artdiamondblog.com – Page 570 – Art Diamond's web log

New York Rent Control Limits Incentives to Build Apartments

“Tryn Collins, left, and Mary Hill share small quarters at a loft building in Brooklyn that was transformed from a factory.” Source of caption and photo: online version of the NYT article quoted and cited below.

New York City has had rent control in effect for decades. Economists predict that one effect of rent control is that incentives are reduced to build and maintain apartments. As a result, those seeking living space, have fewer options. (For example, the WSJ a few years ago ran a front page article explaining how some enterprising New Yorkers were living in abandoned elevator shafts.)
The article quoted below, provides additional evidence.

(p. A1) One “room” is a cramped cubby that measures, in all, perhaps 25 square feet, just enough for a full-size mattress and whatever can be stashed beneath. The first-floor rooms, in the basement, are musty and windowless, like caves. The second-floor rooms have plywood walls but no doors, only cut-out windows that overlook a kitchen cluttered with day-old dishes, a chore wheel and the odd paintbrush.
One of the residents likens her home to a “giant treehouse.” Another says it is like “living in a public bathroom.”
“Where the stalls are just superficial sight lines that block the other person, but you can hear everything they do,” said Robyn Frank, a 23-year-old artist. She had just moved in to the McKibbin lofts in East Williamsburg, Brooklyn, and sometimes they literally become bathrooms. They are known for their giant, raucous parties; revelers occasionally urinate in the halls.
This is life in what some refer to as the McKibbin “dorms,” a landing pad for hundreds of postcollegiate creative types yearning to make it as artists, and live like them too, in today’s New York.
Newcomers marvel that such a place exists: two sprawling, almost identical five-story former factories filled with mostly white hip young things, smack in the middle of a neighborhood that has little in common with Williamsburg proper, its cocktail-mixing neighbor to the west.
Perhaps 300 people live in each building, which face each other and sit, respectively, at 248 and 255 McKibbin Street. Between one and eight people live in each loft. Few were born before the mid-1980s. Rents can range from $375 for one person to roughly $800 for a space.

For the full story, see:
CARA BUCKLEY. “Young Artists Find a Private Space, Only Without the Privacy.” The New York Times (Weds., May 7, 2008): A1 & A17.

“The Black Hole of Agriculture”: “People Love Free Money”

(p. A17) WASHINGTON — Americans are in sticker-shock over grocery prices, while people in developing countries are rioting over food shortages. And across the heartland, American farmers are enjoying record incomes, but losing sleep over rising expenses and turbulence in the commodity futures markets.
Here on Capitol Hill, though, it is pretty much farm politics as usual.
As Congress works toward final passage of the farm bill, it is poised to continue most of the existing farmer subsidy programs, including about $5.2 billion a year in so-called “direct payments” that will be disbursed even as net farm income is projected to hit a historic high in 2008.
The farm bill, which comes along once every five years and will cost upward of $300 billion, in fact will do little to address many of the most pressing concerns. It will not change biofuel mandates that are directing more corn to ethanol and contributing to a global rise in food prices.
. . .
But even strong proponents of the bill, like Senator Tom Harkin, Democrat of Iowa and chairman of the Agriculture Committee, concede that farm interests are deeply entrenched and that there is little appetite for change among many farm state lawmakers, especially when it comes to the direct payment program.
The direct payments are based on the amount of land that certain farmers own, and Mr. Harkin, who has sought to eliminate the payments, said that many recipients of the money then use it to acquire more land and qualify for more payments.
“It’s like the black hole in space that astronomers talk about: everything gets sucked in and nothing ever comes out,” he said. “This is the black hole of agriculture. It doesn’t make sense, but farmers continue to get it.”
Mr. Harkin said there was not much he could do because “I don’t have the votes,” adding, “People love free money.”

For the full commentary, see:
DAVID M. HERSZENHORN. “NEWS ANALYSIS; Farmers’ Income Rises, as Do Food Prices, but It’s Mostly Politics as Usual.” The New York Times (Thurs., April 24, 2008): A17.
(Note: ellipsis added.)

Schumpeterians Lead Ranking of Business Gurus

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

The top two business gurus in the WSJ‘s latest ranking, have each written major books that make substantial use of Schumpeter’s concept of creative destruction. (The Hamel book is Leading the Revolution, and the Thomas Friedman book is The Lexus and the Olive Tree.)
Others among the top 20 gurus who have written favorably of the process of creative destruction, include Clayton Christensen, Jack Welch, and Tom Peters.

(p. B1) The guru game is changing.
Psychologists, journalists and celebrity chief executives crowd the top of a ranking of influential business thinkers compiled for The Wall Street Journal. The results, based on Google hits, media mentions and academic citations, ranked author and consultant Gary Hamel No. 1.
But Dr. Hamel is the only traditional business guru in the top five, which includes two journalists, Thomas Friedman and Malcolm Gladwell, and a former CEO, Bill Gates. Mr. Gladwell is among three thinkers in the top eight who focus on psychology. His 2005 book “Blink: The Power of Thinking Without Thinking” examined the role of snap judgments in decision-making. Howard Gardner, a professor of education at Harvard best known for the theory of “multiple intelligences,” is No. 5, while Daniel Goleman, a psychologist who has written about “emotional intelligence,” ranks eighth.
Thomas H. Davenport, a management professor at Babson College, compiled the ranking, employing the same methodology he used in a 2003 book, “What’s the Big Idea?” Several well-known business gurus fell lower in the updated list, including Michael Porter and Tom Peters, who topped the 2003 ranking and dropped to Nos. 14 and 18, respectively. Harvard’s Prof. Porter noted that his last book was on health care rather than general management, and that “I feel like my recent work continues to have an impact in my various fields.”
Dr. Davenport says the changes show that time-strapped managers are hungry for easily digestible advice wherever they can find it. Today, the most pressing themes include globalization, motivation and innovation. Traditional business gurus writing “weighty tomes” are in decline, he says.

For the full story, see:
ERIN WHITE. “New Breed of Business Gurus Rises; Psychologists, CEOs Climb in Influence, Draw Hits, Big Fees.” Wall Street Journal (Mon., May 5, 2008): B1.

Source of table:
ERIN WHITE. “What Influential Business Thinkers Focus On; Top Gurus Ponder Manager’s Worries, New Approaches.” Wall Street Journal (Mon., May 5, 2008): B6.
(Note: the online version of the article has the title: “Quest for Innovation, Motivation Inspires the Gurus; Leading Thinkers Apply Varied Skills For Global Solutions.”)

Why Most Economists Oppose the Gas Tax Holiday

(p. A31) Most economists oppose the Clinton-McCain gas tax holiday because they can’t see how consumers will benefit. In fact, “most” is an understatement; when challenged to name one economist willing to back her plan, Mrs. Clinton’s response was to disparage the whole profession.
Why are economists so opposed? In the short run, the supply of gasoline is basically fixed; it takes a while to build a new refinery. The demand for gasoline, in contrast, is more responsive to price; we’re already seeing greater use of public transportation and brisk sales of fuel-efficient cars. When you combine fixed supply with flexible demand, it’s suppliers, not demanders, who pocket the tax cut. That’s Econ 101.
. . .
When the public rejects the mundane explanations for high gas prices — big boring facts like rapid Asian growth — politicians aren’t going to correct them. The best we can expect is for Washington to try to channel the public’s misconceptions in relatively harmless directions. We could do a lot worse than the gas tax holiday; in fact, we usually do.

For the full commentary, see:
BRYAN CAPLAN. “The 18-Cent Solution.” The New York Times (Thurs., May 8, 2008): A31.
(Note: ellipsis added.)

For Happiness, “Income Does Matter”

Source of graph: online version of the NYT article quoted and cited below.

(p. C7) . . . , Betsey Stevenson and Justin Wolfers argue that money indeed tends to bring happiness, even if it doesn’t guarantee it. They point out that in the 34 years since Mr. Easterlin published his paper, an explosion of public opinion surveys has allowed for a better look at the question. “The central message,” Ms. Stevenson said, “is that income does matter.”
To see what they mean, take a look at the map that accompanies this column. It’s based on Gallup polls done around the world, and it clearly shows that life satisfaction is highest in the richest countries. The residents of these countries seem to understand that they have it pretty good, whether or not they own an iPod Touch.
If anything, Ms. Stevenson and Mr. Wolfers say, absolute income seems to matter more than relative income. In the United States, about 90 percent of people in households making at least $250,000 a year called themselves “very happy” in a recent Gallup Poll. In households with income below $30,000, only 42 percent of people gave that answer. But the international polling data suggests that the under-$30,000 crowd might not be happier if they lived in a poorer country.
. . .
Economic growth, by itself, certainly isn’t enough to guarantee people’s well-being — which is Mr. Easterlin’s great contribution to economics. In this country, for instance, some big health care problems, like poor basic treatment of heart disease, don’t stem from a lack of sufficient resources. Recent research has also found that some of the things that make people happiest — short commutes, time spent with friends — have little to do with higher incomes.
But it would be a mistake to take this argument too far. The fact remains that economic growth doesn’t just make countries richer in superficially materialistic ways.
Economic growth can also pay for investments in scientific research that lead to longer, healthier lives. It can allow trips to see relatives not seen in years or places never visited. When you’re richer, you can decide to work less — and spend more time with your friends.
Affluence is a pretty good deal. Judging from that map, the people of the world seem to agree. At a time when the American economy seems to have fallen into recession and most families’ incomes have been stagnant for almost a decade, it’s good to be reminded of why we should care.

For the full commentary, see:
DAVID LEONHARDT. “Economic Scene; Money Doesn’t Buy Happiness. Well, on Second Thought . . . .” The New York Times (Weds., April 16, 2008): C1 & C7.
(Note: ellipses in text added; ellipsis in title in original; the title in the online version was “Economic Scene; Maybe Money Does Buy Happiness After All.” )

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

United States Making More Output with Less Physical Input: An Almost Lighter Economy

(p. 492) The long-standing trend away from value produced by manual labor and natural resources and toward the intangible value-added we associate with the digital econnomy can be expected to continue. Today it takes a lot less physical material to produce a unit of output than it did in generations past. Indeed, the physical amount of materials and fuels either consumed in the production of output or embodied in the output has increased very modestly over the past half century. The output of our economy is not quite literally lighter, but it is close.
Thin fiber-optic cable, for instance, has replaced huge tonnages of copper wire. New architectural, engineering, and materials technologies have enabled the construction of buildings enclosing the same space with far less physical material than was required fifty or one hundred years ago. Mobile phones have not only downsized but also morphed into multipurpose communication devices. The movement over the decades toward production of services that require little physical input has also been a major contributor to the marked rise in the ratio of constant dollars of GDP to tons of input.

Source:
Greenspan, Alan. The Age of Turbulence: Adventures in a New World Economic Flexibility. New York: Penguin Press, 2007.
(Note: italics in original.)

Franklin Roosevelt Exposed in The Forgotten Man

Source of book image: http://blog.syracuse.com/shelflife/forgotten.jpg

Amity Shlaes’s new history of the Great Depression is at once depressing and encouraging. It is depressing in showing how vulnerable human progress is to the threat from a dishonest, slick orator, who has not a clue about how the economy works. It is encouraging in that it shows so clearly that the length and depth of the Great Depression was due to easily avoidable mistakes in policy, rather than due to some fundamental flaw in capitalism, as has occasionally been claimed.
Although the book does not shy away from pointing out the flaws of Coolidge, Hoover and Willke, it mainly shows how F.D.R.’s routine whimsical policy reversals and double-dealings, alienated not only his original opponents, but many of his early friends and allies.
The New Deal policies to seize business profits, reduced business incentives to take risks: if the risks turned out badly, the business would lose the investment, while if the risks turned out well, the profits would be taxed away by the federal government.
In addition, the sheer unpredictability of New Deal policies further led the prudent to delay investments, thereby further impeding recovery.
The book is well-written, and should be equally well-read.

The reference for the book is:
Shlaes, Amity. The Forgotten Man: A New History of the Great Depression. New York: HarperCollins, 2007.

“Nature” Article Forecasts Cooler Europe and North America Over Next Decade

The journal Nature (along with the journal Science) is often viewed as one of the two most prestigious journals in science. The NYT article below reports that a recent Nature article forecasts that temperatures in Europe and North America will be cooler over the next decade.
After the portion quoted below, the NYT article goes on to reassure global warming true-believers that a decade of cooling would in no way be evidence against the global warming maintained hypothesis.

(p. A10) After decades of research that sought, and found, evidence of a human influence on the earth’s climate, climatologists are beginning to shift to a new and similarly daunting enterprise: creating decade-long forecasts for climate, just as meteorologists routinely generate weeklong forecasts for weather.
One of the first attempts to look ahead a decade, using computer simulations and measurements of ocean temperatures, predicts a slight cooling of Europe and North America, probably related to shifting currents and patterns in the oceans.
The team that generated the forecast, whose members come from two German ocean and climate research centers, acknowledged that it was a preliminary effort. But in a short paper published in the May 1 issue of the journal Nature, they said their modeling method was able to reasonably replicate climate patterns in those regions in recent decades, providing some confidence in their prediction for the next one.

For the full story, see:
ANDREW C. REVKIN. “Scientists Work on Decade-Based Forecast for the Climate.” The New York Times (Thurs., May 1, 2008): A10.

Will Smith’s ‘I Am Legend’ Performance Earns the Academy Award that Matters

Will Smith in I Am Legend. Source of photo: http://blogs.bet.com/news/newsyoushouldknow/?p=1398

Will Smith’s remake of Charleton Heston’s The Omega Man, is a pretty good movie. It shows a lone scientist struggling to cure a terrible disease in a world where he has lost almost everything that he valued. The Will Smith character exemplifies the motto of the marines: semper fi.
But I think I still like the Heston version a bit better, even though its special effects are dated, and Heston may have been a bit old for the role.
Why, then? After some thought, I think there is one main reason I like the Heston version better: the villains in The Omega Man, have ideas, while the villains in I Am Legend are subhuman, idealess vampires. The battle of good against evil in The Omega Man is both physical and intellectual, and that makes it easier to care more deeply about the outcome.
Still, I Am Legend is a good movie, showing a heroic man’s lonely struggle to remain true to his mission.
(And his canine companion should have received some sort of award too.)

(p. 2E) West Point, N.Y. (AP) — Will Smith wasn’t nominated for an Oscar this year, but his role in “I Am Legend” has earned a different “academy” award — from the cadets at the U.S. Military Academy.
Smith was named the first winner of the Cadet Choice Movie Award, designed to honor the character that best personifies West Point leadership qualities on the silver screen.

For the full story, see:
“People; Cadets vote Will Smith a winner.” Omaha World-Herald (Mon., Feb. 25, 2008): 2E.

Creative Destruction Brings Triumph of Brain Over Brawn in the Labor Market

(p. 435) . . . , the inexorable growth in the proportion of our GDP that is conceptual, especially technological, has increased the value of intellectual power relative to the value of human brawn many times over many generations. I am old enough to remember when physical prowess on the job was the source of legend and reverence. A large statue of Paul Bunyan, the mythical logger, still oversees the northern Minnesota lake country. Stevedores of a century ago were extolled for their brute strength. Today, the activities once carried out by stevedores are often run by young women at a computer console.

Source:
Greenspan, Alan. The Age of Turbulence: Adventures in a New World Economic Flexibility. New York: Penguin Press, 2007.

Freeing Medical Entrepreneurship Could Speed Cures

Medical entrepreneur Tom Harold. Source of photo: http://www.scyfix.org/management.php

(p. 1D) ScyFix, a Chanhassen, Minn., startup, has developed a device it claims treats diseases such as glaucoma and macular degeneration by shooting electric currents into the eye. The company, which is conducting clinical trials in India and the United States, hopes to sell the first device approved by the Food and Drug Administration designed to restore eyesight.
“To me, this is the pacemaker for the eye,” said Dr. Darrell DeMello, ScyFix president and a former executive at Boston Scientific Corp.
ScyFix hopes to eventually raise $60 million to $70 million to finish its clinical trials.
. . .
(p. 2D) Thomas Harold first came up with the idea for ScyFix in 2002. An Internet entrepreneur and a former executive at General Mills, Harold became interested in studies that showed electricity could restore sight. Drugs, however, could only slow the effects of some diseases.
. . .
Specifically, the studies showed electricity could stimulate the production of neurotrophins, a family of proteins that can instruct optic nerve, retinal neurons and photoreceptor cells not to die. In addition, neuromodulation can also repair cell membranes, allowing cells to absorb nutrients, release wastes, improve blood flow to the eye and rewire faulty nerve connections.
Working with doctors and engineers, Harold, who has no medical background, developed a device that releases low-intensity electric currents into the eyelids through electrodes. A complex mathematical equation programmed into the device controls the amount and frequency of the electricity. Patients can administer the treatment at home twice a day for 20 minutes.
Harold says he is encouraged by the results so far: Since 2002, the device has halted progression of diseases in 95 percent of the 1,000 patients tested in 29 countries, according to ScyFix.
“Everything stopped getting worse,” Harold said. “That was a win in itself.”
In addition, 80 percent of the patients reported vision improvement. There were no side effects, the company said.

For the full story, see:
Lee, Thomas (The Star Tribune). “‘Pacemaker’ for eyes shows initial promise.” Omaha World-Herald (Sunday, March 9, 2008): 1D & 2D.
(Note: ellipses added.)

Below I have pasted a couple of paragraphs from the ScyFIX web site. Note that Europeans are free to try the therapy, if they so desire. But citizens of the United States are not free to try the therapy, due to the regulations of the Food and Drug Admininstration (FDA) of the U.S. government.

Buy ScyFIX 600 and Accessories on-line!
Welcome to ScyFIX international web shop where you can order products, choose payment method, including a secure on-line credit card payment service (SSL), and check your delivery status on-line. Buying on-line is safe and easy and you will be guided all the way. All prices are in € (Euro). Place your order and your credit card company will convert the amount in € to your own currency. We accept Visa, Master Card, EuroCard and most bank cards connected to VISA or Master Card. Follow the instructions to take you through the pages, and then onto a secure site in which you will input your credit card and shipping details. When bank authorization has been attained, you will get a confirmation on-line, as well as a confirming e-mail. If at any stage you wish to change your order, just click the “Remove”-button.
Please note that ScyFIX can not ship devices to US addresses, until the ongoing FDA trials have resulted in an approval to market the product in the USA. US customers who mistakenly order and pay for a therapy kit over the web, will be contacted and refunded. However, ScyFIX will deduct 100€ (Euros) covering banking fees and handling costs. If you are a US resident and want to know more about our therapy, please send an inquiry by e-mail to our European office support@scyfix.org, or fill in your personal information in our Clinical Trial & Purchase Interest Form by clicking here www.scyfix.org/clinical_trial_form.htm.

The paragraphs were accessed on 3/9/08 from:
http://www.scyfix.org/shop/