Category: Economics

Libertarian Economist Thomas Sowell Praises Trump’s “Defiant Response to Being Shot At”

(p. A13) Although the attempt to assassinate Donald Trump failed, it was part of a long and growing pattern of threats and violence that can be fatal to American society.

. . .

Over the years, too many people have used too many clever words to play down threats and violence. “No justice, no peace” has been one of the more fashionable phrases.

. . .

If one side keeps getting away with threats and violence, it is only a matter of time before their opponents also start using threats and violence. At that point, whatever they initially disagreed about is no longer the issue. It is now a question of revenge and counter-revenge, especially for unforgivable acts on both sides. And no compromise on the original issues can stop that.

If anything positive can be salvaged from this ominous attempt on Donald Trump’s life, it may be his defiant response to being shot at. It may be important to let foreign enemies know that there are still some strong American leaders that they may have to deal with.

For the full commentary see:

Thomas Sowell. “Lessons of the Attack on Trump.” The Wall Street Journal (Tuesday, July 16, 2024): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 15, 2024, and has the title “Lessons of the Trump Assassination Attempt.”)

A Founding Manager (aka Project Entrepreneur) Has the Motivation, Knowledge, and Power to Keep His Firm Innovative

In my Openness book, I discuss “project entrepreneurs” who overlap considerably with what is called “founder mode” in the commentary quoted below.

(p. B4) People like Elon Musk and Steve Jobs at times seemed to have a je ne sais quoi that allowed them to act and behave as leaders of their companies in ways that would have tripped up mere mortals.

This past week, Silicon Valley put a name to it: “Founder Mode.”

It’s a term coined by Paul Graham, co-founder of Y Combinator, an influential startup incubator in the San Francisco Bay Area. He wrote an essay this month gaining a lot of attention in tech circles that pits his “Founder Mode” against what he calls “Manager Mode.”

Graham tries to put his finger on the special relationship entrepreneurs have with their companies that he argues outsiders just lack.

. . .

In a podcast late last year, Chesky, who co-founded Airbnb originally as AirBed and Breakfast, talked about the three traits he said better equip a company’s founder over an outside manager.

“They’re the biological parent—you can love something but when you’re the biological parent of something, like, it came from you, it is you, there’s a deep passion and love,” Chesky said. “The second thing a founder has is they have the permission…like I can’t tell another child what to do but if they were my child I probably could.”

This empowers a founder to make dramatic changes, such as rebranding.

And finally, according to Chesky, a founder knows how the company was built in the first place. “You know how to rebuild it, you know the freezing temperature of a company, you know at what temperature it melts,” he said.

. . .

Before publishing his essay, Graham ran it by a few tech titans, including Musk. After it was published, Musk weighed in on X with his own endorsement: “Worth reading.”

For the full commentary see:

Tim Higgins. “Micromanaging Is Cool Again in Tech.” The Wall Street Journal (Monday, Sept. 9, 2024): B4.

(Note: ellipses between paragraphs added; ellipsis within paragraph in original.)

(Note: the online version of the commentary has the date September 7, 2024, and has the title “With ‘Founder Mode,’ Silicon Valley Makes Micromanaging Cool.” The French phrase is italicized in the print version.)

My book, mentioned above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Before Co-founding “Colossal” Private For-Profit Firm, George Church “Was Planning on Slogging Along at a Slow Pace” in Academia

Harvard Professor George Church chooses to pursue his bold dream of bringing wooly mammoths back to life through a private firm rather than through a nonprofit organization or an educational institution. Is that because nimble innovation is less constrained in a private for-profit firm?

(p. D3) A team of scientists and entrepreneurs announced on Monday that they have started a new company to genetically resurrect the woolly mammoth.

The company, named Colossal, aims to place thousands of these magnificent beasts back on the Siberian tundra, thousands of years after they went extinct.

“This is a major milestone for us,” said George Church, a biologist at Harvard Medical School, who for eight years has been leading a small team of moonlighting researchers developing the tools for reviving mammoths. “It’s going to make all the difference in the world.”

. . .

The idea behind Colossal first emerged into public view in 2013, when Dr. Church sketched it out in a talk at the National Geographic Society.

. . .

Russian ecologists have imported bison and other living species to a preserve in Siberia they’ve dubbed Pleistocene Park, in the hopes of turning the tundra back to grassland. Dr. Church argued that resurrected woolly mammoths would be able to do this more efficiently. The restored grassland would keep the soil from melting and eroding, he argued, and might even lock away heat-trapping carbon dioxide.

Dr. Church’s proposal attracted a lot of attention from the press but little funding beyond $100,000 from PayPal co-founder Peter Thiel.

. . .

“Frankly, I was planning on slogging along at a slow pace,” Dr. Church said. But in 2019, he was contacted by Ben Lamm, the founder of the Texas-based artificial intelligence company Hypergiant, who was intrigued by press reports of the de-extinction idea.

Mr. Lamm visited Dr. Church’s lab, and the two hit it off. “After about a day of being in the lab and spending a lot of time with George, we were pretty passionate on pursuing this,” Mr. Lamm said.

Mr. Lamm began setting up Colossal to support Dr. Church’s work, all the way from tinkering with DNA to eventually placing “a functional mammoth,” as Dr. Hysolli calls it, in the wild.

The company’s initial funding comes from investors ranging from Climate Capital Collective, an investment group that backs efforts to lower carbon emissions, to the Winklevoss twins, known for their battles over Facebook and investments in Bitcoin.

. . .

Heather Browning, a philosopher at the London School of Economics, said that whatever benefits mammoths might have to the tundra will need to be weighed against the possible suffering that they might experience in being brought into existence by scientists.

“You don’t have a mother for a species that — if they are anything like elephants — has extraordinarily strong mother-infant bonds that last for a very long time,” she said. “Once there is a little mammoth or two on the ground, who is making sure that they’re being looked after?”

And Colossal’s investors may have questions of their own: How will these mammoths make any money? Mr. Lamm predicted that the company would be able to spin off new forms of genetic engineering and reproductive technology.

“We are hopeful and confident that there will be technologies that come out of it that we can build individual business units out of,” Mr. Lamm said.

For the full story see:

Carl Zimmer. “MATTER; A Company Aims to Restock the Woolly Mammoth.” The New York Times (Tuesday, September 14, 2021 [sic]): D3.

(Note: ellipses added.)

(Note: the online version of the story was updated Sept. 30 [sic], 2021 [sic], and has the title “MATTER; A New Company With a Wild Mission: Bring Back the Woolly Mammoth.”)

Successes of Thiel’s Entrepreneurial Anti-College Fellowships Undermine Veneration of Higher Ed

Gary Becker won the Nobel Prize in part for his work as a founder of the study of the economics of human capital. One common finding of the field is that investment in higher education has a high rate of return. So Becker was puzzled when his own grandson pondered skipping college in order to directly become a technology entrepreneur.

I speculate that information technology will make it increasingly easy for autodidacts to learn on their own what they need to know, whenever they need to know it. I further speculate that formal education, especially formal higher education, will wither into irrelevance, just as the Post Office has withered in the face of email and Amazon.

(p. B4) Peter Thiel is trying harder than ever to get young people to skip college.

Since 2010, Thiel, an early Facebook investor and a founder of PayPal Holdings, has offered to pay students $100,000 to drop out of school to start companies or nonprofits.

. . .

Some big successes include Vitalik Buterin, co-founder of Ethereum, the blockchain network; Laura Deming, a key figure in venture investing in aging and longevity; Austin Russell, who runs self-driving technologies company Luminar Technologies; and Paul Gu, co-founder of consumer lending company Upstart.

When he began his fellowship, Thiel, a vocal libertarian who was an active supporter of Donald Trump in 2016, was disenchanted with leading colleges and convinced they weren’t best suited for many young people.

His aim, at least in part, was to undermine the popular view that college was necessary for all students, and that top universities should be accorded prestige and veneration.

Since then, public opinion has shifted toward his perspective. More Americans are rethinking the value of a college education. At the same time, America’s elite universities have come under fire for their handling of a surge in antisemitism and for maintaining what critics call a double standard regarding free speech.

For the full story see:

Gregory Zuckerman. “Thiel’s Offer to Skip College Draws Many.” The Wall Street Journal (Monday, Feb. 26, 2024): B4.

(Note: ellipsis added.)

(Note: the online version of the story has the date February 24, 2024, and has the title “Peter Thiel’s $100,000 Offer to Skip College Is More Popular Than Ever.”)

Becker is best known for:

Becker, Gary S. Human Capital: A Theoretical and Empirical Analysis; with Special Reference to Education. 3rd ed. New York: Columbia University Press, 1993.

Start-Ups Succeed When They Give Up Work-Life Balance in Order to “Work Like Hell”

(p. B4) Eric Schmidt, ex-CEO and executive chairman at Google, walked back remarks in which he said his former company was losing the artificial intelligence race because of its remote-work policies.

. . .

“Google decided that work-life balance and going home early and working from home was more important than winning,” Schmidt said at Stanford. “The reason startups work is because the people work like hell.”

For the full story see:

Joseph De Avila. “Ex-CEO Criticizes Google, Retracts It.” The Wall Street Journal (Thursday, Aug. 15, 2024): B4.

(Note: ellipsis added.)

(Note: the online version of the story was updated Aug. 14, 2024, and has the title “Eric Schmidt Walks Back Claim Google Is Behind on AI Because of Remote Work.”)

Healthcare Competition Sometimes Reduces Prices

Numerous complex government healthcare regulations differentially increase the costs of small healthcare firms and independent healthcare practitioners that cannot afford to hire the specialized experts to understand and navigate the regulations. As a result the small firms and independent practitioners often give up and merge with larger organizations, thereby reducing competition. Also, in many locations, governments give incumbent hospitals veto power over the start-up of new hospitals, thereby also reducing competition.

(p. A3) Prices for surgery, intensive care and emergency-room visits rise after hospital mergers. The increases come out of your pay.

Hospitals have struck deals in recent years to form local and regional health systems that use their reach to bargain for higher prices from insurers. Employers have often passed the higher rates onto employees.

Such price increases added an average of $204 million to national health spending in the year after mergers of nearby hospitals, according to a study published Wednesday [April 24, 2024] by American Economic Review: Insights.

Workers cover much of the bill, said Zack Cooper, an associate professor of economics at Yale University who helped conduct the study. Employers cut into wages and trim jobs to offset rising insurance premiums, he said. “The harm from these mergers really falls squarely on Main Street,” Cooper said.

For the full story see:

Melanie Evans. “Hospital Prices Rise After Mergers, and Patients Bear Brunt.” The Wall Street Journal (Thursday, April 25, 2024): A3.

(Note: bracketed date added.)

(Note: the online version of the story was updated April 24, 2024, and has the title “The True Cost of Megamergers in Healthcare: Higher Prices.” The online version says that the title of the print version was “Hospital-Care Prices Rise After Mergers.” But my national edition of the print version had the title “Hospital Prices Rise After Mergers, and Patients Bear Brunt.”)

The forthcoming article co-authored by Cooper, and mentioned above, is:

Brot-Goldberg, Zarek, Zack Cooper, Stuart Craig, and Lev Klarnet. “Is There Too Little Antitrust Enforcement in the U.S. Hospital Sector?” American Economic Review: Insights (forthcoming).

Cloud Brightening Could Counter Global Warming

If the costs of global warming become large enough, we can brighten clouds to reverse global warming.

(p. A1) A little before 9 a.m. on Tuesday [April 2, 2024], an engineer named Matthew Gallelli crouched on the deck of a decommissioned aircraft carrier in San Francisco Bay, pulled on a pair of ear protectors, and flipped a switch.

A few seconds later, a device resembling a snow maker began to rumble, then produced a great and deafening hiss. A fine mist of tiny aerosol particles shot from its mouth, traveling hundreds of feet through the air.

It was the first outdoor test in the United States of technology designed to brighten clouds and bounce some of the sun’s rays back into space, a way of temporarily cooling a planet that is now dangerously overheating. The scientists wanted to see whether the machine that took years to create could consistently spray the right size salt aerosols through the open air, outside of a lab.

If it works, the next stage would be to aim at the heavens and try to change the composition of clouds above the Earth’s oceans.

. . .

(p. A14) Brightening clouds is one of several ideas to push solar energy back into space — sometimes called solar radiation modification, solar geoengineering, or climate intervention. Compared with other options, such as injecting aerosols into the stratosphere, marine cloud brightening would be localized and use relatively benign sea salt aerosols as opposed to other chemicals.

. . .

“I hope, and I think all my colleagues hope, that we never use these things, that we never have to,” said Sarah Doherty, an atmospheric scientist at the University of Washington and the manager of its marine cloud brightening program.

. . .

But it’s vital to find out whether and how such technologies could work, Dr. Doherty said, in case society needs them. And no one can say when the world might reach that point.

In 1990, a British physicist named John Latham published a letter in the journal Nature, under the heading “Control of Global Warming?,” in which he introduced the idea that injecting tiny particles into clouds could offset rising temperatures.

Dr. Latham later attributed his idea to a hike with his son in Wales, where they paused to look at clouds over the Irish Sea.

“He asked why clouds were shiny at the top but dark at the bottom,” Dr. Latham told the BBC in 2007. “I explained how they were mirrors for incoming sunlight.”

Dr. Latham had a proposal that may have seemed bizarre: create a fleet of 1,000 unmanned, sail-powered vessels to traverse the world’s oceans and continuously spray tiny droplets of seawater into the air to deflect solar heat away from Earth.

The idea is built on a scientific concept (p. A15) called the Twomey effect: Large numbers of small droplets reflect more sunlight than small numbers of large droplets. Injecting vast quantities of minuscule aerosols, in turn forming many small droplets, could change the composition of clouds.

“If we can increase the reflectivity by about 3 percent, the cooling will balance the global warming caused by increased C02 in the atmosphere,” Dr. Latham, who died in 2021, told the BBC. “Our scheme offers the possibility that we could buy time.”

A version of marine cloud brightening already happens every day, according to Dr. Doherty.

As ships travel the seas, particles from their exhaust can brighten clouds, creating “ship tracks,” behind them. In fact, until recently, the cloud brightening associated with ship tracks offset about 5 percent of climate warming from greenhouse gases, Dr. Doherty said.

Ironically, as better technology and environmental regulations have reduced the pollution emitted by ships, that inadvertent cloud brightening is fading, as well as the cooling that goes along with it.

A deliberate program of marine cloud brightening could be done with sea salts, rather than pollution, Dr. Doherty said.

For the full story see:

Christopher Flavelle. “Salting the Clouds to Cool an Overheating Earth.” The New York Times (Thursday, April 4, 2024): A1 & A14-A15.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date April 2, 2024, and has the title “Warming Is Getting Worse. So They Just Tested a Way to Deflect the Sun.”)

The article by the physicist John Latham, published in the one of the top two journals in science, and mentioned above, is:

Latham, John. “Control of Global Warming?” Nature 347, no. 6291 (Sept. 27, 1990): 339-40.

The Benefits of the “Energy Transition” Are Distant and Uncertain, While the Costs Are Immediate and Large

(p. A15) The 2015 Paris Agreement aspired to “reduce the risks and impacts of climate change” by eliminating greenhouse-gas emissions in the latter half of this century. The centerpiece of the strategy was a global transition to low-emission energy systems.

. . .

The energy transition’s purported climate benefits are distant, vague and uncertain while the costs and disruption of rapid decarbonization are immediate and substantial. The world has many more urgent needs, including the provision of reliable and affordable energy to all.  . . .

U.S. and European governments are trying to induce an energy transition by building or expanding organizations and programs favoring particular “clean” technologies, including wind and solar generation, carbon capture, hydrogen production and vehicle electrification. Promoting technological innovation is a worthy endeavor, but such efforts face serious challenges as costs and disruptions grow without tangible progress in reducing local, let alone global, emissions. Retreats from aggressive goals are already under way in Europe, with clear signs of mandate fatigue. The climbdown will be slower in the U.S., where subsidies create constituencies that make it more difficult to reverse course.

. . . today’s ineffective, inefficient, and ill-considered climate-mitigation strategies will be abandoned, making room for a more thoughtful and informed approach to responsibly providing for the world’s energy needs.

For the full commentary see:

Steven E. Koonin. “The ‘Climate Crisis’ Fades Out.” The Wall Street Journal (Tuesday, June 11, 2024): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date June 10, 2024, and has the same title as the print version.)

Koonin’s commentary, quoted above, is related to his book:

Koonin, Steven E. Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters. Dallas, TX: BenBella Books, 2021.

IRS Has “Ridiculous” 675 Day Delay in Getting Earned Refunds to the Victims of Identity Fraud

Some federal politicians sanctimoniously seek voter approval by pushing new giveaway programs to select groups (like $25,000 to first-time home buyers). If they were sincere about wanting to help the most deserving among the least-well-off, they would instead prioritize getting earned refunds to the low-income victims of identity theft.

(p. B6) If a thief files a fraudulent return using your tax information and pilfers your refund, you’ll have to wait an average of 675 days to get the money rightfully owed to you, according to the Taxpayer Advocate Service, a group within the Internal Revenue Service that works on behalf of taxpayers.

“That period of time is just ridiculous,” Erin M. Collins, who leads the service, said in an interview.

For reasons not yet clear, Ms. Collins noted, many of those affected are lower-income tax filers, who often depend on tax refunds to cover basic living costs. Those filers often qualify for tax breaks for working families, like the earned-income tax credit, that can result in significant refunds.

“These are true victims,” Ms. Collins said. “The I.R.S. should be helping these people.”

About half a million tax returns are in limbo at the I.R.S. because of identity theft fraud, a spokesman for the Taxpayer Advocate Service said.

. . .

The lengthy processing time for identity theft returns can cause other problems, Ms. Collins said in the blog post, like difficulty applying for a mortgage. When taxpayers are flagged for identity theft, she said, the I.R.S. won’t send tax transcripts — a record of the filers’ income and tax information — directly to lenders. So taxpayers have to request the transcripts themselves and give them to the lender. The red tape delays the completion of their home loan applications.

Other issues can arise, such as when a taxpayer chooses to have a refund applied to a subsequent tax year but the I.R.S. hasn’t yet applied it because of an unresolved identity theft issue. The tax owed on the subsequent year then goes unpaid, and the I.R.S. system begins to send collection notices.

For the full commentary see:

Ann Carrns. “Long Wait for Victims of Tax Return Fraud.” The New York Times (Saturday, June 15, 2024): B6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date June 14, 2024, and has the title “First a Victim of Tax Return Identity Theft, Then a 2-Year Wait for a Refund.” Where there are a couple of small differences in wording, the passages quoted above follow the online version.)

The blog post by Collins mentioned above is:

Collins, Erin M., National Taxpayer Advocate. “Identity Theft Victims Are Waiting Nearly Two Years to Receive Their Tax Refunds.” In NTA Blog, June 6, 2024.br />

The New York Times Is Open to the Possibility and Desirability of Geoengineering

In the past, The New York Times either ignored, or was dismissive of, geoengineering to reverse or mitigate the alleged future effects of global warming. A few months ago, I was pleasantly surprised to see the paper publish a page one article, quoted below, that was open to the policy of geoengineering. This is progress because the left’s standard response to the alleged effects of global warming is to advocate reduced economic growth. Geoengineering would allow economic growth, and the human flourishing it allows, to continue, even if global warming becomes as severe as the pessimists fear.

(p. 1) On a windswept Icelandic plateau, an international team of engineers and executives is powering up an innovative machine designed to alter the very composition of Earth’s atmosphere.

If all goes as planned, the enormous vacuum will soon be sucking up vast quantities of air, stripping out carbon dioxide and then locking away those greenhouse gases deep underground in ancient stone — greenhouse gases that would otherwise continue heating up the globe.

Just a few years ago, technologies like these, that attempt to re-engineer the natural environment, were on the scientific fringe. They were too expensive, too impractical, too sci-fi. But with the dangers from climate change worsening, and the world failing to meet its goals of slashing greenhouse gas emissions, they are quickly moving to the mainstream among both scientists and investors, despite questions about their effectiveness and safety.

. . .  Once science fiction, today these ideas are becoming reality.

Researchers are studying ways to block some of the sun’s radiation. They are testing whether adding iron to the ocean could carry carbon dioxide to the sea floor. They are hatching plans to build giant parasols in space. And with massive facilities like the one in Iceland, they are seeking to reduce the concentration of carbon dioxide in the air.

. . .

(p. 12) A plant similar to the one in Iceland, but far larger, is being built in Texas by Occidental Petroleum, the giant oil company.

. . .

The Occidental plant, being built near Odessa, Texas, and known as Stratos, will be more than 10 times more powerful than Mammoth, powered by solar energy, and have the potential to capture and sequester 500,000 metric tons of carbon dioxide per year.

It uses a different process to extract carbon dioxide from the air, though the goal is the same: Most of it will be locked away deep underground. But at least some of the carbon dioxide, Occidental says, will also be used to extract more oil.

In that process, carbon dioxide is pumped into the ground to force out oil that might otherwise be too difficult to reach. Techniques like this have made Occidental a company worth more than $50 billion and helped send American crude production to a new high in recent years.

Of course, it is the world’s reliance on the burning of oil and other fossil fuels that has so dangerously sent carbon dioxide levels soaring. In the atmosphere, carbon dioxide acts as a blanket, trapping the sun’s heat and warming the world.

Today, Occidental says it is trying to become a “carbon management” company as well as an oil producer. Last year, it paid $1.1 billion for a start-up called Carbon Engineering that had developed a way to soak up carbon dioxide from the air, and began building the Stratos project. Today, what was a barren plot of dirt less than 12 months ago is a bustling construction site.

“It’s like the Apollo missions at NASA,” said Richard Jackson, who oversees carbon management and domestic oil operations at Occidental. “We’re trying to move as quickly as we can.”

For the full story see:

David Gelles. “Can We Engineer Our Way Out of a Climate Crisis?” The New York Times, First Section (Sunday, March 31, 2024): 1 & 12-13.

(Note: ellipses added.)

(Note: the online version of the story was updated April 4, 2024, and has the title “Can We Engineer Our Way Out of the Climate Crisis?” The sentence above that starts “Once science fiction” appeared in the print, but not the online, version.)

Black Physician Wants to “Play Fair” and Be Judged on Merit

(p. A17) Do I deserve to jump the line? If I say yes, I may play a leading role in ending the scourge of atherosclerosis—also known as hardening of the arteries. If I play fair, I may lose the opportunity to save people around the world from heart attacks and strokes. I’m angry at the National Institutes of Health for putting me in this position. I’m even angrier it has done so in the name of racial equity.

My quandary comes down to whether I should “check the box” on an upcoming NIH grant application attesting to my recent African heritage. Since at least 2015, the NIH has asserted its belief in the intrinsic superiority of racially diverse research teams, all but stating that such diversity influences funding decisions. My family’s origins qualify me under the federal definition of African-American. Yet I feel it’s immoral and narcissistic to use race to gain an advantage over other applicants. All that should matter is the merit of my application and the body of my work, which is generally accepted as foundational in atherosclerosis research.

. . .

If I refuse to identify myself as African-American, our application is more likely to lose on “diversity” grounds. It’s a double wrong. Not only is the system rigged based on nonscientific—and possibly illegal—criteria; it encourages me to join in the rigging.

Truth be told, I made my decision years ago. When my study team files our application, it won’t note my West African origins. If we don’t get the grant, so be it. I refuse to engage in a moral wrong in pursuit of a moral good—even one as important as saving lives from the leading killer on earth. My father, who struggled against racism to achieve so much on the merits of his own work, would never forgive me for “checking the box” to grab a race-based advantage.

And no matter what happens, I can never forgive the National Institutes of Health for reinjecting racism into medical research.

For the full commentary see:

Kevin Jon Williams. “Why I’m Saying No to NIH’s Racial Preferences.” The Wall Street Journal (Thursday, March 28, 2024): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date March 27, 2024, and has the same title as the print version.)