Government – Page 133 – artdiamondblog.com

Creative Sparks Arise from Opportunistic Innovation

Source of book image:
http://ecx.images-amazon.com/images/I/51vovIVI5sL.jpg

(p. D16) One of the insights of “Strategic Intuition” is that business makes progress by following the opportunistic innovation model, while governments and international-aid agencies aim repetitively at rigid social goals. Such rigidity happens partly for a reason that Mr. Duggan is too polite to mention — bureaucrats, by nature, rarely give off a creative spark. Mr. Duggan prefers to emphasize a structural cause: The public demands solutions to problems of great social importance; thus bureaucrats get stuck with fixed objectives. Yet Mr. Duggan also shows that social progress often happens by emulating the opportunism of business. Among the most powerful of his examples is Muhammad Yunus’s invention of microcredit.
. . .
If there are still businessmen who feel compelled to follow a fixed-goal plan — missing out on the profits of opportunistic flexibility — then at least there is the free market to punish them. Market feedback is surely one big reason that we have so many innovative entrepreneurs. Where the old approach does most of the damage is in social policy, where the feedback is either fuzzy (as in domestic policy) or absent (foreign aid). Social policy could use a lot fewer commencement speakers and a lot more creative sparkers.

For the full review, see:
WILLIAM EASTERLY. “BOOKSHELF; Surprised by Opportunity.” The Wall Street Journal (Weds., November 14, 2007): D16.
(Note: ellipsis added.)

The reference to the Stratetic Intuition book is:
Duggan, William. Strategic Intuition: The Creative Spark in Human Achievement. New York: Columbia University Press, 2007.

Market Prices Send “the Right Signal to the Customer to Save Energy”

In the passage quoted below, the “commission” refers to China’s “National Development and Reform Commission.”

(p. A6) The commission estimates China’s energy efficiency is about 10% below that of developed countries because of obsolete technology. But many experts say Beijing’s policy priorities are a bigger obstacle.
Worries about social unrest and inflation led Beijing to put the brakes on pricing overhauls, at tremendous cost to state refiners PetroChina Co. and China Petroleum & Chemical Corp., known as Sinopec.
“Market prices are a very important and key issue because they send out the right signal to the customer to save energy,” said Yang Fuqiang, vice president of the Energy Foundation in Beijing.

For the full story, see:
David Winning. “Why Energy Efficiencies Prove Elusive in China.” Wall Street Journal (Tues., Nov. 6, 2007): A6.

Government Post-Doc Funding Creates “Glut” of Scientists

The quotes below from a WSJ summary of a Nov. 16, 2007 The Chronicle of Higher Education article, suggests that we do not need to worry about the sometimes-alleged “shortage” of scientists and engineers:

(p. B14) The federal dollars pumped into university science departments has created more scientists and engineers than the market wants, said Michael S. Teitelbaum, vice president of Alfred P. Sloan Foundation, which sponsors research, at a hearing in Congress last week. Mr. Teitelbaum said the federal government should find a way to adjust how it funds university research so that university departments don’t end up using the extra money to add graduate students and postdoctoral fellows

For the full summary, see:
“The Informed Reader; Science; U.S. Faces a Glut (Really) of Scientists, Engineers.” The Wall Street Journal (Tues., November 13, 2007): B14.

Former New Orleanians Do Not Miss the Crime and Chaos

“Carla Reese, left, with her daughter Renee Roussell, who said that “there is nothing to go back to” in New Orleans.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) LAKE CHARLES, La. — With resignation, anger or stoicism, thousands of former New Orleanians forced out by Hurricane Katrina are settling in across the Gulf Coast, breaking their ties with the damaged city for which they still yearn.

They now cast their votes in small Louisiana towns and in big cities of neighboring states. They have found new jobs and bought new houses. They have forsaken their favorite foods and cherished pastors. But they do not for a moment miss the crime, the chaos and the bad memories they left behind in New Orleans.

This vast diaspora — largely black, often poor, sometimes struggling — stretches across the country but is concentrated in cities near the coast, like this one, or Atlanta or Baton Rouge or Houston, places where the newcomers are still reaching for accommodation.

The break came fairly recently. Sometime between the New Orleans mayor’s race in spring 2006, when thousands of displaced citizens voted absentee or drove in to cast a ballot, and the city election this fall, when thousands did not — resulting in a sharply diminished electorate and a white-majority City Council — the decision was made: there was no going back. Life in New Orleans was over.

For the full story, see:
ADAM NOSSITER. “With Regrets, New Orleans Is Left Behind.” The New York Times (Tues., December 18, 2007): A1 & A29.

“Cynthia Jones, left, her sister, Pauline Hurst, and their mother, Evelyn Williams, at the church warehouse where they now work.” Source of caption and photo: online version of the NYT article quoted and cited above.

Bill Clinton’s Role in “Fueling the Mother of All Housing Bubbles”

The author of the lines quoted below won the Nobel Prize in economics in 2002.

(p. A20) The joint housing and mortgage-market crisis once again reminds us that all financial implosions stem from the same cause: borrowing short and lending long without enough equity to weather periodic storms in the gap between.
But this bubble was different. Besides being fueled by housing purchases and repackaged loans, each with inadequate equity — doubling down with other people’s money — at the end of the capital-gains rainbow was the right to take up to $500,000 of profit, tax free.
Thank you President Bill Clinton for your 1997 action, applauded by the banks, the realtors and all citizens in search of half-millionaire status from an investment they could understand and self deceptively believe to be low risk; thank you for fueling the mother of all housing bubbles; thank you for enabling so many of us who bought second or third homes, and homes before construction began, which we then sold to someone else who dreamed of riches from owning homes long enough to sell to another fool.
Once again, try as we might and in spite of our political rhetoric, we have failed to help the poor in applauding government action intended to help ourselves.

For the full commentary, see:
VERNON L. SMITH. “The Clinton Housing Bubble.” The Wall Street Journal (Tues., December 18, 2007): A20.

Motive Power Really Does Matter: More on Why Africa is Poor

“A crowded train traveling through Katanga Province. Goods and people are crammed in, and bathrooms are used for storage.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A4) In large swaths of Congo, a vast country the size of Western Europe, roads are impassable or nonexistent, large riverboats no longer ply the waterways and air travel is prohibitively expensive, leaving many people to rely on an increasingly dangerous railway system long past its prime.
Fresh from its first democratic elections in nearly 50 years and still struggling to emerge from civil war, Congo is trying to get its trains running again. But it has a long way to go.
. . .
The bathrooms in first class become filthy soon after a trip begins. In second and third class, the bathrooms are used for storage. In one car, five large bags of charcoal were stuffed into a bathroom, and people relieved themselves in buckets or out windows.
The railway employs over 13,000 people, but the last time paychecks were sent out was in May, and that was payment for the spring of 2005. So many employees do not go to work, and bribes are widespread.
“Sometimes it’s difficult to resist temptations,” said Agustín, the police chief at the Kamina station, who gave only his first name. “I do bad things.”
“I haven’t been paid in 29 months,” he added. “How am I supposed to send my children to school?”
Léon, a conductor and machinist who gave only his first name, thinks the problem begins in Kinshasa, the capital. “This is a state-owned company,” he said. “It’s bankrupt because of the government. The way things are going, we won’t last two years.”

For the full story, see:
WILL CONNORS. “Congo by Rail: Filthy, Crowded and Dangerous.” The New York Times (Tues., September 4, 2007): A4.
(Note: ellipsis added.)

“A train controller relays the position of a train to another station. Because pay is so infrequent, many employees do not go to work and bribes are widespread.” Source of caption and photo: online version of the NYT article quoted and cited above.

Bolivia Sells More Brazil Nuts Than Brazil

(p. A4) Throughout the 20th century, most of the Brazil nuts consumed around the world came from the jungle surrounding this bustling river market town in the eastern Amazon. But the bitter joke here these days is that the only place you can still find a Brazil nut tree is on the municipal seal.
To the chagrin of Brazilians, exports of the nuts that bear their country’s name have fallen precipitously to about 7,000 metric tons in 2003 from nearly 19,000 metric tons in 2000, allowing neighboring Bolivia to become the market leader. Groves of Brazil nut trees are disappearing all over the Brazilian Amazon, and the question of who bears responsibility for that sharp decline and resulting deforestation has become the subject of a heated and growing debate.
Economists, scientists and other scholars tend to point to a single family, based here, that has dominated the industry for three generations and controls hundreds of thousands of acres in this region at the junction of the Araguaia and Tocantins rivers. But members of the influential clan, called Mutran, say they are being unjustly attacked and complain of unfair competition and contraband.
. . .
”At their peak, the Mutrans had a monopoly on everything connected with the Brazil nut industry, from harvesting to transport to exports,” said Marilia Emmi, a professor at the Nucleus for Amazon Research at the Federal University of Pará. ”Much of their own production occurred on public lands that belonged to the state but were initially leased to them for a pittance as the result of backroom political deals.”
. . .
”Because of their monopoly, the Mutrans paid a price so low that production dropped off the map,” said Zico Bronzeado, a former Brazil nut harvester who now represents Acre in the lower house of Congress. The low prices drove growers to abandon the business, the critics say, selling their lands to loggers and cattle ranchers in a process that deforested vast stretches of the Amazon and further enriched the Brazilian elite.

For the full story, see:
LARRY ROHTER. “Marabá Journal; Brazil’s Problem in a Nutshell: Bolivia Grows Nuts Best.” The New York Times (Thurs., August 26, 2004): A4.
(Note: ellipses added.)

Unintended Consequences of the Government’s Pushing Ethanol

Source of graphs: online version of the NYT article quoted and cited below.

(p. C1) Shopping at a Whole Foods Market in suburban Chicago, Meredith Estes said food prices have jumped so much she has resorted to coupons. Charles T. Rodgers Jr., an Arkansas cattle rancher, said normal feed rations so expensive and scarce he is scrambling for alternatives. In Oregon, Jack Joyce, the owner of Rogue Ales, said the cost of barley malt has soared 88 percent this year.

For years, cheap food and feed were taken for granted in the United States.
But now the price of some foods is rising sharply, and from the corridors of Washington to the aisles of neighborhood supermarkets, a blame alert is under way.
Among the favorite targets is ethanol, especially for food manufacturers and livestock farmers who seethe at government mandates for ethanol production. The ethanol boom, they contend, is raising corn prices, driving up the cost of producing dairy products and meat, and causing farmers to plant so much corn as to crowd out other crops.
The results are working their way through the marketplace, in this view, with overall consumer grocery costs up roughly 5 percent in a year and feed costs up more than 20 percent.
Now, with Congress poised to adopt a new mandate that would double the volume of ethanol made from corn, ethanol skeptics say a fateful moment has arrived, with the nation about to commit itself to decades of competition between food and fuel for the use (p. C4) of agricultural land.
(p. C4) “This is like a runaway freight train,” said Scott Faber, a lobbyist for the Grocery Manufacturers Association, who complained that ethanol has the same “magical effect” on politicians as the tooth fairy and Santa Claus have on children. “It’s great news for corn farmers, but terrible news for consumers.”
. . .
The price increases for corn have had a broad impact, both because farmers are planting more corn and less of other crops and because livestock producers are scrambling for feed substitutes. For instance, soybeans acreage planted this year was about 16 percent less than in 2006.
Feed costs have increased 25 to 30 percent in the last year, according to David Fairfield, director of feed services at the National Grain and Feed Association. He attributed virtually all of the increase to the demands of the ethanol industry
One consequence of the higher feed costs is rising competition for malt barley between livestock farmers, who want it for feed, and brewers, who need it for beer. Mr. Joyce, the Rogue Ales owner in Newport, Ore., said he has been forced to raise prices to pay for the additional costs of ingredients.
Mr. Rodgers, the Rison, Ark., rancher, said he used to feed his cattle a mixture of corn gluten and soybean hulls. But he said he cannot get corn gluten anymore, and the cost of soybean hulls has risen to $150 a ton from about $105 a ton.

For the full story, see:
ANDREW MARTIN. “The Price of Growing Fuel.” The New York Times (Tues., December 18, 2007): C1 & C4.
(Note: ellipsis added.)

“Jack Joyce, the owner of Rogue Ales in Newport, Ore., says the cost of barley has skyrocketed, forcing him to raise prices.” Source of caption and photo: online version of the NYT article quoted and cited above.

Incentives Matter: Capital Punishment Deters Murders

Source of graph: online version of the WSJ commentary quoted and cited below.

(p. A13) Recent high-profile events have reopened the debate about the value of capital punishment in a just society. This is an important discussion, because the taking of a human life is always a serious matter.
Most commentators who oppose capital punishment assert that an execution has no deterrent effect on future crimes. Recent evidence, however, suggests that the death penalty, when carried out, has an enormous deterrent effect on the number of murders. More precisely, our recent research shows that each execution carried out is correlated with about 74 fewer murders the following year.
For any society concerned about human life, that type of evidence is something that should be taken very seriously.
The study examined the relationship between the number of executions and the number of murders in the U.S. for the 26-year period from 1979 to 2004, using data from publicly available FBI sources. The chart nearby shows the number of executions and murders by year.

For the full commentary, see:
ROY D. ADLER and MICHAEL SUMMERS. “Capital Punishment Works.” The Wall Street Journal (Fri., November 2, 2007): A13.

Britain’s “Novel Immigration Problem”: Too Few Polish Immigrants

“Polish women selling sausages at the Borough Market in London. The British have also grown to enjoy Polish food.” Source of caption and photo: online version of the International Herald Tribune version of the article quoted and cited below.

(p. C1) LONDON, Oct. 18 — When Piotr Farbiszewski landed here three years ago, he had enough money in his pocket to live for two weeks.
A successful technology consultant in Warsaw, he and his wife, Ela, a schoolteacher, had come to London to try it on for size; if they liked it, they would stay. To earn money, he worked as a builder while she flipped hamburgers.
They decided that they liked London, and within a year, Mr. Farbiszewski was a senior programmer at a software company. In March, the couple bought a small terraced house outside London, where they plan to raise a family.
“We’re very happy here,” Mr. Farbiszewski, 31, said. “The quality of life is better, the economy is stronger, there is less bureaucracy, it’s a multicultural society and the lady in the supermarket will smile at me. People don’t smile at each other in Poland.”
The Farbiszewskis are small players in one of Europe’s most successful immigration stories. Since Poland joined the European Union in 2004 and Britain, unlike France and most other members, welcomed Polish workers, an estimated 1.1 million Poles, mainly young, have come to Britain. Today, they are the third-largest group of immigrants in the country, behind (p. C5) Irish and Indians.
Britain has benefited. On Tuesday, the Home Office estimated that immigration added £6 billion ($12.3 billion) to the nation’s economy last year. According to David Blanchflower of the Bank of England’s monetary policy committee, East European immigration has also reduced inflation pressure by increasing the supply of goods and services.
Indeed, Britain may soon face a novel immigration problem. As Poland’s economy has improved this year, immigration has slowed, which economists say could cause labor shortages in British industries.

For the full story, see:
JULIA WERDIGIER. “As the Poles Get Richer, Fewer Seek British Jobs.” The New York Times (Fri., October 19, 2007): C1 & C5.

The Government’s War on Working Bodega Cats

“Holly scares the rodents away at home, a deli in Williamsburg, Brooklyn.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A28) Across the city, delis and bodegas are a familiar and vital part of the streetscape, modest places where customers can pick up necessities, a container of milk, a can of soup, a loaf of bread.
Amid the goods found in the stores, there is one thing that many owners and employees say they cannot do without: their cats. And it goes beyond cuddly companionship. These cats are workers, tireless and enthusiastic hunters of unwanted vermin, and they typically do a far better job than exterminators and poisons.
When a bodega cat is on the prowl, workers say, rats and mice vanish.
. . .
To store owners, the services of cats are indispensable in a city where the rodent problem is serious enough to be documented in a still popular two-minute video clip on YouTube from late February (youtube.com/watch?v=su0U37w2tws) of rats running amok in a KFC/Taco Bell in Greenwich Village. Store-dwelling cats are so common that there is a Web site, workingclasscats.com, dedicated to telling their tales.
But as efficient as the cats may be, their presence in stores can lead to legal trouble. The city’s health code and state law forbid animals in places where food or beverages are sold for human consumption. Fines range from $300 for a first offense to $2,000 or higher for subsequent offenses.
. . .
In October, a health inspector fined Mr. Martinez $300 and warned him that if Junior was still there by the time of the next inspection he would be fined $2,000.
“He wants me to get rid of the cat, but the rats will take over if I do,” Mr. Martinez said. “I need the cat, and the cat needs a home.”
Because stores do not get advance notification of an inspection, Mr. Martinez is trying to keep Junior in his office as much as possible. Many bodega owners reason that a cat is less of a health threat than an army of nibbling rats. “If cats live in homes and apartments where people have food, a cat shouldn’t be a threat in a store if it’s well maintained,” Mr. Fernández said.

For the full story, see:
KATE HAMMER. “To Dismay Of Inspectors, Prowling Cats Keep Rodents On the Run At City Delis The New York Times (Fri., December 21, 2007): A28.
(Note: ellipses added.)
“Oreo roams at a deli in Greenpoint, Brooklyn.” Source of caption and photo: online version of the NYT article quoted and cited above.