February 2011 – Page 3 – artdiamondblog.com

Socialism Cut Venezuelan GDP, So Chavez Rejected GDP

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

(p. A15) President Hugo Chávez wasn’t pleased with data . . . that showed the Venezuelan economy tumbling into a recession. So the populist leader came up with a solution: Forget traditional measures of economic growth, and find a new, “Socialist-friendly” gauge.

“We simply can’t permit that they continue calculating GDP with the old capitalist method,” President Chávez said in a televised speech before members of his Socialist party . . . . “It’s harmful.”
Mr. Chávez’s comments came shortly after data showed Venezuela’s gross domestic product — a broad measure of annual economic output — fell 4.5% in the third quarter from the year-earlier period. It was the second consecutive quarterly decline, and observers have questioned how Mr. Chávez will be able to generate growth without high oil prices.
. . .
“It’s hard to say if [Mr. Chávez] is serious or not,” said Robert Bottome of publisher VenEconomía. “They’ve already tampered with the way they compute unemployment and how they determine how much oil [state oil company] PdVSA exports. So why not tamper with the economy figures as well.”

For the full story, see:
DAN MOLINSKI and DAVID LUHNOW. “Chávez Discounts Accuracy of GDP.” The Wall Street Journal (Fri., NOVEMBER 20, 2009): A15.
(Note: ellipses added.)

After a Series of Anonymous Threats, Cartwright Power Looms Were Burned Down

(p. 239) Cartwright constructed twenty looms using his design and put them to work in a weaving “shed” in Doncaster. He further agreed to license the design to a cotton manufacturer named Robert Grimshaw, who started building five hundred Cartwright looms at a new mill in Manchester in the spring of 1792. By summertime, only a few dozen had been built and installed, but that was enough to provoke Manchester’s weavers, who accurately saw the threat they represented. Whether their anger flamed hot enough to burn down Grimshaw’s mill remains unknown, but something certainly did: In March 1792, after a series of anonymous threats, the mill was destroyed.

Cartwright’s power looms were not the first textile machines to be attacked, and they would not be the last.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

Ronald Reagan Would Be 100 Today; He Got the Job Done

A couple of years ago, I read a collection of recollections of Ronald Reagan by some of those who had known him. I jotted down a few notes on what was important in the collection:
Mike Wallace’s entry is a good one. He has a telling exchange with Reagan where Reagan says he is not a politician. Wallace is flabbergasted. He says to the effect: Mr. Reagan, how can you say you are not a politician when you are planning to run for the highest political office in the land?
Reagan’s response is that he’s not seeking the office for glory or self-aggrandizement; rather he’s seeking it because there’s a job that needs to get done.
In a later entry, someone (Cap Weinberger, maybe?) recounts an episode while Governor where someone warns Reagan that if he vetoes a certain bill (on teacher pay, maybe?) he will not get re-elected. Reagan’s response was: ‘I didn’t come here to get re-elected.’
Years ago I remember reading in a newspaper somewhere that an ordinary citizen saw Reagan in a park, at a time well after his announcement about having Alzheimer’s. The citizen went up to Reagan and thanked him for what he had done to preserve freedom. Reagan smiled and responded ‘that is my job.’

The book of recollections is:
Hannaford, Peter, ed. Recollections of Reagan: A Portrait of Ronald Reagan: William Morrow & Company, 1997.

Polar Bears Can Survive Global Warming

(p. 3A) ANCHORAGE, Alaska (AP) — . . .

A study report published Wednesday rejects the often used concept of a “tipping point,” or point of no return, when it comes to sea ice and the big bear that has become the symbol of climate change woes. . . .
Another research group projects that even if global warming doesn’t slow, a thin, icy refuge for the bears would still remain between Greenland and Canada.
. . .
A . . . study was to be presented Thursday at the American Geophysical Union conference in San Francisco. That research considers a future in which global warming continues at the same pace.
And it shows that a belt from the northern archipelago of Canada to the northern tip of Greenland will likely still have ice because of various winds and currents.
The sea ice forms off Siberia in an area that’s called “the ice factory” and is blown to this belt, which is like an “ice cube tray,” said Robert Newton of the Lamont-Doherty Earth Observatory at Columbia University.
That “sea ice refuge” will be good for polar bears and should continue for decades to come, maybe even into the next century, he said.

For the full story, see:
AP. “Scientists: It’s Not Too Late for Polar Bears After All.” Omaha World-Herald (Thurs., December 16, 2010): 3A.
(Note: ellipses added.)

The first article mentioned is:
Amstrup, Steven C., Eric T. DeWeaver, David C. Douglas, Bruce G. Marcot, George M. Durner, Cecilia M. Bitz, and David A. Bailey. “Greenhouse Gas Mitigation Can Reduce Sea-Ice Loss and Increase Polar Bear Persistence.” Nature 468, no. 7326 (December 16, 2010): 955-58.

A poster on an earlier version of the second paper can be found at:
Pfirman, Stephanie, Bruno Tremblay, Charles Fowler, and Robert Newton. “The Arctic Sea Ice Refuge.” March 2010.

The reference to the second paper is:
Pfirman, Stephanie, Robert Newton, Bruno Tremblay, and Brenden P. Kelly. “The Last Arctic Sea-Ice Refuge?” In Presented at meetings of American Geophysical Union, December 2010.

Healthy Longevity Can Mean You “Get a Do-Over in Life”

“Gid Pool performing at the Buford Variety Theater . . . ” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. R1) It’s easy, these days, to think about later life and retirement as limiting. And with good reason: The economy remains fragile; nest eggs are smaller than they should be; and Social Security and Medicare are looking pale. Millions of people are delaying retirement and scaling back plans for the future.

And then there’s Gid Pool.
Almost five years ago, on something of a lark, he enrolled in a class near his home in North Port, Fla., that taught stand-up comedy. He was 61 years old. Today, he performs in clubs, theaters, colleges and corporate settings throughout much of the South, playing at times to hundreds of people and clearing as much as $1,000 an evening. For good measure, he spends, on average, a week each month on cruise ships, where he teaches comedy classes.
. . .
“I was thinking last night about how lucky I am, at this stage in my life, to have something that really gets me up in the morning,” he says. “I saw my grandfather, an engineer on the Illinois Central Railroad, turn my age with a body beaten down by his daily job. My father was a pilot in World War II and suffered all his adult life from an injury in a plane crash.
“Today I’m part of a generation that has literally been given a second chance to live a first life. People say you don’t get a do-over in life. I beg to differ.”

For the full story, see:
GLENN RUFFENACH. “Did You Hear the One About the Retired Real-Estate Agent? He became a stand-up comedian. And he has never been happier.” The Wall Street Journal (Mon., December 20, 2010): R1 & R9.
(Note: ellipsis added.)

“Inventors Are Sometimes Beneficiaries of Their Own Ignorance”

William Rosen gives us a thought-provoking anecdote about Edmund Cartwright, the inventor of the first power loom:

(p. 238) He was also, apparently, convinced of the practicality of such a machine by the success of the “Mechanical Turk,” a supposed chess-playing robot that had mystified all of Europe and which had not yet been revealed as one of the era’s great hoaxes: a hollow figurine concealing a human operator. Inventors are sometimes beneficiaries of their own ignorance.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

Suppliers Hold Back Some Supply When They Expect Prices to Rise in the Future

“Farmer Yu Feng tends his stockpile of roughly 7,700 pounds of cotton that he is storing in his home in Huji, China.” Source of caption and photo: online version of the WSJ article quoted and cited below.

In my Micro Principles classes I explain some of the variables that shift demand curves and some of the variables that shift supply curves. Supply curves, for instance, can be shifted by a change in the expectations of future prices. So, if suppliers come to expect that prices will go up in the future, that will shift the supply curve today to the left.
When I saw the photo above, I thought it was a wonderful illustration of the point.

(p. B1) Yu Lianmin, a cotton farmer in Huji, China, harvested 6,600 pounds of cotton this year. Despite record cotton prices, he didn’t sell any of it.
Instead, mounds of cotton are piled up in two empty rooms of Mr. Yu’s home, and the homes of many of the farmers in his small township of Yujia, which is part of the bigger township of Huji in northern Shandong province, 220 miles southeast of Beijing.
. . .
“I think there’s still hope for prices to go higher,” he said.
. . .
Expectations that prices will rise are driving the apparent stockpiling, . . .

For the full story, see:
CAROLYN CUI. “Chinese Take a Cotton to Hoarding.” The Wall Street Journal (Sat., January 29, 2011): B1 & B11.
(Note: ellipses added.)

Federal Regulations Hurt Small Toy Makers

(p. C12) The story begins in 2007, an unusually good year for Peapods Natural Toys and Baby Care, in St. Paul, Minn., and many similar mom-and-pop businesses. Frightened by news that toys made in China contained unsafe levels of lead, customers were looking for alternatives to the usual big-box offerings. Just as organic farmers gain market share whenever there’s a food-safety panic, the lead scare boosted sales of artisanal children’s goods. “People wanted made-in-USA products, and we were the only place in town that had them,” says Dan Marshall, the owner of Peapods.

Vendors offering organic materials and a personal touch seemed poised to prosper. But the short-term boon soon turned into a long-term disaster. In response to the lead panic, Congress passed the Consumer Product Safety Improvement Act, or CPSIA, by an overwhelming majority. The law mandates third-party testing and detailed labels not only for toys but for every single product aimed at children 12 and under.
. . .
Although big companies like Mattel could spread the extra costs over millions of toys, Mr. Marshall’s small-scale suppliers couldn’t. Unable to afford thousands of dollars in testing per product, some went out of business. Others moved production to China to cut costs. Many slashed their product lines, reserving the expensive new tests for only their top sellers. The European companies that used to sell Peapods such specialty items as wooden swords and shields or beeswax-finished cherry-wood rattles simply abandoned the U.S. market. The survivors jacked up prices.

For the full commentary, see:
VIRGINIA POSTREL. “COMMERCE & CULTURE; Small Crafts vs. Big Government.” The Wall Street Journal (Sat., January 29, 2011): C12.
(Note: ellipsis added.)