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.”)

Precise Decisions Can Be Fairer (But Can You Be Precisely Wrong?)

There’s a famous quote, usually wrongly attributed to Keynes that ‘it’s better to be vaguely right than precisely wrong.’ In a new book “noise” refers to inconsistent decisions, that need not be biased in any consistent way. But consistency is not the only value that matters. Academics are sometimes evaluated on the basis of the number of articles they publish. If this is done conscientiously, then the evaluation is consistent, and in that sense “fair.” But maybe there are other criteria that are harder to measure, but that matter more, like the profundity and insight of what is published. Evaluating on the basis of well-measured criteria, that matter less, rather than poorly-measured criteria, that matter more, may increase unfairness in a deeper sense.

(p. 10) A study at an oncology center found that the diagnostic accuracy of melanomas was only 64 percent, meaning that doctors misdiagnosed melanomas in one of every three lesions.

When two psychiatrists conducted independent reviews of 426 patients in state hospitals, they came to the equivalent of a tossup: agreement 50 percent of the time on what kind of mental illness was present.

. . .

Doctors are more likely to order cancer screenings for patients they see early in the morning than late in the afternoon.

. . .

In a study of the effectiveness of putting calorie counts on menu items, consumers were more likely to make lower-calorie choices if the labels were placed to the left of the food item rather than the right.

“When calories are on the left, consumers receive that information first and evidently think ‘a lot of calories!’ or ‘not so many calories!’ before they see the item,” Daniel Kahneman, Olivier Sibony and Cass R. Sunstein explain in this tour de force of scholarship and clear writing. “By contrast, when people see the food item first, they apparently think ‘delicious!’ or ‘not so great!’ before they see the calorie label. Here again, their initial reaction greatly affects their choices.” This hypothesis is supported, the authors write in a typically clever aside, by the “finding that for Hebrew speakers, who read right to left, the calorie label has a significantly larger impact if it is on the right rather than the left.”

These inconsistencies are all about noise, which Kahneman, Sibony and Sunstein define as “unwanted variability in judgments.”

. . .

As the authors explain in their introduction, a team of target shooters whose shots always fall to the right of the bull’s-eye is exhibiting a bias, as is a judge who always sentences Black people more harshly. That’s bad, but at least they are consistent, which means the biases can be identified and corrected. But another team whose shots are scattered in different directions away from the target is shooting noisily, and that’s harder to correct. A third team whose shots all go to the left of the bull’s-eye but are scattered high and low is both biased and noisy.

Despite its prominence in so many realms of human judgment, the authors note that “noise is rarely recognized,” let alone counteracted. Which is why the parade of noise examples that the authors provide are so compelling, and why gathering the examples in one place to demonstrate the cost of noise and then suggesting noise reduction techniques, or “decision hygiene,” makes this book so important. We are living in a moment of rampant polarization and distrust in the fundamental institutions that underpin civil society. Eradicating the noise that leads to random, unfair decisions will help us regain trust in one another.

“Noise” seems certain to make a mark by calling attention to the problem and providing a tangible guide to reducing it. Despite the authors’ intimidating academic credentials, they take pains to explain, even with welcome redundancy, their various categories of noise, the experiments and formulas that they introduce, as well as their conclusions and solutions.

For the full review, see:

Steven Brill. “No Chance.” The New York Times Book Review (Sunday, May 30, 2021): 10.

(Note: ellipses added.)

(Note: the online version of the review has the date May 18, 2021, and has the title “For a Fairer World, It’s Necessary First to Cut Through the ‘Noise’.”)

The book under review is:

Kahneman, Daniel, Olivier Sibony, and Cass R. Sunstein. Noise: A Flaw in Human Judgment. New York: Little, Brown Spark, 2021.

Nazi Regime Was “Really Bad at Industrial Production”

(p. A6) The failure of Nazi Germany’s nuclear program is well established in the historical record.

. . .

In their quest to produce an atomic bomb, the Germans wanted to use a method in which uranium is submerged in heavy water, Professor Brown said. But the Allies dealt those plans “a big blow” when they bombed a plant in Norway that was the only place the Germans could get the key ingredient, she added.

Additionally, to succeed in its efforts, Nazi Germany would have needed large factories to produce bombs, vast tracts of land to test them and security from the threat of aerial attacks so that enemies could not spy on them, Professor Brown said.

Adam Seipp, a history professor at Texas A&M University, said Nazi Germany lacked the resources because it was “really bad at industrial production.”

“It’s one of the reasons they lost the war so catastrophically,” he said.

For the full story, see:

Jesus Jiménez. “New Podcasts Add to the Conversation in Cuba.” The New York Times, First Section (Sunday, September 12, 2021): A6.

(Note: ellipsis added.)

(Note: the online version of the story was updated Sept. 11, 2021, and has the title “Could Nazis Have Built Bomb? Lab Tracks a Clue.” The sentence starting with “Additionally” appears in the online, but not the print, version of the article.)

Cuban Podcasts Thrive Because Cheap to Produce and Hard for Communists to Censure

(p. 4) There has been little to laugh about in Cuba lately. But on a recent episode of El Enjambre, a weekly podcast produced on the island, the three hosts were howling at the latest form of censorship by the state-run telecommunications company.

“If you send a text message with the word freedom, the message doesn’t reach the recipient,” Lucía March told her incredulous co-hosts, referring to the Spanish language word libertad. “It evaporates, vanishes! I’m serious.”

The exchange was funny, informative and lighthearted, traits that have made El Enjambre one of the biggest hits among the scores of new Cuban-made podcasts that are now competing for residents’ attention and limited internet bandwidth.

Cubans began having access to the internet on smartphones only in 2018. Since then, podcasts about politics, current events, history, entrepreneurship and language have upended how Cubans get their information, expanding the middle ground between the hyperpartisan content generated by government-run media outlets and American government funded newsrooms that are highly critical of the island’s authoritarian leaders.

. . .

“It’s very difficult for a government to censor a podcast because there are many ways of distributing it,” said Mr. Lugones, who believes the new audio initiatives are stirring nuanced conversations on the island. “Podcasts spark debates in society all the time. They cause people to reflect.”

A desire to do just that prompted Camilo Condis, an industrial engineer who has opened a few restaurants in Havana, to launch El Enjambre — Spanish for swarm of bees — in late 2019. The heart of the show is a spirited, spontaneous conversation among Mr. Condis and his co-hosts, Ms. March and Yunior García Aguilera.

No subject is off limits.

El Enjambre provided detailed coverage of the remarkable July 11 anti-government protests in Cuba and searing criticism of the ruthless crackdown that followed.

The hosts also dissected the dismal state of the health care system as Covid-19 cases surged on the island, mocked the sputtering initiatives by the government to allow some private sector activities, such as garage sales, and attempted to read the tea leaves on the future of Washington’s relationship with Havana.

Each episode includes a short, humorous, scripted drama, a segment called History without Hysteria and a lengthy conversation that tends to focus on the issues Cubans have been arguing about on social media over the past few days.

“The objective was to create a conversation like you’d have on any street corner in Cuba,” Mr. Condis said. “But we provide only verified facts, because it matters greatly to us to never provide false information.”

. . .

But the format is the rare media venture that requires little training or capital, said Elaine Díaz, the founder of Periodismo de Barrio, a watchdog news site that covers environmental and human rights issues in Cuba.

. . .

Podcasts in Cuba are labors of love at this point, said Mr. Condis. But he hopes that one day they can become profitable.

“In the future, I want to have advertisers,” he said.

For the full story, see:

Ernesto Londoño. “New Podcasts Add to the Conversation in Cuba.” The New York Times, First Section (Sunday, September 19, 2021): 4.

(Note: ellipses added.)

(Note: the online version of the story has the date Sept. 18, 2021, and has the title “Despite Censorship and Poor Internet, Cuban Podcasts Are Booming.”)

E.U. Blocks Innovations in Charger Port Technology

(p. B1) The European Union unveiled plans on Thursday [September 23, 2021] to make USB-C connectors the standard charging port for all smartphones, tablets and other electronic devices sold across the bloc, an initiative that it says will reduce environmental waste but that is likely to hit Apple the hardest.

The move would represent a long-awaited yet aggressive step into product-making decisions by the European Commission, the bloc’s executive arm. Apple, whose iPhones are equipped with a different port, has long opposed the plan, arguing that it would stifle innovation and lead to more electronic waste as all current chargers that are not USB-C would become obsolete.

. . .

(p. B6) European Union officials and lawmakers at the European Parliament have been advocating a common charger since 2009, when there were more than 30 charging options on the market, now down to three. They have argued that fewer wires would be more convenient for users and better for the environment, as mobile phone chargers are responsible for 11,000 tons of electronic waste per year across the bloc, according to estimates by the European Commission.

But Apple has also argued that if the European Union had imposed a common charger in 2009, it would have restricted innovation that led to USB-C and Lightning connectors. In a statement, Apple said that although it welcomed the European Commission’s commitment to protecting the environment, it favored a solution that left the device side of the charging interface open for innovation.

For the full commentary, see:

Elian Peltier. “E.U. Aims to Require USB-C Ports.” The New York Times (Friday, Sept. 24, 2021): B1 & B6.

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

(Note: the online version of the commentary has the date Sept. 23, 2021, and has the title “In a setback for Apple, the European Union seeks a common charger for all phones.”)

Central Planners’ Electric-Vehicle Push Is “More Political Showmanship Than Sound Planning”

(p. A1) The Toyota Prius hybrid was a milestone in the history of clean cars, attracting millions of buyers worldwide who could do their part for the environment while saving money on gasoline.

But in recent months, Toyota, one of the world’s largest automakers, has quietly become the industry’s strongest voice opposing an all-out transition to electric vehicles — which proponents say is critical to fighting climate change.

. . .

(p. A9) In statements, Toyota said that it was in no way opposed to electric vehicles. “We agree and embrace the fact that all-electric vehicles are the future,” Eric Booth, a Toyota spokesman, said. But Toyota thinks that “too little attention is being paid to what happens between today, when 98 percent of the cars and trucks sold are powered at least in part by gasoline, and that fully electrified future,” he said.

Until then, Mr. Booth said, it makes sense for Toyota to lean on its existing hybrid and plug-in hybrid vehicles to reduce emissions. Hydrogen fuel cell technology should also play a role. And any efficiency standards should “be informed by what technology can realistically deliver and help keep vehicles affordable,” the company said in a statement.

. . .

On paper, Toyota’s approach to zero-emissions vehicles, the hydrogen fuel cell, is a dream: Unlike battery-powered electric vehicles, these cars carry hydrogen tanks and fuel cells that turn the hydrogen into electricity. They refuel and accelerate quickly, and can travel for several hundred miles on a tank, emitting only water vapor. And hydrogen, theoretically, is abundant.

But a high sticker price, as well as lack of refueling infrastructure, has hampered the growth of a hydrogen economy, at least for passenger cars.

. . .

Jeffrey K. Liker, professor emeritus of industrial and operations engineering at the University of Michigan and author of “The Toyota Way,” said that there were other factors slowing Toyota’s push. A famously cautious company, Toyota has researched solid-state batteries, which are safer than the widely used lithium-ion technology, but readying that technology has taken longer than they expected, he said. Toyota has also spoken about not wanting to lay off employees or bankrupt suppliers in a rapid transition to electrics.

“Toyota’s view is also that countries are jumping in with the idea of the electric-vehicle endgame without a real plan, and it’s more political showmanship than sound planning,” Mr. Liker said.

For the full story, see:

Hiroko Tabuchi. “Maker of Prius Now Resisting Emissions Push.” The New York Times (Monday, July 26, 2021): A1 & A9.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. [sic] 6, 2021, and has the title “Toyota Led on Clean Cars. Now Critics Say It Works to Delay Them.”)

Liker’s book mentioned above is:

Liker, Jeffrey. The Toyota Way, 14 Management Principles from the World’s Greatest Manufacturer. 2nd ed: McGraw-Hill Education, 2021.