. “BUSINESS BOOKSHELF; Spinning Out of Control; How the record industry missed out on a chance to compete in a new digital world.” The Wall Street Journal (Weds., February 11, 2009): A15.
(Note: first two ellipses added; third ellipsis in original.)

The book under review is:
Knopper, Steve. Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age. New York: Free Press, 2009.

The Decay of River Rouge’s Diseconomies of Scale

RiverRougeFordRollingHall2013-06-28.jpg “The rolling hall at Ford’s River Rouge plant, one of Andrew Moore’s photographs of Detroit.” Source of caption and of the Andrew Moore photo: online version of the NYT article quoted and cited below.

Ford’s River Rouge plant near Detroit is a standard textbook example of diseconomies of scale (aka diminishing returns to scale). The image above is an apt illustration of the consequences of diseconomies of scale.

(p. 19) A Connecticut native, Mr. Moore moved to New York in 1980, living near South and John Streets in Lower Manhattan. At night he would wander the neighborhood taking pictures of the construction of the South Street Seaport, which kindled an interest in documenting “life in flux,” he said. “I like places in transformation, the process of becoming and changing.”
. . .
Photos like those of the enormous rolling hall at Ford’s River Rouge plant and a sunset over the Bob-Lo Island boat dock were inspired, Mr. Moore said, by 19th-century American landscape painters like Frederic Church and Martin Johnson Heade.

For the full story, see:
MIKE RUBIN. “Capturing the Idling of the Motor City.” The New York Times, Arts&Leisure Section (Sun., August 21, 2011): 19.
(Note: ellipsis added.)
(Note: the online version of the story has the date August 18, 2011.”)

Andrew Moore has a book of his photos of Detroit:
Moore, Andrew, and Philip Levine. Andrew Moore: Detroit Disassembled. Bologna, Italy: Damiani/Akron Art Museum, 2010.

Samuel Adams Is Underrated Founder Because He Burned His Paper Trail

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Source of book image: online version of the WSJ review quoted and cited below.

(p. A17) “Samuel Adams: A Life” makes it abundantly clear why the British so detested Adams. He started talking independence more than a decade before the Declaration and did more than anyone to organize opposition to colonial taxes and to make “no taxation without representation” a rallying cry. . . .
. . .
If Mr. Stoll’s biography lacks the narrative power of books on other Founders, such as David McCullough’s “John Adams,” the reason may be that the paper trail left by Samuel Adams is frustratingly short. He destroyed much of his correspondence during the revolutionary years, fearful that it could fall into the wrong hands. Some of the letters that remain end with the words “burn this.” This Adams wasn’t playing for the history books. He was trying to plot a revolution. Mr. Stoll makes a convincing case that Samuel Adams is not just the most underrated of the Founders but also one of the most admirable, down-to-earth and principled (he worked to abolish slavery).

For the full review, see:
JONATHAN KARL. “Revolution Is No Tea Party; Rabble-rouser, wordsmith, strategist and defender of liberty.” The Wall Street Journal (Tues., November 3, 2008): A17.
(Note: ellipses added.)

The book under review is:
Stoll, Ira. Samuel Adams: A Life. New York: Free Press, 2008.

Why Wind Power Has Not, and Will Not, Replace a Single Conventional Power Plant

(p. A17) After decades of federal subsidies–almost $24 billion according to a recent estimate by former U.S. Sen. Phil Gramm–nowhere in the United States, or anywhere else, has an array of wind turbines replaced a single conventional power plant. Nowhere.
But wind farms do take up space. The available data from wind-power companies, with which the Environmental Protection Agency agrees, show that the most effective of them can generate about five kilowatts per acre. This means 300 square miles of land–192,000 acres–are necessary to generate the 1,000 megawatts (a billion watts) of electricity that a conventional power plant using coal, nuclear energy or natural gas can generate on a few hundred acres. A billion watts fulfills the average annual power demand of a city of 700,000.
. . .
The promise that wind and solar power could replace conventional electricity production never really made sense. It’s known to everybody in the industry that a wind turbine will generate electricity 30% of the time–but it’s impossible to predict when that time will be. A true believer might be willing to do without electricity when the wind is not blowing, but most people will not. And so, during the 30% of the time the blades are spinning, conventional power plants are also spinning on low, waiting to operate during the other 70% of the time.

For the full commentary, see:
JAY LEHR. “OPINION; The Rationale for Wind Power Won’t Fly; Physical limitations will keep this energy source a niche provider of U.S. electricity needs.” The Wall Street Journal (Tues., June 18, 2013): A17.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date June 17, 2013.)

Project Entrepreneur Would Rather Change the World than Buy a Luxury Car

HoffmanReidGreylockPartners2013-06-28.jpg“Reid Hoffman at Greylock Partners foresees a tectonic shift coming in the Web, with data and its many uses as the new linchpin, replacing identity and relationships.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 5) As an executive vice president, it was up to Mr. Hoffman to manage external relations. “He was the firefighter in chief at PayPal,” Mr. Thiel says. “Though that diminishes his role because there were many, many fires.”

Mr. Hoffman emerged as a connector and high-level strategist. He packed his schedule with meetings, charmed credit card companies and soothed the regulators.
PayPal survived, and when the company went public, in 2002, Mr. Hoffman and many of his colleagues became multimillionaires.
Mr. Thiel splurged on a Ferrari. Mr. Hoffman wanted to buy an Audi but instead invested his newfound riches in one of the first solar panel companies to come out of Silicon Valley, Nanosolar, and bought an Acura instead.
“I started to think about the value of money,” he says. “I thought if I only had $75,000, would I rather invest in a luxury car or make a play in changing the world?”
Nanosolar became a multibillion-dollar enterprise.

For the full story, see:
EVELYN M. RUSLI. “A King of Connections; How Reid Hoffman of LinkedIn Became Tech’s Go-To Guy.” The New York Times, SundayBusiness Section (Sun., November 6, 2011): 1 & 5.
(Note: ellipsis added.)
(Note: the online version of the article has the date November 5, 2011, and has the title “A King of Connections Is Tech’s Go-To Guy.”)

In the England of the Late 1600s, Coffeehouses Were “Crucibles of Creativity”

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Source of book image: http://www.drinkoftheweek.com/wp-content/plugins/simple-post-thumbnails/timthumb.php?src=/wp-content/thumbnails/23682.jpg&w=250&h=400&zc=1&ft=jpg

(p. 8) Like coffee itself, coffeehouses were an import from the Arab world.
. . .
Patrons were not merely permitted but encouraged to strike up conversations with strangers from entirely different walks of life. As the poet Samuel Butler put it, “gentleman, mechanic, lord, and scoundrel mix, and are all of a piece.”
. . .
. . . , coffeehouses were in fact crucibles of creativity, because of the way in which they facilitated the mixing of both people and ideas. Members of the Royal Society, England’s pioneering scientific society, frequently retired to coffeehouses to extend their discussions. Scientists often conducted experiments and gave lectures in coffeehouses, and because admission cost just a penny (the price of a single cup), coffeehouses were sometimes referred to as “penny universities.” It was a coffeehouse argument among several fellow scientists that spurred Isaac Newton to write his “Principia Mathematica,” one of the foundational works of modern science.
Coffeehouses were platforms for innovation in the world of business, too. Merchants used coffeehouses as meeting rooms, which gave rise to new companies and new business models. A London coffeehouse called Jonathan’s, where merchants kept particular tables at which they would transact their business, turned into the London Stock Exchange. Edward Lloyd’s coffeehouse, a popular meeting place for ship captains, shipowners and traders, became the famous insurance market Lloyd’s.
And the economist Adam Smith wrote much of his masterpiece “The Wealth of Nations” in the British Coffee House, a popular meeting place for Scottish intellectuals, among whom he circulated early drafts of his book for discussion.

For the full commentary, see:
TOM STANDAGE. “OPINION; Social Networking in the 1600s.” The New York Times, SundayReview Section (Sun., June 23, 2013): 8.
(Note: ellipses added.)
(Note: the online version of the commentary has the date June 22, 2013.)

The author of the commentary is also the author of a related book:
Standage, Tom. A History of the World in Six Glasses. New York: Walker & Company, 2005.

Office Workers Switch Tasks Every 11 Minutes and Take 25 Minutes to Return to Original Task

(p. 12) As economics students know, switching involves costs. But how much? When a consumer switches banks, or a company switches suppliers, it’s relatively easy to count the added expense of the hassle of change. When your brain is switching tasks, the cost is harder to quantify.
There have been a few efforts to do so: Gloria Mark of the University of California, Irvine, found that a typical office worker gets only 11 minutes between each interruption, while it takes an average of 25 minutes to return to the original task after an interruption. But there has been scant research on the quality of work done during these periods of rapid toggling.

For the full commentary, see:
BOB SULLIVAN and HUGH THOMPSON. “GRAY MATTER; Brain, Interrupted.” The New York Times, SundayReview Section (Sun., May 5, 2013): 12.
(Note: the online version of the commentary has the date May 3, 2013.)

The Gloria Mark paper referred to in the commentary is:
Mark, Gloria, Victor M. Gonzalez, and Justin Harris. “No Task Left Behind? Examining the Nature of Fragmented Work.” Proceedings of ACM CHI’05, Portland, OR, (April 2-7, 2005): 321-30.

Another relevant Gloria Mark paper is:
Mark, Gloria, Daniela Gudith, and Ulrich Kloecke. “The Cost of Interrupted Work: More Speed and Stress.” Proceeding of the Twenty-sixth Annual SIGCHI Conference on Human Factors in Computing Systems (CHI’08), Florence, Italy, ACM Press (2008): 107-10.

Walker Says Those Who Call Him “Patent Troll” Want His Property Without Paying

WalkerJayPatentDefender2013-06-28.jpg

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

(p. B1) Jay Walker turned his idea for “name your own price” Internet auctions into a fortune by starting Priceline.com Inc. Now the entrepreneur is trying to cash in on his ideas by suing other companies.

Since it was founded in 1994 as a research lab, Walker Digital LLC has made much of its money by spinning out its inventions, like online travel agent Priceline and vending-machine firm Vendmore Systems LLC, as independent businesses.
. . .
Mr. Walker defends his newly aggressive tactics, which some critics compare to those of “patent trolls,” a derogatory term for firms that opportunistically enforce patents. Without the lawsuits, he said, his patents could expire while other companies exploit them. Patents have a 20-year lifespan.
“Not only are we not a troll, but the people who want to label me are often the same ones that want to use our property and not pay,” Mr. Walker said in an interview.

For the full story, see:
JOHN LETZING. “Founder of Priceline Spoiling for a Fight Over Tech Patents.” The Wall Street Journal (Mon., August 22, 2011): B1 & B10.
(Note: ellipsis added.)