Category: Regulations

Bill Gates Says Regulations Keep Innovative Nuclear Technology Out of U.S.

(p. B3) Add Bill Gates to the list of executives whose businesses have been ensnared by the Trump administration’s battle with China over technology and trade.
The tech tycoon and philanthropist said in an essay posted late last week that a nuclear-energy project in China by a company he co-founded called TerraPower LLC is now unlikely to proceed because of recent changes in U.S. policy toward China. That leaves TerraPower, which had been working on the China project for more than three years, scrambling for a new partner and uncertain where it might be able to run a pilot of the nuclear reactor it has been developing, according to company officials.
. . .
Mr. Gates, in a year-end essay posted on his personal website on Saturday [December 29, 2018], said TerraPower might be able to build its nuclear-reactor pilot project in the U.S., but only if there are changes to regulation. The Microsoft Corp. co-founder said he intends to advocate for those changes in 2019 because he sees nuclear power as “the only carbon-free, scalable energy source that’s available 24 hours a day.”
“The world needs to be working on lots of solutions to stop climate change,” he wrote. “Advanced nuclear is one, and I hope to persuade U.S. leaders to get into the game.”

For the full story, see:
Greene, Jay. “Bill Gates Project Hit by Trade Fight.” The Wall Street Journal (Wednesday, Jan. 2, 2019): B3.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date Jan. 1, 2019, and has the title “Trump’s Tech Battle With China Roils Bill Gates Nuclear Venture.”)

Iowa Regulations Require Cosmetologists Get 16 Times the Training of Medics

(p. 6) The amount of time Ms. Lozano spent learning to give haircuts, manicures and facials was enormous, but the requirement was set by the state, and she didn’t much question it. She was determined to earn enough money to move out of her mother’s house. Only a few weeks after getting her cosmetology license in 2005, she was hired at a local Great Clips.
The job, though, paid just $9 an hour, which meant that her days double-shifting at Pizza Hut weren’t over. Even with tips, Ms. Lozano didn’t earn more than $25,000 in any of her first few years as a cosmetologist. For years, she relied on food stamps and health insurance from the state. She couldn’t cover living expenses and keep chipping away at her loan payments. Thirteen years after graduating, she still owes more than $8,000.
. . .
Each state sets its own standards. Most require 1,500 hours, and some, like New York and Massachusetts, require only 1,000. Iowa requires 2,100 — that’s a full year’s worth of 40-hour workweeks, plus an extra 20. By comparison, you can become an emergency medical technician in the state after 132 hours at a community college. Put another way: An Iowa cosmetologist who has a heart attack can have her life saved by a medic with one-sixteenth her training.
There’s little evidence that spending more hours in school leads to higher wages. Nor is there proof that extra hours result in improved public safety. But one relationship is clear: The more hours that students are forced to be in school, the more debt they accrue. Among cosmetology programs across the nation, Iowa’s had the fourth-highest median student debt in 2014, according to federal data.
. . .
(p. 7) Iowa, with its 2,100-hour standard, remains “an embarrassment,” said Dawn Pettengill, a Republican state representative who will retire next month. Hoping to lower the profession’s barrier to entry, Ms. Pettengill this year introduced legislation that would drop the hours to 1,500. Republicans in the Senate proposed a similar bill.
Schools and their lobbyists mounted a fierce pushback. The schools “were livid,” said State Senator Jason Schultz, a Republican subcommittee chairman. “I didn’t expect the amount of opposition.”
The school association’s political action committee had given more than $20,000 to Iowa candidates since 2014. It also had three lobbyists registered with the state; for the last session, the organization paid the lobbyists’ company $12,500.
While the dollar amounts weren’t huge, a little goes a long way in Des Moines. Hearings weren’t publicized, or even required, giving an advantage to the well-organized group.

For the full story, see:
Meredith Kolodner and Sarah Butrymowicz. “For-Profit Cosmetology Schools Can Entangle Students in Debt That $10-an-Hour Jobs Barely Dent.” The New York Times, SundayBusiness Section (Sunday, Dec. 30, 2018): 6-7.
(Note: ellipses added.)
(Note: the online version of the story has the date Dec. 26, 2018, and has the title “A $21,000 Cosmetology School Debt, and a $9-an-Hour Job.”)

Regulations to Keep Herds Small May Destroy Reindeer Herding

(p. A6) Jovsset Ante Sara, a boyish-looking 26-year-old, knows his section of the tundra as if it were a city grid, every hill and valley familiar, the land acquired over generations through the meticulous work of his ancestors.
He can tell his reindeer from any others by their unique earmark. And he and his family need them to live and preserve their claim to the land as well as their traditions.
That’s why, Mr. Sara says, he has refused to abide by Norwegian laws, passed more than a decade ago, that limit the size of reindeer herds. The measure was taken, the government says, to prevent overgrazing.
Mr. Sara’s herd was capped at 75. So every year, if the herd grows, he must pare it down. At least, those are the rules. He has refused to cull his 350 to 400 reindeer, and took the government to court.
. . .
For decades, the Norwegian government has designated reindeer herding as an exclusively Sami activity, providing herding licenses tied to ancestral lands.
The regulations limiting herd sizes were passed in 2007, forcing Sami to eliminate 30 percent of their reindeer at the time.
Mr. Sara said the limits have been devastating. If he obeyed the limit, he said, he would make only $4,700 to $6,000 a year.
“Clearly it’s not possible to make a living as the job has become quite expensive, requiring snowmobiles and all the equipment that goes along with that,” he said.
The law also states that any herders who are no longer profitable can lose their license. But that is not all Mr. Sara said he would lose.
“I would lose everything my ancestors worked their entire lives to create for us today,” he said. “I will lose the land.”

For the full story, see:
Nadia Shira Cohen. “The Hinterlands Where Reindeer Are a Way of Life.” The New York Times (Monday, Dec. 17, 2018): A6.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date Dec. 16, 2018, and has the title “NORWAY DISPATCH; Where Reindeer Are a Way of Life.”)

Chinese Entrepreneurs Anxious Over Growing Government Control of Private Enterprise

(p. A15) HONG KONG — The comments were couched in careful language, but the warning about China’s direction was clear.
China grew to prosperity in part by embracing market forces, said Wu Jinglian, the 88-year-old dean of pro-market Chinese economists, at a forum last month. Then he turned to the top politician in the room, Liu He, China’s economic czar, and said “unharmonious voices” were now condemning private enterprise.
“The phenomenon,” Mr. Wu said, “is worth noting.”
Mr. Wu gave rare official voice to a growing worry among Chinese entrepreneurs, economists and even some government officials: China may be stepping back from the free-market, pro-business policies that transformed it into the world’s No. 2 economy. For 40 years, China has swung between authoritarian Communist control and a freewheeling capitalism where almost anything could happen — and some see the pendulum swinging back toward the government.
. . .
China’s leadership turned to entrepreneurs in the late 1970s, after the government had led the economy to the brink of collapse. Officials gave them special economic zones where they could open factories with fewer government rules and attract foreign investors. The experiment was an unparalleled success. When extended to the rest of the country, it created a growth machine that helped make China second only to the United States in terms of economic heft.
Today, the private sector contributes nearly two-thirds of the country’s growth and nine-tenths of new jobs, according to the All-China Federation of Industry and Commerce, an official business group. So pressures on private businesses could create serious ripples.
“The private sector is experiencing great difficulties right now,” wrote Mr. Hu, the retired minister, who as the son of a former top Communist Party leader is often a voice for reform in China, in an essay posted online last Thursday. “We should try our best not to replicate the nationalization of private enterprise in the 1950s and the state capitalism.”
. . .
Private entrepreneurs are loath to speak out for fear of attracting official condemnation. But signs of distress aren’t hard to find.
Last month, Chen Shouhong, the founder of an investment research firm, asked a group of executive M.B.A. students — many of whom already owned publicly listed companies — to choose between panic and anxiety to describe how they feel about the economy. An overwhelming majority chose panic, according to a transcript. Mr. Chen declined to be interviewed.
. . .
Xiao Han, an associate law professor in Beijing, cited one of Aesop’s fables, of a man trying and failing to stop a donkey from going over a cliff.
“Before long,” Mr. Xiao said, “we’ll probably find a body of a China donkey under the cliff.”

For the full story, see:
Li Yuan. “China Muscles In on Its Free-Market Prosperity.”The New York Times (Thursday, Oct. 4, 2018): A1 & A12.
(Note: ellipses added.)
(Note: the online version of the story has the date Oct. 3, 2018, and has the title “Private Businesses Built Modern China. Now the Government Is Pushing Back.”)

Sam Peltzman Offers Advance Praise for Openness to Creative Destruction

We are told that robots are about to make us superfluous and that the giants of Silicon Valley will swallow the economy. Art Diamond’s “openness to creative destruction” provides a healthy antidote to all this gloom and doom. He gives us the necessary historical perspective: we owe our comfort and even our lives to generations of disruptive innovation. Yet each disruption bred apocalyptic portents like those we hear today. These did not come to pass because of new disruptions down the road. Diamond ably documents this process of “creative destruction” and its enormous historical benefit. He also provides a timely warning against heeding the pessimists of the moment by imposing legal and regulatory shackles on the innovators. “Openness to Creative Destruction” is a most valuable addition to the public discussion of innovation.

Sam Peltzman, Professor Emeritus of Economics, University of Chicago; Director Emeritus of the George J. Stigler Center for the Study of the Economy and the State. Author of Political Participation and Government Regulation, and other works.

Peltzman’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.

Tech Entrepreneurs Know Innovation Thrives in Flexible Labor Markets

(p. B1) A politically awakened Silicon Valley, buttressed by the tech industry’s growing economic power, could potentially alter politics long after President Trump has left the scene. But if the tech industry becomes a political force, what sort of policies will it push?
(p. B6) A new survey by political scientists at Stanford University suggests a mostly straightforward answer — with one glaring twist. The study is the first comprehensive look at the political attitudes of wealthy technologists, whose views have long been misunderstood to the point of caricature by many outside the industry.
. . .
Over all, the study showed that tech entrepreneurs are very liberal — among some of the most left-leaning Democrats you can find. They are overwhelmingly in favor of economic policies that redistribute wealth, including higher taxes on rich people and lots of social services for the poor, including universal health care.
. . .
Now for the twist. The study found one area where tech entrepreneurs strongly deviate from Democratic orthodoxy and are closer to most Republicans: They are deeply suspicious of the government’s efforts to regulate business, especially when it comes to labor. They said that it was too difficult for companies to fire people, and that the government should make it easier to do so. They also hope to see the influence of both private and public-sector unions decline.
. . .
. . . if they’re not libertarians, what accounts for techies’ opposition to regulation? One idea might be that it’s driven by self-interest. A large fraction said they opposed regulating car-sharing services as if they were taxis, for instance; to the extent that the tech elite have a lot of money riding on the sharing economy, they may worry that regulation of such companies could hurt their wallets.
. . .
To tease out whether self-interest was at play in their views on regulation, surveyors asked a question about Uber’s surge-pricing policy, which increases prices during periods of peak demand. But the researchers disguised it with a business unrelated to tech: “On a holiday, when there is a great demand for flowers, sellers usually increase their prices. Do you think it is fair for them to raise their prices like this?”
A majority of Democrats and Republicans said it would be unfair for a florist to do that. But 96 percent of the tech elite thought it would be fair.
“My guess is there’s an underlying principle to their views,” Dr. Broockman said. “They see an entrepreneur trying to do what they want in the marketplace, and they see nothing unfair about that.”

For the full commentary, see:
Farhad Manjoo. “Tech’s Giants Skew Liberal.” The New York Times (Thursday, Sept. 7, 2017): B1 & B6.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Sept. 6, 2017, and has the title “STATE OF THE ART; Silicon Valley’s Politics: Liberal, With One Big Exception.”)

The Stanford study, discussed above, has been published online in advance of print publication:
Broockman, David E., Gregory Ferenstein, and Neil Malhotra. “Predispositions and the Political Behavior of American Economic Elites: Evidence from Technology Entrepreneurs.” American Journal of Political Science published online on Nov. 19, 2018, https://doi.org/10.1111/ajps.12408.

Jack Ma Worries that Heavier Chinese Government Regulations Risk “Destroying Innovation”

(p. B3) SHANGHAI–Chinese e-commerce tycoon Jack Ma used a government-sponsored forum to suggest regulators take a lighter touch in dealing with technology companies, saying the market should be allowed to decide how new industries such as artificial intelligence develop.
“I personally think that the government has to do what the government should do, and the companies do what companies should do,” Mr. Ma said at the World Artificial Intelligence Conference in Shanghai on Monday, recalling a conversation he said he had last year with U.S. Secretary of Transportation Elaine Chao about self-driving cars.
“Protecting the backward forces who are crying out loud will be the most important factor in destroying innovation,” Mr. Ma said.

For the full story, see:
Yoko Kubota. “Jack Ma Urges Beijing to Ease Up.” The Wall Street Journal (Tuesday, September 18, 2018): B3.
(Note: the online version of the story has the date Sept. 17, 2018, and has the title “Alibaba’s Jack Ma Says Government Should Stick to Governing.”)

“Outsider Status” of Surgeons “Permitted Greater Risks and Leaps of Faith”

(p. A19) . . . as Arnold van de Laar reminds us in “Under the Knife: A History of Surgery in 28 Remarkable Operations,” a collection of hypervivid anecdotes and oddities, it was only recently that surgeons were considered the equals of what we would now call internists–doctors who diagnose, prescribe medicine and prognosticate.
. . .
. . . , it has been both the bane and the secret glory of surgery as a vocation that it was relegated for so long to the margins of “decent” intellectual or professional life. Its dodgy, outsider status perhaps permitted greater risks and leaps of faith than were available to nonsurgical physicians, who still found themselves making inchworm progress from the dictates of Hippocrates and Galen. Surgeons worked fast to beat pain and gangrene (so fast that in one case, Scottish surgeon Robert Liston cut off a man’s testicles in a rush to amputate his leg). They used whatever materials seemed to make sense–in some cases gold thread, costly but long-lasting; in other cases branding irons.

For the full review, see:
Laura Kolbe. “The Kindest Cuts.” The Wall Street Journal (Saturday, November 15, 2018): A19.
(Note: ellipses added.)
(Note: the online version of the review has the date Nov. 14, 2018, and has the title “BOOKSHELF; ‘Under the Knife’ Review: The Kindest Cuts.”)

The book under review, is:
van de Laar, Arnold. Under the Knife: A History of Surgery in 28 Remarkable Operations. New York: St. Martin’s Press, 2018.

Musk Jabs the SEC as “the Shortseller Enrichment Commission”

(p. B1) Elon Musk risked reigniting a battle with federal securities regulators on Thursday when he appeared to openly mock the Securities and Exchange Commission only days after the Tesla Inc. chief executive settled fraud charges with the agency.
Seemingly without prompt, Mr. Musk sent a tweet in the early afternoon that suggested the SEC was enriching investors betting against the electric-car maker. “Just want to [say] that the Shortseller Enrichment Commission is doing incredible work,” Mr. Musk tweeted. “And the name change is so on point!”

For the full story, see:
Tim Higgins and Gabriel T. Rubin. “Tweet by Elon Musk Takes Jab at the SEC.” The Wall Street Journal (Saturday, October 5, 2018): B1 & B4.
(Note: the online version of the story has the date Oct. 4, 2018, and has the title “Elon Musk Tweet Mocks the Securities and Exchange Commission.”)

“The Stigma of Being ‘Drivers'”

(p. 6) They were arrested, suspended from jobs, shunned by relatives and denounced by clerics as loose women out to destroy society. Their offense? They did what many in Saudi Arabia considered unthinkable: getting in cars and driving.
Their protest in 1990 against the kingdom’s ban on women driving failed, and the women paid dearly for it, with the stigma of being “drivers” clinging to them for years.
So last month, when King Salman announced that the ban on women driving would be lifted next June, few were happier than the first women to demonstrate for that right — almost three decades ago.
. . .
Many restrictions on women remain, including so-called guardianship laws that give Saudi men power over their female relatives on certain matters. But the original protesters are overjoyed that their daughters and granddaughters will have freer lives than they did, thanks to the automobile.
“That I am driving means that I know where I am going, when I’m coming back and what I’m doing,” said Ms. Alaboudi, the social worker.
“It is not just driving a car,” she said, “it is driving a life.”

For the full story, see:
BEN HUBBARD. “27 Years After Protest, a Victory Lap for Saudi Women.” The New York Times, First Section (Sunday, October 8, 2017): 6.
(Note: ellipsis added.)
(Note: the online version of the story has the date OCT. 7, 2017, and has the title “‘Once Shunned as ‘Drivers,’ Saudi Women Who Fought Ban Now Celebrate.”)

Deregulation Can Revive 3% Economic Growth

(p. A17) Growth deniers are declaring that America’s economy has lost its ability to grow at 3% above inflation. If that’s the case, maybe we should go back to where we lost 3% growth and retrace our steps until we find it. For only with 3% or higher growth does America experience measurable progress in poverty reduction, strong job creation and income growth. If 3% growth is irretrievably lost, so is the American Dream.
Did America actually experience 3% real growth to start with? Yes. In the postwar era, the U.S. averaged 3.4% annual growth from 1948 through 2008. We averaged 3% growth for half of the George W. Bush presidency (2003-06). From 2009-12, the Obama administration, the Congressional Budget Office and the Federal Reserve all thought they saw 3% growth just around the corner. If the possibility of 3% growth is gone forever, it hasn’t been gone very long.
. . .
While Obama apologists like to claim that labor-productivity and labor-supply factors preclude 3% growth, most of the growth constraints we face today are directly attributable to Mr. Obama’s policies.
. . .
A tidal wave of new rules and regulations across health care, financial services, energy and manufacturing forced companies to spend billions on new capital and labor that served government and not consumers. Banks hired compliance officers rather than loan officers. Energy companies spent billions on environmental compliance costs, and none of it produced energy more cheaply or abundantly. Health-insurance premiums skyrocketed but with no additional benefit to the vast majority of covered workers.
In a world of higher costs, productivity plummeted. Productivity measures the production of things the market values that flow from the employment of labor and capital. Try listing the Obama-era regulatory requirements that generated the employment of labor and capital in ways that actually produced something you buy.
. . .
Bad policies–not bad luck or a loss of God’s favor–have driven down labor productivity and the labor supply. We can change those policies.
. . .
With 3% growth, the American dream is achievable and virtually anybody willing to work hard can live it. Let 3% growth die and a lot of what we love most about our country will die with it.

For the full commentary, see:
Phil Gramm and Michael Solon. “Finding America’s Lost 3% Growth; If the country can’t grow like it once did, then the American Dream really is irretrievably lost.” The Wall Street Journal (Monday, Sept. 11, 2017): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Sept. 10, 2017.)