Category: Entrepreneurship

Chinese Communists Extend Control of Firms by Buying “Golden Shares”

(p. A1) In its uneasy dance with China’s private sector, the Communist Party is moving away from a public battle with some of the country’s biggest companies. Instead, it is inching toward a quieter form of control.

At the center of the effort is a push by various levels of government to take stakes in the private companies that have long driven Chinese innovation and job creation.

The government stakes are sometimes very small, like the 1% holding that a fund of Beijing’s cyberspace watchdog recently took in the digital-media unit of e-commerce giant Alibaba Group Holding Ltd. But they tend to give the government board seats, voting power and sway over business decisions. Colloquially, they are known as golden shares.

For the companies, there is little choice: Selling such a stake to a government entity that seeks one is crucial for staying in business. For the state, the stakes mean more direct involvement in some of China’s most high-profile companies—digital cornerstones of Chinese life and, in some cases, darlings of global investors.

. . .

(p. A9) One result of the new normal of subtle influence is that the boundary between the party-state and the private sector is getting increasingly muddled. That reverses a trend dating to the late 1970s, when Chinese leader Deng Xiaoping had the party-state step back from business control and let entrepreneurs flourish.

For the full story, see:

Lingling Wei. “Stakes in Firms Give Beijing New Control.” The Wall Street Journal (Thursday, April 11, 2023): A1 & A9.

(Note: ellipsis added.)

(Note: the online version of the story has the date March 8, 2023, and has the title “China’s New Way to Control Its Biggest Companies: Golden Shares.”)

The Growing Pain of the Working-Class

Many of the working poor are indeed suffering. The solution is mainly to reduce government regulations, to allow a robustly redundant labor market and more opportunities for free-agent entrepreneurship. (See Openness to Creative Destruction.)

(p. 6) Ever since Bobbie Wert was 8 years old, her stomach has ached. “My tummy hurts,” was her refrain as a girl, and the discomfort was accompanied by vomiting and diarrhea that kept her out of school — sometimes for half the days in the school year.

Doctors poked and scanned but couldn’t figure out anything wrong. Over the years, they cut her open and removed bits and pieces yet couldn’t drive away the pain. So doctors prescribed opioids in increasing doses — even fentanyl patches — that left her addicted. At age 43, she now is off opioids but still suffers every single day, enduring chronic pain like an estimated 50 million other Americans.

Wert is part of a vast and mysterious panorama of pain that is increasing, sometimes with no obvious physical cause. And while chronic pain is a global problem, it is particularly puzzling in America. In other wealthy countries, it’s the elderly who report the most chronic pain, which makes some sense. But in the United States it’s the middle-aged — especially the jobless and people like Wert, who did not graduate from high school — who suffer the most. It is a plague on the less educated.

All this raises the question: Is this physical suffering a canary in the coal mine warning us of larger dysfunction in our society?

Here’s what we do know: Tens of millions of Americans are suffering pain. But chronic pain is not just a result of car accidents and workplace injuries but is also linked to troubled childhoods, loneliness, job insecurity and a hundred other pressures on working families.

. . .

“People’s lives are coming apart, and this leads to huge increases in physical pain,” said Angus Deaton, a Nobel Prize winner in economics who with Anne Case popularized the term “deaths of despair.” He, Case and Arthur Stone warn in a recent article that “the mystery of American pain reveals a warning for the future.”

Americans die from deaths of despair — drugs, alcohol and suicide — at a rate of more than a quarter-million a year, and the number of walking wounded is far greater.

For the full commentary, see:

Nicholas Kristof. “Why So Many Americans Are Feeling More Pain.” The New York Times, SundayOpinion Section (Sunday, May 7, 2023): 6-7.

(Note: ellipsis added. In the original last paragraph, the words “want” and “all” are in italics.)

(Note: the online version of the commentary has the date May 3, 2023, and has the title “Why Americans Feel More Pain.”)

The book by Deaton and Case alluded to above is:

Case, Anne, and Angus Deaton. Deaths of Despair and the Future of Capitalism. Princeton, N.J.: Princeton University Press, 2013.

Occidental Building Costly Plant to Bury Carbon Dioxide, Hoping to Be the Last Firm Still Allowed to Produce Oil

The “oracle of Omaha,” Warren Buffett, has been investing in Occidental.

(p. A1) About fifty miles southwest of Midland, Texas, deep in the oil-saturated Permian Basin, more than 100 workers are busy laying out roads and water lines, preparing to build an elaborate complex of fans, each as large as a tennis court.

When they start running in 2024, the fans will suck massive amounts of carbon dioxide out of the air. The carbon will be funneled thousands of feet down deep wells into geological formations, where it should remain for centuries.

The company behind this environmental moonshot is Occidental Petroleum Corp., one of the country’s most successful oil-and-gas producers. It hopes the enterprise will give it license to keep operating as a driller decades into the future.

It is spending more than $1 billion to build the first in a planned fleet of plants using direct-air capture to pull the CO2 out of the air, a budding technology with fuzzy economics. Bolstering the move are generous tax incentives included in the climate package President Biden signed into law last year that cover up to 45% of Occidental’s expected initial costs per metric ton.

. . .

(p. 8) To be successful, Occidental will need to bring the cost of capture and containment down by hundreds of dollars per metric ton of CO2, according to energy executives and analysts.

Occidental estimated its initial cost to remove a metric ton of CO2 would be between $400 and $500. It said that as it manufactures more plants and efficiencies kick in, it will be able to roughly halve that to between $200 and $250 a ton by the end of the decade, according to the company. None of the figures include federal tax credits.

The Inflation Reduction Act, signed into law by President Biden last year, rewards companies that capture and store atmospheric CO2 with a $180 tax credit per metric ton contained permanently, up from $50. Credits for capturing atmospheric CO2 and using it in enhanced oil recovery rose to $130 a metric ton, up from $35. The bill also offers incentives to companies that capture CO2 at industrial plants and sequester it, which Occidental also plans to do.

. . .

Howard Herzog, a leading researcher on carbon capture at the Massachusetts Institute of Technology, said he didn’t think bringing the cost of direct-air capture down to around $100 a metric ton was a realistic goal. Occidental is “probably more bullish on direct-air capture than I would be,” he said. But he added that how much buyers of carbon credits are willing to pay will also determine how profitable direct-air capture turns out to be.

Ms. Hollub told The Wall Street Journal in August that Occidental’s efforts on carbon capture and on becoming a net-zero emitter would allow it to keep up its investments in oil and gas. She warned that underinvestment in fossil fuels, which she says will be needed for years even amid the broader transition to clean energy, will lead to a scarcity of supplies. In contrast, she said, other oil majors such as BP PLC and Shell PLC have shrunk their oil segment and invested in renewables.

Oil companies will have to find ways to remove as much carbon dioxide as they emit “if they want to be the last producer standing in the world,” Ms. Hollub said.

For the full story, see:

Benoît Morenne. “Occidental’s Green Bet To Keep Pumping Oil.” The Wall Street Journal (Tuesday, April 11, 2023): A1 & A8.

(Note: ellipses added.)

(Note: the online version of the story has the date April 10, 2023, and has the title “Occidental Makes a Billion-Dollar Climate Moonshot—So It Can Keep Pumping Oil.”)

Political Challenges Were Greater Than Technology Challenges in Creating Geostationary Satellites

(p. A13) After the Soviet Union launched Sputnik 1, the world’s first satellite, in 1957, a 31-year-old Rosen was inspired to build “a lightweight satellite that, when launched into a high orbit above the equator, would mimic the Earth’s rotation and retain its relative position, like a spoke on a wheel.” Mr. Amelinckx goes on: “This geostationary satellite would provide twenty-four-hour global communications, something never before attempted. Rosen was excited.”

Indeed he was. Rosen was a brilliant electrical engineer who worked at Hughes Aircraft in California. His tenacity enabled him to surmount, over the following years, the seemingly endless number of infuriating obstacles that stood between him and his goal. There was the multitude of technical problems to be solved—from the satellite’s weight to its spin, antenna, solar panels and more. There were the questions from NASA, Congress, the Pentagon and aerospace companies about whether the U.S. should prefer low-orbit satellites or geostationary ones. (The latter would possess greater transmitting and receiving versatility, but many scientists were convinced that geostationary satellites, which orbit at much higher altitudes, were impractical and would “take years to develop.”)

Mr. Amelinckx notes that solving the political challenges proved more difficult than creating the necessary technologies. Fortunately for Rosen, President Kennedy was keen on communications satellites. And so in 1961, NASA began funding Hughes to create Rosen’s vision.

For the full review, see:

Howard Schneider. “BOOKSHELF; How ‘Early Bird’ Got the Worm.” The Wall Street Journal (Friday, April 14, 2023): A13.

(Note: the online version of the review has the date April 13, 2023, and has the title “BOOKSHELF; ‘Satellite Boy’ Review: How ‘Early Bird’ Got the Worm.”)

The book under review is:

Amelinckx, Andrew. Satellite Boy: The International Manhunt for a Master Thief That Launched the Modern Communication Age. Berkeley: Counterpoint, 2023.

The Hybrid Trees Weyerhaeuser Plants, Absorb More Carbon Dioxide Than Did the Trees It Cuts Down

(p. A1) KIBBY TOWNSHIP, Maine—Weyerhaeuser Co. has cut down more trees than any other American company since its founder started logging before the Civil War. Environmentalists have long treated it as an enemy.

Now, the new math of carbon emissions is enabling the lumber producer to cast itself as something quite different: a force for environmental good.

Its 10.6 million acres of U.S. timberland act as a giant sponge for carbon dioxide, which Weyerhaeuser says more than compensates for the greenhouse gases it emits by felling trees, sawing them into lumber and distributing wood products.

Although Weyerhaeuser is cutting down as many trees as ever and plans to increase lumber production 5% in the next few years, it says its net carbon footprint is negative—so much so that it is offering carbon dioxide storage capacity to other companies. Weyerhaeuser expects a new unit dedicated to helping other firms offset their emissions to generate $100 million a year in profit by the end of 2025.

“I don’t think there are many companies in the world with a better environmental (p. A8) story than Weyerhaeuser,” said Devin Stockfish, chief executive officer of the Seattle-based company. “The moment is really ripe for us.”

. . .

Weyerhaeuser logs about 2% of its land each year and plants more than 130 million saplings a year to replace much of what it cuts. Company scientists have selectively bred trees over the decades to grow bigger, faster and better for lumber-making than the ones they replace. The company says those new breeds will sock away carbon dioxide faster than the ones cut down, allowing it to boost sequestration and wood production at the same time.

“There is a pretty significant difference in the genetics of the trees that we grow versus what would have grown naturally,” Mr. Stockfish said.

For the full story, see:

Ryan Dezember. “Logger Recasts Itself As Climate Friendly.” The Wall Street Journal (Tuesday, April 18, 2023): A1 & A8.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 17, 2023, and has the title “America’s Most Prolific Logger Recasts Itself as Environmental Do-Gooder.”)

Firing an Actor “Early Could Be a Motivator for the Remaining Cast”

The ability to fire at will gives the entrepreneur (and the movie director) the ability to put together the right team for a project. Keeping those employed who are not doing their jobs, can be demoralizing for those who are doing their jobs.

(p. C1) When the writer and director Mike Nichols was young, he had an allergic reaction to a whooping cough vaccine. The result was a complete and lifelong inability to grow hair. One way to read Mark Harris’s crisp new biography, “Mike Nichols: A Life,” is as a tender comedy about a man and his wigs.

. . .

(p. C5) Harris is the author of two previous books, “Pictures at a Revolution: Five Movies and the Birth of the New Hollywood” and “Five Came Back: A Story of Hollywood and the Second World War.” He’s also a longtime entertainment reporter with a gift for scene-setting.

He’s at his best in “Mike Nichols: A Life” when he takes you inside a production. His chapters on the making of three films in particular — “The Graduate,” “Silkwood” and “Angels in America” — are miraculous: shrewd, tight, intimate and funny. You sense he could turn each one into a book.

Nichols was an actor’s director. &nbsp. . .  But he had a steely side.

He fired Gene Hackman during week one on “The Graduate.” Hackman was playing Mr. Robinson and it wasn’t working, in part because, at 37, he looked too young for the role.

Sacrificing someone early could be a motivator for the remaining cast, he learned. He fired Mandy Patinkin early in the filming of “Heartburn,” and brought in Jack Nicholson to play Meryl Streep’s faithless husband.

For the full review, see:

Dwight Garner. “BOOKS OF THE TIMES; The Wit and Wigs Of a Star-Studded Life.” The New York Times (Tuesday, January 26, 2021): C1 & C5.

(Note: ellipses added.)

(Note: the online version of the review was updated Jan. 29, 2021, and has the title ‘BOOKS OF THE TIMES; ‘Mike Nichols’ Captures a Star-Studded Life That Shuttled Between Broadway and Hollywood.”)

The book under review:

Harris, Mark. Mike Nichols: A Life. New York: Penguin Press, 2021.

Musk on San Francisco: “Even if Attackers Are Caught, They Are Often Released Immediately”

(p. A3) A suspect was arrested in connection with the fatal stabbing in San Francisco of Cash App founder Bob Lee, police said, more than a week after the tech executive’s death shocked Silicon Valley.

Nima Momeni, 38, was arrested by San Francisco police Thursday morning and booked on a murder charge, said Bill Scott, the San Francisco police chief.

Mr. Lee, 43, was fatally stabbed in the early morning hours of April 4 [2023]. The suspect and the victim knew each other, said Chief Scott. He declined to elaborate on the motive for the killing.

. . .

Some tech-industry executives slammed San Francisco over crime after Mr. Lee’s murder. Last week, Elon Musk tweeted, “Violent crime in SF is horrific and even if attackers are caught, they are often released immediately.”

For the full story, see:

Alyssa Lukpat and Zusha Elinson. “Man Arrested in Killing of Cash App Founder.” The Wall Street Journal (Friday, April 14, 2023): A3.

[Note: ellipsis and bracketed year added.]

(Note: the online version of the story was updated April 13, 2023, and has the title “Suspect Arrested in Fatal Stabbing of Cash App Founder Bob Lee.”)

Musk Says M.B.A.s Lack Creative Focus on Products and Services

(p. B3) What is wrong with American corporations? Elon Musk says too many M.B.A.s. are polluting companies’ ability to think creatively and give customers what they really want.

His comments criticizing M.B.A.s came amid a broader conversation about leadership before an online audience during The Wall Street Journal’s CEO Council annual summit, where he also encouraged executives to step away from their spreadsheets and get out of the boardroom and onto the factory floor.

“I think there might be too many M.B.A.s running companies,” the Tesla Inc. chief executive said. “There’s the M.B.A.-ization of America, which I think is maybe not that great. There should be more focus on the product or service itself, less time on board meetings, less time on financials.”

For the full story, see:

Patrick Thomas. “Musk Decries ‘M.B.A.ization’.” The Wall Street Journal (Thursday, Dec. 10, 2020): B3.

(Note: the online version of the story was updated December 9, 2020, and has the same title “Elon Musk Decries ‘M.B.A.-ization’ of America.”)

Towns Flourish When Entrepreneurs Want to Live in Them

(p. B1) SIDNEY, Neb. — The forest green roof and pair of bronze stags frozen in combat are impossible to miss as you drive down Interstate 80.

. . .

For 54 years, Cabela’s made its home here, a juggernaut that kept the town humming. But in 2017, the sporting goods store sold for $5 billion to Bass Pro Shops — a takeover that eventually made 2,000 jobs vanish in a town of roughly 6,600 residents.

. . .

But Sidney’s staying power still surprises experts, who say it’s driven by two factors.

One: Former Cabela’s employees opening their small businesses, diversifying the economy in a formerly one-company town.

Two: A recent influx of new (p. B3) residents, both retirees and remote workers.

. . .

Each spring, high schoolers from Nebraska and neighboring states flock to Sidney searching for the perfect prom dress. Their destination: Charlotte & Emerson, a downtown boutique — and one example of Sidney’s rebirth from the ashes of Cabela’s.

Co-owner Sarah Kaiser and husband Kurt Kaiser both worked at Cabela’s. When the company was swallowed by Missouri-based Bass Pro, the family relocated there as Sarah Kaiser ran the combined company’s human resources.

But in 2020, they decided to return to Sidney, her hometown. Sarah Kaiser opened Charlotte & Emerson with her sister. Her husband launched an online fitness store, Frost Giant Fitness. They’re two of many Sidney-based companies run by ex-Cabela’s employees who decided to stick around and start something new.

“The corporate experience of these young folks really was key to this particular recovery,” said David Iaquinta, a Nebraska Wesleyan University sociology professor who has researched Sidney’s economic development. “. . . they combined that talent with a strong desire for the lifestyle that they had. They said, ‘We’re here. We’re rooted here.’”

Budding companies are being boosted by E3, a Nebraska Community Foundation program meant to aid entrepreneurship in rural Nebraska.

Already, new businesses have remodeled once-dilapidated buildings, said Sarah Sinnett, the program’s community lead.

. . .

Economic development in Nebraska “used to be about cheap land, cheap labor and cheap incentives” to nab big companies, Stinnett said.

Now: “If you want small towns to start thriving … really it needs to be focused on entrepreneurship,” she said.

For the full story, see:

Natalia Alamdari, Flatwater Free Press. “Sydney Shows Staying Power.” Omaha World-Herald (Sunday, April 23, 2023): B1 & B3.

(Note: ellipses between paragraphs, and bracketed date, added; ellipsis internal to paragraph, in original.)

(Note: the online version of the story was updated April 28, 2023, and has the title “Six years after ‘Cabela’s debacle,’ Sidney’s lights are still on.”)

Small “Creative” Subsistence Farmers Experiment and Innovate to Adapt to Global Warming

(p. A1) When it comes to growing food, some of the smallest farmers in the world are becoming some of the most creative farmers in the world. Like Judith Harry and her neighbors, they are sowing pigeon peas to shade their soils from a hotter, more scorching sun. They are planting vetiver grass to keep floodwaters at bay.

They are resurrecting old crops, like finger millet and forgotten yams, and planting trees that naturally fertilize the soil. A few are turning away from one legacy of European colonialism, the practice of planting rows and rows of maize, or corn, and saturating the fields with chemical fertilizers.

“One crop might fail. Another crop might do well,” said Ms. Harry, who has abandoned her parents’ tradition of growing just maize and tobacco and added peanuts, sunflowers, and soy to her fields. “That might save your season.”

It’s not just Ms. Harry and her neighbors in Malawi, a largely agrarian nation of 19 million on the front lines of climate hazards. Their scrappy, throw-everything-at-the-wall array of innovations is multiplied by small subsistence farmers elsewhere in the world.

. . .

(p. A10) . . . Mr. Mponda, 26, grows maize. But he no longer counts on maize alone. The soil is degraded from decades of monoculture. The rains don’t come on time. This year, fertilizer didn’t either.

“We are forced to change,” Mr. Mponda said. “Just sticking to one crop isn’t beneficial.”

The total acreage devoted to maize in Mchinji District, in central Malawi, has declined by an estimated 12 percent this year, compared with last year, according to the local agricultural office, mainly because of a shortage of chemical fertilizers.

Mr. Mponda is part of a local group called the Farmer Field Business School that runs experiments on a tiny plot of land. On one ridge, they’ve sown two soy seedlings side by side. On the next, one. Some ridges they’ve treated with manure; others not. Two varieties of peanuts are being tested.

The goal: to see for themselves what works, what doesn’t.

For the full story, see:

Somini Sengupta. “Climate Shocks Force Small Farmers to Reinvent.” The New York Times (Friday, April 28, 2023): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date April 27, 2023, and has the title “Meet the Climate Hackers of Malawi.”)


For Musk, Buying Twitter “Needed to Be Done”

(p. A8) LONDON — Billionaire Elon Musk told the BBC that running Twitter has been “quite painful” but claimed the social media company is now roughly breaking even after he acquired it late last year.

In an interview also streamed live late Tuesday [April 11, 2023] on Twitter Spaces, Musk discussed his ownership of the online platform, including layoffs, misinformation and his work style.

. . .

After acquiring the platform, Musk carried out mass layoffs as part of cost-cutting efforts. He said Twitter’s workforce was slashed to about 1,500 employees from about 8,000 previously.

“It’s not fun at all,” Musk said. “The company’s going to go bankrupt if we don’t cut costs immediately. This is not a caring-uncaring situation. It’s like if the whole ship sinks, then nobody’s got a job.”

Asked if he regretted buying the company, he said it was something that “needed to be done.”

For the full story, see:

Associated Press. “Musk says owning Twitter ‘painful’ but needed to be done.” Omaha World-Herald (Tuesday, April 13, 2023): A8.

(Note: ellipsis, and bracketed date, added)

(Note: the online version of the story has the date April 12, 2023, and has the same title as the print version.)