“If Everyone Were Patient, There’d Be No New Companies”

NewNewThingBK.jpg Source of book image: http://www.austinchronicle.com/gyrobase/Issue/review?oid=oid%3A74686


Michael Lewis’ book provides some interesting stories and insights into the important information technology (IT) entrepreneur, Jim Clark, who founded Silicon Graphics, and had a hand in many other IT startups, such as Netscape.

For example, here is more evidence against Buddhism; dissatisfaction drives improvement:

Impatience might be a social vice but, to Clark, it was a commercial virtue.  "If everyone was patient," he’d say, "there’s be no new companies." (p. 42 of hardback edition; p. 26 of paperback edition)


The reference for the book is: 

Lewis, Michael. The New New Thing: A Silicon Valley Story. New York: W. W. Norton & Company, 2000.

Bush on Entrepreneurship

Source of book image: http://www.harpercollins.com/harperimages/isbn/large/8/9780060841638.jpg


At lunchtime today (11/27/06) I heard part of a C-Span broadcast of a Heritage Foundation event in which Carl J. Schramm gave a presentation based on his new book (see above). It sounded as though Schramm has some useful thoughts about the impact of entrepreneurship, and on how the institutions of higher education are very unentrepreneurial.

I smiled when Schramm mentioned that George W. Bush had once said that: "The problem with the French is that they don’t know the meaning of the word "entrepreneur." To those who don’t "get" the joke: it is another of those Bush-is-stupid jokes, based on the word "entrepreneur" being of French origins.

A web site devoted to "urban legends" identifies the Bush quote as one of these legends:

Yet another "George W. Bush is dumb" story has been taken up by those who like their caricatures drawn in stark, bold lines.  According to scuttlebutt that emerged in the British press in July 2002, President Bush, Britain’s Prime Minister Tony Blair, and France’s President Jacques Chirac were discussing economics and, in particular, the decline of the French economy.  "The problem with the French," Bush afterwards confided in Blair, "is that they don’t have a word for entrepreneur."  

The source was Shirley Williams, also known as the Baroness Williams of Crosby, who claimed "my good friend Tony Blair" had recently regaled her with this anecdote in Brighton.

Lloyd Grove of The Washington Post was unable to reach Baroness Williams to gain her confirmation of the tale, but he did receive a call from Alastair Campbell, Blair’s director of communications and strategy.  "I can tell you that the prime minister never heard George Bush say that, and he certainly never told Shirley Williams that President Bush did say it," Campbell told The Post.  "If she put this in a speech, it must have been a joke."


The main reference relied on by the Urban Legend web site for this entry, was: 

Grove, Lloyd. "The Reliable Source." The Washington Post. 10 July 2002 (p. C3).


The most obvious interpretation of the joke is that it is ridiculing W.  But, more subtly, it could be taken to be giving just a bit of a jab to the French too.  (Just because the French invented the word, doesn’t mean that they couldn’t have forgotten its meaning, through lack of use.)


The reference on the Schramm book is: 

Schramm, Carl J. The Entrepreneurial Imperative: How America’s Economic Miracle Will Reshape the World (and Change Your Life). New York: Collins, 2006.


“Forgotten not for lack of importance, but for lack of theoretical frame-works”

A paper by current head of the President’s Council of Economic Advisors, Ed Lazear, is significant for what it says near the end about economists forgetting facts, because the facts do not fit into current theory.

(p. 260)  Human capital theory is primarily a supply-side approach that focuses on the characteristics and skills of the individual workers.  It pays far less attention to the environments in which workers work.  As such, the human capital framework has led researchers to focus on one class of questions, but to ignore others.  Specifically, little attention has been paid to the jobs in which workers are employed. 

(p. 263) The fact that some jobs and some job characteristics are more likely to lead to promotions than other jobs is not surprising.  But the analysis suggests that other ways of thinking about wage determination, namely, through job selection, may have been unduly ignored in the past. 

. . .

Researchers have begun to make jobs rather than individuals the unit of analysis.  This change of focus can illuminate new issues and provide answers to questions that were once posed and forgotten.  The questions were forgotten not for lack of importance, but for lack of theoretical frame-works.  The theory is now developed and awaits confirmation in the data.


For the full paper, see:

Lazear, Edward P.  "A Jobs-Based Analysis of Labor Markets."  American Economic Review 85, no. 2 (May 1995):  260-265.

(Note:  elipsis added.)


Career Opportunities for Economists

  Econ major, and rap recording artist, Stat Quo.  So who says economists aren’t cool?  Source of photo:  http://www.statquo.com/


According to Wikipedia, up and coming rap artist Stat Quo earned a 3.54 gpa, while majoring in economics at the University of Florida. How’s that for refuting the stereotypes about economists?

See: http://en.wikipedia.org/wiki/Stat_Quo


“Smart People Can’t Come Here”

Several years ago, I got up in the middle of the night to call the United States embassy in Beijing, in order to beg an embassy official to issue a visa to our best applicant for our open Research Assistant position.  He did not want to do so, solely on the grounds that she might not return to China.  The woman we wanted to hire had sky-high credentials by every measurable criterion, and based on letters of recommendation, was exceptional by the non-measurable criteria too. 

How bizarre is the immigration policy of the United States when we view it as a problem that such a person might honor us by wanting to stay in the United States?


PALO ALTO, Calif. – Some of technology’s biggest names shared the stage at Stanford University last week to discuss the future of American innovation.

Yahoo co-founder Jerry Yang and Kleiner Perkins Caufield & Byers venture capitalist John Doerr were among the members of two panels at a technology summit at the university.

The third annual innovation summit, where industry leaders talked about emerging trends and government technology policy, was organized by TechNet, an advocacy group that lobbies on behalf of tech executives.

. . .  

The executives also lamented government policies limiting student and work visas, warning that this shuts out people like Google co-founder Sergey Brin and former Intel chief executive Andrew Grove.

"We have this crazy policy in the U.S. that says smart people can’t come here. I think we all agree it makes absolutely no sense," Yang said. "Are people going to want to build a company in the U.S. . . . or in the new talent centers?"


For the full story, see: 

SAN JOSE MERCURY NEWS.  "Technology summit sees risks for U.S."  Omaha World-Herald  (Sunday, November 19, 2006):  7D.

(Note:  the ellipsis between paragraphs was added; the ellipsis in the Yang quote was in the original article.)


Playstation 3 Fails to Leapfrog Xbox 360

  If Schiesel’s review is on-target, these shoppers, waiting to buy Playstation 3, may regret having camped-out at the store to be among the first to buy the new game platform.  Source of photo:  http://graphics8.nytimes.com/images/2006/11/17/business/15game1.650.jpg


(p. B1)  Howard Stringer, you have a problem.  Your company’s new video game system just isn’t that great.

Ever since Mr. Stringer took the helm last year at Sony, the struggling if still formidable electronics giant, the world has been hearing about how the coming PlayStation 3 would save the company, or at least revitalize it.  Even after Microsoft took the lead in the video-game wars a year ago with its innovative and powerful Xbox 360, Sony blithely insisted that the PS3 would leapfrog all competition to deliver an unsurpassed level of fun.

Put bluntly, Sony has failed to deliver on that promise.

Measured in megaflops, gigabytes and other technical benchmarks, the PlayStation 3 is certainly the world’s most powerful game console.  It falls far short, however, of providing the world’s most engaging overall entertainment experience.  There is a big difference, and Sony seems to have confused one for the other.

The PS3, which was introduced in North America on Friday with a hefty $599 price tag for the top version, certainly delivers gorgeous graphics.  But they are not discernibly prettier than the Xbox 360’s.  More important, the whole PlayStation 3 system is surprisingly clunky to use and simply does not provide many basic functions that users have come to expect, especially online.


For the full commentary, see:

SETH SCHIESEL.  "VIDEO GAMES; A Weekend Full of Quality Time With PlayStation 3."  The New York Times  (Mon., November 20, 2006):  B1 & B7.

(Note:  the bold has been added to "leapfrog.")


“Atlas May Actually Decide to Shrug”

(p. A16) During the recent off-year elections, the president repeatedly pointed to the booming economy and noted that his tax cuts were responsible.  With growth strong and unemployment low despite the ending of the stock-market bubble, terrorist attacks and the war in Iraq, he had every reason to be proud.  Moreover, both economic theory and the actual timing of the economic revival support his claims regarding the tax cuts.

That is why it is so odd that rumors swarm around Washington that the president may be willing to raise taxes as part of a "deal" on entitlement reform.  In particular, the rumors suggest the president might be willing to get rid of the provision that caps the income level used to compute Social Security taxes and benefits.  These rumors aren’t without substance; last year the president would not rule out raising the cap when asked.

Doing so would raise the marginal tax rate on the entrepreneurs that Mr. Bush credits for having led the economic recovery by more than 10 percentage points.  The new effective rate would be five percentage points above the level when he took office.  Moreover, in 2011, the rate would go up a further 4.3 percentage points to an effective 53% marginal rate on entrepreneurial income.  The president would thus be not just raising taxes on entrepreneurs to well above the levels that prevailed in the Clinton administration, but to a rate higher than that which prevailed in the Carter administration.  Most of the improved incentives for entrepreneurship and work brought about under Reagan would be repealed.

. . .

Last year an entrepreneur similar to me would have paid federal taxes equal to 33.9% of total income.

. . .

Don’t make it too tough on him, or Atlas may actually decide to shrug.


For the full commentary, see: 

LAWRENCE B. LINDSEY.  "Compromised."  Wall Street Journal  (Mon., November 20, 2006):  A16.

(Note:  the ellipses are added.) 


The last line of the commentary is a not-so-veiled allusion to: 

Rand, Ayn.  Atlas Shrugged.  New York:  Random House, 1957.