Category: Economics

Former Teacher Union President Says Charter Schools Give Black and Hispanic Children “Access to a Quality Education”

(p. A21) When I became a teacher, it seemed natural to become an advocate for the profession. Somewhere along the way I became more of a union leader than an educational leader.

. . .

I used to oppose charter schools, not because they were bad for kids, but because they were bad for unions.

. . .

I served as president of the Washington Teachers’ Union for six years and recognize the added value unions can bring in securing fair compensation and safe working conditions for teachers. I’m still a union member. But I now work on behalf of charter schools.

Charter schools are also public schools. All of them. They provide more than three million students, mostly black and Hispanic, access to a quality public education. They are innovative and student-centered. They break down barriers that have kept families of color from the educational opportunities they deserve. Another two million children would attend charter schools if there were space for them. How could I work against these kids?

For the full commentary, see:

George Parker. “How My Mind Opened to Charter Schools.” The Wall Street Journal (Thursday, May 27, 2021): A21.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 26, 2021, and has the same title as the print version.)

Amazon Hiring 55,000 Workers

(p. B3) Amazon.com Inc. said it is seeking to hire about 55,000 people globally among its corporate and technology ranks during a recruiting event set for Sept. 15, [2021] as the e-commerce giant continues a hiring spree begun at start of the Covid-19 pandemic.

The Seattle-based company is aiming to fill roles in cloud-computing unit Amazon Web Services, as well as in divisions such as Amazon Studios, advertising and its broadband satellite Project Kuiper. The open positions include more than 40,000 roles in the U.S. across 220 locations, including in New York City; Bellevue, Wash.; and Arlington, Va., where the company is opening a large corporate office.

. . .

The company employs about 950,000 people in the U.S. and has said it has made more than 450,000 hires throughout the country since the public-health crisis began.

For the full story, see:

Dave Sebastian. “Amazon Seeks to Hire 55,000 for Office, Tech Roles.” The Wall Street Journal (Thursday, Sept. 2, 2021): B3.

(Note: ellipsis, and bracketed year, added.)

(Note: the online version of the story was updated Sept. 1, 2021, and has the title “Amazon Seeks to Hire 55,000 for Corporate, Tech Roles.”)

“The Best Recipe for Economic Growth Is” Freedom and Opportunity

(p. C3) Migration has been central to the American story since the beginning. In the early 19th century, New Englanders left the rocky soil of Massachusetts for the more fertile Ohio River valley. During the Dust Bowl of the 1930s, farmers fled Oklahoma for California. In the early 20th century, millions of African-Americans left the Jim Crow South to find work in the factories of northern cities. Through the 20th century, mobility was an American tradition: In every year between 1950 and 1992, according to the Current Population Survey, more than 6% of Americans moved across county lines.

In recent years, however, the engine of American migration has been grinding to a halt. People often move to get ahead, which makes mobility a reasonable measure of economic dynamism. So it’s a troubling sign that since 2007, geographic mobility has dropped by one-third, with fewer than 4% of Americans changing counties annually. The reason is clear: In the most prosperous cities and regions, insiders have figured out how to use regulations, laws and institutions to make life easier for themselves and harder for everyone else. In the process, they have made the U.S. a far less dynamic society.

. . .

Most important, we need to stop thinking of growth as a zero-sum game. Today, insiders worry about getting their share of the pie instead of growing the economy for everyone. The best recipe for economic growth is the traditional American one: freedom, combined with robust investment in opportunity for the least advantaged.

For the full commentary, see:

Edward Glaeser and David Cutler. “The American Housing Market Is Stifling Mobility.” The Wall Street Journal (Saturday, July 17, 2021): C3.

(Note: ellipses added.)

(Note: the online version of the commentary has the date September 2, 2021, and has the same title as the print version.)

The commentary quoted above is based on the authors’ book:

Glaeser, Edward L., and David Cutler. Survival of the City: Living and Thriving in an Age of Isolation. New York: Penguin Press, 2011.

Walmart Hiring 20,000 Workers

(p. B3) Walmart Inc. is hiring 20,000 workers for its supply-chain operations ahead of the holidays, highlighting the growing role of distribution and delivery as the retailer competes with e-commerce giant Amazon.com Inc.

The new hires will be permanent positions aimed at supporting Walmart through the holiday surge and beyond, the retailer said Wednesday [Sept. 1, 2021]. The full- and part-time jobs range from order pickers, freight handlers and forklift operators to technician and management roles at more than 250 Walmart and Sam’s Club distribution and fulfillment centers and transportation offices.

For the full story, see:

Jennifer Smith. “Walmart Plans to Add 20,000 Workers.” The Wall Street Journal (Thursday, Sept. 02, 2021): B3.

(Note: bracketed date added.)

(Note: the online version of the story was updated Sept. 1, 2021, and has the title “Walmart Will Add 20,000 Workers to Supply-Chain Operations This Year.”)

James Dyson Persevered Through 5,127 Prototypes to Achieve Vacuum Cleaner Success

(p. C7) James Dyson was a less than stellar student at the boarding school he attended in Norfolk, England, where his father was a classics master. Yet he would become the founder of a family-owned global manufacturing empire. Mr. Dyson gained fame—and a peerage—as the inventor of a revolutionary vacuum cleaner that exploits the principle of the cyclone and never needs a replacement bag, among other novel domestic appliances.

. . .

It took Mr. Dyson four years and precisely 5,127 prototypes—as he reminds us in the first paragraph of this book’s introduction and in the last paragraph of its last chapter, as well as several times in between. He points out that his perseverance—abetted by subsequent and continuing failures in the form of rebuffs from the likes of banks, venture capitalists, government agencies, manufacturers, distributors and retailers—was rewarded with ultimate success. The idea of “accepting and even enjoying failure, but going on” is another theme carried throughout Mr. Dyson’s book.

. . .

With success achieved in the United Kingdom, Mr. Dyson looked to sell the fruits of his intellectual property beyond the sceptered shores. In America, he got legally tangled up with Amway, which he was convinced was infringing on his patents. The lessons learned from his failure to protect his patent rights for the Ballbarrow, however, steeled Mr. Dyson and his wife and business partner, Deirdre, against allowing this to happen a second time. Mr. Dyson sued Amway and, after five years of costly litigation, received a favorable settlement. The victory boosted the businessman’s growing reputation as a fighter and a winner.

. . .

. . . , Mr. Dyson tells a story of the struggles of entrepreneurship, and his arduous quests for private capital; suitable manufacturing facilities; building permits; talented and trained employees; and at least moral support from the British government. He reveals the many and continuing obstacles—financial, political, regulatory, sociological, cultural—that frustrated his attempts to expand his manufacturing enterprises within the United Kingdom. This challenge, he explains, eventually drove him to move the bulk of his business to Singapore, where Mr. Dyson’s company is now headquartered.

For the full review, see:

Henry Petroski. “The Inventor’s Dilemma.” The Wall Street Journal (Saturday, Sept. 4, 2021): C7.

(Note: ellipses added.)

(Note: the online version of the review was updated Sept. 3, 2021, and has the title “‘Invention’ Review: James Dyson’s Dilemma.”)

The book under review is:

Dyson, James. Invention: A Life. New York: Simon & Schuster, 2021.

University of Chicago’s Milton Friedman Center Now Run by “Former Obama Staffers Who Cheer” . . . “Moves Toward Socialism”

(p. A15) Colleges’ ideological turn leftward has become sharper. At my own institution, a center dedicated to Milton Friedman is now run by former Obama staffers who cheer on the Biden administration’s moves toward socialism.

These policies reward professors and administrators who can then raise the price of their services. It’s basic economics that subsidizing demand increases the price of the product. Tuition rising as loan subsidies expand is no different. It isn’t a coincidence that education and health care, the industries in which government subsidies are most pervasive, took the highest price increases over the past 15 years—3.7% and 3.1% a year, compared with the 1.8% average across industries.

For the full commentary, see:

Tomas J. Philipson. “College Subsidies Are a Feedback Loop for Bigger Government.” The Wall Street Journal (Friday, June 11, 2021): A15.

(Note: the online version of the commentary has the date June 10, 2021, and has the title “College Subsidies Are a Feedback Loop for Bigger Government.”)

“Folly” of $66 Billion Subsidy for Trains, When Americans Prefer Cars and Planes

(p. 9) While long-haul railroads have a beloved place in our history, Americans almost entirely abandoned them more than a half century ago for the greater convenience of cars and the speed of planes.

And yet, not only have we continued to run a hugely loss-making nationwide network of passenger trains, last week’s bipartisan infrastructure plan includes tens of billions more for an Amtrak-based transportation system that will only ever be used by a small sliver of Americans outside of the Northeast Corridor rail line (known as the N.E.C.), which stretches from Washington to Boston.

The folly of another $66 billion — mostly for passenger railroads, one of the biggest allocations in the bipartisan compromise — makes me doubt how well other pieces of the trillions in spending proposed by the administration will be allocated. (President Biden wanted even more for Amtrak.)

. . .

Really? Consider a few stats: In the 2019 fiscal year, when excluding the N.E.C., Amtrak carried just 4.5 million passengers (not including services subsidized by states and cities), roughly 1.4 percent of our population. On average, passengers paid $115 while Amtrak spent $222 to transport each of them.

Unprofitable ticket prices notwithstanding, long-distance train travel dropped by 5.4 percent between the 2010 and 2018 fiscal years, while air travel rose by nearly 24 percent. On average, Amtrak filled only 55 percent of its long-distance seats in 2018. Does that warrant another $66 billion?

. . .

Populous California, where the automobile has reigned for decades, is an example of why betting on an American train travel revival is questionable. High-speed service between Los Angeles and San Francisco — which was approved by voters in 2008 at an estimated cost of $33 billion with completion expected in 2020 — remains a mirage. Completion is unlikely before 2030, while outlays are now projected to total at least $100 billion.

The California fiasco illustrates how execution will be key to implementing any infrastructure projects. But the government’s record is not great.

For the full commentary, see:

Steven Rattner. “Who Needs Amtrak? Not Wyoming.” The New York Times, SundayReview Section (Sunday, July 4, 2021): 9.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 1, 2021, and has the title “Why ‘Amtrak Joe’ Should Pull Back on Train Funding’.” Where the wording of the two versions slightly differs, the passages quoted above follow the online version.)

“Our Cities Protect Insiders and Leave Outsiders to Suffer”

(p. A15) Mr. Glaeser’s “Survival of the City: Living and Thriving in an Age of Isolation,” written with Harvard health economist David Cutler, shares the pleasing style of its predecessor, an engaging mixture of history and analysis. It has none of the triumphalism of its predecessor, however. In the move to social distancing that began in the spring of 2020, Messrs. Glaeser and Cutler see nothing less than “the rapid-fire deurbanization of our world.”

“Uncontrolled pandemic,” the authors write, poses “an existential threat” to the urban world. Nor is the coronavirus the only problem that cities face. “A Pandora’s Box of urban woes has emerged,” they continue, “including overly expensive housing, violent conflict over gentrification, persistently low levels of upward mobility, and outrage over brutal and racially targeted policing and long prison sentences for minor drug crimes.” These are not disparate problems. Rather, they “all stem from a common root: our cities protect insiders and leave outsiders to suffer.”

In Messrs. Glaeser and Cutler’s view, something has gone deeply wrong with how policy is set in many American cities. Insiders have captured control of how cities operate—and used that control to enrich themselves while providing limited opportunities for newer, younger residents. Consider Los Angeles. In 1970, housing costs in Southern California were much the same as those nationwide. By 1990, building limitations and strong demand had sent prices soaring in many coastal cities. The result: a massive redistribution of wealth from the young to the old.

For the full review, see:

John Buntin. “BOOKSHELF; Saving Our Urban Future.” The Wall Street Journal (Friday, Sept. 10, 2021): A15.

(Note: the online version of the review has the date September 9, 2021, and has the title “BOOKSHELF; ‘Survival of the City’ Review: Saving Our Urban Future.”)

The book under review is:

Glaeser, Edward L., and David Cutler. Survival of the City: Living and Thriving in an Age of Isolation. New York: Penguin Press, 2021.

A Firm Does Not Need to Be a Platform to Matter

(p. 17) Over the past two decades, the world’s hyper-ambitious entrepreneurs — is there now any other kind? — have largely pursued a pair of goals in tandem. First: Become a platform. Second: Take over the world. The former is supposed to lead to the latter, as it seemingly has for the five companies conglomerated under the intimidating acronym FAANG. Facebook, Apple, Amazon, Netflix and Google have taken such a bloodsucking bite (get it?) out of the world economy that in the past half decade alone they have more than tripled in value — at a rate three times faster than the growth of the entire S&P 500 — and are now worth north of $7 trillion. The appeal of building a platform is clear.

. . .

The word “platform” has been deployed so many times in so many ways that it has lost almost all meaning, a fact that Jonathan Knee, who teaches at Columbia University’s business school, tries to spell out in his new book, “The Platform Delusion.”

. . .

Knee’s book is filled with business school case studies that might be a bit in the weeds for general readers. (One of the successes he identifies is a company that makes software for a very specific financial accounting function.) But for aspiring entrepreneurs these stories offer a primer on the delusion Knee has identified, and show how to avoid the two primary misjudgments that cause it. The first is a belief that platforms emerged with the dawn of the internet. In fact, they’ve been around for decades.

. . .

But the crux of Knee’s argument is that “beyond their size and success” — no small feat — there is little the big platforms have in common.

. . .

Knee grants that the breadth and scope of the giant tech platforms is “awe-inspiring,” but he thinks our collective fear of them is overblown. (. . . ) The platforms have weaknesses just like any business, he argues, and the succubi themselves push the myth of their own invincibility in order to dissuade any potential competition.

But what the myth has mostly done is tempt young entrepreneurs to try to match them.

. . .

Knee believes that investors, and many of his students, are fooling themselves into thinking that building a globe-spanning platform is a viable goal. Platforms are successful not because they are platforms, but because they exploit the same kinds of advantages that successful businesses have enjoyed for decades. It’s a boring realization, but one that Knee hopes will save his students not only from pursuing bad ideas, but from ruining their lives. The platform siren song, he writes, “fatally impedes the ability of many to clearly consider what they might actually enjoy.” Not everyone needs to start a company to be happy. And not every company needs to take over the world.

For the full review, see:

Reeves Wiedeman. “Nosedive.” The New York Times Book Review (Sunday, September 26, 2021): 17.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 15, 2021, and has the title “Why Does Every Company Now Want to Be a Platform?”)

The book under review is:

Knee, Jonathan A. The Platform Delusion: Who Wins and Who Loses in the Age of Tech Titans. New York: Portfolio, 2021.

Public Transit Subsidies Reduce Incentives to Innovate

(p. A4) The bipartisan infrastructure bill approved by the Senate this month is the latest effort to inject federal money into public transit agencies. But all that money likely won’t buy what transit really needs: more riders.

Unless ridership recovers from its pandemic-induced drop, agencies will again confront large budget deficits once the federal money runs out in three or four years, analysts say. That could mean service cuts and fare increases, according to transit agencies.

“As soon as the money stops flowing, transit agencies are going to be in the same position as they were before,” said Baruch Feigenbaum, a transportation policy expert at the libertarian-leaning Reason Foundation.

New York’s Metropolitan Transportation Authority, for instance, expects to use up its $14.5 billion allocation of federal aid by 2024, at which point it will face a $3.5 billion two-year shortfall.

. . .

Some experts say agencies’ financial struggles during the pandemic should prompt Congress to help fund agencies’ day-to-day costs.

. . .

Other analysts, however, say agencies need to find ways to adapt instead of living off federal subsidies.

“The problem with free money is it does not encourage innovation, and that’s really what transit agencies need to be encouraged to do right now,” said the Reason Foundation’s Mr. Feigenbaum. “It’s just postponing the reckoning.”

For the full story, see:

David Harrison. “Public Transit Is Flush With Cash, But Not Riders.” The Wall Street Journal (Monday, Aug. 23, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the story has the date August 22, 2021, and has the title “Transit Got Billions in Relief From Congress but Still Faces Deficits.”)

Chinese Proletariat Yells: “Evergrande, Give Back My Money I Earned With Blood and Sweat!”

(p. B1) When the troubled Chinese property giant Evergrande was starved for cash earlier this year, it turned to its own employees with a strong-arm pitch: Those who wanted to keep their bonuses would have to give Evergrande a short-term loan.

Some workers tapped their friends and family for money to lend to the company. Others borrowed from the bank. Then, this month, Evergrande suddenly stopped paying back the loans, which had been packaged as high-interest investments.

Now, hundreds of employees have joined panicked home buyers in demanding their money back from Evergrande, gathering outside the company’s offices across China to protest last week.

Once China’s most prolific property developer, Evergrande has become the country’s most in-(p. B7)debted company. It owes money to lenders, suppliers and foreign investors. It owes unfinished apartments to home buyers and has racked up more than $300 billion in unpaid bills. Evergrande faces lawsuits from creditors and has seen its shares lose more than 80 percent of their value this year.

Regulators fear that the collapse of a company Evergrande’s size would send tremors through the entire Chinese financial system. Yet so far, Beijing has not stepped in with a bailout, having promised to teach debt-saddled corporate giants a lesson.

. . .

As rumors rippled through the Chinese internet that Evergrande might go bankrupt this month, Mr. Jin and some of his colleagues gathered in front of provincial government offices to pressure the authorities to step in.

In the southern city of Shenzhen, home buyers and employees crowded into the lobby of Evergrande’s headquarters last week and shouted for their money back. “Evergrande, give back my money I earned with blood and sweat!” some could be heard yelling in video footage.

For the full story, see:

Alexandra Stevenson and Cao Li. “Workers Had To Lend Cash To China Firm.” The New York Times (Saturday, September 20, 2021): B1 & B7.

(Note: ellipsis added.)

(Note: the online version of the story was updated Sept. 22, 2021, and has the title “Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus.”)