artdiamondblog.com – Page 417 – Art Diamond's web log

EU Costs Britain $238 Billion Per Year According to Congdon Report

“Nigel Farage has waged a 20-year campaign to get Britain to leave the European Union.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A7) Strasbourg, France THE floor of the European Union’s cavernous and mostly vacant parliamentary chamber here is hardly known for its lively debates. At least not until Nigel Farage, the Brussels-bashing leader of Britain’s fastest growing political party, gets up to speak.

The vast majority of the European Parliament’s 754 members, as they process the torrent of rules and regulations that Europe bestows upon them, are not inclined to question why they are here. The pay and perks are generous for those elected to five-year terms in low-turnout elections throughout the European Union’s 27 member countries. And the mission — to extend the sweep of European federalism — is for most a shared one.
But for Mr. Farage, who has waged a 20-year campaign to get Britain to leave the European Union, Strasbourg has become the perfect stage to disseminate his anti-European Union message by highlighting the bloc’s bureaucratic absurdities and spendthrift tendencies as well as by mocking with glee the most prominent proponents of a European superstate: the head of the European Commission, José Manuel Barroso, and the European Council president, Herman Van Rompuy. “I said you’d be the quiet assassin of nation-state democracy,” Mr. Farage has declared, as his target, Mr. Van Rompuy, squirmed in his seat just opposite, “and sure enough, in your dull and technocratic way, you’ve gone about your course.”
. . .
Last year, in net terms, Britain paid $16 billion to the European Union. But according to a recent study by the economist Tim Congdon, himself an Independence Party member, if the cost of regulation, waste and misallocated resources is included, the annual cost of membership rises to $238 billion a year, or about 10 percent of Britain’s economic output.
Perhaps the most egregious example of this profligacy is the spot where Mr. Farage has found fame: the European Parliament. As most of the legislative work is done in Brussels, the building is in use just three days each month. Analysts estimate that it costs taxpayers about $250 million a year to transport each month 754 members of Parliament, several thousand support staff members and lobbyists to this French city.
Mr. Farage lights another cigarette and shakes his head. “I just would like for my grandchildren to read some day that I did my part in saving my country from this lunacy,” he said with a sigh.

For the full story, see:
LANDON THOMAS Jr. “THE SATURDAY PROFILE; An Enemy of Brussels, and Not Afraid to Say So.” The New York Times (Sat., December 8, 2012): A11.
(Note: ellipsis added.)
(Note: the online version of the article has the date December 7, 2012.)

The Tim Congdon report mentioned is:
Congdon, Tim. “How Much Does the European Union Cost Britain?” UK Independence Party, 2012.
(Note: the report calculates a total cost of about 150 billion British pounds, which when converted to dollars is equal to the $238 billion reported in the article, at an exchange rate of about $1.587 per British pound.)

Why Health Care Costs So Much in McAllen

(p. 235) Atul Gawande lays out “The Cost Conundrum: What a Texas town can teach us about health care.” “It is spring in McAllen, Texas. The morning sun is warm. The streets are lined with palm trees and pickup trucks. McAllen is in Hidalgo County, which has the lowest household income in the country, but it’s a border town, and a thriving foreign-trade zone has kept the unemployment rate below ten per cent. McAllen calls itself the Square Dance Capital of the World. ‘Lonesome Dove’ was set around here. McAllen has another distinction, too: it is one of the most expensive health-care markets in the country. Only Miami–which has much higher labor and living costs–spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.”

Gawande as quoted in:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 24, no. 2 (Fall 2009): 231-38.

The full Gawande article can be viewed online at:
Gawande, Atul. “Annals of Medicine; the Cost Conundrum; What a Texas Town Can Teach Us About Health Care.” The New Yorker 85, no. 16 (June 2009): 36-44.

A later Gawande article, that asks why the health care system cannot be run as well as The Cheesecake Factory, can be viewed online at the link below. (Spoiler alert: I haven’t read this article yet, but I’m guessing it has something to do with the feedback and incentives provided by the free market.)
Gawande, Atul. “Annals of Health Care; Big Med; Restaurant Chains Have Managed to Combine Quality Control, Cost Control, and Innovation. Can Health Care?” The New Yorker 88, no. 24 (August 2012): 52-63.

Does Washington Want “to Regulate Everything That’s Warm”?

“Mike Taylor displays a gas-log set at Acme Stove in Rockville, Md.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A8) Rett Rasmussen sells gas-log sets, which use a “dancing flame” design that his father invented more than 50 years ago to replicate a cozy wood fire.

They are just for decoration, he says. But as the season approaches for families to gather around the hearth–real or fake–Mr. Rasmussen and other makers of hearth products are having a flare-up with the Department of Energy. The federal agency says it has the authority to regulate the log sets as heating equipment, though it isn’t proposing any changes now.
The issue “just hit us out of left field,” said Mr. Rasmussen. His company of about 50 employees–Rasmussen Iron Works Inc. of Whittier, Calif.–has spent at least $20,000 to fight any regulatory change, he says.
. . .
Judge A. Raymond Randolph expressed sympathy for the industry, saying that an object is not a heater simply “because it makes the air around it warm.”
“I don’t understand that as a matter of pure English,” said Judge Randolph, who was appointed by President George H.W. Bush. He added: “That’s like saying a match is designed to furnish warm air. It’s designed to furnish a flame.”
H. Thomas Byron, a Justice Department lawyer, said it was “rhetorical hyperbole” to suggest Washington wanted to regulate everything that’s warm. . . .
Mr. Rasmussen, who says the family business has struggled in the weak economy, monitors the case closely. “We’re alive and kicking, but it’s not what it used to be, and when you have to fight your government, it’s hard to see where it’s going to get back anywhere near where it has been,” he said.

For the full story, see:
RYAN TRACY. “Hearth Makers Get Hot Over Regulations.” The Wall Street Journal (Tues., October 23, 2012): A8.
(Note: ellipses and bracketed date added.)
(Note: the online version of the article was dated October 22, 2012.)
(Note: in the third paragraph “he says” appeared in the online, but not the print, version.)

“Did Alexander Graham Bell Do Any Market Research Before He Invented the Telephone?”

(p. 170) After the Macintosh team returned to Bandley 3 that afternoon, a truck pulled into the parking lot and Jobs had them all gather next to it. Inside were a hundred new Macintosh computers, each personalized with a plaque. “Steve presented them one at a time to each team member, with a handshake and a smile, as the rest of us stood around cheering,” Hertzfeld recalled. It had been a grueling ride, and many egos had been bruised by Jobs’s obnoxious and rough management style. But neither Raskin nor Wozniak nor Sculley nor anyone else at the company could have pulled off the creation of the Macintosh. Nor would it likely have emerged from focus groups and committees. On the day he unveiled the Macintosh, a reporter from Popular Science asked Jobs what type of market research he had done. Jobs responded by scoffing, “Did Alexander Graham Bell do any market research before he invented the telephone?”

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.
(Note: italics in original.)

“Planning Is Crap”

Source of book image: http://images.indiebound.com/636/044/9780807044636.jpg

(p. C8) As Mr. Wooten recounts, obstacles abounded from a municipality bent on redesigning New Orleans while the city was still in crisis. Neighborhoods from middle-class Lakeview to the devastated Lower Ninth Ward began to fear that the city they loved didn’t love them back.

“Planning is crap,” said Martin Landrieu, a member of a prominent local political family, at a meeting of Lakeview residents. “What you really need is the cleaning up of houses . . . . Where are the hammers and nails?” Yet five months after Katrina, a city commission called Bring New Orleans Back presented an ambitious plan to restore the city that included converting neighborhoods that had heavy flooding into green space. The commission also imposed a temporary moratorium on rebuilding there. Residents would have to show that their communities were viable or risk being planned out of existence; they were given four months.

For the full review, see:
CARLA MAIN. “After the Waters Receded.” The Wall Street Journal (Sat., August 4, 2012): C8.
(Note: ellipsis in original.)
(Note: the online version of the article was dated August 3, 2012.)

Health Care Costs Can Be Lowered by Less Waste and More Cost-Reducing Innovation

(p. 234) Melinda Beeuwkes Buntin and David Cutler discuss “The Two Trillion Dollar Solution: Saving Money by Modernizing the Health Care System.” “Two sorts of savings are possible in health care. The first is eliminating waste and inefficiency. The most commonly cited estimate is that 30 percent of the money spent on medical care does not buy care worth its cost. Medicare costs per capita in Minneapolis, for example, are about half those in Miami, yet Miami does not have better health outcomes. International comparisons yield the same conclusion. . . . Second, reform might stimulate cost-reducing innovation instead of the continuous cost increases that accompany current innovation. For nearly 20 years, scholars have argued that generous reimbursement policies for medical care have led to innovations that almost always increase health care costs. Changing that dynamic by investing in research about what works and rewarding health care providers who choose efficient treatments could have a dramatic effect on cost growth. . . . Reducing costs by 30 percent will take time and effort, but it is not inconceivable over the long term. Experience in the health care sector and other industries suggests that cost reductions on the order of 1.5-to-2.0 percentage points per year are within reach.”

Buntin and Cutler as quoted in:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 24, no. 2 (Fall 2009): 231-38.
(Note: ellipses in original.)

The Buntin and Cutler report is:
Buntin, Melinda Beeuwkes, and David Cutler. “The Two Trillion Dollar Solution: Saving Money by Modernizing the Health Care System.” Washington, D.C.: Center for American Progress, 2009.

With Scorned Ideas, and Without College, Inventor and Entrepreneur “Ovshinsky Prevailed”

“Stanford R. Ovshinsky and Iris M. Ovshinsky founded Energy Conversion Laboratories in 1960.” Source of caption and photo: online version of the NYT obituary quoted and cited below.

(p. A23) Stanford R. Ovshinsky, an iconoclastic, largely self-taught and commercially successful scientist who invented the nickel-metal hydride battery and contributed to the development of a host of devices, including solar energy panels, flat-panel displays and rewritable compact discs, died on Wednesday [October 17, 2012] at his home in Bloomfield Hills, Mich. He was 89.
. . .
His ideas drew only scorn and skepticism at first. He was an unknown inventor with unconventional ideas, a man without a college education who made his living designing automation equipment for the automobile industry in Detroit, far from the hotbeds of electronics research like Silicon Valley and Boston.
But Mr. Ovshinsky prevailed. Industry eventually credited him for the principle that small quantities or thin films of amorphous materials exposed to a charge can instantly reorganize their structures into semicrystalline forms capable of carrying significant current.
. . .
In 1960, he and his second wife, the former Iris L. Miroy, founded Energy Conversion Laboratories in Rochester Hills, Mich., to develop practical products from the discovery. It was renamed Energy Conversion Devices four years later.
Energy Conversion Devices and its subsidiaries, spinoff companies and licensees began translating Mr. Ovshinsky’s insights into mechanical, electronic and energy devices, among them solar-powered calculators. His nickel-metal battery is used to power hybrid cars and portable electronics, among other things.
He holds patents relating to rewritable optical discs, flat-panel displays and electronic-memory technology. His thin-film solar cells are produced in sheets “by the mile,” as he once put it.
. . .
“His incredible curiosity and unbelievable ability to learn sets him apart,” Hellmut T. Fritzsche, a longtime friend and consultant, said in an interview in 2005.

For the full obituary, see:
BARNABY J. FEDER. “Stanford R. Ovshinsky Dies at 89, a Self-Taught Maverick in Electronics.” The New York Times (Fri., October 19, 2012): A23.
(Note: ellipses and bracketed date added.)
(Note: the online version of the article was dated October 18, 2012.)
(Note: in the first sentence of the print version, “hybrid” was used instead of the correct “hydride.”)

“What Marketing Guys Are: Paid Poseurs”

(p. 152) Jobs had asked Hertzfeld and the gang to prepare a special screen display for Sculley’s amusement. “He’s really smart,” Jobs said. “You wouldn’t believe how smart he is.” The explanation that Sculley might buy a lot of Macintoshes for Pepsi “sounded a little bit fishy to me,” Hertzfeld recalled, but he and Susan Kare created a screen of Pepsi caps and cans that danced around with the Apple logo. Hertzfeld was so excited he began waving his arms around during the demo, but Sculley seemed underwhelmed. “He asked a few questions, but he didn’t seem all that interested,” Hertzfeld recalled. He never ended up warming to Sculley. “He was incredibly phony, a complete poseur,” he later said. “He pretended to be interested in technology, but he wasn’t. He was a marketing guy, and that is what marketing guys are: paid poseurs.”

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

“It Isn’t What You Know that Counts–It Is How Efficiently You Can Refresh”

Source of book image: online version of the WSJ review quoted and cited below.

(p. A17) Knowledge, then, is less a canon than a consensus in a state of constant disruption. Part of the disruption has to do with error and its correction, but another part with simple newness–outright discoveries or new modes of classification and analysis, often enabled by technology.
. . .
In some cases, the facts themselves are variable. . . .
. . .
More commonly, however, changes in scientific facts reflect the way that science is done. Mr. Arbesman describes the “Decline Effect”–the tendency of an original scientific publication to present results that seem far more compelling than those of later studies. Such a tendency has been documented in the medical literature over the past decade by John Ioannidis, a researcher at Stanford, in areas as diverse as HIV therapy, angioplasty and stroke treatment. The cause of the decline may well be a potent combination of random chance (generating an excessively impressive result) and publication bias (leading positive results to get preferentially published).
If shaky claims enter the realm of science too quickly, firmer ones often meet resistance. As Mr. Arbesman notes, scientists struggle to let go of long-held beliefs, something that Daniel Kahneman has described as “theory-induced blindness.” Had the Austrian medical community in the 1840s accepted the controversial conclusions of Dr. Ignaz Semmelweis that physicians were responsible for the spread of childbed fever–and heeded his hand-washing recommendations–a devastating outbreak of the disease might have been averted.
Science, Mr. Arbesman observes, is a “terribly human endeavor.” Knowledge grows but carries with it uncertainty and error; today’s scientific doctrine may become tomorrow’s cautionary tale. What is to be done? The right response, according to Mr. Arbesman, is to embrace change rather than fight it. “Far better than learning facts is learning how to adapt to changing facts,” he says. “Stop memorizing things . . . memories can be outsourced to the cloud.” In other words: In a world of information flux, it isn’t what you know that counts–it is how efficiently you can refresh.

For the full review, see:
DAVID A. SHAYWITZ. “BOOKSHELF; The Scientific Blind Spot.” The Wall Street Journal (Mon., November 19, 2012): A17.
(Note: ellipses added, except for the one internal to the last paragraph, which was in the original.)
(Note: the online version of the article was dated November 18, 2012.)

The book under review, is:
Arbesman, Samuel. The Half-Life of Facts: Why Everything We Know Has an Expiration Date. New York: Current, 2012.

Early Retirement Reduces Cognitive Ability

(p. 136) Early retirement appears to have a significant negative impact on the cognitive ability of people in their early 60s that is both quantitatively important and causal. We obtain this finding using cross-nationally comparable survey data from the United States, England, and Europe that allow us to relate cognition and labor force status. We argue that the effect is causal by making use of a substantial body of research showing that variation in pension, tax, and disability policies explain most variation across countries in average retirement rates.

Further exploration of existing data and new data being collected would allow a considerably deeper exploration of the roles of work and leisure in determining the pace of cognitive aging. For example, the HRS contains considerable information on how respondents use their leisure time that would allow both cross-sectional and longitudinal analysis of changes in cognitive exercise that are associated with (p. 137) retirement. In addition, detailed occupation and industry data could be used to understand differences in the pace of technical change to which workers must adjust during the latter part of their careers. Also, in the 2010 wave, the HRS will be adding measures of other components of fluid intelligence. Future work in this area should be able to separate the effects of the “unengaged lifestyle hypothesis” (that early retirees suffer cognitive declines because the work environment they have left is more cognitively stimulating than the full-time leisure environment they have entered) from the “on-the-job retirement hypothesis” (which holds that incentives to invest among older workers are significantly reduced when they expect to retire at an early age).

During the past decade, older Americans seem to have reversed a century-long trend toward early retirement and have been increasing their labor force participation rates, especially beyond age 65. This is good news for the standard of living of elderly Americans, as well as for the fiscal balance of the Social Security and Medicare systems. Our paper suggests that it may also be good news for the cognitive capacities of our aging nation.

Source:
Rohwedder, Susann, and Robert J. Willis. “Mental Retirement.” Journal of Economic Perspectives 24, no. 1 (Winter 2010): 119-38.

“We Don’t Need No Thought Control”

“In Hong Kong, protesters march against Beijing’s introduction of ‘Chinese patriotism classes’ in schools.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A11) Consider the . . . scene in Hong Kong, where tens of thousands of parents, teachers and students protested an effort by Beijing to re-educate the inhabitants of the former British colony, which reverted to the mainland in 1997.

Hong Kong people objected to a government-funded booklet titled, “The China Model,” which was supposed to educate them in the patriotic ways of the mainland. It celebrates China’s one-party Communist regime as “progressive, selfless and united” while criticizing the U.S. political system as having “created social turbulence.”
There is no reference to the Cultural Revolution or Tiananmen Square–history also suppressed on the mainland, where the Web is largely censored. The booklet even encourages Hong Kong people to learn how to “speak cautiously,” a highly unlikely development to those of us who have lived in Hong Kong with its often pungently plain-spoken citizens.
The chairman of the pro-Beijing China Civic Education Promotion Association in Hong Kong, Jiang Yudui, tried to defend the booklet by saying, “If there are problems with the brain, then it needs to be washed, just like dialysis for kidney patients.”
This led the Hong Kong education secretary to back away, assuring that, “Brainwashing is against Hong Kong’s core values and that’s unacceptable to us.” Meanwhile, Hong Kong’s sophisticated protesters carried banners that included lyrics from British rock group Pink Floyd, “We don’t need no thought control.”

For the full commentary, see:
L. GORDON CROVITZ. “INFORMATION AGE; Brainwashing in the Digital Era.” The Wall Street Journal (Mon., August 6, 2012): A11.
(Note: ellipsis added.)
(Note: the online version of the article was dated August 5, 2012.)