Category: Economics

Feds Impede Consumer Choice by Going Back to Incandescent Ban

(p. A16) In 2019, the Trump administration blocked a rule designed to phase out older incandescent bulbs, calling it unnecessary and an impediment to consumer choice.

With the move, the administration heeded to both industry demands as well as free market proponents who have long railed against tougher efficiency regulations for consumer appliances and goods, like energy-saving bulbs or water-saving dishwashers, as governmental overreach.

“The new bulb is many times more expensive, and I hate to say it, it doesn’t make you look as good,” Donald J. Trump, the former president, quipped at a White House meeting in 2019, referring to an early common complaint that LEDs emit a harsher light, though recent LED lights come in warmer hues. “We’re bringing back the old light bulb,” he later told a rally in Michigan.

The Biden administration has moved to reinstate the standards. But in a letter to the Department of Energy last year, NEMA, the industry group, urged federal rules to allow companies to manufacture and import inefficient bulbs for at least another year, followed by another year or more to sell out stockpiled inventory.

For the full story, see:

Hiroko Tabuchi. “Obsolete Bulbs Fill the Shelves At Dollar Stores.” The New York Times (Monday, January 24, 2022): A1 & A16.

(Note: the online version of the story has the date January 23, 2022, and has the title “Old-Fashioned, Inefficient Light Bulbs Live On at the Nation’s Dollar Stores.”)

Instead of Centralizing With C.D.C., the Need for Speed Requires “Clinical and Commercial Labs to Create and Deploy Tests”

(p. A22) The faulty coronavirus testing kits developed by the Centers for Disease Control and Prevention in the early weeks of the pandemic were not only contaminated but had a basic design flaw, according to an internal review by the agency.

Health officials had already acknowledged that the test kits were contaminated, but the internal report, whose findings were published in PLOS ONE on Wednesday, also documented a design error that caused false positives.

. . .

The C.D.C.’s test was designed to detect three distinct regions, or target sequences, of the virus’s genetic material. The test kits contain a set of what are known as primers, which bind to and make copies of the target sequences, and probes, which produce a fluorescent signal when these copies are made, indicating that genetic material from the virus is present.

The primers and probes need to be carefully designed so that they bind to the target sequences and not to each other. In this case, that did not happen. One of the probes in the kit sometimes bound to one of the primers, producing the fluorescent signal and generating a false positive.

“It’s something that should have been caught in the design phase,” said Susan Butler-Wu, a clinical microbiologist at the Keck School of Medicine of the University of Southern California. “That’s one thing that you check for.”

. . .

The bigger lesson, Dr. Butler-Wu said, is that the responsibility for developing diagnostic tests should be distributed more widely during a public health emergency. Rather than relying on the C.D.C. to be the sole test developer, officials could also enlist clinical and commercial labs to create and deploy tests.

“It’s great that there’s all these additional checks in place, but what are you going to do when there’s a new emerging pathogen and we need to respond quickly?” she said. “I don’t think that’s a viable model for responding to a pandemic.”

For the full story, see:

Emily Anthes. “C.D.C. Finds Design Error In Testing Kits It Distributed.” The New York Times Thursday, December 16, 2021): A22.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 15, 2021, and has the title “C.D.C. Virus Tests Were Contaminated and Poorly Designed, Agency Says.”)

The PLOS ONE article mentioned above is:

Lee, Justin S., Jason M. Goldstein, Jonathan L. Moon, Owen Herzegh, Dennis A. Bagarozzi, Jr., M. Steven Oberste, Heather Hughes, Kanwar Bedi, Dorothie Gerard, Brenique Cameron, Christopher Benton, Asiya Chida, Ausaf Ahmad, David J. Petway, Jr., Xiaoling Tang, Nicky Sulaiman, Dawit Teklu, Dhwani Batra, Dakota Howard, Mili Sheth, Wendi Kuhnert, Stephanie R. Bialek, Christina L. Hutson, Jan Pohl, and Darin S. Carroll. “Analysis of the Initial Lot of the CDC 2019-Novel Coronavirus (2019-nCoV) Real-Time RT-PCR Diagnostic Panel.” PLOS ONE 16, no. 12 (Dec. 15, 2021). DOI: 10.1371/journal.pone.0260487.

Technology Behind the Telephone Was Originally Intended to Aid Transcribing Telegraph Messages

(p. C5) Thomas Alva Edison’s self-proclaimed greatest invention, the phonograph, won him overnight fame.  . . .

In February 1877, the same month that saw Edison turn 30 and show his first streaks of silver hair, he and his fellow inventor Charles Batchelor began a new series of experiments on what they called, variously, the “telephonic telegraph,” the “speaking telegraph” and the “talking telephone.” This confusion of names would last as long as Americans took to adjust to the startling notion that an electrically transmitted message did not necessarily have to be transcribed.

It was beyond even Alexander Graham Bell’s imagination that people might one day use the telephone just to chat. As far as Edison was concerned, Bell’s invention was a device to speed up the process of turning words into pulsations of current, then turning the pulsations back into words at the other end—words intended to be heard only by a receiving operator, who would then (as Edison had done thousands of times as a youth) copy out the message for delivery. Hence the telephone really was, for all its crackly noise, telegraphic in function.

. . .

“Kruesi—make this,” Edison recalled saying to John Kruesi, his Swiss-born master machinist, giving him a drawing of a mounted, foil-wrapped cylinder, with a handle on one side to turn it, and a vibrant mouthpiece projecting a stylus that just touched the surface of the wrap. “I told him I was going to record talking, and then have the machine talk back,” Edison wrote. “He thought it absurd. However, it was finished, the foil was put on; I then shouted Mary had a little lamb, etc. I adjusted the reproducer, and the machine reproduced it perfectly….I never was so taken aback in my life.”

What awed Edison beyond any other thought was that the moment did not have to be a moment; it could be a century, if the foil and the stylus were preserved; and then in 1977, if some unborn person turned this same handle, the voice of a man long dead would speak to him. No wonder that Kruesi, listening with incredulity to the thing he had made talking with Edison’s voice, exclaimed, “Mein Gott im Himmel!” (My God in heaven).

All those who heard the miraculous machine in the ensuing months, from the president of the U.S. on down, reacted with equal disbelief. Since the dawn of humanity, religions had asserted that the human soul would live on after the body rotted away. The human voice was a thing almost as insubstantial as the soul, but it was a product of the body and therefore must die too—in fact, did die, evaporating like breath the moment each word, each phoneme was sounded. Even the notes of inanimate things—the tree falling in the wood, thunder rumbling, ice cracking—sounded once only, except if they were duplicated in echoes that themselves rapidly faded.

But here now were echoes made hard, resounding as often as anyone wanted to hear them again.

For the full essay, see:

Edmund Morris. “The Making of Thomas Edison’s Miraculous Machine.” The Wall Street Journal (Saturday, October 19, 2019): C5.

(Note: ellipses at the end or in between paragraphs, added; ellipsis internal to a paragraph, in original.)

(Note: the online version of the essay has the date October 17, 2019, and has the same title as the print version.)

The essay quoted above is adapted from Morris’s book:

Morris, Edmund. Edison. New York: Random House, 2019.

Economic Growth Reduces the Harms from Global Warming

(p. C3) Long-term economic growth is associated with both rising per capita energy consumption and slower population growth. For this reason, as the world continues to get richer, higher per capita energy consumption is likely to be offset by a lower population.

A richer world will also likely be more technologically advanced, which means that energy consumption should be less carbon-intensive than it would be in a poorer, less technologically advanced future. In fact, a number of the high-emissions scenarios produced by the United Nations Intergovernmental Panel on Climate Change involve futures in which the world is relatively poor and populous and less technologically advanced.

Affluent, developed societies are also much better equipped to respond to climate extremes and natural disasters. That’s why natural disasters kill and displace many more people in poor societies than in rich ones. It’s not just seawalls and flood channels that make us resilient; it’s air conditioning and refrigeration, modern transportation and communications networks, early warning systems, first responders and public health bureaucracies.

New research published in the journal Global Environmental Change finds that global economic growth over the last decade has reduced climate mortality by a factor of five, with the greatest benefits documented in the poorest nations. In low-lying Bangladesh, 300,000 people died in Cyclone Bhola in 1970, when 80% of the population lived in extreme poverty. In 2019, with less than 20% of the population living in extreme poverty, Cyclone Fani killed just five people.

Poor nations are most vulnerable to a changing climate. The fastest way to reduce that vulnerability is through economic development.

So while it is true that poor nations are most vulnerable to a changing climate, it is also true that the fastest way to reduce that vulnerability is through economic development, which requires infrastructure and industrialization. Those activities, in turn, require cement, steel, process heat and chemical inputs, all of which are impossible to produce today without fossil fuels.

For the full commentary, see:

Ted Nordhaus. “Ignore the Fake Climate Debate.” The Wall Street Journal (Saturday, January 25, 2020): C3.

(Note: the online version of the commentary has the date Jan. 23, 2020, and has the same title as the print version.)

Nordhaus’s commentary is related to the manifesto that he co-authored with many others:

Asafu-Adjaye, John, Linus Blomqvist, Stewart Brand, Barry Brook, Ruth DeFries, Erle Ellis, Christopher Foreman, David Keith, Martin Lewis, Mark Lynas, Ted Nordhaus, Roger Pielke Jr., Rachel Pritzker, Joyashree Roy, Mark Sagoff, Michael Shellenberger, Robert Stone, and Peter Teague. “An Ecomodernist Manifesto.” April 2015.

Technological Progress Helped Create Cosmopolitan Europe

(p. C7) Cultural history is frequently written as if circumscribed by national borders, with each country laying claim to a discrete social and intellectual way of life. Dismayed at this tendency, Orlando Figes, a noted historian of Russia, found himself wondering whether the forces of transnational integration weren’t at least as decisive as those that would drive cultures apart. In his new study “The Europeans” he aims “to approach Europe as a space of cultural transfers, translations and exchanges crossing national boundaries, out of which a ‘European culture’—an international synthesis of artistic forms, ideas and styles—would come into existence and distinguish Europe from the broader world.

. . .

His monumental work is the product of thorough and extensive research, largely in archival sources and in several languages. The author has a remarkable capacity to keep a huge quantity of factual material present in mind, and to bind it moreover into a coherent story. Woven through the biographical narrative is a detailed account of the transformations in technology, mores and law that created the new cosmopolitanism.

Chief among these was the rapid construction of railways, such that in France alone, for example, well more than 8,000 miles of track were laid down between 1850 and 1870. Railway travel gave people the time and comfort to read newspapers and fiction, which they could procure in the dozens of station bookstalls set up by merchants like W.H. Smith. “The train,” Mr. Figes notes, “was smoother than a horse-drawn carriage on a bumpy road, enabling passengers to read a book more easily.” Literacy had increased dramatically, and the rotary press, invented in 1843, facilitated the production of a vast quantity of printed matter, distribution of which deep into the provinces was in turn driven by the ramifying network of trains.

. . .

The spread of gas lighting, invented in the 1790s, made it possible for people to read comfortably in the evening. It also enabled them to play the piano at home, and of course piano technology had kept pace: The instruments became easier to play, and cheaper as well. In 1845, by the author’s estimation, 100,000 people in Paris were playing the piano, of which there were 60,000 in a city of about one million people.

For the full review, see:

Dan Hofstadter. “Engines of Progress.” The Wall Street Journal (Saturday, October 19, 2019): C7 & C9.

(Note: ellipses added.)

(Note: the online version of the review has the date October 18, 2019, and has the title “‘The Europeans’ Review: Engines of Progress.”)

The book under review in the passages quoted above is:

Figes, Orlando. The Europeans: Three Lives and the Making of a Cosmopolitan Culture. New York: Metropolitan Books, 2019.

Majority of Economists Say Price Controls Would Fail to “Successfully” Reduce Inflation

(p. B1) America’s recent inflation spike has prompted renewed interest in an idea that many economists and policy experts thought they had long ago left behind for good: price controls.

The federal government last imposed broad-based limits on how much private companies could charge for their goods and services in the 1970s, when President Richard M. Nixon ushered in wage and price freezes over the course of a few years. That experiment was widely regarded as a failure, and ever since, the phrase “price controls” has, at least for many people, called to mind images of product shortages and bureaucratic overreach. In recent decades, few economists have bothered to study the idea at all.

. . .

(p. B2) Artificially holding down prices leads to shortages, inefficiencies or other unintended consequences, like an increase in black-market activity. And while some economists say price controls on specific products can make sense in specific situations — to prevent price-gouging after a natural disaster, for example — most argue that they are a poor tool for fighting inflation, which is a broad increase in prices.

In a recent survey of 41 academic economists conducted by the University of Chicago’s Booth School of Business, 61 percent said that price controls similar to those imposed in the 1970s would fail to “successfully reduce U.S. inflation over the next 12 months.” Others said the policy might bring down inflation in the short-term but would lead to shortages or other problems.

“Price controls can of course control prices — but they’re a terrible idea!” David Autor, an economist at the Massachusetts Institute of Technology, wrote in response to the survey.

. . .

“It sounds good: Your wages are going to be higher, and your prices are going to be the same,” said Lawrence H. Summers, a Harvard University economist. “Unless there is a mechanism for producing more stuff, it’s just going to result in longer queues.”

For the full story, see:

Ben Casselman and Jeanna Smialek. “A Throwback Idea Returns As Inflation Rears Its Head.” The New York Times (Monday, January 17, 2022): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story was updated Jan. 13, 2022, and has the title “Price Controls Set Off Heated Debate as History Gets a Second Look.”)

Most Private-Sector Workers Do Not Value Unions Enough to Want to Pay Dues

(p. A17) The annual BLS report on union membership released last week shows that unions lost nearly a quarter-million members in 2021, with private-sector membership dropping to a historic low of 6.1%. Even in retail and healthcare, which labor organizers targeted over pandemic-related safety concerns, union membership declined in 2021 from 2020.

. . .

. . . thinking well of unions and wanting to pay dues to be represented by one aren’t the same. I recently moderated focus groups of workers 18 to 29 in the Midwest and on the East and West coasts. While most said positive things about unions, only a handful wanted to join one.

. . .

The “historic” worker strife that has drawn media attention is more fiction than fact. Don’t take my word for it: The socialist magazine Jacobin reviewed the new BLS data on work stoppages and concluded that 2021 “was a quiet year, even by recent standards.”

For the full commentary, see:

Michael Saltsman. “Big Labor’s Resurgence That Wasn’t.” The Wall Street Journal (Monday, January 24, 2022): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Jan. 23, 2022, and has the same title as the print version.)

DeSantis Upgrades Infrastructure to Mitigate Flooding

(p. A5) The Republican governor, unlike many of his Democratic counterparts, didn’t use the term “climate change” or endorse specific policies aimed at combating factors that most climate scientists say are driving warming, such as greenhouse-gas emissions. He focused on responding to the effects of a warming climate.

“What I’ve found is people, when they start talking about things like global warming, they typically use that as a pretext to do a bunch of left-wing things,” said Mr. DeSantis at the event. “We’re not doing any left-wing stuff.”

Governors and lawmakers in several Republican-led states, including Idaho, South Carolina and Texas, are taking a similar approach as concern about climate change increases. After natural disasters that research suggests are becoming more frequent and intense, they are taking measures such as infrastructure upgrades to mitigate flooding, wildfires and severe storms. Such moves are vital to their states’ economic livelihood, they say.

. . .

At the Oldsmar event, Mr. DeSantis outlined a proposal to dedicate more than $270 million to 76 projects aimed at bolstering defenses against rising sea levels and flooding. “We’re a low-lying state, we’re a storm-prone state, and we’re a flood-prone state,” he said.

For the full story, see:

Arian Campo-Flores. “Republicans Adjust Climate Message.” The Wall Street Journal (Monday, January 24, 2022): A5.

(Note: ellipsis added.)

(Note: the online version of the story has the date Jan. 23, 2022, and has the title “Millions Have Lost a Step Into the Middle Class, Researchers Say.”)

30 Million Workers May Have the Skills, but Not the Degrees, to Move to Jobs That Pay 70 Percent More

(p. B1) Over the last two decades, workers without four-year college degrees have lost ground in the occupations that used to be ladders to middle-class lives for them and their families.

While the trend has been well known, putting a number on the lost steppingstone jobs has been elusive. A new study, published on Friday, estimates that such workers have been displaced from 7.4 million jobs since 2000.

The research points to the persistent challenge for the nearly two-thirds of American workers who do not have a four-year college degree, even as some employers have dropped the requirement in recent years.

“These workers have been displaced from millions of the precise jobs that offer them upward mobility,” said Papia Debroy, head of research for Opportunity@Work, the nonprofit that published the study. “It represents a stunning loss for workers and their families.”

. . .

(p. B2) A previous study by Opportunity@Work, with academic researchers, dissected skills in different occupations and found that up to 30 million workers had the skills to realistically move to new jobs that paid on average 70 percent more than their current ones.

Some major companies have started to adjust their hiring requirements. Rework America Business Network, an initiative of the Markle Foundation, has pledged to adopt skills-based hiring for many jobs. Companies in the group include Aon, Boeing, McKinsey, Microsoft and Walmart.

. . .

“The country as a whole will benefit from not stranding human capital,” said Erica Groshen, an economist at Cornell University and a former head of the Bureau of Labor Statistics.

For the full story, see:

Steve Lohr. “Requirement For Degrees Curbs Hiring.” The New York Times (Monday, January 17, 2022): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date Jan. 14, 2022, and has the title “Millions Have Lost a Step Into the Middle Class, Researchers Say.”)

Side Gigs Can Lift Mood Enough to Improve Performance in Main Job

(p. R4) Contrary to the popular wisdom, moonlighting doesn’t leave people worn out and unproductive from 9 to 5. Instead, side gigs can make people feel more empowered—and thereby more productive at the office.

Dr. Sessions and his colleagues—whose results were recently published in the Academy of Management Journal—posted ads on large social-media networking groups, asking people to take a series of surveys about the nature of their supplementary work.  . . .

The study showed that supplementary work frequently enables side hustlers to feel empowered by taking ownership of self-directed work—which was especially true for those who were motivated beyond making money, says Dr. Sessions.

. . .

Side hustlers self-reported that they were preoccupied with their after-hours gigs the next morning, due to being deeply engaged in that work.

. . .

But that wasn’t the whole story: The moonlighters’ colleagues rated their co-workers’ performance significantly higher on those same days.

So, the uplift in mood had a statistically stronger positive effect on employee performance than the negative effect of being distracted—even if the moonlighters didn’t see things that way.

For the full story, see:

Heidi Mitchell. “When Two Jobs Can Be Better Than One.” The Wall Street Journal (Thursday, Nov. 4, 2021): R4.

(Note: ellipses added.)

(Note: the online version of the story has the date November 1, 2021 , and has the title “How a Side Hustle Can Boost Performance at Your Regular Job.”)

The comprehensive review by Prof. Stephan mentioned above is:

Stephan, Ute. “Entrepreneurs’ Mental Health and Well-Being: A Review and Research Agenda.” Academy of Management Perspectives 32, no. 3 (Aug. 2018): 290-322.

The recent study co-authored by Dr. Sessions mentioned above is:

Sessions, Hudson, Jennifer D. Nahrgang, Manuel J. Vaulont, Raseana Williams, and Amy L. Bartels. “Do the Hustle! Empowerment from Side-Hustles and Its Effects on Full-Time Work Performance.” Academy of Management Journal 64, no. 1 (Feb. 2021): 235-64.

Entrepreneurs Are Happier Because Autonomy and More Meaningful Work Matter More Than Stress and Workload

(p. R1) “If you look at the data, it turns out that entrepreneurs on average earn less money than a typical employed person, work 13 hours more a week and report that it’s a very stressful occupation,” says Boris Nikolaev, assistant professor of entrepreneurship at Baylor University in Waco, Texas. “But despite that, there’s overwhelming evidence in the literature that entrepreneurs report significantly higher levels of job satisfaction.”

. . .

“Entrepreneurs are happier in terms of all indications (p. R4) of life satisfaction and work satisfaction,” says Ute Stephan, professor of entrepreneurship at King’s College London, who conducted a comprehensive review of more than 100 academic studies on entrepreneurship and well-being. “However, they might be more stressed than the rest of us, as well.”

This unusual mix of stress and happiness comes about, she says, because entrepreneurs tend to be deeply invested in their businesses, and their passion is a double-edged sword: It gives them a strong sense of purpose and autonomy, but it can also lead to worry, late nights, overwork and stress.

. . .

The stress and workload have a strong negative effect, as is evident in other studies, but the sense of doing something important and being their own boss is so gratifying that it outweighs all those negatives and leaves them happier overall.

“What they are doing is important to them, it’s part of who they are, it’s part of their identity, and that’s why it has such a positive impact on well-being,” says Prof. Stephan.

. . .

. . . in a recent study, Prof. Stephan discovered that autonomy alone isn’t enough. It’s important, to be sure—but what entrepreneurs need, above all, is meaning. She analyzed survey data from over 22,000 people in 16 European countries, comparing their feelings of happiness with the extent to which their work gives them a sense of meaning and autonomy.

. . .

She found that entrepreneurs experienced higher levels of happiness than wage-earning employees (4.37 vs. 4.28 on a scale of 1 to 6), as well as higher levels of meaning (4.56 vs. 4.25 on a scale of 1 to 5) and autonomy (2.66 vs. 1.95 on a scale of 0 to 3). Using regression analysis, she discovered that meaning was the decisive factor in entrepreneurial happiness.

“What we found is that much more important than decision-making freedom is the sense of doing something profoundly meaningful,” she says. “That really energizes you, and as an entrepreneur you really need that energy to be creative and to do the work that’s important to you.”

But finding meaning in work doesn’t have to be about changing the world. Framing work in terms of performing an important service can help even entrepreneurs in less glamorous industries find meaning and happiness—such as contractors who help people build a dream home, or accountants saving people from disastrous money problems.

For the full story, see:

Andrew Blackman. “Are Entrepreneurs Happier Than Other People?” The Wall Street Journal (Thursday, Nov. 04, 2021): R1 & R4.

(Note: ellipses added.)

(Note: the online version of the story was updated Nov. 3, 2021 , and has the title “Are Entrepreneurs Happier Than Everybody Else?”)

The comprehensive review by Prof. Stephan mentioned above is:

Stephan, Ute. “Entrepreneurs’ Mental Health and Well-Being: A Review and Research Agenda.” Academy of Management Perspectives 32, no. 3 (Aug. 2018): 290-322.

The recent study by Prof. Stephan mentioned above is:

Stephan, Ute, Susana M. Tavares, Helena Carvalho, Joaquim J. S. Ramalho, Susana C. Santos, and Marc van Veldhoven. “Self-Employment and Eudaimonic Well-Being: Energized by Meaning, Enabled by Societal Legitimacy.” Journal of Business Venturing 35, no. 6 (Nov. 2020): DOI: https://doi.org/10.1016/j.jbusvent.2020.106047.