Musk “Could Be Completely Delusional”

(p. B2) Tesla Inc. on Tuesday [January 23, 2018] unleashed a bold pay package for Chief Executive Elon Musk that again ties his compensation entirely to key performance benchmarks. This time, the goals take the electric-car maker to cosmic heights, including an ultimate aim of hitting $650 billion in market value.
. . .
Mr. Musk could net billions of dollars by hitting only a few of the milestones. Tesla said in a proxy filing the 20.26 million stock options today would have a preliminary value of about $2.62 billion. But if Tesla were to reach the audacious market value of $650 billion–as much as Amazon.com Inc. is worth today–the company said Mr. Musk’s stock award would reap him as much as $55.8 billion fully vested.
That total, however, assumes the company’s shares outstanding won’t be diluted. Tesla has added tens of millions of shares over the past several years, so that total dollar figure is unlikely.
. . .
Mr. Musk is saying, “I want to set an audacious goal, and then if I achieve it, then pay me audaciously,” said John Challenger, a longtime expert in corporate compensation as chief executive of Challenger, Gray & Christmas. “He is in some ways capturing the spirit of Silicon Valley.”
. . .
Mr. Musk had previously committed the company to reaching a market cap of $700 billion, something he reiterated last year. “I could be completely delusional, but I think I see a clear path to that outcome,” he told analysts in May.

For the full story, see:
Higgins, Tim. “Tesla Primes Musk’s Pay for Blastoff.” The Wall Street Journal (Weds., January 24, 2018): B2.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date JAN. 23, 2018, and has the title “Elon Musk Could Net Billions by Hitting Tesla’s New Milestones.” Where the wording of the two versions differs, the passages quoted above follow the wording of the online version.)

Value of Higher Education Is in the Signaling, Not the Learning

(p. A13) Mr. Caplan, an economist at George Mason University, argues that most of the value of education–especially higher education–comes from “signaling,” not from the content of learning. As a result, Americans are “overeducated,” and it’s time to stop spending so much money (both private and public) on schools.
. . .
After surveying the research on the “transfer of learning,” Mr. Caplan concludes: “Students learn only the material you specifically teach them . . . if you’re lucky.” Generally, they don’t know how to transfer their reasoning from one topic to a related one. As to informal reasoning–the ability to come up with arguments for or against a particular proposition–education’s effect, he says, has been “tiny.” He similarly dispenses with the claim that schools teach common values or civic education. As college attendance has skyrocketed, he notes, voter turnout has declined.

For the full review, see:
Naomi Schaefer Riley. “BOOKSHELF; Deciding Against the Paper Chase; High costs, indifferent teachers, hours devoted to subjects that have little to do with earning a living in the real world: Is it all worth it?” The Wall Street Journal (Tuesday, Jan. 16, 2018): A13.
(Note: ellipsis between paragraphs, added; ellipsis internal to second paragraph, in original.)
(Note: the online version of the review has the date Jan. 15, 2018, and has the title “BOOKSHELF; Review: Deciding Against the Paper Chase; High costs, indifferent teachers, hours devoted to subjects that have little to do with earning a living in the real world: Is it all worth it?”)

The book under review, is:
Caplan, Bryan. The Case Against Education: Why the Education System Is a Waste of Time and Money. Princeton, NJ: Princeton University Press, 2018.

Trump Tax Plan Induces Firms to Repatriate Hundreds of Billions

(p. A23) Apple’s announcement on Wednesday [January 17, 2018] that it will repatriate most of the estimated $274 billion that it holds in offshore earnings is great news for the United States. Uncle Sam will get a one-time $38 billion tax payment. The company promises to add 20,000 jobs to its U.S. work force, a 24 percent increase, and build a new campus. Another $5 billion will go toward a fund for advanced manufacturing in America.
C’mon. What’s with the long face?
In December this column warned that hysterical opposition to the Republican tax bill was a fool’s game for Democrats that could only help Donald Trump. Yes, there were things to dislike in the legislation, from both a liberal and a conservative perspective.
But it was not the moral and fiscal apocalypse its critics claimed. And its central achievement — a dramatic cut in corporate rates to 21 percent from 35 percent — was an economic no-brainer that many Democrats, including President Obama, had supported (albeit less steeply) just a few years ago.
Apple will not be the only multinational that will soon bring back gigantic profits to take advantage of new low repatriation rates. Microsoft holds $146 billion in overseas earnings, Pfizer $178 billion, General Electric $82 billion, Alphabet $78 billion, and Cisco $71 billion, according to estimates from the Zion Research Group. The total stash is about $3 trillion — by one measure nearly three times what it was just a decade ago.
Assume that just half of that money comes home to the United States. It’s still the equivalent of Canada’s entire gross domestic product. Not too shabby, especially considering all the hyperbolic predictions of economic doom that went with Trump’s election

For the full commentary, see:

Stephens, Bret. “Clueless Versus Trump.” The New York Times (Sat., January 20, 2018): A23.
(Note: bracketed date added.)
(Note: the online version of the commentary has the date JAN. 19, 2018.)

With Cuts in Red Tape, Firms Invest More

(p. A1) WASHINGTON — A wave of optimism has swept over American business leaders, and it is beginning to translate into the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation — and may finally raise wages significantly.
While business leaders are eager for the tax cuts that take effect this year, the newfound confidence was initially inspired by the Trump administration’s regulatory pullback, not so much because deregulation is saving companies money but because the administration has instilled a faith in business executives that new regulations are not coming.
“It’s an overall sense that you’re not going to face any new regulatory fights,” said Granger MacDonald, a home builder in Kerrville, Tex. “We’re not spending more, which is the main thing. We’re not seeing any savings, but we’re not seeing any increases.”
. . .
(p. A10) Only a handful of the federal government’s reams of rules have actually been killed or slated for elimination since Mr. Trump took office. But the president has declared that rolling back regulations will be a defining theme of his presidency. On his 11th day in office, Mr. Trump signed an executive order “on reducing regulation and controlling regulatory costs,” including the stipulation that any new regulation must be offset by two regulations rolled back.
That intention and its rhetorical and regulatory follow-ons have executives at large and small companies celebrating. And with tax cuts coming and a generally improving economic outlook, both domestically and internationally, economists are revising growth forecasts upward for last year and this year.
. . .
. . . economists see a plausible connection between Mr. Trump’s determination to prune the federal rule book and the willingness of businesses to crank open their vaults. Measures of business confidence have climbed to record heights during Mr. Trump’s first year.
. . .
“We have spent the past dozen years or longer operating in environments that have had an increasing regulatory burden,” said Michael S. Burke, the chairman and chief executive of Aecom, a Los Angeles-based multinational consulting firm that specializes in infrastructure projects. “That burden has slowed down economic growth, it’s slowed down investment in infrastructure. And what we’ve seen over the last year is a big deregulatory environment.”
. . .
The White House sees its efforts as having their intended effect. Mr. Trump boasted about his deregulatory efforts last month at an event where he stood in front of a small mountain of printouts representing the nation’s regulatory burden and ceremonially cut a large piece of “red tape.”
The chairman of the White House Council of Economic Advisers, Kevin Hassett, said in an interview that the administration’s freeze on new regulations, in particular, appeared to have buoyed confidence. Though he cautioned that it could take years of research to pin down the magnitude of the effects, he said deregulation was “the most plausible story” to explain why economic growth in 2017 had outstripped most forecasts.
“Our view is, the ‘no new regulations’ piece has to be more powerful than we thought,” he said.

For the full story, see:
BINYAMIN APPELBAUM and JIM TANKERSLEY. “With Red Tape Losing Its Grip, Firms Ante Up.” The New York Times (Tues., January 2, 2018): A1 & A10.
(Note: ellipses added.)
(Note: the online version of the story has the date JAN. 1, 2018, and has the title “The Trump Effect: Business, Anticipating Less Regulation, Loosens Purse Strings.”)

Cuts in Red Tape Build Business Confidence

TrumpCutsRedTape2018-01-31.jpg“President Trump described his administration’s deregulation efforts in remarks at the White House on Thursday. He then stood between two piles of paper representing government regulations in 1960, (20,000 pages, he said), and today — a pile that was about six feet tall (said to be 185,000 pages).” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A22) WASHINGTON — President Trump said on Thursday that his administration was answering “a call to action” by rolling back regulations on environmental protections, health care, financial services and other industries as he made a push to showcase his accomplishments near the end of his first year in office.
The remarks highlighted an area where Mr. Trump has perhaps done more to change the policies of his predecessor than any other, with regulatory shifts that have affected wide sections of the economy.
. . .
Echoing his days as a real estate developer with the flair of a groundbreaking, Mr. Trump used an oversize pair of scissors to cut a ribbon his staff had set up in front of two piles of paper, representing government regulations in 1960 (20,000 pages, he said), and today — a pile that was about six feet tall (said to be 185,000 pages).
. . .
. . . , several economic indicators — and comments from companies large and small — suggest that a shift in federal regulatory policy is building business confidence and accelerating economic growth, developments Mr. Trump certainly took credit for on Thursday [December 14, 2017].
A survey of chief executives released this month by the Business Roundtable found that, for the first time in six years, executives did not cite regulation as the top cost pressure facing their companies.
“C.E.O.s appear to be responding to the administration’s energetic focus on regulation,” Joshua Bolten, the roundtable’s president, said this month.

For the full story, see:

ERIC LIPTON and DANIELLE IVORY. “Most Far-Reaching’ Rollback of Rule.” The New York Times (Sat., DEC. 15, 2017): A22.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date DEC. 14, 2017, and has the title “Trump Says His Regulatory Rollback Already Is the ‘Most Far-Reaching’.” The online page for this article says that it appeared on p. A16 of the New York edition. My page number above is from my paper, which was probably the midwest edition.)

Innovation Skeptics Fail to See Its Broad Benefits

(p. B11) Professor Juma died on Dec. 15 [2017] at his home in Cambridge, Mass. He was 64. His wife said the cause was cancer. At his death he was widely credited as having been an important force in ensuring that biotechnology would play a critical role in improving economic life in many developing countries, especially in sub-Saharan Africa.
“Calestous understood that people often resist the changes that come with innovation, and that overcoming this resistance can be very important in enabling societies to move ahead,” said Douglas W. Elmendorf, dean of the Kennedy School. “So he tried to understand why people resist innovation, and what can be done to make them feel comfortable with change.”
Professor Juma’s latest book, “Innovation and Its Enemies” (2016), described how technological change is often greeted with public skepticism. Beneath such opposition, he argued, is the belief that only a small segment of society will benefit from potential progress, while the much broader society bears the greatest risk.
. . .
Professor Juma could be lighthearted in the classroom or in public in order to make his points. With more than 100,000 followers on Twitter, he shared with them cartoons that teased skeptics of science and innovation. One of his last posts featured a game show called “Facts Don’t Matter.” In it, a contestant is told: “I’m sorry, Jeannie, your answer was correct, but Kevin shouted his incorrect answer over yours, so he gets the points.”

For the full obituary, see:
ADEEL HASSAN. “Calestous Juma, 64, Advocate of African Progress, Dies.” The New York Times (Tues., January 2, 2018): B11.
(Note: ellipsis, and bracketed year, added.)
(Note: the online version of the obituary has the date JAN. 1, 2018, and has the title “Calestous Juma, 64, Dies; Sought Innovation in African Agriculture.”)

The most recent book by Juma, mentioned above, is:
Juma, Calestous. Innovation and Its Enemies: Why People Resist New Technologies. New York: Oxford University Press, 2016.

Incentive Packages to Big Incumbent Firms Hurt Local Start-Ups

(p. A1) When New Jersey announced a $7 billion package of tax incentives to try to lure Amazon’s second headquarters to Newark, local officials saw a chance to jump-start a city that has long struggled with poverty and joblessness.
Many economists, however, saw something else: a failed development strategy that they had hoped was falling out of favor.
. . .
(p. A15) Gina Schaefer, who owns a dozen hardware stores in the Washington area, said she did not mind paying taxes, and had learned to deal with the bureaucratic hurdles that come with running a small business in the area. But she said it was frustrating to watch local governments — three of the 20 finalists for the Amazon project are in the Washington area — roll out the red carpet for a multibillion-dollar corporation. Suddenly, she said, her tax dollars could be flowing to one of her most daunting competitors.
“There are no incentives for those of us who are already here,” Ms. Schaefer said. Alluding to Amazon’s chief executive, Jeff Bezos, she added, “Why should the richest man in the history of the world get money to open his business?”
Indeed, tax incentives tend to flow overwhelmingly to big, established companies, rather than to the local start-ups that research has shown are a more significant source of job growth. And some who have studied the issue say incentives rarely work: Companies will play cities and states off one another to save money, but ultimately base site-selection decisions mostly on other factors.

For the full story, see:
BEN CASSELMAN. “Risks for Cities In Sweetening Amazon’s Pot.” The New York Times (Sat., JAN. 27, 2018): A1 & A15.
(Note: ellipsis added.)
(Note: the online version of the story has the date JAN. 26, 2018, and has the title “Promising Billions to Amazon: Is It a Good Deal for Cities?”)

45 Start-Ups Working on New Processor Chips

(p. B1) SAN FRANCISCO — For years, tech industry financiers showed little interest in start-up companies that made computer chips.
How on earth could a start-up compete with a goliath like Intel, which made the chips that ran more than 80 percent of the world’s personal computers? Even in the areas where Intel didn’t dominate, like smartphones and gaming devices, there were companies like Qualcomm and Nvidia that could squash an upstart.
But then came the tech industry’s latest big thing — artificial intelligence. A.I., it turned out, works better with new kinds of computer chips. Suddenly, venture capitalists forgot all those forbidding roadblocks to success for a young chip company.
Today, at least 45 start-ups are working on chips that can power tasks like speech and self-driving cars, and at least five of them have raised more than $100 million from investors. Venture capitalists invested more than $1.5 billion in chip start-ups last year, nearly doubling the investments made two years ago, according to the research firm CB Insights.
The explosion is akin to the sudden proliferation of PC and hard-drive makers in the 1980s. While these are small companies, and not all will survive, they have the power to fuel a period of rapid technological change.

For the full story, see:
CADE METZ. “Bets on A.I. Open a New Chip Frontier.” The New York Times (Mon., January 15, 2018): B1 & B3.
(Note: the online version of the story has the date JAN. 14, 2018, and has the title “Big Bets on A.I. Open a New Frontier for Chip Start-Ups, Too.”)

Trump Argues Regulations Impede Infrastructure Investment

(p. A18) Mr. Trump is pursuing a similar shift in regulation, seeking to reverse or rewrite a host of rules intended to protect workers and consumers, under the theory that freeing companies from “red tape” will allow businesses to prosper, with wide-ranging benefits.
In remarks at the White House last week, Mr. Trump argued that regulation was impeding private investment in infrastructure. He held up a long, multicolored chart that he said reflected the permitting process for the construction of “a highway or a roadway.”
“By the time you finished, you probably gave up,” Mr. Trump said.

For the full story, see:
BINYAMIN APPELBAUM and ANA SWANSON. “Trump Bets on Business to Lift Workers.” The New York Times (Thurs., December 21, 2017): A18.
(Note: the online version of the story has the date DEC. 20, 2017, and has the title “Republican Economic Policies Put Business First.” The online version says that the page number for the print New York edition was A19. My print paper was probably the midwest edition.)

Cognitive Abilities Highest After Waking in Morning

(p. A15) A raft of studies in disciplines ranging from medicine to economics have yielded all sorts of data on the science of timing. Daniel Pink, an author who regularly applies behavioral science to the realm of work, has handily distilled the findings in “When: The Scientific Secrets of Perfect Timing.”
. . .
For a slim book, “When” brims with a surprising amount of insight and practical advice. In amiable, TED-talk-ready prose, Mr. Pink offers scheduling tips for everything from workouts to weddings. Exercise, for example, is best done in the morning for those who hope to lose weight, build strength and boost their mood through the day.
. . .
Moods are not the only things that shift every 24 hours. Our cognitive abilities also morph in foreseeable ways. We are often sharpest in the hours after waking up, which makes morning the best time to take exams or answer logic problems. Researchers analyzing four years of test results for two million Danish schoolchildren found that students consistently scored higher in mornings than afternoons.

For the full review, see:
Emily Bobrow. “BOOKSHELF; Hacking The Clock; Exercise in the morning if you want to lose weight. But if you want to perform at your physical peak, plan a workout for the afternoon.” The Wall Street Journal (Wednesday, Jan. 10, 2018): A15.
(Note: ellipses added.)
(Note: the online version of the review has the date Jan. 9, 2018, and has the title “BOOKSHELF; Review: Hacking The Clock; Exercise in the morning if you want to lose weight. But if you want to perform at your physical peak, plan a workout for the afternoon.”

The book under review, is:
Pink, Daniel H. When: The Scientific Secrets of Perfect Timing. New York: Riverhead Books, 2018.

Weather Channel Entrepreneur Was a Global Warming Skeptic

(p. B1) John S. Coleman, a co-founder of the Weather Channel, the original meteorologist on ABC’s “Good Morning America” and, later in his career, a vocal climate change skeptic, died on Saturday [January 20, 2018] at Summerlin Hospital Medical Center in Las Vegas. He was 83.
. . .
His career took him through broadcast positions in Omaha, Milwaukee and Peoria, Ill. He joined the fledgling “Good Morning America” in 1975 and stayed for seven years.
“He was sort of a weather rock star at the time,” said Joseph D’Aleo, whom Mr. Coleman recruited out of academia to lend a hand at “Good Morning America” and to help him develop his idea for a 24-7 weather channel.
“He was dedicated to everything he did; he’d sometimes take off after the morning shows, get on an airplane, go halfway across the country and meet with venture capitalists to present his idea,” Mr. D’Aleo said in an interview.
But after a year of false starts, Mr. D’Aleo said, Mr. Coleman “felt a little bit like Sancho Panza behind Don Quixote and his impossible dream.”
. . .
The American Meteorological Society named Mr. Coleman broadcast meteorologist of the year in 1983, citing his “many years of service in presenting weather reports of high informational, educational and professional quality.”
. . .
By the time he retired in 2014, he had become a lightning rod for controversy over his views on climate change.
At the top of his personal blog, he wrote: “There is no significant man-made global warming at this time, there has not been any in the past and there is no reason to fear any in the future.”

For the full obituary, see:
TIFFANY Hsu. “John Coleman, 83, TV Weather Pioneer.” The New York Times (Weds., January 24, 2018): B14.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the obituary has the date JAN. 21, 2018, and has the title “John S. Coleman, Weather Channel Co-Founder, Dies at 83.”)