Silicon Valley “Oligarchs” Block Upward Mobility of Masses

Bill Gates, Jaron Lanier, Tim Berners-Lee, and others have suggested that a fairer system of information technology property rights would enable micropayments for intellectual content posted to blogs and Facebook. This also would allow upward mobility. The value of the intellectual contributions is currently being unfairly appropriated by mega-server companies such as Google and Facebook.

A different kind of socialism

The oligarchs of the Bay Area have a problem: They must square their progressive worldview with their enormous wealth. They certainly are not socialists in the traditional sense. They see their riches not as a result of class advantages, but rather as reflective of their meritocratic superiority. As former TechCrunch reporter Gregory Ferenstein has observed, they embrace massive inequality as both a given and a logical outcome of the new economy.

The nerd estate is definitely not stupid, and like rulers everywhere, they worry about a revolt of the masses, and even the unionization of their companies. Their gambit is to expand the welfare state to keep the hoi polloi in line. Many, including Mark Zuckerberg, now favor an income stipend that could prevent mass homelessness and malnutrition.

How socialism morphs into feudalism

Unlike its failed predecessor, this new, greener socialism seeks not to weaken, but rather to preserve, the emerging class structure. Brown and his acolytes have slowed upward mobility by environment restrictions that have cramped home production of all kinds, particularly the building of moderate-cost single-family homes on the periphery. All of this, at a time when millennials nationwide, contrary to the assertion of Brown’s “smart growth” allies, are beginning to buy cars, homes and move to the suburbs.

For the full commentary, see:

KOTKIN, Joel. “California’s Descent to Socialism.” Orange County Register, Posted: June 11, 2017. URL: http://www.ocregister.com/2017/06/11/californias-descent-to-socialism/
(Note: bold headings in original.)

Bezos Resurrects Washington Post Through High-Quality Journalism

(p. B1) As a private company since 2013, when the deep-pocketed Amazon founder Jeff Bezos bought it for $250 million, The Post doesn’t disclose much financial data. But by all visible measures, including the vital but hard-to-measure buzz factor, the resurrection of The Post, both editorially and financially, in less than four years has been little short of astonishing.
The Post has said that it was prof-(p. B4)itable last year — and not through cost-cutting. On the contrary, under the newsroom leadership of Martin Baron, the former editor of The Boston Globe memorably portrayed in the film “Spotlight,” The Post has gone on a hiring spree. It has hired hundreds of reporters and editors and has more than tripled its technology staff.
. . .
Scoops — and high-quality journalism more generally — are integral to The Post’s business model at a time when the future of digital journalism seemed to be veering toward the lowest common denominator of exploding watermelons and stupid pet tricks.
“Investigative reporting is absolutely critical to our business model,” Mr. Baron told me. “We add value. We tell people what they didn’t already know. We hold government and powerful people and institutions accountable. This cannot happen without financial support. We’re at the point where the public realizes that and is willing to step up and support that work by buying subscriptions.”

For the full story, see:
JAMES B. STEWART. “Common Sense; The Post’s Latest Bombshell: It’s Thriving in Digital News.” The New York Times (Sat., MAY 20, 2017): B1 & B4.
(Note: ellipsis added.)
(Note: the online version of the story has the date MAY 19, 2017, and has the title “Common Sense; Washington Post, Breaking News, Is Also Breaking New Ground.”)

“Gratuitously Stupid” Petunia Regulations

(p. A17) Sometimes government regulators do things that are not merely misguided but gratuitously stupid. A classic example came last month, when the U.S. Department of Agriculture called for the destruction of at least 13 varieties of petunias with striking hues. These plants don’t pose any danger to health or the natural environment. But because they were crafted with modern genetic-engineering techniques, technically they’re in violation of 30-year-old government regulations.
These petunias, first developed in the 1980s, were sold around the globe for years without incident. Then in 2015 a Finnish plant scientist noticed bright-orange petunias at a train station in Helsinki.
. . .
He tipped off Finnish regulators, who notified their counterparts in Europe and North America. Since no government had issued permits to sell these varieties, the result was a petunia purge. Untold numbers of beautiful and completely harmless flowers and seeds were destroyed.
. . .
If a researcher wants to perform a field trial with a regulated article such as the forbidden petunias, he must submit extensive paperwork to the Agriculture Department. After conducting tests for years at many sites, the developer can then submit a large dossier of data and request “deregulation” by the USDA for cultivation and sale.
These requirements make genetically engineered plants extraordinarily expensive to develop and test. On average, each costs about $136 million, according to Wendelyn Jones of DuPont Crop Protection. This probably is why the developers of the genetically engineered petunias never commercialized them legally. At around $5 for 5,000 seeds, there is no way to recover the regulatory costs.

For the full commentary, see:
Henry I. Miller. “Attack of the Killer Petunias; Harmless flowers are destroyed since they were genetically modified but not Washington-approved.” The Wall Street Journal (Tues., June 13, 2017): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date June 12, 2017.)

Human Species Is Highly Adaptable to Climate Variation

(p. A15) In “Evolution’s Bite,” paleoanthropologist Peter S. Ungar follows the stories encapsulated in our enamel-coated anatomy.
Mr. Ungar’s story isn’t so much about teeth themselves as about the sweeping tale of human evolution as seen through the mouth.
. . .
Unpredictability in climate and resources, Mr. Ungar emphasizes, has made us a species adapted to variation. Drawing from the work of researchers like Elisabeth Vrba and Rick Potts, he underscores how environmental shifts influence our evolution just as they have for other animals. The invention of culture did not somehow free us from nature. Our existence and continuing evolution are still influenced by shifts in climate and their effects. Humans didn’t become locked into just one narrow mode of life but rather became a flexible species as comfortable above the Arctic Circle as on the equator. “Climate change,” he writes, “drove human evolution, in large part by swapping out food options available on the biospheric buffet.”
This new story–that humans became adapted to the variability of the world rather than any one set of conditions–hasn’t had time to become pop-culture canon just yet. Images of Man the Hunter stepping out onto the savanna in search of big game still dominate. “The story used to be simpler,” Mr. Ungar writes, when it seemed that “the spreading savanna coaxed our ancestors down from the trees, and the challenges it brought made them human.” All the same, the mounting swell of research doesn’t show a slow and steady transition from a chilly Ice Age world to the warmer one we know today. Instead, Mr. Ungar points out, temperatures dipped and spiked in a haphazard pattern prior to our influence on the climate, having an overall trajectory that we can detect now but that probably would have seemed simply chaotic to the people and creatures living through it.

For the full review, see:
Brian Switek. “BOOKSHELF; Chewing Over History.” The Wall Street Journal (Weds., May 31, 2017): A15.
(Note: ellipsis added.)
(Note: the online version of the review has the date May 30, 2017, and the title “BOOKSHELF; Chewing Over Humanity’s History.”)

The book under review, is:
Ungar, Peter S. Evolution’s Bite: A Story of Teeth, Diet, and Human Origins. Princeton, NJ: Princeton University Press, 2017.

Small, Obscure Firm Innovates to Keep Moore’s Law Alive

(p. B1) VELDHOVEN, the Netherlands– ASML Holding NV, a little-known company based next to corn fields here, may hold the answer to a question hanging over the global semiconductor industry: how to make chips do more while keeping them the same, compact size.
The industry’s past prowess has been codified into what’s been called Moore’s Law, named after an observation Intel Corp. co-founder Gordon Moore first made in 1965. He postulated that chip makers could double the number of transistors in–and boost the performance of–a typical microprocessor every two years.
Last year, though, Intel Chief Executive Brian Krzanich warned that after decades of incredible leaps, that timeline was slipping closer to every 2.5 years. Some in the industry feared the eventual death of Moore’s Law, a rule of thumb underpinning modern computing.
ASML believes its breakthrough technology can postpone the demise. “I’m not concerned yet about the next 10-plus years,” said Hans Meiling, who oversees ASML’s effort trying to solve this problem.
Many in the industry, including big backers like Intel itself and Samsung Electronics Co. , are hoping ASML can quicken the pace of innovation once again. With around 15,000 employees and €6.3 billion ($7.05 billion) in revenue last year, the company manufactures equipment that makes chips–specializing in a field called photolithography. Specifically, ASML uses light rays to essentially lay out billions of transistors–the brain cells of a chip–in a microprocessor.

For the full story, see:
Stu Woo and Maarten van Tartwijk. “Dutch Company Aims to Make Chips Do More.” The Wall Street Journal (Mon., Oct. 3, 2016): B1 & B5.
(Note: the online version of the story has the title “Can This Little-Known Chip Company Preserve Moore’s Law?”)

Britain’s Socialist National Health Service Failed to Update Old Software

(p. A4) LONDON — Martin Hardy was in his hospital gown, about to be wheeled into the operating room for knee surgery on Saturday morning [May 13, 2017] at Royal London Hospital in East London, when, he said, his operation was abruptly canceled.
Mr. Hardy, 52, a caregiver for his father, said his surgeon told him the operation could not be carried out because the hospital’s computer system was not working and his condition was not life-threatening.
“I was in my hospital robe literally about to go in,” he said, wincing as he stood on crutches outside the hospital, waiting for a taxi home. “How can anyone in their right mind do such a thing?” he added, referring to the people behind the devastating cyberattack that affected organizations in nearly 100 countries and sent tremors across Britain’s National Health Service.
A day after one of the largest “ransomware” attacks on record, which left thousands of computers at companies in Europe, universities in Asia and hospitals in Britain still crippled or shut down on Saturday, Amber Rudd, the British home secretary, told the BBC that the N.H.S. needed to learn from what had happened and upgrade its information technology system.
. . .
Ms. Rudd conceded that the N.H.S., where many computers had outdated software vulnerable to malware and ransomware, had been ill prepared, despite numerous warnings. “I would expect N.H.S. trusts to learn from this and to make sure that they do upgrade,” she said.
. . .
“You can’t blame the hospital, but surely the N.H.S. knew this could happen?” he said, his face reddening with anger. “And I don’t understand why their computers weren’t secure. We all pay into the N.H.S., and this is what we get. What on earth is going on in this country?”
. . .
Dr. Krishna Chinthapalli, a senior resident at the National Hospital for Neurology and Neurosurgery in London, who predicted a cyberattack on the N.H.S. in an article published in the British Medical Journal a few days before the attack, said it was disturbing.
“I had expected an attack,” he said in an interview. “But not on this scale.”
He had warned in the article that hospitals were especially vulnerable to ransomware attacks because they held vital data, and were probably more willing than others to pay a ransom to recover it. He said in the interview that many of the N.H.S. computers still ran Windows XP, an out-of-date software.

For the full story, see:
DAN BILEFSKY. “British Patients Suffer as Hospitals Race to Revive Computer Systems.” The New York Times, First Section (Sun., MAY 14, 2017): 11.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date MAY 13, 2017, and has the title “British Patients Reel as Hospitals Race to Revive Computer Systems.”)

Deregulation Can Stimulate Dynamism and Economic Growth

(p. A15) Various estimates suggest that had U.S. productivity growth not slowed, GDP would be about $3 trillion higher than it is today.
. . .
Many economists contend that properly counting free digital services from companies like Google and Facebook would substantially boost productivity and GDP growth. One of the highest estimates, calculated by economists Austan Goolsbee and Peter Klenow, stands at $800 billion. That’s a big number, but not big enough to fill a $3 trillion hole.
. . .
In his 2016 book, “The Rise and Fall of American Growth,” Northwestern University economist Robert Gordon contends that the current economy fails to measure up to the great inventions of the past, and that innovation today is more incremental than transformative. He has argued vigorously that the transformative effects of technologies like electric lighting, indoor plumbing, elevators, autos, air travel and television are unlikely to be repeated. Technological innovation, he argues, will not be sufficiently robust to counter the headwinds of slowing population growth, rising inequality and exploding sovereign debt.
Former Treasury Secretary Larry Summers has resurrected Alvin Hansen’s 1938 theory of secular stagnation. Morgan Stanley economist Ruchir Sharma has argued that a 2% economy is the new normal. Former Fed Chairman Alan Greenspan has repeatedly said that the growing share of social benefits and entitlements in GDP crowds out national savings and reduces investments required to boost productivity growth.
The growth dividends from disruptive technology often require time before they are widely diffused and used. To Mr. Gordon’s point, economic historians respond that the Industrial Revolution did not improve British living standards for almost a century. Likewise the productivity boost spurred by the transformative innovations of the early 20th century took decades to kick in.
In the short term, as companies try to develop online capabilities while maintaining a physical presence, some costs are duplicated.
. . .
It’s possible that economic dynamism and entrepreneurship are no longer driving the U.S. economy. Startups are being created at a slower pace. From 1996 to 2007 the ratio of new firms to the total number of firms oscillated between 9.6 and 11.2. Today it has dropped to 7.8. Existing firms do innovate and contribute to improved productivity, but the declining share of young firms suggests a less dynamic economy.
Concurrently, the most recent numbers from the Bureau of Labor Statistics confirm that churn in the U.S. labor market remains weak across industries, regions and age groups. People are simply not moving or changing jobs for better alternatives.
. . .
The real debate is about policies that favor productivity and GDP growth. Predicting future innovation is hazardous, but deregulation and streamlined licensing requirements will facilitate job mobility. Tax reform that encourages and rewards investment should stimulate capital investment.
. . .
These necessary policy changes provide options for improving productivity and GDP growth. Waiting for the data debate to resolve itself gets us nowhere.

For the full commentary, see:
Brian Switek. “The Great Productivity Slowdown; It began long before the financial crisis, and it has worsened markedly in the past six years.” The Wall Street Journal (Fri., May 5, 2017): A15.
(Note: ellipses added.)
(Note: the online version of the commentary has the date May 4, 2017.)

The Goolsbee and Klenow article mentioned above, is:
Goolsbee, Austan, and Peter J. Klenow. “Valuing Consumer Products by the Time Spent Using Them: An Application to the Internet.” American Economic Review 96, no. 2 (May 2006): 108-13.

Socialized Medicine Seeks to Ensure “No One Does Anything New or Interesting”

(p. A15) Heart surgeons are among the superstars of the medical profession, possessing finely tuned skills and a combination of detachment and sheer guts that enables them to carve open fellow human beings and hold the most vital human organ in their hands. In “Open Heart,” British cardiac surgeon Stephen Westaby shares often astonishing stories of his own operating-room experiences, illuminating the science and art of his specialty through the patients whose lives he has saved and, in some cases, lost.
. . .
One theme in “Open Heart” is Dr. Westaby’s frustration with Britain’s National Health Service, which, he says, values saving money over saving lives. He grows frustrated as he tries to get the reluctant government-run payer to cover the costs of advanced interventions. There are other problems too: Dire situations often get worse, he says, because of treatment delays and poor attention to best practices, like administering clot-busting drugs after a heart attack. Medical directors, he says, seem intent on ensuring that “no one does anything new or interesting.”

For the full review, see:
Laura Landro. “BOOKSHELF; Priming the Pump; One procedure involved implanting a turbine heart-pumping device and screwing a titanium plug, Frankenstein-like, into the skull.” The Wall Street Journal (Fri., July 14, 2017): A15.
(Note: ellipsis added.)
(Note: the online version of the review has the date July 13, 2017.)

The book under review, is:
Westaby, Stephen. Open Heart: A Cardiac Surgeon’s Stories of Life and Death on the Operating Table. New York: Basic Books, 2017.

“Startling” Chinese Government Report Faults Slow and Tepid Reform “Stalemate”

(p. B1) BEIJING — China’s ambitious plan to revamp its economy has bogged down. Flabby state conglomerates have thwarted attempts to whip them into commercial shape. Rules that treat millions of city-dwelling rural migrants like second-class citizens have barely budged.
Such criticisms are common from skeptical foreign economists who have long argued that President Xi Jinping’s efforts to remake China’s economy and fix pernicious social problems have been too slow and tepid.
But these withering findings on China’s reforms come from a startling place: from within the government itself.
Just as striking, this unflattering report card from a Chinese state think tank — published this month with little fanfare — faults misconceived “top-level design” in policies, as well as local bureaucrats and state managers reluctant to change.
. . .
It concludes: “Reform has to some extent fallen into stalemate.”
The report brings into focus a sharpening debate in China about economic priorities. Experts inside and outside China say the country’s economy needs to be overhauled to continue growing fast enough to provide jobs and higher incomes for its people.
. . .
(p. B5) The new report, a 217-page study titled “The Reform Obstruction Phenomenon,” was written by researchers from the Economic System and Management Institute of China’s National Development and Reform Commission, which steers policy on industry, energy and many other sectors. The head of the commission, He Lifeng, and his deputy, Liu He, both have ties to Mr. Xi. But nothing in the report suggests that it had their blessing. The authors declined to be interviewed.

For the full story, see:
CHRIS BUCKLEY. “Still Waiting for Reforms.” The New York Times (Tues., MARCH 28, 2017): B1 & B5.
(Note: ellipses added.)
(Note: the online version of the story has the date MARCH 27, 2017, and has the title “In Rare Move, Chinese Think Tank Criticizes Tepid Pace of Reform.”)

Pineapple Displays “Plodding Banality” of Conceptual Art

(p. A4) LONDON — How did a pineapple become a postmodern masterpiece?
The aesthetic merits of tropical fruit inadvertently entered Britain’s national cultural conversation after two students jokingly placed a store-bought pineapple on an empty table at an art exhibition this month at Robert Gordon University in Aberdeen, a port city in northeastern Scotland.
When they returned a few days later to the exhibition — part of the Look Again festival, which aims to highlight Aberdeen’s cultural heritage — they were shocked to discover their pineapple protected by a glass display case, instantly and mysteriously transformed into a work of art.
After one of the students, Lloyd Jack, 22, who studies business, put a photograph of the pineapple on Twitter, along with the words, “I made art,” the image was shared widely on social media, turning the fruit, fairly or not, into a cultural sensation. To some, though, the stunt was a self-promoting social media prank befitting the digital age.
Mr. Jack’s post received nearly 5,000 likes on Twitter. Before long, the work, which the two students titled “Pineapple,” had been deconstructed on art blogs and social media worldwide; parsed in Paris, Texas and Tokyo; and even featured on Canadian television. Some on Twitter lauded its “genius,” while others ridiculed it as the latest example of conceptual art’s plodding banality.
. . .
Others saw hidden meaning in the pineapple, including an art professor at the university who, Mr. Gray said, enthusiastically lauded the “purposeful way” in which the display case had pressed down on the fruit’s leaves.
“It just goes to show the ludicrousness of conceptual art and how anything can become art,” Mr. Jack said.
. . .
Peter York, an author and cultural commentator, noted that the pineapple display, consciously or not, wittily reflected Duchamp’s notion that if you declare something art, it becomes art.
“I rank pineapples quite highly as they are quite decorative objects, sort of colonial superfruits, with leaves that look like green fountains at the top,” he said. “But you wouldn’t really want a pineapple exhibited in your home.”

For the full story, see:
DAN BILEFSKY. “Scots Plumb a Pineapple’s Hidden Meaning After it Becomes Accidental Art.” The New York Times (Fri., MAY 12, 2017): A4.
(Note: ellipses added.)
(Note: the online version of the story has the date MAY 11, 2017, and has the title “How a Humble Pineapple Became Art.”)

Level 3 Failed, In Spite of a Well-Executed, Plausible Business Plan

Level3StockPricesGraph2017-06-09.jpgSource of graph: online version of the Omaha World-Herald article quoted and cited below.

(p. 1D) Thomas Dowd and hundreds of other Omahans soon will be digging out their Level 3 Communications Inc. stock records. • The reason: This week, Level 3 shareholders are voting to sell the company to Century Link Communications. • The sale marks the end of an investment saga that began 20 years ago with hopes of riches but ended with big losses for most shareholders, despite the efforts of some of Omaha’s biggest names in business. • “It was a very bad experience,” said Dowd, a retired attorney and former director of the Metropolitan Utilities District. “It’s just one purchase at a time, and you think everything’s going good and then, bam! Anyway, lesson learned.” • Although his loss was “substantial,” he said, it didn’t disrupt his lifestyle, and he figures he’s better off than shareholders who lost their retirement savings or other vital funds. He’s still a Level 3 shareholder and will get some cash and Century Link shares in the sale, which is scheduled for September [2017].

(p. 4D) But it works out to about $4.43 for shares he bought years ago, some of them costing more than $100.
. . .
On March 20, 2000, someone sold and someone bought Level 3 shares for $132.25, a price that made the company’s publicly traded stock worth nearly $20 billion. By 2002, the price had nearly collapsed, putting most shareholders into the red.
Level 3 might have an information highway, but its toll system wasn’t collecting enough to earn a profit. It was clear that the nation had a “bandwidth glut,” a huge overcapacity of fiber networks.
Level 3 had installed its network, at an eventual cost of $14 billion, and could cheaply add more lines by stringing extra cable through its conduits.
But others had built networks, too, and the demand for bandwidth wasn’t growing as Crowe had hoped. Researchers also found ways to send more data along existing fibers, meaning greater capacity along existing lines.
Most of the new fiber networks were unused, or “dark.” Only a fraction of fibers in the buried bundles were “lit” by the light waves that carried digital communications and brought in revenue for companies like Level 3.
The supply of fiber far outran the demand, and Level 3’s losses mounted, along with its stock price. Investors lost confidence that the company would begin making profits anytime soon. In fact, that didn’t happen until 2014.
. . .
Dowd, the retired attorney, said he held onto the shares because it didn’t seem worthwhile to sell at the lower prices and he figured someone would buy the company and he would get some of his money back.
“I always thought Walter Scott was going to pull a rabbit out of the hat,” he said. “He never did.”

For the full story, see:
STEVE JORDON. “END OF THE LINE FOR LEVEL 3; Omaha-born company, which laid fiber-optic cable, will cease to exist.” Omaha World-Herald (Sun., March 12, 2017): 1D & 4D.
(Note: ellipses added.)