artdiamondblog.com – Page 373 – Art Diamond's web log

Russia and China Redistributed Wealth “to Disastrous Effect”

Shane Smith, entrepreneur behind VICE media company. Source of photo: online version of the NYT article quoted and cited below.

(p. 10) You believe that young people worldwide are disenfranchised. Do you think popular uprisings will fix things? No. I’m actually worried, because I believe that it’s going to get worse. Look, economic disparity is bad. But we’ve already tried having governments redistribute wealth. We tried it in Russia and China to disastrous effect.

News Corp. bought a 5 percent stake in Vice, and now James Murdoch is on the board. Why did you sell to them? I’ve said that I want to be the next MTV, the next CNN, the next ESPN. Cue everyone rolling their eyes. MTV went to Viacom, ESPN went to Disney and Hearst, CNN went to Time Warner. Why? Because to build a global media brand, it’s almost impossible to do it alone. James has been involved in one of the largest media companies in the world since he was in short pants.
Do you ever fear that Vice will become legacy media itself? It’s our time now. Then, I don’t know, it’ll be holograms next, and some kid will come up and eat our lunch.

For the full interview, see:
Staley, Willy, interviewer. ” ‘Have We Unleashed a Monster?’: The Vice C.E.O. Shane Smith on His New Kind of News.” The New York Times Magazine (Sun., MARCH 23, 2014): 12.
(Note: ellipsis added; bold in original.)
(Note: the online version of the interview has the date MARCH 21, 2014, and has the title “Vice’s Shane Smith: ‘Have We Unleashed a Monster?’.”)

Edison’s Magnetic Low-Grade Iron Ore Processing Inventions Might Have Succeeded

(p. 193) Edison took great pleasure in the novelty of the technical challenges and in the opportunity to redeem his reputation as a savvy businessperson, even though redemption never came. The low-grade iron ore in New Jersey did not have a competitive chance once huge reserves of high-grade ore were discovered in the Mesabi Range of northeastern Minnesota; the Mesabi ore was easily mined near the surface and close to economical shipping on Lake Superior. Well after the first Mesabi mine opened in 1890, Edison remained pitiably hopeful about his Ogden mine, even when objective facts made the future of its business appear bleak to anyone else. In 1897, when failure was inevitable, he refused to acknowledge the facts. Edison wrote a colleague, “My Wall Street friends think I cannot make another success, and that I am a back number, hence I cannot raise even $10,000 from them, but I am going to show them that they are very much mistaken. I am full of vinegar yet.”

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

“The Experts Keep Getting It Wrong and the Oddballs Keep Getting It Right”

“A worker at a hydraulic fracturing and extraction operation in western Colorado on March 29[, 2014].” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. C3) The experts keep getting it wrong. And the oddballs keep getting it right.

Over the past five years of business history, two events have shocked and transformed the nation. In 2007 and 2008, the housing market crumbled and the financial system collapsed, causing trillions of dollars of losses. Around the same time, a few little-known wildcatters began pumping meaningful amounts of oil and gas from U.S. shale formations. A country that once was running out of energy now is on track to become the world’s leading producer.
What’s most surprising about both events is how few experts saw them coming–and that a group of unlikely outsiders somehow did.
. . .
Less well known, but no less dramatic, is the story of America’s energy transformation, which took the industry’s giants almost completely by surprise. In the early 1990s, an ambitious Chevron executive named Ray Galvin started a group to drill compressed, challenging formations of shale in the U.S. His team was mocked and undermined by dubious colleagues. Eventually, Chevron pulled the plug on the effort and shifted its resources abroad.
Exxon Mobil also failed to focus on this rock–even though its corporate headquarters in Irving, Texas, were directly above a huge shale formation that eventually would flow with gas. Later, it would pay $31 billion to buy a smaller shale pioneer.
“I would be less than honest if I were to say to you [that] we saw it all coming, because we did not, quite frankly,” Rex Tillerson, Exxon Mobil’s chairman and CEO said last year in an interview at the Council on Foreign Relations.
. . .
The resurgence in U.S. energy came from a group of brash wildcatters who discovered techniques to hydraulically fracture–or frack–and horizontally drill shale and other rock. Many of these men operated on the fringes of the oil industry, some without college degrees or much background in drilling, geology or engineering.

For the full commentary, see:
GREGORY ZUCKERMAN. “ESSAY; The Little Guys Who Saw Our Economic Future; Corporate Caution and Complacency Come at a Cost.” The Wall Street Journal (Sat., Nov. 2, 2013): C3.
(Note: ellipsis, and bracketed year in caption, added.)
(Note: the online version of the commentary was updated Nov. 3, 2013, and has the title “ESSAY; The Outsiders Who Saw Our Economic Future; In both America’s energy transformation and the financial crisis, it took a group of amateurs to see what was coming.” )

Zuckerman’s commentary, quoted above, is partly based on his book:
Zuckerman, Gregory. The Frackers: The Outrageous inside Story of the New Billionaire Wildcatters. New York: Portfolio/Penguin, 2013.

Koch Industries Was Only Major Ethanol Producer to Oppose Ethanol Tax Credits

(p. A17) I have devoted most of my life to understanding the principles that enable people to improve their lives. It is those principles–the principles of a free society–that have shaped my life, my family, our company and America itself.
Unfortunately, the fundamental concepts of dignity, respect, equality before the law and personal freedom are under attack by the nation’s own government. That’s why, if we want to restore a free society and create greater well-being and opportunity for all Americans, we have no choice but to fight for those principles.
. . .
Far from trying to rig the system, I have spent decades opposing cronyism and all political favors, including mandates, subsidies and protective tariffs–even when we benefit from them. I believe that cronyism is nothing more than welfare for the rich and powerful, and should be abolished.
Koch Industries was the only major producer in the ethanol industry to argue for the demise of the ethanol tax credit in 2011. That government handout (which cost taxpayers billions) needlessly drove up food and fuel prices as well as other costs for consumers–many of whom were poor or otherwise disadvantaged. Now the mandate needs to go, so that consumers and the marketplace are the ones who decide the future of ethanol.

For the full commentary, see:
CHARLES G. KOCH. “OPINION; I’m Fighting to Restore a Free Society; Instead of welcoming free debate, collectivists engage in character assassination.” The Wall Street Journal (Thurs., April 3, 2014): A17.
(Note: ellipsis added.)
(Note: the online version of the commentary was updated April 2, 2014, and has the title “OPINION; Charles Koch: I’m Fighting to Restore a Free Society; Instead of welcoming free debate, collectivists engage in character assassination.” )

Koch’s philosophy of the free market is more fully elaborated in:
Koch, Charles G. The Science of Success: How Market-Based Management Built the World’s Largest Private Company. Hoboken, NJ: Wiley & Sons, Inc., 2007.

Delta Overcomes Obstacles that Ground Other Airlines

Source of graphic: online version of the WSJ article quoted and cited below.

Cancellations due to mechanical failures, piliot illness and government regulations are often announced as though they were acts of God, outside the possible control of airlines, for which the airline is blameless. But airlines can take actions, and improve processes, to reduce the frequency and consequences of such cancellations. In airlines, and in other firms, there is not a sharp line between what can and what cannot be under the firm’s control.

(p. D3) Atlanta

The crew of Delta Air Lines Flight 55 last Thursday couldn’t legally fly from Lagos, Nigeria, to Atlanta unless they waited a day due to new limits on how much pilots can fly in a rolling 28-day period. The trip would have to be canceled.
Instead, Delta headquarters told the captain to fly to San Juan, Puerto Rico, which they could reach within their duty limits. There, two new pilots would be waiting to take the Boeing 767 on to Atlanta. The plane arrived in San Juan at 2:44 a.m., quickly took on fuel and pilots, and landed in Atlanta only 40 minutes late.
The episode, unorthodox in the airline industry, illustrates the fanaticism Delta now has for avoiding cancellations. Last year, Delta canceled just 0.3% of its flights, according to flight-tracking service FlightStats.com. That was twice as good as the next-best airlines, Southwest and Alaska, and five times better than the industry average of 1.7%.
. . .
Managers in Delta operations centers move planes, crews and parts around hourly trying to avoid canceling flights. How well an airline maintains its fleet and how smartly it stashes spare parts and planes at airports affect whether your flight goes or not.
Delta thinks it has come up with new analytical software and instruments that can help monitor the health of airplanes and predict which parts will soon fail. Empty planes are ferried to replace crippled jets rather than waiting for overnight repairs.
Mechanics developed a vibration monitor to install on cooling fans for cockpit instruments. A plane can’t be sent out on a new trip with a broken fan.
Now when vibration starts to increase, indicating that a bearing may be wearing down and getting close to failing, a new fan is swapped in. The wobbly fan goes to the shop for new bearings. That has reduced canceled flights.
So has spending $2 million to have spare starters for Boeing 767 engines at all 767 stations abroad. Starters last about five years. While each plane has two and both engines can be started with one, you can’t send a plane out on a long trip over oceans with only one working.

For the full story, see:
SCOTT MCCARTNEY. “THE MIDDLE SEAT; A World Where Flights Aren’t Canceled; How Smartly an Airline Stashes Spare Parts and Planes at Airports Affects Whether or Not Your Flight Takes Off.” The Wall Street Journal (Thurs., April 3, 2014): D3.
(Note: ellipsis added.)
(Note: the online version of the story was updated April 2, 2014, and has the title “THE MIDDLE SEAT; A World Where Flights Aren’t Canceled; Inside Delta’s new strategies to avoid stranding fliers.”)

In the End Edison Said “I Am Not Business Man Enough to Spend Time” in the Electricity Business

(p. 186) In early 1892, the deal was done: Edison General Electric and Thomson-Houston merged as nominal equals. The organization chart, however, reflected a different understanding among the principals. Thomson-Houston’s chief executive, Charles Coffin, became the new head and other Thomson-Houston executives filled out the other positions. Insull was the only manager from the Edison side invited to stay, which he did only briefly. From the outside, it appeared that Thomas (p. 187) Edison and his coterie had arranged the combination from a position of abject surrender. Edison did not want this to be the impression left in the public mind, however. When the press asked him about the announcement, he said he had been one of the first to urge the merger. This was not close to the truth, and is especially amusing when placed in juxtaposition to Alfred Tate’s account of the moment when Tate, hearing news of the merger first, had been the one to convey the news to Edison.

I always have regretted the abruptness with which I broke the news to Edison but I am not sure that a milder manner and less precipitate delivery would have cushioned the shock. I never before had seen him change color. His complexion naturally was pale, a clear healthy paleness, but following my announcement it turned as white as his collar.

“Send for Insull,” was all he said as he left me standing in his library.

Having collected himself before meeting with the reporters, Edison could say with sincerity that he was too busy to “waste my time” on the electric light. For the past three years, since he first realized that his direct-current system would ultimately be driven to the margins by alternating current, he had been carting his affections elsewhere. The occasion of the merger did shake him into a rare disclosure of personal shortcoming: He allowed that “I am not business man enough to spend time” in the power-and-light business.

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

Heart Pioneer Bailey Kept Moving from Hospital to Hospital Due to His Failures

Source of book image:
http://media.npr.org/assets/bakertaylor/covers/e/extreme-medicine/9781594204708_custom-14713d8588e54f066a6abf7b5a13e4c9de832ea1-s6-c30.jpg

(p. C8) In “Extreme Medicine,” physician Kevin Fong reminds us that virtually everything we take for granted in lifesaving medical intervention was once unthinkable. Over the past century, as technology has allowed man to conquer hostile environments and modernize warfare, medical pioneers have been on a parallel journey, confronting what had once been fatal in man’s boldest pursuits and making it survivable.
. . .
As Dr. Fong notes, many of today’s commonplace treatments were once dangerously experimental. One pioneer in the early postwar years, a Philadelphia surgeon named Charles Bailey, killed several patients while trying to repair problems of the mitral valve, which if damaged can cause blood to flow backward into the hear chamber, decreasing flow to the rest of the body. Bailey moved from hospital to hospital to avoid scrutiny of his successive failures.

For the full review, see:
LAURA LANDRO. “BOOKS; They Died So We Might Live; Hypothermia, which killed explorers like Scott, is now induced in heart patients to allow time for surgery.” The Wall Street Journal (Sat., Feb. 15, 2014): C8.
(Note: ellipsis added.)
(Note: the online version of the review has the date Feb. 14, 2014, and has the title “BOOKSHELF; Book Review: ‘Extreme Medicine’ by Kevin Fong; Explorers, astronauts and soldiers all pushed the limits of doctors’ abilities to heal and repair.”)

The book under review is:
Swidey, Neil. Trapped under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles into the Darkness. New York: Crown Publishers, 2014.

Fair Use Doctrine Allows Copying for Educational Purposes

(p. 23) I am a public-school teacher with a limited budget for supplies. Is it unethical to illegally download copyrighted instructional materials for use in my class? BEN L., BROOKLYN
It is not. In fact, it’s sometimes not even illegal. In 1976, Congress created copyright exceptions for educational purposes. Copyright law allows “face-to-face” exhibition and presentation of a copyrighted work, assuming the purpose is academic. There is also the doctrine of fair use, which states that copies “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship or research, is not an infringement of copyright.”
Now, it’s worth acknowledging that these guidelines were implemented before downloading a textbook was even possible. And even in an educational setting, using an entire copyrighted work, and thereby diminishing its market potential, might constitute a violation of fair use. But in my opinion, the principles are the same, even if you do violate copyright law: If your sole motive for downloading material is educational (and there is no free or low-cost equivalent that serves your purposes equally well), there should be no problem.

For the full commentary, see:
Chuck Klosterman. “THE ETHICIST; Piracy 101.” The New York Times Magazine (Sun., MARCH 30, 2014): 23.
(Note: italics and bold in original.)
(Note: the online version of the commentary has the date MARCH 28, 2014.)

Television Improved Test Scores

“Economist Matthew Gentzkow found media slant to be a function of audience preference.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A2) An economist known for pioneering work on slanted coverage in the news media won the John Bates Clark Medal, one of the profession’s most prestigious honors.

Matthew Gentzkow, a professor at the University of Chicago’s Booth School of Business, on Thursday was awarded the Clark medal by the American Economic Association, which every year honors the nation’s most promising economist under age 40.
. . .
A big theme in Mr. Gentzkow’s work is finding innovative ways to tackle questions that expand economists’ tool kits.
. . . , in 2008, he and Mr. Shapiro examined the fact that different parts of the U.S. got access to television at different times to gauge TV’s effects on high-school students in the 1960s.
The economists found that children who lived in cities that gave them more exposure to TV in early childhood performed better on tests than those with less exposure. The work also suggested TV helped American children in non-English-speaking households do better in school.

For the full story, see:
NEIL SHAH. “Economist Honored for Work on Media Slant.” The Wall Street Journal (Fri., April 18, 2014): 12.
(Note: ellipses added.)
(Note: the online version of the story has the date April 17, 2014.)

The Gentzkow and Shapiro paper on the effects of television, is:
Gentzkow, Matthew, and Jesse M. Shapiro. “Preschool Television Viewing and Adolescent Test Scores: Historical Evidence from the Coleman Study.” Quarterly Journal of Economics 123, no. 1 (Feb. 2008): 279-323.

Managing Engaged Edison Only Half as Much as Inventing

(p. 146) In 1885, three years after the start of service at Pearl Street, a director of the company who chose to remain anonymous complained to the Philadelphia Press that Edison insisted on taking an active part in the management of the company “although he is not a bit of a business man.” He gave an example of Edison’s poor judgment: Edison had proposed installing a new cable in Manhattan that would cost nearly $30,000 a mile, oblivious to the fact that Western Union had one with similar capacity in operation that had only cost $500 a mile. “If he would leave it to practical business men to make money out of it and stick to his inventions,” the director said, “the company would in time become very rich.”
For Edison, “sticking to his inventions” full-time would mean relinquishing control of Edison Electric, which was anathema. Managing his company did not engage him half as much as creating it, but he could not bring himself to let go of the captain’s chair. Edison’s intellectual interests, however, wandered from one minor project to the next. He had always done best when attempting something both entirely new and gargantuan in scale, but in the mid-1880s he could not find a suitable project.

Source:
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.
(Note: italics in original.)

Government Pushed Kiewit to Ignore Worker Safety

Source of book image: http://d202m5krfqbpi5.cloudfront.net/books/1369819962l/17934699.jpg

(p. C9) Boston Harbor’s filth is legendary. It was mock-celebrated in the 1966 song “Dirty Water.” The city’s water-treatment plants were hopelessly inadequate, and barely treated sewage had been pouring into the harbor for decades.
. . .
The Deer Island Sewage Treatment Plant was supposed to solve these problems. Begun in 1990, the $3.8 billion facility would process human and industrial waste on a small island in Boston Harbor and then send it through a 9.5-mile tunnel into the deep waters of the Atlantic. Fifty-five vertical pipes called risers spurred off the tunnel’s final section to further diffuse waste before releasing it into the sea. Temporary safety plugs, likened to giant salad bowls, had been placed near the bottom of each riser to keep water from seeping in before construction was complete.
These plugs were a source of conflict between the tunnel’s owner, the Massachusetts Water Resources Authority (MWRA), and the company they hired to build it, Kiewit, “the Omaha-based construction giant” that, Mr. Swidey notes, “had built more miles of the U.S. highway system than any other contractor.” The director of MWRA, Doug MacDonald, had left a job as a partner in a Boston law firm to take over the authority, a behemoth of 1,700 employees and, at the peak of harbor cleanup, an additional 3,000 construction workers. Mr. MacDonald’s job included mollifying various parties who disagreed about how the Deer Island project would reach completion: Kiewit; the tunnel’s designers, mostly out of the picture by 1998; ICF Kaiser Engineers, hired by MWRA to protect its interests and act as Mr. MacDonald’s eyes and ears; the union “sandhogs” who bored out 2.4 million tons of rock to create the tunnel; the Occupational Safety and Health Administration, ostensibly looking out for worker safety but seeming more interested in handing out fines; and, though federal funds for harbor cleanup had long since dried up, “a bow-tied federal judge who served as the cleanup project’s robed referee, threatening stiff fines or worse if the deadlines he imposed were not met.”
. . .
The problem weighed most heavily on Kiewit. The firm was contractually obligated to deliver on time, subject to late-fee penalties of $30,000 a day, and to cover cost overruns. More, Kiewit had fronted the construction costs and would only be paid by selling the tunnel, piece by piece, to MWRA. The contract further obligated Kiewit to provide “lighting and ventilation (or breathing apparatus) for the personnel” that pulled the plugs but, in what seemed a senseless conflict, mandated that the plugs “could be removed only after the tunnel was completed,” writes Mr. Swidey, “meaning after the sandhogs had cleared out, taking their extensive ventilation, transportation, and electrical systems with them.”
Kiewit protested that clearing the tunnel of its life-sustaining infrastructure would make “the risk of catastrophe [to the workers pulling the plugs] . . . exponentially higher !” They offered several sound alternatives. In response, ICF Kaiser accused them of just wanting their payday. After a “year-long memo war,” Kiewit capitulated, cleared the tunnel and hired a commercial dive team to go into a pitch-black airless tube.

For the full review, see:
NANCY ROMMELMANN. “BOOKS; One Mile Down, Ten Miles Out; Their oxygen was starting to get thin. On the verge of passing out, Hoss radioed back to the Humvees. The reply was an expletive, and the line went dead.” The Wall Street Journal (Sat.,March 15, 2014): C9.
(Note: ellipses between paragraphs, added; ellipsis inside last paragraph, in original.)
(Note: the online version of the review has the date March 14, 2014, and has the title “BOOKSHELF; Book Review: ‘Trapped Under the Sea’ by Neil Swidey; In 1999, five deep-sea welders had to traverse a tunnel beneath Boston Harbor with no breathable air, no light and no chance for rescue should things go horribly wrong.” )

The book under review is:
Swidey, Neil. Trapped under the Sea: One Engineering Marvel, Five Men, and a Disaster Ten Miles into the Darkness. New York: Crown Publishers, 2014.