Boeing Maximized Short-Term Profits Instead of Long-Term Quality (and Profits)

(p. A19) Boeing remains one of America’s leading manufacturers, but it is reduced in reputation as well as equity. The “fall” that Mr. Robison’s subtitle alludes to is the corrosion of a culture that had emphasized quality.

. . .

Mr. Robison is upset that Boeing followed the unremarkable philosophy of the Business Roundtable (recently revised under woke pressure) that the first duty of any company is to its shareholders. He says that Boeing focused on metrics that “tend to favor investors over employees and customers.” This is an easy but misworded critique. In the long term, the interests of shareholders and customers are aligned. A manufacturer that disregards either customers or employees will eventually not have profits to distribute.

In fact, Boeing forgot that its long-term success depended on its reputation for superior engineering. Executives like Alan Mulally, project leader in the 1990s for the costly but highly successful Boeing 777, were passed over for the top job. The corporate metamorphosis was accelerated by the 1997 merger with rival McDonnell Douglas. The executive suite was colonized by such figures as McDonnell’s Harry Stonecipher, a Jack Welch protégé who was explicit about changing the culture. His intent, he said, was to run Boeing “like a business rather than a great engineering firm.” Increasingly that meant doing whatever it took to hike the share price. Phil Condit, the CEO who orchestrated the merger, pushed his managers to quintuple the stock in five years, which suggested that his eye was on Wall Street and not on the planes.

. . .

Test flights showed a tendency for the MAX to pitch up. Designers corrected the problem on the cheap, with software that pushed the nose down. Somewhat perilously, a single sensor measuring the angle of the wings against oncoming air could force the plane into a downward trajectory. An optional cockpit indicator—alerting pilots that the sensor might be faulty—was not included on cheaper models. And the sensors, which sat outside the plane, were vulnerable to bird strikes or improper installation.

. . .

. . ., the FAA, as Mr. Robison shows, was compromised by years of having adapted its regulatory role to promote manufacturers. Even after the first plane went down, it kept the MAX flying—despite an agency analysis predicting more crashes.

For the full review, see:

Roger Lowenstein. “BOOKSHELF; Downward Trajectory.” The Wall Street Journal (Monday, Nov. 29, 2021): A19.

(Note: ellipses added.)

(Note: the online version of the review has the date November 28, 2021, and has the title “BOOKSHELF; ‘Flying Blind’ Review: Downward Trajectory.”)

The book under review is:

Robison, Peter. Flying Blind: The 737 MAX Tragedy and the Fall of Boeing. New York: Doubleday, 2021.

Applying Coase Theorem to Refute the Externality Argument Used to Defend Covid-19 Mandates and Lockdowns

(p. A17) The online Merriam-Webster dictionary defines “anti-vaxxer” as “a person who opposes the use of vaccines or regulations mandating vaccination.” Where does that leave us? We both strongly favor vaccination against Covid-19; one of us (Mr. Hooper) has spent years working and consulting for vaccine manufacturers. But we strongly oppose government vaccine mandates. If you’re crazy about Hondas but don’t think the government should force everyone to buy a Honda, are you “anti-Honda”?

. . .

. . ., early in the pandemic the Food and Drug Administration used its coercive power to discourage the development of diagnostic tests for Covid-19. The FDA required private labs wanting to develop tests to submit special paperwork to get approval that it had never required for other diagnostic tests. That, in combination with the CDC’s claims that it had enough testing capacity, meant that testing necessitated the use of a CDC test later determined to be so defective that it found the coronavirus in laboratory-grade water.

With voluntary approaches, we get the benefit of millions of people around the world actively trying to solve problems and make our lives better. We get high-quality vaccines from BioNTech/ Pfizer, Johnson & Johnson and Moderna, instead of the suspect vaccines from the governments of Cuba and Russia. We get good diagnostic tests from Thermo Fisher Scientific instead of the defective CDC one. We get promising therapeutics such as Pfizer’s Paxlovid and Merck’s molnupiravir.

. . .

The supposed trump card of those who favor coercion is externalities: One person’s behavior can put another at risk. But that’s only half the story. The other half is that we choose how much risk we accept. If some customers at a store exhibit risky behavior, then we can vaccinate, wear masks, keep our distance, shop at quieter times, or avoid the store.

Economists understand how one person can impose a cost on another. But it takes two to tango, and it’s generally more efficient if the person who can change his behavior with the lower cost changes how he behaves. In other words, to perform a proper evaluation of policies to deal with externalities, we must consider the responses available to both parties. Many people, including economists, ignore this insight.

For the full commentary, see:

David R. Henderson and Charles L. Hooper. “Coercion Made the Pandemic Worse.” The Wall Street Journal (Tuesday, December 28, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 27, 2021, and has the same title as the print version.)

Entrepreneurs Re-Purpose Old High-Ceiling Mills as Well-Ventilated Restaurants That Reduce Virus Spread

(p. B7) On a typical evening at the Wool Factory, a renovated textile mill in Charlottesville, Va., guests savor local wine and hors d’oeuvres in a spacious courtyard decorated with festive string lights. Between bites and sips, their eyes might gaze at the factory, a 100-year-old red brick building where as many as 200 workers once made military uniforms, but which now houses a fine-dining restaurant, a brewery and an event space.

. . .

The Wool Factory is part of a larger effort by developers to convert grain, textile and water mills that came of age during the Industrial Revolution.

. . .

“They’re incredible spaces to be in, with 15-foot-high ceilings and huge windows with great views, which makes them a desirable place to develop,” Catherine De Almeida, an assistant professor in the College of Built Environments at the University of Washington in Seattle.

. . . the ample open space makes them easy to configure and attract guests who want to socially distance during the pandemic.

. . .

Terra Nova recently transformed a 19th-century flour and cotton mill into the $25 million Whitehall Mill, which attracts diners to its 190-seat oyster farm and seafood restaurant, True Chesapeake Oyster Company. Its 200-seat food emporium, Whitehall Market, features eight tenants, including a cheese seller, Firefly Farms Market and a nationally renowned pastry vendor, Crust by Mack.

When Whitehall Mill’s events venue couldn’t open last year because of the pandemic, the developer could use that space to allocate an additional 75 seats for the restaurants, bringing in more business at a time when they were forced to operate in a limited capacity, Mr. Tufaro said. Guests cautious about indoor dining can sit in the mill’s substantial outdoor space, with 125 patio seats between the restaurant and market.

“I think it’s partly the attraction for the old that inspires people,” Mr. Tufaro said. “The other is, it turns out, they’re very adaptable to new uses.”

For the full story, see:

Julekha Dash. “Turning Old Mills Into Vibrant Destinations.” The New York Times (Wednesday, December 22, 2021): B7.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 21, 2021, and has the title “Renovated Mills Offer a Perk in the Age of Social Distancing: Space.”)

Mars Can Be Terraformed to Reduce Costs of Colonization

(p. D5) Since joining NASA in 1980, Jim Green has seen it all. He has helped the space agency understand Earth’s magnetic field, explore the outer solar system and search for life on Mars. As the new year arrived on Saturday, he bade farewell to the agency.

Over the past four decades, which includes 12 years as the director of NASA’s planetary science division and the last three years as its chief scientist, he has shaped much of NASA’s scientific inquiry, overseeing missions across the solar system and contributing to more than 100 scientific papers across a range of topics. While specializing in Earth’s magnetic field and plasma waves early in his career, he went on to diversify his research portfolio.

. . .

Ahead of a December [2021] meeting of the American Geophysical Union in New Orleans, Dr. Green spoke about some of this wide-ranging work and the search for life in the solar system. Below are edited and condensed excerpts from our interview.

. . .

    You’ve previously suggested it might be possible to terraform Mars by placing a giant magnetic shield between the planet and the sun, which would stop the sun from stripping its atmosphere, allowing the planet to trap more heat and warm its climate to make it habitable. Is that really doable?

Yeah, it’s doable. Stop the stripping, and the pressure is going to increase. Mars is going to start terraforming itself. That’s what we want: the planet to participate in this any way it can. When the pressure goes up, the temperature goes up.

The first level of terraforming is at 60 millibars, a factor of 10 from where we are now. That’s called the Armstrong limit, where your blood doesn’t boil if you walked out on the surface. If you didn’t need a spacesuit, you could have much more flexibility and mobility. The higher temperature and pressure enable you to begin the process of growing plants in the soils.

There are several scenarios on how to do the magnetic shield. I’m trying to get a paper out I’ve been working on for about two years. It’s not going to be well received. The planetary community does not like the idea of terraforming anything. But you know. I think we can change Venus, too, with a physical shield that reflects light. We create a shield, and the whole temperature starts going down.

For the full story, see:

Jonathan O’Callaghan, interviewer. “Inhabiting Mars? He Calls It ‘Doable.’” The New York Times (Tuesday, January 4, 2022): D5.

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

(Note: the online version of the story has the date Jan. 2, 2021, and has the title “NASA’s Retiring Top Scientist Says We Can Terraform Mars and Maybe Venus, Too.” The first three paragraphs, and the block-indented sentence and question, are by the interviewer Jonathan O’Callaghan. The answer after the question is by Jim Green.)

Butterworth Made “Steady Forward Progress” an “Ingenious” Business Model for Tractor Success

(p. A15) The story of Ford’s dream of perfecting an affordable, all-purpose tractor—or, as Ford later imagined it, a gasoline-powered “automobile plow”—is seldom told. Neil Dahlstrom’s “Tractor Wars” tells it well.

. . .

By 1918 there were many competitors in America’s great tractor pull. Most were small or mid-sized firms, including the Gas Traction Co. of Minneapolis, and the Moline (Ill.) Plow Co. and the Waterloo (Iowa) Gasoline Engine Co. Two ultimately broke out of the pack with loud, gas-guzzling chugs.

. . .

Early attempts by International Harvester to develop a gas-powered tractor were only moderately successful, but in 1920 its engineers made a breakthrough, converting the two front wheels into “traction wheels,” moving the engine from the rear to the middle, and adding three reverse speeds. All of this, plus enhancements to compatible cultivating attachments, made Harvester’s Farmall tractor competitive with the Fordson.

Ford’s other chief rival was the John Deere Co. Its earliest claim to fame was becoming the “world’s largest manufacturer of steel plows.” The company shifted course in 1907 when William Butterworth, the son-in-law of Charles Deere, took control. According to Mr. Dahlstrom, Butterworth was “cautious with the family money that still financed the company, pushing for long-term gains in a cyclical, low-margin, weather-dependent business.” While some outsiders “mistook Butterworth’s preference for steady forward progress as indecision,” his business model turned out to be ingenious.

. . .

Mr. Dahlstrom, to his credit, has written a superb history of the tractor and this long-forgotten period of capitalism in U.S. agriculture.

For the full review, see:

Michael Taube. “BOOKSHELF; American Power Pull.” The Wall Street Journal (Thursday, December 30, 2021): A15.

(Note: the online version of the review has the date December 29, 2021, and has the title “BOOKSHELF; ‘Tractor Wars’ Review: American Power Pull.”)

The book under review is:

Dahlstrom, Neil. Tractor Wars: John Deere, Henry Ford, International Harvester, and the Birth of Modern Agriculture. Dallas, TX: Matt Holt Books, 2022.

The “Adventure” and “Fun” of Driving Cars

(p. B6) For one Monday in early December, the New York Stock Exchange played the role of vintage car museum. At one end of Broad Street, outside the exchange, sat a high-roofed and stately 1921 Duesenberg coupe. At the other, a fearsome 1966 Ford GT40 racecar. Between them, encased in a glass vitrine, was an imperturbably cheery 1967 Porsche 911S.

Shaking hands by the coffee stand was McKeel Hagerty. The chief executive of the classic car insurance company that bears his name, Mr. Hagerty was there to ring the opening bell, and celebrate the first day of trading for his newly public company (HGTY). Later, at a brunch in the Big Board’s boardroom, Mr. Hagerty wielded a ceremonial gavel and said, “This is only just the beginning.”

The origins of Hagerty, the company, are far humbler. It was founded by his parents, Frank and Louise, in 1984, in their basement in Traverse City, Mich., as a boutique insurer of wooden boats.

In the early 1990s, the company began insuring collectible cars. With Mr. Hagerty at the helm, it has become one of the largest indemnifiers of vintage vehicles, with over two million classics on its rolls. The actuarial data necessary to determine repair and replacement costs on these cars has also made it a foremost authority on their valuation.

. . .

Hagerty went public via a SPAC, or special-purpose acquisition company, raising roughly $265 million in the process with a goal of expanding. So, what are Hagerty’s ambitions now? And why did it need to become a publicly traded company in order to achieve them?

“The purpose of the company is to save driving and car culture,” Mr. Hagerty said flatly, as we piloted a zippy, Hagerty-insured 1972 BMW 2002 tii toward the tip of Lower Manhattan. “If we’re going to save car culture, we have to make investments outside of the core business, and really help create a whole ecosystem.” Achieving this lofty goal required hundreds of millions of dollars in additional investment, he said: “That would have been tough for us to afford just as a private company.”

. . .

Outside experts agreed with this assessment of Mr. Hagerty’s vocation. “They encourage driving. Their tag lines all the time are, ‘Drive your cars,’” Mr. Gross said. “In some ways, you think, that’s a little strange for an insurance company. You think they’d want you to drive as little as possible to minimize the risk.” He laughed.

Instead, Mr. Hagerty said he sincerely wants to help people find the pleasure in “the experiential sides” of the automobile, those organized around adventure, preservation, culture and legacy. “I think that if we can help steward along the reasons that people drive and love cars, other than to get from Point A to Point B, then we win.”

Mr. Gross concurred with this plan. “I don’t know how many companies there are that take the long way around. And that’s what Hagerty is doing here. They’re not only selling insurance. They’re trying to make sure that the reason you need that insurance is viable and fun, and lots of people are doing it,” he said. “As a business strategy, it’s pretty smart.”

For the full commentary, see:

Brett Berk. “A Classic Car Insurer’s Vision to ‘Save Driving’.” The New York Times (Friday, Dec. 17, 2021): B6.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 16, 2021, and has the title “A Classic Car Giant With a Lofty Mission: Save Driving.”)

Scientists Should Not Censor Contrarian Conjectures from Outsiders

On Nov. 3, 2021 I presented my paper “Galilean Science: The Impediment to Progress When Science as Doctrine Wins Over Science as Process” at Day 3 of the Organisation [sic] for Economic Co-operation and Development (OECD) “Workshop on AI and the Productivity of Science.” The OECD has 38, mainly European, governments as members and has the objective of finding policies to advance the economic progress of the world.

The link above is to OECD’s recently posted YouTube Zoom recording of all of Day 3. My presentation starts at about 1:23.

In the session where I presented my paper, we were asked to answer one of a couple of questions. I chose to focus on the question: “What is the most important impediment to raising the productivity of science, and why?” My answer, in brief, was that science is impeded when authorities require adherence to the dominant doctrines, censoring rather than permitting the contrarian conjectures from outsiders who advance us toward truth.

Galilean science is also discussed on p. 129 of my Openness book:

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

E-Mobility Devices Offer Consumers “Lower Virus Risk” and More Convenience Than Public Transit

(p. A9) A boom in electric-powered mobile devices is bringing what is likely to be a lasting change and a new safety challenge to New York’s vast and crowded street grid.

The devices have sprouted up all over. Office workers on electric scooters glide past Manhattan towers. Parents take electric bikes to drop off their children at school. Young people have turned to electric skateboards, technically illegal on city streets, to whiz through the far corners of New York.

Though many of these riders initially gave up their subway and bus trips because of the lower virus risk of traveling outdoors, some say they are sticking with their e-mobility devices even as the city begins to move beyond the pandemic.

“I use the scooter for everything, it’s really convenient,” said Shareese King, 41, a Bronx resident who deleted the Uber app from her phone after she started running her errands on an electric scooter.

Electric bikes, scooters and other devices are in many cases made for urban life because they are affordable, better for the environment, take up little, if any, street space for parking and are just fun to use, said Sarah M. Kaufman, the associate director of the Rudin Center for Transportation Policy and Management at New York University.

For the full story, see:

Winnie Hu and Chelsia Rose Marcius. “As Personal E-Mobility Spreads, Safety Challenges Grow.” The New York Times (Tuesday, October 28, 2021): A9.

(Note: the online version of the story was updated Nov. [sic] 8, 2021, and has the title “As E-Scooters and E-Bikes Proliferate, Safety Challenges Grow.”)

Small Modular Reactors Are Safer and Cheaper Than Older Reactors and Generate More Predictable Carbon-Free Energy Than Can Wind and Sun

(p. B13) Nuclear energy is a rare thing—a carbon-free energy source that isn’t hyped and enjoys bipartisan support in Washington. The big question now is whether new technologies that might lower the costs actually work.

Governments are reconsidering nuclear power, given its ability to provide predictable carbon-free energy.

. . .

“Modular” nuclear fission plants are where the real promise lies. Simpler designs, standardized components and passive safety features all help reduce costs. Being smaller can make it easier to find sites and integrate into a grid with intermittent renewables. Proponents estimate that modular reactors could more than halve the cost and build time associated with traditional ones.

One approach uses existing technologies to build small modular reactors, known as SMRs. They generate anything from a few megawatts to 500, compared with around 1,000 or more for a typical conventional reactor. The controlled fission reaction splits uranium, which heats water into steam, driving a turbine to generate electricity. Water also cools the reactor. SMRs use passive safety features, such as placement underground or in a pool of water, to reduce the need for some more expensive measures. It makes them cheaper to build, but opponents worry it could be a recipe for more disasters.

. . .

Others are trying to build modular reactors with new technology, such as novel nuclear fuels or cooling systems involving gas or salt instead of water. These advanced designs are intended to reduce the risk of accidents and build in more flexibility for intermittent power.

. . .

In 2020, the U.S. Department of Energy’s Advanced Reactor Demonstration Program co-founded two advanced nuclear reactor demonstration plants to be completed by 2027. The first is designed by Bill Gates-backed TerraPower in partnership with GE-Hitachi. It will feature a 345 MW sodium-cooled fast reactor with integrated energy storage on the site of a retiring coal plant in Wyoming. The second will be built in Washington state by X-Energy using four of its 80 MW helium gas-cooled reactors fueled by special uranium pebbles.

. . .

There is also innovation in nuclear fusion—combining atoms to generate energy—which comes with fewer safety and waste concerns. This month, Commonwealth Fusion Systems secured $1.8 billion in funding with promises to build reactors in the 2030s. But many think commercially viable fusion remains a very long shot.

For the full commentary, see:

Rochelle Toplensky. “Nuclear Power’s Second Chance.” The Wall Street Journal (Tuesday, Dec. 21, 2021): B13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 20, 2021, and has the title “Nuclear Power Has a Second Chance to Prove Itself.”)

“Two Self-Made Mill Owners” in Golden Age of Capitalism Collected and Preserved “Literary Treasures”

(p. C6) A consortium of British libraries and museums has announced that it successfully raised more than $20 million to buy a “lost” library containing rare manuscripts by Robert Burns, Walter Scott and the Brontës, heading off an auction and preserving the collection intact.

. . .

“A collection of literary treasures of this importance comes around only once in a generation,” Richard Ovenden, the head of the Bodleian Libraries at Oxford, said in a news release earlier this month announcing the deal.

. . .

Alfred and William Law, two self-made mill owners who grew up less than 20 miles from the Brontë home in Haworth (which is now the Brontë Parsonage Museum), began collecting what became the Honresfield Library in the 1890s.

. . .

In the announcement, Gabriel Heaton, the Sotheby’s specialist who organized the planned sale, called it “a collection like no other that has come to market in recent decades.”

For the full story, see:

Jennifer Schuessler. “$20 Million Raised to Preserve a ‘Lost Library’.” The New York Times (Saturday, December 25, 2021): C6.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 24, 2021, and has the title “Group Raises $20 Million to Preserve ‘Lost’ Brontë Library.”)

“Endless” Trial-and-Error Experiments Led to Creation of Islet Cells to Cure Type 1 Diabetes

(p. 1) Brian Shelton’s life was ruled by Type 1 diabetes.

. . .

His ex-wife, Cindy Shelton, took him into her home in Elyria, Ohio. “I was afraid to leave him alone all day,” she said.

Early this year, she spotted a call for people with Type 1 diabetes to participate in a clinical trial by Vertex Pharmaceuticals. The company was testing a treatment developed over decades by a scientist who vowed to find a cure after his baby son and then his teenage daughter got the devastating disease.

Mr. Shelton was the first patient. On June 29, [2021] he got an infusion of cells, grown from stem cells but just like the insulin-producing pancreas cells his body lacked.

Now his body automatically controls its insulin and blood sugar levels.

Mr. Shelton, now 64, may be the first person cured of the disease with a new treatment that has experts daring to hope that help may (p. 18) be coming for many of the 1.5 million Americans suffering from Type 1 diabetes.

“It’s a whole new life,” Mr. Shelton said. “It’s like a miracle.”

. . .

One problem was the source of the cells — they came from unused fertilized eggs from a fertility clinic. But in August 2001, President George W. Bush barred using federal money for research with human embryos. Dr. Melton had to sever his stem cell lab from everything else at Harvard. He got private funding from the Howard Hughes Medical Institute, Harvard and philanthropists to set up a completely separate lab with an accountant who kept all its expenses separate, down to the light bulbs.

Over the 20 years it took the lab of 15 or so people to successfully convert stem cells into islet cells, Dr. Melton estimates the project cost about $50 million.

The challenge was to figure out what sequence of chemical messages would turn stem cells into insulin-secreting islet cells. The work involved unraveling normal pancreatic development, figuring out how islets are made in the pancreas and conducting endless experiments to steer embryonic stem cells to becoming islets. It was slow going.

. . .

The next step for Dr. Melton, knowing he’d need more resources to make a drug that could get to market, was starting a company.

. . .

His company Semma was founded in 2014, a mix of Sam and Emma’s names.

One challenge was to figure out how to grow islet cells in large quantities with a method others could repeat. That took five years.

The company, led by Bastiano Sanna, a cell and gene therapy expert, tested its cells in mice and rats, showing they functioned well and cured diabetes in rodents.

At that point, the next step — a clinical trial in patients — needed a large, well financed and experienced company with hundreds of employees. Everything had to be done to the exacting standards of the Food and Drug Administration — thousands of pages of documents prepared, and clinical trials planned.

Chance intervened. In April 2019, at a meeting at Massachusetts General Hospital, Dr. Melton ran into a former colleague, Dr. David Altshuler, who had been a professor of genetics and medicine at Harvard and the deputy director of the Broad Institute. Over lunch, Dr. Altshuler, who had become the chief scientific officer at Vertex Pharmaceuticals, asked Dr. Melton what was new.

Dr. Melton took out a small glass vial with a bright purple pellet at the bottom.

“These are islet cells that we made at Semma,” he told Dr. Altshuler.

Vertex focuses on human diseases whose biology is understood. “I think there might be an opportunity,” Dr. Altshuler told him.

Meetings followed and eight weeks later, Vertex acquired Semma for $950 million. With the acquisition, Dr. Sanna became an executive vice president at Vertex.

. . .

Less than two years after Semma was acquired, the F.D.A. allowed Vertex to begin a clinical trial with Mr. Shelton as its initial patient.

For the full story, see:

Gina Kolata. “A Cure for Severe Diabetes? For an Ohio Patient, It Worked.” The New York Times, First Section (Sunday, November 28, 2021): 1 & 18.

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

(Note: the online version of the story has the date Nov. 27, 2021, and has the title “A Cure for Type 1 Diabetes? For One Man, It Seems to Have Worked.”)