Category: Economics

Wrecking Ball for Bureaucracy That “Is Killing the Country”

(p. B4) America’s big tech companies are facing some of their toughest political challenges as they flirt with or surpass trillion-dollar valuations. Before lawmakers try to rein them in, Reid Hoffman argues government officials better be careful what they wish for.
Mr. Hoffman was chief operating officer of PayPal while it was still a small payments startup before he co-founded the professional social-network LinkedIn.
. . .
WSJ: You’re vociferously opposed to President Trump and even commissioned an anti-Trump card game. Does Silicon Valley have a problem with liberal bias?
Mr. Hoffman: I do think that there is a reflexive bias to liberalism that causes discomfort. I think you have that kind of left bias within the Silicon Valley culture, too, which is, “I’m so convinced that’s idiotic, I’m not listening to anything about it.” And that’s the problem. The problem is not actively listening. But that’s human. It’s not only here. Part of the reason [for strong negative reactions] to Trump is the flat-out lies.
WSJ: When you talk politics with Peter Thiel, PayPal’s co-founder and a well-known Trump supporter, what are those conversations like?
Mr. Hoffman: He’s a friend of mine, but we’ve disagreed about politics since we were college undergraduates. One thing we argue about is how much does Trump lie? I’ve been trying to advance him the case that there’s always been some lying around politicians, but Trump is one or two orders of magnitude worse than ever before. He says Obama is a bigger liar than Trump–based on, for example, the claim that under Obamacare you’d be able to spend as much time with your primary doctor as you did before Obamacare.
Peter thinks that the bureaucracy is killing the country and that you need a wrecking ball to shake it up, and maybe Trump is the only wrecking ball you get. His pro-Trump arguments are that someone needed to stand up to China. Trump at least is, [while] everyone else gave it lip service.

For the full interview, see:
Rolfe Winkler, interviewer. “A Silicon Valley Warning.” The Wall Street Journal (Thursday, Sept. 27, 2018): B4.
(Note: ellipsis added; bolded and bracketed words in original.)
(Note: the online version of the interview has the date Sept. 26, 2018, and the title “LinkedIn’s Co-Founder Warns of Perils in Regulating Big Tech.” The last question and answer quoted above, is included in the online, but not the print, version of the interview.)

Free Trade Benefits Harley-Riding Econometricians (and All Other Consumers Too)

Roughly 40 years ago, I completed a very useful econometrics course at the University of Chicago taught by the author of the commentary quoted below. Life is hard to predict, with or without econometrics. Who could have predicted that Eddie Lazear would end up on a Harley?

(p. A15) When I served in the George W. Bush administration, a group of Harley-Davidson -riding cabinet members and White House principals led the 2008 Memorial Day Rolling Thunder motorcycle parade. I own a 100th Anniversary Year Road King Classic. I am disappointed to see President Trump singling out the iconic American motorcycle company for harassment–a precedent that could inflict long-run damage on the U.S. economy.

. . .
Mr. Trump may genuinely believe his trade tactics will pressure other countries to reduce their tariffs, resulting in freer trade overall. This is unlikely. In the meantime his policies impose steep costs on American firms, like Harley-Davidson, and the people who want to buy from them. The best way to get others to buy American is to produce high-quality goods inexpensively. Those American products that do well abroad, Harley-Davidson motorcycles among them, succeed because consumers value them, not because tariffs and trade-war threats force them to buy American.

For the full commentary, see:
Edward Lazear. “Keep Your Tariffs off My Harley.” The Wall Street Journal (Tuesday, Aug. 28, 2018): A15.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Aug. 27, 2018.)

“No Clear Path” for A.I. to Match Humans in “Broad, Integrated, Flexible and Robust Understanding of the World”

The author of the comments quoted below is a Duke University Professor of Computer Science.

(p. A15) For those not working in AI, it can be difficult to interpret achievements in the field.
. . .
. . . the AI system solves problems in a very different way than humans.
. . .
Tasks that require responding to the same kind of standardized input over and over, with a clear measure of success, are a natural fit. Such tasks range from the diagnosis of medical images to flipping burgers. On the other hand, jobs that are messy and unpredictable and require an understanding of people and the broader world–I like to think of kindergarten teachers–will likely remain safe for a long time.
Much progress has been made in AI in a short time, so future breakthroughs are not unthinkable. For now, humans remain unsurpassed in their broad, integrated, flexible and robust understanding of the world.
. . .
. . . currently there is no clear path toward building such systems.

For the full commentary, see:
Vincent Conitzer. “Natural Intelligence Still Has Its Advantages; AI is disruptive, but it hasn’t rendered humanity obsolete.” The Wall Street Journal (Wednesday, Aug. 29, 2018): A15.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Aug. 28, 2018.)

Automation Predicted to Destroy 19 Million Old Jobs and Create 21 Million New Jobs

(p. B5) At least 21 new job categories may soon emerge from technological and other societal changes, says a new report from IT-services and consulting firm Cognizant Technology Solutions Corp.
With titles such as “genetic diversity officer,” “virtual store sherpa” and “personal memory curator,” these roles aren’t science fiction, the study’s authors argue. Rather, they are identified as jobs many employers will have to fill within the next decade.
“It’s easier to understand what types of jobs are going to go away,” says Ben Pring, director of Cognizant’s Center for the Future of Work, . . .   The idea behind the report, he says, was “to craft a credible narrative of what we’re going to gain.”
. . .
Mr. Pring and his colleagues say the dawning age of intelligent machines won’t be without painful upheaval: They estimate about 19 million positions in the U.S. will be automated out of existence in the next 15 years, while employers create some 21 million new roles. At the same time, the majority of existing ones will likely be enhanced. “Work will change, but it won’t go away,” Mr. Pring says.

For the full story, see:
Vanessa Fuhrmans. “A Future Without Jobs? Think Again.” The Wall Street Journal (Thursday, November 16, 2017): B5.
(Note: ellipses added.)
(Note: the online version of the story has the date Nov. 15, 2017, and has the title “How the Robot Revolution Could Create 21 Million Jobs.”)

The Cognizant report, mentioned above, is:
Pring, Ben, Robert H. Brown, Euan Davis, Manish Bahl, and Michael Cook. “21 Jobs of the Future: A Guide to Getting – and Staying – Employed for the Next 10 Years.” Teaneck, NJ: Cognizant’s Center for the Future of Work, Nov. 15, 2017.

“Much Less” Poverty in U.S. Now Than 30 Years Ago

(p. A15) Instead of focusing on reported incomes, our work measures poverty based on consumption: what food, housing, transportation and other goods and services people are able to purchase. This approach, which captures the effect of noncash programs and accounts for the known bias in the CPI-U, demonstrates clearly that there is much less material deprivation than there was decades ago.
Other indicators support this finding. According to the American Housing Survey, the poorest 20% of Americans live as the middle class did a generation ago as measured by the square footage of their homes, the number of rooms per person, and the presence of air conditioning, dishwashers and other amenities. In terms of housing problems like peeling paint, leaks and plumbing issues, today’s poor haven’t quite matched the living standards of the 1980s middle class, but they are getting close.

For the full commentary, see:
Bruce D. Meyer and James X. Sullivan. “Hardly Anyone Wants to Admit America Is Beating Poverty; The White House tells the truth, but partisans on both sides are wedded to the idea of failure.” The Wall Street Journal (Tuesday, Aug. 7, 2018): A15.
(Note: the online version of the commentary has the date Aug. 6, 2018.)

Hershey Gave the World Chocolate Candy and a Single, Very Rich, Residential School

(p. A19) In the early 20th century, Milton Hershey transformed chocolate from a luxury good to a working-class staple. It made him a fortune, which he used to establish Hershey, Pa.–a model company town 100 miles west of Philadelphia and the self-proclaimed “sweetest place on earth.” He also established an orphanage, the Milton Hershey School, to provide housing and education primarily for children from the area.
. . .
Other early-20th-century philanthropists, such as Andrew Carnegie and John D. Rockefeller, left behind massive general-purpose foundations that underwrote experiments in medicine, science and higher education, Mr. Kurie observes, while Hershey “gave us chocolate candy and a single residential school in south-central Pennsylvania that remains little known outside the region.”
. . .
. . . , [Mr. Kurie] suggests that the trust can be viewed as a model of philanthropic responsibility, even by institutions without a devoutly local focus. Mr. Kurie’s most significant contribution here is to draw attention to philanthropy’s “external stakeholders,” those people and organizations “who are neither agents nor subjects of philanthropy but who are, for better or worse, caught up in its activities.” He demonstrates how a philanthropic institution can continue to reflect a founder’s vision while shaping and being shaped by the community that grows up around it, one whose bonds can often be bittersweet.

For the full review, see:
Benjamin Soskis. BOOKSHELF; A Man, a Brand, a School, a Town.” The Wall Street Journal (Monday, March 26, 2018): A19.
(Note: ellipses, and bracketed name, added.)
(Note: the online version of the review has the date March 25, 2018, and has the title “BOOKSHELF; ‘In Chocolate We Trust’ Review: A Man, a Brand, a School, a Town.”)

The book under review, is:
Kurie, Peter. In Chocolate We Trust: The Hershey Company Town Unwrapped. Philadelphai, PA: University of Pennsylvania Press, 2018.

Kilby Invented Transistor While Flouting Mandated Summer Vacation

(p. A15) Sixty years. But how much longer? In 1958 Jack St. Clair Kilby–from Great Bend, Kan.–created one of the greatest inventions, a great bend, in the history of mankind. Kilby recently had started at Texas Instruments as an electrical engineer. Most everyone left on a mandated summer break, but he stayed in the lab and worked on combining a transistor, capacitor and three resistors on a single piece of germanium. On Sept. 12, he showed his boss his integrated circuit. At a half-inch long and not very wide, it had ugly wires sticking out, resembling an upside-down cockroach glued to a glass slide.
. . .
Brace yourself. When Moore’s Law finally gives up the ghost, productivity and economic growth will roll over too–unless. The world needs another Great Bend, another Kilbyesque warp in the cosmos, to drive the economy.
. . .
Let’s hope the next Jack Kilby skipped this summer’s vacation.

For the full commentary, see:
Kessler, Andy. “INSIDE VIEW; The Chip That Changed the World; Jack Kilby built the first integrated circuit 60 years ago. We need a new Moore’s Law.” The Wall Street Journal (Monday, Aug. 27, 2018): A15.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Aug. 26, 2018.)

To Bacharach, Retiring from Music “Is Like Dying”

(p. 6B) NEW YORK (AP) — At age 90, Burt Bacharach hasn’t lost faith in the power of music.
“Music softens the heart, makes you feel something if it’s good, brings in emotion that you might not have felt before,” he said. “It’s a very powerful thing if you’re able to do to it, if you have it in your heart to do something like that.”
. . .
Bacharach says he has no plans to stop writing or performing. He contributes music to a new album by Elvis Costello, a longtime admirer with whom Bacharach has worked with before, and he continues to tour.
“You can throw up your hands and say, ‘I can’t do this anymore,’ but it’s what I do. I’m not just going to stop and retire, that is like dying, you know.”

For the full story, see:
AP. “School shootings inspire song by Bacharach, 90.” Omaha World-Herald (Tuesday, September 28, 2018): 6B.
(Note: ellipsis added.)

“Regulatory Humility” Enabled 4G “Entrepreneurial Brilliance”

(p. A15) America dominated 4G because the government largely got out of the way of risk-takers. U.S. regulators, unlike their European counterparts, didn’t try to mandate technical standards or require forced sharing of their wireless networks with competitors. Regulatory humility produced one of the greatest explosions of entrepreneurial brilliance in human history, the mobile internet.
Today the FCC is helping speed 5G deployment by modernizing regulations. Last December it removed utility-style regulations placed on wireless broadband by the Obama administration. On Sept. 26, it pre-empted localities from charging outrageous fees for 5G deployment. It is also gearing up to auction more spectrum in November to help connect the Internet of Things. Tax reform and the Trump administration’s broader deregulatory agenda have also created a more business-friendly environment.
But more should be done. Antitrust officials should update their definitions of markets to give more clarity to 5G entrepreneurs. As T-Mobile and Sprint argue in their merger filings, 5G and free Wi-Fi will compete head-to-head with cable broadband for in-home use.
Regulators also need to recognize that as 5G emerges, old categories are becoming scrambled. Consumers don’t necessarily know, or care, if their content comes from an online provider, a broadcaster, a cable channel or a “tech” company, so long as they can get it on their phone or tablet. Regulations must allow companies to invest, innovate, and merge in this new ecosystem.

For the full commentary, see:
Robert M. McDowell. “To Boost 5G, Keep the Industry Free.” The Wall Street Journal (Friday, Sept. 28, 2018): A15.
(Note: the online version of the commentary has the date Sept. 27, 2018.)

Growing Percent of Seniors Choose Entrepreneurship Over Retirement

(p. A17) Fed up, Mr. Grupper decided to try something new: being his own boss.
. . .
“The risks have paid off,” he said. “I’m making money doing what I love to do.”
. . .
These “encore entrepreneurs” are increasingly finding their niche: Their numbers are growing more than twice as fast as the population of New Yorkers over 50. Now a new report by the Center for an Urban Future, a nonprofit research and policy organization, has documented the trend using an analysis of census and labor data and dozens of interviews with organizations that work with entrepreneurs.
“Ask most New Yorkers to picture an entrepreneur, and they imagine a 20- or 30-something in jeans and sneakers. But the face of entrepreneurship across New York City is changing,” reads the report, “Starting Later: Realizing the Promise of Older Entrepreneurs in New York City.”
The number of self-employed New Yorkers who were at least 50 rose to 209,972 in 2016, up 63.7 percent from 128,282 in 2000. By comparison, the number of city residents overall who were at least 50 rose just 28.5 percent to 2.67 million from 2.08 million during that same period.
These older New York entrepreneurs are also part of a national trend, driven partly by the financial crisis a decade ago. Still, their numbers have grown even as the economy has rebounded. In August [2018], the national unemployment rate was 3.9 percent overall, and 3.1 percent for those 55 years and over, according to the Bureau of Labor Statistics.
For many, it means no more answering to bosses half their age, or making do with part-time jobs bagging groceries to get by in their golden years.

For the full story, see:
Winnie Hu. “They’re Over 50, and Excited for a New Start(up).” The New York Times (Tuesday, Sept. 18, 2018): A17.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the story has the date Sept. 17, 2018, and has the title ” of the New York edition with the headline: “Retire? These Graying ‘Encore Entrepreneurs’ Are Just Starting Up.”)

Unemployed Robot Can Open Doors, If the Doors Have the Right Handles

(p. B1) WALTHAM, Mass. — Moving like a large dog, knees bent and hips swaying, the robot walked across a parking lot and into a rain puddle.
There, it danced a jig, splashing water across the asphalt. Then it turned and trotted toward a brick building, climbing over a curb and stopping within inches of a floor-length window. Pausing for several seconds, it seemed to eye its own reflection in the glass.
The scene was mesmerizing — so mesmerizing, it was easy to forget that a woman was guiding the four-legged machine from across the parking lot, a joystick in her hands and a laptop computer strapped to her waist.
The robot was called SpotMini. It was designed by Boston Dynamics, a company widely known for building machines that move like animals and humans. Thanks to a steady stream of YouTube videos from the otherwise secretive robotics lab, its machines have become an internet phenomenon.
But YouTube fame has not translated to very much revenue. In the coming year, Boston Dynamics, which was founded in 1992, plans to start selling the SpotMini, its first commercial robot. The mechanical dog would be a turning point for an outfit that has bewildered people with both its wondrous technology and its seeming lack of interest in making things someone — anyone — would actually want to buy.
Even now, it is not entirely clear what someone would do with one of these robots. That makes it hard to get past a question people have been asking about Boston Dynamics for years: Is this a business or a research lab?
. . .
(p. B4) Walking through the Boston Dynamics lab, Mr. Raibert, 68, wore bluejeans and a Hawaiian shirt, as he does nearly every day. He wants to build robots that can do what humans and animals can do. That was his aim in the early 1980s, when he founded the Leg Lab at Carnegie Mellon University in Pittsburgh. And it was his aim when he moved the lab to M.I.T.
. . .
No machine comes closer to his vision than Atlas, a 165-pound anthropomorphic robot that can run, jump and even do back flips. Mr. Raibert would not let us shoot video of Atlas or other robots while inside the lab. But he did give a brief demonstration of the machine.
Like the SpotMini, Atlas is controlled by a joystick, a laptop computer and a wireless radio. When Mr. Raibert signaled for the demo, an engineer touched the joystick and the 165-pound robot crashed to the floor. Atlas is so large and so lifelike, you feel bad for it.
. . .
SpotMini is smaller and cheaper and has better balance than Atlas. It can carry (small) items on its back, and it can open doors (provided the doors have the proper handles). This requires an extra limb that attaches between its shoulders.

For the full story, see:
Cade Metz. “‘For Sale: One Robot In Search Of a Job.” The New York Times (Saturday, Sept. 22, 2018): B1 & B4.
(Note: ellipses added.)
(Note: the online version of the story has the date Sept. 21, 2018, and has the title “‘These Robots Run, Dance and Flip. But Are They a Business?”)