Chinese Communists Crush Innovative Entrepreneurs by Banning Open Internet

(p. A1) BEIJING — Jing Yuechen, the founder of an Internet start-up here in the Chinese capital, has no interest in overthrowing the Communist Party. But these days she finds herself cursing the nation’s smothering cyberpolice as she tries — and fails — to browse photo-sharing websites like Flickr and struggles to stay in touch with the Facebook friends she has made during trips to France, India and Singapore.
Gmail has become almost impossible to use here, and in recent weeks the authorities have gummed up Astrill, the software Ms. Jing and countless others depended on to circumvent the Internet restrictions that Western security analysts refer to as the Great Firewall.
By interfering with Astrill and several other popular virtual private networks, or V.P.N.s, the government has complicated the lives of Chinese astronomers seeking the latest scientific data from abroad, graphic designers shopping for clip art on Shutterstock and students submitting online applications to American universities.
If it was legal to protest and throw rotten eggs on the street, I’d definitely be up for that,” Ms. Jing, 25, said.
China has long had some of the world’s most onerous Internet restrictions. But until now, the authorities had effectively tolerated the proliferation of V.P.N.s as a lifeline for millions of people, from archaeologists to foreign investors, who rely heavily on less-fettered access to the Internet.
But earlier this week, after a number of V.P.N. companies, including StrongVPN and Golden Frog, complained that the Chi-(p. A6)nese government had disrupted their services with unprecedented sophistication, a senior official for the first time acknowledged its hand in the attacks and implicitly promised more of the same.
The move to disable some of the most widely used V.P.N.s has provoked a torrent of outrage among video artists, entrepreneurs and professors who complain that in its quest for so-called cybersovereignty — Beijing’s euphemism for online filtering — the Communist Party is stifling the innovation and productivity needed to revive the Chinese economy at a time of slowing growth.
“I need to stay tuned into the rest of the world,” said Henry Yang, 25, the international news editor of a state-owned media company who uses Facebook to follow American broadcasters. “I feel like we’re like frogs being slowly boiled in a pot.”
. . .
The vast majority of Chinese Internet users, especially those not fluent in English and other foreign languages, have little interest in vaulting the digital firewall. But those who require access to an unfiltered Internet are the very people Beijing has been counting on to transform the nation’s low-end manufacturing economy into one fueled by entrepreneurial innovation.
. . .
Avery Goldstein, a professor of contemporary Chinese studies at the University of Pennsylvania, said the growing online constraints would not only dissuade expatriates from relocating here, but could also compel ambitious young Chinese studying abroad to look elsewhere for jobs.
“If they aren’t able to get the information to do their jobs, the best of the best might simply decide not to go home,” he said.
For those who have already returned to China and who crave membership in an increasingly globalized world, the prospect of making do with a circumscribed Internet is dispiriting. Coupled with the unrelenting air pollution and the crackdown on political dissent, a number of Chinese said the blocking of V.P.N.s could push them over the edge.
“It’s as if we’re shutting down half our brains,” said Chin-Chin Wu, an artist who spent almost a decade in Paris and who promotes her work online. “I think that the day that information from the outside world becomes completely inaccessible in China, a lot of people will choose to leave.”

For the full story, see:
ANDREW JACOBS. “China Further Tightens Grip on the Internet.” The New York Times (Fri., JAN. 30, 2015): A1 & A12.
(Note: ellipses added.)
(Note: the online version of the story has the date JAN. 29, 2015.)

Brin: Regulatory Burden Discourages Health Entrepreneurs

(p. A13) Earlier this month, at a private conference for the CEOs of his portfolio companies, venture capitalist Vinod Khosla interviewed Google co-founders Sergey Brin and Larry Page, asking them if the company might jump into health care. “It’s just a painful business to be in,” Mr. Brin replied, later noting that “the regulatory burden in the U.S. is so high that I think it would dissuade a lot of entrepreneurs.”
Mr. Brin is right. As a neurosurgeon-scientist and entrepreneur who co-founded a bioelectronic medicine company that deploys implantable technology to supplant drugs, I wish he were wrong.
. . .
. . . entrepreneurs should be allowed to carve out their own turf and let patients choose their own level of risk.
Consider the case of Goran Ostovich, a burly, 47-year-old truck driver from Mostar, Bosnia. Mr. Ostovich has suffered from long-standing rheumatoid arthritis and needed near-permanent bed rest. With his hands and wrists swollen and aching, he could no longer hold on to a wheel or even play with his small children. He tried a variety of medications. None worked.
When I met Goran at his doctor’s office in 2012, however, he didn’t seem at all afflicted with the disease. That’s because, one year earlier, he had been offered the opportunity to be the first participant in a clinical trial of a new therapy based on my invention. He received a bioelectronic implant and rapidly improved.
. . .
Since news of this clinical trial’s success became public, people from all over the U.S. stricken with rheumatoid arthritis have emailed, called and sent letters pressing for their shot at potentially effective–but not yet FDA-approved–treatments.
. . .
Some patients are very willing to take a calculated risk, . . .

For the full commentary, see:
KEVIN J. TRACEY. “Let Patients Decide How Much Risk They’ll Take; Take a tip from Sergey Brin: The health-care regulatory burden stops entrepreneurs from getting into the game.” The Wall Street Journal (Mon., July 28, 2014): A13.
(Note: ellipses added.)
(Note: the online version of the commentary has the date July 27, 2014, and has the title “Let Patients Decide How Much Risk They’ll Take; Take a tip from Sergey Brin: The health-care regulatory burden stops entrepreneurs from getting into the game.”)

Most of Benefits of Minimum Wage Increases Do Not Go to the Poor

(p. A11) A higher minimum wage raises wages of low-wage workers, and even though most evidence points to job losses from higher minimum wages, the evidence doesn’t point to widespread employment declines. Thus, consistent with a recent Congressional Budget Office report, many more low-wage workers will get a raise than will lose their jobs. But that argument is about low-wage workers, not low-income families. Minimum wages are ineffective at helping poor families because such a small share of the benefits flow to them.
One might think that low-wage workers and low-income families are the same. But data from the U.S. Census Bureau show that there is only a weak relationship between being a low-wage worker and being poor, for three reasons.
First, many low-wage workers are in higher-income families–workers who are not the primary breadwinners and often contribute a small share of their family’s income. Second, some workers in poor families earn higher wages but don’t work enough hours. And third, about half of poor families have no workers, in which case a higher minimum wage does no good. This is simple descriptive evidence and is not disputed by economists.
A historical perspective is instructive. Assembling Census Bureau data over nearly seven decades, Richard Burkhauser and Joseph Sabia have shown that in 1939, just after the federal minimum wage was established, 85% of low-wage workers (those earning less than one-half the private-sector wage) were in poor families. Such a high percentage implies that, in that year, the new minimum wage targeted poor families well. However, as the public safety net expanded, family structure changed and more people in families began working, this percentage fell sharply over time–to around 17% by the early 2000s.
In contrast, as of the early 2000s 34% of low-wage workers were in families that were far from poor, with incomes more than three times the poverty line. In other words, for every poor minimum-wage worker who might directly benefit from the minimum wage, two workers in families with incomes more than three times the poverty line would benefit.

For the full commentary, see:
DAVID NEUMARK. “Who Really Gets the Minimum Wage; Obama’s $10.10 target would steer only 18% of the benefits to poor families; 29% would go to families with incomes three times the poverty level.” The New York Times (Mon., July 7, 2014): A11.
(Note: the online version of the commentary has the date July 6, 2014.)

For more of Neumark on minimum wages, see:
Neumark, David, and William L. Wascher. Minimum Wages. Cambridge, MA: The MIT Press, 2008.

Over-Regulation Could Stifle Drones’ Potential to Revolutionize Our Lives

(p. A15) In the early days of the automobile, Vermont enacted a law requiring someone to walk one-eighth of a mile in front of every car and wave a red flag to warn pedestrians. Iowa directed all motorists to call ahead to warn each town on their route that they were coming. Some jurisdictions set speed limits so low that drivers who obeyed them risked having their engines stall.
Those laws seem humorously quaint, but if they had been widely adopted and enforced, the automobile revolution might have been shut down and its manifold benefits denied to millions. Today over-regulation could stifle the development of drones, which have the potential to revolutionize many parts of the economy and our everyday lives.
To cite a few examples: Amazon hopes to launch Prime Air, which would use drones to deliver packages in less than 30 minutes after an order is placed. Texas Equusearch, which organizes missing-person recovery efforts, can replace the labor of 100 volunteers with one drone. Clayco Inc., a construction firm, intends to use drones for aerial imaging of construction projects–replacing either helicopters, which burn fossil fuels and can be dangerous to those below, or construction workers, who risk serious injury through falls when they must climb to reach high, hard-to-reach places to take photos.

For the full commentary, see:
JOSEPH R. PALMORE and CHRISTOPHER J. CARR. “Overregulated Drones Struggle for Take-Off; The FAA has been slow and stuck in the past–precisely what the technology is not.” The Wall Street Journal (Mon., Feb. 23, 2015): A15.
(Note: the online version of the commentary has the date Feb. 22, 2015,)

Regulations Reduce Biotech Innovation

(p. A15) Modern genetic engineering, also called genetic modification or GM, has been around since the 1970s. Yet with the notable exception of biopharmaceuticals–beginning with the marketing of human insulin in 1982 and now accounting for more than 20% of U.S. drug expenditures–genetic engineering has failed to realize anything approaching its potential for vertical progress.
The reason is plain: In the non-pharmaceutical sectors, federal regulators for years seemingly have done everything they can to prevent U.S. researchers and companies from employing genetic engineering to create the “next big thing.”
. . .
Regulatory disincentives are potent. It costs about $136 million to bring a genetically engineered crop plant to market. This is the primary reason more than 99% of such crop plants are those that are grown at huge scale: . . .
. . .
“Biopharming”–the once-promising biotechnology area that uses genetic engineering techniques to induce crops such as corn, tomatoes and tobacco to produce high concentrations of high-value pharmaceuticals (one of which is the Ebola drug, ZMapp)–is moribund because of the Agriculture Department’s extraordinary regulatory burdens. Thanks to EPA’s policies, which discriminate against organisms modified with the most precise and predictable techniques, the high hopes for genetically engineered “biorational” microbial pesticides and microorganisms to clean up toxic wastes have evaporated.

For the full commentary, see:
HENRY I. MILLER. “Regulators Put the Brakes On Biotech; Thanks to EPA, hopes have evaporated for genetically engineered microorganisms to clean up toxic wastes.” The Wall Street Journal (Weds., Jan. 14, 2015): A15.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Jan. 13, 2015.)

Occupational Licensing Raises Costs for Consumers and Reduces Jobs

(p. B1) What lesson should we draw from the success of Uber?
Customers have flocked to its service. In the final three months of last year, its so-called driver-partners made $656.8 million, according to an analysis of Uber data released last week by the Princeton economist Alan B. Krueger, who served as President Obama’s chief economic adviser during his first term, and Uber’s Jonathan V. Hall.
Drivers like it, too. By the end of last year, the service had grown to over 160,000 active drivers offering at least four drives a month, from near zero in mid-2012. And the analysis by Mr. Krueger and Mr. Hall suggests they make at least as much as regular taxi drivers and chauffeurs, on flexible hours. Often, they make more.
This kind of exponential growth confirms what every New Yorker and cab riders in many other cities have long suspected: Taxi service is woefully inefficient. It also raises a question of broader relevance: Why stop here?
. . .
(p. B5) . . . like taxi medallions, state licenses required to practice all sorts of jobs often serve merely to cordon off occupations for the benefit of licensed workers and their lobbying groups, protecting them from legitimate competition.
This comes at a substantial social cost. “Lower-income people suffer from licensing,” Professor Krueger told me. “It raises the costs of many services and prevents low-income people from getting into some professions.”
In a study commissioned by the Brookings Institution’s Hamilton Project, Morris Kleiner of the University of Minnesota found that almost three out of 10 workers in the United States need a license from state governments to do their jobs, up from one in 20 in the 1950s. By cordoning off so many occupations, he estimates, professional licensing by state governments ultimately reduces employment by up to 2.8 million jobs.

For the full commentary, see:
Eduardo Porter. “Job Licenses in Spotlight as Uber Rises.” The New York Times (Weds., JAN. 28, 2015): B1 & B5.
(Note: ellipses added.)
(Note: the online version of the commentary has the date JAN. 27, 2015.)

The working paper co-authored by Krueger, is:
Hall, Jonathan V., and Alan B. Krueger. “An Analysis of the Labor Market for Uber’s Driver-Partners in the United States.” Working paper. January 22, 2015.

Kleiner’s working paper at Brookings, is:
Kleiner, Morris M. “Reforming Occupational Licensing Policies.” In The Hamilton Project, Brookings, Discussion Paper 2015-01, January 2015.

Over-Taxed and Over-Regulated Castles for Sale in Italy

(p. A3) While castles and historic mansions in Italy have long been family inheritances, today dozens of them are for sale, even in one of the most conservative real estate markets in Europe.
. . .
On historic buildings, where owners used to pay little as compensation for the elevated costs of maintaining centuries-old structures, the taxes increased by 20 or 30 times, depending on the property’s location.
On some buildings, taxes spiked from 3,000 euros (about $3,400) in 2011 to 75,000 euros (about $84,000) by 2013. That might be a small figure for castle dwellers in the United Kingdom, but it is a burden for Italian pockets, especially in regions where the property’s market value or tourism interest is low.
The trends, to many here, are indicative of Italy’s place as a country caught between its past glory and its modern difficulty in producing an innovative climate capable of ensuring its future.
. . .
. . . buyer beware: Living a nobleman’s life in Italy comes at a cost, even for many tycoons. New owners face the same onerous bureaucracy as Italians to make even minimal changes to many older properties.
Under Italian law, the owner of a historic building is its custodian, bound to maintain it and grant its security and, in some cases, its use to the public. Many buyers give up on properties of great historic value, but in bad condition, for this reason, brokers said.
“This is a problem for possible investors, who want to have modern comforts like a spa, air-conditioning or a lift,” said Mr. Pallavicini, of the Italian Historic Houses Association.
“We no longer live like in 1800,” he added. “But 99 percent of those changes are either impossible or extremely bureaucratic and complicated in an Italian historic building.”

For the full story, see:
GAIA PIANIGIANI. “PONTASSIEVE JOURNAL; Life of Italian Nobility for Sale, Complete With Regulations and Taxes.” The New York Times (Weds., JAN. 28, 2015): A11.
(Note: ellipses are added.)
(Note: the online version of the story has the date JAN. 27, 2015.)

“It’s My Life, and I Want the Chance to Save It”

(p. 18) LYONS, Colo. — Since May [2014], a string of states have passed laws that give critically ill patients the right to try medications that have not been approved by the Food and Drug Administration.
Deemed “Right to Try” laws, they have passed quickly and often unanimously in Colorado, Michigan, Missouri, Louisiana and Arizona, bringing hope to patients like Larry Kutt, who lives in this small town at the edge of the Rocky Mountains. Mr. Kutt, 65, has an advanced blood cancer and says his state’s law could help him gain access to a therapy that several pharmaceutical companies are testing. “It’s my life,” he said, “and I want the chance to save it.”
The laws do not seem to have helped anyone obtain experimental medicine, as the drug companies are not interested in supplying unapproved medications outside the supervision of the F.D.A. But that seems almost beside the point to the Goldwater Institute, the libertarian group behind legislative efforts to pass Right to Try laws. “The goal is for terminally ill patients to have choice when it comes to end-stage disease,” said Craig Handzlik, state policy coordinator for the Goldwater Institute, based in Arizona. “Right to Try is something that will help terminally ill people all over the country.”

For the full story, see:
JULIE TURKEWITZ. “Patients Seek ‘Right to Try’ New Drugs.” The New York Times, First Section (Sun., JAN. 11, 2015): 18.
(Note: the bracketed year is added.)
(Note: the online version of the story has the date JAN. 10, 2015.)

Free Market Tour Guide Challenges Savannah’s Attack on Free Speech

(p. A25) SAVANNAH, Ga. — Especially when she sips French onion soup at a restaurant that was featured in the Julia Roberts movie “Something to Talk About,” Michelle Freenor is an irrepressible tour guide.
She rattles off the history of Methodism in this city, as well as tidbits about William T. Sherman’s March to the Sea. She discusses the canopy of Spanish moss that hangs above Savannah’s streets, whether “Jingle Bells” was actually composed here, and just how haunted one of the country’s largest historic landmark districts might be.
But Ms. Freenor has also emerged in recent weeks in a new role: plaintiff in a federal lawsuit that could reshape Savannah’s lucrative and potent tourism industry. Backed by a nonprofit law firm with libertarian leanings, Ms. Freenor and three others, including her husband, are challenging the Savannah ordinance that requires tour guides to hold licenses and pass regular academic and medical examinations.
“It’s the free market that made us successful, not the City of Savannah,” said Ms. Freenor, 43. “You shouldn’t have to pass a test to be able to tell people where the best ice cream in Savannah is.”
. . .
“What tour guides do is talk for a living,” said Robert Johnson, one of Ms. Freenor’s lawyers. “They’re just like stand-up comedians, journalists or novelists. And in this country, you don’t need a license from the government to be able to talk.”

For the full story, see:
ALAN BLINDER. “Lawsuit May Reshape Tourist Industry in History-Rich Savannah.” The New York Times, First Section (Sun., DEC. 21, 2014): A25 & A31.
(Note: ellipsis added.)
(Note: the online version of the story has the date DEC. 20, 2014. The online version says that the New York paper version of the article started on p. 28. It does not say on what page of that edition, the article continued. My page numbers are from the National Edition, which I usually receive.)

Yucca Mountain Has Multiple Barriers to Isolate Nuclear Materials

(p. A20) The Nuclear Regulatory Commission on Thursday [Oct. 16, 2014] released a long-delayed report on the suitability of Yucca Mountain as a disposal spot for nuclear waste, finding that the design met the commission’s requirements, laying the groundwork to restart the project . . .
. . .
. . . the report released Thursday, mostly done in 2010 but frozen until a recent court decision, concluded that the design had the required multiple barriers, to assure long-term isolation of radioactive materials.

For the full story, see:
MATTHEW L. WALD “Calls to Use a Proposed Nuclear Site, Now Deemed Safe.” The New York Times (Fri., OCT. 17, 2014): A20.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date OCT. 16, 2014., and has the title “Calls to Use Yucca Mountain as a Nuclear Waste Site, Now Deemed Safe.”)

As with Airplanes, Lives Must Be Risked to Achieve Routine Safety in Spaceships

(p. A21) SEATTLE — ONE clear winter day in 1909, in Hampshire, England, a young man named Geoffrey de Havilland took off in a twin-propeller motorized flying machine of his own design, built of wood, piano wire and stiff linen hand-stitched by his wife. The launch was flawless, and soon he had an exhilarating sensation of climbing almost straight upward toward the brilliant blue sky. But he soon realized he was in terrible trouble.
The angle of ascent was unsustainable, and moments later de Havilland’s experimental plane crashed, breaking apart into a tangled mass of shards, splinters and torn fabric, lethal detritus that could easily have killed him even if the impact of smashing into the ground did not. Somehow, he survived and Sir Geoffrey — he was ultimately knighted as one of the world’s great aviation pioneers — went on to build an astonishing array of military and civilian aircraft, including the world’s first jet airliner, the de Havilland Comet.
I thought immediately of de Havilland on Friday when I heard that Virgin Galactic’s SpaceShipTwo, a rocket-powered vehicle designed to take well-heeled tourists to the edge of space, had crashed on a flight over the Mojave Desert, killing one test pilot and seriously injuring the other.
. . .
Certainly the Wright brothers and others like de Havilland were involved in what we now view as an epic quest, but many experts of the day were certain that flight, however interesting, was destined to be not much more than a rich man’s hobby with no practical value.
“The public has greatly over-estimated the possibilities of the aeroplane, imagining that in another generation they will be able to fly over to London in a day,” said a Harvard expert in 1908. “This is manifestly impossible.” Two other professors patiently explained that while laymen might think that “because a machine will carry two people another may be constructed that will carry a dozen,” in fact “those who make this contention do not understand the theory of weight sustentation in the air.”
. . .
There will be tragedies like the crash of SpaceShipTwo and nonlethal setbacks such as the fiery explosion, also last week, of a remote-controlled rocket intended for a resupply mission to the International Space Station. There will be debates about how to improve regulation without stifling innovation. Some will say private industry can’t do the job — though it’s not as if the NASA-sponsored Apollo or space shuttle missions went off without a hitch (far from it, sadly).
But at the heart of the enterprise there will always be obsessives like Sir Geoffrey, who forged ahead with his life’s work of building airplanes despite his own crash and, incredibly, the deaths of two of his three sons while piloting de Havilland aircraft, one in an attempt to break the sound barrier. Getting to routine safety aloft claimed many lives along the way, and a hundred years from now people will agree that in that regard, at least, spaceships are no different from airplanes.

For the full commentary, see:
SAM HOWE VERHOVEK. “Not a Flight of Fancy.” The New York Times (Tues., NOV. 4, 2014): A21.
(Note: ellipses added.)
(Note: the online version of the commentary has the date NOV. 3, 2014.)