Economics – Page 216 – artdiamondblog.com

Another Boeing BHAG Takes Flight

“Members of the public watched the first test flight of the Boeing 787 on Tuesday in Everett, Wash.” Source of caption and photo: online version of the NYT article quoted and cited below.

In their stimulating business best-seller Built to Last Collins and Porrus have a chapter in which they argue that one way to attract and retain the best employees is to give them a difficult but important project to work on. They call such projects “BHAGs,” which stands for Big Hairy Audacious Goals. Among their main examples (e.g., p. 104) of BHAGs were Boeing’s development of the 707 and 747.
Boeing’s latest BHAG is the 787 Dreamliner.

(p. A25) EVERETT, Wash. — The new Boeing 787 Dreamliner lifted into the gray skies here for the first time on Tuesday morning, more than two years behind schedule and burdened with restoring Boeing’s pre-eminence in global commercial aviation.

“Engines, engines, engines, engines!” shouted April Seixeiro, 37, when the glossy twin-engine plane began warming up across from where spectators had informally gathered at Paine Field. Ms. Seixeiro was among scores of local residents and self-described “aviation geeks” who came to watch the first flight.
Moments after the plane took off at 10:27 a.m., Mrs. Seixeiro was wiping tears from her eyes. A friend, Katie Bailey, 34, cried, too.
“That was so beautiful,” Ms. Bailey said.

For the full story, see:
WILLIAM YARDLEY. “As 787 Takes Flight, Seattle Wonders About Boeing’s Future.” The New York Times (Weds., December 16, 2009): A25.
(Note: the online version of the article has the title “A Takeoff, and Hope, for Boeing Dreamliner” and is dated December 15, 2009.)

The reference for the Collins and Porras book is:
Collins, James C., and Jerry I. Porras. Built to Last: Successful Habits of Visionary Companies. New York: HarperBusiness, 1994.

Like Cesar Chavez, Union Intimidates Its Own Members

“Amelia Frank-Vitale, a former union organizer, said the practice of pink sheeting sent her into therapy.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) After six years working in the laundry of a Miami hotel, Julia Rivera was thrilled when her union tapped her to become a full-time union organizer.

But her excitement soon turned to outrage.
Ms. Rivera said her supervisors at Unite Here, the hotel and restaurant workers’ union, repeatedly pressed her to reveal highly personal information, getting her to divulge that her father had sexually abused her.
Later, she said, her supervisors ordered her to recount her tale of abuse again and again to workers they were trying to unionize at Tampa International Airport, convinced that Ms. Rivera’s story would move them, making them more likely to join the union.
“I was scared not to do what they said,” said Ms. Rivera, adding that she resented being pressured to disclose intimate information and then speak about it in public. “To me, it was sick. It was horrible.”
Ms. Rivera and other current and former Unite Here organizers are speaking out against what they say is a longstanding practice in which Unite Here officials pressured subordinates to disclose sensitive personal information — for example, that their mother was an alcoholic or that they were fighting with their spouse.
More than a dozen organizers said in interviews that they had often been pressured to detail such personal anguish — sometimes under the threat of dismissal from their union positions — and that their supervisors later used the information to press them to comply with their orders.
“It’s extremely cultlike and extremely manipulative,” said Amelia Frank-Vitale, a Yale graduate and former hotel union organizer who said these practices drove her to see a therapist.
Several organizers grew incensed when they discovered that details of their history had been put into the union’s database so that supervisors could use that information to manipulate them.
“This information is extremely personal,” said Matthew Edwards, an organizer who had disclosed that he was from a broken home and was overweight when young. “It is catalogued and shared throughout the whole organizing department.”
. . .
(p. B5) Several organizers likened pink sheeting to a practice that Cesar Chavez, former president of the United Farm Workers, used when he embraced a mind-control practice developed by Synanon, a drug rehabilitation center founded in Santa Monica, Calif. Union staff members were systematically subjected to intense, prolonged verbal abuse in an effort to break them down and assure loyalty.
. . .
Ms. Frank-Vitale, now a graduate student at American University, says she is still haunted by memories of pink sheeting.
“One night my supervisor pushed me and pushed me, and I started talking about being an overweight woman in America, what that was like in high school, that it was very difficult for me,” she said. “I felt kind of violated.”

For the full story, see:
STEVEN GREENHOUSE. “Some Organizers Protest Their Union’s Tactics.” The New York Times (Thurs., November 19, 2009): B1 & B5.
(Note: the online version of the article is dated November 18, 2009.)
(Note: ellipses added.)

“Better to Be Socrates Dissatisfied than a Fool Satisfied”

(p. 10) Happiness is, . . . , a complex concept and difficult to measure, and John Stuart Mill had a point when he suggested: “It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied.”

For the full commentary, see:
NICHOLAS D. KRISTOF. “Our Basic Human Pleasures: Food, Sex and Giving.” The New York Times, Week in Review Section (Sun.., January 16, 2010): 10.
(Note: the online version of the article is dated January 16, 2010.)
(Note: ellipsis added.)

Microsoft Hired Good People and Gave Them the Space and Privacy to Think

Not Microsoft. “Mark Clemente, a Steinreich Communications vice president, in the firm’s smaller Hackensack, N.J., office.” Source of caption and photo: online version of the WSJ article quoted and cited below.

The article quoted below documents the trend in business toward small, and more open offices. I believe that this trend is largely a mistake.
Another trend in business (see Levy and Murnane 2004) is for more jobs to involve thinking and creativity. Thinking and creativity are harder in an environment of noise and frequent and unpredictable interruptions.
David Thielen’s book on the secrets of Microsoft’s success that said that Microsoft emphasized hiring really good people, and then respected them enough to give them an office with a door, so they could have the space and privacy to think and create (e.g., pp. 17-35 & 147-150).
Microsoft had the right idea.

(p. B7) The office cubicle is shrinking, along with workers’ sense of privacy.

Many employers are trimming the space allotted for each worker. The trend has accelerated during the recession as employers seek to cut costs and boost productivity.
. . .

Tighter quarters and open floor plans also can present challenges. David Lewis, president of OperationsInc LLC, a Stamford, Conn., provider of human-resources services to more than 300 U.S. companies, says open floor plans and low cubicle walls can create discord and lead to increased turnover.
“Now everybody knows everybody else’s business,” he says. “It actually starts to create a level of tension in an office that never existed before. People can’t focus on work because they’re on top of each other.”

For the full story, see:
SARAH E. NEEDLEMAN. “THEORY & PRACTICE; Office Personal Space Is Crowded Out; Workstations Become Smaller to Save Costs, Taking a Toll on Employee Privacy.” The Wall Street Journal (Mon., DECEMBER 7, 2009): B7.
(Note: ellipsis added.)

The Levy and Murnane book mentioned above, is:
Levy, Frank, and Richard J. Murnane. The New Division of Labor: How Computers Are Creating the Next Job Market. Princeton, NJ: Princeton University Press, 2004.
The Thielen book is:
Thielen, David. The 12 Simple Secrets of Microsoft Management: How to Think and Act Like a Microsoft Manager and Take Your Company to the Top. New York: McGraw-Hill, 1999.

Recession Is Prolonged By Doubts on Obama Policies

(p. A17) Several pieces of evidence point to extreme caution by businesses and households. A regular survey by the National Federation of Independent Businesses (NFIB) shows that recent capital expenditures and near-term plans for new capital investments remain stuck at 35-year lows. The same survey reveals that only 7% of small businesses see the next few months as a good time to expand. Only 8% of small businesses report job openings, as compared to 14%-24% in 2008, depending on month, and 19%-26% in 2007.

The weak economy is far and away the most prevalent reason given for why the next few months is “not a good time” to expand, but “political climate” is the next most frequently cited reason, well ahead of borrowing costs and financing availability. The authors of the NFIB December 2009 report on Small Business Economic Trends state: “the other major concern is the level of uncertainty being created by government, the usually [sic] source of uncertainty for the economy. The ‘turbulence’ created when Congress is in session is often debilitating, this year being one of the worst. . . . There is not much to look forward to here.”
Government statistics tell a similar story. Business investment in the third quarter of 2009 is down 20% from the low levels a year earlier. Job openings are at the lowest level since the government began measuring the concept in 2000. The pace of new job creation by expanding businesses is slower than at any time in the past two decades and, though older data are not as reliable, likely slower than at any time in the past half-century. While layoffs and new claims for unemployment benefits have declined in recent months, job prospects for unemployed workers have continued to deteriorate. The exit rate from unemployment is lower now than any time on record, dating back to 1967.
According to the Michigan Survey of Consumers, 37% of households plan to postpone purchases because of uncertainty about jobs and income, a figure that has not budged since the second quarter of 2009, and one that remains higher than any previous year back to 1960.
These facts suggest that it was a serious economic mistake to press for a hasty, major transformation of the U.S. economy on the heels of the worst financial crisis in decades. A more effective approach would have been to concentrate first on fighting the recession and laying solid foundations for growth. They should have put plans to re-engineer the economy on the backburner, and kept them there until the economy emerged fully from the recession and returned to robust growth. By failing to adopt a measured approach to economic policy, Congress and the president may be slowing the economic recovery, and thereby prolonging the distress from the recession.

For the full commentary, see:
GARY S. BECKER, STEVEN J. DAVIS AND KEVIN M. MURPHY. “OPINION; Uncertainty and the Slow Recovery; A recession is a terrible time to make major changes in the economic rules of the game.” The Wall Street Journal (Mon., JANUARY 4, 2010): A17.
(Note: ellipsis in original.)

World’s Poor Care More About Food and Illness than Global Warming

(p. A21) The saddest fact of climate change–and the chief reason we should be concerned about finding a proper response–is that the countries it will hit hardest are already among the poorest and most long-suffering.

In the run-up to this month’s global climate summit in Copenhagen, the Copenhagen Consensus Center dispatched researchers to the world’s most likely global-warming hot spots. Their assignment: to ask locals to tell us their views about the problems they face. Over the past seven weeks, I recounted in these pages what they told us concerned them the most. In nearly every case, it wasn’t global warming.
Everywhere we went we found people who spoke powerfully of the need to focus more attention on more immediate problems. In the Bauleni slum compound in Lusaka, Zambia, 27-year-old Samson Banda asked, “If I die from malaria tomorrow, why should I care about global warming?” In a camp for stateless Biharis in Bangladesh, 45-year-old Momota Begum said, “When my kids haven’t got enough to eat, I don’t think global warming will be an issue I will be thinking about.” On the southeast slopes of Mt. Kilimanjaro in Tanzania, 45-year-old widow and HIV/AIDS sufferer Mary Thomas said she had noticed changes in the mountain’s glaciers, but declared: “There is no need for ice on the mountain if there is no people around because of HIV/AIDS.”

For the full commentary, see:
BJORN LOMBORG. “OPINION; Time for a Smarter Approach to Global Warming; Investing in energy R&D might work. Mandated emissions cuts won’t..” The Wall Street Journal (Tues., DECEMBER 15, 2009): A21.

Bose Leapfrogs the Competition in Defense of Your Peace and Quiet

“The Bose QuietComfort 15 has refined circuitry and redesigned earcaps.” Source of caption: print version of the NYT article quoted and cited below. Source of photo: online version of the NYT article quoted and cited below.

(p. B8) . . . , if your sales are getting eaten alive by cheaper rivals, and you don’t want to play the price game, you have only one option: play leapfrog. Make your gadget so much better than the me-toos that people will be willing to pay your premium once again.

That’s the idea behind Bose’s new QuietComfort 15 model ($300), which replaces the QuietComfort 2.
. . .
First, the QC15 model really, truly does advance the art of noise cancellation — big time. The QC 2 headphones and my Panasonics cut the airplane roar by half. But the 15 reduced it by, say, 85 percent, leaving only a distant, whispery whoosh to remind you that you’re in an aluminum tube 39,000 feet up in the air. Taking them off after a while, as you’ll want to do because your ears get sweaty, is like walking into a rock concert when you’ve been outside the building.

For the full story, see:
DAVID POGUE. “State of the Art; Ho Ho Ho? You Won’t Hear a Thing.” The New York Times (Thurs., December 3, 2009): B1 & B8.
(Note: the online version of the article is “State of the Art; Bose’s Latest Headphones Can Quell the Clangor” and is dated December 2, 2009.)
(Note: ellipses added.)

Heart Disease Is Not Just a Malady of Modern Societies, But “Is Part of the Human Condition”

“Scientists scanned 20 mummies, and examined scans of two more, for the study.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A5) ORLANDO, Fla. — Researchers said they found evidence of hardening of the arteries in Egyptian mummies dating as far back as 3,500 years, challenging longstanding assumptions that cardiovascular disease is mainly a malady of modern societies.

A team of heart-imaging experts and Egyptologists examined 22 mummies from the Egyptian National Museum of Antiquities in Cairo in a CT scanning machine, looking for evidence of calcium buildup that could indicate vascular disease.
They were able to identify the hearts, arteries or both in 16 of the mummies, nine of whom had deposits of calcification. An analysis determined the deposits were either definite or probable evidence of atherosclerosis, the condition that leads to heart attacks and strokes.
“Not only do we have atherosclerosis now, it was prevalent as long as 3,500 years ago,” said Gregory Thomas, a cardiologist and imaging specialist at University of California, Irvine, who was principal investigator of the study. “It is part of the human condition.”
The research was presented Tuesday at the American Heart Association scientific meeting here. A report is also scheduled to appear in Wednesday’s issue of the Journal of the American Medical Association.

For the full story, see:
RON WINSLOW. “Heart Disease Found in Egyptian Mummies.” The Wall Street Journal (Weds., NOVEMBER 18, 2009): A5.
(Note: the online version of the article has a date of NOVEMBER 19, 2009 and is titled “Heart Disease Found in Egyptian Mummies.”)

Entrepreneurial Innovation Comes from Diverse Outsiders Rather than Establishments

(p. 113) Firms that win by the curve of mind often abandon it when they establish themselves in the world of matter. They fight to preserve the value of their material investments in plant and equipment that embody the ideas and experience of their early years of success. They begin to exalt expertise and old knowledge, rights and reputation, over the constant learning and experience of innovative capitalism. They get fat.

A fat cat drifting off the curve, however, is a sitting duck for new nations and companies getting on it. The curve of mind thus tends to favor outsiders over establishments of all kinds. At the capitalist ball, the blood is seldom blue or the money rarely seasoned. Microcosmic technologies are no exception. Capitalism’s most lavish display, the microcosm, is no respecter of persons.
The United States did not enter the microcosm through the portals of the Ivy League, with Brooks Brothers suits, gentleman Cs, and warbling society wives. Few people who think they are in already can summon the energies to break in. From immigrants and outcasts, street toughs and science wonks, nerds and boffins, the bearded and the beer-bellied, the tacky and uptight, and sometimes weird, the born again and born yesterday, with Adam’s apples bobbing, psyches (p. 114) throbbing, and acne galore, the fraternity of the pizza breakfast, the Ferrari dream, the silicon truth, the midnight modem, and the seventy-hour week, from dirt farms and redneck shanties, trailer parks and Levittowns, in a rainbow parade of all colors and wavelengths, of the hyperneat and the sty high, the crewcut and khaki, the pony-tailed and punk, accented from Britain and Madras, from Israel and Malaya, from Paris and Parris Island, from Iowa and Havana, from Brooklyn and Boise and Belgrade and Vienna and Vietnam, from the coarse fanaticism and desperation, ambition and hunger, genius and sweat of the outsider, the downtrodden, the banished, and the bullied come most of the progress in the world and in Silicon Valley.

Source:

Gilder, George. Microcosm: The Quantum Revolution in Economics and Technology. Paperback ed. New York: Touchstone, 1990.

“When the Sons of the Communists Themselves Wanted to Become Capitalists and Entrepreneurs”

“Josef Janicek, 61, was on the keyboard for a concert in Prague last week by the band Plastic People of the Universe.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) PRAGUE — It has been called the Velvet Revolution, a revolution so velvety that not a single bullet was fired.

But the largely peaceful overthrow of four decades of Communism in Czechoslovakia that kicked off on Nov. 17, 1989, can also be linked decades earlier to a Velvet Underground-inspired rock band called the Plastic People of the Universe. Band members donned satin togas, painted their faces with lurid colors and wrote wild, sometimes angry, incendiary songs.
It was their refusal to cut their long, dank hair; their willingness to brave prison cells rather than alter their darkly subversive lyrics (“peace, peace, peace, just like toilet paper!”); and their talent for tapping into a generation’s collective despair that helped change the future direction of a nation.
“We were unwilling heroes who just wanted to play rock ‘n’ roll,” said Josef Janicek, 61, the band’s doughy-faced keyboard player, who bears a striking resemblance to John Lennon and still sports the grungy look that once helped get him arrested. “The Bolsheviks understood that culture and music has a strong influence on people, and our refusal to compromise drove them insane.”
. . .
In 1970, the Communist government revoked the license for the Plastics to perform in public, forcing the band to go underground. In February 1976, the Plastic People organized a music festival in the small town of Bojanovice — dubbed “Magor’s Wedding” — featuring 13 other bands. One month later, the police set out to silence the musical rebels, arresting dozens. Mr. Janicek was jailed for six months; Mr. Jirous and other band members got longer sentences.
Mr. Havel, already a leading dissident, was irate. The trial of the Plastic People that soon followed became a cause célèbre.
Looking back on the Velvet Revolution they helped inspire, however indirectly, Mr. Janicek recalled that on Nov. 17, 1989, the day of mass demonstrations, he was in a pub nursing a beer. He argued that the revolution had been an evolution, fomented by the loosening of Communism’s grip under Mikhail Gorbachev and the overwhelming frustration of ordinary people with their grim, everyday lives. “The Bolsheviks knew the game was up,” he said, “when the sons of the Communists themselves wanted to become capitalists and entrepreneurs.”

For the full story, see:
DAN BILEFSKY. “Czechs’ Velvet Revolution Paved by Plastic People.” The New York Times (Mon., November 16, 2009): A10.
(Note: the online version of the article is dated November 15, 2009.)
(Note: ellipsis added.)

Intel’s Computer-on-a-Chip “Was Achieved Largely by Immigrants from Hungary, Italy, Israel, and Japan”

(p. 111) By launching the computer-on-a-chip, Intel gave America an enduring advantage in this key product in information technology–an edge no less significant because it was achieved largely by immigrants from Hungary, Italy, Israel, and Japan. Intel’s three innovations of 1971–plus the silicon gate process that made them the smallest, fastest, and best-selling devices in the industry–nearly twenty years later remain in newer versions the most powerful force in electronics.

Source:

Gilder, George. Microcosm: The Quantum Revolution in Economics and Technology. Paperback ed. New York: Touchstone, 1990.