Government – Page 86 – artdiamondblog.com

Teles Argues the Evils of Government Arise More from Its Complexity than Its Size

(p. A21) Steven M. Teles had a mind-altering essay in National Affairs called “Kludgeocracy in America.” While we’ve been having a huge debate about the size of government, the real problem, he writes, is that the growing complexity of government has made it incoherent. The Social Security system was simple. But now we have a maze of saving mechanisms — 401(k)’s, I.R.A.’s, 529 plans and on and on. Health insurance is now so complicated that only 14 percent of beneficiaries could answer basic questions about deductibles and co-pays.
This complexity stymies rational thinking, imposes huge compliance costs, and aids special interests who are capable of manipulating the intricacies. One of the reasons we have such complex structures, Teles argues, is that Americans dislike government philosophically, but like government programs operationally. Rather than supporting straightforward government programs, they support programs in which public action is hidden behind a morass of tax preferences, obscure regulations and intricate litigation.

For the full commentary, see:
DAVID BROOKS. “The Sidney Awards, Part 2.” The New York Times (Tues., December 31, 2013): A21. [National Edition]
(Note: the online version of the commentary has the date December 30, 2013.)

The article praised by Brooks is:
Teles, Steven M. “Kludgeocracy in America.” National Affairs 17 (Fall 2013): 97-114.

AquaBounty Has Waited More than 17 Years for FDA Approval

“The Enviropig Scientists at the University of Guelph, in Canada, developed these pigs to produce more environmentally friendly waste than conventional pigs. But the pigs were killed because the scientists could not get approval to sell them as food.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 4) If patience is a virtue, then AquaBounty, a Massachusetts biotech company, might be the most virtuous entity on the planet.

In 1993, the company approached the Food and Drug Administration about selling a genetically modified salmon that grew faster than normal fish. In 1995, AquaBounty formally applied for approval. Last month, more than 17 years later, the public comment period, one of the last steps in the approval process, was finally supposed to conclude. But the F.D.A. has extended the deadline — members of the public now have until late April to submit their thoughts on the AquAdvantage salmon. It’s just one more delay in a process that’s dragged on far too long.
The AquAdvantage fish is an Atlantic salmon that carries two foreign bits of DNA: a growth hormone gene from the Chinook salmon that is under the control of a genetic “switch” from the ocean pout, an eel-like fish that lives in the chilly deep. Normally, Atlantic salmon produce growth hormone only in the warm summer months, but these genetic adjustments let the fish churn it out year round. As a result, the AquAdvantage salmon typically reach their adult size in a year and a half, rather than three years.
. . .
We should all be rooting for the agency to do the right thing and approve the AquAdvantage salmon. It’s a healthy and relatively cheap food source that, as global demand for fish increases, can take some pressure off our wild fish stocks. But most important, a rejection will have a chilling effect on biotechnological innovation in this country.
. . .
Then there’s the Enviropig, a swine that has been genetically modified to excrete less phosphorus. Phosphorus in animal waste is a major cause of water pollution, and as the world’s appetite for meat increases, it’s becoming a more urgent problem. The first Enviropig, created by scientists at the University of Guelph, in Canada, was born in 1999, and researchers applied to both the F.D.A. and Health Canada for permission to sell the pigs as food.
But last spring, while the applications were still pending, the scientists lost their funding from Ontario Pork, an association of Canadian hog farmers, and couldn’t find another industry partner. (It’s hard to blame investors for their reluctance, given the public sentiment in Canada and the United States, as well as the uncertain regulatory landscape.) The pigs were euthanized in May.
The F.D.A. must make sure that other promising genetically modified animals don’t come to the same end. Of course every application needs to be painstakingly evaluated, and not every modified animal should be approved. But in cases like AquaBounty’s, where all the available evidence indicates that the animals are safe, we shouldn’t let political calculations or unfounded fears keep these products off the market. If we do that, we’ll be closing the door on innovations that could help us face the public health and environmental threats of the future, saving countless animals — and perhaps ourselves.

For the full commentary, see:
EMILY ANTHES. “Don’t Be Afraid of Genetic Modification.” The New York Times, SundayReview Section (Sun., March 10, 2013): 4.
(Note: ellipses added.)
(Note: the online version of the commentary has the date March 9, 2013.)

Emily Anths, who is quoted above, has written a related book:
Anthes, Emily. Frankenstein’s Cat: Cuddling up to Biotech’s Brave New Beasts. New York: Scientific American / Farrar, Straus and Giroux, 2013.

Unpedigreed, Self-Educated, Obese Knox Understood Artillery

Source of book image: online version of the WSJ review quoted and cited below.

(p. A17) In “Sons of the Father: George Washington and His Protégés,” we can see how Washington’s ideas about character evolved over the course of the war and after. This collection of essays, edited by Robert M.S. McDonald, explores Washington’s relationships with a series of younger men.
. . .
Knox came to Washington’s attention in 1775 for his work on the defenses around Boston. His resourcefulness and keen interest in military science proved invaluable. When Washington allowed Knox to head for Fort Ticonderoga in hopes of retrieving some 50 British cannon captured by Ethan Allen, Knox succeeded against long odds. Over nine harrowing weeks, Mark Thompson writes, Knox and his men hauled 60 tons of artillery 300 miles “through the New York backcountry, along waterways and gullied roads, across ice and snow.” Deployed on Dorchester Heights overlooking Boston, the guns helped persuade the British to abandon the city. But Knox was far more than a herculean teamster. Washington put him in charge of all Continental artillery, and the batteries under his direction loomed large at Trenton, Princeton, Monmouth and Yorktown. After the war, Knox became Washington’s secretary of war.
Washington saw merit in the unprepossessing Knox, as he did in others, despite the lack of a “gentlemanly” pedigree. Forced as a child to support his mother when his father abandoned the family, Knox was a mere bookseller before the war, self-educated and obese. But he understood artillery and could see its role in sieges and in the mobile warfare that would characterize the Revolution. More than that, he could discuss its theory and application with Washington. Jefferson and Madison, in their more playful approach to ideas, complicated matters; Knox clarified them.

For the full review, see:
ALAN PELL CRAWFORD. “Bookshelf; A Few Men of Character.” The Wall Street Journal (Tues., Dec. 10, 2013): A17.
(Note: ellipsis added.)
(Note: the online version of the review has the date Dec. 9, 2013, and has the title “BOOKSHELF; Book Review: ‘George Washington: Gentleman Warrior,’ by Stephen Brumwell and ‘Sons of the Father,’ edited by Robert M.S. McDonald; By 1775, Washington had strong ideas about how to run an army. Officers, he said, should be men of independent financial means.”)

Book under review:
McDonald, Robert M. S., ed. Sons of the Father: George Washington and His Protégés, Jeffersonian America. Charlottesville, VA: University of Virginia Press, 2013.

Ignorance of Economics Makes U.S. Agency Complicit in Elephant Deaths

“Crushed ivory falls out of the crusher as the U.S. crushed its six-ton stock of confiscated ivory at the Rocky Mountain Arsenal National Wildlife Refuge . . . .” Source of caption and photo: online version of the WSJ article quoted and cited below.

The higher the price of ivory, the greater the incentive for ivory poachers to kill elephants. The U.S. Fish and Wildlife Service could have put their cache of ivory on the market, thereby increasing the supply, and reducing the price. If they had done so, they would have reduced the incentive of the poachers to poach. (This is basic price theory that I teach in each of my micro-economic principles classes.) Instead they crushed the ivory and thereby doomed some elephants to death, who otherwise could have been saved.

(p. A3) COMMERCE CITY, Colo.–The U.S. government spent the past 25 years amassing contraband ivory in a warehouse here, with pieces ranging from tiny statuettes to full elephant tusks tattooed by intricate carvings. Ultimately, the pile grew to six tons–equivalent to ivory from at least 2,000 elephants.

On Thursday, the stash collected by the U.S. Fish and Wildlife Service was pulverized by an industrial rock crusher as government officials, conservationists from around the world and celebrities gathered to watch the destruction.
The move, which follows similar events in the Philippines and Gabon in recent years, is part of a global effort to combat elephant poaching, on the rise because of growing demand for ivory trinkets in Asia. Proponents argue that crushing the ivory conveys to illegal traffickers and collectors that it has no value unless it is attached to an elephant.
. . .
But critics of the practice said they worry that destroying the coveted commodity, sometimes referred to as “white gold,” could instead create the perception that the world’s remaining ivory is more valuable–and drive poachers to kill more elephants for their tusks. “This could be self-defeating,” said Michael ‘t Sas-Rolfes, an independent conservation economist.
. . .
While praising efforts to preserve elephants, some in conservation circles consider crushing contraband ivory to be an ineffective strategy.
Kirsten Conrad, a wildlife conservation consultant who has studied the Chinese ivory market, said elephants could be better served if sustainably harvested ivory–from elephants that died from natural causes, for example–were regularly offered for sale.
The proceeds would give communities in Africa an incentive to better protect wildlife, and the steady supply would dissuade speculators in China from stockpiling, as she says they are doing now. A kilo of raw ivory can sell for up to $3,000. “We’re losing an elephant every 16 minutes,” she said. “We should look really hard at legal trade.”

For the full story, see:
ANA CAMPOY. “Crushing Illegal Ivory Trade; In Move to Combat Elephant Poaching, U.S. Destroys Six Tons of ‘White Gold’.” The Wall Street Journal (Fri., Nov. 15, 2013): A3.
(Note: ellipses added.)
(Note: the online version of the review has the date Nov. 14, 2013, and has the title “Crushing Illegal Ivory Trade; In Move to Combat Elephant Poaching, Government Agency Destroys Six Tons of ‘White Gold’.”)

“Ivory on display before the U.S. crushed it in Commerce City, Colo., Thursday. On Thursday the government destroyed nearly six tons of seized contraband ivory tusks and trinkets.” Source of caption and photo: online version of the WSJ article quoted and cited above.

“Western Union Bullied the Makers of Public Policy into Serving Private Capital”

Source of book image: online version of the WSJ review quoted and cited below.

(p. A13) Until now there has been no full-scale, modern company history. Joshua D. Wolff’s “Western Union and the Creation of the American Corporate Order, 1845-1893” ably fills the bill, offering an exhaustive and yet fascinating account.
. . .
If people today remember anything about Western Union, it is that its coast-to-coast line put the Pony Express out of business and that its leaders didn’t see the telephone coming. Mr. Wolff tells us that neither claim is exactly true. It was Hiram Sibley, Western Union’s first president, who went out on his own, when his board balked, to form a separate company and build the transcontinental telegraph in 1861; he made his fortune by eventually selling it to Western Union. And the company was very aware of Alexander Graham Bell’s invention, patented in 1876, but history had supposedly shown that it wasn’t necessary to control a patent to win the technology war. The company’s third president, William Orton, was sure that Bell and his “toy” would not get the better of Western Union: “We would come along and take it away from him.” They didn’t.
. . .
Mr. Wolff contends that the company’s practices set the template for today’s “corporate triumphalism,” not least in the way Western Union bullied the makers of public policy into serving private capital. Perhaps, but telecom competition today is so ferocious and differently arranged from that of the late 19th century that a “triumphant” company today may be toast tomorrow–think of BlackBerry–and can’t purchase help with anything like Western’s Union’s brazenness and scope. Western Union had friends in Congress, the regulatory bureaucracy and the press. Members of the company’s board of directors chaired both the 1872 Republican and Democratic national conventions. It seemed that, whatever the battles in business, politics, technology or the courts, the company’s shareholders won.

For the full review, see:
STUART FERGUSON. “Bookshelf; The Octopus of the Wires.” The Wall Street Journal (Mon., Dec. 23, 2013): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date Dec. 22, 2013, and has the title “BOOKSHELF; Book Review: ‘Western Union and the Creation of the American Corporate Order, 1845-1893,’ by Joshua D. Wolff.”)

Book under review:
Wolff, Joshua D. Western Union and the Creation of the American Corporate Order, 1845-1893. New York: Cambridge University Press, 2013.

Wind Power Fined $1 Million for Killing Birds

“A golden eagle flies over a wind turbine on Duke Energy’s wind farm in Converse County, Wyo.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A17) The Justice Department announced late . . . [in the week of Nov. 17-23] that a subsidiary of Duke Energy has agreed to pay $1 million for killing golden eagles and other federally protected birds at two of the company’s wind projects in Wyoming. The guilty plea was a long-overdue victory for the rule of law and a sign that green energy might be going out of vogue.

As Justice noted in its news release, this is the first time a case has been brought against a wind company for violating the Migratory Bird Treaty Act. The 1918 law makes it a federal crime to kill any bird of more than 1,000 different species. Over the past few decades, federal authorities have brought hundreds of cases against oil and gas companies for killing birds, while the wind industry has enjoyed a de facto exemption. By bringing criminal charges against Duke for killing 14 golden eagles and 149 other protected birds, Justice has ended the legal double standard on enforcement.

For the full commentary, see:
ROBERT BRYCE. “Wind Power Is Brought to Justice; Duke Energy’s guilty plea for killing protected birds is an ominous sign for renewable energy.” The Wall Street Journal (Fri., Nov. 29, 2013): A17.
(Note: ellipsis, and bracketed words, added.)
(Note: the online version of the commentary has the date Nov. 28, 2013.)

Carnegie’s Uncle Aitkin Expected to Make a Good Profit Starting a Private Lending Library

Shortly after arriving in Allegheny City (near Pittsburgh) Andrew Carnegie’s Uncle Aitkin had complained in a letter:

(p. 42) “There is no possibility of getting papers or periodicals to read here for a small sum–most of the people being in the habit of purchasing them for their own use. This has been to me a great deprivation. I really find that books here are as dear as in the old country everything considered.”

Uncle Aitkin hoped to remedy this flaw in American cultural life–and make a profit at it–by starting up his own lending library. “I am now convinced that for any one to keep a library and to give works out at a cheaper rate would pay very well & I think I will be engaged in this business in a short time,–after I make a little money by lecturing etc.” Regrettably–for Uncle Aitkin and for Allegheny City’s starved readers–he never got around to setting up his business.

Source:
Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.
(Note: the pagination of the hardback and paperback editions of Nasaw’s book are the same.)

Over-Regulated Tech Entrepreneurs Seek Their Own Country

The embed above is provided by YouTube where the video clip is posted under the title “Balaji Srinivasan at Startup School 2013.”

(p. B4) At a startup conference in the San Francisco Bay area last month, a brash and brilliant young entrepreneur named Balaji Srinivasan took the stage to lay out a case for Silicon Valley’s independence.

According to Mr. Srinivasan, who co-founded a successful genetics startup and is now a popular lecturer at Stanford University, the tech industry is under siege from Wall Street, Washington and Hollywood, which he says he believes are harboring resentment toward Silicon Valley’s efforts to usurp their cultural and economic power.
On its surface, Mr. Srinivasan’s talk,called “Silicon Valley’s Ultimate Exit,”sounded like a battle cry of the libertarian, anti-regulatory sensibility long espoused by some of the tech industry’s leading thinkers. After arguing that the rest of the country wants to put a stop to the Valley’s rise, Mr. Srinivasan floated a plan for techies to build an “opt-in society, outside the U.S., run by technology.”
His idea seemed a more expansive version of Google Chief Executive Larry Page’s call for setting aside “a piece of the world” to try out controversial new technologies, and investor Peter Thiel’s “Seastead” movement, which aims to launch tech-utopian island nations.

For the full commentary, see:
FARHAD MANJOO. “HIGH DEFINITION; The Valley’s Ugly Complex.” The Wall Street Journal (Mon., Nov. 4, 2013): B4.
(Note: the online version of the commentary has the date Nov. 3, 2013, and has the title “HIGH DEFINITION; Silicon Valley Has an Arrogance Problem.”)

Spain’s $11 Billion Per Year Slows Global Warming by 61 Hours

(p. A17) Today Spain spends about 1% of GDP throwing money at green energy such as solar and wind power. The $11 billion a year is more than Spain spends on higher education.
At the end of the century, with current commitments, these Spanish efforts will have delayed the impact of global warming by roughly 61 hours, according to the estimates of Yale University’s well-regarded Dynamic Integrated Climate-Economy model. Hundreds of billions of dollars for 61 additional hours? That’s a bad deal.

For the full commentary, see:
BJORN LOMBORG. “Green Energy Is the Real Subsidy Hog; Renewables receive three times as much money per energy unit as fossil fuels.” The Wall Street Journal (Tues., Nov. 12, 2013): A17.
(Note: the online version of the commentary has the date Nov. 11, 2013.)

Regulators Harass Saucy and Irreverent Buckyball Entrepreneur

“Craig Zucker, former head of Maxfield & Oberton, which made Buckyballs, sells Liberty Balls to raise a legal-defense fund against an unusual action by federal regulators.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) Over the last three weeks, more than 2,200 people have placed orders for $10-to-$40 sets of magnetic stacking balls, rising to the call of a saucy and irreverent social media campaign against a government regulatory agency.
. . .
It involves an effort by the federal Consumer Product Safety Commission to recall Buckyballs, sets of tiny, powerfully magnetic stacking balls that the magazines Rolling Stone and People once ranked on their hot products lists.
Last year, the commission declared the balls a swallowing hazard to young children and filed an administrative action against the company that made the product, demanding it recall all Buckyballs, and a related product called Buckycubes, and refund consumers their money. The company, Maxfield & Oberton Holdings, challenged the action, saying labels on the packaging clearly warned that the product was unsafe for children.
But the fuss now has less to do with safety. After Maxfield & Oberton went out of business last December, citing the financial toll of the recall battle, lawyers for the product safety agency took the highly unusual step of adding the chief executive of the dissolved firm, Craig Zucker, as a respondent in the recall action, arguing that he con-
(p. B6)trolled the company’s activities. Mr. Zucker and his lawyers say the move could ultimately make him personally responsible for the estimated recall costs of $57 million.
While the “responsible corporate officer” doctrine (also known as the Park doctrine) has been used frequently in criminal cases, allowing for prosecutions of individual company officers in cases asserting corporate wrongdoing, experts say its use is virtually unheard-of in an administrative action where no violations of law or regulations are claimed.
. . .
Three well-known business organizations — the National Association of Manufacturers, the National Retail Federation and the Retail Industry Leaders Association — banded together this summer to file a brief urging the administrative law judge reviewing the recall case to drop Mr. Zucker as a respondent.
The groups argue that holding an individual responsible for a widespread, expensive recall sets a disturbing example and runs counter to the business desire for limited liability. They contend that such risk would have a detrimental effect on entrepreneurism and openness in dealing with regulatory bodies.
. . .
Conservative legal groups like Cause of Action, a nonprofit that targets what it considers governmental overreach, have been watching the proceedings with interest and weighing taking some action.
“This really punishes entrepreneurship and establishes a bad precedent for businesses working to create products for consumers,” said Daniel Z. Epstein, the group’s executive director. “It undermines the business community’s ability to rely upon the corporate form.”

For the full story, see:
HILARY STOUT. “In Regulators’ Sights; Magnetic-Toy Recall Gives Rise to Wider Legal Campaign.” The New York Times (Fri., November 1, 2013): B1 & B6.
(Note: ellipses added.)
(Note: the online version of the article has the date October 31, 2013, and has the title “Buckyball Recall Stirs a Wider Legal Campaign.”)

In Britain Right and Left Support “Libertarian Paternalism”

(p. 4) In 2010, Mr. Cameron set up the Behavioral Insights Team — or nudge unit, as it’s often called. Three years later, the team has doubled in size and is about to announce a joint venture with an external partner to expand the program.
The unit has been nudging people to pay taxes on time, insulate their attics, sign up for organ donation, stop smoking during pregnancy and give to charity — and has saved taxpayers tens of millions of pounds in the process, said David Halpern, its director.
. . .
Creating Commitment
One morning in late May 2008, 10 copies of a little red book arrived for Rohan Silva in Norman Shaw South, the Westminster wing where the leader of the political opposition — at the time, the Conservatives — is traditionally housed.
The book was “Nudge,” and Mr. Silva, then 27 and David Cameron’s youngest adviser, piled them up on his desk. He had read the book as soon as it came out, a few weeks before. In fact, he had read deeply on behavioral economics and social psychology and met many of the American academics who specialized in the field. He was eager to spread the message in his country. “We used to joke about Ro being on commission for Thaler and Sunstein,” said Steve Hilton, Mr. Cameron’s former director of strategy and now a visiting scholar at Stanford.
. . .
Libertarian Paternalism
. . .
. . . , the question in Britain no longer seems to be whether, but how, to nudge. In their book, Professor Thaler and Mr. Sunstein defined their approach as steering people toward decisions deemed superior by the government but leaving them free to choose. “Libertarian paternalism,” they called it, and while that term is not used much in Britain, there is broad agreement on the subject among the left and the right.
Mr. Halpern used to be policy chief for Tony Blair, the former Labour prime minister, and later wrote a report on behavioral policy-making commissioned by Mr. Blair’s Labour Party successor, Gordon Brown. In one small way, the 2010 election campaign was also a race to decide which party would carry out an idea that had been percolating in the intellectual ranks of both for some years.

Wider Horizons
One of Mr. Thaler’s favorite nudges is something that Schiphol Airport near Amsterdam adopted in public bathrooms: a small sticker of a fly in the center of a urinal has been shown to improve aim. It saves the airport cleaning costs.
During a recent visit to Downing Street, Mr. Thaler ran into Mr. Cameron in the men’s room. There were no fly stickers.
“What’s the deal?” he joked.

For the full story, see:
KATRIN BENNHOLD. “The Ministry of Nudges.” The New York Times, SundayBusiness Section (Sun., December 8, 2013): 1 & 4.
(Note: ellipses added; bold in original.)
(Note: the online version of the article has the date December 7, 2013, and has the title “Britain’s Ministry of Nudges.”)

The Nudge book is:
Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. Revised & Expanded (pb) ed: Penguin Books, 2009.