Free Markets – Page 22 – artdiamondblog.com

Charles Wolf’s Main Cancer Regret: “I’m Not There for the Market Open”

“Charles Wolf with laptop and Archie, in his house near Denver last spring.” Source of the caption and the photo: online version of the WSJ article quoted and cited below.

(p. C5) He was irked when a cancer recurrence last year required him to resume morning radiation treatments, partly because that took him away from the market. “What kills me more than anything else is that I’m not there for the market open,” he said.

For the full obituary, see:
E.S. BROWNING. “Wolf Loses Battle With Cancer; Disease Didn’t Affect His Investing Success; Model Patient.” The Wall Street Journal (Thurs., JANUARY 29, 2009): C5.

Government Elevator Inspectors Vote with Their Feet for the Private Sector

“The chief inspection official, Charles Miraglia, works on the side for at least one private elevator company.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A27) More than a dozen members of the New York Housing Authority’s elevator staff — including the official who directs all safety inspections — also work second jobs for private companies in the elevator industry, according to interviews and city records.

The employees, including three managers and nearly half the inspection staff, say their second jobs do not conflict with their duties maintaining the 3,300 elevators in the authority’s 2,600 buildings. Tenant complaints and inspection records indicate that the authority’s elevators are among the worst maintained in the city.
All of the elevator staff members with second jobs, including the chief inspection official, Charles Miraglia, have received a waiver from the city’s Conflicts of Interest Board, which ruled the second jobs did not present an ethical conflict. Each waiver was granted, the board said, based on the endorsement of the Housing Authority chairman, Tino Hernandez, and an assurance from the employee that the job would not interfere with his authority duties.
. . .
Criticism of the way the authority, the nation’s largest public housing landlord, maintains its elevators intensified recently, after a 5-year-old boy died trying to escape a stalled elevator in an authority-owned building in Williamsburg, Brooklyn, on Aug. 19. The Brooklyn district attorney’s office continues to investigate that accident.
. . .
Some of those who received waivers to work a second job said in interviews that they worked only part time, and always after hours or on weekends.
Scott T. Hayes, a longtime elevator consultant and inspector for building owners in the city, said 99 percent of all commercial and residential inspections take place during normal business hours, and almost never on weekends. “If a building super works till 4:30 or 5 o’clock and then they’re off, and you show up at 6 o’clock and say I want to inspect the elevator, he’ll throw you out of the building,” Mr. Hayes said. “So I don’t know what kind of work they could be doing. It doesn’t make sense.”
Mr. Miraglia earns $104,000 a year in his authority post and received his waiver to work outside jobs in August 2007, at a time when the authority’s difficulties in inspecting elevators were already apparent.

For the full story, see:
RAY RIVERA. “Fixing Elevators: For the City, and on the Side.” The New York Times (Tues., September 30, 2008): B1.
(Note: ellipses added.)

Instead of Government Money, Benson “Just Wanted the Opportunity to Compete”

“Jim Benson” Source of caption and photo: online version of the WSJ obituary quoted and cited below.

(p. A10) “A number of people had told me they wanted to start space businesses,” Mr. Huntress says, “but they always wanted government money. Jim said he didn’t want any government money. He just wanted the opportunity to compete. That got my attention.”

Mr. Benson, who died Oct. 10 at age 63 of a brain tumor, put it directly: “If we’re going to space to stay, space has to pay.”

He thought he’d found a business model. “We offer FedEx-like package delivery rides,” he proclaimed in 1999. He imagined getting customers like NASA itself and the armed forces, as well as scientists and industry. Always looking for an angle, he also envisioned a more terrestrial use for his rockets: sending a package from San Jose, Calif., to Taipei in 20 minutes.

With organizational ability he developed at software start-ups in the 1980s, Mr. Benson assembled a team of mostly young engineers plus some NASA veterans and set to work. To avoid high development costs, he used off-the-shelf technologies and designs. He quickly landed several contracts, including one from the University of California at Berkeley for ChipSat, a small satellite built for carrying scientific instruments to study interstellar gas. It cost $7 million to build — peanuts in space bucks — and has continued to function since its 2003 launch.

For the full obituary, see:
STEPHEN MILLER. “REMEMBRANCES; Jim Benson (1945 – 2008); Rocket Man Ran a Proper Business, But Loftiest Plans Were Ill-Starred.” The Wall Street Journal (Sat., OCTOBER 18, 2008): A10.

How Ayn Rand Matters Today

(p. A7) Ayn Rand died more than a quarter of a century ago, yet her name appears regularly in discussions of our current economic turmoil. Pundits including Rush Limbaugh and Rick Santelli urge listeners to read her books, and her magnum opus, “Atlas Shrugged,” is selling at a faster rate today than at any time during its 51-year history.
. . .
Rand . . . noted that only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism — and that so long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention — and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.
Rand offered us a way out — to fight for a morality of rational self-interest, and for capitalism, the system which is its expression. And that is the source of her relevance today.

For the full commentary, see:
YARON BROOK. “Is Rand Relevant?” Wall Street Journal (Sat., MARCH 14, 2009): A7.
(Note: ellipses added.)

“The Vast Inefficiencies of Public Sector Airports”

“One aviation expert said the Midway deal was a way to overcome inefficiencies of public airports.” Source of caption and photo: online version of the NYT article quoted and cited.

(p. A16) CHICAGO — Midway Airport is poised to become the first large privately run hub airport in the country, officials said Tuesday, after an investment group bid $2.52 billion to win rights to a long-term lease.
. . .
An aviation expert at the Brookings Institution, Clifford Winston, said he saw the deal’s attractiveness as helping to overcome “the vast inefficiencies of public sector airports.”
“The Midway experiment is important,” Mr. Winston said, “but it’s only a tiny step.”

For the full story, see:
SUSAN SAULNY. “In Chicago, Private Firm Is to Run Midway Airport.” The New York Times (Weds., October 1, 2008): A16.
(Note: ellipsis added.)

Vaclav Klaus: The Czech Republic’s Free Market Crusader

“President Vaclav Klaus of the Czech Republic is known for his economic liberalism.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A6) To supporters, Mr. Klaus is a brave, lone crusader, a defender of liberty, the only European leader in the mold of the formidable Margaret Thatcher. (Aides say Mr. Klaus has a photo of the former British prime minister in his office near his desk.)
. . .
As a former finance minister and prime minister, he is credited with presiding over the peaceful 1993 split of Czechoslovakia into two states and helping to transform the Czech Republic into one of the former Soviet bloc’s most successful economies.
But his ideas about governance are out of step with many of the European Union nations that his country will lead starting Jan. 1.
While even many of the world’s most ardent free marketeers acknowledged the need for the recent coordinated bailout of European banks, Mr. Klaus lambasted it as irresponsible protectionism. He blamed too much — rather than too little — regulation for the crisis.
A fervent critic of the environmental movement, he has called global warming a dangerous “myth,” arguing that the fight against climate change threatens economic growth.
. . .
Those who know Mr. Klaus say his economic liberalism is an outgrowth of his upbringing. Born in 1941, he obtained an economics degree in 1963 and was deeply influenced by free market economists like Milton Friedman.
Mr. Klaus’s son and namesake, Vaclav, recalled in an interview that when he was 13, his father told him to read Aleksandr Solzhenitsyn to better understand Communism’s oppressiveness.
“If you lived under communism, then you are very sensitive to forces that try to control or limit human liberty,” he said in an interview.

For the full story, see:
DAN BILEFSKY. “A Fiery Czech Is Poised to Be the Face of Europe.” The New York Times (Tues., November 25, 2008): A6.
(Note: ellipses added.)

“Government Interventions Only Prolonged the Crisis”

The comments of Maart Laar, former prime minister of Estonia, are worth considering:

(p.A13) It is said that the only thing that people learn from history is that people learn nothing from history. Looking at how the world is handling the current economic crisis, this aphorism appears sadly true.

World leaders have forgotten how the collapse of Wall Street in 1929 developed into a world-wide depression. It happened not thanks to market failures but as a result of mistakes made by governments which tried to protect their national economies and markets. The market was not allowed to make its corrections. Government interventions only prolonged the crisis.
We may hope that, even as we see several bad signs of neo-interventionist attitude, all the mistakes of the 1930s will not be repeated. But it is clear that the tide has turned again. Capitalism has been declared dead, Marx is honored, and the invisible hand of the market is blamed for all failures. This is not fair. Actually it is not markets that have failed but governments, which did not fulfill their role of the “visible hand” — creating and guaranteeing market rules. Weak regulation of the banking sector and extensive lending, encouraged by governments, are examples of this failure.

For the full commentary, see:
MART LAAR. “Economic Freedom Is Still the Best Policy.” Wall Street Journal (Fri., FEBRUARY 13, 2009): A13.

The Values of the Belgian Diamond Market

“Orthodox Jews have been at the center of Antwerp’s diamond trade since the late 19th century, when they fled Eastern Europe.” Source of the caption and photo: online version of the NYT article quoted and cited below.

Markets will work better when a critical mass of participants hold certain core values, including those of tolerance and honesty.

(p. A11) ANTWERP, Belgium — Teetering on their bicycles or strolling amiably while chattering into cellphones in Yiddish, Dutch, French, Hebrew or English, the Orthodox Jews of this Belgian port city have set the tone of its lively diamond market for more than a century.

Hoveniersstraat, or Gardener’s Street, is the backbone of the market, where four-fifths of the world’s uncut diamonds are traded. It winds past the L & A Jewelry Factory and the office of Brinks, the armored car company, and on to the World Diamond Center just opposite the little Sephardic synagogue. On any given day but Friday, it is sprinkled liberally with Orthodox Jewish diamond traders, many of them Hasidim.
. . .
Ari Epstein, 33, is the son of a diamond trader, whose father emigrated from a village in Romania in the 1960s. “It’s a typical shtetl environment,” he said, wearing the yarmulke with a business suit. “It’s live and let live. Most important is to do business together and to be honorable.”

For the full story, see:
JOHN TAGLIABUE. “Antwerp Journal; Belgian Market’s Luster Dims, but Legacy Stays.” The New York Times (Tues., January 6, 2009): A11.
(Note: ellipsis added.)

“The market employs about 7,000 and creates work indirectly for another 26,000.” Source of the caption and photo: online version of the NYT article quoted and cited above.

Globalization Helps U.S. During Financial Crisis

Source of the graphic: screen capture from the online version of the WSJ article quoted and cited below.

(p. A1) Much of the world may be struggling with the economic downturn, but life has been getting better in Columbus, Ind., Kingsport, Tenn., and Waterloo, Iowa.

These out-of-the-way places have become trade hot spots as U.S. exports, fueled by the dollar’s fall, continue to provide a rare spark in an otherwise gloomy economy.
While many economists expect a recent snapback in the value of the dollar and a spreading global slowdown to soften that growth, exports have become a key to greater local prosperity more than at any time in decades.
. . .
(p. A16) Export-driven growth marks a dramatic shift in an economy that has relied heavily on consumer spending. That has slowed in recent months as Americans, nervous about job losses, teetering banks, falling home values, and rising gasoline and food prices, have tightened spending. Against that background, exports have emerged as a powerful motor.
Over the past year, real-goods exports have risen $115 billion, or 12%, and are up across every major category. They now make up nearly 13.5% of gross domestic product, the highest percentage since World War II. Critics often grumble that the U.S. exports masses of scrap steel and other waste materials to recyclers in China and elsewhere, which is true, but exports of manufactured goods, commodities and services are also growing. Consumer products, from sporting goods to art supplies, have risen 12%, and even autos, which are languishing on showroom floors in the U.S., saw a 4% bump up in exports.
Service exports — which include media, entertainment, financial services, computer software and foreign tourism in the U.S. — have grown strongly right along with the larger goods side of the trade ledger. Through the second quarter of 2008, real-service exports are up nearly 10% over the past year.
It’s a badly needed tonic for the beleaguered U.S. economy.

For the full story, see:
TIMOTHY AEPPEL. “Exports Bolster Local Economies.” The Wall Street Journal (Thurs., SEPTEMBER 11, 2008): A1 & A16.
(Note: the title of the article on the web is: “Exports Prop Up Local Economies.”)
(Note: ellipsis added.)

Economic Freedom Correlated with “Every Indicator of Well-Being”

Source of table: online version of the WSJ article quoted and cited below.

(p. A17) For 15 years, The Wall Street Journal and The Heritage Foundation have been measuring countries’ commitment to free-market capitalism in the “Index of Economic Freedom.” The 2009 Index, published this week, provides strong evidence that the countries that maintain the freest economies do the best job of promoting prosperity for all citizens.

The positive correlation between economic freedom and national income is confirmed yet again by this year’s data. The freest countries enjoy per capita incomes over 10 times higher than those in countries ranked as “repressed.” This year, for the first time, the Index also correlates economic freedom with important societal values like poverty reduction, human development, political freedom and environmental protection. The linkages are robust, with economically freer countries performing significantly better on every indicator of well-being.
. . .
In a special chapter in this year’s Index, the Journal’s Stephen Moore chronicles the critical role that tax cuts, particularly cuts in corporate taxes, have played in economic growth in Eastern European countries and others like Ireland. The citizens of those countries lived for decades with state-directed economic planning and regulation, which many now advocate for the U.S. and other advanced economies. They remember the clumsiness of socialism and the government missteps that fostered economic disaster. To switch dance partners now that they have adapted to the quick step of capitalism and are enjoying its many benefits would be a tragic mistake.
It would be ironic indeed if the world’s advanced economies, in seeking to address current woes, abandoned the system that has brought them and others around the world the amazing levels of prosperity experienced over the last half century. The “Index of Economic Freedom” provides a record of that progress. It charts the path to economic advancement and proves that the best way forward is to hang onto our partner and step to the music of the market.

For the full commentary, see:
TERRY MILLER. “Freedom Is Still the Winning Formula.” The Wall Street Journal (Tues., January 13, 2009): A17.
(Note: ellipsis added.)

Taxpayers Pay $91 Million for Surplus Milk Powder

“Millions of pounds of government-owned milk powder stored in a warehouse in Fowler, Calif.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) FOWLER, Calif. — The long economic boom, fueled by easy credit that allowed people to spend money they did not have, led to a huge oversupply of cars, houses and shopping malls, as recent months have made clear. Now, add one more item to the list: an oversupply of cows.
And it turns out that shutting down the milk supply is not as easy as closing an automobile assembly line.
As a breakneck expansion in the global dairy industry turns to bust, Roger Van Groningen must deal with the consequences. In a warehouse that his company runs here, 8 to 20 trucks pull up every day to unload milk powder. Bags of the stuff — surplus that nobody will buy, at least not at a price the dairy industry regards as acceptable — are unloaded and stacked into towering rows that nearly fill the warehouse.
Mr. Van Groningen’s company does not own the surplus milk powder, but merely stores it for the new owners: the taxpayers of the United States. To date, the government has agreed to buy about $91 million worth of milk powder.
. . .
(p. B5) Government price supports provide a price floor for agricultural products as a way of keeping farmers afloat during hard times and ensuring an adequate food supply.
The Agriculture Department has committed to buying 111.6 million pounds of milk powder at 80 cents a pound, for roughly $91 million, which includes some handling fees. . . .
. . .
. . . the agency has not decided what to do with the cache of milk powder in California.
Some critics of farm subsidies argue that price support programs are antiquated and allow farmers to continue producing even when the economics make no sense, as taxpayers will always buy up the excess production.
“They don’t want to downsize or respond to the market signal. They want to keep producing,” said Kenneth Cook, president of the Environmental Working Group, a Washington research organization that has long been critical of the government’s farm policy. “Once you get in a jam like this, it becomes our collective problem.”

For the full story, see:
ANDREW MARTIN. “Awash in Milk and Headaches; Cows Keep Producing Despite Drop in Demand.” The New York Times (Fri., January 1, 2009): B1 & B5.
(Note: ellipses added.)
(Note: the online version of the article is dated January 1, 2009, and is entitled “As Recession Deepens, So Does Milk Surplus.”)

“Arthur Machado, a dairy farmer in Fresno, Calif., has to keep feeding his herd of more than 300 cows. He plans to sell them and take up a more stable commodity.” Source of caption and photo: online version of the NYT article quoted and cited above.