February 2008 – Page 3 – artdiamondblog.com

Recent Years Were Not as Hot as Thought

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

(p. 19) Never underestimate the power of the blogosphere and a quarter of a degree to inflame the fight over global warming.

A quarter-degree Fahrenheit is roughly the downward adjustment NASA scientists made earlier this month in their annual estimates of the average temperature in the contiguous 48 states since 2000. They corrected the numbers after an error in meshing two sets of temperature data was discovered by Stephen McIntyre, a blogger and retired business executive in Toronto. Smaller adjustments were made to some readings for some preceding years.

All of this would most likely have passed unremarkably if Mr. McIntyre had not blogged that the adjustments changed the rankings of warmest years for the contiguous states since 1895, when record-keeping began.

Suddenly, 1934 appeared to vault ahead of 1998 as the warmest year on record (by a statistically meaningless 0.036 degrees Fahrenheit). In NASA’s most recent data set, 1934 had followed 1998 by a statistically meaningless 0.018 degrees. Conservative bloggers, columnists and radio hosts pounced. “We have proof of man-made global warming,” Rush Limbaughtold his radio audience. “The man-made global warming is inside NASA.”

Mr. McIntyre, who has spent years seeking flaws in studies pointing to human-driven climate change, traded broadsides on the Web with James E. Hansen, the NASA team’s leader. Dr. Hansen said he would not “joust with court jesters” and Mr. McIntyre posited that Dr. Hansen might have a “Jor-El complex” — a reference to Superman’s father, who foresaw the destruction of his planet and sent his son packing.

For the full story, see:

ANDREW C. REVKIN. "Quarter-Degree Fix Fuels Climate Fight." The New York Times, Main Section (Sunday, August 26, 2007): 19.

Schumpeter in The Age of Turbulence

Source of book image: http://us.penguingroup.com/nf/Book/BookDisplay/0,,9781594201318,00.html#

Joseph Schumpeter was born on this date in 1883.

Alan Greenspan’s much-discussed memoir, is full of thoughtful discussions of Schumpeter’s central mesage of creative destruction. Here are a few lines from the first of those discussions:

(p. 48) Working with heavy industry gave me a profound appreciation of the central dynamic of capitalism. “Creative destruction” is an idea that was articulated by the Harvard economist Joseph Schumpeter in 1942. LIke many powerful ideas, his is simple: A market economy will incessantly revitalize itself from within by scrapping old and failing businesses and then reallocating resources to newer, more productive ones. I read Schumpeter in my twenties and always thought he was right, and I’ve watched the process at work through my entire career.

The reference to Greenspan’s book is:

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

Early Humans Resiliently Innovated to Survive During Climate Cooling

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

(p. A6) Previous research had indicated that human ancestors had for ages depended solely on terrestrial plants and animals. Both fossil and genetic data show that modern humans evolved 150,000 to 200,000 years ago, but archaeological evidence for the emergence of modern behavior in technology, creativity, symbolic thinking and lifestyles is sparse.

But six years ago, at Blombos Cave, near Pinnacle Point, archaeologists uncovered 77,000-year-old tools along with pigments and engraved stones suggesting symbolic behavior, a sign of early creativity. Now, at the Pinnacle Point cave site, the shellfish remains reveal another important innovation.

. . .

Forced to seek new sources of food, some of the people migrated to the shore in search of “famine food.” At Pinnacle Point, the discovery team reported, they feasted on a variety of marine life, brown mussels, giant periwinkles and whelks.

So on the southern shore of Africa, Dr. Marean said in a statement issued by Arizona State, a small population of cave-dwelling modern humans struggled and survived through the prevailing cold, eating shellfish and developing somewhat advanced technologies.

For the full story, see:

JOHN NOBLE WILFORD. “Key Human Traits Tied to Shellfish Remains.” The New York Times (Thurs., October 18, 2007): A6.

(Note: ellipses added.)

Bill Gates Misreads Adam Smith’s Theory of Moral Sentiments

Bill Gates speaking at the Davos meetings in Switzerland on January 24, 2008. Source of the photo: http://graphics8.nytimes.com/images/blogs/dealbook/davos2008/gates600.jpg

The German scholars used to call it “Das Adam Smith Problem”: how to reconcile the Adam Smith’s Theory of Moral Sentiments with his later Wealth of Nations. One alleged inconsistency is the advocacy of altruism in the former, and the advocacy of self-interest in the latter.

But a closer reading of The Theory of Moral Sentiments solves the problem. Smith thought a case could be made for altruism, but only toward those we know really well, which primarily meant one’s own family, and maybe also others in one’s community who one knows well. The reason is that altruism works only when we know very well the situation and values of those who we propose to help. Otherwise, we may end up doing more harm than good.

So when Gates embarks on global altruism, he should be careful in citing Smith for support.

The passage quoted below discusses Bill Gates’s interpretation of Adam Smith:

(p. A15) Key to Mr. Gates’s plan will be for businesses to dedicate their top people to poor issues — an approach he feels is more powerful than traditional corporate donations and volunteer work. Governments should set policies and disburse funds to create financial incentives for businesses to improve the lives of the poor, he plans to say today. “If we can spend the early decades of the 21st century finding approaches that meet the needs of the poor in ways that generate profits for business, we will have found a sustainable way to reduce poverty in the world,” Mr. Gates plans to say.

In the interview, Mr. Gates was emphatic that he’s not calling for a fundamental change in how capitalism works. He cited Adam Smith, whose treatise, “The Wealth of Nations,” lays out the rationale for the self-interest that drives capitalism and companies like Microsoft. That shouldn’t change, “one iota,” Mr. Gates said.

But there’s more to Adam Smith, he added. “This was written before ‘Wealth of Nations,'” Mr. Gates said, flipping through a copy of Adam Smith’s 1759 book, “The Theory of Moral Sentiments.” It argues that humans gain pleasure from taking an interest in the “fortunes of others.” Mr. Gates will quote from that book in his speech today.

Talk of “moral sentiments” may seem surprising from a man whose competitive drive is so fierce that it drew legal challenges from antitrust authorities. But Mr. Gates said his thinking about capitalism has been evolving for years. He outlined part of his evolution from software titan to philanthropist in a speech last June to Harvard’s graduating class, recounting how when he left Harvard in 1975 he knew little of the inequities in the world. A range of experiences including trips to Africa and India have helped raise that awareness.

In the Harvard speech, Mr. Gates floated the idea of “creative capitalism.” But at the time he had only a “fuzzy” sense of what he meant. To clarify his thinking, he decided to prepare the Davos speech.

For the full story, see:

ROBERT A. GUTH. “Bill Gates Issues Call For Kinder Capitalism; Famously Competitive, Billionaire Now Urges Business to Aid the Poor.” The Wall Street Journal (Thurs., January 24, 2008): A1 & A15.

One good article that discusses some of the issues in my initial commentary is:

Coase, Ronald H. “Adam Smith’s View of Man.” In Essays on Economics and Economists. Chicago: University of Chicago Press, 1995.

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

The Spontaneous Order of Houston Tunnels

"The three major sections of the tunnel system are connected under the building at 919 Milam Street in downtown Houston." Source of caption and photo: online version of the NYT article cited below.

Houston is one of the most vibrant, free-wheeling cities in the United States. It is the only major city that does not have zoning laws, (See: Bernard Siegan’s Land Use Without Zoning.)

The tunnels of Houston appear to be another great example of what Hayek called "spontaneous order."

(p. A14) HOUSTON, Aug. 20 — Where is everybody?

Seared by triple-digit heat and drenched by tropical storms, midday downtown Houston appears eerily deserted, the nation’s fourth-largest city passing for a ghost town.

On the street, that is.

But below, there are tunnels at the end of the light — nearly seven color-coded miles of them connecting 77 buildings — aswarm with Houstonians lunching, shopping and power-walking in dry, air-chilled comfort.

. . .

It was not centrally planned; it just grew, inspired by Rockefeller Center in New York. But it is not connected to a transit network. And, befitting Texans’ distrust of government, most of it is private; each segment is controlled by the individual building owner who deigns to allow the public access during business hours — and then locks the doors on nights and weekends. Some parts, like those belonging to the former Enron buildings now leased by Chevron, are closed to outsiders altogether.

Few claim mastery of the labyrinth.

“It’s one of Houston’s best-kept secrets,” said Sandra Lord, widely known as the Tunnel Lady, a Yankee transplant who dispels the mysteries for $10 a head and roams the downtown underworld with proprietary aplomb, sometimes stopping strangers to ask, “And you are?” Corporations pay Ms. Lord to orient new employees below ground, and nearly 45,000 natives and visitors have taken her Discover Houston Tours since 1988.

. . .

Ms. Lord, a writer and Houston historian, traced the origins of the tunnels to Ross Sterling, an oilman and governor during the Depression, who, inspired by Rockefeller Center, linked two of his downtown buildings underground in the early 1930s. Soon after, an entertainment entrepreneur, Will Horwitz, connected three of his vaudeville and movie theaters to save on air-conditioning.

And the tunnels grew from there, despite the private expense of digging connections. The oil bust of the 1980s forced many building owners to compete for business with amenities like tunnels.

Many were flooded by Tropical Storm Allison in 2001, prompting installation of submarine-type doors with inflatable rubber insulation for airtight seals.

For the full story, see:

RALPH BLUMENTHAL. "It’s Lonesome in This Old Town, Until You Go Underground." The New York Times (Tues., August 21, 2007): A14.

(Note: ellipses added.)

Top photo shows "Sandra Lord, owner of Discover Houston Tours, leading a tunnel excursion . . . " Bottom photo shows a map of the tunnels. Source of caption and photo: online version of the NYT article cited above.

Government Pushing Fluorescent Bulbs with Hazardous Mercury

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

(p. D1) As part of the government’s focus on energy and the environment, Americans are urged to buy compact fluorescent light bulbs, which use only about 25% of the energy and last up to 10 times as long as traditional incandescent bulbs. Nearly 300 million such bulbs were sold in U.S. in 2007, compared with 100 million two years earlier, according to the Department of Energy.

. . .

Yet unlike traditional incandescent bulbs, these bulbs contain mercury, a metal hazardous to human health and the environment. Consumers are urged not to toss them in the trash. In some states, such as California, it’s illegal to throw them away; they must be recycled. Still, many cities and towns don’t have recycling programs for the bulbs, and consumers aren’t sure what to do with them.

For the full story, see:

SARA SCHAEFER MUÑOZ. “The Dark Side Of ‘Green’ Bulbs Disposing of Fluorescents, Electronics Releases Toxins; Companies Tout Recycling.” The Wall Street Journal (Thurs., January 24, 2008): D1.

(Note: ellipsis added.)

Google and Microsoft Seek to Shift Health Care Power to Consumers

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

(p. C1) In politics, every serious candidate for the White House has a health care plan. So too in business, where the two leading candidates for Web supremacy, Google and Microsoft, are working up their plans to improve the nation’s health care.

. . .

(p. C8) If the efforts of the two big companies gain momentum over time, that promises to accelerate a shift in power to consumers in health care, just as Internet technology has done in other industries.

Today, about 20 percent of the nation’s patient population have computerized records — rather than paper ones — and the Bush administration has pushed the health care industry to speed up the switch to electronic formats. But these records still tend to be controlled by doctors, hospitals or insurers. A patient moves to another state, for example, but the record usually stays.

The Google and Microsoft initiatives would give much more control to individuals, a trend many health experts see as inevitable. “Patients will ultimately be the stewards of their own information,” said John D. Halamka, a doctor and the chief information officer of the Harvard Medical School.

Already the Web is allowing people to take a more activist approach to health. According to the Harris survey, 58 percent of people who look online for health information discussed what they found with their doctors in the last year.

It is common these days, Dr. Halamka said, for a patient to come in carrying a pile of Web page printouts. “The doctor is becoming a knowledge navigator,” he said. “In the future, health care will be a much more collaborative process between patients and doctors.”

Microsoft and Google are hoping this will lead people to seek more control over their own health records, using tools the companies will provide.

For the full story, see:

STEVE LOHR. "Dr. Google and Dr. Microsoft." The New York Times (Tues., August 14, 2007): C1 & C8.

(Note: ellipsis added.)

Unhappy Italians: “More Fear than Hope”

"A priest passes an abandoned garage covered with graffiti in Milan. Italy’s malaise, an economic, political, and social funk, was summed up in a recent poll: Italians report themselves to be the least happy people in Western Europe." Source of caption and photo: online verison of the NYT article quoted and cited below.

(p. A1) ROME — All the world loves Italy because it is old but still glamorous. Because it eats and drinks well but is rarely fat or drunk. Because it is the place in a hyper-regulated Europe where people still debate with perfect intelligence what, really, the red in a stoplight might mean.

But these days, for all the outside adoration and all of its innate strengths, Italy seems not to love itself.   The word here is “malessere,” or “malaise”; it implies a collective funk — economic, political and social — summed up in a recent poll: Italians, despite their claim to have mastered the art of living, say they are the least happy people in Western Europe.

“It’s a country that has lost a little of its will for the future,” said Walter Veltroni, the mayor of Rome and a possible future center-left prime minister. “There is more fear than hope.”

. . .

. . .   In 1987, Italy celebrated its economic parity with Britain. Now Spain, which joined the European Union only a year earlier, may soon overtake it, and Italy has fallen behind Britain.

Italy’s low-tech way of life may enthrall tourists, but Internet use and commerce here are among the lowest in Europe, as are wages, foreign investment and growth. Pensions, public debt and the cost of government are among the highest.

. . .

(p. A18) . . .  entrepreneurs complain that they are alone. Politicians offered little help making Italy competitive, and this remains a major impediment to making their gains grow. Businesses want less bureaucracy, more flexible labor laws and large investments in infrastructure to make moving goods around easier.

. . .

. . .   Many worry . . . that Italy may share the same fate as the Republic of Venice, based in what many say is the most beautiful of cities, but whose domination of trade with the Near East died with no culminating event. Napoleon’s conquest in 1797 only made it official.

Now it is essentially an exquisite corpse, trampled over by millions of tourists. If Italy does not shed its comforts for change, many say, a similar fate awaits it: blocked by past greatness, with aging tourists the questionable source of life, the Florida of Europe.

. . .

. . .   “We have reached a point where hoping for some kind of white knight coming in saying, ‘We’ll sort you out,’ is over.”

“We Italians have our destiny in our hands more than ever before,” he said.

For the full story, see:

IAN FISHER "In a Funk, Italy Sings an Aria of Disappointment." The New York Times (Thurs., December 13, 2007): A1 & A18.

(Note: ellipses added.)

Health Care Costs Are High and Rising

Source of graph: online version of the Omaha World-Herald article quoted and cited below.

The article quoted below summarizes a seminar by Dr. John Abramson. He was right to highlight the high costs of health care in the U.S., though he didn’t show any special insight in suggesting solutions.

(p. 1D) Costs are out of control, he said, and yet the United States, out of 22 developed nations, pays the most per person for health care and ranks last in having citizens lead long, healthy lives.

For the full story, see:

STEVE JORDON. “Employers urged to cure health system.” Omaha World-Herald (Weds., August 22, 2007): 1D & 2D.

Source of cartoon: online version of the Omaha World-Herald article quoted and cited above.