artdiamondblog.com – Page 499 – Art Diamond's web log

Banks Try to Suppress Competition Through Federal Finance Regulations

“Banco Wal-Mart plans to open more than 160 branches in Mexico this year.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B2) Banco Wal-Mart plans to open more than 160 branches in Mexico this year, nearly doubling its presence south of the border. Wal-Mart Canada Bank also opened this month. It is offering a credit card and may make loans, including mortgages.

As Wal-Mart has done with retail in America, a Wal-Mart bank could be a disciplining force in keeping down costs for customers. It could also act as an engine of credit creation for a significantly underbanked subset of the American populace.
The Federal Deposit Insurance Corporation estimates that 60 million Americans, most of them low-income, are underserved by local community banks and wind up using usurious check cashers, payday lenders and pawnbrokers for financial services.
. . .
As part of the financial reform legislation, bankers have supported a three-year freeze on new applications for industrial loan corporations, the charter Wal-Mart would need.
That runs contrary to the supposed spirit of reform that seeks to empower and protect consumers. Greater competition, coupled with sounder regulatory supervision, would help accomplish that. And Wal-Mart could be its catalyst.

For the full commentary, see:
ROLFE WINKLER, ROB COX and MARTIN HUTCHINSON. “Reuters Breakingviews; The Halls of Finance Fear Wal-Mart.” The New York Times (Thurs., June 24, 2010): B2.
(Note: the online version of the article has the date June 23, 2010.)
(Note: ellipsis added.)

Smithsonian and NIH Are Contributing to Wikipedia, But Will Professors?

(p. B2) Professor Jemielniak in the passage quoted below, asks why professors would ever contribute to Wikipedia since they already can get published in academic journals, and also have a captive audience at their lectures.
Based on that reasoning, Professors likewise would have little motive to blog—yet many do. Why? Perhaps because there is something satisfying in reaching a wide audience of readers who are not required to read, but who choose to read.
(Readers of academic articles are often few, and students at academic lectures are often captives whose bodies are present, but whose minds are somewhere else.)

(p. B2) In the United States, the Wikimedia Foundation has sponsored an academy to teach experts at the National Institutes of Health how to contribute to the site and monitor what appears there. And Mr. Wyatt said that other institutions including the Smithsonian had inquired about getting their own Wikipedian in residence to facilitate their staff members’ contributions to the site.

One talk here by a Polish professor, Dariusz Jemielniak, took a jab at the idea of experts as contributors. He said he had noticed that students often remained contributors to Wikipedia but that professors left quickly. His explanation was that Wikipedia was really just a game for people to gain status. A teenager offering the definitive account of the Thirty Years’ War gets a huge audience and respect from his peers. But, Mr. Jemielniak asked, why would a professor stoop to edit Wikipedia?
“Professors already get published and can lecture and force people to listen to their ideas,” he said.

For the full story, see:

NOAM COHEN. “Link by Link; How Can Wikipedia Grow? Maybe in Bengali.” The New York Times (Mon., July 12, 2010): B2.
(Note: the online version of the article is dates July 11, 2010.)

Driving Blind: Exploring the Unexplorable

“The National Federation of the Blind operates a science camp to inspire young blind students, such as the girl above [Addison Hugen]. The organization is working with Virginia Tech on a vehicle equipped with sensors for blind drivers.” Source of photo: online version of the article quoted and cited below. Source of caption: print version of the article quoted and cited below. [Bracketed name from online version of caption.]

(p. 3A) WASHINGTON (AP) – Could a blind person drive a car? Researchers are trying to make that far-fetched notion a reality.

The National Federation of the Blind and Virginia Tech plan to demonstrate a prototype vehicle next year equipped with technology that helps a blind person drive a car independently.
The technology, called “nonvisual interfaces,” uses sensors to let a blind driver maneuver a car based on information transmitted to him about his surroundings: whether another car or object is nearby, in front of him or in a neighboring lane.
Advocates for the blind consider it a “moon shot,” a goal similar to President John F. Kennedy’s pledge to land a man on the moon. For many blind people, driving a car long has been considered impossible. But researchers hope the project could revolutionize mobility and challenge long-held assumptions about limitations.
“We’re exploring areas that have previously been regarded as unexplorable,” said Dr. Marc Maurer, president of the National Federation of the Blind.

For the full story, see:
KEN THOMAS . “Blind Drivers Goal of High-Tech Car Project.” Omaha World-Herald (Saturday, July 3, 2010): 3A.
(Note: the online version of the article has the title: “Driving while blind? Maybe, with new high-tech car.”)

Inventor Wozniak Tries Entrepreneurship

(p. 247) In a way, that happened to me. The US Festival was exactly the opposite of the Apple experience for me. It didn’t come easily. It involved having plans to get certain groups, and having those groups cancel. It involved having plans for sites, and having those sites cancel. It involved having plans for equipment, and having the equipment not come through. It was a costly battle to do all the right things, but we did them anyway.

I’d written a check. I had confidence in my people. I’d already taken a stand, and when you take a stand, you don’t back away from it. Sometimes this has been a big problem in my life–especially marriage-wise–but if I’m in, I’m in. I don’t back out. And by the time I could see this was a disaster, I had this guy, Pete Ellis, and all the people he’d hired, counting on me. I couldn’t just (p. 248) all of a sudden pull the rug out. And we’d already planned the date: the first US Festival would be the Labor Day weekend of 1982, right after my first year back at school.
. . .
(p. 255) I loved that first US Festival concert, and I knew I’d made so many people happy doing it. We thought from press reports that enough people–nearly half a million–had shown up. So we thought that would make us money. But we lost money, nearly $12 million, because it turned out we didn’t sell as many tickets as there were people.

Source:
Wozniak, Steve, and Gina Smith. iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: W. W. Norton & Co., 2006.

Expert Says Australian Cow Burps Add to Global Warming

“Athol Klieve, an expert on cattle stomachs, with steers used for research on reducing methane emissions from belching cattle.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A14) GATTON, Australia — To hear Athol Klieve tell it, a key to reducing Australia’s enormous carbon emissions is to make a cow more like this country’s iconic animal — the kangaroo.
. . .
Australia contributes more greenhouse gases per capita than just about any other country, with its coal-fired power plants leading the way. But more than 10 percent of those gases come from what bureaucrats call livestock emissions — animals’ burping.
At any given point, after munching and regurgitating grass, tens of millions of Australian cattle, as well as sheep, are belching methane gases nonstop into the air. With methane considered 21 times more potent than carbon dioxide in warming the atmosphere, the burping has given ammunition to environmentalists, vegetarians and other critics of beef while initially putting the large meat industry on the defensive.
. . .
Ruminants release methane because of the peculiar way they digest their food. Inside a cow’s foregut, which can contain more than 200 pounds of grass at any given time, fermentation of the food leads to the release of hydrogen, a byproduct that would slow down the fermentation. Microbes known as methanogens help the ruminants get rid of the excess hydrogen by producing methane gases that the animals release into the atmosphere.
In other animals known as hindgut fermenters, including humans — in which food is fermented after going through their stomachs — methane is sometimes released through flatulence, a fact that, Mr. Klieve said, has led to misunderstanding about his work
“We’ve had to put up with that all the time,” Mr. Klieve said. “It comes from the front end! In the cow, it comes from the front end. But if you’re a hindgut fermenter, it goes the other way.”
. . .
Like cattle, kangaroos are also foregut fermenters. But instead of relying on methanogens to get rid of the unwanted hydrogen, kangaroos use different microbes that reduce hydrogen by producing not methane, but harmless acetic acids, the basis of vinegar.
. . .
“It’s going to be very difficult to meet the current production needs, particularly for the current global population, with kangaroo,” Ms. Henry said. “You need something like 10 kangaroos to produce the same amount of meat as one steer. You can’t herd them or fence them in.”
Undaunted, a few kangaroo meat entrepreneurs are pressing ahead, seeing methane emissions as a business opportunity.

For the full story, see:
NORIMITSU ONISHI. “Gatton Journal; Trying to Stop Cattle Burps From Heating Up Planet.” The New York Times (Weds., July 14, 2010): A14.
(Note: the online version of the article is dated July 13, 2010.)
(Note: ellipses added.)

Source of map: online version of the NYT article quoted and cited above.

Obama Mentor Saul Alinsky on Chicago Reform Candidates

(p. A15) When Barack Obama came to prominence as a presidential candidate, his Chicago background–in particular, his efforts as a “community organizer”–reignited an interest in Saul Alinsky (1909-72), the hard-charging activist whose 1971 book, “Rules for Radicals,” was said to have had a formative influence on Mr. Obama’s thinking.
. . .
Hardscrabble though his youth had been, Alinsky managed to get into the University of Chicago, where his major was archaeology. When the Depression dried up money for digs, he wangled a fellowship to study criminology and began hanging out with gangsters as part of his study, including Al Capone’s “enforcer,” Frank Nitti.
Mr. von Hoffman tells us that one of Alinsky’s favorite stories involved a meeting between Nitti and Anton Cermak just after Cermak had been elected Chicago’s mayor in 1931. The meeting’s purpose was to negotiate the money that Capone would pay the city to keep its speakeasies stocked with beer and liquor: “As Saul told the story,” Mr. von Hoffman writes, “Cermak explained to Nitti, ‘You know I was elected as a reform candidate.’ To which Nitti replied, ‘What the hell does that mean, Tony?’ and waited for an answer. ‘It means,’ the mayor said after a suitable pause, ‘that the price is double.’ ”
The anecdote nicely illustrates the cynicism that informed Alinsky’s ideas about the way the world works.

For the full review, see:
CHRISTOPHER WILLCOX. “A Chicago-Style Peace Disturber; ‘Community organizer’ Saul Alinsky lumped politicians in with gangsters..” The Wall Street Journal (Thurs., July 15, 2010): A15.
(Note: ellipsis added.)

The book under review is:
von Hoffman, Nicholas. Radical: A Portrait of Saul Alinsky. New York: Nation Books, 2010.

Jefferson “Was Experimental and Had a Lot of Failures”

“In the vegetable garden at Monticello, his home in Virginia, Thomas Jefferson sowed seeds from around the world and shared them with farmers. He was not afraid of failure, which happened often.” Source of caption and photo: online version of the NYT article quoted and cited below.

Steven Johnson has written an intriguing argument that the intellectual foundation of the founding fathers was based as much on experimental science as on religion. The article quoted below provides a small bit of additional evidence in support of Johnson’s argument.

(p. D1) NEW gardeners smitten with the experience of growing their own food — amazed at the miracle of harvesting figs on a Brooklyn rooftop, horrified by the flea beetles devouring the eggplants — might be both inspired and comforted by the highs and lows recorded by Thomas Jefferson from the sun-baked terraces of his two-acre kitchen garden 200 years ago.

And they could learn a thing or two from the 19th-century techniques still being used at Monticello today.
“He was experimental and had a lot of failures,” Peter Hatch, the director of gardens and grounds, said on a recent afternoon, as we stood under a scorching sun in the terraced garden that took seven slaves three years to cut into the hill. “But Jefferson always believed that ‘the failure of one thing is repaired by the success of another.’ ”
After he left the White House in 1809 and moved to Monticello, his Palladian estate here, Jefferson grew 170 varieties of fruits and 330 varieties of vegetables and herbs, until his death in 1826.
As we walked along the geometric beds — many of them planted in an ancient Roman quincunx pattern — I made notes on the beautiful crops I had never grown. Sea kale, with its great, ruffled blue-green leaves, now full of little round seed pods. Egyptian onions, whose tall green stalks bore quirky hats of tiny seeds and wavy green sprouts. A pre-Columbian tomato called Purple Calabash, whose energetic vines would soon be trained up a cedar trellis made of posts cut from the woods.
“Purple Calabash is one of my favorites,” Mr. Hatch said. “It’s an acidic, al-(p. D7)most black tomato, with a convoluted, heavily lobed shape.”
Mr. Hatch, who has directed the restoration of the gardens here since 1979, has pored over Jefferson’s garden notes and correspondence. He has distilled that knowledge in “Thomas Jefferson’s Revolutionary Garden,” to be published by Yale University Press.

For the full story, see:
ANNE RAVER. “A Revolutionary With Seeds, Too.” The New York Times (Thurs., July 1, 2010): D1 & D7.
(Note: the online version of the article is dated June 30, 2010 and has the title “In the Garden; At Monticello, Jefferson’s Methods Endure.”)

Apple Fired Mike Scott for Firing the Laggards

Wozniak writes of pre-1983 management troubles at Apple, in the passage quoted below. The passage highlights that large companies usually lose flexibility in hiring and firing. Good managers who have tacit (or just insufficiently documented) judgment about who the best employees are, have limited ability to act on that knowledge.
I wonder if this is a necessary disadvantage of size, or a disadvantage that is due to our laws, customs and institutions?

(p. 231) By this time, I should point out, Mike Scott–our president who took us public and the guy who took us through the phenomenally successful IPO–was gone. During the time the Apple III was being developed, he thought we’d grown a bit too large. There were good engineers, sure, but there were also a lot of lousy engineers floating around. That happens in any big company.

It’s not necessarily the lousy engineer’s fault, by the way. There’s always going to be some mismatch between an engineer’s interests and the job he’s doing.
Anyway, Scotty had told Tom Whitney, our engineering manager, to take a vacation for a week. And meanwhile he did some research. He went around and talked to every engineer in the company and found out who was doing what and who was working and who wasn’t doing much of anything.
Then he fired a whole bunch of people. That was called Bloody Monday. Or, at least, that’s what it ended up being called in the Apple history books. I thought that, pretty much, he fired all the right ones. The laggards, I mean.
And then Mike Scott himself was fired. The board was just very pissed that he’d done this without a lot of backing and enough due process, the kind of procedure you’re supposed to follow at a big company.
Also, Mike Markulla told me Mike Scott had been making a lot of rash decisions and decisions that just weren’t right. Mike thought Scotty wasn’t really capable of handling the company given the point and size it had gotten to.
I did not like this one bit. I liked Scotty very, very much as a person. I liked his way of thinking. I liked his way of being able to joke and be serious. With Scotty, I didn’t see many things fall (p. 232) through the cracks. And I felt that he respected the good work that I did–the engineering work. He came from engineering.
And as I said, Scotty had been our president, our leader from day one of incorporation until we’d gone public in one of the biggest IPOs in U.S. history. And now, all of a sudden, he was just pushed aside and forgotten.
I think it’s sad that none of the books today even seem to recall him. Nobody knows his name. Yet Mike Scott was the president that took us through the earliest days.

Source:
Wozniak, Steve, and Gina Smith. iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: W. W. Norton & Co., 2006.

Capitalism is Not a Zero-Sum Game

The Wall Street Journal on 7/12/2010 ran the above photo on the top of its front page and referred to articles inside on the final game of the 2010 World Cup. Their caption was: “120 minutes, a record 13 yellow cards and a single goal: Andrés Iniesta, right, celebrates scoring to beat the Netherlands in the World Cup; Dutch player Gergory van der Wiel, left, buries his face.” Source of photo: http://www.zumapress.com/images/SIGMA/IMAGES312/20100711_zaf_d20_347.pre (sic)

What a beautiful picture for illustrating a zero-sum game. Football (or soccer) is a zero-sum game—Spain can only win, if the Netherlands lose.
Capitalism is sometimes compared to sports, because both involve competition. In the short-run competition of capitalism, sometimes one “team” wins and another “team” loses. But in the longer run, the essential fact about capitalism is not competition, but innovation. And in the longer run triumph of innovation, all can win.
When Ghiberti and Brunelleschi competed to build the Gates of Paradise, Ghiberti ended up building the doors. But it would be a mistake to see him as the winner and Brunelleschi as the loser. Brunelleschi moved on to build the Duomo, and everyone won.

Finland Approves Two New Nuclear Power Plants

(p. B5) The Finnish Parliament approved the construction of two nuclear power plants on Thursday, the latest victory for proponents of atomic energy in Europe.

Just two weeks ago, the Swedish Parliament narrowly voted to allow the reactors at 10 nuclear power plants to be replaced when the old ones are shut down — a reversal from a 1980 referendum that called for them to be phased out entirely.
Nuclear power fell out of favor in much of Europe after the 1979 accident at Three Mile Island in Pennsylvania and the 1986 disaster at Chernobyl, Ukraine.
But in an era of concern about dependence on foreign supplies of fossil fuels and increases in atmospheric carbon, there is renewed interest in electricity generated by nuclear fission.
“Over all, opinions are firming and more positive,” Ian Hore-Lacy, a spokesman for the World Nuclear Association, said of the European mood. “People are less concerned about waste because they’ve seen it’s not a drama, and it’s been well managed.”

For the full story, see:
AVID JOLLY. “Why Is the Gulf Cleanup So Slow? There are obvious actions to speed things up, but the government oddly resists taking them..” The New York Times (Fri., July 2, 2010): B5.
(Note: the online version of the article is dated July 1, 2010.)

“A Rare Phenomenon in Europe — A Genuine Business Celebrity”

“Nicolas Hayek was asked to help shut the troubled Swiss watch industry, but instead he revived it by introducing the Swatch.” Source of caption and photo: online version of the NYT article quoted and cited below.

Richard Langlois has used the story of Nicolas Hayek to illustrate why Schumpeter was wrong when he worried that the entrepreneur might become obsolete.

(p. A23) Nicolas Hayek, a Lebanese-born business consultant who is widely credited with having saved the Swiss watch industry with the introduction of the Swatch, the inexpensive, plastic — and, as it transpired, highly collectible — wristwatch that made its debut in 1983, died Monday in Biel, Switzerland. He was 82.

Mr. Hayek, a founder and the chairman of the Swatch Group, died of heart failure while working at the company’s headquarters, according to an announcement on the company Web site.
The formation of the Swatch Group, which in addition to Swatch today comprises high-end watch brands like Breguet, Omega, Longines, Tissot, Calvin Klein and Mido, made Mr. Hayek one of Switzerland’s wealthiest men. The exquisite irony is that the company came about after Mr. Hayek was brought in to help shut the foundering Swiss watch industry altogether.
A flamboyant figure with a roguish sense of humor, Mr. Hayek was “a rare phenomenon in Europe — a genuine business celebrity,” as The Harvard Business Review described him in 1993.

For the full story, see:
MARGALIT FOX. “Nicolas Hayek Dies at 82; His Swatch Saved an Industry.” The New York Times (Tues., June 29, 2010): A23.
(Note: the online version of the article is dated June 28, 2010.)

Nicolas Hayek’s entrepreneurship is nicely summarized and analyzed on pp. 59-65 of:
Langlois, Richard N. The Dynamics of Industrial Capitalism: Schumpeter, Chandler and the New Economy. London: Routledge, 2006.