Category: Entrepreneurship

Deregulation “Unleashed Powerful Forces of Innovation and Consumer Benefit”

(p. A13) The railroads harmed small merchants who were tied to the older system of roads and canals. But even those who benefited from railroads—notably farmers and producers of raw materials—feared the power of the enterprises that provided them with large new markets. The anxieties of innumerable small players generated powerful political energy, culminating in the Interstate Commerce Act of 1887, which created the ICC—and with it the template of the independent regulatory commission.

The historian Gabriel Kolko famously argued that the ICC was created by and for the railroads themselves, as a solution to a problem of intense competition. But more-recent research has shown that the interests of shippers were also at play, and by the early 20th century the ICC had essentially been captured by the shippers. The result for the railroads was absurdly low rates of return and an inability to raise capital. The ICC also became a bottleneck through which virtually all railroad business decisions had to pass.

Thus began the long and steady decline of the American railroad industry, which wasn’t arrested until surface freight was deregulated (and the ICC ultimately abolished) in the 1970s. Throughout its life, the ICC repeatedly stood in the way of innovation, including containerized shipping.

. . .

It is fashionable nowadays to dismiss unleashed powerful forces of innovation and consumer benefit of the late 20th century as an unfortunate if fleeting episode of “neoliberalism.” In fact, dismantling some of America’s rigid and retrogressive regulatory institutions unleashed powerful forces of innovation and consumer benefit. Before we attempt to rebuild those structures, we need to examine the lessons of history.

For the full commentary, see:

Richard N. Langlois. “Warren and Graham Emulate History’s Failed Regulators.” The Wall Street Journal (Saturday, Aug. 5, 2023): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 4, 2023, and has the same title as the print version.)

Langlois’s commentary can be viewed as an application of the narrative in his book:

Langlois, Richard N. The Corporation and the Twentieth Century: The History of American Business Enterprise. Princeton: Princeton University Press, 2023.

Foundations with an End Date May Honor the Donor’s Intent

(p. C6) This year, the William E. Simon Foundation is closing its doors, or “sunsetting,” in the parlance of modern philanthropy. Since it was founded in 1967 by former Treasury Secretary William E. Simon and his wife Carol, the foundation has given away almost $300 million to the causes that mattered to them—faith, family and education.

. . .

Traditionally, sunsetting a foundation has appealed to more conservative donors. Bill Simon, Jr., who manages the Simon Foundation along with his six siblings, says that his late father set a closing date because he had seen “foundations that seemed to veer off of their donor’s intent.” Simon recalls: “Dad trusted his own seven children to know where he would have put his money…But as much as he loved his grandchildren, he did not know them.”

Indeed, Henry Ford II resigned from the Ford Foundation’s board in 1977, writing that its hostility to capitalism had thrown it off course: “Perhaps it is time for the trustees and staff to examine the question of our obligations to our economic system and to consider how the foundation, as one of the system’s most prominent offspring, might act most wisely to strengthen and improve its progenitor.”

For the full commentary, see:

Naomi Schaefer Riley. “Philanthropists Discover the Value of ‘Sunsetting’.” The Wall Street Journal (Saturday, Aug. 5, 2023): C6.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 3, 2023, and has the same title as the print version.)

Blue Cross of California Seeks to End Drug Rebates and Hidden Fees

(p. A3) A major health insurer says it will jettison the complicated system that Americans use to pay for drugs, and create something that aims to be better, with partners including Amazon.com and the entrepreneur Mark Cuban.

Blue Shield of California said it is dropping CVS Health’s Caremark, the pharmacy-benefit manager it currently uses, which negotiates drug prices and wraps in other services such as a mail-order pharmacy.

. . .

Blue Shield said that, working with its partners, it aims to negotiate prices with pharmaceutical makers in a way that is different from the typical approach—with a simple net price structure that is supposed to eliminate rebates and hidden fees.

Blue Shield executives said that with one company handling many aspects of how drugs are procured through the system, it is often hard to track the flow of payments accurately.

“The current pharmacy supply chain is a forest of opacity and profit,” said Paul Markovich, Blue Shield’s chief executive officer, in an interview with The Wall Street Journal. “It is overwhelmingly complex, it is designed to maximize the earnings of the participants.” His company’s new setup, he said, will be “flipping that on its head.”

For the full story, see:

Anna Wilde Mathews. “Health Insurer Revamps Drug Pricing Model.” The Wall Street Journal (Friday, Aug. 18, 2023): A3.

(Note: ellipsis added.)

(Note: the online version of the story was updated Aug. 17, 2023, and has the title “A Big Health Insurer Is Ripping Up the Playbook on Drug Pricing.”)

Nimbly Use What Is Available Now Rather Than Wait for Adoption of Perfect Global Standards

(p. A9) For more than five decades, Don Bateman led teams of engineers at what is now Honeywell International in creating and enhancing technology that warns pilots of impending disasters.

The result is an array of software and equipment, much of it mandatory, that squawks warnings and flashes digital admonitions if a plane is heading into a mountain, a ridge, a radio tower or some other obstacle.

. . .

Rather than waiting years for global industry standards to be adopted, he always wanted to use whatever technology was available immediately. Ratan Khatwa, a former Honeywell colleague of Bateman, recalled his advice: “You’ve got to work like farmers,” using whatever is available now rather than waiting for perfection.

For the full obituary, see:

James R. Hagerty. “Safety Engineer Helped Pilots Avoid Crashes.” The Wall Street Journal (Saturday, June 3, 2023): A9.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date May 30, 2023, and has the title “Don Bateman, Champion of Airline Safety, Dies at 91.”)

Socialist Alexandria Ocasio-Cortez (AOC) Buys Foreign Sunscreens Not Approved by U.S. Government F.D.A.

(p. 2) After months of prompting, I have finally managed to help my husband form a daily sunscreen habit. Whenever I see traces of paper white cream in his dark beard, I think, We’re halfway there.

Hoping to avoid the white cast, heaviness and greasiness common in many sunscreen products available in U.S. drugstores, some Americans, including Representative Alexandria Ocasio-Cortez of New York, have taken matters into their own hands, opting for sunscreens manufactured abroad. In a recent interview, the congresswoman said she toggled between Bioré in the summer and Beauty of Joseon in the winter — two Asian brands that employ active ingredients not approved for use in the United States.

“The technology is very sophisticated,” Ms. Ocasio-Cortez said. “You don’t feel like you have a layer of sunscreen on, and it kind of just feels like you’re putting on a moisturizer in that sense, which makes it easier to use.”

While sunscreen is regulated as a cosmetic in major skin-care hubs like South Korea, Japan and the European Union, in the United States, it falls under the purview of the Food and Drug Administration. Any drug product marketed to American consumers must be approved by the F.D.A., and because sunscreen “makes a drug claim” — namely, that it can prevent sunburn, decrease the risk of skin cancer and mitigate early skin aging — the agency regulates it as an over-the-counter drug.

The last time the Food and Drug Administration approved new active ingredients for use in sunscreens was more than two decades ago, and at times it can feel as if the rest of the world has surpassed the United States in the development of new sunscreen formulations and protocols. Skin-care influencers on TikTok and Instagram are in a near-constant state of frenzy over exciting new products and innovations that are nowhere to be found on American shelves. Currently there are 14 sunscreen filters approved for use by the F.D.A. The European Union employs more than 30.

Frustrated by what seems to be a wealth of more exciting options for sun protection overseas, skin-care-conscious Americans have been quick to point the finger at the F.D.A. for the delay in approving new active ingredients.

For the full story, see:

Sandra E. Garcia. “U.S. Sunscreen Is Stuck in the ’90s.” The New York Times, SundayStyles Section (Sunday, August 13, 2023): 2.

(Note: the online version of the story has the date Aug. 12, 2023, and has the title “U.S. Sunscreen Is Stuck in the ’90s. Is This a Job for Congress?”)

“Best-Funded Startup” in History Seeks Longevity by Rejuvenating Cells

(p. B1) Arch is the largest institutional investor in Altos, which already has $3 billion of committed investments, likely making it the biotech indus-(p. B2)try’s best-funded startup on record.

Nelsen is characteristically unrestrained when discussing Altos’s prospects.

“Epigenetic reprogramming is the biggest thing in healthcare in 100 years. Or ever,” he says. “We will clearly live much healthier and longer lives if this works.”

. . .

A native of Walla Walla, Wa., Nelsen studied biology and economics at the University of Puget Sound before getting an M.B.A. at the University of Chicago.

. . .

His manic energy can lead to confrontations. Nelsen drives his GMC Yukon so aggressively that some friends avoid riding with him. He’s started fights with supermarket customers who resisted using plastic bags.

“I hate plastic bag bans, because the assumption that they are better for the environment than paper is flawed and I am grown up enough to not have government choose my bag for me,” Nelsen says.

. . .

Taking cells back to their youthful, healthier state long captured the imagination of scientists, but seemed unlikely. Then a breakthrough paper published in 2006 by Japanese scientist Shinya Yamanaka and a colleague showed mature skin cells of mice could be reprogrammed into primordial, immature stem cells—called induced pluripotent stem cells—in effect resetting their molecular clocks. Yamanaka, who later shared a Nobel Prize for work in this area, is an adviser to Altos. In 2016, Spanish biochemist Juan Carlos Izpisua Belmonte, Altos’s founding scientist, showed how the age of cells could be reverted without changing their genome and identity. His work demonstrated the potential for toggling between the ‘old’ and ‘young’ states of cells—the basis for Altos’s effort to rejuvenate cells.

For the full story, see:

Gregory Zuckerman. “Fear of Death Drives A Venture Capitalist.” The Wall Street Journal (Monday, Aug. 21, 2023): B1-B2.

(Note: the online version of the story has the date August 20, 2023, and has the title “For This Venture Capitalist, Research on Aging Is Personal; ‘Bob Has a Big Fear of Death’.”)

The Enemies of Horatio Alger “Are Out to Get the American Dream”

(p. A13) Of all the institutions for investigative journalists to put under the microscope, the Horatio Alger Association of Distinguished Americans sure is a strange target.

The charity says it has awarded more than $245 million in college scholarships to 35,000 students since 1984. Its 300 or so members cross the political, cultural and business-success spectrum and include Michael Bloomberg and Oprah Winfrey.

So what explains the recent onslaught of critical press coverage? The New York Times has put eight reporters on the case and devoted two 4,000-word Sunday front-page pieces in the past two months to the Horatio Alger Association and its members. ProPublica, which styles itself “an independent, nonprofit newsroom that produces investigative journalism with moral force,” produced a 5,000-word article that credited four reporters.

The journalists and the advocates they quote say it’s a matter of judicial ethics, highlighting Justice Clarence Thomas’s role as an honorary board member of the Horatio Alger Association and his friendships with the association’s members, some of whom are prosperous.

. . .

The venom directed at the Horatio Alger Association, though, isn’t only about Justice Thomas and the court. The association’s critics are out to get the American dream.

The association’s website explains that its mission is to “educate all youth about the limitless possibilities that are available through the American free-enterprise system.” The group was founded to dispel the myth “that the American dream was no longer attainable.” Its members are “role models whose experiences exemplify that opportunities for a successful life are available to all individuals who are dedicated to the principles of integrity, hard work, perseverance and compassion for others.”

For the full commentary, see:

Ira Stoll. “Why the Left Hates Horatio Alger.” The Wall Street Journal (Saturday, Aug. 12, 2023): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date August 11, 2023, and has the same title as the print version.)

With Repetitions Surgeons Gain Informal Knowledge, Such as “Muscle Memory”

(p. C6) Imagine you’ve been admitted to the hospital and you’re meeting the physician taking care of you for the first time. Who are you hoping walks through that door? Would you rather they be in their 50s with a good amount of gray hair, or in their 30s, just a few years out of residency?

In a study published in 2017, one of us (Dr. Jena) and colleagues set out to shed some light on the role of age when it came to internists who treat patients in hospitals. These physicians, called hospitalists, provide the majority of care for elderly patients hospitalized in the U.S. with some of the most common acute illnesses, such as serious infections, organ failure and cardiac problems.

. . .

. . ., the results suggested if the over-60 doctors took care of 1,000 patients, 13 patients who died in their care would have survived had they been cared for by the under-40 doctors. We repeated the analysis using 60- and 90-day mortality rates, in case longer term outcomes might have been different, but again, the pattern persisted: Younger doctors had better outcomes than their more experienced peers.

. . .

Younger doctors possess clinical knowledge that is more current. If older doctors haven’t kept up with the latest advances in research and technology, or if they aren’t following the latest guidelines, their care may not be as good as that of their younger peers.

. . .

. . ., a separate study by Dr. Jena and colleagues looked at about 900,000 Medicare patients who underwent common non-elective major surgeries (for example, emergency hip fracture repair or gall bladder surgery) performed by about 46,000 surgeons of varying age.

. . .

The results showed that unlike hospitalists, surgeons got better with age. Their patient mortality rates had modest but significant declines as they got older: mortality was 6.6% for surgeons under 40, 6.5% for surgeons age 40-49, 6.4% for surgeons age 50-59, and 6.3% for surgeons over age 60.

Clearly something different was happening here. It may be that for hospitalists, the benefit of steadily increasing experience starts to be outweighed by their waning knowledge of the most up-to-date care. It’s different for surgeons, though, who hone many of their skills in the OR. Surgeons build muscle memory through repetition, working in confined spaces with complex anatomy. They learn to anticipate technical problems before they happen and plan around them based on prior experience. Over time, they build greater technical skills across a wider variety of scenarios, learn how to best avoid complications, and choose better surgical strategies.

What does this mean for all of us as patients when we meet a new doctor? Taking studies of hospitalists and surgeons together, it’s clear that a doctor’s age isn’t something that can be dismissed out of hand—age does matter—but nor can it be considered in isolation. If we’re concerned about the quality of care we’re receiving, the questions worth asking aren’t “How old are you?” or even “How many years of experience do you have?” but rather “Do you have a lot of experience caring for patients in my situation?” or “What do you do to stay current with the research?”

For the full essay, see:

Anupam B. Jena and Christopher Worsham. “Do Younger or Older Doctors Get Better Results?” The Wall Street Journal (Saturday, July 8, 2023): C6.

(Note: ellipses added.)

(Note: the online version of the essay was updated July 8, 2023, and has the same title as the print version.)

The essay quoted above is adapted from the book:

Jena, Anupam B., and Christopher M. Worsham. Random Acts of Medicine: The Hidden Forces That Sway Doctors, Impact Patients, and Shape Our Health. New York: Doubleday, 2023.

Socialist Alexandria Ocasio-Cortez (AOC) Rallied with Poor Hispanic Entrepreneurs Who Were Shut Down by Government Regulators

(p. A21) Until last week, Corona Plaza in Queens was bustling: taqueros flipping fresh tortillas and vendors hawking Central American crafts over a soundtrack of cumbia and train traffic. There were produce stands, live bands and surging crowds, all in a public square that was named one of the 100 best places to eat in the city.

But last Thursday [Aug. 3, 2023] and Friday [Aug. 4, 2023], sanitation workers swept through the plaza, removing several stalls and threatening to penalize vendors who did not have a city permit to operate — nearly all of the more than 80 who regularly work there. In the days since, the grilled-meat stands and jugs of agua fresca have been replaced with protest signs.

It was the latest escalation in the city’s tense relationship with the plaza merchants — most of them immigrant women, many of them undocumented — who have helped revive one of the New York neighborhoods hit hardest by the coronavirus pandemic.

. . .

The City Council passed a law in 2021 mandating the release of another 445 food vendor permits every year for a decade, but the rollout has been slow.

There are 10,195 food vendors on the waiting list, according to a spokeswoman for the Department of Health and Mental Hygiene, which manages the applications. The agency has issued just 104 of the new licenses so far, and only four of the recipients have completed all the steps needed to sell food legally.

Ms. Calle is one of the few vendors at the plaza who has a permit — but only because she rents it from a third party for $16,000 a year, a prohibited but widespread practice.

Even so, Ms. Calle decided to close her stall this week, in solidarity with her neighbors.

“I know how hard it is” for new vendors, she said in Spanish, recounting how she had been arrested four times in 23 years for various permitting violations.

While few merchants at the plaza own the hard-to-obtain permits, most of them, including Ms. Calle, pay taxes on sales, and hold a license that certifies they have taken a food safety course.

At the rally at the plaza on Wednesday [Aug. 2, 2023], the dispersed merchants were joined by elected officials including Representative Alexandria Ocasio-Cortez and Donovan Richards, the Queens borough president, . . .

. . .

Nearly 4,000 people, most of them locals, have signed a petition in support of the vendors.

The plaza, once an underused service road near 103rd Street and Roosevelt Avenue, was redesigned in 2012 as a public square.

When the pandemic hit the surrounding neighborhood of Corona — harder than almost anywhere else in the United States — the plaza became an economic and cultural hub for recovering workers, said Carina Kaufman-Gutierrez, the deputy director of the Street Vendor Project.

For the full story, see:

Stefanos Chen and Raúl Vilchis. “Their Food Is Hailed; They Want the Right to Sell It.” The New York Times, First Section (Sunday, August 6, 2023): A21.

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

(Note: the online version of the story has the date Aug. 5, 2023, and has the title “They Make Some of New York’s Best Food. They Want the Right to Sell It.” Where there are minor differences in wording between the print and online versions, the passages quoted above make use of the online wording.)

The “Deliciously Guilty Pleasure” and “Disorienting Joy” of California Skiing in August

(p. A20) This weekend, . . . hordes of Californians are smearing pink and yellow zinc oxide on noses, shoving feet into hard plastic ski boots and gliding over to the lifts at Mammoth Mountain for yet another day on the slopes. A reminder: It’s August.

. . .

Unpredictable change is the new status quo.  . . . it can also, in a rare instance like the chance to ski in the dog days of summer, bring a disorienting joy.

. . .

In mid-July [2023], well after all the hot dogs and fireworks, I headed up to the Sierra and ran into so much lingering snow that the road through Yosemite National Park hadn’t yet opened for the season. I took an alternate route, 108 over Sonora Pass, and saw people parking in turnouts, carrying skis up dirt trails through trees, stepping onto sunny snow slopes and linking turns back down to ice chests full of cold drinks before, you know, maybe going for a swim. When I finally got to Kelly’s place, the creek on her high desert property frothed in a fabulous white and clear torrent through sage lands sparkling with superblooming yellow mule’s ear, red paintbrush and white phlox. The big peaks, meanwhile — in the dead heat of a California summer — remained so heavily blanketed in snow that I felt I was seeing them the way Indigenous people must have during the Little Ice Age, 500 years ago.

The premise of California’s secular faith in nature is that water plus sunshine equals enlightenment. In high school I was transfixed by a description on the jacket of Bank Wright’s classic “Surfing California” of “skiing Mount Baldy in the morning and surfing Hermosa Beach in the afternoon.” That struck the teenage me as the absolute perfect way of snatching healthy peace and giddy fun from the predictable maw of adult misery.

. . .

. . . when I drove to Mammoth, put on my favorite cowboy hat against the sun and sipped iced coffee while watching tiny black figures ski down blinding white slopes, the experience was perhaps best likened to the queasy adrenalized thrill of an oncoming manic episode after a long and dark depression — worrisome, yes, bound for nowhere good but, as long as we’re just talking here and now, a deliciously guilty pleasure.

For the full commentary, see:

Daniel Duane. “The Upside of Climate Chaos? Skiing in August.” The New York Times (Monday, August 7, 2023): A20.

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

(Note: the online version of the commentary has the date Aug. 6, 2023, and has the title “It’s August. Californians Are Still Skiing. Don’t Ask.”)

Hybrids Appeal to Consumers with Short-Term E.V. “Range Anxiety”

(p. A19) . . . there’s a good argument to be made that the government, and automakers, are leaning too hard into all-electric and neglecting the virtues of hybrid technology. When I first heard this counterintuitive argument from Toyota, I dismissed it as heel-dragging by a company that lags in electrics, but I’ve come around to the idea that hybrids — at least for now — do have a lot of advantages over all-electric vehicles.

. . .

(p. A6) “Toyota’s claim is accurate. We’ve crunched the numbers on this,” Ashley Nunes told me. He is a senior research associate at Harvard Law School and the director for federal policy, climate and energy at the Breakthrough Institute, a think tank. He testified on the topic in April [2023] before the House Subcommittee on Environment, Manufacturing and Critical Materials.

. . . electric vehicles consume huge quantities of lithium and other materials because they have huge batteries. And they have huge batteries because customers suffer from “range anxiety” and won’t buy an E.V. unless it can go for hundreds of miles without charging — even though the vast majority of trips are short.

. . .

Some people will keep driving old ICE-mobiles (cars with internal combustion engines) because they can’t afford an E.V. And those ICE-mobiles will continue to be major emitters of greenhouse gases.

The production of electric vehicles produces more greenhouse gases than the production of cars with combustion engines. So E.V.s have to travel between 28,000 and 68,000 miles before they have an emissions advantage over similarly sized and equipped ICE-mobiles, according to Nunes. That may take 10 years or more if the E.V. isn’t driven much.

For the full commentary, see:

Peter Coy. “We May Not Be Ready for an All-E.V. World.” The New York Times (Monday, July 17, 2023): A19.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 14, 2023, and has the title “A Climate Hawk’s Issues With Electric Vehicles.”)